<PAGE> 1
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
September 30, 1996 Commission File Number 0-19466
--------------------- -------------------------------
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 36-3684373
------------------- ---------------------------
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> 2
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
PART I - FINANCIAL INFORMATION
Item 1.
Index to Financial Statements
Balance Sheets
September 30, 1996 (unaudited)
December 31, 1995
Statements of Revenue and Expenses (unaudited)
For the three months ended September 30, 1996
For the three months ended September 30, 1995
For the nine months ended September 30, 1996
For the nine months ended September 30, 1995
Statements of Changes in Partners' Equity
For the nine months ended September 30, 1996
(unaudited)
Statements of Cash Flows (unaudited)
For the nine months ended September 30, 1996
For the nine months ended September 30, 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> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
BALANCE SHEETS
September 30, 1996 - Unaudited
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- -----
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $1,425,621 $1,726,216 $3,151,837
Investments in commercial lease
paper, net 12,018 89,529 101,547
Installment contract receivable,
net 58,944 288,809 347,753
Net investment in direct
financing leases 28,374 6,548,123 6,576,497
Diverted and other assets, net 760,153 3,724,527 4,484,680
---------- ----------- -----------
$2,285,110 $12,377,204 $14,662,314
========== =========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and
accrued expenses $ 29,146 $ 172,749 $ 201,895
Lessee rental deposits 135,981 781,438 917,419
Due to management company 361 1,969 2,330
---------- ----------- -----------
Total liabilities 165,488 956,156 1,121,644
Total partners' equity 2,119,622 11,421,048 13,540,670
---------- ----------- -----------
$2,285,110 $12,377,204 $14,662,314
========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 4
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
BALANCE SHEETS
December 31, 1995
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- -----
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $1,219,379 $ 2,056,790 $3,276,169
Investments in commercial lease
paper, net 22,024 261,396 283,420
Installment contract receivable,
net 109,334 535,706 645,040
Net investment in direct
financing leases 250,405 10,893,937 11,144,342
Diverted and other assets, net 760,153 3,724,527 4,484,680
Restricted cash 182,488 894,135 1,076,623
Organization and acquisition
costs, net of accumulated
amortization 25,620 125,528 151,148
---------- ----------- -----------
$2,569,403 $18,492,019 $21,061,422
========== =========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and
accrued expenses $ 46,708 $ 281,857 $ 328,565
Lessee rental deposits 173,802 996,494 1,170,296
Due to management company 64 28,530 28,594
---------- ----------- -----------
Total liabilities 220,574 1,306,881 1,527,455
Total partners' equity 2,348,829 17,185,138 19,533,967
---------- ----------- -----------
$2,569,403 $18,492,019 $21,061,422
========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 5
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended September 30, 1996
(Unaudited)
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- -----
Revenue:
Lease income $ 4,735 $ 272,260 $ 276,995
Interest income 7,890 71,393 79,283
--------- ---------- ----------
12,625 343,653 356,278
--------- ---------- ----------
Expenses:
Management fees-New Era 47,278 294,847 342,125
General Partner's
expense reimbursement 10,064 49,308 59,372
Professional fees 18,750 106,495 125,245
Other operating expenses 4,391 23,175 27,566
Provision for lease losses - 250,000 250,000
Provision for loss on commercial
lease paper 1,695 23,305 25,000
--------- ---------- ----------
82,178 747,130 829,308
--------- ---------- ----------
Net loss $ (69,553) $ (403,477) $ (473,030)
========= ========== ==========
Net loss -
General Partner $ (696) $ (4,035) $ (4,731)
========= ========== ==========
Net loss -
Limited Partners $ (68,857) $ (399,442) $ (468,299)
========= ========== ==========
Net loss per Limited
Partnership Unit $(2.03) $ (2.41)
====== =======
Weighted average number
of Limited Partnership Units
outstanding 33,858 165,901
====== =======
See accompanying notes to financial statements.
