UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Under Section 13
or 15 (d) of the Securities
Exchange Act of 1934
---------------------------------
For the Quarter Ended
March 31, 1996 Commission File Number 0-17744
- --------------------- ------------------------------
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
-----------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 36-3581924
- ------------------- -------------------------
State or other IRS Employer Identification
jurisdiction of Number
incorporation or
organization
1300 E. Woodfield Road, Suite 312 Schaumburg, Illinois 60173
- --------------------------------- --------------------------
Address of principal City, State, Zip Code
executive offices
Registrant's telephone number: (847) 240-6200
---------------------------
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.
(1) Yes x No
-- --
(2) Yes x No
-- --
<PAGE>
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
-----------------------------------------
FORM 10-Q
---------
FOR THE QUARTER ENDED MARCH 31, 1996
------------------------------------
PART I - FINANCIAL INFORMATION
Item 1.
- -------
Index to Financial Statements
Balance Sheets
March 31, 1996 (unaudited)
December 31, 1995
Statements of Revenue and Expenses (unaudited)
For the three months ended March 31, 1996
For the three months ended March 31, 1995
Statements of Changes in Partners' Equity
For the three months ended March 31, 1996
(unaudited)
Statements of Cash Flows (unaudited)
For the three months ended March 31, 1996
For the three months ended March 31, 1995
Notes to Financial Statements (unaudited)
Item 2.
- -------
Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II - OTHER INFORMATION
Items 1-6.
- ---------
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
-----------------------------------------
BALANCE SHEETS
--------------
March 31, 1996 - Unaudited
------------------------------------------
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- --------
<S> <C> <C> <C>
ASSETS
- ------
Cash and cash equivalents $2,359,594 $2,189,345 $4,548,939
Installment contract receivable 46,272 100,530 146,802
Net investment in direct
financing leases 401,009 4,025,774 4,426,783
Diverted and Other Assets, net 100,249 217,800 318,049
Restricted Cash 10,812 23,489 34,301
---------- ---------- ----------
$2,917,936 $6,556,938 $9,474,874
========== ========== ==========
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Accounts payable and
accrued expenses $ 93,291 $ 232,267 $ 325,558
Lessee rental deposits 251,048 599,855 850,903
Due to Management Company 90 211 301
---------- ---------- -----------
Total liabilities 344,429 832,333 1,176,762
Total Partners' equity 2,573,507 5,724,605 8,298,112
---------- ---------- -----------
$2,917,936 $6,556,938 $9,474,874
========== ========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
----------------------------------------
BALANCE SHEETS
--------------
December 31, 1995
--------------------------------------
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ------------
<S> <C> <C> <C>
ASSETS
- ------
Cash and cash equivalents $2,379,752 $1,515,551 $3,895,303
Installment contract receivable 54,427 118,246 172,673
Net investment in direct
financing leases 544,282 5,066,223 5,610,505
Diverted and Other Assets, net 100,249 217,800 318,049
Restricted Cash 10,812 23,489 34,301
---------- ---------- -----------
$3,089,522 $6,941,309 $10,030,831
========== ========== ===========
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Accounts payable and
accrued expenses $ 125,264 $ 303,393 $ 428,657
Lessee rental deposits 253,067 602,291 855,358
Due to Management Company 134 276 410
---------- ---------- ----------
Total liabilities 378,465 905,960 1,284,425
---------- ---------- -----------
Total Partners' equity 2,711,057 6,035,349 8,746,406
---------- ---------- -----------
$3,089,522 $6,941,309 $10,030,831
========== ========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
-----------------------------------------
STATEMENTS OF REVENUE AND EXPENSES
----------------------------------
For the three months ended March 31, 1996
-----------------------------------------
(Unaudited)
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Lease income $ 18,332 $ 157,727 $176,059
Interest income 9,829 61,611 71,440
--------- --------- ---------
28,161 219,338 247,499
========= ========= =========
Expenses:
Management fees-New Era 79,828 196,893 276,721
General Partner's
expense reimbursement 40,740 88,511 129,251
Professional fees 38,846 93,096 131,942
Other operating expenses 6,297 14,612 20,909
--------- --------- ---------
165,711 393,112 558,823
--------- --------- ---------
Net loss $(137,550) $(173,774) $(311,324)
========= ========= =========
Net loss - General Partner $ (1,376) $ (1,738) $ (3,114)
========= ========= =========
Net loss - Limited Partners $(136,174) $(172,036) $(308,210)
========= ========= =========
Net loss per Limited
Partnership Unit $(2.16) $ (1.26)
====== =======
Weighted average number
of Limited Partnership Units
outstanding 63,030 136,969
====== =======
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
-----------------------------------------
STATEMENTS OF REVENUE AND EXPENSES
------------------------------------
For the three months ended March 31, 1995
------------------------------------------
(Unaudited)
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- --------- -------
Revenue:
Lease income $ 54,240 $328,508 $382,748
Interest income 19,905 54,005 73,910
--------- -------- --------
74,145 382,513 456,658
========= ======== ========
Expenses:
Management fees-New Era 95,712 264,682 360,394
General Partner's
expense reimbursement 2,637 5,729 8,366
Professional fees 42,582 94,168 136,750
Other operating expenses 4,322 11,956 16,278
--------- -------- --------
145,253 376,535 521,788
--------- -------- --------
Net earnings (loss) - $ (71,108) $ 5,978 $(65,130)
========== ======== ========
Net earnings (loss) -
General Partner $ (711) $ 60 $ (651)
========= ======== ========
Net earnings (loss) -
Limited Partners $ (70,397) $ 5,918 $(64,479)
========= ======== ========
Net earnings (loss) per
Limited Partnership
Unit $(1.12) $ 0.04
======= =======
Weighted average number
of Limited Partnership
Units outstanding 63,030 136,969
====== =======
See accompanying notes to financial statements.
