UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal ended December 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-11458
LIBERTY EQUIPMENT INVESTORS - 1983
(Exact name of Registrant as specified in its charter)
New York 13-3163119
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
World Financial Center - South Tower, N.Y., N.Y. 10080-6114
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(212) 236-6560
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of each class)
Units of Limited Partnership Interest
(Title of Class)
Depository Receipts for Certificates of Partnership Interest
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in a definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Documents incorporated by reference:
Part I - Pages 17 through 33 of Prospectus, dated September 7,
1983, filed pursuant to Rule 424(b) under the Securities Act of
1933, as supplemented by a Supplement, dated September 14, 1983,
filed pursuant to Rule 424(c) under the Securities Act of 1933.
<PAGE>
Part I
Item 1. Business
Formation
Liberty Equipment Investors-1983 ("Registrant"), a New York
limited partnership, was organized March 30, 1983 and is
currently governed by the New York Revised Limited Partnership
Act. Maiden Lane Partners Inc., a Delaware corporation (the
"General Partner"), is Registrant's sole general partner. The
General Partner is a wholly-owned subsidiary of ML Leasing
Equipment Corp. ("MLLEC") (which is an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. and the successor in
interest to Merrill Lynch Leasing Inc. and Merlease Leasing
Corp.) and is an affiliate of Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch").
Registrant is engaged in the business of operating, leasing and
holding for investment, equipment, or interests therein
("Equipment"), manufactured by non-affiliated companies. See
note 8 to the financial statements included in Item 8 hereof for
information on Registrant's segment activities. (See "Financial
Statements and Supplementary Data" included in Item 8 hereof).
Registrant offered through Merrill Lynch up to 40,000 units of
limited partnership interest ("Units") and depository receipts
for certificates of partnership interest ("Depository Receipts")
at $1,000 per Unit. The Units and Depository Receipts were
registered under the Securities Act of 1933 under Registration
Statement No. 2-82749, which was declared effective on
September 7, 1983 (the "Registration Statement") and the offering
was commenced on September 14, 1983. Reference is made to the
prospectus filed with the Securities and Exchange Commission
pursuant to Rule 424(b) under the Securities Act of 1933, as
supplemented by a supplement dated September 14, 1983 which has
been filed pursuant to Rule 424(c) under the Securities Act of
1933. Pursuant to Rule 12b-23 of the Securities and Exchange
Commission's General Rules and Regulations promulgated under the
Securities and Exchange Act of 1934, the description of
Registrant's business set forth under the heading "Risk and Other
Important Factors" at pages 17 through 25 and under the heading
"Investment Objectives and Policies" at pages 25 through 33 of
the above-referenced prospectus as supplemented is hereby
incorporated herein by reference.
Upon termination of the offering of Units on October 25, 1983,
Registrant accepted subscriptions for 40,000 Units, representing
funds aggregating $40,000,000.
The Equipment
Registrant's interest in equipment owned at year-end 1994
consisted of five intercity buses (adjusted to reflect the
disposition of 81 buses since inception); a limited partner
interest in the Trigen Trenton District Energy Company ("TDEC"),
formerly known as Trenton District Energy Company, a New Jersey
limited partnership, which has constructed a cogeneration
district heating system; and diagnostic imaging equipment and
leasehold improvements to a facility which houses the equipment.
The facility, located in Seattle, Washington, operates as a free-
standing medical diagnostic imaging center. Registrant's
investment in the San Jose cogeneration facility was disposed on
September 30, 1991. Registrant's 45 reverse vending machines
were sold to its lessee in August 1992 (described below) and, in
the fourth quarter of 1993, Registrant's 917 remaining 45-foot
long, 102-inch wide dry-van piggyback trailers were sold to its
lessee (described below).
Piggyback Trailers
Registrant originally acquired 1,675 trailers of which 675
galavan trailers were manufactured by BRAE Trailers, Inc.
("BRAE") and 1,000 fiberglass reinforced trailers were
manufactured by Monon Trailer Inc. ("Monon"), a division of Evans
Transportation Company. The total invoice cost of the trailers,
tires, decals and positioning was $22,451,419 of which $8,836,419
was paid in cash and the balance of $13,615,000 was funded by an
eight-year term loan with The First National Bank of Chicago
("First Chicago"), for an initial interest rate of 14.02%.
On November 15, 1985, Registrant borrowed $5,000,000 from the
First Bank National Association ("First Bank") (formerly First
National Bank of Minneapolis) which was utilized to prepay
$4,671,544 of the First Chicago loan described above and to pay a
prepayment charge of $255,900. The First Bank loan, as amended,
was paid off concurrent with the sale of the BRAE trailers on
January 31, 1992 (see below).
On April 4, 1986 Registrant obtained additional financing from
First Bank in the amount of $7,600,000, which was utilized to
prepay the balance of the First Chicago loan and a portion of the
related $523,000 prepayment charges. Of the $7.6 million loan,
the $4 million traunche carried a rate of 9.5% and was fully paid
by April 1, 1991. The $3,600,000 traunche carried an interest
rate of 9.98% per annum. The remaining loan balance was fully
repaid with proceeds from the sale of trailers on October 15,
1993 (see below).
On January 31, 1992, Registrant sold and assigned the
Transamerica Equipment Leasing Company, Inc. ("TELCO") lease for
its 652 remaining BRAE trailers to Greenbrier Capital Corporation
("Greenbrier"), the trailer manager, and sold the trailers to
Greenbrier for $3,750 per trailer or a total sales price of
$2,445,000. Concurrent with the sale, Registrant repaid the
$502,114 principal plus interest and fees related to the loan
secured by those trailers. The sale proceeds were significantly
less than the net book value of those trailers at December 27,
1991. Accordingly, Registrant wrote down the carrying value of
these 652 trailers by approximately $1,386,000 to net realizable
value in the fourth quarter of 1991.
In addition, each of Registrant's 652 BRAE trailers was
substantially of the same value as Registrant's Monon trailers.
The market value at that time, coupled with the fact that
Registrant did not expect to realize future cash flows equal to
Registrant's net carrying value for the Monon trailers, indicated
that there had been an impairment of the carrying value of the
Monon trailers. Accordingly, Registrant wrote down its carrying
value of the Monon trailers by $2.1 million in the fourth quarter
of 1991.
Registrant entered into a purchase agreement dated as of October
1, 1993 whereby Registrant sold its remaining 917 trailers to
TELCO effective as of the respective lease expiration date of
each trailer. All 917 trailers were subject to a lease to TELCO
with scheduled expiration dates of September 30, 1993 for 282
trailers, October 15, 1993 for 339 trailers and November 22, 1993
for 296 trailers. The purchase price for the trailers was $3,650
per trailer, or a total of $3,347,050 for all 917 trailers. On
October 15, 1993, Registrant consummated the sale of 621 trailers
for a total price of $2,266,650, representing trailers with
leases expiring on September 30, 1993 and October 15, 1993. On
November 22, 1993, the remaining 296 trailers were sold to TELCO
for a total price of $1,080,400.
Concurrent with the sale transaction on October 15, 1993,
Registrant repaid the then-remaining $651,397 balance of the non-
recourse bank loan secured by the trailers, including accrued
interest thereon, and the bank released Registrant from all
future obligations related to the trailer loan.
Revenues generated by all of Registrant's trailers amounted to
$1,407,939 (49% of total revenues of Registrant) in 1993 and
$1,796,966 (56%) in 1992.
Registrant entered into an eight-year management agreement with
BRAE Intermodal Corporation, which, during 1985, was acquired by
and is now a wholly-owned subsidiary of Greenbrier. Under the
management agreement, Greenbrier managed the trailers on behalf
of Registrant, including arranging for the inspections,
maintenance, re-leasing, and monitoring of the trailers. For its
services under the management agreement, Greenbrier, during the
initial lease period, was entitled to receive a management fee
equal to $36 per month for each of the Monon trailers. On
September 16, 1991 Registrant amended its management agreement
for the Monon trailers whereby the monthly management fee would
be based upon 3.03% of monthly trailer rentals based upon the
monthly lease rates at that time of $155.40 per trailer for the
Monon trailer lease equal to $4.71 per trailer. The management
agreement was terminated concurrent with the sale of the
remaining trailers referred to above.
Intercity Buses
The original 86 40-foot intercity buses acquired by Registrant
were manufactured by either Eagle International Inc., Motor Coach
Industries, Inc., Transportation Manufacturing Corporation or
Prevost Car, Inc., and were acquired by Registrant for an
aggregate invoice cost (including the cost of tires, accessories
and engine warranty extension) of $13,975,414. An additional
cost of $99,220 was paid for delivery charges and federal and
state taxes where applicable. Of the 86 buses, 18 were purchased
and placed in service in 1983 and the balance were purchased and
placed in service by August 17, 1984.
Through 1994, Registrant sold 80 of its intercity buses to former
lessees, charter operators, distributors, and other various
organizations. In addition, one bus was stolen for which
insurance proceeds were received. Sale proceeds and insurance
proceeds were used to pay down the loan principal (referred to
below). At the beginning of the year Registrant owned 18 buses,
of which 11 were off lease. Registrant sold 13 buses in 1994 for
$588,129. At year-end 1994 Registrant owned five buses which
were all off lease and available for sale.
Revenues from the buses amounted to $38,341 (8% of total revenues
of Registrant) in 1994, $351,912 (12%) in 1993 and $590,396 (18%)
in 1992.
Registrant continued to experience off-lease time during 1994.
Since the end of the second quarter, all of the remaining buses
have been off-lease. Due to current market conditions and the
increasing age of Registrant's buses, it is expected that the
buses will remain off-lease until they are sold. Given the then-
expected poor prospects for the sale or re-lease of a significant
portion of Registrant's bus portfolio in 1991, in management's
opinion, the value of the equipment had been permanently
impaired. To reflect this impairment, Registrant wrote down the
book value of its buses by $1,900,000 in the fourth quarter of
1991. Registrant determined that additional write-downs were not
necessary in 1994, 1993 or 1992.
The buses were managed for Registrant by BusLease, Inc., a Texas
corporation ("BLI"), under a management agreement entered into at
the time the buses were placed in service. BLI was responsible
for the day-to-day operations of the buses including arranging
for the re-leasing of the buses, collecting all rents, obtaining
insurance for the buses, and monitoring the maintenance for the
buses. The management agreement was for a term of 10 years but
could be terminated at an earlier date as to any bus sold,
destroyed or withdrawn and may have been terminated with respect
to any bus at the option of Registrant at the end of the lease
term for such bus. For its services as manager, BLI received a
fixed monthly management fee of $275 per bus, which became
subject to increase after December 31, 1985 in proportion to
increases in the Gross National Product Price Deflator.