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<PAGE> 6
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended September 30, 1995
(Unaudited)
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ---------
Revenue:
Lease income $ 28,105 $525,176 $ 553,281
Settlement proceeds (Note 5) 72,118 353,356 425,474
Interest income 16,076 109,767 125,843
-------- -------- ----------
116,299 988,299 1,104,598
-------- -------- ----------
Expenses:
Amortization of organization
and equipment acquisition costs 51,677 253,200 304,877
Management fees-New Era 45,175 366,441 411,616
General Partner's
expense reimbursement 6,971 34,160 41,131
Professional fees (Note 5) 38,682 191,461 230,143
Other operating expenses 9,020 51,562 60,582
Provision for lease losses - 150,000 150,000
-------- -------- ----------
151,525 1,046,824 1,198,349
-------- -------- ----------
Net loss $(35,226) $(58,525) $ (93,751)
======== ======== ==========
Net loss -
General Partner $ (352) $(585) $ (937)
======== ======== ==========
Net loss -
Limited Partners $(34,874) $(57,940) $ (92,814)
======== ======== ==========
Net loss per Limited
Partnership Unit $ (1.03) $(0.35)
======== ======
Weighted average number
of Limited Partnership Units
outstanding 33,858 165,901
====== =======
See accompanying notes to financial statements.
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<PAGE> 7
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the nine months ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------ ---------- -----
<S> <C> <C> <C>
Revenue:
Lease income $ 3,373 $ 883,437 $ 886,810
Interest income 53,411 333,685 387,096
--------- ---------- -----------
56,784 1,217,122 1,273,906
========= ========== ===========
Expenses:
Amortization of organization
and equipment acquisition costs 25,620 125,528 151,148
Management fees-New Era 140,936 987,696 1,128,632
General Partner's
expense reimbursement 50,431 247,096 297,527
Professional fees 57,497 306,344 363,841
Other operating expenses 9,812 63,779 73,591
Provision for lease losses - 425,000 425,000
Provision for loss on commercial
lease paper 1,695 23,305 25,000
--------- ---------- -----------
285,991 2,178,748 2,464,739
--------- ---------- -----------
Net loss $(229,207) $ (961,626) $(1,190,833)
========= ========== ===========
Net loss -
General Partner $ (2,292) $ (9,616) $ (11,908)
========= ========== ===========
Net loss -
Limited Partners $(226,915) $ (952,010) $(1,178,925)
========= ========== ===========
Net loss per Limited
Partnership Unit $(6.70) $ (5.74)
====== =======
Weighted average number
of Limited Partnership Units
outstanding 33,858 165,901
====== =======
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 8
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the nine months ended September 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
---------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Lease income $ 125,665 $1,917,970 $2,043,635
Settlement proceeds (Note 5) 72,118 353,356 425,474
Interest income 48,454 301,741 350,195
--------- ---------- -----------
246,237 2,573,067 2,819,304
--------- ---------- -----------
Expenses:
Amortization of organization
and equipment acquisition costs 155,030 759,598 914,628
Management fees-New Era 143,182 1,390,037 1,533,219
General Partner's
expense reimbursement 40,912 200,458 241,370
Professional fees (Note 5) 91,046 454,038 545,084
Other operating expenses 32,009 182,760 214,769
Provision for lease losses - 150,000 150,000
--------- ---------- -----------
462,179 3,136,891 3,599,070
--------- ---------- -----------
Net loss $(215,942) $ (563,824) $ (779,766)
========= ========== ==========
Net loss -
General Partner $ (2,159) $ (5,638) $ (7,797)
========= ========== ==========
Net loss -
Limited Partners $(213,783) $ (558,186) $ (771,969)
========= ========== ==========
Net loss per Limited
Partnership Unit $ (6.31) $ (3.36)
========= ==========
Weighted average number
of Limited Partnership Units
outstanding 33,858 165,901
====== =======
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 9
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY
(Unaudited)
<TABLE>
<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 $(668,826)* $2,419,615 $17,783,178 $19,533,967
Distributions to partners
(Note 3) (36,480) - (4,765,984) (4,802,464)
Net loss (11,908) (226,915) (952,010) (1,190,833)
Allocation of General
Partner's equity 717,214 (73,078) (644,136) -
--------- ---------- ----------- -----------
Balance, September 30, 1996 $ - $2,119,622 $11,421,048 $13,540,670
========= ========== =========== ===========
</TABLE>
* Balance as previously reported was $0 due to allocation of $70,786
and $598,040 to Liquidating and Continuing Limited Partners' Equity,
respectively.