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
-----------------------------------------
STATEMENT OF CHANGES IN PARTNERS' EQUITY
----------------------------------------
(Unaudited)
<CAPTION>
Liquidating Continuing
General Limited Limited Total
Partner's Partners' Partners' Partners'
Equity Equity Equity Equity
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Balance, December 31, 1995 $(378,417)* $2,803,733 $6,321,090 $ 8,746,406
Distributions to partners
(Note 3) - - (136,970) (136,970)
Net loss (3,114) (136,174) (172,036) (311,324)
Allocation of General
Partner's Equity 381,531 (94,052) (287,479) -
-------- ---------- ----------- -----------
Balance, March 31, 1996 $ - $2,573,507 $5,724,605 $ 8,298,112
======== ========== ========== ===========
<FN>
* Balance as previously reported was $0 due to allocation of
$92,676 and $285,741 to Liquidating and Continuing Limited Partners' Equity,
respectively.
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
-----------------------------------------
STATEMENTS OF CASH FLOWS
------------------------
For the three months ended March 31, 1996
-----------------------------------------
(Unaudited)
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(137,550) $(173,774) $ (311,324)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Changes in assets and liabilities:
Accounts payable and accrued
expenses (31,973) (71,126) (103,099)
Lessee rental deposits (2,019) (2,436) (4,455)
Due to Management Company (44) (65) (109)
--------- ---------- -----------
(171,586) (247,401) (418,987)
--------- ---------- -----------
Cash flows from investing activities:
Principal collections on leases 143,273 1,040,449 1,183,722
Principal collections on
installment contract receivable 8,155 17,716 25,871
--------- ---------- -----------
151,428 1,058,165 1,209,593
--------- ---------- -----------
Cash flows from financing activities:
Distributions to limited partners (a) - (136,970) (136,970)
--------- ---------- -----------
- (136,970) (136,970)
--------- ---------- -----------
Net increase (decrease) in cash
and cash equivalents (20,158) 673,794 653,636
Cash and cash equivalents:
Beginning of year 2,379,752 1,515,551 3,895,303
--------- ---------- -----------
End of first quarter $2,359,594 $2,189,345 $4,548,939
========== ========== ==========
<FN>
(a)Distributions during the period were $1.00 per unit for
Continuing Limited Partners (see Note 3).
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
-----------------------------------------
STATEMENTS OF CASH FLOWS
------------------------
For the three months ended March 31, 1995
-----------------------------------------
(Unaudited)
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
---------- ---------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (71,108) $ 5,978 $ (65,130)
Adjustments to reconcile net
earnings (loss) to net cash
used in operating activities:
Changes in assets and liabilities:
Accounts payable and accrued
expenses (34,529) (78,511) (113,040)
Lessee rental deposits (10,501) (22,267) (32,768)
Due to Management Company 342 197 539
----------- ---------- ------------
(115,796) (94,603) (210,399)
----------- ---------- ------------
Cash flows from investing activities:
Principal collections on leases 530,643 1,789,130 2,319,773
Diverted and Other Assets, net 37,116 80,634 117,750
Datronic Assets 19,786 42,988 62,774
Principal collections on
installment contract receivable 9,313 20,236 29,549
----------- ---------- ------------
596,858 1,932,988 2,529,846
----------- ---------- ------------
Cash flows from financing activities:
Distributions to limited partners (a) (100,540) (2,700,376) (2,800,916)
Distributions to General Partner (2,703) (26,098) (28,801)
----------- ---------- ------------
(103,243) (2,726,474) (2,829,717)
----------- ---------- ------------
Net increase (decrease) in cash
and cash equivalents 377,819 (888,089) (510,270)
Cash and cash equivalents:
Beginning of year 1,489,393 5,559,822 7,049,215
----------- ---------- ------------
End of first quarter $ 1,867,212 $4,671,733 $ 6,538,945
=========== ========== ============
<FN>
(a)Distributions during the period were $1.60 per unit for
Liquidating Limited Partners and $19.72 per unit for Continuing
Limited Partners.
