<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
June 30, 2000 Commission File Number 0-21260
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DATRONIC EQUIPMENT INCOME FUND XX, L.P.
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(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
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Address of principal City, State, Zip Code
executive offices
Registrant's telephone number: (847) 240-6200
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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
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(2) Yes x No
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DATRONIC EQUIPMENT INCOME FUND XX, L.P.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2000
PART I - FINANCIAL INFORMATION
<TABLE>
<S> <C>
Item 1.
Index to Financial Statements
Balance Sheets
June 30, 2000 (unaudited) 3
December 31, 1999 4
Statements of Revenue and Expenses (unaudited)
For the three months ended June 30, 2000 5
For the three months ended June 30, 1999 6
For the six months ended June 30, 2000 7
For the six months ended June 30, 1999 8
Statements of Changes in Partners' Equity
For the six months ended June 30, 2000
(unaudited) 9
Statements of Cash Flows (unaudited)
For the six months ended June 30, 2000 10
For the six months ended June 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
</TABLE>
2
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DATRONIC EQUIPMENT INCOME FUND XX, L.P.
BALANCE SHEETS
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
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<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 47,505 $ 902,035 $ 949,540
Net investment in direct financing
leases -- 70,082 70,082
Residual interest in CRCA -- -- --
Diverted and other assets, net 5,364 73,986 79,350
Datronic assets, net -- -- --
------------- ------------- -------------
$ 52,869 $ 1,046,103 $ 1,098,972
============= ============= =============
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued
expenses $ 164 $ 6,393 $ 6,557
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Total liabilities 164 6,393 6,557
Total partners' equity 52,705 1,039,710 1,092,415
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$ 52,869 $ 1,046,103 $ 1,098,972
============= ============= =============
</TABLE>
See accompanying notes to financial statements
3
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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
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Total liabilities 97 3,867 3,964
Total partners' equity 110,046 2,422,710 2,532,756
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$ 110,143 $ 2,426,577 $ 2,536,720
============= ============= =============
</TABLE>
See accompanying notes to financial statements
4
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DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF REVENUE AND EXPENSES
For the three months ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------- ------------- -------------
<S> <C> <C> <C>
Revenue:
Lease income $ 64 $ 3,816 $ 3,880
Interest income 142 24,000 24,142
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206 27,816 28,022
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Expenses:
General Partner's expense
reimbursement 7,549 99,400 106,949
Professional fees 838 11,871 12,709
Other operating expenses 598 8,250 8,848
Credit for lease losses (143) (7,980) (8,123)
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8,842 111,541 120,383
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Net loss $ (8,636) $ (83,725) $ (92,361)
============= ============= =============
Net loss - General Partner $ (86) $ (837) $ (923)
============= ============= =============
Net loss - Limited Partners $ (8,550) $ (82,888) $ (91,438)
============= ============= =============
Net loss per limited
partnership unit $ (1.68) $ (1.18)
============= =============
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 June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------- ------------- -------------
<S> <C> <C> <C>
Revenue:
Lease income $ 71 $ 11,211 $ 11,282
Interest income 762 23,852 24,614
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833 35,063 35,896
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Expenses:
General Partner's expense
reimbursement 9,055 139,890 148,945
Professional fees 854 17,158 18,012
Other operating expenses 447 6,223 6,670
Credit for lease losses (6,020) (102,031) (108,051)
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4,336 61,240 65,576
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Net loss $ (3,503) $ (26,177) $ (29,680)
============= ============= =============
Net loss - General Partner $ (35) $ (262) $ (297)
============= ============= =============
Net loss - Limited Partners $ (3,468) $ (25,915) $ (29,383)
============= ============= =============
Net loss per limited
partnership unit $ (0.68) $ (0.37)
============= =============
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 six months ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------- ------------- -------------
<S> <C> <C> <C>
Revenue:
Lease income $ 64 $ 8,528 $ 8,592
Interest income 497 47,450 47,947
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561 55,978 56,539
------------- ------------- -------------
Expenses:
General Partner's expense
reimbursement 21,456 295,683 317,139
Professional fees 1,503 26,486 27,989
Other operating expenses 853 12,235 13,088
Credit for lease losses (752) (19,377) (20,129)
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23,060 315,027 338,087
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Net loss $ (22,499) $ (259,049) $ (281,548)
============= ============= =============
Net loss - General Partner $ (225) $ (2,590) $ (2,815)
============= ============= =============
Net loss - Limited Partners $ (22,274) $ (256,459) $ (278,733)
============= ============= =============
Net loss per limited
partnership unit $ (4.37) $ (3.64)
============= =============
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 six months ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------- ------------- -------------
<S> <C> <C> <C>
Revenue:
Lease income $ 241 $ 30,109 $ 30,350
Interest income 3,185 69,018 72,203
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3,426 99,127 102,553
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Expenses:
General Partner's expense
reimbursement 16,739 266,618 283,357
Professional fees 1,793 38,706 40,499
Other operating expenses 588 8,437 9,025
Credit for lease losses (6,296) (125,837) (132,133)
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12,824 187,924 200,748
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Net loss $ (9,398) $ (88,797) $ (98,195)
============= ============= =============
Net loss - General Partner $ (94) $ (888) $ (982)
============= ============= =============
Net loss - Limited Partners $ (9,304) $ (87,909) $ (97,213)
============= ============= =============
Net loss per limited
partnership unit $ (1.82) $ (1.25)
============= =============
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 (2,815) (22,274) (256,459) (281,548)
Allocation of General
Partner's Equity 2,815 (225) (2,590) --
------------- ------------- ------------- -------------
Balance, June 30, 2000 $ -- $ 52,705 $ 1,039,710 $ 1,092,415
============= ============= ============= =============
</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 six months ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (22,499) $ (259,049) $ (281,548)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Credit for lease losses (752) (19,377) (20,129)
Changes in assets and liabilities:
Accounts payable and
accrued expenses 67 2,526 2,593
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(23,184) (275,900) (299,084)
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Cash flows from investing activities:
Principal collections on leases 752 110,162 110,914
Distribution of Diverted and
other assets 2,808 38,727 41,535
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3,560 148,889 152,449
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Cash flows from financing activities:
Distributions to Limited Partners (34,842) (1,123,951) (1,158,793)
------------- ------------- -------------
Net decrease in cash and
cash equivalents (54,466) (1,250,962) (1,305,428)
Cash and cash equivalents:
Beginning of year 101,971 2,152,997 2,254,968
------------- ------------- -------------
End of second quarter $ 47,505 $ 902,035 $ 949,540
============= ============= =============
</TABLE>
See accompanying notes to financial statements
10
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DATRONIC EQUIPMENT INCOME FUND XX, L.P.
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Liquidating Continuing
Limited Limited
Partners Partners Total
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (9,398) $ (88,797) $ (98,195)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Credit for lease losses (6,296) (125,837) (132,133)
Changes in assets and liabilities:
Judgment receivable, net 3,405 46,964 50,369
Accounts payable and
accrued expenses (658) (17,866) (18,524)
Lessee rental deposits -- (142) (142)
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(12,947) (185,678) (198,625)
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Cash flows from investing activities:
Principal collections on leases 381 198,913 199,294
Residual interest in CRCA 5,915 81,585 87,500
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6,296 280,498 286,794
------------- ------------- -------------
Cash flows from financing activities:
Distributions to Limited Partners (108,330) (2,318,049) (2,426,379)
------------- ------------- -------------
Net decrease in cash and
cash equivalents (114,981) (2,223,229) (2,338,210)
Cash and cash equivalents:
Beginning of year 225,068 4,315,347 4,540,415
------------- ------------- -------------
End of second quarter $ 110,087 $ 2,092,118 $ 2,202,205
============= ============= =============
</TABLE>
See accompanying notes to financial statements
11
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DATRONIC EQUIPMENT INCOME FUND XX, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(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. See Notes 5, 8 and 10 to the
Partnership's financial statements included in the 1999 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 1999 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 2 to the Partnership's financial statements included in the
1999 Form 10-K.
NOTE 3 - 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.
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 June 30, 2000. The discussion and analysis of results of operations is
for the three and six month periods ended June 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 six months ended June 30, 2000, Partnership assets continued to be
converted to cash in order to pay Partnership operating expenses and to provide
for the ultimate liquidation of the Partnership. During this period, Partnership
cash and cash equivalents decreased by $1,305,000 to $950,000 at June 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 $299,000, partially offset by cash receipts from collections on
leases of $111,000 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 sources of future liquidity are expected to come from
cash-on-hand, cash receipts from leases owned by the Partnership and the
proceeds from the sale of the remaining Diverted Assets (consisting of cash and
an office building in Schaumburg, Illinois). The lease portfolio is scheduled to
be fully liquidated by March 2001. The general partner expects that the building
will be sold during 2000 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%.
Accordingly, the general partner believes that the value of the building has
increased and that this value will be realized when the building is sold. The
amount to be realized from the sale of the building, however, cannot be
determined until it is sold.
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 $92,000 and $282,000 for the three and six
months ended June 30, 2000 in the aggregate for all classes of partners. This
compares to net losses of $30,000 and $98,000 for the three and six months ended
June 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 six month periods ended June 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 six months ended June 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
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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 August 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
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
27 Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for Information only and not
filed.
</TABLE>
