PAGE | |
Background | 1 |
Reason for the Liquidation and Dissolution | 1 |
Terms of the Plan of Complete Liquidation and Dissolution | 1 |
Assets Subject to Liquidation | 2 |
Risks Involved with Adopting the Proposals in Connection with the Liquidation of the Trust | 2 |
Tax Consequences | 4 |
PROPOSAL 1 - APPROVAL OF THE AMENDMENT TO SECTION 7.3 OF THE TRUST AGREEMENT TO ALLOW | |
FOR THE SALE OF ASSETS BY THE TRUST TO ITS AFFILIATES | 5 |
The Amendment | 5 |
Reason for the Amendment | 5 |
Risks of the Managing Trustee's History of Engaging in Transactions with Affiliates | 6 |
PROPOSAL 2 - APPROVAL OF THE SALE OF THE TRUST'S MEMBERSHIP INTEREST IN MILPI HOLDINGS, LLC | 9 |
Reason for the Sale | 9 |
Terms of the Sale | 9 |
Fairness Opinion | 10 |
Selected Financial Data | 15 |
Tax Consequences | 15 |
PROPOSAL 3 - APPROVAL OF THE AMENDMENTS TO SECTION 8.1(b) AND SECTION 7.7 OF THE | |
TRUST AGREEEMENT TO PERMIT THE MANAGING TRUSTEE TO MAKE DISTRIBUTIONS IN-KIND | 16 |
TO AFFILIATES OF THE MANAGING TRUSTEE | 16 |
The Amendment | 16 |
Reasons for the Amendment | 16 |
UNAUDITED PRO FORMA FINANCIAL INFORMATION | 17 |
Notes to Unaudited Pro Forma Financial Information | 20 |
SUMMARY OF MATERIAL FEDERAL INCOME TAX CONSEQUENCES IN CONNECTION WITH THE PROPOSALS | 22 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 23 |
ADDITIONAL INFORMATION CONCERNING THE TRUST | 24 |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS | 25 |
Annex A Plan of Complete Liquidation and Dissolution | A-1 |
Annex B Fairness Opinion | B-1 |
Annex C Text of Amendment | C-1 |
Annex D Membership Interest Purchase Agreement | D-1 |
Annex E 1934 Act Filings: Form 10-KSB for the fiscal year ended December 31, 2003 | E-1 |
TRUST AGREEMENT
TO ALLOW FOR THE SALE OF ASSETS BY THE TRUST TO ITS AFFILIATES
The Trust intends to sell its 50% membership interest in MILPI to PLM LLC or another affiliate, pursuant to a Membership Interest Purchase Agreement at the MILPI Sale Price of $8.3 million. PLM LLC currently intends to continue operating PLM through MILPI as an ongoing business. If the sale of the Trust’s MILPI interests to PLM LLC is not concluded for any reason, the Managing Trustee would be authorized to determine, in its discretion, to sell the Trust’s MILPI interests to another affiliate. Any such sale to an affiliate would be on the same terms and conditions as the proposed sale to PLM LLC. Trust D previously received the approval of its beneficiaries to sell its 50% membership in MILPI to PLM LLC for $8.3 million on the same terms and conditions that you are being asked to approve.
Summary of Operations | December 31,2003 |
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| Pro Forma December 31, 2003(1 | ) |
| 2002 |
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| 2000 |
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| 1999 | |||
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Lease revenue | $ | 4,214 | $ | 4,214 | $ | 5,682 | $ | 6,520 | $ | 7,734 | $ | 10,287 | |||||||
Total revenue | $ | 1,439 | $ | 1,439 | $ | 5,521 | $ | 6,986 | $ | 10,785 | $ | 15,453 | |||||||
Net income (loss) | $ | 725 | $ | 2,886 | $ | (1,451 | ) | $ | (5,599 | ) | $ | 2,050 | $ | 5,803 | |||||
Per Beneficiary Interest: | |||||||||||||||||||
Net income (loss) | |||||||||||||||||||
Class A Interests | $ | 0.49 | $ | 1.34 | $ | (0.83 | ) | $ | (2.84 | ) | $ | 0.66 | $ | 1.13 | |||||
Class B Interests | $ | (0.04 | ) | $ | 0.10 | $ | - | $ | (0.10 | ) | $ | 0.18 | $ | 0.75 | |||||
Cash distributions declared | |||||||||||||||||||
Class A Interests | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 4.56 | |||||||
Class B Interests | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 3.66 | |||||||
Financial Position | |||||||||||||||||||
Total assets | $ | 18,330 | $ | 18,944 | $ | 36,524 | $ | 42,172 | $ | 51,641 | $ | 71,091 | |||||||