See accompanying notes to financial statements.
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<PAGE> 10
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (229,207) $ (961,626) $(1,190,833)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Amortization expense 25,620 125,528 151,148
Provision for lease losses - 425,000 425,000
Provision for losses on commercial
lease paper 1,695 23,305 25,000
Changes in assets and liabilities:
Accounts payable and accrued
expenses (17,562) (109,108) (126,670)
Lessee rental deposits (37,821) (215,056) (252,877)
Due to management company 297 (26,561) (26,264)
---------- ----------- -----------
(256,978) (738,518) (995,496)
---------- ----------- -----------
Cash flows from investing activities:
Purchases of lease receivables - (919,590) (919,590)
Principal collections on leases 222,031 3,908,473 4,130,504
Sale of leases (Note 4) - 931,931 931,931
Repayments of commercial lease paper 8,311 148,562 156,873
Release of restricted cash 182,488 894,135 1,076,623
Principal collections on
installment contract receivable 50,390 246,897 297,287
---------- ----------- -----------
463,220 5,210,408 5,673,628
---------- ----------- -----------
Cash flows from financing activities:
Distributions to Limited Partners (a) - (4,765,984) (4,765,984)
Distributions to General Partner - (36,480) (36,480)
---------- ----------- -----------
- (4,802,464) (4,802,464)
---------- ----------- -----------
Net increase (decrease) in
cash and cash equivalents 206,242 (330,574) (124,332)
Cash and cash equivalents:
Beginning of year 1,219,379 2,056,790 3,276,169
---------- ----------- -----------
End of third quarter $1,425,621 $ 1,726,216 $ 3,151,837
========== =========== ===========
</TABLE>
(a) Distributions during the period were $0 per unit for Liquidating
Limited Partners and $28.72 per unit for Continuing Limited Partners
(see Note 3).
See accompanying notes to financial statements.
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<PAGE> 11
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- --------- -----
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (215,942) $ (563,824) $ (779,766)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Amortization expense 155,030 759,598 914,628
Provision for lease losses - 150,000 150,000
Changes in assets and liabilities:
Accounts payable and accrued
expenses (19,420) (126,646) (146,066)
Lessee rental deposits (30,358) (87,462) (117,820)
Due to Management Company 45 6,325 6,370
---------- ----------- -----------
(110,645) 137,991 27,346
---------- ----------- -----------
Cash flows from investing activities:
Purchases of lease receivables - (6,720,665) (6,720,665)
Principal collections on leases 799,923 7,582,681 8,382,604
Sale of leases (Note 4) 36,512 7,547,133 7,583,645
Distribution of Diverted and other assets 281,237 1,377,980 1,659,217
Distribution of Datronic Assets 22,781 111,621 134,402
Repayments of commercial lease paper 18,628 186,108 204,736
Principal collections on
installment contract receivable 45,613 223,492 269,105
---------- ----------- -----------
1,204,694 10,308,350 11,513,044
---------- ----------- -----------
Cash flows from financing activities:
Distributions to limited partners (a) (649,735) (7,779,675) (8,429,410)
Distributions to General Partner (LRC) (12,105) (149,680) (161,785)
---------- ----------- -----------
(661,840) (7,929,355) (8,591,195)
---------- ----------- -----------
Net increase in cash and
cash equivalents 432,209 2,516,986 2,949,195
Cash and cash equivalents:
Beginning of year 941,564 4,416,807 5,358,371
---------- ----------- -----------
End of third quarter $1,373,773 $ 6,933,793 $ 8,307,566
========== =========== ===========
</TABLE>
(a) Distributions during the period were $19.19 per unit for
Liquidating Limited Partners and $46.89 per unit for Continuing
Limited Partners.
