Form 10K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|X| Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 (no fee required) For
the Year Ended December 31, 1999
OR
|_| Transition report pursuant to section 13 or 15(d) of
the Securities Exchange Act of 1934 (no fee required)
For the transition period from ____ to ____
Commission File number 0-23842
ATEL Cash Distribution Fund V, L.P.
California 94-3165807
- ---------- ----------
(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
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Limited Partnership
Units
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 |_|
State the aggregate market value of voting stock held by non-affiliates of the
registrant. Inapplicable
DOCUMENTS INCORPORATED BY REFERENCE
None
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. |X|
1
<PAGE>
PART I
Item 1: BUSINESS
General Development of Business
ATEL Cash Distribution Fund V, L.P. (the Partnership), was formed under the laws
of the State of California in September 1992. The Partnership was formed for the
purpose of acquiring equipment to engage in equipment leasing and sales
activities.
The Partnership conducted a public offering of 12,500,000 units of Limited
Partnership interest (Units), at a price of $10 per Unit. As of November 15,
1994, the Partnership had received and accepted subscriptions for 12,500,000
($125,000,000) Limited Partnership Units in addition to the Initial Limited
Partners' Units and the offering was terminated. Of those Units, 12,497,000 were
issued and outstanding as of December 31, 1999 and 1998. Of the proceeds
received, $11,875,000 was paid to ATEL Securities Corporation, a wholly-owned
subsidiary of ATEL Financial Corporation (ATEL) (the General Partner), as sales
commissions, $5,738,415 was paid to the General Partner as reimbursements of
organization and other syndication costs, $1,875,000 was reserved for
repurchases of Units and working capital and $105,511,585 has been used to
acquire leased equipment, including acquisition fees paid or to be paid to the
General Partner.
The Partnership's principal objectives are to invest in a diversified portfolio
of equipment which will (i) preserve, protect and return the Partnership's
invested capital; (ii) generate substantial distributions to the partners of
cash from operations and cash from sales or refinancing, with any balance
remaining after certain minimum distributions to be used to purchase additional
equipment during the reinvestment period, ending December 31, 2000 and (iii)
provide significant distributions following the reinvestment period and until
all equipment has been sold. The Partnership is governed by its Limited
Partnership Agreement.
Narrative Description of Business
The Partnership has acquired and intends to acquire various types of equipment
and to lease such equipment pursuant to "Operating" leases and "Full Payout"
leases, where "Operating" leases are defined as being leases in which the
minimum lease payments during the initial lease term do not recover the full
cost of the equipment and "Full Payout" leases recover such cost. It is the
intention of the General Partner that no more than 25% of the aggregate purchase
price of equipment will be subject to "Operating" leases upon final investment
of the Net Proceeds of the Offering and that no more than 20% of the aggregate
purchase price of equipment will be invested in equipment acquired from a single
manufacturer.
The Partnership only purchases equipment for which a lease exists or for which a
lease will be entered into at the time of the purchase. The Partnership has
completed its initial acquisition stage with the investment of the net proceeds
from the public offering of Units. As noted above, however, it intends to
continue to invest any cash flow in excess of certain amounts required to be
distributed to the Limited Partners in additional items of leased equipment
through December 31, 2000.
As of December 31, 1999, the Partnership had purchased equipment with a total
acquisition price of $186,995,157.
2
<PAGE>
The Partnership's objective is to lease a minimum of 75% of the equipment
acquired with the net proceeds of the offering to lessees which (i) have an
aggregate credit rating by Moody's Investor Service, Inc. of Baa or better, or
the credit equivalent as determined by the General Partner, with the aggregate
rating weighted to account for the original equipment cost for each item leased
or (ii) are established hospitals with histories of profitability or
municipalities. The balance of the original equipment portfolio may include
equipment leased to lessees which, although deemed creditworthy by the General
Partner, would not satisfy the general credit rating criteria for the portfolio.
In excess of 75% of the equipment acquired with the net proceeds of the offering
(based on original purchase cost) had been leased to lessees with an aggregate
credit rating of Baa or better or to such hospitals or municipalities. During
1999, no single lessee generated 10% of the Partnership's lease revenues. During
1998 and 1997, certain lessees generated significant portions of the
Partnership's total lease revenues as follows:
Percentage of Total Lease
Revenues
Lessee Type of Equipment 1998 1997
------ ----------------- ---- ----
Burlington Northern Railroad Locomotives 14% 19%
The Pittston Company Mining 11% 14%
These percentages are not expected to be comparable in future periods.
The equipment leasing industry is highly competitive. Equipment manufacturers,
corporations, partnerships and others offer users an alternative to the purchase
of most types of equipment with payment terms which vary widely depending on the
lease term and type of equipment. The ability of the Partnership to keep the
equipment leased and/or operating and the terms of the acquisitions, leases and
dispositions of equipment depends on various factors (many of which are not in
the control of the General Partner or the Partnership), such as general economic
conditions, including the effects of inflation or recession, and fluctuations in
supply and demand for various types of equipment resulting from, among other
things, technological and economic obsolescence.
The General Partner will seek to limit the amount invested in equipment to any
single lessee to not more than 20% of the aggregate purchase price of equipment
owned at any time during the reinvestment period.
The business of the Partnership is not seasonal.
The Partnership has no full time employees.
Equipment Leasing Activities:
Through December 31, 1999, the Partnership has disposed of certain leased assets
as set forth below:
Original
Equipment Cost, Excess of
Type of Excluding Rents Over
Equipment Acquisition Fees Sale Price Expenses *
--------- ---------------- ---------- ----------
Transportation $ 29,949,497 $15,065,548 $21,949,526
Furniture, fixtures and office
equipment 15,131,313 6,675,396 11,299,693
Mining equipment 10,338,298 5,987,744 6,003,264
Materials handling 2,779,975 833,204 2,208,665
Office automation 2,635,065 507,086 2,436,378
Other 6,568,932 3,451,846 6,284,890
---------------- ---------------- ---------------
$ 67,403,080 $32,520,824 $50,182,416
================ ================ ===============
* Includes only those expenses directly related to the production of the related
rents.
3
<PAGE>
The Partnership has acquired a diversified portfolio of equipment. The equipment
has been leased to lessees in various industries. The following tables set forth
the types of equipment acquired by the Partnership through December 31, 1999 and
the industries to which the assets have been leased.
<TABLE>
<CAPTION>
Purchase price excluding Percentage of total
Asset types acquisition fees acquisitions
----------- ---------------- ------------
<S> <C> <C>
Transportation, over-the-road tractors and trailers $ 34,546,518 18.47%
Furniture and fixtures 24,145,180 12.91%
Transportation, other 18,454,853 9.87%
Mining 15,986,308 8.55%
Transportation, intermodal containers 15,484,688 8.28%
Construction 15,335,327 8.20%
Materials handling 14,469,358 7.74%
Railroad locomotives 12,350,000 6.60%
Earth moving 11,943,745 6.39%
Transportation, rail cars 7,180,000 3.84%
Printing 4,707,508 2.52%
Other * 12,391,672 6.63%
---------------- ----------------
$ 186,995,157 100.00%
================ ================
</TABLE>
<TABLE>
<CAPTION>
Purchase price excluding Percentage of total
Industry of lessee acquisition fees acquisitions
------------------ ---------------- ------------
<S> <C> <C>
Transportation, rail $ 45,670,556 24.42%
Mining 29,823,055 15.95%
Oil & gas 21,301,523 11.39%
Retail, foods 11,215,586 6.00%
Food processing 9,828,623 5.26%
Construction 9,410,789 5.03%
Chemicals 9,075,487 4.85%
Retail, restaurant 8,528,067 4.56%
Transportation, other 8,311,346 4.44%
Primary metals 7,526,037 4.02%
Manufacturing, other 6,815,862 3.64%
Manufacturing, auto/truck 6,690,185 3.58%
Printing 4,707,508 2.52%
Other * 8,090,533 4.34%
---------------- ----------------
$ 186,995,157 100.00%
================ ================
</TABLE>
* Individual amounts included in "Other" represent less than 2.5% of the total.
For further information regarding the Partnership's equipment lease portfolio as
of December 31, 1999, see Note 3 to the financial statements, Investments in
equipment and leases, set forth in Item 8, Financial Statements and
Supplementary Data.
Item 2. PROPERTIES
The Partnership does not own or lease any real property, plant or materially
important physical properties other than the equipment held for lease as set
forth in Item 1.
4
<PAGE>
Item 3. LEGAL PROCEEDINGS
No material legal proceedings are currently pending against the Partnership or
against any of its assets.
