Form 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|X| Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934.
For the quarterly period ended March 31, 2000
|_| 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 000-19160
ATEL Cash Distribution Fund III, L.P.
(Exact name of registrant as specified in its charter)
California 94-3100855
- ---------- ----------
(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
1
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
2
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
BALANCE SHEET
MARCH 31, 2000
(Unaudited)
ASSETS
Cash and cash equivalents $3,786,384
Accounts receivable 87,870
Investments in leases 717,145
----------------
Total assets $4,591,399
================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable 236,241
----------------
Total liabilities 236,241
Partners' capital:
General Partners 270,013
Limited partners 4,085,145
----------------
Total partners' capital 4,355,158
----------------
Total liabilities and partners' capital $4,591,399
================
See accompanying notes.
3
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
INCOME STATEMENTS
THREE MONTH PERIODS ENDED
MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Revenues:
Lease revenues:
Gain on sales of assets $ 2,713,100 $ 3,677
Operating leases 30,000 461,446
Direct financing leases 3,438 23,811
Leveraged leases - 5,281
Interest income 5,867 90,096
Other 39 651
---------------------- ----------------
2,752,444 584,962
---------------------- ----------------
Expenses:
Administrative cost reimbursements to General Partners 41,486 24,695
Professional fees 16,796 4,002
Depreciation and amortization 18,313 200,119
Other 11,037 14,532
Interest 1,791 9,076
Equipment and partnership management fees to General Partners 874 52,726
Taxes on income and franchise fees - 36,583
---------------------- ----------------
90,297 341,733
---------------------- ----------------
Net income $ 2,662,147 $ 243,229
====================== ================
Net income:
General Partners $ 26,621 $ 2,432
Limited Partners 2,635,526 240,797
---------------------- ----------------
$ 2,662,147 $ 243,229
====================== ================
Net income per Limited Partnership unit $ 0.36 $ 0.03
Weighted average number of units outstanding 7,375,284 7,375,284
</TABLE>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
THREE MONTHS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
Limited Partners General
Units Amount Partners Total
<S> <C> <C> <C> <C>
Balance December 31, 1999 7,375,284 $1,449,619 $ 243,392 $1,693,011
Net income 2,635,526 26,621 2,662,147
----------------- ---------------- ---------------------- ----------------
Balance March 31, 2000 7,375,284 $4,085,145 $ 270,013 $4,355,158
================= ================ ====================== ================
</TABLE>
See accompanying notes.
4
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
STATEMENTS OF CASH FLOWS
THREE MONTH PERIODS ENDED
MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
Operating activities:
<S> <C> <C>
Net income $ 2,662,147 $ 243,229
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization 18,313 200,119
Gain on sale of assets (2,713,100) (3,677)
Leveraged lease income - (5,281)
Changes in operating assets and liabilities:
Accounts receivable (3,781) (39,686)
Accounts payable, general partner - (318,134)
Accounts payable, other 85,848 80,614
Accrued interest - (501)
Unearned operating lease income - 28,427
---------------------- ----------------
Net cash (used in) provided by operations 49,427 185,110
---------------------- ----------------
Investing activities:
Proceeds from sales of lease assets 3,064,395 342,201
Reductions of net investment in direct financing leases - 115,921
---------------------- ----------------
Net cash provided by investing activities 3,064,395 458,122
---------------------- ----------------
Financing activities:
Repayments of non-recourse debt (57,291) (127,559)
Distributions to limited partners - (2,766,044)
---------------------- ----------------
Net cash used in financing activities (57,291) (2,766,044)
---------------------- ----------------
Net decrease in cash and cash equivalents 3,056,531 (2,122,812)
Cash and cash equivalents at beginning of period 729,853 11,294,942
---------------------- ----------------
Cash and cash equivalents at end of period $ 3,786,384 $9,172,130
====================== ================
Supplemental disclosures of cash flow information:
Cash paid during period for interest $ 1,791 $ 9,577
====================== ================
</TABLE>
See accompanying notes.
5
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(Unaudited)
1. Summary of significant accounting policies:
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
10KSB.
2. Organization and partnership matters:
ATEL Cash Distribution Fund III, L.P. (the Partnership), was formed under the
laws of the State of California in September 1989, for the purpose of acquiring
equipment to engage in equipment leasing and sales activities. Contributions in
the amount of $600 were received as of September 7, 1989, $100 of which
represented the General Partners' continuing interest, and $500 of which
represented the Initial Limited Partners' capital investment.
Upon the sale of the minimum amount of Units of Limited Partnership interest
(Units) of $1,200,000 and receipt of the proceeds thereof on March 1, 1990, the
Partnership commenced operations.
The Partnership's business consisted of leasing various types of equipment.
3. Investment in leases:
The Partnership's investment in leases consists of the following:
<TABLE>
<CAPTION>
Depreciation
Expense or Reclassi-
December 31, Lease fications and March 31,
1999 Amortization Dispositions 2000
---- ------------ - ------------- ----
<S> <C> <C> <C> <C>
Assets held for lease or sale $ 2,500 $ 397,500 $ 400,000
Net investment in operating leases 735,458 $ (18,313) (400,000) 317,145
Net investment in direct financing leases 348,795 - (348,795) -
----------------- ---------------- ---------------------- ----------------
$1,086,753 $ (18,313) $ (351,295) $ 717,145
================= ================ ====================== ================
</TABLE>
Equipment on operating leases was acquired in 1990, 1991, 1992, 1993 and 1995.