See accompanying notes to financial statements.
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<PAGE> 12
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
NOTE 1 - ORGANIZATION:
Datronic Equipment Income Fund XIX, L.P., a Delaware Limited Partnership (the
"Partnership"), was formed on December 22, 1989 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.
NOTE 3 - LIMITED PARTNERSHIP DISTRIBUTIONS:
Distributions to Liquidating Limited Partners were suspended after payment of
the October 1, 1995 distribution. Distributions to Continuing Limited Partners
were reduced to an annual rate of 9% effective with the February 1, 1996
distribution. The Partnership entered its Liquidation Phase in August 1996.
Accordingly, Continuing Limited Partners received their last reduced Target
Distribution on July 1, 1996 and received their first Liquidating Distribution
on October 1, 1996.
NOTE 4 - LEASE PORTFOLIO SALES:
During the nine months ended September 30, 1996, the Partnership and Fund XX
each entered into separate lease purchase agreements with Linc Anthem
Corporation to sell equipment leases at a discount rate of 11.75% which resulted
in aggregate net proceeds of approximately $1.5 million. The Partnership's
proceeds were
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<PAGE> 13
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
NOTES TO FINANCIAL STATEMENTS
approximately $932,000. Of this amount, all was allocable to Continuing Limited
Partners and approximately $920,000 has been invested in new leases.
During the nine months ended September 30, 1995, the Partnership, Fund XVIII,
Fund XX, and Finance Income Fund I each entered into separate lease purchase
agreements with Southern Pacific Thrift & Loan Association to sell equipment
leases at discount rates ranging from 10.75% to 12.25% which resulted in
aggregate proceeds of approximately $16.7 million. The Partnership's proceeds
were approximately $7.6 million. Of this amount, approximately all were
allocable to Continuing Limited Partners and invested in new leases.
NOTE 5 - SETTLEMENT WITH FORMER ATTORNEYS:
On August 10, 1995, the United States District Court of the Northern District of
Illinois, Eastern Division, approved as fair, reasonable and adequate, a
settlement with all the Datronic Partnerships and the Partnerships' former
attorneys, Siegan, Barbakoff, Gomberg & Kane in the aggregate amount of
$1,775,000 ($425,474 for the Partnership) or $2.13 per unit (see Note 6 to the
Partnership's financial statements included in the 1995 Form 10-K). A total of
$683,147, of expenses ($163,753 for the Partnership), consisting primarily of
professional fees, were incurred in connection with this recovery resulting in a
net recovery of $1,091,853 or $1.31 per unit. However, since the Partnerships
had previously paid $239,397 ($57,384 for the Partnership) of these expenses, a
total of $1,331,250 or $1.60 per unit was available for distribution.
Accordingly, on October 1, 1995, the Partnership distributed $1.60 per unit to
Liquidating Limited Partners and to Continuing Limited Partners. All settlement
proceeds and all related expenses have been allocated to all unit holders of the
Datronic Partnerships based on the number of limited partnership units owned.
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<PAGE> 14
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 September 30, 1996. The discussion and analysis of results of
operations is for the three and nine month periods ended September 30, 1996 as
compared to the corresponding periods in 1995.
Financial Condition, Liquidity and Capital Resources
During the nine months ended September 30, 1996, Partnership assets continued to
be converted to cash in order to, generally, pay Partnership operating expenses,
acquire new leases for the Continuing Limited Partners and make distributions to
the Continuing Limited Partners and General Partner.
Investment in commercial lease paper, net decreased an aggregate of
approximately $182,000 during the nine months ended September 30, 1996 due to
scheduled principal collections of approximately $157,000 and a provision for
loss of $25,000.