BLI and its parent, Greyhound Lines, Inc. ("GLI") GLI, filed for
protection from creditors under Chapter 11 of the United States
Bankruptcy Code on June 4, 1990. In accordance with the BLI Plan
of Reorganization, substantially all the assets of BLI were sold
to Continental Asset Services, Inc. ("CASI"). Registrant entered
into a management agreement with CASI which agreement is
substantially the same as the former BLI agreement. This
agreement became effective at the closing of the BLI asset sale
on August 21, 1991.
On November 6, 1992, CASI sold certain of its assets and
liabilities to TMO Acquisition Corporation ("TMOAC"), a Delaware
corporation and, at the time, a wholly-owned subsidiary of The
Dial Corp. On November 6, 1992, in connection with the sale, and
pursuant to an Assignment, Assumption and Amendment Agreement by
and between CASI, TMOAC and Hausman Bus Sales, Inc. ("Hausman"),
substantially all terms of the management agreements and sale
agreements between Registrant and CASI were jointly assigned to,
and assumed by, TMOAC and Hausman. The assumption of the
management agreements and sale agreements by TMOAC and Hausman
was effective November 6, 1992. TMOAC and Hausman are not
affiliated with the General Partner. As of December 30, 1994, the
management agreement had been terminated, however, the bus
manager continues to serve as selling agent to Registrant with
respect to the remaining buses. In 1994, management fees
incurred by Registrant for its buses totaled $11,820.
To fund the bus acquisitions, Registrant entered into a Loan
Agreement with the First Bank National Association ("First
Bank"), on February 20, 1984, as amended on June 20, 1984,
pursuant to which Registrant borrowed $2,806,439 on March 15,
1984, and $2,160,236 on May 3, 1984. Pursuant to a Supplemental
Loan Agreement dated June 20, 1984, on August 14, 1984,
Registrant borrowed an additional $2,676,108. These loans were
subsequently restructured in 1986.
On May 15, 1991 Registrant repaid the bus loan balance of
approximately $2.9 million utilizing approximately $1 million of
funds from Registrant's working capital and operating reserves
and a $1.9 million unsecured loan from the General Partner. The
loan from the General Partner was payable over twelve months and
accrued interest at the General Partner's floating cost of funds
(which approximated 5% per year). This rate was lower than the
interest rate on the previous bank loan and the rate did not
yield any profit for the General Partner. During 1991,
Registrant repaid portions of the loan from the General Partner
with proceeds received from bus dispositions, and in February
1992 Registrant repaid the remaining $1.1 million outstanding
balance.
The industry followed the financial developments at GLI, the
nation's largest scheduled bus line, with more than passing
interest during the second half of the year. Although most bus
operators do not compete directly with GLI, many have small line
runs that connect to GLI's system, and all are concerned by fleet
values that would be damaged by a GLI bankruptcy or liquidation
action. Both of these scenarios were averted just prior to year-
end 1994 when GLI completed a financial restructuring by
exchanging convertible debt for stock and by issuing additional
shares.
The equipment markets were steady throughout 1994 as previous
stocks of MC9 coaches returned to equipment dealers were sold.
Used bus prices are expected to remain steady with little change
from 1994 as the general economy and the bus industry remains
sound, and reflecting the fact that bus manufacturers have not
announced any new models for early in 1995.
Reverse Vending Machines
In 1983, Registrant entered into a Purchase Agreement with Golden
Recycle Company, a Colorado corporation ("GRC"), a wholly-owned
subsidiary of Adolph Coors Brewing Company, a corporation not
affiliated with the General Partner or its affiliates, pursuant
to which Registrant purchased a total of 45 aluminum reverse
vending machines ("CanBanks"), at an aggregate cost of $803,755.
In July 1985, Registrant entered into a long-term net lease with
Reynolds Metals Company (the "Lessee") for all of Registrant's
forty-five CanBanks. Under the terms of the lease, the Lessee
made an initial payment of $250,000 and was required to make
fixed payments of $14,545 per month through July 31, 1992.
Registrant sold the CanBanks to the lessee in August 1992 for an
aggregate purchase price of $22,500. During 1992, income under
the lease totaled $48,598, or 2% of gross revenues.
Cogeneration District Heating Facility
On December 28, 1983, Registrant purchased a 49.89% interest (the
"Interest") in the Trigen Trenton District Energy Company L.P.
("TDEC"), formerly Trenton District Energy Company, a New Jersey
limited partnership formed for the sole purpose of constructing,
acquiring, installing and operating a district heating system
located in downtown Trenton, New Jersey.
Registrant was a general partner of TDEC with all of the rights,
but not all of the obligations thereto. Specifically, Registrant
was not jointly and severally liable, as the other general
partners were, for all of the obligations arising under most
financing arrangements. Registrant was originally liable only
with respect to obligations of TDEC to the City of Trenton, New
Jersey pursuant to an Urban Development Action Grant of
approximately $4 million.
Registrant's Interest in TDEC was originally purchased for $6.1
million on January 2, 1985, through a $3.6 million equity
contribution and the assumption of $2.5 million of non-recourse
notes payable from the Registrant's share of distributable cash
from TDEC. Under the terms of the amended limited partnership
agreement of TDEC, described below, Registrant is to receive
11.8% of all Distributable Cash generated by TDEC until its non-
recourse purchase price notes are paid in full, and 7.5% of all
Distributable Cash after its non-recourse notes are paid in full.
The terms of the non-recourse notes were amended to require that
payments were to be made by the Registrant from 73% of all annual
cash distributions it receives from its TDEC Interest while the
non-recourse notes are outstanding.
No cash distributions were received by Registrant in 1994, 1993
or 1992.
In 1987 the New Jersey Department of Environmental Protection
issued an order against TDEC as a result of violations of certain
minimum environmental emission standards. To correct the
violation, TDEC incurred substantial capital and operating
expenditures. The partners of TDEC expressed concern over the
long-term economic viability of the facility and decided to seek
additional third party equity to be utilized for continued
expansion of the facility. Registrant concluded that there had
been an impairment in the value of Registrant's interest in TDEC
and decided not to fund any additional losses. Therefore,
Registrant wrote down its investment in TDEC, net of related non-
recourse debt, to a value of zero and discontinued accruing
additional losses.
On October 16, 1987, Registrant converted its general partnership
interest to that of a limited partner with a 7.5% limited
partner's interest in TDEC. Registrant entered into an amended
limited partnership agreement dated as of November 20, 1987 with
the then existing partners of TDEC, under which Trenton Energy
Corporation was admitted as the new managing general partner and
the City of Trenton was admitted as a special limited partner.
Upon its admission as managing general partner, Trenton Energy
Corporation made an equity contribution of $4 million, arranged
for restructuring of all of TDEC's then current debt obligations,
and also arranged for an additional $13 million of tax exempt
debt financing, the proceeds of which were utilized for the
expansion of the TDEC project.
Cogeneration Power Plant
Registrant entered into a Purchase Contract dated as of July 31,
1984 to acquire from Catalyst/IPT Cogeneration Corporation
("Seller"), a California corporation, all of the right, title and
interest of Seller (the "San Jose Interest") in and to San Jose
Cogeneration Limited Partnership ("San Jose"), a California
limited partnership. Seller was then the existing general
partner of San Jose and, upon consummation of Registrant's
purchase of the San Jose Interest, Registrant became the general
partner of, and owned a 99.99% interest in, San Jose. San Jose
was organized on September 12, 1983, for the purpose of
constructing, installing, owning and operating a cogeneration
power plant (the "Facility") to be located on the campus of San
Jose State University (the "University"). The purchase price
paid for the San Jose Interest was $3,951,000 in cash, and a
secured non-recourse note of Registrant in the principal amount
of $200,000.
In October 1991 Registrant completed the divestiture of its
complete interest in the San Jose cogeneration facility.
Registrant was required to pay outstanding liabilities of
approximately $200,000 to effectuate this transaction. As a
result of this transaction, Registrant recorded an accounting
gain on disposition of approximately $790,000 in the fourth
quarter of 1991.
Medical Diagnostic Equipment
Registrant entered into a purchase and assumption agreement dated
as of April 17, 1984 with Digital Diagnostics, Inc., a Washington
corporation ("Digital") not affiliated with the General Partner
or its affiliates, which had devised a plan for the design,
equipment operation and supervision of a diagnostic imaging
center in Seattle, Washington. Pursuant to the purchase and
assumption agreement, Registrant purchased Digital's entire
right, title and interest in, and took assignment of on-order
positions with respect to, certain new diagnostic imaging
equipment (the "Scanning Equipment") manufactured by Picker
International, Inc. The Scanning Equipment consists of a computer
tomography ("CT") scanner, a magnetic resonance ("MR") scanner
and ancillary computer and scanning equipment.
Under the purchase and assumption agreement, Registrant also took
assignment of the lease of the premises where the equipment would
be operated as part of a diagnostic imaging center and purchased
from Digital all leasehold improvements (the "Leasehold
Improvements"), and contracts related to such premises. The
Scanning Equipment, the Leasehold Improvements and the premises
are collectively referred to as the "Center". In connection with
all equipment sold and assigned to Registrant, Digital has
assigned to Registrant all warranties and any rights to upgrades
from the respective equipment manufacturers and contractors.
As of December 30, 1994, the total invoice cost paid by
Registrant for the Scanning Equipment, the Leasehold
Improvements, and all assigned contracts and agreements related
thereto was approximately $3.9 million, representing the actual
amount expended by Digital (and reimbursed to Digital) or paid to
the manufacturers or contractors for the Center.
On May 31, 1988 Registrant entered into an Amended and Restated
Joint Venture Agreement (the "New Venture Agreement"). Under the
terms of the New Venture Agreement, two additional partners were
admitted to the Venture: Medical Imaging Partners L.P. ("MIP"),
a limited partnership whose general partner was an entity
affiliated with the General Partner (the current general partner
being a wholly owned subsidiary of Raytel Corporation), and
Imaging Services, Inc. ("ISI"), a Washington corporation.
Each partner in the joint venture is entitled to a defined
Priority Distribution representing a cumulative, non-compounded
annual distribution equal to 14% of each partner's investment.
After Priority Distributions to venture partners are paid,
distributable cash is shared 41.4% by Registrant, 48.75% by MIP,
5% by ISI and 4.85% by Digital.
Under the current 10 year management agreement expiring in 1998,
or such earlier time as the New Venture Agreement is terminated,
the Center will be managed by 2001 Management Associates, Inc.
