<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, 2000 Commission File Number 0-21260
--------------------- -------------------------------
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
---------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 36-3763539
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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
--- ---
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DATRONIC EQUIPMENT INCOME FUND XX, L.P.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
PART I - FINANCIAL INFORMATION
Item 1.
Index to Financial Statements
Balance Sheets
September 30, 2000 (unaudited) 3
December 31, 1999 4
Statements of Revenue and Expenses (unaudited)
For the three months ended September 30, 2000 5
For the three months ended September 30, 1999 6
For the nine months ended September 30, 2000 7
For the nine months ended September 30, 1999 8
Statements of Changes in Partners' Equity
For the nine months ended September 30, 2000
(unaudited) 9
Statements of Cash Flows (unaudited)
For the nine months ended September 30, 2000 10
For the nine months ended September 30, 1999 11
Notes to Financial Statements 12
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 13 - 15
Item 3.
Quantitative and Qualitative Disclosures about
Market Risk 15
PART II - OTHER INFORMATION
Items 1-6. 16
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2
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DATRONIC EQUIPMENT INCOME FUND XX, L.P.
BALANCE SHEETS
September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 42,301 $ 879,940 $ 922,241
Net investment in direct financing
leases - 44,203 44,203
Residual interest in CRCA - - -
Diverted and other assets, net 5,364 73,986 79,350
Datronic assets, net - - -
---------- --------- ----------
$ 47,665 $ 998,129 $1,045,794
========== ========= ==========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued
expenses $ 116 $ 9,762 $ 9,878
---------- --------- ----------
Total liabilities 116 9,762 9,878
Total partners' equity 47,549 988,367 1,035,916
---------- --------- ----------
$ 47,665 $ 998,129 $1,045,794
========== ========= ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
BALANCE SHEETS
December 31, 1999
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- -----------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 101,971 $ 2,152,997 $ 2,254,968
Net investment in direct financing
leases - 160,867 160,867
Residual interest in CRCA - - -
Diverted and other assets, net 8,172 112,713 120,885
Datronic assets, net - - -
--------- ----------- -----------
$ 110,143 $ 2,426,577 $ 2,536,720
========= =========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued
expenses $ 97 $ 3,867 $ 3,964
--------- ----------- -----------
Total liabilities 97 3,867 3,964
Total partners' equity 110,046 2,422,710 2,532,756
--------- ----------- -----------
$ 110,143 $ 2,426,577 $ 2,536,720
========= =========== ===========
</TABLE>
See accompanying notes to financial statements
4
<PAGE> 5
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- --------
<S> <C> <C> <C>
Revenue:
Lease income $ 48 $ 2,823 $ 2,871
Interest income 10 15,647 15,657
--------- --------- --------
58 18,470 18,528
--------- --------- --------
Expenses:
General Partner's expense
reimbursement 4,876 67,249 72,125
Professional fees 296 6,474 6,770
Other operating expenses 117 1,616 1,733
Credit for lease losses (75) (5,526) (5,601)
--------- --------- --------
5,214 69,813 75,027
--------- --------- --------
Net loss $ (5,156) $ (51,343) $(56,499)
========= ========= ========
Net loss - General Partner $ (52) $ (513) $ (565)
========= ========= ========
Net loss - Limited Partners $ (5,104) $ (50,830) $(55,934)
========= ========= ========
Net loss per limited
partnership unit $ (1.00) $ (0.72)
========= =========
Weighted average number of limited
