Form 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|X| Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of
1934. For the quarterly period ended
September 30, 2000
|_| Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
For the transition period from _______ to _______
Commission File Number 000-21552
ATEL Cash Distribution Fund IV, L.P.
(Exact name of registrant as specified in its charter)
California 94-3145429
---------- ----------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
235 Pine Street, 6th Floor, San Francisco, California 94104
(Address of principal executive offices)
Registrant's telephone number, including area code: (415)989-8800
Indicate by a 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.
Yes |X|
No |_|
DOCUMENTS INCORPORATED BY REFERENCE
None
1
<PAGE>
Part I FINANCIAL INFORMATION
Item 1. Financial Statements.
2
<PAGE>
ATEL CASH DISTRIBUTION FUND IV, L.P.
BALANCE SHEET
SEPTEMBER 30, 2000
(Unaudited)
ASSETS
Cash and cash equivalents $1,899,111
Accounts receivable 332,965
Investment in leases 5,831,413
-----------------
$8,063,489
=================
LIABILITIES AND PARTNERS' CAPITAL
Non-recourse debt $1,413,641
Accounts payable:
General Partner 29,789
Other 29,088
Accrued interest 6,969
Unearned operating lease income 89,213
-----------------
Total liabilities 1,568,700
Partners' capital:
General Partner 218,849
Limited Partners 6,275,940
-----------------
Total partners' capital 6,494,789
-----------------
$8,063,489
=================
See accompanying notes.
3
<PAGE>
ATEL CASH DISTRIBUTION FUND IV, L.P.
INCOME STATEMENTS
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
------------- -------------
Revenues: 2000 1999 2000 1999
---- ---- ---- ----
Lease revenues:
<S> <C> <C> <C> <C>
Operating $1,634,319 $ 2,156,039 $ 408,028 $ 650,091
Direct financing 524,587 515,961 165,707 159,785
Leveraged - 80,864 - -
Gain (loss) on sales of assets 1,217,674 5,423,105 (5,480) 285,466
Interest income 182,983 138,558 72,863 90,720
Other 38,487 13,303 709 1,291
----------------- ------------------ ---------------- -----------------
3,598,050 8,327,830 641,827 1,187,353
Expenses:
Depreciation and amortization 837,320 1,328,425 276,637 362,705
Management fees 236,186 525,619 85,954 172,466
Administrative cost reimbursements 178,446 168,992 70,959 68,985
Interest 132,397 238,336 32,501 64,580
Railcar maintenance 111,237 - - -
Other 80,631 118,289 24,463 (23,695)
Professional fees 39,491 28,834 3,674 7,875
----------------- ------------------ ---------------- -----------------
1,615,708 2,408,495 494,188 652,916
----------------- ------------------ ---------------- -----------------
Net income $1,982,342 $ 5,919,335 $ 147,639 $ 534,437
================= ================== ================ =================
Net income:
General Partner $ 19,823 $ 59,193 $ 1,476 $ 5,344
Limited Partners 1,962,519 5,860,142 146,163 529,093
----------------- ------------------ ---------------- -----------------
$1,982,342 $ 5,919,335 $ 147,639 $ 534,437
================= ================== ================ =================
Net income per Limited Partnership unit $0.26 $0.78 $0.02 $0.07
Weighted average number of units outstanding 7,487,350 7,487,350 7,487,350 7,487,350
</TABLE>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
NINE MONTH PERIOD ENDED
SEPTEMBER 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners General
Units Amount Partner Total
<S> <C> <C> <C> <C>
Balance December 31, 1999 7,487,350 $ 12,234,093 $ 199,026 $ 12,433,119
Distributions to limited partners (7,920,672) - (7,920,672)
Net income 1,962,519 19,823 1,982,342
----------------- ------------------ ---------------- -----------------
Balance September 30, 2000 7,487,350 $ 6,275,940 $ 218,849 $6,494,789
================= ================== ================ =================
</TABLE>
See accompanying notes.
4
<PAGE>
ATEL CASH DISTRIBUTION FUND IV, L.P.