In October 1997, Schwegmann's Giant Supermarkets, one of the Partnership's
lessees, defaulted on two of five locations of retail grocery store fixtures and
equipment, the lease payments, and certain other obligations under the lease,
with a receivable balance currently totaling approximately $1.7 million. The
remaining portion of the lease payments with respect to three of five stores was
assumed by SGSM Acquisition Company ("SGSM"). Payments with respect to these
leases remained current until February 1999; however, on March 26, 1999, SGSM
filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The
Partnership is currently pursuing damages in the amount of $2.8 million,
representing amounts due under the lease. The lessee claims that it has
sufficient assets to satisfy the claims of all secured creditors of the lessee;
however, as the lessee's assets are primarily relatively illiquid real property
investments, the timing of the liquidation of such assets have resulted in
delays in the payments to the lessee's creditors. As of this date, the General
Partner believes that it has a reasonable basis for asserting a likelihood of
recovering most or all of the amounts claimed.
On January 16, 1998, Pegasus Gold Corporation filed for protection under Chapter
11. The initial meeting of creditors established by the Bankruptcy Court was
held on March 9, 1998. The lessee's lease with the Partnership had previously
been leveraged on a non-recourse basis with The CIT Group/Equipment Financing,
Inc. ("CIT"), and all lease receivables (estimated at $6,032,460) were assigned
to the lender. Consequently, the Partnership's exposure is no greater than the
fair market residual value of the equipment under lease, estimated at
$1,101,803. The reorganized lessee/debtor has assumed the Partnership's lease in
the Bankruptcy Court and, made all past due payments. The Partnership has
entered into an Escrow Agreement with CIT, wherein CIT has agreed not to
foreclose on the Partnership's interest so long as the lessee continues to
perform under the lease. At this time, the lessee is current in its lease
obligations. The ultimate recovery under this lease is dependent on the price of
gold remaining
On December 31, 1997, Quaker Coal Company requested a moratorium on lease
payments from January through March 1998. No lease payments were made through
June of 1998. As a result, the General Partner declared the lease in default.
Subsequently, the lessee made the outstanding payments, however, the General
Partner refused to waive the default and insisted on additional damages in the
range of $993,000 to $1,370,000. The General Partner sued the lessee for damages
and is currently awaiting judgement from the court. The General Partner believes
that an adverse ruling would not have a material impact on the operations of the
Partnership. The amounts of these damages have not been included in the
financial statements included in Item 8 of this report.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Inapplicable.
PART II
Item 5. MARKET FOR REGISTRANT'S LIMITED PARTNERSHIP UNITS
AND RELATED MATTERS
Market Information
The Units are transferable subject to restrictions on transfers which have been
imposed under the securities laws of certain states. However, as a result of
such restrictions, the size of the Partnership and its investment objectives, to
the General Partner's knowledge, no established public secondary trading market
has developed and it is unlikely that a public trading market will develop in
the future.
5
<PAGE>
Holders
As of December 31, 1999, a total of 7,364 investors were record holders of Units
in the Partnership.
Dividends
The Partnership does not make dividend distributions. However, the Limited
Partners of the Partnership are entitled to certain distributions as provided
under the Limited Partnership Agreement.
The General Partner shall have sole discretion in determining the amount of
distributions; provided, however, that the General Partner will not reinvest in
equipment, but will distribute, subject to payment of any obligations of the
Partnership, such available cash from operations and cash from sales or
refinancing as may be necessary to cause total distributions to the Limited
Partners for each year during the reinvestment period to equal the following
amounts per unit: $1.05 in 1995 and 1996; $1.10 in 1997 and 1998; and $1.20 in
1999 and 2000.
The rate for monthly distributions from 1997 operations was $0.09166 per Unit.
The distributions were made in February 1997 through December 1997 and in
January 1998. For each quarterly distribution (made in April, July and October
1997 and in January 1998) the rate was $0.275 per Unit. Distributions were from
1997 cash flows from operations. The amounts paid to holders of Units were
adjusted based on the length of time within the previous calendar month or
quarter that the Units were outstanding.
The rate for monthly distributions from 1998 operations was $0.10 per Unit. The
distributions were made in February 1998 through December 1998 and in January
1999. For each quarterly distribution (made in April, July and October 1998 and
in January 1999) the rate was $0.30 per Unit. Distributions were from 1998 cash
flows from operations. The amounts paid to holders of Units were adjusted based
on the length of time within the previous calendar month or quarter that the
Units were outstanding.
The rate for monthly distributions from 1999 operations was $0.10 per Unit. The
distributions were made in February 1999 through December 1999 and in January
2000. For each quarterly distribution (made in April, July and October 1999 and
in January 2000) the rate was $0.30 per Unit. Distributions were from 1999 cash
flows from operations. The amounts paid to holders of Units were adjusted based
on the length of time within the previous calendar month or quarter that the
Units were outstanding.
The following table presents summarized information regarding distributions to
Limited Partners:
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Distributions of net income $ 0.41 $ 0.39 $ 0.14 $ 0.23 $ 0.13
Return of investment 0.79 0.80 0.96 0.86 0.92
---------------- --------------- ---------------- --------------- ----------------
Distributions per unit 1.20 1.19 1.10 1.09 1.05
Differences due to timing of
distributions - 0.01 - 0.01 -
---------------- --------------- ---------------- --------------- ----------------
Nominal distribution rates from
above $ 1.20 $ 1.20 $ 1.10 $ 1.10 $ 1.05
================ =============== ================ =============== ================
</TABLE>
Owners of 1,000 or more units may make the election without charge to receive
distributions on a monthly basis. Owners of less than 1,000 units may make the
election upon payment of a $20.00 annual fee.
6
<PAGE>
Item 6. SELECTED FINANCIAL DATA
The following table presents selected financial data of the Partnership for the
years ended December 31, 1999, 1998, 1997, 1996 and 1995. This financial data
should be read in conjunction with the financial statements and related notes
included under Item 8 of this report.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross Revenues $ 17,064,600 $ 22,011,168 $23,437,655 $ 24,987,922 $20,884,669
Net income $ 5,198,570 $ 4,861,233 $ 1,813,431 $ 2,851,885 $ 1,627,911
Weighted average Units 12,497,000 12,497,000 12,497,000 12,497,713 12,498,550
Net income per Unit, based on
weighted average Units outstanding $ 0.41 $ 0.39 $ 0.14 $ 0.23 $ 0.13
Distributions per Unit, based on
weighted average Units outstanding $ 1.20 $ 1.19 $ 1.10 $ 1.09 $ 1.05
Total Assets $ 67,961,144 $ 86,671,855 $106,707,576 $ 130,546,718 $136,475,349
Non-recourse Debt $ 22,138,639 $ 29,331,123 $40,138,400 $ 41,496,203 $19,129,298
Total Partners' Capital $ 44,820,397 $ 54,621,053 $64,614,239 $ 76,545,683 $87,372,135
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Capital Resources and Liquidity
The Partnership's public offering provided for a total maximum capitalization of
$125,000,000.
The liquidity of the Partnership will vary in the future, increasing to the
extent cash flows from leases and proceeds from asset sales 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 and
proceeds from asset sales.
As another source of liquidity, the Partnership has contractual obligations with
a diversified group of lessees for fixed lease terms at fixed rental amounts. As
the initial lease terms expire, the Partnership will re-lease or sell the
equipment. The future liquidity beyond the contractual minimum rentals will
depend on the General Partner's success in re-leasing or selling the equipment
as it comes off lease.
The Partnership participates with the General Partner and certain of its
affiliates in a $95,000,000 revolving line of credit with a financial
institution that includes certain financial covenants. The line of credit
expires on April 30, 2000. As of December 31, 1999, the Partnership had no
borrowings under this line of credit and the remaining availability was
$21,857,103.
The Partnership anticipates reinvesting a portion of lease payments from assets
owned in new leasing transactions. Such reinvestment will occur only after the
payment of all obligations, including debt service (both principal and
interest), the payment of management and acquisition fees to the General Partner
and providing for cash distributions to the Limited Partners. At December 31,
1999, there were no commitments to purchase lease assets.
7
<PAGE>
As of December 31, 1999, cash balances consisted of working capital and amounts
reserved for distributions in January 2000, generated from operations in 1999.
The Partnership currently has available adequate reserves to meet its immediate
cash requirements, 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 December 31, 1999, the Partnership had borrowed $58,317,911 of
non-recourse debt. The remaining unpaid balance as of that date was $22,138,639.
