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 0-21260
- -------------------- -------------------------------
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 36-3763539
- --------------------- --------------------------
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 XX, 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
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 XX, 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 $126,685 $1,427,020 $1,553,705
Installment contract receivable,
net 62,378 860,378 922,756
Net investment in direct
financing leases 83,285 4,298,881 4,382,166
Diverted and Other Assets, net 15,325 211,382 226,707
Organization costs, net of
accumulated amortization 14,878 205,218 220,096
Acquisition costs, net of
accumulated amortization 14,945 206,136 221,081
-------- ---------- -----------
$317,496 $7,209,015 $ 7,526,511
======== ========== ===========
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Accounts payable and
accrued expenses $ 830 $ 48,591 $ 49,421
Lessee rental deposits 5,699 81,102 86,801
Due to Management Company 24 6,359 6,383
-------- ---------- -----------
Total liabilities 6,553 136,052 142,605
Total Partners' equity 310,943 7,072,963 7,383,906
-------- ---------- -----------
$317,496 $7,209,015 $ 7,526,511
======== ========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
---------------------------------------
BALANCE SHEETS
--------------
December 31, 1995
---------------------------
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
---------- ---------- --------
<S> <C> <C> <C>
ASSETS
- ------
Cash and cash equivalents $253,297 $2,470,149 $2,723,446
Installment contract receivable 70,792 976,434 1,047,226
Net investment in direct
financing leases 122,399 4,547,783 4,670,182
Diverted and Other Assets, net 15,325 211,382 226,707
Organization costs, net of
accumulated amortization 18,066 249,193 267,259
Acquisition costs, net of
accumulated amortization 18,148 250,308 268,456
-------- ---------- ----------
$498,027 $8,705,249 $9,203,276
======== ========== ==========
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Accounts payable and
accrued expenses $ 2,975 $ 75,779 $ 78,754
Lessee rental deposits 5,675 80,762 86,437
Due to Management Company 8 25,908 25,916
-------- ---------- ----------
Total liabilities 8,658 182,449 191,107
Total Partners' equity 489,369 8,522,800 9,012,169
-------- ---------- ----------
$498,027 $8,705,249 $9,203,276
======== ========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XX, 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 $ 5,610 $179,301 $ 184,911
Interest income 5,237 76,214 81,451
-------- --------- ---------
10,847 255,515 266,362
======== ========= =========
Expenses:
Amortization of organization
and equipment acquisition costs 6,391 88,147 94,538
Management fees-New Era 13,342 370,198 383,540
General Partner's
expense reimbursement 7,683 105,970 113,653
Professional fees 4,742 66,500 71,242
Other operating expenses 698 16,992 17,690
------- --------- ---------
32,856 647,807 680,663
-------- --------- ---------
Net loss $(22,009) $(392,292) $(414,301)
======== ========= =========
Net loss - General Partner $ (220) $ (3,923) $ (4,143)
======== ========= =========
Net loss - Limited Partners $(21,789) $(388,369) $(410,158)
======== ========= =========
Net loss per Limited Partnership
Unit $(4.27) $(5.52)
====== ======
Weighted average number
of Limited Partnership Units
outstanding 5,100 70,396
===== ======
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
---------------------------------------
STATEMENTS OF REVENUE AND EXPENSES
----------------------------------
For the three months ended March 31, 1995
-----------------------------------------
(Unaudited)
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------ ------------ ----------
<S> <C> <C> <C>
Revenue:
Lease income $ 16,472 $ 347,506 $ 363,978
Interest income 4,682 64,549 69,231
-------- ---------- ----------
21,154 412,055 433,209
======== ========== ==========
Expenses:
Amortization of organization
and equipment acquisition costs 6,391 88,147 94,538
Management fees-New Era 16,647 365,327 381,974
General Partner's
expense reimbursement 7,088 97,764 104,852
Professional fees 5,228 72,116 77,344
Other operating expenses 332 6,111 6,443
Credit for losses on
installment contract receivable (6,084) (83,916) (90,000)
-------- --------- ---------
29,602 545,549 575,151
-------- --------- ---------
Net loss $(8,448) $(133,494) $(141,942)
======== ========= =========
Net loss - General Partner $ (84) $ (1,335) $ (1,419)
======== ========== =========
Net loss - Limited Partners $(8,364) $(132,159) $(140,523)
======== ========== =========
Net loss per Limited Partnership Unit $(1.64) $(1.88)
====== ======
Weighted average number
of Limited Partnership Units
outstanding 5,100 70,396
====== ======
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XX, 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 $(278,256)* $504,666 $ 8,785,759 $ 9,012,169
Distributions to partners (17,372) (156,009) (1,040,581) (1,213,962)
Net loss (4,143) (21,789) (388,369) (414,301)
Allocation of General
Partner's Equity 299,771 (15,925) (283,846) -
--------- -------- ----------- -----------
Balance, March 31, 1996 $ - $310,943 $ 7,072,963 $ 7,383,906
========= ======== =========== ===========
<FN>
* Balance as previously reported was $0 due to allocation of
$15,297 and $262,959 to Liquidating and Continuing Limited
Partners' Equity, respectively.