("2001"), an affiliate of Digital, and will receive a base
management fee equal to 8% of defined net revenues of the New
Venture. In addition, under certain circumstances, and if
certain annual budgeted operating results are exceeded, 2001 can
earn a management bonus of up to 20% of defined Excess Net
Revenues.
The New Venture Agreement continues until April 17, 1999, unless
terminated earlier. The Center lease currently terminates on
August 31, 1995 unless renewed . Termination of the lease would
terminate the New Venture Agreement. Registrant has notified MIP
and ISI that it does not intend to renew the lease.
During 1994, the Center generated $2,543,024 in net operating
revenues which, after deducting expenses, has resulted in net
operating income before priority payments of $468,183 and
priority distributions to Registrant of $309,139 compared with
$2,838,213, $617,312, and $389,910, respectively, in 1993 and
$3,396,230, $920,070 and $511,215, respectively, in 1992.
The Center has not generated sufficient operating cash flow to
fulfill its obligation to make priority payments to Registrant in
full and such condition is expected to continue. Registrant had
recognized revenue related to the Center's contractual obligation
to make these past priority payments. Based upon the Center's
expected future inability to fulfill these prior obligations
Registrant took a charge of $350,000 to reserve against this
receivable in the fourth quarter of 1991.
Gross revenues and net income from the operation of the Center
depend principally upon the rate of utilization of the Scanning
Equipment, the fees collected for procedures, and the expenses of
operating, maintaining and managing the Center. The economic
outlook for outpatient services in general continues to be
positive. The trends and movements within the health care
industry continue to support and encourage patients and
physicians to utilize outpatient facilities and to limit and
restrict the time a person spends in a hospital as a patient. In
addition, Federal and State governments are still contemplating
new health care reform legislation which would, among other
things, encourage the utilization of outpatient diagnostic and
treatment centers. However, the success of the Center will
depend not only on the general acceptance of outpatient services,
but on the specific market conditions within the Center's
referral area and its reputation within the community.
Windplant
Registrant engaged U.S. Windpower, Inc., a Delaware Corporation
("USW") not affiliated with the General Partner or its
affiliates, to produce, construct and install a windpower
electric generating facility ("Windplant") located in Altamont
Pass, California. The Windplant was acquired in 1983 and was
designed to produce approximately 1 million kilowatt-hours of
electricity per year under average annual wind conditions.
During the second quarter of 1988, Registrant entered into an
Amended and Restated Option Agreement with USW pursuant to which
on July 29, 1988 USW paid Registrant $1,380,000, (the "Option
Price") and advanced to Registrant $470,000 (which was applied to
the sale price) in exchange for the right, at USW's discretion,
to purchase Registrant's Windplant during the period from
December 27, 1988 through January 31, 1989 for a sale price of
$5,100,000.
On January 31, 1989 USW exercised its option to purchase the
Registrant's investment in the Windplant and paid Registrant
$5,100,000. The sale price proceeds were used to retire
manufacturer's debt and accrued interest payable to USW.
Competition
The equipment leasing industry is highly competitive, offering
users alternatives to the purchase of nearly every type of
equipment. Competitive conditions vary considerably depending
upon the type of equipment and the market conditions existing in
the areas in which Registrant operates. Registrant is in
competition with equipment managers, leasing companies and
institutions engaged in leasing or otherwise marketing or
remarketing equipment as well as with other owner-operators of
equipment serving the business areas served by Registrant's
equipment. In many industries manufacturers have established
their own in-house leasing operations for the rental of their
equipment and in other industries some manufacturers have
established vendor leasing programs under which third-party
leasing companies, in cooperation with the manufacturer, acquire
equipment from the manufacturer subject to leases to third-party
lessees.
Many of the firms with which Registrant will compete have
considerably greater financial resources and experience than
Registrant and its affiliates in managing, leasing and operating
equipment. As a result of having greater financial resources,
many of Registrant's competitors have newer, more advanced
equipment and much lower inventories. In addition, manufacturer-
owned lessors and lessors under vendor leasing programs have an
advantage over Registrant in that the manufacturer's salesmen
have an on-going relationship with equipment users.
Finally, when Registrant considers selling its equipment, it will
encounter competition from limited partnerships, equipment
managers, leasing companies and other institutions engaged in the
sale of used equipment comparable to and competitive with
Registrant's equipment. Many of such competitors have
considerably greater financial resources and expertise than the
General Partner and its affiliates in selling equipment.
Employees
Registrant has no employees. The business of Registrant is
managed by the General Partner. ML Leasing Management Inc., an
affiliate of the General Partner, performs certain management and
administrative services for Registrant.
<PAGE>
Item 2. Properties
A description of the Equipment of Registrant is contained in Item
1 above.
Item 3. Legal Proceedings
There are no legal proceedings pending against Registrant which
are anticipated to have a material impact on Registrant's
financial statements. However, for a discussion of certain legal
matters related to Registrant's buses, see "Item 1 -- Business -
The Equipment -- Intercity Buses
Item 4. Submission of Matters to a Vote of Security Holders
On October 14, 1994 Registrant mailed to its limited partners a
Proxy Statement Furnished in Connection with the Solicitation of
Consents relating to an amendment to Registrant's Partnership
Agreement. The solicitation was successfully concluded whereby a
majority of limited partners consented to the amendment.
Pursuant to the amendment, the requirement that limited partners
consent to any sale, abandonment or disposition of all or
substantially all of Registrant's assets has been eliminated to
the extent that, in the determination of the General Partner,
such sale, abandonment or disposition is in the best interests of
Registrant.
<PAGE>
Part II
Item 5. Market for the Registrant's Equity and Related
Stockholder Matters
There is no established trading market for the Units and
Depository Receipts. The number of owners of Units as of January
31, 1995 was 2,688, all of such owners holding Depository
Receipts for Units.
Registrant does not distribute dividends. Registrant distributes
Distributable Cash from Operations, and proceeds arising from
Sale or Refinancing, to the extent available, quarterly. The
following distributions have been made during the Registrant's
prior two fiscal years:
<TABLE>
Selected Financial Data
<CAPTION>
Amount Distributed
Date Per Unit *
<S> <C>
February, 1993 $ 10.00
May, 1993 10.00
August, 1993 20.00
November, 1993 56.00
February, 1994 40.00
May, 1994 5.00
August, 1994 6.00
November, 1994 6.00
</TABLE>
*Includes return of capital
<PAGE>
Item 6. Selected Financial Data
<TABLE>
Selected Financial Data
<CAPTION>
Years Ended
12/30/94 12/31/93 12/25/92
<S> <C> <C> <C>
Total Revenues $ 468,525 $ 2,858,342 $ 3,229,323
Net Income (Loss) $ 206,790 $ 1,881,256 $ 1,615,184
Income (Loss) Per Unit
of Limited
Partnership Interest
(2) $ 5.12 $ 46.56 $ 39.98
Cash Distributions per
Unit of Limited
Partnership Interest
(1) (2)
$ 57.00 $ 96.00 $ 60.00
As of As of As of
12/30/94 12/31/93 12/25/92
Total Assets $ 5,113,800 $ 7,191,463 $11,037,444
Debt $ 3,419,078 $ 3,419,078 $ 5,234,277
1993 includes 53 weeks. All other years presented include 52 weeks.
(1) Includes return of capital.
(2) 40,000.2 Units of Limited Partnership Interest
</TABLE>
<PAGE>
Item 6. Selected Financial Data - continued
<TABLE>
Selected Financial Data
<CAPTION>
Years Ended
12/27/91 12/28/90
<S> <C> <C>
Total Revenues $ 5,010,661 $ 4,948,534
Net Income (Loss) $ (4,905,550) $ 398,800
Income (Loss) Per Unit of Limited
Partnership Interest (2) $ (121.41) $ (9.87)
Cash Distributions per Unit of
Limited Partnership Interest (1)
(2) $ 6.00 $ 38.00
As of As of
12/27/91 12/28/90
Total Assets $ 14,845,135 $23,668,876
Debt $ 8,086,823 $11,892,418
1993 includes 53 weeks. All other years presented include 52 weeks.
(1) Includes return of capital.
(2) 40,000.2 Units of Limited Partnership Interest.
</TABLE>
<PAGE>
Item 7.Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At December 30, 1994, Registrant had $1,434,993 in cash and cash
equivalents which included $1,339,650 in commercial paper. The
balance is maintained in a demand deposit cash account. Included
in these funds are reserves for working capital, operating
requirements and cash distributions to the Partners.
Approximately $242,000 were distributed to Partners in the first
quarter of 1995.
Registrant generated positive cash flow in 1994 from sales of
buses and from its medical imaging facility investment. These
generated funds were utilized to meet operational obligations and
provide for distributions to Partners.
Registrant continued to experience off-lease time for its bus
fleet during 1994. Since the end of the second quarter, all of
the remaining buses have been off-lease. Due to current market
conditions and the increasing age of Registrant's buses, it is
expected that Registrant's buses will remain off-lease until they
are sold. During 1994, Registrant sold 13 buses resulting in
five buses remaining at December 30, 1994.
The occupancy lease for Registrant's medical facility currently
terminates on August 31, 1995 unless renewed. Termination of the
lease would terminate the joint venture agreement. Registrant
has notified its venture partners that it does not intend to
renew the lease.
As of December 30, 1994, Registrant's remaining investments
include five buses discussed above, its investment in the Seattle-
based First Hill medical imaging facility and its TDEC investment
(which is considered to have relatively small, if any, value over
its associated debt).
On October 14, 1994 Registrant mailed to its limited partners a
Proxy Statement Furnished in Connection with the Solicitation of
Consents relating to an amendment to Registrant's Partnership
Agreement. The solicitation was successfully concluded whereby a
majority of limited partners consented to the amendment.
Pursuant to the amendment, the requirement that limited partners
consent to any sale, abandonment or disposition of all or
substantially all of Registrant's assets has been eliminated to
the extent that, in the determination of the General Partner,
such sale, abandonment or disposition is in the best interests of
Registrant.
During 1995, Registrant will continue to focus on
opportunistically realizing value for its remaining investments
in buses and the medical imaging facility, including selling or
otherwise disposing of the assets and liquidating its interest in
TDEC. Registrant seeks to complete all such sales or
dispositions in an orderly manner with estimated dissolution
occurring, depending upon a number of presently unknown
circumstances, in 1995.
It is currently estimated that Registrant's 1995 cash flow to be
realized from operating its remaining assets, together with asset
sales proceeds and working capital reserves, will provide
Registrant with adequate funds to satisfy all of its obligations
and provide for additional distributions to Partners.