The Partnership's long-term borrowings are non-recourse to the Partnership, that
is, the only recourse of the lender is to the equipment or corresponding lease
acquired with the loan proceeds. The Partnership may only incur additional debt
to the extent that the then outstanding balance of all such debt, including the
additional debt, does not exceed 40% of the original cost of the lease assets
then owned by the Partnership, including any such assets purchased with the
proceeds of such additional debt.
The Partnership commenced regular distributions, based on cash flows from
operations, beginning with the second quarter of 1993. See Items 5 and 6 of this
report for additional information regarding the distributions.
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.
In future periods, cash flows from operating leases are expected to be the
Partnership's primary source of cash flows from operations.
Cash Flows
1999 vs. 1998:
In 1999, operating lease rents were the Partnership's primary source of cash
flows from operating activities. Cash flows from operations decreased from
$15,715,879 in 1998 to $10,478,968 in 1999, a decrease of $5,236,911. This
decrease resulted from decreases in operating lease revenues from $18,651,503 in
1998 to $13,469,113 in 1999, a decrease of $5,182,390.
Sources of cash from investing activities consisted of rents from direct
financing leases and proceeds from sales of lease assets. Such financing lease
rents decreased from $3,019,154 in 1998 to $2,160,238 in 1999, a decrease of
$858,916. Proceeds from sales of lease assets are not expected to be consistent
from one year to another and decreased from $13,675,178 in 1998 to $5,186,472 in
1999, a decrease of $8,488,706.
There were no financing sources of cash in 1999. Repayments of debt decreased as
a result of scheduled debt payments.
1998 vs. 1997:
Cash flows from operations decreased by $830,594 compared to 1997. This decrease
was primarily due to a decrease in operating lease rents of $1,501,869. Direct
financing lease revenues decreased by $643,234 compared to 1997.
8
<PAGE>
In 1998, cash flows from investing activities consisted of the proceeds of lease
asset sales ($13,675,178) and rents from direct financing leases ($3,019,154).
Proceeds from sales of lease assets increased by $10,538,252 compared to 1997.
This reflects primarily the increased sales of assets coming off of operating
leases. The cost of such assets sold in 1998 was $19,583,222 compared to
$1,983,077 in 1997. Proceeds from these sales are not expected to be comparable
from one year to another.
In 1998, the only source of cash from financing activities was the $1,000,000
borrowed on the line of credit. Cash was used in financing activities to repay
non-recourse debt and to make distributions to the limited partners.
Results of Operations
As of March 19, 1993, subscriptions for the minimum amount of the offering
($1,200,000) had been received and accepted by the Partnership. As of that date,
the Partnership commenced operations in its primary business (leasing
activities).
As of December 31, 1999, 26% of total equipment at cost (21% at December
31,1998) was leased to lessees in the rail transportation industry. As of
December 31, 1999, 14% of total equipment at cost (less than 10% at December 31,
1998) was leased to lessees in the petroleum and coal products industry. As of
December 31, 1999, 13% of total equipment at cost (14% at December 31, 1998) was
leased to lessees in the mining industry. Leases are subject to ATEL's credit
committee review. The leases provide for the return of the equipment upon
default. The concentration of the Partnership's assets in these industries is
not known to have had any effect on the Partnership's results of operations nor
is there any known trend regarding these industries that would effect its
operations in future periods.
1999 vs. 1998:
Overall, net income increased from $4,861,233 in 1998 to $5,198,570 in 1999. The
increase of $337,337 was the result of a number of largely offsetting factors.
Operating lease revenues declined by $5,182,390 ($18,651,503 in 1998 and
$13,469,113 in 1999), but the related depreciation on operating lease assets
decreased by $3,655,354 ($11,145,876 in 1998 and $7,490,522 in 1999), a
difference of $1,527,036. Both of these decreases are related to the sales of
lease assets at the end of the lease terms in both 1998 and 1999. Direct
financing lease revenues declined from $2,139,981 in 1998 to $1,905,218 in 1999,
a decrease of $234,763. This decrease is also the result of lease asset sales
over the last two years.
Gains on sales of assets in 1999 increased from $1,050,907 in 1998 to $1,291,920
in 1999, an increase of $241,013. Such gains are not, however, expected to be
consistent from one year to another.
Interest expense has decreased as a result of scheduled debt payments and the
consequent reductions of the outstanding balances.
Equipment management fees are based on the revenues of the Partnership. As those
revenues have declined, the management fees have decreased as well.
1998 vs. 1997:
Operations in 1998 resulted in net income of $4,861,233 compared to $1,813,431
in 1997.
Operating lease revenues and depreciation expense decreased by $1,501,869 and
$1,463,181, respectively, as a result of the asset sales noted above under the
caption "Cash Flows". Revenues from direct financing leases decreased by
$643,234 in 1998, as compared to 1997 as a result of asset sales. The decreases
in operating and direct financing lease revenues were partially offset by an
increase in the gain recognized on sales of assets of $705,567 during 1998. Such
gains are not expected to be consistent from one year to another.
9
<PAGE>
Interest expense decreased by $861,031 compared to 1997. The decrease resulted
from scheduled debt payments and the resulting decreases in debt balances.
The provision for losses and impairments decreased by $1,645,693 compared to
1997. The 1997 expense included a provision directly related to the Pegasus Gold
lease (see Note 10 to the financial statements included in item 8 of this
report). There were no similar defaults in 1998.
Impact of the Year 2000
To date, the Partnership has experienced no significant year 2000 problems and
the General Partner believes it does not have continued exposure to the year
2000 problem.
Item 7a. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership, like most other companies, is exposed to certain market risks,
including primarily changes in interest rates. The Partnership believes its
exposure to other market risks including foreign currency exchange rate risk,
commodity risk and equity price risk are insignificant to both its financial
position and results of operations.
In general, the Partnership manages its exposure to interest rate risk by
obtaining fixed rate debt. The fixed rate debt is structured so as to match the
cash flows required to service the debt to the payment streams under fixed rate
lease receivables. The payments under the leases are assigned to the lenders in
satisfaction of the debt. Furthermore, the Partnership has historically been
able to maintain a stable spread between its cost of funds and lease yields in
both periods of rising and falling rates. Nevertheless, the Partnership
frequently funds leases with its floating rate line of credit and is therefore
exposed to interest rate risk until fixed rate financing is arranged, or the
floating rate line of credit is repaid. As of December 31, 1999, there was no
outstanding balance on the floating rate line of credit.
To hedge its interest rate risk related to this variable rate debt, the
Partnership may enter into interest rate swaps. As of December 31, 1999, no
swaps or other derivative financial instruments were held by the Partnership.
The Partnership does not hold or issue derivative financial instruments for
speculative purposes.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the Report of Independent Auditors, Financial Statements and Notes to
Financial Statements attached hereto at pages 11 through 24.
10
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Partners
ATEL Cash Distribution Fund V, L.P.
We have audited the accompanying balance sheets of ATEL Cash Distribution Fund
V, L.P. as of December 31, 1999 and 1998, and the related statements of income,
changes in partners' capital, and cash flows for each of the three years in the
period ended December 31, 1999. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ATEL Cash Distribution Fund V,
L.P. at December 31, 1999 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
San Francisco, California
February 1, 2000
11
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
1999 1998
---- ----
Cash and cash equivalents $ 3,330,065 $ 8,872,945
Accounts receivable 2,772,627 2,050,366
Other receivables, net of allowance for doubtful
accounts of $100,605 in 1999 and 1998 1,309,783 995,175
Investments in equipment and leases 60,548,669 74,753,369
--------------- ---------------
Total assets $ 67,961,144 $86,671,855
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Non-recourse debt $ 22,138,639 $29,331,123
Line of credit - 1,000,000
Accounts payable:
Equipment purchases 1,352 178,200
General Partner 117,089 217,385
Other 359,831 348,769
Accrued interest payable 107,182 104,179
Unearned lease income 416,654 871,146
--------------- ---------------
Total liabilities 23,140,747 32,050,802
Partners' capital:
General Partner 169,819 117,833
Limited Partners 44,650,578 54,503,220
--------------- ---------------
Total partners' capital 44,820,397 54,621,053
--------------- ---------------
Total liabilities and partners' capital $ 67,961,144 $86,671,855
=============== ===============
See accompanying notes.