partnership units outstanding 5,100 70,396
========= =========
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 6
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ---------- ---------
<S> <C> <C> <C>
Revenue:
Lease income $ - $ 8,627 $ 8,627
Interest income 396 20,433 20,829
----------- -------- ---------
396 29,060 29,456
----------- -------- ---------
Expenses:
General Partner's expense
reimbursement 6,349 103,708 110,057
Professional fees 684 10,550 11,234
Other operating expenses 204 2,820 3,024
Credit for lease losses (923) (42,739) (43,662)
----------- -------- ---------
6,314 74,339 80,653
----------- -------- ---------
Net loss $ (5,918) (45,279) $ (51,197)
=========== ======== =========
Net loss - General Partner $ (59) $ (453) $ (512)
=========== ======== =========
Net loss - Limited Partners $ (5,859) (44,826) $ (50,685)
=========== ======== =========
Net loss per limited
partnership unit $ (1.15) $ (0.64)
=========== ========
Weighted average number of limited
partnership units outstanding 5,100 70,396
=========== ========
</TABLE>
See accompanying notes to financial statements
6
<PAGE> 7
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the nine months ended September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Lease income $ 112 $ 11,351 $ 11,463
Interest income 507 63,097 63,604
--------- ---------- ---------
619 74,448 75,067
--------- ---------- ---------
Expenses:
General Partner's expense
reimbursement 26,332 362,932 389,264
Professional fees 1,799 32,960 34,759
Other operating expenses 970 13,851 14,821
Credit for lease losses (827) (24,903) (25,730)
--------- ---------- ---------
28,274 384,840 413,114
--------- ---------- ---------
Net loss $ (27,655) $ (310,392) $(338,047)
========= ========== =========
Net loss - General Partner $ (276) $ (3,104) $ (3,380)
========= ========== =========
Net loss - Limited Partners $ (27,379) $ (307,288) $(334,667)
========= ========== =========
Net loss per limited
partnership unit $ (5.37) $ (4.37)
========= ==========
Weighted average number of limited
partnership units outstanding 5,100 70,396
========= ==========
</TABLE>
See accompanying notes to financial statements
7
<PAGE> 8
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the nine months ended September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Lease income $ 241 $ 38,736 $ 38,977
Interest income 3,581 89,451 93,032
--------- ---------- ---------
3,822 128,187 132,009
--------- ---------- ---------
Expenses:
General Partner's expense
reimbursement 23,088 370,326 393,414
Professional fees 2,477 49,256 51,733
Other operating expenses 792 11,257 12,049
Credit for lease losses (7,219) (168,576) (175,795)
--------- ---------- ---------
19,138 262,263 281,401
--------- ---------- ---------
Net loss $ (15,316) $ (134,076) $(149,392)
========= ========== =========
Net loss - General Partner $ (153) $ (1,341) $ (1,494)
========= ========== =========
Net loss - Limited Partners $ (15,163) $ (132,735) $(147,898)
========= ========== =========
Net loss per limited
partnership unit $ (2.97) $ (1.89)
========= ==========
Weighted average number of limited
partnership units outstanding 5,100 70,396
========= ==========
</TABLE>
See accompanying notes to financial statements
8
<PAGE> 9
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS 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, 1999* $ - $ 110,046 $ 2,422,710 $ 2,532,756
Distributions to partners - (34,842) (1,123,951) (1,158,793)
Net loss (3,380) (27,379) (307,288) (338,047)
Allocation of General
Partner's Equity 3,380 (276) (3,104) -
------- --------- ----------- -----------
Balance, September 30, 2000 $ - $ 47,549 $ 988,367 $ 1,035,916
======= ========= =========== ===========
</TABLE>
* Balances are net of $16,396 and $293,506 of General Partner's Equity
previously allocated to Liquidating and Continuing Limited Partners' Equity.