Asset Impairment and Estimated Useful Life of Assets
Registrant assesses the impairment of assets on a quarterly basis
or immediately upon the occurrence of a significant event in the
marketplace or an event that directly impacts its assets or
related contracts. The methodology varies depending on the type
of asset but typically consists of comparing the net carrying
value of the asset to either: 1) the undiscounted expected
future cash flows generated by the asset plus estimated salvage
value, if any, less estimated selling commissions at the end of
the cash flow stream (usually corresponding to the end of the
current lease term of the asset), and/or 2) the current market
values obtained from industry sources. The market values used
are conservative wholesale values.
If the net carrying value of a particular asset is materially
higher than the estimated net realizable value, Registrant will
write down the net carrying value of the asset accordingly;
however, Registrant does not write its assets down to a value
below the asset-related non-recourse debt. Registrant relies on
industry sources and its experience in the particular marketplace
to determine whether an asset impairment is other than temporary.
Each year, Registrant compares the estimated useful life of its
assets to similar assets owned by others in the particular
industry and assesses useful life in light of changing technology
in the particular industry. Registrant also assesses the
estimated useful life of its equipment immediately upon the
occurrence of a significant event in the marketplace or an event
that directly impacts its assets or related contracts.
Results of Operations
1994 vs. 1993
Overall Results
Registrant's net income for the year ended December 30, 1994 was
significantly lower than net income for the same period in 1993
reflecting the sale of the remaining trailers in 1993, buses
going off-lease, sales of buses, and lower revenues from
Registrant's medical imaging facility. In addition, Registrant
had lower gains from the sale of equipment in 1994 when compared
to 1993.
Total revenues decreased in 1994 compared to 1993 reflecting: (1)
the sale, in 1993, of Registrant's remaining trailers which
generated revenues of approximately $1,408,000 in 1993, (2) lower
revenues from Registrant's medical imaging facility, which
generated revenues to Registrant of approximately $309,000 and
$390,000 in 1994 and 1993, respectively, primarily due to reduced
magnetic resonance patient volume and reduced fees the Center is
contractually permitted to charge providers of health care
services, (3) bus revenues of approximately $38,000 in 1994
compared to approximately $352,000 in 1993 primarily as a result
of buses sold and buses going off-lease and (4) lower gains from
the sale of equipment, primarily due to a higher volume of
equipment sold in 1993.
Total expenses decreased in 1994 compared to 1993 reflecting: (1)
lower property operating expenses and depreciation and
amortization expense as a result of the sale of the remaining
trailers in 1993 and the sale of buses and (2) no interest
expense incurred in 1994 as a result of the repayment of all
remaining trailer debt during 1993.
Results By Segment
Equipment Leasing:
Registrant's equipment leasing segment generated operating
revenues of approximately $38,000 in 1994 compared to
approximately $1,760,000 in 1993. This decrease was due to the
sale of all remaining trailers in 1993 and to sales of buses and
buses going off-lease.
Registrant's equipment leasing segment incurred property
operating expenses of approximately $27,000 in 1994 compared to
approximately $128,000 in 1993. Additionally, depreciation and
amortization expense was approximately $42,500 in 1994 compared
to approximately $498,000 in 1993. These decreases are due
primarily to the sale of all remaining trailers in 1993 and sales
of buses in 1993 and 1994. Additionally, Registrant incurred no
interest expense in 1994 as a result of the repayment of all
remaining trailer debt in 1993.
Medical Imaging:
Registrant's medical imaging segment, which consists of one
diagnostic imaging facility, generated revenues to Registrant of
approximately $309,000 in 1994 compared to approximately $390,000
in 1993. The decrease in revenues reflects reduced magnetic
resonance patient volume and reduced patient fees the Center is
contractually permitted to charge providers of health care
services.
1993 vs. 1992
Overall Results
Registrant's 1993 operations resulted in net income of
approximately $1.9 million compared to net income of
approximately $1.6 million in 1992. The favorable change
reflects lower total expenses partially offset by lower total
revenues.
Registrant's revenues decreased in 1993 when compared to the
prior year as a result of lower revenues from Registrant's
trailers, buses and medical imaging facility. Registrant's
trailer revenue decreased by approximately $390,000 in 1993
compared to 1992 primarily reflecting the sale of all remaining
trailers in the fourth quarter of 1993. Registrant's bus revenue
decreased by approximately $240,000 in 1993 compared to 1992
primarily as a result of bus sales. Registrant's medical imaging
facility generated revenues that were approximately $120,000
lower in 1993 compared to 1992, reflecting reduced patient volume
and reduced patient fees the center is contractually allowed to
charge providers of health care service. Registrant also earned
no income from sale-type lease in 1993 due to the sale of
Registrant's interest in reverse aluminum can vending machines in
August of 1992. These decreases in revenues were partially
offset by a larger gain from asset disposals in 1993 due mostly
to the sale of Registrant's trailers.
Registrant's expenses were lower in 1993 compared to 1992 as a
result of: (1) lower depreciation and amortization expense in
1993 primarily reflecting the sale of trailers and buses during
1992 and 1993, (2) lower interest expense primarily reflecting
repayments of the trailer loan in January 1992 and October 1993
upon the sale of the trailers, and scheduled repayments of
trailer debt during 1993 and 1992, (3) lower property operating
expenses, reflecting lower management fees and other operating
expenses for the buses and trailers as a result of 1992 and 1993
equipment sales and lower property taxes on Registrant's medical
imaging facility; and (4) the loss on the disposal of
Registrant's interest in reverse aluminum can vending machines in
1992.
Results by Segment
Results of operation of Registrant's equipment leasing segment,
which comprised a majority of Registrant's operations in 1993 and
1992, are presented as follows:
Registrant's equipment leasing segment generated operating
revenues of approximately $1.8 million in 1993 compared to
approximately $2.4 million in 1992. This decrease was due, to:
(a) a decrease in trailer revenue of approximately $390,000 due
mostly to the sale of all remaining trailers in the fourth
quarter of 1993 and (b) a decrease in bus revenue by
approximately $240,000 due mostly to sales of buses.
Registrant's equipment leasing segment incurred operating
expenses of approximately $620,000 in 1993 compared to
approximately $1,131,000 due primarily to lower management fees
and other operating expenses as a result of 1992 and 1993
equipment sales.
Inflation
The low levels of inflation during 1994, 1993, and 1992 had no
significant effect on Registrant's operations.
<PAGE>
Item 8. Financial Statements and Supplementary Data
LIBERTY EQUIPMENT INVESTORS - 1983
Table of Contents
Independent Auditors' Report
Balance Sheets as of December 30, 1994 and December 31, 1993
Statements of Operations for the Years Ended December 30,
1994, December 31, 1993 and December 25, 1992
Statements of Cash Flows for the Years Ended December 30,
1994, December 31, 1993 and December 25, 1992
Statements of Changes in Partner's Capital for the Years
Ended December 30, 1994, December 31, 1993 and December
25, 1992
Notes to Financial Statements for the Years Ended December
30, 1994, December 31, 1993 and December 25, 1992
<PAGE>
INDEPENDENT AUDITORS' REPORT
Liberty Equipment Investors - 1983:
We have audited the accompanying financial statements of Liberty
Equipment Investors-1983 (the "Partnership"), listed in the
accompanying table of contents. These financial statements are
the responsibility of the Partnership's general partner. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by the general partner, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements presently fairly, in
all material respects, the financial position of the Partnership
at December 30, 1994 and December 31, 1993 and the results of its
operations and its cash flows for each of the three years in the
period ended December 30, 1994 in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
New York, New York
March 16, 1995
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
BALANCE SHEETS AS OF DECEMBER 30, 1994 AND DECEMBER 31, 1993
<TABLE>
<CAPTION>
NOTES 1994 1993
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents 1,2 $ 1,434,993 $ 2,977,607
Property under management
contract and held for
lease (less accumulated
depreciation of
$4,464,357 in 1994 and
$5,998,914 in 1993) 1,3 236,925 820,836
Investment in partnership
- TDEC 1,5,6 3,290,195 3,290,195
Accounts receivable (net
of allowance for doubtful
accounts of $350,000 in
1994 and in 1993) and
other assets 3 151,687 102,825
TOTAL ASSETS $ 5,113,800 $ 7,191,463
LIABILITIES AND PARTNERS'
CAPITAL:
Liabilities:
Note payable - TDEC 6 3,419,078 3,419,078
Accounts payable and
accrued liabilities 7 278,934 260,345
Total Liabilities 3,698,012 3,679,423
PARTNERS' CAPITAL: 1
General Partner:
Capital contributions,
net of offering expenses
and return of capital 290,771 307,515
Cash distributions (115,316) (109,029)
Cumulative loss (161,296) (163,364)
14,159 35,122
</TABLE>
Continued on following page.
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
BALANCE SHEETS AS OF DECEMBER 30, 1994 AND DECEMBER 31, 1993
(Continued)
<TABLE>
<CAPTION>
NOTES 1994 1993
<S> <C> <C> <C>
Limited Partners:
Capital contributions,
net of offering expenses
and return of capital
(40,000.2 Units of
Limited Partnership
Interest) 28,786,131 30,443,682
Cash distributions (11,416,087) (10,793,627)
Cumulative loss (15,968,415) (16,173,137)
1,401,629 3,476,918
Total Partners' Capital 1,415,788 3,512,040
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 5,113,800 $ 7,191,463
</TABLE>
See Notes to Financial Statements.
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 30, 1994,
DECEMBER 31, 1993 AND DECEMBER 25, 1992
<TABLE>
<CAPTION>
NOTES 1994 1993 1992
<S> <C> <C> <C> <C>
REVENUES:
Rental and other
operating income
3 $ 347,480 $ 2,149,761 $ 2,897,543
Income from sales-
type lease
4 - - 48,598
Interest income 74,303 82,441 87,407
Gain on disposals
of leased assets
3 46,742 626,140 195,775
Total Revenues 468,525 2,858,342 3,229,323
EXPENSES:
Depreciation and
amortization 1 42,524 497,534 706,961
Interest expense 6 - 96,541 243,522
Property
operating
expenses 31,771 139,754 261,667
Other operating
expenses 7 187,440 243,257 215,324
Loss on disposal
of net
investment in
sales-type lease
4 - - 186,665
Total Expenses 261,735 977,086 1,614,139
Net Income $ 206,790 $ 1,881,256 $ 1,615,184
</TABLE>
Continued on following page.
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 30, 1994,
DECEMBER 31, 1993 AND DECEMBER 25, 1992
(Continued)
<TABLE>
<CAPTION>
NOTES 1994 1993 1992
<S> <C> <C> <C> <C>
Net Income
allocated to
General Partner $ 2,068 $ 18,813 $ 16,152
Net Income
allocated to
Limited Partners
$ 204,722 $ 1,862,443 $ 1,599,032
INCOME PER UNIT
OF LIMITED
PARTNERSHIP
INTEREST
(40,000.2 Units
of Limited
Partnership
Interest) $ 5.12 $ 46.56 $ 39.98
</TABLE>
See Notes to Financial Statements.