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XX, 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 $ (22,009) $ (392,292) $ (414,301)
Adjustments to reconcile net loss
to net cash used in operating activities:
Amortization expense 6,391 88,147 94,538
Changes in assets and liabilities:
Accounts payable and accrued
expenses (2,145) (27,188) (29,333)
Lessee rental deposits 24 340 364
Due to Management Company 16 (19,549) (19,533)
--------- ------------ -----------
(17,723) (350,542) (368,265)
--------- ------------ -----------
Cash flows from investing activities:
Purchases of lease receivables - (1,093,987) (1,093,987)
Principal collections on leases 36,709 762,639 799,348
Sale of leases (Note 4) 2,405 580,250 582,655
Principal collections on
installment contract receivable 8,414 116,056 124,470
--------- ------------ -----------
47,528 364,958 412,486
--------- ------------ -----------
Cash flows from financing activities:
Distributions to limited partners (a) (156,009) (1,040,581) (1,196,590)
Distributions to General Partner (408) (16,964) (17,372)
--------- ------------ -----------
(156,417) (1,057,545) (1,213,962)
--------- ------------ -----------
Net decrease in cash and
cash equivalents (126,612) (1,043,129) (1,169,741)
--------- ------------ -----------
Cash and cash equivalents:
Beginning of year 253,297 2,470,149 2,723,446
--------- ------------ -----------
End of first quarter $ 126,685 $1,427,020 $ 1,553,705
========= ============ ===========
<FN>
(a) Distributions during the period were $30.59 per unit for
Liquidating Limited Partners and $14.78 per unit for Continuing
Limited Partners.
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DATRONIC EQUIPMENT INCOME FUND XX, 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 loss $ (8,448) $ (133,494) $ (141,942)
Adjustments to reconcile net loss
to net cash used in operating activities:
Amortization expense 6,391 88,147 94,538
Credit for losses on
installment contracts receivable (6,084) (83,916) (90,000)
Changes in assets and liabilities:
Accounts payable and accrued
expenses (1,736) (19,339) (21,075)
Lessee rental deposits 90 3,629 3,719
Due to Management Company 6 34,614 34,620
------------ ------------ -----------
(9,781) (110,359) (120,140)
------------ ------------ -----------
Cash flows from investing activities:
Purchases of lease receivables - (1,678,783) (1,678,783)
Principal collections on leases 73,973 1,261,539 1,335,512
Sales of leases (Note 4) 26,580 596,087 622,667
Diverted and Other Assets, net 5,622 77,541 83,163
Datronic Assets 2,710 37,377 40,087
Principal collections on
installment contracts receivable 15,362 211,890 227,252
Repayments of commercial lease paper 2,730 37,653 40,383
------------ ------------ -----------
126,977 543,304 670,281
------------ ------------ -----------
Cash flows from financing activities:
Distributions to limited partners (a) (62,025) (1,041,828) (1,103,853)
Distributions to General Partner (1,488) (30,346) (31,834)
------------ ------------ -----------
(63,513) (1,072,174) (1,135,687)
------------ ------------ -----------
Net increase (decrease) in cash
and cash equivalents 53,683 (639,229) (585,546)
------------ ------------ -----------
Cash and cash equivalents:
Beginning of year 222,562 2,063,899 2,286,461
------------ ------------ -----------
End of first quarter $276,245 $ 1,424,670 $1,700,915
============ ============ ===========
<FN>
(a) Distributions during the period were $12.16 per unit for
Liquidating Limited Partners and $14.80 per unit for Continuing
Limited Partners.
