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
September 30, 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
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Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section13 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 |_|
1
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
None
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<PAGE>
2
ATEL CASH DISTRIBUTION FUND III, L.P.
BALANCE SHEET
SEPTEMBER 30, 2000
(Unaudited)
ASSETS
Cash and cash equivalents $ 326,393
Accounts receivable 59,080
----------------
$ 385,473
================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable, general partners $ 103,776
----------------
Total liabilities 103,776
Partners' capital:
General Partners 264,279
Limited Partners 17,418
----------------
Total partners' capital 281,697
----------------
$ 385,473
================
See accompanying notes
3
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
INCOME STATEMENTS
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
<S> <C> <C> <C> <C>
Lease income:
Gain on sales of assets $ 2,253,471 $ 38,505 $ 81,854
Operating 60,000 1,125,221 271,883
Direct financing 3,438 60,793 18,659
Leveraged - 15,842 5,280
Other 70,917 3,991 $ 802 1,706
Interest income 57,391 253,645 20,582 72,578
---------------- ----------------- ---------------- ----------------
2,445,217 1,497,997 21,384 451,960
---------------- ----------------- ---------------- ----------------
Expenses:
Management fees 117,699 114,822 114,699 33,632
Administrative cost reimbursements 95,488 155,774 9,427 68,332
Professional fees 53,395 22,251 8,850 6,885
Other 38,216 71,198 16,922 8,030
Depreciation 36,625 637,679 - 205,924
Taxes 9,360 49,014 - 11,670
Interest expense 5,746 18,425 3,056 3,243
---------------- ----------------- ---------------- ----------------
356,529 1,069,163 152,954 337,716
---------------- ----------------- ---------------- ----------------
Net income (loss) $ 2,088,688 $ 428,834 $ (131,570) $ 114,244
================ ================= ================ ================
Net income (loss):
General Partners $ 20,887 $ 4,288 $ (1,316) $ 1,142
Limited Partners 2,067,801 424,546 (130,254) 113,102
---------------- ----------------- ---------------- ----------------
$ 2,088,688 $ 428,834 $ (131,570) $ 114,244
================ ================= ================ ================
Net income (loss) per limited partnership unit $ 0.28 $ 0.06 $ (0.02) $ 0.02
Weighted average number of units
outstanding 7,376,284 7,376,284 7,376,284 7,376,284
</TABLE>
See accompanying notes
4
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
NINE MONTH PERIOD ENDED
SEPTEMBER 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners General
Units Amount Partners Total
----- ------ -------- -----
<S> <C> <C> <C> <C>
Balance December 31, 1999 7,376,284 $1,449,619 $ 243,392 $1,693,011
Distributions to limited partners (3,500,002) - (3,500,002)
Net income 2,067,801 20,887 2,088,688
---------------- ----------------- ---------------- ----------------
Balance September 30, 2000 7,376,284 $ 17,418 $ 264,279 $ 281,697
================ ================= ================ ================
</TABLE>
See accompanying notes
STATEMENTS OF CASH FLOWS
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Operating activities:
<S> <C> <C> <C> <C>
Net income (loss) $ 2,088,688 $ 428,834 $ (131,570) $ 114,244
Adjustments to reconcile net income (loss) to
net cash provided by operations:
Depreciation 36,625 637,679 - 205,924
Leveraged lease income - (15,842) - (5,280)
Gain on sales of assets (2,253,471) (38,505) - (81,854)
Changes in operating assets and liabilities:
Accounts receivable 25,009 1,996 193,794 27,838
Accounts payable, General Partner 103,776 (326,710) 103,776 12,664
Accounts payable, other (150,393) (38,573) (190,027) (16,384)
Accrued interest - (1,363) - (349)
Unearned operating lease income - (22,746) - (91,738)
---------------- ----------------- ---------------- ----------------
Net cash provided by operations (149,766) 624,770 (24,027) 165,065
---------------- ----------------- ---------------- ----------------
Investing activities:
Proceeds from sales of equipment 3,303,599 999,366 - 262,498
Reduction in net investment in direct financing
leases - 353,855 - 116,878
---------------- ----------------- ---------------- ----------------
Net cash provided by investing activities 3,303,599 1,353,221 - 379,376
---------------- ----------------- ---------------- ----------------
5
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
STATEMENTS OF CASH FLOWS
(CONTINUED)
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Financing activities:
Distributions to limited partners (3,500,002) (8,304,354) (3,500,002) (2,767,565)
Repayments of non-recourse debt (57,291) (328,915) - (70,840)
---------------- ----------------- ---------------- ----------------
Net cash used in financing activities (3,557,293) (8,633,269) (3,500,002) (2,838,405)
---------------- ----------------- ---------------- ----------------
Net decrease in cash and cash equivalents (403,460) (6,655,278) (3,524,029) (2,293,964)
Cash and cash equivalents at beginning
of period 729,853 11,294,942 3,850,422 6,933,628
---------------- ----------------- ---------------- ----------------
Cash and cash equivalents at end of period $ 326,393 $4,639,664 $ 326,393 $4,639,664
================ ================= ================ ================
Supplemental disclosures of cash flow
information:
Cash paid for interest $ 5,746 $ 18,425 $ 3,056 $ 3,243
================ ================= ================ ================
</TABLE>
See accompanying notes
6
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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:
<TABLE>
<CAPTION>
Depreciation
Expense or Reclass-
December 31, Amortization ifications & September 30,
1999 of Leases Dispositions 2000
---- --------- -------------- ----
<S> <C> <C> <C> <C>
Net investment in operating leases $ 735,458 $ (36,625) $ (698,833) $ -
Net investment in direct financing leases 348,795 - (348,795) -
Net investment in leveraged leases - - - -
Equipment held for sale or lease 2,500 - (2,500) -
---------------- ----------------- ---------------- ----------------
$ 1,086,753 $ (36,625) $(1,050,128) $ -
================ ================= ================ ================
</TABLE>
The following schedule provides an analysis of the Partnership's investment in
property on operating leases by major classifications as of December 31, 1999,
dispositions during the nine months ended September 30, 2000 and as of September
30, 2000.