12
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Leasing activities:
Operating leases $13,469,113 $ 18,651,503 $20,153,372
Direct financing leases 1,905,218 2,139,981 2,783,215
Leveraged leases 99,758 109,769 107,494
Gain on sales of assets 1,291,920 1,050,907 345,340
Interest income 274,904 22,490 32,575
Other 23,687 36,518 15,659
---------------- --------------- ----------------
17,064,600 22,011,168 23,437,655
Expenses:
Depreciation and amortization 7,935,060 11,830,276 13,503,318
Interest expense 2,055,475 2,738,745 3,599,776
Equipment and incentive management fees to General Partner 1,022,381 1,318,373 1,647,388
Other 442,298 724,155 571,546
Administrative cost reimbursements to General Partner 355,881 422,293 405,886
Professional fees 54,935 60,684 94,603
Provision for losses and impairments - 55,409 1,701,102
Provision for doubtful accounts - - 100,605
---------------- --------------- ----------------
11,866,030 17,149,935 21,624,224
---------------- --------------- ----------------
Net income $ 5,198,570 $ 4,861,233 $ 1,813,431
================ =============== ================
Net income:
General Partner $ 51,986 $ 48,612 $ 18,134
Limited Partners 5,146,584 4,812,621 1,795,297
---------------- --------------- ----------------
$ 5,198,570 $ 4,861,233 $ 1,813,431
================ =============== ================
Net income per Limited Partnership unit $ 0.41 $ 0.39 $ 0.14
Weighted average number of units outstanding 12,497,000 12,497,000 12,497,000
</TABLE>
See accompanying notes.
13
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
Limited Partners General
Units Amount Partner Total
----- ------ ------- -----
<S> <C> <C> <C> <C>
Balance December 31, 1996 12,497,000 $76,494,596 $ 51,087 $76,545,683
Distributions to Limited Partners ($1.10 per Unit) (13,744,875) (13,744,875)
Net income 1,795,297 18,134 1,813,431
---------------- ---------------- --------------- ----------------
Balance December 31, 1997 12,497,000 64,545,018 69,221 64,614,239
Distributions to Limited Partners ($1.19 per Unit) (14,854,419) (14,854,419)
Net income 4,812,621 48,612 4,861,233
---------------- ---------------- --------------- ----------------
Balance December 31, 1998 12,497,000 54,503,220 117,833 54,621,053
Distributions to Limited Partners ($1.20 per Unit) (14,999,226) (14,999,226)
Net income 5,146,584 51,986 5,198,570
---------------- ---------------- --------------- ----------------
Balance December 31, 1999 12,497,000 $44,650,578 $ 169,819 $44,820,397
================ ================ =============== ================
</TABLE>
See accompanying notes.
14
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
Operating activities: 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net income $ 5,198,570 $ 4,861,233 $ 1,813,431
Adjustment to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 7,935,060 11,830,276 13,503,318
Provision for losses and impairments - 55,409 1,701,102
Provision for doubtful accounts - - 100,605
Leveraged lease income (99,758) (109,769) (107,494)
Gain on sales of assets (1,291,920) (1,050,907) (345,340)
Changes in operating assets and liabilities:
Accounts receivable (722,261) 143,895 695,452
Other receivables - 221,000 (482,653)
Other assets - - 10,000
Accounts payable, General Partner (100,296) (100,330) 22,010
Accounts payable, other 11,062 113,701 (49,861)
Accrued interest payable 3,003 (115,390) (13,239)
Unearned lease income (454,492) (133,239) (301,211)
---------------- --------------- ----------------
Net cash provided by operating activities 10,478,968 15,715,879 16,546,120
Investing activities:
Proceeds from sales of assets 5,186,472 13,675,178 3,136,926
Reduction of net investment in direct financing leases 2,160,238 3,019,154 4,476,163
Purchases of equipment on operating leases (176,848) - (286,404)
Decrease of net investment in leveraged leases - 391,167 -
Purchases of equipment on direct financing leases - - (33,023)
---------------- --------------- ----------------
Net cash provided by investing activities 7,169,862 17,085,499 7,293,662
Financing activities:
Distributions to Limited Partners (14,999,226) (14,854,419) (13,744,875)
Repayments of non-recourse debt (7,192,484) (10,807,277) (8,175,254)
Repayments of borrowings under line of credit (1,000,000) - (10,171,190)
Borrowings under line of credit - 1,000,000 250,000
Proceeds of non-recourse debt - - 6,817,451
---------------- --------------- ----------------
Net cash used in financing activities (23,191,710) (24,661,696) (25,023,868)
---------------- --------------- ----------------
Net (decrease) increase in cash and cash equivalents (5,542,880) 8,139,682 (1,184,086)
Cash and cash equivalents at beginning of period 8,872,945 733,263 1,917,349
---------------- --------------- ----------------
Cash and cash equivalents at end of period $ 3,330,065 $ 8,872,945 $ 733,263
================ =============== ================
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $ 2,052,472 $ 2,854,135 $ 3,613,015
================ =============== ================
Schedule of non-cash transactions:
Direct financing lease assets reclassified to other receivables $ 314,608 $ 834,127 $ 482,653
================ =============== ================
</TABLE>
See accompanying notes.
15
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. Organization and Partnership matters:
ATEL Cash Distribution Fund V, L.P. (the Partnership), was formed under the laws
of the State of California in September 1992, for the purpose of acquiring
equipment to engage in equipment leasing and sales activities.
Upon the sale of the minimum amount of Units of Limited Partnership interest
(Units) of $1,200,000 and the receipt of the proceeds thereof on March 19, 1993,
the Partnership commenced operations.
The General Partner of the Partnership is ATEL Financial Corporation (ATEL).
The Partnership or the General Partner on behalf of the Partnership, incurred
costs in connection with the organization, registration and issuance of the
Units. The amount of such costs to be borne by the Partnership was limited to
15% of Gross Proceeds of up to $25,000,000 and 14% of Gross Proceeds in excess
of $25,000,000.
The Partnership's business consists of leasing various types of equipment. As of
December 31, 1999, the original terms of the leases ranged from two months to
twenty years.
Pursuant to the Limited Partnership Agreement, the General Partner receives
compensation and reimbursements for services rendered on behalf of the
Partnership (Note 5). The General Partner is required to maintain in the
Partnership reasonable cash reserves for working capital, the repurchase of
Units and contingencies.
2. Summary of significant accounting policies:
Equipment on operating leases:
Equipment on operating leases is stated at cost. Depreciation is being provided
by use of the straight-line method over the terms of the related leases to the
equipment's estimated residual values at the end of the leases.
Revenues from operating leases are recognized evenly over the life of the
related leases.
Direct financing leases:
Income from direct financing lease transactions is reported on the financing
method of accounting, in which the Partnership's investment in the leased
property is reported as a receivable from the lessee to be recovered through
future rentals. The income portion of each rental payment is calculated so as to
generate a constant rate of return on the net receivable outstanding.
Investment in leveraged leases:
Leases which are financed principally with non-recourse debt at lease inception
and which meet certain other criteria are accounted for as leveraged leases.
Leveraged lease contracts receivable are stated net of the related non-recourse
debt service (which includes unpaid principal and aggregate interest on such
debt) plus estimated residual values. Unearned income represents the excess of
anticipated cash flows (after taking into account the related debt service and
residual values) over the investment in the lease and is amortized using a
constant rate of return applied to the net investment when such investment is
positive.
16
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
2. Summary of significant accounting policies (continued):
Reserve for losses and impairments:
The Partnership maintains a reserve on its investments in equipment and leases
for losses and impairments which are inherent in the portfolio as of the balance
sheet date. The General Partner's evaluation of the adequacy of the allowance is
a judgmental estimate that is based on a review of individual leases, past loss
experience and other factors. While the General Partner believes the allowance
is adequate to cover known losses, it is reasonably possible that the allowance
may change in the near term. However, such change is not expected to have a
material effect on the financial position or future operating results of the
Partnership. It is the Partnership's policy to charge off amounts which, in the
opinion of the General Partner, are not recoverable from lessees or the
disposition of the collateral.
Statements of cash flows:
For purposes of the Statements of Cash Flows, cash and cash equivalents includes
cash in banks and cash equivalent investments with original maturities of ninety
days or less.
Income taxes:
The Partnership does not provide for income taxes since all income and losses
are the liability of the individual partners and are allocated to the partners
for inclusion in their individual tax returns.
The tax basis of the Partnership's net assets and liabilities varies from the
amounts presented in these financial statements (unaudited):
1999 1998
---- ----
Financial statement basis of net assets $ 44,820,397 $54,621,053
Tax basis of net assets 30,533,830 38,059,569
---------------- ----------------
Difference $ 14,286,567 $16,561,484
================ ================
The primary differences between the tax basis of net assets and the amounts
recorded in the financial statements are the result of differences in accounting
for syndication costs and differences between the depreciation methods used in
the financial statements and the Partnership's tax returns.