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
-----------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
March 31, 1996
--------------
(Unaudited)
NOTE 1 - ORGANIZATION:
- ----------------------
Datronic Equipment Income Fund XVII, L.P., a Delaware Limited
Partnership (the "Partnership"), was formed on May 12, 1988 for
the purpose of acquiring and leasing both high-and low-
technology equipment. Reference is made to Notes 4, 6, 7 and 8
to the Partnership's financial statements included in the 1995
Form 10-K for a discussion of the alleged diversion of
Partnership assets in 1991 and 1992 and the subsequent litigation
and settlement, change in general partner, new classes of limited
partners established and amendments to the Partnership Agreement
which occurred.
NOTE 2 - BASIS OF FINANCIAL STATEMENTS:
- ---------------------------------------
The accompanying financial statements should be read in
conjunction with the Partnership's financial statements included in
the 1995 Form 10-K. The financial information furnished herein is
unaudited but in the opinion of Management includes all adjustments
necessary (all of which are normal recurring adjustments) for a
fair presentation of financial condition and results of operations.
See Note 3 to the Partnership's financial statements included in
the 1995 Form 10-K.
Effective January 1, 1996 the Partnership adopted SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of." The adoption of SFAS 121 had no
effect on the Partnership's financial position or net loss.
NOTE 3 - LIMITED PARTNERSHIP DISTRIBUTIONS:
- -------------------------------------------
Distributions to Liquidating Limited Partners were suspended
after payment of the April 1, 1995 distribution. Distributions to
Continuing Limited Partners were suspended after payment of the
January 1, 1996 distribution.
NOTE 4 - SUBSEQUENT EVENT:
- --------------------------
On April 29, 1996, the United States District Court for the
Northern District of Illinois entered an order removing any claim
that one of the defendants in the class action litigation might
have had against the Partnership's Restricted Cash and Diverted and
Other Assets. See Notes 4, 5 and 6 to the Partnership's financial
statements included in the 1995 Form 10-K for a discussion of this
matter. Pursuant to the terms of the order, approximately $725,000
of Recovered Assets (the Partnership's interest therein is
approximately $28,000 and is included in Diverted and Other Assets)
will be held in escrow for the potential benefit of the defendant
pending the outcome of certain other Partnership litigation. If
the assets are ultimately transferred to the defendant, the impact
on the Partnership's financial position will not be material.
PART I
- ------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- ----------------------------------------------------------
The following discussion and analysis of liquidity and capital
resources covers material changes in the Partnership's financial
condition from December 31, 1995 through March 31, 1996. The
discussion and analysis of results of operations is for the
three month period ended March 31, 1996 as compared to the
corresponding period in 1995.
Financial Condition, Liquidity and Capital Resources
- ----------------------------------------------------
During the three months ended March 31, 1996, Partnership assets
continued to be converted to cash to pay Partnership operating
expenses and the January 1, 1996 distribution to the Continuing
Limited Partners and to increase or maintain cash on hand at levels
to ensure that sufficient cash is available to pursue pending
litigation and liquidate the Partnership in an orderly manner.
Net investment in direct financing leases decreased approximately
$1,184,000 during the three months ended March 31, 1996 due to
principal collections.
Accounts payable and accrued expenses decreased approximately
$103,000 during the three months ended March 31, 1996 primarily due
to payment of accrued legal fees and sales and use taxes.
In the aggregate, partners' equity decreased approximately
$448,000 during the three months ended March 31, 1996 due to
distributions to Continuing Limited Partners of approximately
$137,000, and a net loss of $311,000.
During the three months ended March 31, 1996, the Partnership's
operating activities resulted in a use of $418,987 of cash.
This was due principally to decreases in accounts payable and
security deposits of $107,554 and a net loss of $311,324. During
the period, cash flows from investing activities aggregated
$1,209,593 relating to principal collections on leases of
$1,183,722, and collections on an installment contract of $25,871.