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 30, 1994,
DECEMBER 31, 1993 AND DECEMBER 25, 1992
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS
Cash Flows from operating
activities:
Net Income $ 206,790 $ 1,881,256 $ 1,615,184
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 42,524 497,534 706,961
Gain on disposals of
leased assets (46,742) (626,140) (195,775)
Loss on disposal of net
investment in sales-type
lease - - 186,665
Increase/decrease in:
Accounts payable and
accrued liabilities
18,589 (33,253) (146,075)
Accounts receivable and
other assets (48,862) 37,905 47,943
Net cash provided by
operating activities 172,299 1,757,302 2,214,903
</TABLE>
Continued on following page.
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 30, 1994,
DECEMBER 31, 1993 AND DECEMBER 25, 1992
(Continued)
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Cash flows from investing
activities:
Proceeds from disposal
of equipment 588,129 4,539,289 3,448,900
Payment on disposal of
San Jose - - (36,933)
Decrease in short-term
investment - 587,266
Principal payments on
sales-type lease - - 67,764
Net cash provided by
investing activities 588,129 4,539,289 4,066,997
Cash flows from financing
activities:
Repayments of:
Bank loans - (1,815,199) (1,574,503)
Notes payable -
affiliate - - (1,278,043)
Cash distributed to
limited partners (622,460) (1,045,105) (809,141)
Cash distributed to
general partner (6,287) (10,557) (8,172)
Capital returned to
limited partners (1,657,551) (2,794,892) (1,590,872)
Capital returned to
general partner (16,744) (28,231) (16,069)
</TABLE>
Continued on following page.
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 30, 1994,
DECEMBER 31, 1993 AND DECEMBER 25, 1992
(Continued)
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Net cash used in
financing activities (2,303,042) (5,693,984) (5,276,800)
Net (decrease)/increase
in cash and cash
equivalents (1,542,614) 602,607 1,005,100
Cash and cash equivalents
- Beginning of Year
2,977,607 2,375,000 1,369,900
Cash and cash equivalents
- End of Year
$ 1,434,993 $ 2,977,607 $ 2,375,000
Supplemental Disclosure
of Cash Flow
Information:
Cash paid during the
year for interest $ - $ 142,837 $ 274,469
</TABLE>
See Notes to Financial Statements.
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE YEARS ENDED
DECEMBER 30, 1994, DECEMBER 31, 1993 AND DECEMBER 25, 1992
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
<S> <C> <C> <C>
BALANCE, DECEMBER 27, 1991
$ 63,186 $ 6,255,453 $ 6,318,639
1992:
NET INCOME 16,152 1,599,032 1,615,184
RETURN OF CAPITAL (16,069) (1,590,872) (1,606,941)
DISTRIBUTIONS TO PARTNERS:
GENERAL PARTNER (8,172) - (8,172)
LIMITED PARTNER
($202.28) per 10 Units
of Limited Partnership
Interest) - (809,141) (809,141)
BALANCE, DECEMBER 25, 1992
55,097 5,454,472 5,509,569
<CAPTION>
General Limited
Partner Partners Total
<S> <C> <C> <C>
1993:
NET INCOME 18,813 1,862,443 1,881,256
RETURN OF CAPITAL (28,231) (2,794,892) (2,823,123)
DISTRIBUTIONS TO PARTNERS:
GENERAL PARTNER (10,557) - (10,557)
LIMITED PARTNERS ($261.27
per 10 Units of Limited
Partnership Interest
- (1,045,105) (1,045,105)
BALANCE, DECEMBER 31, 1993
35,122 3,476,918 3,512,040
</TABLE>
Continued on following page.
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE YEARS ENDED
DECEMBER 30, 1994, DECEMBER 31, 1993 AND DECEMBER 25, 1992
(Continued)
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
<S> <C> <C> <C>
1994:
NET INCOME 2,068 204,722 206,790
RETURN OF CAPITAL (16,744) (1,657,551) (1,674,295)
DISTRIBUTIONS TO PARTNERS:
GENERAL PARTNER (6,287) - (6,287)
LIMITED PARTNERS ($155.61
per 10 Units of Limited
Partnership Interest)
- (622,460) (622,460)
BALANCE, DECEMBER 30, 1994
$ 14,159 $ 1,401,629 $ 1,415,788
</TABLE>
See Notes to Financial Statements.
<PAGE>
LIBERTY EQUIPMENT INVESTORS - 1983
NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 30,
1994, DECEMBER 31, 1993, AND DECEMBER 25, 1992
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Liberty Equipment Investors - 1983 (the "Partnership") was formed
and the Certificate of Limited Partnership was filed under the
Uniform Limited Partnership Act of the State of New York on March
30, 1983. The Partnership subsequently elected to be governed by
the New York Revised Limited Partnership Act.
Under the terms of the Agreement of the Limited Partnership (the
"Partnership Agreement"), on October 25, 1983, Maiden Lane
Partners Inc., the general partner ("MLPI" or the "General
Partner"), admitted additional limited partners to the
Partnership with capital contributions amounting to $40,000,000.
Prior to that date, the only capital transactions were
contributions of $5,000 by MLPI and $200 by the initial limited
partners. As provided in the Partnership Agreement, MLPI made an
additional cash contribution of $399,045, which, together with
its previous cash contribution, represented 1% of the total
Partnership capital contributions.
The purpose of the Partnership is to operate and lease equipment,
and direct and indirect interests therein.
Pursuant to the terms of the Partnership Agreement, the General
Partner is liable for all general obligations of the Partnership
to the extent not paid by the Partnership. The limited partners
are not liable for the obligations of the Partnership beyond the
amount of their contributed capital.
Basis of Accounting and Fiscal Year
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting and tax purposes.
The Partnership accounts for its 7.5% limited partnership
interest in the Trigen Trenton District Energy Company
partnership ("TDEC") under the cost method of accounting.
The Partnership records its investment in its First Hill medical
imaging venture under the equity method of accounting.
The fiscal year of the Partnership ends on the last Friday of
each calendar year. Fiscal years 1994 and 1992 consisted of 52
weeks. Fiscal year 1993 consisted of 53 weeks.
Property and Depreciation
Partnership property under management contract and held for lease
is depreciated on a straight-line basis with the following
estimated useful lives:
Intercity Buses 15 years
Dry-van Piggyback Trailers 14 years
Medical Diagnostic Imaging Equipment 5-6 years
The cost of the properties includes the related acquisition fees.
Revenue Recognition
Rental income is recognized as earned according to the terms of
the individual lease agreements.
Asset Impairment
The Partnership assesses the impairment of assets on a quarterly
basis or immediately upon the occurrence of a significant event
in the marketplace or an event that directly impacts its assets
or related contracts. The methodology varies depending on the
type of asset but typically consists of comparing the net
carrying value of the asset to either: 1) the undiscounted
expected future cash flows generated by the asset plus estimated
salvage value, if any, less estimated selling commissions at the
end of the cash flow stream (usually corresponding to the end of
the current lease term of the asset), and/or 2) the current
market values obtained from industry sources. The market values
used are conservative wholesale values.
If the net carrying value of a particular asset is materially
higher than the estimated net realizable value, the Partnership
will write down the net carrying value of the asset accordingly;
however, the Partnership generally does not write its assets down
to a value below the asset-related non-recourse debt. The
Partnership relies on industry sources and its experience in the
particular marketplace to determine whether an asset impairment
is other than temporary.
Cash Flows
For purposes of the Statements of Cash Flows, the Partnership
considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
Income Taxes
No provision for income taxes has been included in the
Partnership's financial statements since all income and losses
are allocated to the partners for inclusion in their respective
tax returns.
In accordance with Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes", the Partnership has
included in Note 9 certain disclosure related to differences in
the book and tax bases of accounting.
Insurance
The Partnership's equipment-related insurance is maintained by
its respective equipment manager or lessee. While the buses are
held by the equipment manager for sale, the buses are covered
under the equipment manager's casualty insurance policy.
Additionally, the Partnership maintains contingent auto liability
which covers the buses while they are held by the equipment
manager and additional contingent physical damage insurance.
Insurance coverage for the Partnership's medical imaging center
and equipment includes comprehensive and general liability.
Property losses have not had a material impact on the
Partnership's financial statements.
2. CASH AND CASH EQUIVALENTS
On December 30, 1994, the Partnership had $1,434,993 in cash and
cash equivalents which included $1,339,650 invested in commercial
paper. The balance is maintained in a demand deposit cash
account. Approximately $242,000 was distributed to partners in
the first quarter of 1995.
On December 31, 1993, the Partnership had $2,977,607 in cash and
cash equivalents which included $1,746,098 invested in commercial
paper, $1,047,024 in banker's acceptances and the balance is
maintained in demand deposit cash accounts.
<PAGE>
3. PROPERTY
The following details the Partnership's investment in property
under management contract and held for lease:
<TABLE>
<CAPTION>
December 30, December 31,
Property 1994 1993
<S> <C> <C> <C>
A) Intercity Buses $ 822,622 $2,941,090
B) Medical Diagnostic Imaging
Equipment 3,878,660 3,878,660
4,701,282 6,819,750
Less accumulated depreciation
Intercity Buses 585,697 2,120,254
Medical Diagnostic Imaging
Equipment 3,878,660 3,878,660
4,464,357 5,998,914
$ 236,925 $ 820,836
</TABLE>
A) The Partnership owned 5 buses as of December 30, 1994,
reflecting the sale of 13 buses during the year. The buses
were under management and sale agreements whereby TMO
Acquisition Corp. ("TMOAC") and Hausman Bus Sales, Inc.
("Hausman") were the equipment managers and placed the buses
under operating leases, collected the rental payments, and
remitted the rentals to the Partnership net of management
fees and operating expenses, and currently act as agent for
the Partnership in selling buses.
On November 6, 1992, Continental Asset Services, Inc.
("CASI"), the previous equipment manager, sold certain of
its assets and liabilities to TMOAC, a Delaware corporation
and, at the time, a wholly-owned subsidiary of The Dial
Corp. On November 6, 1992, in connection with the sale, and
pursuant to an Assignment, Assumption and Amendment
Agreement by and between CASI, TMOAC and Hausman,
substantially all terms of the management agreements and
sale agreements between the Partnership and CASI were
jointly assigned to, and assumed by, TMOAC and Hausman. The
assumption of the management agreements and sale agreements
by TMOAC and Hausman was effective November 6, 1992. TMOAC
and Hausman are not affiliated with the General Partner.