The following reconciles the net income reported in these financial statements
to the loss reported on the Partnership's federal tax return (unaudited):
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net income per financial statements $ 5,198,570 $ 4,861,233 $ 1,813,431
Adjustment to depreciation expense (2,790,702) (5,867,514) (12,174,736)
Adjustments to revenues 5,065,619 16,854,379 7,646,478
Provision for doubtful accounts - - 100,605
Provision for losses and impairments - 55,409 1,701,102
---------------- --------------- ----------------
Net income (loss) per federal tax return $ 7,473,487 $ 15,903,507 $ (913,120)
================ =============== ================
</TABLE>
17
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
2. Summary of significant accounting policies (continued):
Credit Risk:
Financial instruments which potentially subject the Partnership to
concentrations of credit risk include cash and cash equivalents, accounts
receivable and other receivables. The Partnership places its cash deposits and
temporary cash investments with creditworthy, high quality financial
institutions. The concentration of such deposits and temporary cash investments
is not deemed to create a significant risk to the Partnership. Accounts
receivable represent amounts due from lessees in various industries, related to
equipment on operating and direct financing leases. See Note 7 for a description
of lessees by industry as of December 31, 1999. See Note 10 for a description of
the Partnership's other receivables as of December 31, 1999.
Use of estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Such estimates primarily
relate to the determination of residual values at the end of the lease term.
Per unit data:
Net income and distributions per unit are based upon the weighted average number
of units outstanding during the period.
Reclassifications:
Certain 1998 balances have been reclassified to conform to the 1999
presentation.
3. Investments in equipment and leases:
As of December 31, 1999, the Partnership's investments in equipment and leases
consist of the following:
<TABLE>
<CAPTION>
Depreciation
Expense or Reclass-
Amortization ifications or
1998 of Leases Dispositions 1999
---- --------- -------------- ----
<S> <C> <C> <C> <C>
Net investment in operating leases $ 54,308,897 $ (7,490,522) $ (2,863,342) $43,955,033
Net investment in direct financing leases 17,631,304 (2,160,238) (501,532) 14,969,534
Net investment in leveraged leases 2,628,378 99,758 (605,051) 2,123,085
Assets held for sale or lease 217,819 - (212,811) 5,008
Residual value interests 835,759 - - 835,759
Reserve for losses and impairments (2,254,809) - - (2,254,809)
Initial direct costs, net of accumulated amortization
of $1,805,948 in 1999 and $2,268,110 in 1998 1,386,021 (444,538) (26,424) 915,059
---------------- ---------------- --------------- ----------------
$ 74,753,369 $ (9,995,540) $ (4,209,160) $60,548,669
================ ================ =============== ================
</TABLE>
18
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
3. Investments in equipment and leases (continued):
Operating leases:
Property on operating leases consists of the following as of December 31, 1998,
additions and dispositions during 1999 and as of December 31, 1999:
<TABLE>
<CAPTION>
Reclass-
ifications or
1998 Additions Dispositions 1999
---- --------- -------------- ----
<S> <C> <C> <C> <C>
Transportation $ 43,582,225 $ (784,039) $42,798,186
Construction 15,603,111 (203,875) 15,399,236
Materials handling 9,324,247 (1,687,939) 7,636,308
Mining 12,378,185 (5,396,387) 6,981,798
Furniture and fixtures 4,820,519 (111,193) 4,709,326
Manufacturing 3,475,585 - 3,475,585
Office automation 1,658,558 (1,512,832) 145,726
Printing 2,325,000 (2,325,000) -
Food processing 1,643,101 (1,643,101) -
---------------- ---------------- --------------- ----------------
94,810,531 (13,664,366) 81,146,165
Less accumulated depreciation (40,501,634) $ (7,490,522) 10,801,024 (37,191,132)
---------------- ---------------- --------------- ----------------
$ 54,308,897 $ (7,490,522) $ (2,863,342) $43,955,033
================ ================ =============== ================
</TABLE>
Direct financing leases:
As of December 31, 1999, investment in direct financing leases consists of
railroad auto racks, railroad tank cars and retail store fixtures. The following
lists the components of the Partnership's investment in direct financing leases
as of December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Total minimum lease payments receivable $16,142,453 $ 20,393,209
Estimated residual values of leased equipment (unguaranteed) 5,304,034 5,505,466
---------------- ---------------
Investment in direct financing leases 21,446,487 25,898,675
Less unearned income (6,476,953) (8,267,371)
---------------- ---------------
Net investment in direct financing leases $14,969,534 $ 17,631,304
================ ===============
</TABLE>
All of the property on leases was acquired in the years 1993 through 1997.
19
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
3. Investments in equipment and leases (continued):
At December 31, 1999, the aggregate amounts of future minimum lease payments
under operating and direct financing leases are as follows:
Direct
Year ending Operating Financing
December 31, Leases Leases Total
------------ ------ ------ -----
2000 $ 8,145,394 $ 3,722,038 $11,867,432
2001 5,429,659 3,114,032 8,543,691
2002 3,574,219 2,766,273 6,340,492
2003 1,713,606 909,333 2,622,939
2004 568,585 622,852 1,191,437
Thereafter 5,460,812 5,007,925 10,468,737
---------------- --------------- ----------------
$ 24,892,275 $ 16,142,453 $41,034,728
================ =============== ================
Leveraged leases:
As of December 31, 1999, investment in leveraged leases consists of materials
handling equipment. The following lists the components of the Partnership's
investment in leveraged leases as of December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Aggregate rentals receivable $ 1,529,332 $ 2,664,516
Less aggregate principal and interest payable on non-recourse loans (611,503) (1,355,461)
Estimated residual value of leased assets 1,356,686 1,570,511
Less unearned income (151,430) (251,188)
---------------- ---------------
Net investment in leveraged leases $ 2,123,085 $ 2,628,378
================ ===============
</TABLE>
Reserves for losses and impairments:
Activity in the reserve for losses and impairments consists of the following:
Balance 12/31/96 $ 498,298
Provision 1,701,102
----------------
Balance 12/31/97 2,199,400
Provision 55,409
----------------
Balance 12/31/98 2,254,809
Provision -
----------------
Balance 12/31/99 $ 2,254,809
================
20
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
4. Non-recourse debt:
At December 31, 1999, non-recourse debt, other than that related to leveraged
leases which is accounted for as a part of the net investment in leveraged
leases, consists of notes payable to financial institutions. The notes are due
in varying monthly, quarterly and semi-annual payments. Interest on the notes is
at rates from 6.6% to 10.7%. The notes are secured by assignments of lease
payments and pledges of assets. At December 31, 1999, the carrying value of the
pledged assets is approximately $33,789,842. The notes mature from 2000 through
2015.
Future minimum payments of non-recourse debt are as follows:
Year ending
December 31, Principal Interest Total
------------ --------- -------- -----
2000 $ 5,709,333 $ 1,495,656 $ 7,204,989
2001 4,575,203 1,057,560 5,632,763
2002 2,915,879 699,261 3,615,140
2003 709,048 553,832 1,262,880
2004 453,006 513,642 966,648
Thereafter 7,776,170 2,917,357 10,693,527
---------------- --------------- ----------------
$ 22,138,639 $ 7,237,308 $29,375,947
================ =============== ================
5. Related party transactions:
The terms of the Limited Partnership Agreement provide that the General Partner
and/or Affiliates are entitled to receive certain fees for equipment
acquisition, management and resale and for management of the Partnership.
The Limited Partnership Agreement allows for the reimbursement of costs incurred
by the General Partner in providing administrative services to the Partnership.
Administrative services provided include Partnership accounting, investor
relations, legal counsel and lease and equipment documentation. The General
Partner is not reimbursed for services where it is entitled to receive a
separate fee as compensation for such services, such as acquisition and
disposition of equipment. Reimbursable costs incurred by the General Partner are
allocated to the Partnership based upon actual time incurred by employees
working on Partnership business and an allocation of rent and other costs based
on utilization studies.
Substantially all employees of the General Partner record time incurred in
performing administrative services on behalf of all of the Partnerships serviced
by the General Partner. The General Partner believes that the costs reimbursed
are the lower of (i) actual costs incurred on behalf of the Partnership or (ii)
the amount the Partnership would be required to pay independent parties for
comparable administrative services in the same geographic location and are
reimbursable in accordance with the Limited Partnership Agreement.
