0000891804-01-501918.txt : 20011019 0000891804-01-501918.hdr.sgml : 20011019 ACCESSION NUMBER: 0000891804-01-501918 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010831 FILED AS OF DATE: 20011015 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREATAMERICA LEASING RECEIVABLES 2000-1 LLC CENTRAL INDEX KEY: 0001111780 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 421502818 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-34842 FILM NUMBER: 1758818 BUSINESS ADDRESS: STREET 1: 625 FIRST STREET SE STREET 2: STE 701 CITY: CEDAR RAPIDS STATE: IA ZIP: 52401 BUSINESS PHONE: 3193658449 MAIL ADDRESS: STREET 1: 625 FIRST STREET SE STREET 2: SUITE 701 CITY: CEDAR RAPIDS STATE: IA ZIP: 52401 10-Q 1 ga25420.txt GREATAMERICA LEASING RECEIVABLES UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [x] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended August 31, 2001 or [ ] 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: 333-34842 GreatAmerica Leasing Receivables 2000-1, L.L.C. ................................ (Exact name of registrant as specified in its charter) Delaware 42-1502818 ..................... ........................ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 625 First SE, Suite 701 Cedar Rapids, Iowa 52401 ................................ ................. (Address of principal executive offices) (Zip Code) (319) 365-8449 ............................... (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ..X.. No..... INDEX GREATAMERICA LEASING RECEIVABLES 2000-1, L.L.C. Part I - Financial Information Item 1. Financial Statements (Unaudited) Balance Sheets - August 31, 2001 and May 31, 2001 Statements of Operations - Three months ended August 31, 2001; Three months ended August 31, 2000 Statements of Cash Flow - Three months ended August 31, 2001; Three months ended August 31, 2000 Notes to financial statements Item 2. Management's Discussion and Analysis of Financial Condition And Results of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Part II - Other Information Item 6. Exhibits and Reports on Form 8-K PART I FINANCIAL INFORMATION Item 1. Financial Statements GreatAmerica Leasing Receivables 2000-1, L.L.C. Balance Sheets (Unaudited)
August 31, May 31, Assets: 2001 2001 ------------- ------------- Cash, restricted $ 11,559,037 $ 12,814,085 ------------- ------------- Direct Financing Leases: Minimum Lease Payments 131,608,059 154,014,637 Estimated Unguaranteed Residual Values 18,909,029 20,118,464 Unearned Income (18,061,574) (22,179,919) Allowance for Doubtful Accounts (2,502,224) (3,739,859) ------------- ------------- Net Investment in Direct Finance Leases 129,953,290 148,213,322 ------------- ------------- Capitalized Securitization Costs, net of accumulated amortization 819,749 981,051 ------------- ------------- Total Assets $ 142,332,076 $ 162,008,458 ============= ============= Liabilities: Notes Payable $ 126,061,783 $ 146,329,522 Accrued Interest 262,332 304,100 Due to Affiliate 1,623,687 1,448,529 ------------- ------------- Total Liabilities 127,947,802 148,082,151 ------------- ------------- Members' Equity: Paid in Capital 8,022,411 8,022,411 Retained Earnings 6,361,863 5,903,896 ------------- ------------- Total Members' Equity 14,384,274 13,926,307 ------------- ------------- Total Liabilities and Members' Equity $ 142,332,076 $ 162,008,458 ============= =============
The accompanying notes are an integral part of these financial statement.
GreatAmerica Leasing Receivables 2000-1, L.L.C. Statements of Operations (Unaudited) Three Months Ended August 31 ------------------------------------- Revenues: 2001 2000 ------------ ------------ Direct Financing Leases $4,022,753 $6,686,807 Interest Income 103,610 141,849 Gain on Termination of Leases 288,800 232,761 Other Income 681,642 24,216 ---------- ---------- Total Revenues 5,096,805 7,085,633 ---------- ---------- Expenses: Interest Expense 2,570,708 3,387,115 Selling, General and Administrative 429,736 653,259 ---------- ---------- Total Expenses 3,000,444 4,040,374 ---------- ---------- Net Income $2,096,360 $3,045,259 ========== ==========
The accompanying notes are an integral part of these financial statements.