There were no buses on lease at December 30, 1994. Revenue
generated by the Partnership's buses amounted to $38,341 (8%
of total revenues of the Partnership) in 1994, $351,912
(12%) in 1993, and $590,396 (18%) in 1992.
The Partnership continued to experience off-lease time for
most of its remaining bus fleet in the first quarter of 1994
and for all of its bus fleet by the end of the second
quarter and through the end of 1994. Due to current market
conditions and the increasing age of the Partnership's
buses, it is expected that the Partnership's buses will
remain off-lease until they are sold.
B) In 1984, the Partnership entered into a joint venture
agreement pursuant to which the Partnership acquired medical
diagnostic imaging equipment and related leasehold
improvements to be operated at the First Hill Diagnostic
Imaging Center (the "Center") in Seattle, Washington. The
Partnership also took assignment of the lease of the
premises where the equipment would be operated as part of a
diagnostic imaging center. As of December 30, 1994, the
Partnership had acquired approximately $3.9 million of such
equipment including a computer tomography scanner, a
magnetic resonance scanner, and various leasehold
improvements.
The joint venture (the "New Venture") is currently operated
under an agreement dated May 31, 1988 among the Partnership,
Digital Diagnostics, Inc. ("Digital"), Medical Imaging
Partners L.P. ("MIP"), a limited partnership whose general
partner was an entity affiliated with the General Partner
(the current general partner being a wholly owned subsidiary
of Raytel Corporation), and Imaging Services, Inc. ("ISI"),
a Washington corporation. The Partnership is jointly and
severally liable with the other venture partners for certain
obligations of the New Venture. The joint venture agreement
(the "New Venture Agreement") expires on April 17, 1999,
unless terminated earlier.
Under the current 10 year management agreement expiring in
1998, or such earlier time as the New Venture Agreement is
terminated, the Center will be managed by 2001 Management
Associates, Inc. ("2001"), an affiliate of Digital, and will
receive a base management fee equal to 8% of defined net
revenues of the New Venture. In addition, under certain
circumstances, and if certain annual budgeted operating
results are exceeded, 2001 can earn a management bonus of up
to 20% of defined Excess Net Revenues.
The Center lease currently terminates on August 31, 1995,
unless renewed. Termination of the lease would terminate
the New Venture Agreement. The Partnership has notified MIP
and ISI that it does not intend to renew the lease.
Each partner in the New Venture is entitled to a defined
priority distribution representing a cumulative, non-
compounded annual distribution equal to 14% of each
partner's investment. After priority distributions to
venture partners are paid, distributable cash is shared
41.4% by the Partnership, 48.75% by MIP, 5% by ISI and 4.85%
by Digital. Under a management agreement, 2001 Management
Associates, Inc. ("2001"), an affiliate of Digital, manages
the Center and will receive a base management fee equal to
8% of defined net revenues of the venture. Priority cash
distributions received by the Partnership amounted to
$309,139, or 66%, of the Partnership's total revenues in
1994, $389,910, or 14%, in 1993 and $511,215, or 16%, in
1992.
The Center has not generated sufficient operating cash flow
to fulfill its obligation to make priority payments to the
Partnership in full and such condition is expected to
continue. The Partnership had recognized revenue related to
the Center's contractual obligation to make these past
priority payments. Based upon the Center's expected future
inability to fulfill these prior obligations the Partnership
took a charge of $350,000 to reserve against this receivable
in the fourth quarter of 1991.
Trailers Sold in Prior Years
The dry-van piggyback trailers were operated under a management
agreement corresponding with the expiration of the leases,
whereby the equipment manager provided maintenance, periodic
inspection, and arrangements to re-lease the dry-van piggyback
trailers as necessary, in return for a monthly fee. The
management agreement was terminated upon the sale of the
remaining trailers.
Of the Partnership's trailers, 652 were subject to a lease to
Transamerica Equipment Leasing Company, Inc. ("TELCO") through
September 27, 1991 at a monthly rate of $151.00 per trailer. On
January 31, 1992, the Partnership sold and assigned the related
lease to these 652 trailers to Greenbrier Capital Corporation,
the trailer manager, for $3,750 per trailer or a total sales
price of $2,445,000. The Partnership's remaining trailers were
also leased to TELCO at a monthly rate of $155.40 per trailer.
The Partnership entered into a purchase agreement dated as of
October 1, 1993 whereby the Partnership sold its remaining 917
trailers to TELCO effective as of the respective lease expiration
date of each trailer. All 917 trailers were subject to a lease
to TELCO with scheduled expiration dates of September 30, 1993
for 282 trailers, October 15, 1993 for 339 trailers and November
22, 1993 for 296 trailers. The purchase price for the trailers
was $3,650 per trailer, or a total of $3,347,050 for all 917
trailers. On October 15, 1993, the Partnership consummated the
sale of 621 trailers for a total price of $2,266,650,
representing trailers with leases expiring on September 30, 1993
and October 15, 1993. On November 22, 1993, the remaining 296
trailers were sold to TELCO for a total price of $1,080,400.
The Partnership recognized a gain of $526,860 on the disposal of
the remaining 917 trailers in 1993.
Concurrent with the sale transaction on October 15, 1993, the
Partnership repaid the then-remaining $651,397 balance of the non-
recourse bank loan secured by the trailers (including interest
accrued thereon).
Revenues generated by the dry-van piggyback trailers amounted to
$1,407,939 (49% of total revenues of the Partnership) in 1993 and
$1,796,966 (56%) in 1992.
4. NET INVESTMENT IN SALES-TYPE LEASE
In August of 1992, the Partnership sold its interest in the 45
reverse aluminum can vending machines to the then current lessee
for $22,500.
5. INVESTMENT IN PARTNERSHIP
TDEC, a New Jersey limited partnership, was formed for the sole
purpose of constructing, acquiring, and installing a cogeneration
heating system located in Trenton, New Jersey. The Partnership's
original investment in TDEC was approximately $6.1 million.
TDEC was restructured as of November 20, 1987, under the terms of
the amended Agreement of Limited Partnership of Trenton District
Energy Company (the "TDEC Agreement"). Under the terms of the
TDEC Agreement, the Partnership will receive 11.8% of all
Distributable Cash generated by TDEC until its non-recourse
purchase price notes (see note 6) are paid in full, and 7.5% of
all Distributable Cash after its non-recourse notes are paid in
full. No cash distributions were received in 1994, 1993 or 1992.
6. NOTES PAYABLE-TDEC
The notes are non-recourse and bear interest at a rate of 11% per
annum and are payable currently. However, the notes are
collateralized by and payable only from the Partnership's share
of the distributable cash generated by TDEC.
As part of the partnership restructuring effectuated by the
execution of the TDEC agreement, the terms of the non-recourse
notes were amended to require that payments were to be made by
the Partnership from 73% of all annual cash distributions it
receives from its interest in TDEC. To the extent that the 73%
share of the Partnership's cash distribution received is
insufficient to pay any required scheduled note payment, such
unpaid amount will be payable from 73% of all future cash
distributions the Partnership receives from its interest in TDEC,
with interest accruing on such unpaid amounts at 11%. Since
1985, TDEC has not made any cash distributions.
At December 30, 1994, the $3,419,078 debt balance represents the
aggregate amount of principal payments required for notes payable
in 1995.
<PAGE>
7. TRANSACTIONS WITH GENERAL PARTNER
During the years ended December 30, 1994, December 31, 1993 and
December 25, 1992, the Partnership incurred the following fees
and expenses in connection with services provided by the General
Partner:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Management Fees - 6% of
Distributable Cash from
Operations as defined in the
Partnership Agreement $28,132 $69,384 $66,720
Administrative Costs $70,000 $70,000 $70,000
</TABLE>
At December 30, 1994 and December 31, 1993, amounts payable to
the General Partner and/or Affiliate consisted of the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Maiden Lane Partners Inc.
(General Partner) $ -- $12,000
</TABLE>
<PAGE>
8. SEGMENT INFORMATION
The following analysis provides segment information for the three
main industries in which the Partnership operates. The equipment
leasing segment consists of intercity buses, dry-van piggyback
trailers (for 1993 and 1992 only) and the net investment in sales-
type canbank lease (for 1992 only). The medical imaging segment
is comprised of the Partnership's investment in the First Hill
medical imaging center. The alternative energy segment comprises
the Partnership's investment in TDEC.
<TABLE>
<CAPTION>
Equipment Medical Alternative
Leasing Imaging Energy TOTAL
1994
<S> <C> <C> <C> <C>
Operating
revenues $ 38,341 $309,139 $ - $ 347,480
Operating (loss)
income $(30,751) $303,936 $ - $ 273,185
Gain on
Equipment
Disposition 46,742 - - 46,742
Interest income 74,303
General
partnership
expenses (net) $ (187,440)
Net loss $ 206,790
Identifiable
assets $242,383 $141,054 $3,290,195 $3,673,632
General
partnership
assets 1,440,168
TOTAL $5,113,800
Depreciation and
amortization $ 42,524 $ - $ - $ 42,524
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Equipment Medical Alterna-
Leasing Imaging tive Energy TOTAL
1993
<S> <C> <C> <C> <C>
Operating revenues $1,759,851 $ 389,910 $ - $2,149,761
Operating income
(loss) $1,134,149 $ 378,323 $ - $1,512,472
Gain on Equipment
Disposition 626,140 $ - $ - 626,140
Interest income 82,441
Interest expense (96,541)
General partnership
expenses (net)
(243,256)
Net income $1,881,256
Identifiable assets
$ 841,100 $ 143,090 $3,227,128 $4,211,318
General partnership
assets
2,980,145
TOTAL $7,191,463
Depreciation and
amortization $ 497,534 $ - $ - $ 497,534
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Equipment Medical Alternative
Leasing Imaging Energy TOTAL
1992
<S> <C> <C> <C> <C>
Operating revenues $2,435,960 $ 510,181 $ - $ 2,946,141
Operating income
(loss) $1,298,162 $ 488,661 $ - $ 1,786,823
Gain on Equipment
Disposition 195,775 $ - $ - 195,775
Interest income 87,407
Interest expense (243,522)
General partnership
expenses (net)
(211,299)
Net income $ 1,615,184
Identifiable assets
$5,327,771 $ 162,536 $3,227,128 $ 8,717,435
General partnership
assets
2,320,009
TOTAL $11,037,444
Depreciation and
amortization $ 706,961 $ - $ - $ 706,961
</TABLE>
<PAGE>
9. RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING
The differences between the method of accounting used for
income tax reporting and the method of accounting used in the
accompanying financial statements are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Net Income - Financial
Statements $ 206,790 $ 1,881,256 $ 1,615,184
Difference resulting from:
Gain on disposal of
investment properties 541,385 3,873,101 3,439,358
Income and expense
recognition (527) - 248,286
Depreciation and
amortization 36,305 442,429 566,638
Management fees 28,132 69,384 66,720
Income from partnership
investments 82,050 121,080 191,988
Net Income - Income Tax
Method 894,135 6,387,250 6,128,174
Partners' Capital -
Financial Statements 1,415,788 3,512,040 5,509,569
Difference resulting from:
Offering costs 3,985,101 3,985,101 3,985,101
Gain on disposal of
investment properties 27,442,662 26,901,277 23,028,176
Income and expense
recognition (2,907,315) (2,906,788) (2,906,788)
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Depreciation and
amortization (20,756,618) (20,792,923) (21,235,352)
Management fees 622,099 593,967 524,583
Loss from partnership
investments (5,030,750) (5,112,800) (5,233,880)
Provision for loss on
impairment of assets 5,385,703 5,385,703 5,385,703
Other (128,859) (128,859) (128,859)
Partners' Capital -
Income Tax Method $ 10,027,811 $ 11,436,718 $ 8,928,253
</TABLE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
<PAGE>
Part III
Item 10. Directors and Executive Officers of the Registrant
Registrant has no executive officers or directors. The General
Partner manages the Registrant's affairs and has general
responsibility and authority in all matters affecting its
business. The directors and executive officers of the General
Partner are:
<TABLE>
<CAPTION>
Served in Present
Name Capacity Since (l) Position Held
<S> <C> <C>
Kevin K. Albert November 8, 1985 Director
Robert F. Aufenanger February 2, 1993 President
February 27, 1987 Director
Robert W. Seitz February 1, 1993 Director
February 2, 1993 Vice President
Steven N. Baumgarten February 2, 1993 Executive Vice
President
Michael A. Giobbe February 2, 1993 Vice President
David G. Cohen March 7, 1994 Treasurer
</TABLE>
(1)Directors hold office until their successors are elected and
qualified. All executive officers serve at the pleasure of
the Board of Directors.