See accompanying notes to financial statements
9
<PAGE> 10
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (27,655) $ (310,392) $ (338,047)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Credit for lease losses (827) (24,903) (25,730)
Changes in assets and liabilities:
Accounts payable and
accrued expenses 19 5,895 5,914
---------- ----------- -----------
(28,463) (329,400) (357,863)
---------- ----------- -----------
Cash flows from investing activities:
Principal collections on leases 827 141,567 142,394
Distribution of Diverted and
other assets 2,808 38,727 41,535
---------- ----------- -----------
3,635 180,294 183,929
---------- ----------- -----------
Cash flows from financing activities:
Distributions to Limited Partners (34,842) (1,123,951) (1,158,793)
----------- ----------- -----------
Net decrease in cash and
cash equivalents (59,670) (1,273,057) (1,332,727)
Cash and cash equivalents:
Beginning of year 101,971 2,152,997 2,254,968
---------- ----------- -----------
End of third quarter $ 42,301 $ 879,940 $ 922,241
========== =========== ===========
</TABLE>
See accompanying notes to financial statements
10
<PAGE> 11
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (15,316) $ (134,076) $ (149,392)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Credit for lease losses (7,219) (168,576) (175,795)
Changes in assets and liabilities:
Judgment receivable, net 3,405 46,964 50,369
Accounts payable and
accrued expenses (658) (17,920) (18,578)
Lessee rental deposits - (142) (142)
--------- ----------- -----------
(19,788) (273,750) (293,538)
--------- ----------- -----------
Cash flows from investing activities:
Principal collections on leases 1,304 307,650 308,954
Residual interest in CRCA 5,915 81,585 87,500
--------- ----------- -----------
7,219 389,235 396,454
--------- ----------- -----------
Cash flows from financing activities:
Distributions to Limited Partners (108,330) (2,318,049) (2,426,379)
--------- ----------- -----------
Net decrease in cash and
cash equivalents (120,899) (2,202,564) (2,323,463)
Cash and cash equivalents:
Beginning of year 225,068 4,315,347 4,540,415
--------- ----------- -----------
End of third quarter $ 104,169 $ 2,112,783 $ 2,216,952
========= =========== ===========
</TABLE>
See accompanying notes to financial statements
11
<PAGE> 12
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
NOTE 1 - LIMITED PARTNERSHIP DISTRIBUTIONS:
During June 2000, the Partnership made a cash distribution to Limited Partners
who were owners of record on March 31, 2000. This distribution was made from
residual cash, which is cash available for distribution after satisfying current
Partnership liabilities and setting aside reserves against potential future
Partnership liabilities. The total distribution paid to Continuing and
Liquidating Partners was $1,124,000 and $35,000, respectively. Pursuant to the
Partnership Agreement these amounts were allocated among the Limited Partners
based on each partner's proportionate share of total partners' capital
attributable to their Class.
NOTE 2 - LITIGATION
In connection with the 1992 Ventre class action, the United States District
Court for the Northern District of Illinois entered an order on September 27,
2000 finding that Edmund J. Lopinski, Jr. had caused the Datronic Partnerships
to sustain losses of $20.0 million. Against this amount, the Court offset $10.9
million that has already been realized on behalf of the Partnerships through the
sale of Diverted and Other Assets and insurance settlements. The Court also
found that Lopinski is entitled to offset the remaining $9.1 million loss with
the proceeds previously received from the other defendants in the Ventre action
and the appraised value of the Schaumburg office building. Proceeds received
from the other defendants totaled $4.9 million, leaving $4.2 million to be
recovered from the building. During the third quarter 2000, the General Partner
received appraisals for the building indicating that its value substantially
exceeds this amount. Accordingly, the losses assessed against Lopinski have been
fully mitigated.
With this ruling, the Ventre, et al v. Datronic Rental Corp., et al class
action is closed.
12
<PAGE> 13
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, 1999
through September 30, 2000. The discussion and analysis of results of operations
is for the three and nine month periods ended September 30, 2000 as compared to
the corresponding periods in 1999. Any capitalized term not defined herein has
been defined or discussed in the Partnership's 1999 Form 10-K.
Liquidity and Capital Resources
During the nine months ended September 30, 2000, the Partnership continued to
liquidate its assets and use its cash to pay Partnership operating expenses, pay
a distribution to Limited Partners and to provide for the ultimate liquidation
of the Partnership. During this period, Partnership cash and cash equivalents
decreased by $1,333,000 to $922,000 at September 30, 2000 from $2,255,000 at
December 31, 1999. This decrease is primarily due to a distribution paid to
Limited Partners of $1,159,000 (see below) and by cash used in operations of
$358,000, partially offset by cash receipts from collections on leases of
$142,000 and $42,000 from a distribution of Diverted and other assets.