21
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
5. Related party transactions (continued):
The General Partner and/or Affiliates earned fees, commissions and
reimbursements pursuant to the Limited Partnership Agreement as follows during
1999, 1998 and 1997:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Incentive management fees (computed as 5% of distributions of cash from
operations, as defined in the Limited Partnership Agreement) and equipment
management fees (computed as 5% of gross revenues from operating leases, as
defined in the Limited Partnership Agreement plus 2% of gross revenues from full
payout leases, as defined in the Limited Partnership Agreement). $ 1,022,381 $ 1,318,373 $ 1,647,388
Administrative costs reimbursed to General Partner 355,881 422,293 405,886
---------------- --------------- ----------------
$ 1,378,262 $ 1,740,666 $ 2,053,274
================ =============== ================
</TABLE>
6. Partners' capital:
As of December 31, 1999 and 1998, 12,497,000 Units were issued and outstanding
(in addition to the Units issued to the Initial Limited Partners). The
Partnership is authorized to issue up to 12,500,000 Units of Limited Partnership
interest in addition to those issued to the initial Limited Partners.
The Partnership Net Profits, Net Losses, and Tax Credits are to be allocated 99%
to the Limited Partners and 1% to the General Partner.
Available Cash from Operations and Cash from Sales and Refinancing, as defined
in the Limited Partnership Agreement, shall be distributed as follows:
First, 5% of Distributions of Cash from Operations to the General Partner as
Incentive Management Fee.
Second, the balance to the Limited Partners until the Limited Partners have
received Aggregate Distributions 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.
Third, the General Partner will receive as Incentive Management Compensation,
the following:
(A) 10% of remaining Cash from Operations,
(B) 15% of remaining Cash from Sales or Refinancing.
Fourth, the balance to the Limited Partners.
22
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
7. Concentration of credit risk and major customers:
The Partnership leases equipment to lessees in diversified industries. Leases
are subject to the General Partner's credit committee review. The leases provide
for the return of the equipment upon default.
As of December 31, 1999, 1998 and 1997, there were concentrations (greater than
10%) of equipment leased to lessees in certain industries (as a percentage of
total equipment cost) as follows:
1999 1998 1997
---- ---- ----
Rail transportation 26% 21% 25%
Petroleum and coal products 14% * 10%
Mining 13% 14% 15%
* Less than 10%.
During 1999, no customers comprised in excess of 10% of the Partnership's
revenues from leases. During 1998, two customers comprised 14% and 11% of the
Partnership's revenues from leases. During 1997, two customers comprised 19% and
14% of the Partnership's revenues from leases.
8. Line of credit:
The Partnership participates with the General Partner and certain of its
Affiliates in a $95,000,000 revolving credit agreement with a group of financial
institutions which expires on April 30, 2000. The agreement includes an
acquisition facility and a warehouse facility which are used to provide bridge
financing for assets on leases. Draws on the acquisition facility by any
individual borrower are secured only by that borrower's assets, including
equipment and related leases. Borrowings on the warehouse facility are recourse
jointly to certain of the Affiliates, the Partnership and the General Partner.
During 1998, the Partnership borrowed $1,000,000 under the line of credit. There
were no repayments on the line of credit during 1998. The balance was repaid in
January 1999. Interest on the line of credit is based on either the thirty day
LIBOR rate or the bank's prime rate.
The credit agreement includes certain financial covenants applicable to each
borrower. The Partnership was in compliance with its covenants as of December
31, 1999. At December 31, 1999, $21,857,103 was available under this agreement.
23
<PAGE>
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
9. Fair value of financial instruments:
The following methods and assumptions were used to estimate the fair value of
each class of financial instrument for which it is practicable to estimate that
value.
Cash and cash equivalents:
The carrying amount of cash and cash equivalents approximates fair value because
of the short-term maturity of these instruments.
Non-recourse debt:
The fair value of the Partnership's non-recourse debt is estimated using
discounted cash flow analyses, based on the Partnership's current incremental
borrowing rates for similar types of borrowing arrangements. The estimated fair
value of the Partnership's non-recourse debt at December 31, 1999 is
$20,711,452.
Line of credit:
The carrying amount of the Partnership's variable rate line of credit
approximates fair value.
10. Provision for losses and impairments:
In January 1998, Pegasus Gold, one of the Partnership's lessees, filed for
reorganization under Chapter 11 of the United States Bankruptcy Code. The
Partnership determined that certain of the assets under this direct financing
lease (with a total net book value of $5,826,418) were impaired at December
31,1997. The Partnership's provision for losses and impairments for 1997
includes a reserve for the estimated credit exposure related to the remaining
lease assets.
In October 1997 and 1999, Schwegmann's Giant Supermarkets, one of the
Partnership's lessees, defaulted on its lease obligations. The Partnership has
sold the assets relating to the defaulted lease obligation. Subsequent to the
sales of the assets, the Partnership reclassified the remaining lease
investments to other receivables. The book value of the other receivables was
$1,410,388 at December 31, 1999 ($1,095,780 at December 31, 1998). The General
Partner has provided for a reserve of $100,605 on the other receivables at
December 31, 1999 and 1998.
The net book value of the Partnership's defaulted lease obligation related to
Schwegmann's Giant Supermarkets which is classified as an investment in direct
finance lease was $603,976 at December 31, 1998 (none at December 31, 1999). The
Partnership's provision for losses and impairments for 1997 includes a reserve
for the estimated credit exposure related to the remaining lease assets.
Uncertainties surrounding the lessees' workout proceedings, their credit and
collateral and the related bankruptcy court adjudications, among other factors,
all affect the Partnership's ability to estimate its future cash flows from
lease payments and equipment residual values. As a result, it is reasonably
possible that a change in estimate will occur in the near term. However, such
change is not expected to have a material effect on the financial position or
future operating results of the Partnership.
24
<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH AUDITORS ON
ACCOUNTING AND FINANCIAL DISCLOSURES
Inapplicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS
The registrant is a Limited Partnership and, therefore, has no officers or
directors.
All of the outstanding capital stock of ATEL Financial Corporation (the General
Partner) is held by ATEL Capital Group ("ACG"), a holding company formed to
control ATEL and affiliated companies pursuant to a corporate restructuring
completed in July 1994. The outstanding capital stock of ATEL Capital Group is
owned 73.125% by A. J. Batt and 24.375% by Dean Cash, and was obtained in the
restructuring in exchange for their capital interests in ATEL Financial
Corporation. The remaining 2.5% is owned by Paritosh K. Choksi.
Each of ATEL Leasing Corporation ("ALC"), ATEL Equipment Corporation ("AEC"),
ATEL Investor services ("AIS") and ATEL Financial Corporation ("AFC") is a
wholly-owned subsidiary of ATEL Capital Group and performs services for the
Partnership. Acquisition services are performed for the Partnership by ALC,
equipment management, lease administration and asset disposition services are
performed by AEC, investor relations and communications services are performed
by AIS and general administrative services for the Partnership are performed by
AFC. ATEL Securities Corporation ("ASC"), is a wholly-owned subsidiary of ATEL
Financial Corporation.
The officers and directors of ATEL Capital Group and its affiliates are as
follows:
A. J. Batt Chairman of the Board of Directors of ACG, AFC, ALC,
AEC, AIS and ASC; President and Chief Executive
Officer of ACG, AFC and AEC
Dean L. Cash Director, Executive Vice President and Chief
Operating Officer of ACG, AFC, and AEC; Director,
President and Chief Executive Officer of ALC, AIS
and ASC
Paritosh K. Choksi Director, Senior Vice President and Chief Financial
Officer of ACG, AFC, ALC, AEC and AIS
Donald E. Carpenter Vice President and Controller of ACG, AFC, ALC, AEC
and AIS; Chief Financial Officer of ASC
Vasco H. Morais Senior Vice President, Secretary and General Counsel
for ACG, AFC, ALC, AIS and AEC
Carl W. Magnuson Vice President - Syndication of ALC
Barbara F. Medwadowski Vice President - Syndication of ALC
James A. Kamradt Director of Pricing and Syndication of ALC
Thomas D. Sbordone Senior Vice President - Marketing of ALC
Russell H. Wilder Vice President - Credit of AEC
John P. Scarcella Vice President of ASC
25
<PAGE>
A. J. Batt, age 63, founded ATEL in 1977 and has been its president and chairman
of the board of directors since its inception. From 1973 to 1977, he was
employed by GATX Leasing Corporation as manager-data processing and equity
placement for the lease underwriting department, which was involved in equipment
financing for major corporations. From 1967 to 1973 Mr. Batt was a senior
technical representative for General Electric Corporation, involved in sales and
support services for computer time-sharing applications for corporations and
financial institutions. Prior to that time, he was employed by North American
Aviation as an engineer involved in the Apollo project. Mr. Batt received a
B.Sc. degree with honors in mathematics and physics from the University of
British Columbia in 1961.