GreatAmerica Leasing Receivables 2000-1, L.L.C. Statements of Cash Flows (Unaudited) Three Months Ended August 31 ------------------------------ Cash Flows from Operating Activities: 2001 2000 ------------- ------------- Net Income $ 2,096,360 $ 3,045,259 Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: Gain on Termination of Leases (288,800) (232,761) Amortization of Capitalized Securitization Costs 179,152 210,591 Increase in Due to Affiliate 175,158 1,281,816 Increase in Accrued Interest (41,768) 433,421 ------------- ------------- Net Cash Flows from Operating Activities 2,120,102 4,738,326 ------------- ------------- Cash Flows from Investing Activities: Purchase of Direct Financing Leases from Originator -- (234,462,674) Repayment of Direct Financing Leases 15,794,782 30,403,636 Proceeds on Termination of Leases 2,754,049 2,830,440 ------------- ------------- Net Cash Flows from Investing Activities 18,548,831 (201,228,598) ------------- ------------- Cash Flows from Financing Activities: Proceeds from Notes Payable -- 235,195,755 Repayment on Notes Payable (20,267,739) (23,299,936) Payment of Securitization Costs (17,850) (1,711,419) Distributions to Parent (1,638,392) -- ------------- ------------- Net Cash Flows from Financing Activities (21,923,981) 210,184,400 ------------- ------------- Net Increase in Cash (1,255,048) 13,694,128 Cash at the Beginning of the Year 12,814,085 1,000 ------------- ------------- Cash at the End of the Year $ 11,559,037 $ 13,695,128 ============= ============= Supplemental Disclosures: Cash Paid during the Period for Interest $ 2,608,014 $ 2,953,692 Non Cash Investing and Financing Activity-- Contribution of Lease Receivable Contracts -- $ 8,022,411
The accompanying notes are an integral part of the financial statements. GreatAmerica Leasing Receivables 2000-1, L.L.C. Notes to Financial Statements (UNAUDITED) The accompanying unaudited financial statements have been prepared by GreatAmerica Leasing Receivables 2000-1, L.L.C., (the "Company") in accordance with accounting principles generally accepted in the United States of America pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments, consisting of normal recurring entries, considered necessary have been included. The balance sheet information as of May 31, 2001 has been derived from the Company's audited financial statements. 1. Nature of Operations and Significant Accounting Policies Nature of Operations-The Company is a limited purpose limited liability company established under laws of the state of Delaware and was formed by GreatAmerica Leasing Corporation (the "Originator") who holds a 99% membership interest, and GreatAmerica Leasing Receivables 2000 Corporation (the "Special Purpose Member), who holds a 1% membership interest, pursuant to the Limited Liability Company Agreement dated April 12, 2000 between the Originator and the Special Purpose Member (the "Limited Liability Agreement"). The Special Purpose Member is wholly owned by the Originator. The activities of the Company are limited by the terms of the Limited Liability Agreement to purchasing equipment leases and lease receivables (including equipment), loan agreements and other financing agreements, issuing notes collateralized by such assets and other activities related thereto. The leases, loans, and other agreements purchased are originated throughout the United States of America. Prior to June 16, 2000 the Company did not conduct any activities. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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 significantly from those estimated. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the allowance for doubtful accounts and the estimated unguaranteed residual values on the lease receivable contracts purchased. Although the Originator attempts to mitigate credit risk through the use of a variety of commercial credit reporting agencies when processing customer applications, failure of the customers to make scheduled payments under their equipment lease contracts could have a material near-term impact on the allowance for doubtful accounts. GreatAmerica Leasing Receivables 2000-1, L.L.C. Notes to Financial Statements (Continued) Realization of unguaranteed residual values depends on many factors, several of which are not within the Company's control, including general market conditions at the time of the original lease contract's expiration, whether there has been unusual wear and tear on, or use of, the equipment, the cost of comparable new equipment and the extent, if any, to which the equipment has become technologically or economically obsolete during the contract term. These factors, among others, could have a material near-term impact on the estimated unguaranteed residual values. Certain Risk Concentrations-The Company's direct financing leases are concentrated in the services, manufacturing, and retail trade industries, representing approximately 42%, 12% and 10% of the Company's minimum lease payments receivable at August 31, 2001. Restricted Cash-The Company is required to maintain a reserve fund equal to $2,412,264 at August 31, 2001. The remaining available amounts are required to be distributed in accordance with the securitization agreement. 2. Direct Financing Leases Equipment leases are primarily true leases and finance leases for predominantly office equipment. The length of the lease term on the leases initially purchased ranged from 2 to 80 months. The assets were conveyed from the Originator, with funds that were obtained through the issuance of notes payable that were publicly offered, as described in a prospectus, dated June 13, 2000 previously filed with the Securities and Exchange Commission pursuant to Rule 424 A(b) 4. The schedule of remaining annual minimum payments from lessees are as scheduled below:
Unguaranteed Years Ending May 31, Minimum Lease Payment Residual Values --------------------- -------------------- --------------- 2002 $ 51,609,630 $ 4,924,160 2003 46,439,810 6,702,341 2004 24,576,505 3,800,760 2005 8,654,990 3,357,926 2006 242,510 122,821 Thereafter 84,614 1,021 ------------ ------------ $131,608,059 $ 18,909,029 ============ ============
GreatAmerica Leasing Receivables 2000-1, L.L.C. Notes to Financial Statements (Continued) 3. Allowance for Doubtful Accounts Beginning Balance at May 31, 2001 $ 3,739,859 Additions 152,578 Charge-offs (363,577) Defaulted leases (1,072,472) Recoveries 45,836 ------------ Ending Balance at August 31, 2001 $ 2,502,224 ============
Upon purchase of the leases from the Originator, the Company established a 3% allowance for doubtful accounts. Once a contract becomes charged-off or defaulted, the Originator has the option, but is not obligated, to substitute for that contract another contract or contracts having similar characteristics. The Originator may only substitute up to 10% of the initial aggregate discounted contract balance for all such contracts. The substitutions are accounted for as an equity contribution. 4. Related Party Transactions The Originator also serves as the contract servicer. In this function as servicer, it is responsible for collecting, enforcing, and administering the contracts. For performing the servicer function it is entitled to a monthly fee equal to 1/12 of .75% of the aggregate discounted contract balance of the contracts pledged to the indenture trustee as of the beginning of the related collection period. Also in its function as servicer, the Originator has the right to elect, but is not obligated, to advance unpaid scheduled payments with respect to the contracts. As the servicer, the Originator received cash payments for the quarters ended August 31, 2001 and 2000 totaling $268,039 and $442,667 in servicing fees, respectively. Also, the servicer has not been reimbursed for advances of $1,623,687 as of August 31, 2001 which are reflected on the balance sheet as due to affiliate. 5. Notes Payable Notes payable at August 31, 2001 consisted of : Six classes of Receivable-Backed Notes at rates of 7.36% to 8.14% maturing through November 2005 $ 126,061,783 ============= GreatAmerica Leasing Receivables 2000-1, L.L.C. Notes to Financial Statements (Continued) The aggregate maturities of the notes payable as of August 31, 2001 are as follows: Years Ending May 31, -------------------- 2002 $ 51,310,860 2003 43,617,336 2004 22,068,091 2005 9,065,496 ------------ Total $126,061,783 ============ Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS GreatAmerica Leasing Receivables 2000-1, L.L.C. (the "Company") had revenues of $4,022,753 and $6,686,807 for the three months ended August 31, 2001 and 2000, respectively. For these periods, revenues from leasing equipment under direct financing leases accounted for 79% and 94% of total revenues. The decrease in revenues was primarily attributable to the decline in the lease receivables outstanding due to scheduled payments and early terminations which will continue throughout the remaining term of the leases. Other income increased by $657,426 as a result of the number of customers renewing their lease contracts at the end of their contractual payment period. In general, once a customer has made all of their scheduled payments, they have the option to either return the equipment, purchase the equipment, or to continue using the equipment by renewing their lease contract on a month-to-month basis. Expenses were $3,000,444 and $4,040,374 during the three months ended August 31, 2001 and 2000, respectively. Interest expense comprised 86% and 84% of total expenses during these periods. The decrease in interest expense was wholly related to the decline in the notes outstanding. ANALYSIS OF FINANCIAL CONDITION The cash position of the Company is reviewed daily and cash is invested on a short-term basis. The Company's cash from operations is expected to continue to be adequate to cover all operating and investing expenses and debt service requirements under the notes payable during the next twelve month period. Item 3. Quantitative And Qualitative Disclosures About Market Risk The notes issued by the Company have fixed rates, therefore, the Company is not sensitive to changes in interest rates. The following table shows the expected maturity of the outstanding notes at August 31, 2001:
Years Ending May 31, Average Interest Rate ------------------- --------------------- 2002 $ 51,310,860 7.50% 2003 43,617,336 7.54% 2004 22,068,091 7.55% 2005 9,065,496 7.55% ------------------ Total $ 126,061,783 ==================
PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (A) Reports on Form 8-K On June 26, 2001 the Registrant filed a report on Form 8-K to file under Item 5 of the Form, Servicer report information. On July 25, 2001 the Registrant filed a report on Form 8-K to file under Item 5 of the Form, Servicer report information. On August 24, 2001 the Registrant filed a current report on Form 8-K to file under Item 5 of the Form, Servicer report information (B) Exhibits Exhibits required by item 601 that are not incorporated by reference to Form 8-K are available in Form S-1 filed on April 14, 2000 by the Registrant, with amendments subsequently filed on June 2, 2000 and June 12, 2000 and incorporated by reference hereto. 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. GREATAMERICA LEASING RECEIVABLES 2000-1 L.L.C. BY: /s/ Stan Herkelman ------------------------------------- Chief Financial Officer Date: October 15, 2001