STATEMENTS OF CASH FLOWS
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Operating activities:
<S> <C> <C> <C> <C>
Net income $1,982,342 $ 1,180,317 $ 147,639 $ 534,437
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation and amortization 837,320 1,328,425 276,637 362,705
Leveraged lease income - (80,864) - -
(Gain) loss on sales of assets (1,217,674) (5,423,105) 5,480 (285,466)
Changes in operating assets and liabilities:
Accounts receivable 1,266,447 223,550 53,982 120,741
Accounts payable, General Partner (36,787) (401,741) (10,338) 10,528
Accounts payable, other (233,672) (51,838) 6,268 (34,111)
Accrued interest (4,769) (6,743) (1,620) (2,065)
Unearned operating lease income (60,570) 36,694 (12,778) 141,753
----------------- ------------------ ---------------- -----------------
Net cash from operations 2,532,637 1,543,713 465,270 848,522
----------------- ------------------ ---------------- -----------------
Investing activities:
Proceeds from sales of lease assets 1,916,239 14,320,842 8,176 2,922,992
Reduction of net investment in direct financing
leases 682,124 1,100,207 230,255 352,813
----------------- ------------------ ---------------- -----------------
Net cash provided by investing activities 2,598,363 15,421,049 238,431 3,275,805
----------------- ------------------ ---------------- -----------------
Financing activities:
Distributions to limited partners (7,920,672) (7,863,357) (2,679,030) (2,620,945)
Repayment of non-recourse debt (1,175,776) (1,613,626) (399,613) (508,732)
----------------- ------------------ ---------------- -----------------
Net cash used in financing activities (9,096,448) (9,476,983) (3,078,643) (3,129,677)
----------------- ------------------ ---------------- -----------------
Net increase (decrease) in cash and cash
equivalents (3,965,448) 7,487,779 (2,374,942) 994,650
Cash and cash equivalents at beginning of
period 5,864,559 371,891 4,274,053 6,865,020
----------------- ------------------ ---------------- -----------------
Cash and cash equivalents at end of period $1,899,111 $ 7,859,670 $1,899,111 $7,859,670
================= ================== ================ =================
Supplemental disclosures of cash flow
information:
Cash paid for interest $ 137,166 $ 245,079 $ 34,121 $ 66,645
================= ================== ================ =================
</TABLE>
See accompanying notes.
5
<PAGE>
ATEL CASH DISTRIBUTION FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
1. Interim financial statements:
The unaudited interim financial statements reflect all adjustments which are, in
the opinion of the general partners, necessary to a fair statement of financial
position and results of operations for the interim periods presented. All such
adjustments are of a normal recurring nature. These unaudited interim financial
statements should be read in conjunction with the most recent report on Form
10K.
2. Investment in leases:
The Partnership's investment in leases consists of the following:
<TABLE>
<CAPTION>
Depreciation
Expense or Reclass-
December 31, Amortization ifications & September 30,
1999 of Leases Dispositions 2000
---- --------- -------------- ----
<S> <C> <C> <C> <C>
Net investment in operating leases $4,402,707 $ (806,010) $ 413,456 $4,010,153
Net investment in direct financing leases 3,412,936 (682,124) (298,277) 2,432,535
Equipment held for sale or lease 242,793 - (231,687) 11,106
Residual value interests 582,057 - (582,057) -
Initial direct costs, net of accumulated
amortization of $303,846 in 2000 and $514,804
in 1999 61,011 (31,310) - 29,701
Reserve for losses (652,082) - - (652,082)
----------------- ------------------ ---------------- -----------------
$8,049,422 $(1,519,444) $ (698,565) $5,831,413
================= ================== ================ =================
</TABLE>
At September 30, 2000, equipment on operating leases consists of the following:
<TABLE>
<CAPTION>
Balance Balance
December 31, Acquisitions, Dispositions & Reclassifications September 30,
----------------------------------------------
1999 1st Quarter 2nd Quarter 3rd Quarter 2000
---- ----------- ----------- ----------- ----
<S> <C> <C> <C> <C> <C>
Printing $ 3,478,749 $3,478,749
Transportation 2,763,271 $ 513,879 $ (18,130) 3,259,020
Construction equipment 2,058,733 (263,984) $ (38,554) - 1,756,195
Ground support equipment 1,127,988 - - - 1,127,988
Manufacturing 457,670 - - - 457,670
Materials handling 291,920 - - - 291,920
Other 272,267 (188,627) - - 83,640
------------------- ----------------- ------------------ ---------------- -----------------
10,450,598 61,268 (38,554) (18,130) 10,455,182
Accumulated depreciation (6,047,891) 88,352 (228,943) (256,547) (6,445,029)
------------------- ----------------- ------------------ ---------------- -----------------
$ 4,402,707 $ 149,620 $ (267,497) $ (274,677) $4,010,153
=================== ================= ================== ================ =================
</TABLE>
All of the equipment on operating leases was acquired during 1992, 1993, 1994,
1995 and 1996.