Dean L. Cash, age 49, joined ATEL as director of marketing in 1980 and has been
a vice president since 1981, executive vice president since 1983 and a director
since 1984. Prior to joining ATEL, Mr. Cash was a senior marketing
representative for Martin Marietta Corporation, data systems division, from 1979
to 1980. From 1977 to 1979, he was employed by General Electric Corporation,
where he was an applications specialist in the medical systems division and a
marketing representative in the information services division. Mr. Cash was a
systems engineer with Electronic Data Systems from 1975 to 1977, and was
involved in maintaining and developing software for commercial applications. Mr.
Cash received a B.S. degree in psychology and mathematics in 1972 and an M.B.A.
degree with a concentration in finance in 1975 from Florida State University.
Mr. Cash is an arbitrator with the American Arbitration Association.
Paritosh K. Choksi, age 46, joined ATEL in 1999 as a director, senior vice
president and its chief financial officer. Prior to joining ATEL, Mr. Choksi was
chief financial officer at Wink Communications, Inc. from 1997 to 1999. From
1977 to 1997, Mr. Choksi was with Phoenix American Incorporated, a financial
services and management company, where he held various positions during his
tenure, and was senior vice president, chief financial officer and director when
he left the company. Mr. Choksi was involved in all corporate matters at Phoenix
and was responsible for Phoenix's capital market needs. He also served on the
credit committee overseeing all corporate investments, including its venture
lease portfolio. Mr. Choksi was a part of the executive management team which
caused Phoenix's portfolio to increase from $50 million in assets to over $2
billion. Mr. Choksi received a bachelor of technology degree in mechanical
engineering from the Indian Institute of Technology, Bombay; and an M.B.A.
degree from the University of California, Berkeley.
Donald E. Carpenter, age 51, joined ATEL in 1986 as controller. Prior to joining
ATEL, Mr. Carpenter was an audit supervisor with Laventhol & Horwath, certified
public accountants in San Francisco, California, from 1983 to 1986. From 1979 to
1983, Mr. Carpenter was an audit senior with Deloitte, Haskins & Sells,
certified public accountants, in San Jose, California. From 1971 to 1975, Mr.
Carpenter was a Supply Corp officer in the U. S. Navy. Mr. Carpenter received a
B.S. degree in mathematics (magna cum laude) from California State University,
Fresno in 1971 and completed a second major in accounting in 1978. Mr. Carpenter
has been a California certified public accountant since 1981.
Vasco H. Morais, age 41, joined ATEL in 1989 as general counsel to provide legal
support in the drafting and reviewing of lease documentation, advising on
general corporate law matters, and assisting on securities law issues. From 1986
to 1989, Mr. Morais was employed by the BankAmeriLease Companies, Bank of
America's equipment leasing subsidiaries, providing in-house legal support on
the documentation of tax-oriented and non-tax oriented direct and leveraged
lease transactions, vendor leasing programs and general corporate matters. Prior
to the BankAmeriLease Companies, Mr. Morais was with the Consolidated Capital
Companies in the corporate and securities legal department involved in drafting
and reviewing contracts, advising on corporate law matters and securities law
issues. Mr. Morais received a B.A. degree in 1982 from the University of
California in Berkeley, a J.D. degree in 1986 from Golden Gate University Law
School and an M.B.A. (Finance) in 1997 from Golden Gate University. Mr. Morais
has been an active member of the State Bar of California since 1986.
26
<PAGE>
Carl W. Magnuson, age 56, joined ATEL in 1994 and is vice president -
syndication for ALC. Mr. Magnuson is responsible for acquiring third party lease
transactions and debt placement. Prior to joining ATEL he was a regional group
manager and portfolio sales manager for Bell Atlantic Systems Leasing for 10
years. From 1983 to 1984 he was vice president and chief financial officer of
the Handi-Kup Company, a plastics manufacturer, and from 1981 to 1982 he was
controller for the Cyclotron Corporation, engaged in nuclear medicine research
and development. From 1978 to 1981 he was executive vice president of Shannon
Financial Corporation, a middle market leasing corporation. From 1975 to 1978 he
was a deputy program manager for the Watkins Johnson Company. From 1968 to 1973
Mr. Magnuson was an engineering duty officer in the U. S. Navy. Mr. Magnuson
received a B.S. in Engineering Science and an M.S. in applied mathematics from
the Rensselaer Polytechnic Institute, an M.S. in industrial
engineering/operations research from Stanford University, and an M.B.A. from the
University of California at Berkeley.
Barbara F. Medwadowski, age 60, joined ATEL in 1997 and is vice president -
syndication for ALC. Ms. Medwadoski is responsible for acquiring third party
lease transactions. Prior to joining ATEL, she was a syndications manager for
Mellon US Leasing (successor to USL Capital and U.S. Leasing Corporation) for
nine years. From 1985 to 1987, she was a vice president with Great Western
Leasing where she acquired lease and loan transactions from intermediaries. From
1982 through 1984, she was a portfolio manager with U.S. Leasing Corporation.
Ms. Medwadowski received an M.B.A. degree from the University of California at
Berkeley in 1982. From 1964 through 1979, she was a senior researcher in lipids
and lipoproteins at the University of California at Berkeley. In 1964, she
earned an M.S. degree in nutrition and in 1961 a B.S. degree in child
development, each from the University of California at Berkeley.
James A. Kamradt, age 38, director of pricing and syndication for ALC, joined
ATEL in 1997. Mr. Kamradt is involved in the pricing of lease transactions and
the placement of debt to leverage certain transactions. From 1985 to 1997, Mr.
Kamradt managed his own private consulting business, providing underwriting and
operational services for numerous leasing companies. Prior to that, Mr. Kamradt
was the national operations officer for the computer leasing division of Phoenix
American; and regional credit manager for Dana Commercial Credit Corporation.
Mr. Kamradt received a B.S. from Michigan Technological University's Engineering
School of Business, and an M.B.A. from Haas School of Business of the University
of California, Berkeley.
Thomas D. Sbordone, age 41, senior vice president - marketing for ALC, joined
ATEL in 1993, as a regional vice president in the northeastern United States.
Mr. Sbordone is currently responsible for new business development within the
eastern U.S., including management of filed sales personnel and directly
interfacing with ATEL's existing and prospective clients to achieve the
company's lease investment objectives. Prior to joining ATEL, Mr. Sbordone was
employed, from 1985, by American Finance Group, a Boston-based equipment lessor.
While there, Mr. Sbordone's various responsibilities involved lease origination
of vendor finance relationships. Mr. Sbordone earned a B.S., with honors, in
finance and marketing from Northeastern University, and has attended Bentley
College Graduate School of Business.
Russell H. Wilder, age 45, joined ATEL in 1992 as vice president of ATEL
Business Credit, a wholly-owned subsidiary of ACG. Immediately prior to joining
ATEL, Mr. Wilder was a personal property broker specializing in equipment
leasing and financing and an outside contractor in the areas of credit and
collections. From 1985 to 1990 he was vice president and manager of leasing for
Fireside Thrift Co., a Teledyne subsidiary, and was responsible for all aspects
of setting up and managing the department, which operated as a small ticket
lease funding source. From 1983 to 1985 he was with Wells Fargo Leasing
Corporation as assistant vice president in the credit department where he
oversaw all credit analysis on transactions in excess of $2 million. From 1978
to 1983 he was district credit manager with Westinghouse Credit Corporation's
Industrial Group and was responsible for all non-marketing operations of various
district offices. Mr. Wilder holds a B.S. with honors in agricultural economics
and business management from the University of California, Davis. He has been
awarded the Certified Lease Professional designation by the Western Association
of Equipment Lessors.
27
<PAGE>
John P. Scarcella, age 38, joined ATEL Securities as vice president in 1992. He
is involved in the marketing of securities offered by ASC. Prior to joining ASC,
from 1987 to 1991, he was employed by Lansing Pacific Fund, a real estate
investment trust in San Mateo, California and acted as director of investor
relations. From 1984 to 1987, Mr. Scarcella acted as broker dealer
representative for Lansing Capital Corporation, where he was involved in the
marketing of direct participation programs and REITs. Mr. Scarcella received a
B.S.C. degree with emphasis in investment finance in 1983 and an M.B.A. degree
with a concentration in marketing in 1991 from Santa Clara University.
