Form 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
x Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the quarterly period ended June 30, 1995
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 0-16843
ATEL Cash Distribution Fund, a California Limited Partnership
(Exact name of registrant as specified in its charter)
California 94-2985201
State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
235 Pine Street, 6th Floor, San Francisco, California 94104
(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 989-8800
Indicate by a 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
DOCUMENTS INCORPORATED BY REFERENCE
None
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
ATEL CASH DISTRIBUTION FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
JUNE 30, 1995 and DECEMBER 31, 1994
(Unaudited)
ASSETS
1995 1994
---- ----
Cash and cash equivalents $168,677 $203,776
Accounts receivable, net of allowance for doubtful
accounts of $22,097 in 1995 and 1994 4,297 3,606
Investment in leases and equipment 624,386 484,971
-------- --------
$797,360 $692,353
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Long-term non-recourse debt $205,517
Accounts payable and accruals 36,196 $68,459
Deposits due to lessees 12,914 12,914
Unearned operating lease income 1,040 1,903
------- -------
Total liabilities 255,667 83,276
Partners' capital:
General partners 19,083 16,807
Limited partners 522,610 592,270
-------- --------
Total partners' capital 541,693 609,077
-------- --------
$797,360 $692,353
======== ========
See notes to financial statements
ATEL CASH DISTRIBUTION FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
SIX AND THREE MONTH PERIODS ENDED
JUNE 30, 1995 and 1994
(Unaudited)
Six Months Three Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
-------- -------- -------- --------
Revenues:
Lease income:
Operating $49,926 $107,663 $28,249 $41,962
Direct financing 34,150 29,871 16,566 13,581
Gain (loss) on sale
of equipment 9,837 39,238 (2) 40,957
Other 103,308 5,757 103,296 1,296
Gain on sale of marketable
securities 68,158 - - -
Interest income 566 8,077 246 2,919
--------- -------- -------- -------
265,945 190,606 148,355 100,715
--------- -------- -------- --------
Expenses:
Professional fees 12,213 20,169 3,808 13,316
Depreciation 8,760 74,818 6,990 15,472
Other 6,422 9,370 3,907 7,305
Taxes 4,920 - 4,920 -
Interest 3,281 5,809 3,281 2,443
Provision for losses 2,797 - 1,389 -
Administrative cost reimbursements - 34,380 - 13,290
Management fees - 20,359 - -
-------- -------- -------- --------
38,393 164,905 24,295 51,826
-------- -------- -------- --------
Net income $227,552 $25,701 $124,060 $48,889
======== ======== ======== ========
Net income:
General partners $2,276 $257 $1,241 $489
Limited partners 225,276 25,444 122,819 48,400
-------- -------- -------- --------
$227,552 $25,701 $124,060 $48,889
======== ======== ======== ========
Net income per limited
partnership unit $11.29 $1.27 $6.15 $2.42
Weighted average number of
units outstanding 19,962 19,967 19,962 19,962
See notes to financial statements
ATEL CASH DISTRIBUTION FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
SIX MONTHS ENDED JUNE 30, 1995
(Unaudited)
Limited Partners General
Units Amount Partners Total
-------- -------- -------- --------
Balance December 31, 1994 19,962 $592,270 $16,807 $609,077
Net income 225,276 2,276 227,552
Distributions (294,936) (294,936)
-------- -------- -------- ---------
Balance June 30, 1995 19,962 $522,610 $19,083 $541,693
======== ======== ======== =========
See notes to financial statements
ATEL CASH DISTRIBUTION FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
SIX AND THREE MONTH PERIODS ENDED
JUNE 30, 1995 and 1994
(Unaudited)
Six Months Three Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
---- ---- ---- ----
Operating activities:
Net income $227,552 $25,701 $124,060 $48,889
Adjustments to reconcile net
income to net cash provided
by operations:
Depreciation and
amortization expense 8,760 74,818 6,990 15,472
(Gain) loss on sales of assets (9,837) (39,238) 2 (40,957)
Provision for losses 2,797 - 1,389 -
Changes in operating assets
and liabilities:
Accounts receivable (691) 20,406 (4,297) 46,377
Accrued interest - - - (765)
Unearned operating lease income (863) 2,573 125 2,573
Deposits due to lessee - 12,914 - 12,914
Accounts payable, general
partners - (65,389) - (20,359)
Accounts payable, other (32,263) 36,563 (21,544) (7,887)
-------- -------- -------- --------
Net cash from operations 195,455 68,348 106,725 56,257
-------- -------- -------- --------
Investing activities:
Purchase of assets on operating
leases (208,789) - (208,789) -
Proceeds from sales of lease