<TABLE>
<CAPTION>
December 31, September 30,
1999 Dispositions 2000
---- -------------- ----
<S> <C> <C> <C>
Mining $ 3,757,698 $(3,757,698) $ -
------------------ ---------------- -----------------
3,757,698 (3,757,698) -
Less accumulated depreciation (3,022,240) 3,022,240 -
------------------ ---------------- -----------------
$ 735,458 $ (735,458) $ -
================== ================ =================
</TABLE>
7
<PAGE>
ATEL CASH DISTRIBUTION FUND III, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
3. Commitments, management and report of fees:
The terms of the Agreement of Limited Partnership provide that the General
Partners and/or Affiliates are entitled to receive certain fees for equipment
acquisition, management and resale and for management of the Partnership.
The General Partners and/or Affiliates earned the following fees, commissions
and reimbursements, pursuant to the Limited Partnership Agreement as follows:
2000 1999
---- ----
Incentive and equipment management fees $ 117,699 $ 114,822
Reimbursement of administrative costs 95,488 155,774
---------------- ----------------
$ 213,187 $ 270,596
================ ================
4. Partners' capital:
The Partnership Net Profits, Net Losses, and Tax Credits are to be allocated 99%
to the Limited Partners and 1% to the General Partners.
As more fully described in the Partnership Agreement, available Cash from
Operations and Cash from Sales or Refinancing shall be distributed as follows:
First, 5% of Distributions of Cash from Operations to the General Partners as
Incentive Management Compensation.
Second, the balance to the Limited Partners until the Limited Partners have
received aggregate Distributions, as defined, in an amount equal to their
Original Invested Capital, as defined, plus an 8% per annum cumulative
(compounded daily) return on their Adjusted Invested Capital, as defined.
Third, the General Partners will receive as Incentive Management Compensation,
the following:
(A) 10% of remaining Cash from Operations, as defined,
(B) 15% of remaining Cash from Sales or Refinancing, as defined.
Fourth, the balance to the Limited Partners.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Capital Resources and Liquidity
As of June 30, 2000, the Partnership disposed of the last of its lease assets
and ceased operations in its primary business, equipment leasing and sales
activities.
Funds which have been received, but which have not yet been distributed, are
invested in interest-bearing accounts.
The Partnership's primary source of liquidity during the first six months of
2000 were proceeds from sales of assets.
The Partnership currently has available adequate reserves to meet contingencies.
As of September 30, 2000, the Partnership had borrowed approximately
$32,425,000, all of which has been repaid. The General Partners expect that
there will be no additional borrowings.
No commitments of capital have been or are expected to be made. As of September
30, 2000, there were no such commitments.
During August 2000, the Partnership made a liquidating distribution of
approximately $3,500,000, which represented about 4.7% of the original invested
capital of the Partnership.
2000 vs. 1999:
During the nine month period ended September 30, 2000, the Partnership's primary
source of cash from operating activities was lease rents. Lease rents have
decreased compared to the prior year as a result of scheduled lease terminations
and asset sales in the last year.
Sources of cash from investing activities consisted of the proceeds from sales
of lease assets. Proceeds from sales of assets increased compared to 1999. Asset
sales are not expected to be consistent from one period to another. Cash flows
from direct financing leases have decreased as a result of lease terminations
and asset sales.
In 2000 and 1999, there were no financing sources of cash. Repayments of
non-recourse debt have decreased due to scheduled debt payments. Distributions
to limited partners have decreased. The Partnership made only one distribution
to the limited partners in 2000.
Results of Operations
Operations in the third quarter of 2000 resulted in a net loss of $131,570
compared to net income of $114,244 in 1999. Net income for the first nine months
of 2000 was $2,088,688 compared to $428,834 in 1999.
2000 vs. 1999:
Operating lease revenues decreased by $1,065,221 (a decrease of about 95%)
compared to 1999 and depreciation expense decreased by $601,054 (a decrease of
about 94%). Both of these decreases are due to scheduled terminations of
operating leases over the last year and the subsequent sales of the related
assets.
Interest expense has decreased due to scheduled reductions of debt balances.
9
<PAGE>
PART II OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
On December 31, 1997, Quaker Coal Company requested a moratorium on lease
payments from January through March 1998. No lease payments were made through
June of 1998. As a result, the General Partner declared the lease in default.
Subsequently, the lessee made the outstanding payments, however, the General
Partner refused to waive the default and insisted on additional damages. The
General Partner sued the lessee for damages and was awaiting judgment from the
court when on June 16, 2000, the lessee filed for protection under the U. S.
Bankruptcy Act.
The Partnership has filed a stipulation for relief from stay to allow the court
to issue its ruling, and has filed a request to participate on the Official
Committee of Unsecured Creditors. The Partnership has succeeded upon securing
the return of its equipment which it is currently liquidating. The amounts of
these damages have not been included in the financial statements included in
Item 1 of this report, however the liklihood of recovery of amounts above the
liquidation of the equipment is speculative.
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, September 30, 2000.
Income statements for the nine and three month
periods ended September 30, 2000 and 1999.
Statement of changes in partners' capital for
the nine month period ended September 30, 2000.
Statements of cash flows for the nine and three
month periods ended September 30, 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
10
<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:
November 9, 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