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
---------------------------------------
NOTES TO FINANCIAL STATEMENTS
----------------------------
March 31, 1996
--------------
(Unaudited)
NOTE 1 - ORGANIZATION:
- ----------------------
Datronic Equipment Income Fund XX, L.P., a Delaware Limited
Partnership (the "Partnership"), was formed on April 30, 1991 for
the purpose of acquiring and leasing both high- and low-technology
equipment. The offering of limited partnership units terminated on
May 1, 1992. Reference is made to Notes 4, 5, 6 and 7 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 will be suspended
after payment of the July 1, 1996 distribution and distributions to
Continuing Limited Partners will be reduced from 12% annually to an
annual rate of 6% effective after the July 1, 1996 distribution.
NOTE 4 - LEASE PORTFOLIO SALES:
- -------------------------------
During the three months ended March 31, 1996, the Partnership and
Datronic Equipment Income Fund XIX, L.P. 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 approximately $583,000. Of this
amount, approximately $580,000 was allocable to Continuing Limited
Partners of which, approximately $410,000 has been invested in new
leases.
During the three months ended March 31, 1995, the Partnership,
Datronic Equipment Income Fund XVIII, L.P., Datronic Equipment
Income Fund XIX, L.P., and Datronic Finance Income Fund I, L.P.
each entered into separate lease purchase agreements with Southern
Pacific Thrift & Loan Association ("Southern") to sell equipment
leases at discount rates ranging from 10.75% to 11% which resulted
in aggregate net proceeds of approximately $2.6 million. The
Partnership's proceeds were approximately $623,000. Of this
amount, approximately $596,000 was allocable to Continuing Limited
Partners and has been invested in new leases.
NOTE 5 - 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 Diverted and Other Assets. See
Notes 4 and 5 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 $20,000 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 in order to pay Partnership
operating expenses, acquire new leases for the Continuing Limited
Partners and make distributions to limited partners and the General
Partner.
Net investment in direct financing leases decreased approximately
$288,000 during the three months ended March 31, 1996. This
decrease is primarily attributable to principal collections of
approximately $799,000 and sales of leases of approximately
$583,000 (see Note 4 to the financial statements included in Item
1) partially offset by investments in new leases for the Continuing
Limited Partners of approximately $1,094,000.
In the aggregate, partners' equity decreased approximately $1.6
million during the three months ended March 31, 1996 due to a net
loss of approximately $414,000 and distributions to partners of
approximately $1,214,000.
During the three months ended March 31, 1996, the Partnership's
operating activities resulted in a use of $368,265 of cash. This
was due principally to a net loss of $414,301, a decrease in
accounts payable and accrued expenses of $29,333 and a decrease in
due to management company of $19,533 partially offset by a non-cash
amortization expense of $94,538. During the period, cash flows
from investing activities aggregated $412,486 relating primarily
to principal collections on leases of $799,348, sales of leases of
$582,655, net of purchases of lease receivables for the benefit of
the Continuing Limited Partners of $1,093,987. Cash flows used for
financing activities of $1,213,962, consisted of distributions to
limited partners of $1,196,590 and to the general partner of
$17,372.
The Partnership's principal sources of liquidity on both a
long-term and short-term basis are cash on hand and receipts from
leases 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 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 will be suspended after payment of the July 1, 1996
distribution and distributions to Continuing Limited Partners will
be reduced from 12% annually to an annual rate of 6% effective
after the July 1, 1996 distribution. Distributions to Liquidating
Limited Partners will be suspended and distributions to Continuing
Limited Partners will be reduced 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
$226,707 of which, approximately $20,000 may be used to settle the
claims of a defendant of the Class Action Complaint (see Note 5 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 Notes 4, 5
and 8 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, 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 statement included in Item 1).
Results of Operations
- ---------------------
Lease income decreased approximately $179,000 for the three months
ended March 31, 1996 as compared to the corresponding period in
1995. The decrease is primarily due to a decline in the lease
portfolios compared to the corresponding period in 1995.
For the three months ended March 31, 1995 the credit for losses on
installment contract receivable was due to a recovery of an
installment contract receivable which had previously been reserved
100%.
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 5 for a discussion of legal
proceedings involving claims against 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. 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.
<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 XX, 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 XX, 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 XX, 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> 0000875272
<NAME> DATRONIC EQUIPMENT INCOME FUND XX, 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> 1,553,705
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,526,511
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,383,906
<TOTAL-LIABILITY-AND-EQUITY> 7,526,511
<SALES> 0
<TOTAL-REVENUES> 266,362
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 17,690
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (414,301)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