6
<PAGE>
ATEL CASH DISTRIBUTION FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
2. Investment in lease assets (continued):
At September 30, 2000, the aggregate amounts of future minimum lease payments
are as follows:
<TABLE>
<CAPTION>
Direct
Operating Financing Total
<S> <C> <C> <C>
Three months ending December 31, 2000 $ 377,444 $ 395,217 $ 772,661
Year ending December 31, 2001 1,162,969 1,086,349 2,249,318
2002 843,921 648,317 1,492,238
2003 609,022 561,360 1,170,382
2004 - 424,000 424,000
----------------- ------------------ ----------------
$2,993,356 $ 3,115,243 $6,108,599
================= ================== ================
</TABLE>
4. Non-recourse debt:
Notes payable to financial institutions are due in varying monthly, quarterly
and semi-annual installments of principal and interest. The notes are secured by
assignments of lease payments and pledges of the assets which were purchased
with the proceeds of the particular notes. Interest rates on the notes vary from
6.69% to 8.95%.
Future minimum principal payments of non-recourse debt as of September 30, 2000
are as follows:
<TABLE>
<CAPTION>
Principal Interest Total
<S> <C> <C> <C>
Three months ending December 31, 2000 $ 359,429 $ 26,229 $ 385,658
Year ending December 31, 2001 697,282 56,062 753,344
2002 250,450 19,870 270,320
2003 106,480 2,861 109,341
----------------- ------------------ ----------------
$1,413,641 $ 105,022 $1,518,663
================= ================== ================
</TABLE>
5. Related party transactions:
The terms of the Agreement of Limited Partnership provide that the General
Partners and/or Affiliates are entitled to receive certain fees for equipment
acquisition, management and resale and for management of the Partnership.
The General Partners and/or Affiliates earned the following fees and
commissions, pursuant to the Agreement of Limited Partnership as follows:
2000 1999
---- ----
Incentive and equipment management fees $ 236,186 $ 525,619
Administrative cost reimbursements 178,446 168,992
---------------- -----------------
$ 414,632 $ 694,611
================ =================
7
<PAGE>
ATEL CASH DISTRIBUTION FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
6. Partner's capital:
The Fund is authorized to issue up to 7,500,000 Units of Limited Partnership
interest in addition to the Initial Limited Partners.
The Fund's Net Profits, Net Losses and Tax Credits are to be allocated 99% to
the Limited Partners and 1% to the General Partner.
As more fully described in the Partnership Agreement, available Cash from
Operations and Cash from Sales or Refinancing shall be distributed as follows:
First, 5% of Distributions of Cash from Operations to the General Partner
as Incentive Management Fees.
Second, the balance to the Limited Partners until the Limited Partners have
received aggregate Distributions, as defined, in an amount equal to
their Original Invested Capital, as defined, plus a 10% per annum
cumulative (compounded daily) return on their Adjusted Invested
Capital, as defined.
Third,the General Partner will receive as Incentive Management Fees, the
following: (A) 10% of remaining Cash from Operations, as defined, (B)
15% of remaining Cash from Sales or Refinancing, as defined.
Fourth, the balance to the Limited Partners.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Capital Resources and Liquidity
The Partnership's primary sources of liquidity during the first nine months of
2000 were operating lease rents and proceeds from the sales of lease assets. The
liquidity of the Partnership will vary in the future, increasing to the extent
cash flows from leases exceed expenses, and decreasing as lease assets are
acquired, as distributions are made to the Limited Partners and to the extent
expenses exceed cash flows from leases.
The Partnership currently has available adequate reserves to meet contingencies,
but in the event those reserves were found to be inadequate, the Partnership
would likely be in a position to borrow against its current portfolio to meet
such requirements. The General Partner envisions no such requirements for
operating purposes.
As of September 30, 2000, the Partnership had borrowed approximately
$38,342,000, with a remaining unpaid balance of approximately $1,414,000.
Borrowings are to be non-recourse to the Partnership, that is, the only recourse
of the lender will be to the equipment or corresponding lease acquired or
secured with the loan proceeds. The General Partner does not expect that there
will be additional borrowings in the future.
No commitments of capital have been or are expected to be made other than for
the acquisition of additional equipment. As of September 30, 2000, there were no
such commitments.