assets 30,000 317,224 - 264,590
Reductions in net investment in
direct financing leases 37,654 50,950 19,336 (10,810)
Investment in direct financing
leases - (247,000) - (247,000)
Payment of initial direct costs - (3,705) - (3,705)
-------- -------- -------- --------
Net cash provided by investing
activities (141,135) 117,469 (189,453) 3,075
-------- -------- -------- --------
ATEL CASH DISTRIBUTION FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(Continued)
SIX AND THREE MONTH PERIODS ENDED
JUNE 30, 1995 and 1994
(Unaudited)
Six Months Three Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
---- ---- ---- ----
Financing activities:
Distributions to limited partners (294,936) (670,701) (76,735) (335,215)
Proceeds from long-term
non-recourse debt 205,517 - 205,517 -
Repayments of long-term
non-recourse debt - (95,014) - (67,556)
Repurchase of limited
partnership units - (1,894) - (1,894)
-------- -------- -------- --------
Net cash used in financing
activities (89,419) (767,609) 128,782 (404,665)
-------- -------- -------- --------
Net increase (decrease) in cash
and cash equivalents (35,099) (581,792) 46,054 (345,333)
Cash and cash equivalents at
beginning of period 203,776 987,546 122,623 751,087
-------- -------- -------- --------
Cash and cash equivalents at
end of period $168,677 $405,754 $168,677 $405,754
======== ======== ======== ========
Supplemental disclosures of cash flow
information:
Cash paid during the period
for interest $3,281 $5,809 $3,281 $2,443
======== ======== ======== ========
See notes to financial statements
ATEL CASH DISTRIBUTION FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
(Unaudited)
1. Interim financial statements:
The unaudited interim financial statements reflect all adjustments which are,
in the opinion of the general partners, necessary to a fair statement of
financial position and results of operations for the interim periods presented.
All such adjustments are of a normal recurring nature. These unaudited interim
financial statements should be read in conjunction with the most recent report
on Form 10K.
2. Investment in leases:
The Partnership's investment in leases consists of the following:
Depreciation &
December 31, Amortization Dispos- June 30,
1994 Additions of Leases itions 1995
-------- -------- -------- -------- --------
Net investment in
operating leases $149,632 $208,789 ($8,306) ($20,162) $329,953
Net investment in
direct financing
leases 332,682 - (37,654) (1) 295,027
Initial direct costs 3,251 - (454) - 2,797
Reserve for losses (594) (2,797) - - (3,391)
-------- -------- -------- -------- --------
$484,971 $205,992 ($46,414) ($20,163) $624,386
======== ======== ======== ======== ========
ATEL CASH DISTRIBUTION FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
(Unaudited)
2. Investment in leases: (continued)
Operating leases:
The following schedule provides an analysis of the Partnership's investment
in property on operating leases by major classifications as of December 31,
1994, acquisitions and dispositions during the quarters ended March 31, and
June 30, 1995 and as of June 30, 1995.
Acquisitions &
December 31, Dispositions June 30,
1994 1st Quarter 2nd Quarter 1995
-------- -------- -------- --------
Materials handling $392,901 $392,901
Manufacturing equipment 35,653 $208,789 244,442
Motor vehicles 148,672 ($114,972) - 33,700
-------- -------- -------- --------
577,226 (114,972) 208,789 671,043
Less accumulated depreciation (427,594) 93,268 (6,764) (341,090)
-------- -------- -------- --------
$149,632 ($21,704) $202,025 $329,953
======== ========= ========= ========
Equipment on operating leases was acquired in 1987, 1988, 1989, 1990, 1992,
1993 and 1995.
At June 30, 1995, the aggregate amounts of future minimum lease payments from
direct financing leases and operating leases are as follows:
Year ending Direct
December 31, Financing Operating Total
------------ --------- --------- --------
1995 $71,803 $52,153 $123,956
1996 143,606 70,905 214,511
1997 143,606 51,948 195,554
1998 51,091 51,948 103,039
1999 - 51,948 51,948
Thereafter - 25,974 25,974
-------- --------- --------
$410,106 $304,876 $714,982
======== ========= ========
ATEL CASH DISTRIBUTION FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
(Unaudited)
3. Long-term non-recourse debt:
Note payable to financial institution is due in monthly installments of
principal and interest. The note is secured by an assignment of lease
payments and a pledge of the assets which were purchased with the proceeds of
the note. Interest on the note is at an annual rate of 9.25%. The balance
remaining at June 30, 1995 is due in monthly payments through 2000.