6
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(Unaudited)
3. Investment in leases (continued):
The following schedule provides an analysis of the Partnership's investment in
property on operating leases by major classifications as of December 31, 1999,
depreciation and dispositions during the quarter ended March 31, 2000 and as of
March 31, 2000.
<TABLE>
<CAPTION>
Reclassi-
December 31, fications and March 31,
1999 Depreciation Dispositions 2000
---- ------------ - ------------- ----
<S> <C> <C> <C> <C>
Mining equipment $3,757,698 $ (2,505,036) $1,252,662
Less accumulated depreciation (3,022,240) $ (18,313) 2,105,036 (935,517)
----------------- ---------------- ---------------------- ----------------
$ 735,458 $ (18,313) $ (400,000) $ 317,145
================= ================ ====================== ================
</TABLE>
At March 31, 2000, the aggregate amounts of future minimum lease payments are as
follows:
Year ending
December 31,
------------
2000 $ 90,000
2001 20,000
-----------------
$ 110,000
=================
7
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(Unaudited)
4. Related party transactions:
The terms of the Limited Partnership Agreement provide that the General Partner
and/or Affiliates are entitled to receive certain fees for equipment
acquisition, management and resale and for management of the Partnership.
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.
The General Partner and/or Affiliates earned the following fees, commissions and
reimbursements, pursuant to the Limited Partnership Agreement as follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Incentive management fees (computed as 5% of distributions of cash from
operations, as defined in the Limited Partnership Agreement) and equipment
management fees (computed as 5% of gross revenues from operating leases, as
defined in the Limited Partnership Agreement plus 2% of gross revenues from full
payout leases, as defined in the Limited Partnership Agreement). $ 874 $ 52,726
Administrative costs reimbursed to General Partner 41,486 24,695
---------------------- ----------------
$ 42,360 $ 77,421
====================== ================
</TABLE>
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Capital Resources and Liquidity
In the first quarter of 2000, the Partnership's primary source of cash was
proceeds from the sales of lease assets. During the first quarter of 1999, the
Partnership's primary source of cash was rents from operating leases. The
liquidity of the Partnership will vary in the future, increasing to the extent
that rents and proceeds from the sales of lease assets exceed expenses, and
decreasing as distributions are made to the Limited Partners and to the extent
expenses exceed rents and the proceeds from the sales of lease assets.
As of March 31, 2000, the Partnership had borrowed approximately $32,425,000,
all of which has been repaid.
The Partnership is in the process of winding down its operations. It has only
one revenue producing lease and its only other remaining lease assets are
expected to be sold by July 2000, At that time, the General Partners expect that
the Partnership will be terminated.
Cash Flows
Cash flows from operations decreased by $135,683 compared to 1999. The decrease
resulted from a decrease in operating lease revenues. In both years, the primary
operating source of cash was operating lease revenues.
Cash flows provided by investing activities increased by $2,606,273 compared to
1999. This increase was due asset sales in February 2000. Asset sales are not
currently expected to be consistent from one period to another as they do not
occur at regular intervals. Asset sales over the remainder of the year are not
expected to be comparable to those in the first quarter.
There were no financing sources of cash in 2000 or 1999. Payments of
non-recourse debt have decreased as a result of certain of the non-recourse
notes being fully paid off since the first quarter of 1999.
Results of Operations
Operations in the first quarter of 2000 resulted in net income of $2,662,147
compared to $243,229 in 1999.
Operating lease revenues declined from $461,446 in 1999 to $30,000 in 2000. The
decrease is the result of scheduled lease terminations and subsequent sales of
the related lease assets. Revenues from direct finance leases has also decreased
as a result of terminations and asset sales. Lease revenues for the remainder of
2000 are expected to be similar to the first quarter.
Depreciation and amortization expense decreased by $181,606 compared to 1999.
The decrease resulted from sales of assets which were previously on operating
leases. Interest expense has decreased as the Partnership has made scheduled
debt payments and has reduced the overall amounts of its non-recourse debt since
1999.
Management fees are related to the Partnership's revenues and have decreased as
a result of the decreases of those revenues compared to 1999.
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 Sheet, March 31, 2000
Income statements for the three month periods ended March
31, 2000 and 1999
Statements of changes in partners' equity for the three
month period ended March 31, 2000
Statements of cash flows for the three month periods ended
March 31, 2000 and 1999
Notes to the Financial Statements
2. Financial Statement Schedules
All other 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.
(b)Report on Form 8-K
None
9
<PAGE>
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:
May 12, 2000
ATEL CASH DISTRIBUTION FUND III, L.P.
(Registrant)
By: /s/ A. J. Batt
-----------------------------------------------
A. J. Batt
General Partner of registrant
By: /s/ Dean L. Cash
-----------------------------------------------
Dean L. Cash
General Partner of registrant
By: /s/ Paritosh K. Choksi
-----------------------------------------------
Paritosh K. Choksi
Principal financial officer of registrant
By: /s/ Donald E. Carpenter
-----------------------------------------------
Donald E. Carpenter
Principal accounting officer of registrant
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> DEC-31-2000
<CASH> 3,786,384
<SECURITIES> 0
<RECEIVABLES> 87,870
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,591,399
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,355,158
<TOTAL-LIABILITY-AND-EQUITY> 4,591,399
<SALES> 0
<TOTAL-REVENUES> 2,752,444
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 88,506
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,791
<INCOME-PRETAX> 2,662,147
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,662,147
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,662,147
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