Cash flows used for financing activities consisted of
distributions to Continuing Limited Partners of $136,970.
The Partnership's principal sources of liquidity on both a
long-term and short-term basis are receipts from leases and cash on
hand. Additional sources of liquidity on a long-term basis are
expected to include proceeds from the sale of Diverted and Other
Assets and portions of the Partnership's lease portfolio which may
be sold in bulk. Management believes that its sources of liquidity
in the short and long-term are sufficient to meet its operating
cash obligations. Distributions to the Liquidating Limited
Partners were suspended after the April 1, 1995 distribution and
distributions to the Continuing Limited Partners were suspended
after the January 1, 1996 distribution. Distributions were
suspended to ensure that sufficient cash will be available to
pursue recoveries under pending litigation with the Partnership's
former accountants and to liquidate the Partnership in an orderly
manner.
Management expects sources of future liquidity to include proceeds
from the sale or disposition of other Partnership assets. In this
regard, the Partnership has Diverted and Other Assets (net) of
$318,049 of which, approximately $28,000 may be used to settle the
claims of a defendant of the Class Action Complaint (see Note 4 to
the financial statements included in item 1).
The continued operation and eventual liquidation of the
Partnership involves numerous complex issues which have to be
resolved. These issues relate to the timing and realizability
of lease-related assets, Diverted and Other Assets, Datronic
Assets, litigation and the liquidation of the other Datronic
Partnerships (see Note 4, 6 and 9 to the financial statements
included in the 1995 Form 10-K). These issues make it difficult
to predict the time and costs necessary to operate and
liquidate the Partnership in an orderly manner. As a result of
these uncertainties, it is not possible to predict the timing and
availability of cash for future distributions to Limited Partners.
However, it is likely that the amount of future distributions, if
any, to the Limited Partners will ultimately be significantly less
than the amount of Partner's Equity reflected in the March 31, 1996
Balance Sheets (see financial statements included in Item 1).
Results of Operations
- ---------------------
Lease income decreased approximately $207,000 for the three month
period ended March 31, 1996 as compared to the corresponding period
in 1995 primarily due to declining lease portfolios.
Management fees-New Era represent amounts paid New Era for managing
the Partnership on a day-to-day basis. These fees amounted to
approximately $277,000 for the three months ended March 31, 1996 as
compared to $360,000 for the same period in 1995. See Note 8 to
the Partnership's financial statements included in the 1995 Form
10-K.
The General Partner's expense reimbursement represents the amount
paid to LRC in excess of LRC's 1% share of cash flow available for
distribution. Total amounts paid to LRC are primarily a function
of the amount of time LRC spends on the activities of the
Partnership and the timing of certain LRC expenses. Total amounts
paid to LRC for the three months ended March 31, 1996 were
approximately $129,000 (all of which represents the General
Partner's expense reimbursement) as compared to $37,000 ($8,000
representing the General Partner's expense reimbursement and
$29,000 representing LRC's 1% of cash flow available for
distribution) for the three months ended March 31, 1995.
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
Reference is made to Item 3 - Legal Proceedings in the
Partnership's December 31, 1995 Form 10-K for a discussion of
material legal proceedings involving the Partnership.
Reference is made to Part I, Item 1, Note 4 for a discussion of legal
proceedings involving claims against Restricted Cash and Diverted and
Other Assets.
ITEM 2. CHANGES IN SECURITIES
- ------------------------------
None.
ITEM 3.
- -------
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
None.
ITEM 5.
- -------
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) Exhibits
- -------------
See Exhibit Index.
(b) Reports on Form 8-K
- ------------------------
None.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized, on the 9th day
of May 1996.
DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
Registrant
By: DONALD D. TORISKY
Donald D. Torisky
Chairman and Chief Executive Officer
Lease Resolution Corporation
General Partner of
Datronic Equipment Income Fund XVII, L.P.
By: DOUGLAS E. VAN SCOY
Douglas E. Van Scoy
Chief Financial Officer and Director
New Era Funding Corp.
Managing Agent of
Datronic Equipment Income Fund XVII, L.P.
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule, which
is submitted electronically to
the Securities and Exchange
Commission for Information only
and not filed.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet and the Statements of Revenue and EXpenses and is qualifed in its entirety
by reference to such Report on Form 10-Q.
</LEGEND>
<CIK> 0000833409
<NAME> DATRONIC EQUIPMENT INCOME FUND XVII, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 4,548,939
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,474,874
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,298,112
<TOTAL-LIABILITY-AND-EQUITY> 9,474,874
<SALES> 0
<TOTAL-REVENUES> 247,499
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 20,909
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (311,324)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