If inflation in the general economy becomes significant, it may affect the
Partnership inasmuch as the residual (resale) values and rates on re-leases of
the Partnership's leased assets may increase as the costs of similar assets
increase. However, the Partnership's revenues from existing leases would not
increase, as such rates are generally fixed for the terms of the leases without
adjustment for inflation.
If interest rates increase significantly, the lease rates that the Partnership
can obtain on future leases will be expected to increase as the cost of capital
is a significant factor in the pricing of lease financing. Leases already in
place, for the most part, would not be affected by changes in interest rates.
2000 vs. 1999:
Nine months:
During the first nine months of 2000 and 1999, the primary source of operating
cash flows was operating lease revenues. Total lease revenues decreased by
$521,720 in 2000 compared to 1999.
In 2000 and 1999, the most significant source cash flows from investing
activities was the proceeds from the sales of assets. Proceeds from asset sales
are not comparable to prior periods nor are they expected to be comparable to
future periods. Direct financing lease rents decreased by $418,086 compared to
1999.
There were no sources of cash from financing activities in 2000 or in 1999. Cash
used to repay non-recourse debt has decreased due to scheduled debt reductions.
Distributions to Limited Partners have not changed significantly.
9
<PAGE>
Three months:
The primary source of cash from operations for the third quarter was lease
rents. Lease rents have decreased from the prior year due to asset sales during
the preceding twelve months.
The primary source of cash flows from financing activities in 2000 was rents
from direct financing leases.
There were no sources of cash from financing activities in 2000 or in 1999.
Repayments of debt decreased for the same reasons as noted above for the nine
month period. Distributions to the limited partners were almost unchanged.
Results of Operations
Operations in 2000 resulted in net income of $1,982,342 for the nine month
period and $147,639 for the three month period. In 1999, operations resulted in
net income of $5,919,335 for the nine month period and $534,437 for the three
month period.
2000 vs. 1999:
Operating lease revenues have decreased due to sales and reclassifications of
leased assets during the last twelve months. Revenues from leveraged leases
decreased as a result of the sale of the remaining assets on such leveraged
leases in the second quarter of 1999. Gains on sales of lease assets decreased
significantly and resulted largely due to the 1999 sale of leveraged lease
assets that had been on lease to Liquid Carbonics. There were no comparable
sales in 2000.
Depreciation expense is directly related to the amounts of operating lease
assets and has decreased from 1999 to 2000 as a result of sales of operating
lease assets over the last year.
Management fees are related to the amounts of lease revenues and distributions
to Limited Partners. As assets have been sold, lease revenues have decreased and
as a result, equipment management fees have also decreased. Incentive management
fees (which are related to the distributions of operating cash flows to the
limited partners) have also decreased as less of the distributions were of cash
from operations than in 1999. As a result of reductions in the outstanding
non-recourse debt, interest expense has decreased compared to 1999.
10
<PAGE>
PART II OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
Inapplicable.
Item 2. CHANGES IN SECURITIES.
Inapplicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
Inapplicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
Inapplicable.
Item 5. OTHER INFORMATION.
Inapplicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a)Documents filed as a part of this report
1. Financial Statements
Included in Part I of this report:
Balance Sheets, September 30, 2000 and December
31, 1999.
Income statements for the nine and three month
periods ended September 30, 2000 and 1999.
Statement of changes in partners' equity for the
nine month period ended September 30, 2000.
Statements of cash flows for the nine and three
month periods ended September 30, 2000 and 1999.
Notes to the Financial Statements
2. Financial Statement Schedules
All other schedules for which provision is made
in the applicable accounting regulations of the
Securities and Exchange Commission are not
required under the related instructions or are
inapplicable, and therefore have been omitted.
(b) Report on Form 8-K
None
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date:
November 9, 2000
ATEL CASH DISTRIBUTION FUND IV, L.P.
(Registrant)
By: ATEL Financial Corporation
General Partner of Registrant
By: /s/ A. J. BATT
------------------------------------
A. J. Batt
President and Chief Executive Officer
of General Partner
By: /s/ DEAN L. CASH
------------------------------------
Dean L. Cash
Executive Vice President
of General Partner
By: /s/ PARITOSH K. CHOKSI
--------------------------------------
Paritosh K. Choksi
Principal financial officer of
registrant
By: /s/ DONALD E. CARPENTER
--------------------------------------
Donald E. Carpenter
Principal accounting officer of
registrant
12
<PAGE>