Future minimum principal and interest payments of debt as of June 30, 1995 are
as follows:
Year ending
December 31, Principal Interest Total
------------ --------- -------- --------
1995 $14,894 $11,012 $25,906
1996 35,808 16,140 51,948
1997 39,264 12,684 51,948
1998 43,054 8,894 51,948
1999 47,210 4,738 51,948
Thereafter 25,287 687 25,974
-------- ------- --------
$205,517 $54,155 $259,672
======== ======= ========
ATEL CASH DISTRIBUTION FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
(Unaudited)
4. Related party transactions:
The terms of the Limited Partnership Agreement provide that the General
Partners and/or their Affiliates are entitled to receive certain fees for
equipment acquisition, management and resale and management of the
Partnership.
The General Partners earned partnership management fees equal to 5% of cash
distributed from operations and equipment management fees equal to 2% of full
payout lease rentals and 5% of operating lease rentals pursuant to the Limited
Partnership Agreement. Effective April 1, 1994, the General Partners elected
to waive all management fees. The amount of management fees earned in 1994 was
$20,359.
The Limited Partnership Agreement allows for the reimbursement of costs
incurred by ATEL in providing administrative services to the Partnership.
Administrative services provided include partnership accounting, investor
relations, legal counsel and lease and equipment documentation. ATEL is not
reimbursed for services where it is entitled to receive a separate fee as
compensation for such services, such as acquisition and disposition of
equipment. Reimbursable costs incurred by ATEL are allocated to the
Partnership based upon actual time incurred by employees working on
Partnership business and an allocation of rent and other costs based on
utilization studies. Effective May 1, 1994, the General Partners have elected
to waive all reimbursements of administrative costs. In 1995, $32,427 was
waived. Costs charged and reimbursed in 1994 totaled $34,380.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Capital Resources and Liquidity
At June 30, 1995, the Partnership had cash balances of $168,677. Of this
amount, $135,761 was cash held for the distribution made to the Limited
Partners in July of 1995.
During the first and second quarters, the Partnership's primary sources of
liquidity were cash flows from the sales of marketable securities and cash
received relating to the bankruptcy settlement of Financial News Network (FNN),
a former lessee of the Partnership. Lease rentals were the second major source
of liquidity in the first and second quarters. The liquidity of the
Partnership will vary in the future, increasing to the extent cash flows from
operations exceed expenses, and decreasing as distributions are made to the
Limited Partners and to the extent expenses exceed cash flows from leases and
proceeds form asset sales.
The Partnership currently has available adequate reserves to meet
contingencies.
As of June 30, 1995, the Partnership had borrowed approximately $2,817,500 with
a remaining unpaid balance of $205,517. Between December 31, 1994 and June 30,
1995, new borrowings totaled $207,517. The borrowings are non-recourse to the
Partnership, that is the only recourse of the lender is to equipment or
corresponding lease acquired or secured with the loan proceeds. The Agreement
of Limited Partnership limits such borrowings to 80% of the total cost of
equipment, in aggregate.
The Partnership made a distribution of cash from operations to the Limited
Partners in April 1995. This distribution was based on the results of
operations in the first quarter of 1995. The amount of the distribution was
$3.43 per Unit. The distribution represents an annualized distribution rate
of 2.74%.
The Partnership also made a distribution of cash from operations to the
Limited Partners in July 1995. This distribution was based on the results of
operations in the second quarter of 1995. The amount of the distribution was
$6.07 per Unit. The distribution represents an annualized distribution rate of
4.86%.
If inflation in the general economy becomes significant, it may affect the
Partnership inasmuch as the residual (resale) values and rates on re-leases of
the Partnership's leased assets may increase as the costs of similar assets
increase. However, the Partnership's revenues from existing leases would not
increase, as such rates are generally fixed for the terms of the leases without
adjustment for inflation.
If interest rates increase or decrease significantly, the lease rates that the
Partnership can obtain on future leases will be expected to increase or
decrease in parallel as the cost of capital is a significant factor in the
pricing of lease financing. Leases already in place, for the most part, would
not be affected by changes in interest rates.
Six months, 1995 vs. 1994
During the first six months of 1995, the Partnership's largest sources of
operating cash flows came from the sales of marketable securities and from
cash received as a part of the bankruptcy settlement of FNN, $68,158 and
$103,286, respectively. Both of these events were of a one time nature.