Kevin K. Albert, 42, a Managing Director of Merrill Lynch
Investment Banking Group ("ML Investment Banking"), joined
Merrill Lynch in 1981. Mr. Albert works in the Equity Private
Placement Group and is involved in structuring and placing a
diversified array of private equity financing including common
stock, preferred stock, limited partnership interests and other
equity-related securities. Mr. Albert is also a director of
Whitehall Partners Inc. ("Whitehall"), an affiliate of the
General Partner and the general partner of Liberty Equipment
Investors L.P. - 1984; a director of ML Media Management Inc.
("ML Media"), an affiliate of the General Partner and a joint
venturer of Media Management Partners, the general partner of ML
Media Partners, L.P.; a director of ML Film Entertainment Inc.
("ML Film"), an affiliate of the General Partner and the managing
general partner of the general partners of Delphi Film Associates
II, III, IV, V and ML Delphi Premier Partners, L.P.; a director
of ML Opportunity Management Inc. ("ML Opportunity"), an
affiliate of the General Partner and a joint venturer in Media
Opportunity Management Partners, the general partner of ML Media
Opportunity Partners, L.P.; a director of MLL Antiquities Inc.
("MLL Antiquities"), an affiliate of the General Partner and the
administrative general partner of The Athena Fund II, L.P.; a
director of ML Mezzanine Inc. ("ML Mezzanine"), an affiliate of
the General Partner and the sole general partner of the managing
general partner of ML-Lee Acquisition Fund, L.P.; a director of
ML Mezzanine II Inc. ("ML Mezzanine II"), an affiliate of the
General Partner and sole general partner of the managing general
partner of ML-Lee Acquisition Fund II, L.P. and ML-Lee
Acquisition Fund (Retirement Accounts) II, L.P.; a director of
Merrill Lynch Venture Capital Inc. ("ML Venture"), an affiliate
of the General Partner and the general partner of the Managing
General Partner of ML Venture Partners I, L.P. ("Venture I"), ML
Venture Partners II, L.P. ("Venture II"), and ML Oklahoma Venture
Partners Limited Partnership ("Oklahoma"); a director of Merrill
Lynch R&D Management Inc. ("ML R&D"), an affiliate of the General
Partner and the general partner of the General Partner of ML
Technology Ventures, L.P.; and a director of MLL Collectibles
Inc. ("MLL Collectibles"), an affiliate of the General Partner
and the administrative general partner of The NFA World Coin
Fund, L.P. Mr. Albert also serves as an independent general
partner of Venture I and Venture II.
Robert F. Aufenanger, 41, a Vice President of Merrill Lynch & Co.
Corporate Strategy, Credit and Research and a Director of the
Partnership Management Department, joined Merrill Lynch in 1980.
Mr. Aufenanger is responsible for the ongoing management of the
operations of the equipment and project related limited
partnerships for which subsidiaries of ML Leasing Equipment
Corp., an affiliate of Merrill Lynch, are general partners. Mr.
Aufenanger is also a director of Whitehall, ML Media, ML Film, ML
Opportunity, MLL Antiquities, ML Venture, ML R&D, MLL
Collectibles, ML Mezzanine and ML Mezzanine II.
Robert W. Seitz, 48, a First Vice President of Merrill Lynch &
Co. Corporate Strategy, Credit and Research and a Managing
Director within the Corporate Credit Division of Merrill Lynch,
joined Merrill Lynch in 1981. Mr. Seitz is the Private Client
Senior Credit Officer and is also responsible for the firm's
Partnership Management and Asset Recovery Management Departments.
Mr. Seitz is also director of Whitehall, ML Media, ML
Opportunity, ML Venture, ML R&D, ML Film, MLL Antiquities and MLL
Collectibles.
Steven N. Baumgarten, 39, a Vice President of Merrill Lynch & Co.
Corporate Strategy, Credit and Research, joined Merrill Lynch in
1986. Mr. Baumgarten shares responsibility for the ongoing
management of the operations of the equipment and project related
limited partnerships for which subsidiaries of ML Leasing
Equipment Corp., an affiliate of Merrill Lynch, are general
partners. Mr. Baumgarten is also a director of ML Film.
Michael A. Giobbe, 36, an Assistant Vice President of Merrill
Lynch & Co. Corporate Strategy, Credit and Research, joined
Merrill Lynch in 1986. Mr. Giobbe currently shares the
responsibility for managing the assets owned by the equipment and
project related limited partnerships for which subsidiaries of ML
Leasing Equipment Corp., an affiliate of Merrill Lynch, are
general partners.
David G. Cohen, 32, an Assistant Vice President of Merrill Lynch
& Co. Corporate Strategy, Credit and Research, joined Merrill
Lynch in 1987. Mr. Cohen's responsibilities include
controllership and financial management functions for certain
partnerships for which subsidiaries of ML Leasing Equipment
Corp., an affiliate of Merrill Lynch, are general partners.
Messrs. Aufenanger and Giobbe are executive officers of Mid-Miami
Diagnostics Inc. ("Mid-Miami Inc."). On October 28, 1994 both
Mid-Miami Inc. and Mid-Miami Diagnostics, L.P. filed voluntary
petitions for protection from creditors under Chapter 7 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York.
Item 11. Executive Compensation
Registrant does not pay the executive officers or directors of
the General Partner any remuneration. The General Partner does
not presently pay any remuneration to any of its executive
officers or directors. See Note 7 to the Financial Statements
included in Item 8 hereof, however, for sums paid by Registrant
to affiliates in the years ending December 30, 1994, December 31,
1993 and December 25, 1992.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
In addition to its interest in Registrant as general partner, the
General Partner owns .2 Units. No officers or directors of the
General Partner own any interests in Registrant.
To the knowledge of the General Partner, as of February 1, 1995,
officers and directors of the General Partner in aggregate own
less than .01% of the outstanding common stock of Merrill Lynch &
Co., Inc., the ultimate parent of the General Partner.
Item 13. Certain Relationships and Related Transactions
All of the directors of Registrant's General Partner are
executive officers of affiliates that have received fees for
services provided to Registrant as described in Note 7 to the
Financial Statements included in Item 8 hereof.
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) Financial Statements, Financial Statement Schedules and
Exhibits
Financial Statements and Financial Statement Schedules
See Item 8. "Financial Statements and Supplementary Data -
Table of Contents."
<TABLE>
<CAPTION>
Incorporated by
Exhibits Reference to _
<S> <C> <C>
3.1.1 Certificate of Limited Exhibit 3.1.1 to Form S-1
Partnership, dated Registration Statement
March 30, 1983. (File No. 2-82749)
3.1.2 Amendment No. l to Exhibit 3.1.4 to Form S-1
Certificate of Limited Registration Statement
Partnership, dated (File No. 2-82749)
August 8, 1983.
3.1.3 Amendment No. 2 to Exhibit 3.1.3 to 1983
Certificate of Limited Form 10-K Report
Partnership, dated (File No. 2-82749)
October 25, 1983.
3.1.4 Certificate of Adoption Exhibit 3.1.4 to 1991
of Revised Limited Form 10-K Report (File 2-
Partnership Act, dated 82749)
September 30, 1991
3.2.1 Agreement of Limited Exhibit 3.4 to 1983 Form
Partnership, dated as 10-K Report
of October 3, 1983. (File No. 2-82749)
3.2.2 Amendment No. 1 to
Agreement of Limited
Partnership dated
October 25, 1983.
3.2.3 Amendment No. 2 to
Agreement of Limited
Partnership dated
November 30, 1994.
4.1 Agreement to Act as Exhibit 4.2 to 1993 Form
Depository dated as of 10-K Report
January 1, 1993 between (File No. 0-11458)
Registrant, Security
Pacific National Trust
Company and Bank of New
York.
10.1.1 Management Agreement Exhibit 10.1.4 to 1991
effective August 21, Form 10K Report
1991 between Continental (File No. 0-11458)
Asset Services Inc.
("CASI") and Registrant
10.1.2 Sales Agreement effective Exhibit 10.1.5 to 1991
August 21, 1991 between Form 10K Report
CASI and Registrant (File No. 0-11458)
10.2 Lease dated as of July 1, Exhibit 10.7 to 1985 Form
1985 between Registrant 10-K Report
and Reynolds Metals (File No. 0-11458)
Company
10.3.1 Management Agreement, Exhibit 10.13 Form 10-K
dated October 25, 1983, Report
to 1983 between (File No. 2-82749)
Registrant and BRAE
Intermodal
Corporation("BIC")
10.3.2 Amendments to Management Exhibit 10.5.2 to 1986
Agreement between Form 10-K Report
Registrant and BIC
10.3.3 Amendment to Management Exhibit 28.4 to Form 8-K
Agreement between Report dated January 31,
Registrant and GCC dated 1992 (File No. 0-11458)
January 31, 1992
10.4.1 Trailer Lease Agreement Exhibit 10.10 to 1984
dated as of October 17, Form 10-K Report
1983, as amended and as (File No. 0-11458)
assigned, to Registrant
on October 27, 1983
between Registrant and
Transamerica Equipment
Leasing Company
("TELCO").