Installment contract receivable, net decreased approximately $297,000 during the
nine months ended September 30, 1996 due to scheduled principal collections.
Net investment in direct financing leases decreased approximately $4,568,000
during the nine months ended September 30, 1996. This decrease is primarily
attributable to principal collections of approximately $4,131,000, sales of
leases in the amount of approximately $932,000 (see Note 4 to the financial
statements included in Item 1) and a provision for lease loss of $425,000
partially offset by investments in new leases for the Continuing Limited
Partners of approximately $920,000.
Restricted cash of approximately $1,077,000 has been included in cash and cash
equivalents due to the removal of claims on such cash (see Part II, Item 1 -
Legal Proceedings) and repayment to the Partnership with interest in June 1996.
Accounts payable and accrued expenses decreased approximately $127,000 during
the nine months ended September 30, 1996 primarily due to payment of legal fees
and sales and use taxes.
Lessee rental deposits decreased approximately $253,000 during the nine months
ended September 30, 1996 primarily due to overpayments and security deposits
returned to lessees.
In the aggregate, partners' equity decreased approximately $6.0
- 14 -
<PAGE> 15
million during the nine months ended September 30, 1996 due to a net loss of
approximately $1,191,000 and distributions to Continuing Limited Partners and
the General Partner of approximately $4,802,000.
During the nine months ended September 30, 1996, the Partnership's operating
activities resulted in a use of approximately $996,000 of cash. This was due
principally to a net loss of approximately $1,191,000 and a net decrease in
accounts payable, accrued expenses and security deposits of approximately
$380,000 reduced by non-cash expenses relating to amortization of approximately
$151,000, a lease loss provision of $425,000 and a commercial lease paper loss
provision of $25,000. During the period, cash flows from investing activities
aggregated approximately $5,674,000 relating principally to principal
collections on leases of approximately $4,131,000, sales of leases of
approximately $932,000, scheduled repayments on the installment contract
receivable and commercial lease paper of approximately $454,000 and the
availability of cash which was previously restricted of approximately $1,077,000
net of purchases of lease receivables for the benefit of the Continuing Limited
Partners of approximately $920,000. Cash flows used for financing activities of
approximately $4,802,000, consisted of distributions to Continuing Limited
Partners of approximately $4,766,000 and the general partner of approximately
$36,000.
The Partnership's principal sources of liquidity on both a long-term and
short-term basis are cash on hand and receipts under leases, commercial lease
paper and an installment contract receivable. In addition, the Partnership's
sources of liquidity on a long-term basis are expected to include proceeds from
the sale of diverted and other assets and, possibly, 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 Liquidating Limited Partners
were suspended after the October 1, 1995 distribution and Target Distributions
to the Continuing Limited Partners were reduced to an annual rate of 9%
effective with the February 1, 1996 distribution. The Partnership entered its
Liquidating Phase in August 1996. Accordingly, Continuing Limited partners
received their last reduced Target Distribution on July 1, 1996 and their first
Liquidating Distribution on October 1, 1996. Distributions to the Liquidating
Limited Partners were suspended and Target Distributions to the Continuing
Limited Partners were reduced to ensure that sufficient cash will be available
to pursue recoveries under pending litigation with the Partnership's former
accountants and others and to liquidate the Partnership in an orderly manner.
Lease reinvestment activity is prohibited during the Liquidating
- 15 -
<PAGE> 16
Phase and in any period in which full Target Distributions have not been paid.
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 Notes 4, 6 and 9 to the Partnership's 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 September 30, 1996 Balance Sheets (see
financial statements included in Item 1).
Results of Operations
Lease income decreased approximately $276,000 and $1,157,000 for the three and
nine month periods ended September 30, 1996 as compared to the corresponding
periods in 1995. These decreases are primarily due to the declining lease
portfolios and a $125,000 provision in the second quarter of 1996 to provide for
the return of lessee overpayments previously recorded as lease income.