Cash flows from operations resulting from operating lease rents decreased by
about $67,000 due to lease terminations as discussed under the caption
"Results of Operations". Operating lease rents and proceeds from asset sales
were the primary sources of cash for the six month period in 1994.
Proceeds of the sales of assets decreased in 1995 compared to 1994. This was
a result of a smaller amount of equipment being sold (cost of $114,972 in 1995
compared to $1,161,120 in 1994). The types of equipment sold in the two years
was not comparable. Reductions in the net investment in financing leases
decreased due to lease terminations and asset dispositions in the last twelve
months. Investing uses of cash decreased from $250,705 in 1994 to $208,789 in
1995. In both years the uses related to the purchase of lease assets.
In 1995, the only financing source of cash was proceeds from long-term
non-recourse debt. The debt proceeds were used to purchase operating lease
assets. There were no financing sources of cash in the six month periods in
1994. Repayments of debt decreased for the six month period due to lower debt
balances in 1994 compared to 1993 resulting from scheduled debt payments. As of
December 31, 1994, all long-term non-recourse debt had been repaid. The new
borrowings were made near the end of the second quarter and no principal
payments were scheduled between the date the funds were borrowed and June 30,
1995.
Three months, 1995 vs. 1994
Cash flows from operations increased due to the same causes noted above for the
six month period. Cash flows from securities sales and FNN were the primary
sources of cash in the three month period in 1995.
Cash flows from investing activities decreased compared to 1994. The decrease
was primarily the result of lower amounts of asset sales in the second quarter
of 1995 compared to 1994.
The only financing source of cash was the proceeds of debt discussed above.
There were no financing sources of cash in the three month period in 1994.
Results of Operations
The results of operations in future periods may vary significantly from those
of the first six months of 1995 as the Partnership's lease portfolio of capital
equipment matures. Revenues from leases are expected to decline over the long
term as leased assets come off lease and are sold or re-leased at lower lease
rates. The effect on net income is not determinable as it will depend to a
large degree on the amounts received from the sales of assets or from re-leases
to either the same or new lessees once the initial lease terms expire.
Six and three months, 1995 vs. 1994
Operating lease revenues have declined due to lease terminations and
subsequent asset sales. Depreciation has also decreased due to the asset
dispositions and the resulting smaller portfolio of leased equipment.
Management fees are related to the amounts of lease revenues and have decreased
as a result of the decreased amounts of those revenues. Additionally, the
General Partners have suspended the accrual and payment of these fees effective
April 1, 1994. The General Partners also suspended administrative cost
reimbursements effective May 1, 1994. Interest expense has decreased as the
average balances of outstanding debt have been reduced as a result of scheduled
debt payments. The gains on sales of marketable securities and cash received
related to FNN are not expected to occur again in future periods.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
Inapplicable.
Item 2. CHANGES IN SECURITIES.
Inapplicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
Inapplicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Inapplicable.
Item 5. OTHER INFORMATION.
Inapplicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Documents filed as a part of this report
1. Financial Statements
Included in Part I of this report:
Balance sheets, June 30, 1995 and December 31, 1994
Statements of operations for the six and three month periods
ended June 30, 1995 and 1994
Statements of changes in partners' capital for the six months
ended June 30, 1995
Statements of cash flows for the six and three month periods
ended June 30, 1995 and 1994
Notes to the financial statements
2. Financial Statement Schedules
All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange
Commission are not required under the related instructions
or are inapplicable, and therefore have been omitted.
SIGNATURES
Pursuant to the requirements 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.
Date:
August 3, 1995
ATEL Cash Distribution Fund,
a California limited partnership
(Registrant)
By: /s/ A. J. BATT
A. J. Batt,
General Partner of registrant
By: /s/ DEAN L. CASH
Dean Cash,
General Partner of registrant
By: /s/ F. RANDALL BIGONY
F. Randall Bigony
Principal financial officer of registrant
By: /s/ DONALD E. CARPENTER
Donald E. Carpenter,
Principal accounting officer of
registrant
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<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 168,667
<SECURITIES> 0
<RECEIVABLES> 26,394
<ALLOWANCES> 22,097
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 797,360
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<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 797,360
<SALES> 0
<TOTAL-REVENUES> 295,945
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 30,192
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,281
<INCOME-PRETAX> 232,472
<INCOME-TAX> 4,920
<INCOME-CONTINUING> 227,552
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 227,552
<EPS-PRIMARY> 11.29
<EPS-DILUTED> 11.29
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