10.4.2 Second Amendment dated Exhibit 10.11.2 to 1985
November 15, 1985 to Form 10-K Report
Trailer Lease Agreement (File No. 0-11458)
between Registrant and
TELCO
10.5.1 Trailer Lease Agreement Exhibit 10.8 to 1986 Form
dated as of February 1, 10-K Report
1986 between Registrant (File No. 0-11458)
and TELCO
10.5.2 Third Amendment to Exhibit 10.5.2 to 1993
Trailer Lease Agreement Form 10-K Report
between Registrant and (File No. 0-11458)
TELCO dated August 7,
1991
10.6.1 Purchase Agreement Exhibit 28.1 to Form 8-K
between Registrant and Report dated January 31,
Greenbrier Capital 1992 (File No. 0-11458)
Corporation ("GCC")
dated as of January 31,
1992
10.6.2 Bill of Sale between Exhibit 28.2 to Form 8-K
Registrant and GCC dated Report dated January 31,
January 31, 1992 1992 (File No. 0-11458)
10.6.3 Assignment of Lease Exhibit 28.3 to Form 8-K
Agreement among Report dated January 31,
Registrant, GCC and 1992 (File No. 0-11458)
Transamerica Equipment
Leasing Company, Inc.
dated as of January 31,
1992
10.6.4 Purchase Agreement dated Exhibit 10.1 to September
as of October 1, 1993 24, 1993 Form 10-Q Report
between Registrant and (File No. 0-11458)
TELCO
10.7.1 Loan Agreement, dated as Exhibit 10.15.1 to 1985
of November 15, 1985, Form 10-K Report
between Registrant and (File No. 0-11458)
First National Bank of
Minneapolis ("First
Minneapolis")
10.7.2 Security Agreement dated Exhibit 10.15.2 to 1985
as of November 15, 1985 Form 10-K Report
between Registrant and (File No. 0-11458)
First Minneapolis
(executed in the form of
Exhibit B to exhibit
10.9.1)
10.8.1 Loan Agreement dated as Exhibit 10.12.1 to 1986
of May 4, 1986 between Form 10-K Report
Registrant and First (File No. 0-11458)
Minneapolis
10.8.2 Security Agreement May 4, Exhibit 10.12.2 to 1986
1986 between Registrant Form 10-K Report
dated as of and First (File No. 0-11458)
Minneapolis(executed in
the form of Exhibit B to
Exhibit 10.10.1)
10.9.1 Purchase Agreement, dated Exhibit 28(a) to December
as of December 28, 1983, 28, 1983 Form 8-K Report
among Cogeneration (File No. 2-82749)
Development Corporation,
Registrant and certain
persons and corporations
10.9.2 Collateralized Notes, Exhibit 28(b) to December
dated December 28, 1983 28, 1983 Form 8-K Report
(File No. 2-82749)
10.9.3 Secured Non-recourse Exhibit 28(d) to December
Notes, dated December 28, 1983 Form 8-K Report
28, 1983 (File No. 2-82749)
10.10.1 Assignment and Security Exhibit 28(e) to December
Agreement, dated as of 28, 1983 Form 8-K Report
December 28, 1983, among (File No. 2-82749)
Registrant, Trenton
District Energy Company
and certain other
persons and corporations
10.10.2 Instrument of Conversion Exhibit 10.1 to September
of general partner 25, 1987 Form 10-Q Report
interest of Trenton (File No. 0-11458)
District Energy Company
10.10.3 Amended and Restated Exhibit 10.2 to September
Certificate of Limited 25, 1987 Form 10-Q Report
Partnership of Trenton (File No. 0-11458)
District Energy Company
10.10.4 Amendment to Agreement of Exhibit 10.3 to September
Limited Partnership of 25, 1987 Form 10-Q Report
Trenton District Energy (File No. 0-11458)
Company
10.11.1 Promissory Note dated May Exhibit 10.2 to Form 10-Q
8, 1991 between Report for the quarter
Registrant and Maiden ending September 27, 1991
Lane Partners Inc. (File No. 0-11458)
10.12.1 Amended and Restated Exhibit 10.2.1 to Form 10-
Joint Venture Agreement Q Report for the quarter
dated May 31, 1988 ending June 24, 1988
between Registrant, (File No. 0-11458)
Digital, Medical Imaging
Partners, L.P. and
Imaging Services, Inc.
10.12.2 Cooperation Agreement Exhibit 10.12.2 to 1993
between Registrant and Form 10-K Report
Medical Imaging Partners (File No. 0-11458)
L.P. ("MIP") dated
November, 1991
10.12.3 Management Agreement Exhibit 10.2.2 to Form 10-
dated May 31, 1988 Q Report for the quarter
between 2001 Management ending June 24, 1988
Associates, Inc. and (File No. 0-11458)
First Hill Diagnostic
Imaging Center
10.13.1 Settlement Agreement Exhibit 10.1 to Form 10-Q
dated September 30, 1991 Report for the quarter
between Registrant, ending September 27, 1991
Union Bank and San Jose (File No. 0-11458)
Cogeneration Partnership
10.14 Assignment, Assumption Incorporated herein by
and Amendment Agreement reference to Exhibit 10.1
dated November 6, 1992, to Registrant's Form 8
by and between TMO Amendment to its
Acquisition Corporation, Quarterly Report on Form
Hausman Bus Sales, Inc. 10-Q for the quarter
and Continental Asset ending September 25,
Services, Inc. 1992, dated November 20,
1992 (File No. 0-11458)
27 Financial Data Schedule
99.1 Pages 17 through 33 of Prospectus, dated
Prospectus dated September 7, 1983, filed
September 7, 1983, filed pursuant to Rule 424(b)
pursuant to Rule 424(b) under the Securities Act
under the Securities Act of 1933, as supplemented
of l933, as supplemented (File No. 2-82749)
</TABLE>
<PAGE>
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
LIBERTY EQUIPMENT INVESTORS-1983
By: Maiden Lane Partners Inc.
General Partner
Dated: March 29, 1995 /s/ Robert F. Aufenanger
Robert F. Aufenanger
President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant in the capacities and on the dates
indicated.
Signature Title Date
/s/ Kevin K. Albert Director of the General March 29, 1995
(Kevin K. Albert) Partner
/s/ Robert F. Aufenanger Director and President March 29, 1995
(Robert F. Aufenanger) of the General Partner
(chief executive
officer)
/s/ Robert W. Seitz Director and Vice March 29, 1995
(Robert W. Seitz) President of the
General Partner
/s/ David G. Cohen Treasurer of the March 29, 1995
(David G. Cohen) General Partner (chief
accounting officer and
chief financial
officer)
[ARTICLE]
[LEGEND] Exhibit 3.2.3 to 1994 10-K
AMENDMENT NO. 2 TO
AGREEMENT OF LIMITED PARTNERSHIP
OF
LIBERTY EQUIPMENT INVESTORS-1983
AMENDMENT NO. 2 dated as of November 30, 1994 to
AGREEMENT OF LIMITED PARTNERSHIP dated as of October 3, 1983, as
amended, among MAIDEN LANE PARTNERS INC., as general partner (the
"General Partner") of LIBERTY EQUIPMENT INVESTORS-1983 (the
"Partnership"), and the limited partners as set forth therein
(the "Limited Partners").
WHEREAS, the parties hereto have heretofore formed the
Partnership as a limited partnership under the laws of the State
of New York and set forth their respective rights and duties
relating to the Partnership pursuant to the above-referenced
Agreement of Limited Partnership (the "Agreement");
WHEREAS, pursuant to Section 10.1A of the Agreement the
General Partner has prepared an amendment to the Agreement, the
substance of which is set forth herein, and submitted (a) the
text of such amendment, (b) a statement of the purposes of such
amendment and (c) an opinion of counsel as required in such
Section 10.1 of the Agreement, and has provided the notification
to the Limited Partners as provided therein;
WHEREAS, pursuant to Section 10.2A of the Agreement,
and upon receipt of the opinion of counsel as required by Section
11.3 of the Agreement, a majority in interest of the Limited
Partners has given their consent to such amendment;
WHEREAS, pursuant to Section 12.1A(ii) of the Agreement
the General Partner may execute instruments which the General
Partner deems appropriate to reflect a change or modification of
the Partnership in accordance with the terms of the Agreement;
NOW, THEREFORE, in consideration of the mutual promises
and agreements made herein and in the Agreement, the General
Partner on behalf of all parties, states as follows:
Section 5.4B of the Agreement is hereby amended and restated
in its entirety to read as follows:
B. Without the Consent of a majority in interest of
the Limited Partners but subject to the provisions of
Section 11.3, the General Partner shall not have the authority
to:
(i) sell, abandon or otherwise dispose of at any
time all or substantially all the assets of the Partnership,
unless, in the determination of the General Partner, such sale,
abandonment or disposition is in the best interests of the
Partnership, or
(ii) elect to dissolve the Partnership.
Except as expressly amended by the provisions of this
Amendment No. 2, the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the General Partner has executed
this Amendment No. 2 as of the date first above written.
GENERAL PARTNER:
MAIDEN LANE PARTNERS INC.
By ___________________________
Name:
Title:
Attest:
________________________ LIMITED PARTNERS:
By MAIDEN LANE PARTNERS INC.
Attorney-in-Fact
By ___________________________
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from the year end 1994 Form 10K
Balance Sheets and Statements of Operations as of December
30, 1994, and is qualified in its entirety by reference to
such financial statements.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-30-1994
<PERIOD-END> DEC-30-1994
<CASH> 95,343
<SECURITIES> 1,339,650
<RECEIVABLES> 151,687
<ALLOWANCES> 350,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,701,282
<DEPRECIATION> 4,464,357
<TOTAL-ASSETS> 5,113,800
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,415,788
<TOTAL-LIABILITY-AND-EQUITY> 5,113,800
<SALES> 0
<TOTAL-REVENUES> 468,525
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 261,735
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 206,790
<INCOME-TAX> 0
<INCOME-CONTINUING> 206,790
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 206,790
<EPS-PRIMARY> 5.12
<EPS-DILUTED> 0
</TABLE>