Settlement proceeds of approximately $426,000 recorded in the three and nine
month periods ended September 30, 1995 resulted from a settlement with the
Partnership's former attorneys. See Note 5 to the financial statements included
in Item 1.
Interest income decreased $48,000 for the three month period ended September 30,
1996 and increased $37,000 for the nine month period ended September 30, 1996 as
compared to the corresponding periods in 1995. During the second quarter of
1996, approximately $175,000 of previously earned interest on restricted cash
was recognized, excluding this amount, interest income for the nine month period
ended September 30, 1996 would have decreased $138,000 as compared to the
corresponding period in 1995. The decreases are primarily due to the
Partnership's decline in investments in commercial lease paper and installment
contract receivable.
Amortization of organization and equipment acquisition costs decreased
approximately $305,000 and $764,000 for the three and nine month periods ended
September 30, 1996 as compared to the corresponding periods in 1995 due to the
completion of the amortization of these costs in 1996.
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<PAGE> 17
Management fees-New Era represent amounts paid New Era for managing the
Partnership on a day-to-day basis and for acquiring leases for the Continuing
Limited Partners. These fees amounted to approximately $342,000 and $1,129,000
for the three and nine months ended September 30, 1996 as compared to $412,000
and $1,533,000 for the same periods in 1995. The decreases are attributable to
declining Partnership activity and the cessation of lease acquisitions in
January 1996. 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 and nine months ended September 30, 1996 were
approximately $71,000 and $334,000, respectively, ($59,000 and $298,000,
respectively, representing the General Partner's expense reimbursement and
$12,000 and $36,000, respectively, representing LRC's 1% of cash flow available
for distribution) as compared to approximately $84,000 and $403,000,
respectively, ($41,000 and $241,000, respectively, representing the General
Partner's expense reimbursement and $43,000 and $162,000, respectively,
representing LRC's 1% cash flow available for distribution) for the
corresponding periods ended September 30, 1996.
Professional fees decreased approximately $105,000 and $181,000 for the three
and nine month periods ended September 30, 1996 as compared to the corresponding
periods in 1995. These decreases are primarily due to the fees paid in 1995 in
connection with the settlement with the Partnership's former attorneys (see Note
5 to the financial statements included in Item 1) and collections.
Other operating expenses decreased approximately $33,000 and $141,000 for the
three and nine month periods ended September 30, 1996 as compared to the
corresponding periods in 1995 as a result of reduced losses on sales of
equipment residuals.
Provisions for lease losses are the result of management's ongoing assessment of
potential losses inherent in the lease portfolios. Increased provisions for
lease losses in 1996 reflect increases in past due and deficient leases.
- 17 -
<PAGE> 18
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, as amended, for a discussion of material legal proceedings
involving the Partnership.
Reference is made to Part II, Item 1 - Legal Proceedings in the Partnership's
March 31, 1996 Form 10-Q 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.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K
None.
- 18 -
<PAGE> 19
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 11th day of November 1996.
DATRONIC EQUIPMENT INCOME FUND XIX, 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 XIX, 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 XIX, L.P.
- 19 -
<PAGE> 20
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.
- 20 -
<PAGE> 21
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 11th day of November 1996.
DATRONIC EQUIPMENT INCOME FUND XIX, L.P.
Registrant
By: _______________________________________
Donald D. Torisky
Chairman and Chief Executive Officer
Lease Resolution Corporation
General Partner of
Datronic Equipment Income Fund XIX, L.P.
By: _______________________________________
Douglas E. Van Scoy
Chief Financial Officer and Director
New Era Funding Corp.
Managing Agent of
Datronic Equipment Income Fund XIX, L.P.
- 19 -
<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 QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT ON FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 3,151,837
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,662,314
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13,540,670
<TOTAL-LIABILITY-AND-EQUITY> 14,662,314
<SALES> 0
<TOTAL-REVENUES> 1,273,906
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 73,591
<LOSS-PROVISION> 450,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,190,833)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