Item 11. EXECUTIVE COMPENSATION
The registrant is a Limited Partnership and, therefore, has no officers or
directors.
Set forth hereinafter is a description of the nature of remuneration paid and to
be paid to the General Partner and their affiliates. The amount of such
remuneration paid for the years ended December 31, 1999, 1998 and 1997 is set
forth in Item 8 of this report under the caption "Financial Statements and
Supplementary Data - Notes to the Financial Statements - Related party
transactions," at Note 5 thereof, which information is hereby incorporated by
reference.
Selling Commissions
The Partnership paid selling commissions in the amount of 9.5% of Gross
Proceeds, as defined, ($11,875,000) to ATEL Securities Corporation, an affiliate
of the General Partner. Of this amount, $10,170,534 was reallowed to other
broker/dealers.
Acquisition Fees
Acquisition fees are to be paid to the General Partner for services rendered in
finding, reviewing and evaluating equipment to be purchased by the Partnership
and rejecting equipment not to be purchased by the Partnership. The total amount
of acquisition fees to be paid to the General Partner or their Affiliates is not
to exceed 3.5% of the aggregate purchase piece of equipment acquired, not to
exceed approximately 4.75% of the Gross Proceeds of the Offering.
The maximum amount of such fees to be paid is $5,929,583, all of which had been
paid as of December 31, 1996.
Equipment Management Fees
As compensation for its services rendered generally in managing or supervising
the management of the Partnership's equipment and in supervising other ongoing
services and activities including, among others, arranging for necessary
maintenance and repair of equipment, collecting revenue, paying operating
expenses, determining the equipment is being used in accordance with all
operative contractual arrangements, property and sales tax monitoring and
preparation of financial data, the General Partner or its affiliates are
entitled to receive management fees which are payable for each fiscal quarter
and are to be in an amount equal to (i) 5% of the gross lease revenues from
"operating" leases and (ii) 2% of gross lease revenues from "full payout" leases
which contain net lease provisions. See Note 5 to the financial statements
included at Item 8 of this report for amounts paid.
Incentive Management Fees
As compensation for its services rendered in establishing and maintaining the
composition of the Partnership's equipment portfolio and its acquisition and
debt strategies and supervising fund administration including supervising the
preparation of reports and maintenance of financial and operating data of the
Partnership, Securities and Exchange Commission and Internal Revenue Service
filings, returns and reports, the General Partner shall be entitled to receive
the Partnership management fee which shall be payable for each fiscal quarter
and shall be an amount equal to 5% of distributions of cash from operations
until such time as the Limited Partners have received aggregate distributions of
cash from operations in an amount equal to their original invested capital plus
a 10% per annum return on their average adjusted invested capital (as defined in
the Limited Partnership Agreement). Thereafter, the incentive management fee
shall be 15% of all distributions of cash from operations, sales or refinancing.
See Note 5 to the financial statements included at Item 8 of this report for
amounts paid.
28
<PAGE>
Equipment Resale Fees
As compensation for services rendered in connection with the sale of equipment,
the General Partner shall be entitled to receive an amount equal to the lesser
of (i) 3% of the sales price of the equipment, or (ii) one-half the normal
competitive equipment sales commission charged by unaffiliated parties for such
services. Such fee is payable only after the Limited Partners have received a
return of their adjusted invested capital (as defined in the Limited Partnership
Agreement) plus 10% of their adjusted invested capital per annum calculated on a
cumulative basis, compounded daily, commencing the last day of the quarter in
which the limited partner was admitted to the Partnership. To date, none have
been accrued or paid.
Equipment Re-lease Fee
As compensation for providing re-leasing services, the General Partner is
entitled to receive fees equal to 2% of the gross rentals or the comparable
competitive rate for such services relating to comparable equipment, whichever
is less, derived from the re-lease provided that (i) the General Partner or
their affiliates have and will maintain adequate staff to render such services
to the Partnership, (ii) no such re-lease fee is payable in connection with the
re-lease of equipment to a previous lessee or its affiliates, (iii) the General
Partner or its affiliates have rendered substantial re-leasing services in
connection with such re-lease and (iv) the General Partner or its affiliates are
compensated for rendering equipment management services. To date, none have been
accrued or paid.
General Partner's Interest in Operating Proceeds
Net income, net loss and investment tax credits are allocated 99% to the Limited
Partners and 1% to the general partner. See the statements of income included in
Item 8 of this report for the amounts allocated to the general and Limited
Partners in 1999, 1998 and 1997.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Security Ownership of Certain Beneficial Owners
At December 31, 1999 no investor is known to the Partnership to hold
beneficially more than 5% of the issued and outstanding Units.
Security Ownership of Management
The shareholders of the General Partner are beneficial owners of Limited
Partnership Units as follows:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
-------------- ---------------- -------------------- --------
<S> <C> <C> <C>
Limited Partnership Units A. J. Batt Initial Limited Partner Units 0.0002%
235 Pine Street, 6th Floor 25 Units ($250)
San Francisco, CA 94104 (owned by wife)
Limited Partnership Units Dean Cash Initial Limited Partner Units 0.0002%
235 Pine Street, 6th Floor 25 Units ($250)
San Francisco, CA 94104 (owned by wife)
</TABLE>
29
<PAGE>
Changes in Control
The Limited Partners have the right, by vote of the Limited Partners owning more
than 50% of the outstanding limited Partnership units, to remove a General
Partner.
The General Partner may at any time call a meeting of the Limited Partners or a
vote of the Limited Partners without a meeting, on matters on which they are
entitled to vote, and shall call such meeting or for vote without a meeting
following receipt of a written request therefor of Limited Partners holding 10%
or more of the total outstanding Limited Partnership units.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The responses to Item 1 of this report under the caption "Equipment Leasing
Activities," Item 8 of this report under the caption "Financial Statements and
Supplemental Data - Notes to the Financial Statements - Related party
transactions" at Note 5 thereof, and Item 11 of this report under the caption
"Executive Compensation," are hereby incorporated by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) Financial Statements and Schedules
1. Financial Statements
Included in Part II of this report:
Report of Independent Auditors
Balance Sheets at December 31, 1999 and 1998
Statements of Income for the years ended December 31,
1999, 1998 and 1997
Statements of Changes in Partners' Capital for
the years ended December 31, 1999, 1998 and 1997
Statements of Cash Flows for the years ended December
31, 1999, 1998 and 1997
Notes to Financial Statements
2. Financial Statement Schedules
All 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) Reports on Form 8-K for the fourth quarter of 1999
None
(c) Exhibits (3) and (4) Agreement of Limited
Partnership, included as Exhibit B to Prospectus
(Exhibit 28.1), is incorporated herein by
reference to the Report on Form 10K for the period
ended December 31, 1993 (File No. 33-53162)
30
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: 3/22/2000
ATEL Cash Distribution Fund V, 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
ATEL Financial Corporation (General
Partner)
By: /s/ Dean Cash
-------------------------------------------------
Dean Cash,
Executive Vice President of ATEL
Financial Corporation (General Partner)
31
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the persons in the capacities and on the dates
indicated.
SIGNATURE CAPACITIES DATE
/s/ A. J. Batt President, Chairman and Chief Executive 3/22/2000
- ------------------------ Officer of ATEL Financial Corporation
A. J. Batt
/s/ Dean Cash Executive Vice President and director of 3/22/2000
- ------------------------ ATEL Financial Corporation
Dean Cash
/s/ Paritosh K. Choksi Principal financial officer of registrant; 3/22/2000
- ------------------------ principal financial officer and director
Paritosh K. Choksi of ATEL Financial Corporation
/s/ Donald E. Carpenter Principal accounting officer of registrant; 3/22/2000
- ------------------------ principal accounting officer of ATEL
Donald E. Carpenter Financial Corporation
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act:
No proxy materials have been or will be sent to security holders. An annual
report will be furnished to security holders subsequent to the filing of this
report on Form 10-K, and copies thereof will be furnished supplementally to the
Commission when forwarded to the security holders.
32
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> dec-31-1999
<PERIOD-END> dec-31-1999
<CASH> 3,330,065
<SECURITIES> 0
<RECEIVABLES> 2,772,627
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 67,961,144
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 44,820,397
<TOTAL-LIABILITY-AND-EQUITY> 67,961,144
<SALES> 0
<TOTAL-REVENUES> 17,064,600
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,810,555
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,055,475
<INCOME-PRETAX> 5,198,570
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,198,570
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,198,570
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