During June 2000, the Partnership made a cash distribution to Limited Partners
who were owners of record on March 31, 2000. This distribution was made from
residual cash, which is cash available for distribution after satisfying current
Partnership liabilities and setting aside reserves against potential future
Partnership liabilities. The total distribution paid to Continuing and
Liquidating Partners was $1,124,000 and $35,000, respectively. Pursuant to the
Partnership Agreement these amounts were allocated among the Limited Partners
based on each partner's proportionate share of total partners' capital
attributable to their Class.
The Partnership's principal sources of future liquidity are expected to come
from cash-on-hand and proceeds from the sale of the remaining Diverted Assets
(consisting of cash and an office building in Schaumburg, Illinois). In
addition, nominal cash is expected to be received from the remaining scheduled
lease portfolio and from delinquent lessees under payment plan arrangements. The
general partner expects that the building will be sold during the first quarter
of 2001 and the proceeds included in a subsequent distribution to Limited
Partners.
13
<PAGE> 14
The Partnership's interest in the Schaumburg office building is carried on its
books at $79,000 (see Note 5 to the Partnership's financial statements included
in the 1999 Form 10-K). At March 1993, the date LRC was appointed general
partner, the building was approximately 40% occupied. Since then, occupancy has
increased to more than 80% and base rental rates have increased by 75%. An
appraisal received during the third quarter 2000 indicates that the building's
value has increased substantially over its book value.
After all assets are disposed of and the proceeds distributed to the Limited
Partners, the Partnership will be required to file final reports with the
Securities and Exchange Commission and the Internal Revenue Service. The general
partner expects this to occur during 2001.
Results of Operations
The Partnership had net losses of $56,000 and $338,000 for the three and nine
months ended September 30, 2000 in the aggregate for all classes of partners.
This compares to net losses of $51,000 and $149,000 for the three and nine
months ended September 30, 1999. Differences in operating results between
Liquidating and Continuing Limited Partners are attributable to lease income,
acquisition costs, and expenses associated with lease investments made since the
March 4, 1993 Settlement. Liquidating Limited Partners do not participate in
these post Settlement activities. Significant factors affecting overall
operating results for the three and nine month periods ended September 30, 2000
and 1999 include the following:
Lease income:
Since January 1997, the Partnership has been in its Liquidating Phase which
prohibits investing in any new leases. Accordingly, the lease portfolio has
continued to decrease as collections are made, resulting in a continued decline
in lease income. This trend will continue as the Partnership liquidates its
remaining leases.
Interest income:
Interest income includes earnings on invested cash balances. Interest income for
2000 was lower than 1999 because of average invested cash balances, partially
offset by an increase in interest rates.
General Partner's expense reimbursement:
General Partner's expense reimbursement includes payments to LRC for expenses it
incurred as general partner. These expenses represent expenses incurred by LRC
in its management of the day-to-day operations of the Partnership. Included in
the first quarter 2000 expense are $114,000 of insurance premiums associated
with the final wrap up of Partnership affairs and its ultimate liquidation and
dissolution.
14
<PAGE> 15
Professional fees:
Professional fees for the nine months ended September 30, 2000 reflect a
decreasing level of professional services required as a result of the decrease
in the Partnership's lease portfolio and related activities.
Credit for lease losses:
These credits reflect recoveries of previously reserved balances. The 1999
credit includes the Partnership's share ($87,500) of a $250,000 recovery against
its residual interest in CRCA that resulted from the sale of a note receivable.
See Note 4 to the Partnership's financial statements included in the 1999 Form
10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information called for in this disclosure is not applicable to the
Registrant.
15
<PAGE> 16
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to Item 3 - Legal Proceedings in the Partnership's December
31, 1999 Form 10-K for a discussion of material legal proceedings involving the
Partnership.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K
None.
16
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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 14th day of November 2000.
DATRONIC EQUIPMENT INCOME FUND XX, L.P.
Registrant
By: /s/ 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: /s/ JEFFREY T. MCREYNOLDS
-------------------------
Jeffrey T. McReynolds
Vice President and Chief Financial Officer,
Lease Resolution Corporation,
General Partner of
Datronic Equipment Income Fund XX, L.P.
17
<PAGE> 18
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.
18