Total long-term obligations | $ | - | $ | - | $ | - | $ | 22,383 | $ | 26,221 | $ | 32,573 | |||||||
Participants' capital | $ | 18.128 | $ | 18,742 | $ | 16,139 | $ | 17,590 | $ | 23,189 | $ | 21,159 | |||||||
AND SECTION 7.7 OF THE TRUST AGREEMENT
TO PERMIT THE MANAGING
TRUSTEE TO MAKE DISTRIBUTIONS IN-KIND TO AFFILIATES
OF THE MANAGING TRUSTEE
Historical at December 31, 2003 | Pro Forma Adjustments | Pro Forma at December 31, 2003 | |||
Assets | |||||
Cash and cash equivalents | $ 1,698 | $ 8,300 | A | $ 9,998 | |
Accounts receivable - affiliate | 162 | 162 | |||
Loan receivable - EFG/Kettle Development LLC | 528 | 528 | |||
Interest in EFG/Kettle Development LLC | 4,235 | 4,235 | |||
Interest in EFG Kirkwood LLC | 2,491 | 2,491 | |||
Interest in MILPI Holdings, LLC | 7,686 | (7,686) | A | - | |
Interest in C & D IT, LLC | 1,157 | 1,157 | |||
Investments - other | 105 | 105 | |||
Other assets, net of accumulated amortization of $137 | 173 | 173 | |||
Equipment at cost, net of accumulated depreciation $4,440 | 95 | 95 | |||
Total assets | $ 18,330 | $ 614 | $ 18,944 | ||
Liabilities and participants' capital | |||||
Accrued liabilities | 202 | 202 | |||
Total liabilities | 202 | 202 | |||
Participants' capital (deficit): | |||||
Managing Trustee | (2) | 8 | 6 | ||
Special Beneficiary | - | 50 | 50 | ||
Class A Beneficiary Interests (1,786,753 Interests; | |||||
initial purchase price of $25 each) | 19,740 | 438 | 20,178 | ||
Class B Beneficiary Interests (3,024,740 Interests; | |||||
initial purchase price of $5 each) | - | 118 | 118 | ||
Treasury Interests (224,261 Class A Interests at Cost) | (2,339) | (2,339) | |||
Accumulated other comprehensive income | 729 | 729 | |||
Total participants' capital | 18,128 | 614 | 18,742 | ||
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Total liabilities and participants' capital | $ 18,330 | $ 614 | $ 18,944 | ||
Historical for the Year Ended December 31, 2003 | Pro Forma Adjustments | Pro Forma For the Year Ended December 31, 2003 | |||
Revenue | |||||
Lease revenue | $ 4,214 | $ 4,214 | |||
Interest income | 70 | 70 | |||
Gain on disposal of equipment | 1,037 | 1,037 | |||
Loss on the disposal of equipment | (3,882) | (3,882) | |||
Total revenue | 1,439 | 1,439 | |||
Expenses | |||||
Depreciation and amortization | 1,630 | 1,630 | |||
Impairment of investment - other | 67 | 67 | |||
Interest expense | 1,303 | 1,303 | |||
Management fees - affiliates | 372 | (98) | C | 274 | |
Operating expenses | 500 | 500 | |||
Operating expenses - affiliate | 131 | 131 | |||
Total expenses | 4,003 | (98) | 3,905 | ||
Other Income: | |||||
Gain on extinguishment of debt | 3,882 | 3,882 | |||
Other income | 1,557 | 1,557 | |||
Total other income | 5,439 | - | 5,439 | ||
Equity Interests | |||||
Equity in net loss of investment - other | (50) | (50) | |||
Equity in net loss of EFG/Kettle Development LLC | (62) | (62) | |||
Equity in net income of EFG Kirkwood LLC | 25 | 25 | |||
Equity in net loss of MILPI Holdings, LLC | (2,063) | 2,063 | B | - | |
Total (loss) from equity interests | (2,150) | 2,063 | (87) | ||
Net (loss) income | $ 725 | $ 2,161 | $ 2,886 | ||
Net (loss) income | |||||
per Class A Beneficiary Interest | $ 0.49 | $ 0.85 | $ 1.34 | ||
per Class B Beneficiary Interest | $ (0.04) | $ 0.14 | $ 0.10 |
Original purchase price of the membership interest | $ | 9,802 | ||
Plus: Purchase Fees | 98 | (i) | ||
Less: Dividend paid to the Trust | (1,748) | (ii) | ||
Plus: Premium | 148 | |||
Sale Price of membership interest | $ | 8,300 | ||
Name and Address of Beneficial Owner(1) | Number of Class A Interests | Percent of Class A Interests Owned | Number of Class B Interests | Percent of Class B Interests Owned | Percentage of Special BeneficiaryInterest Owned |
Equis II Corporation(2). | 5,240 | * | 3,019,220 | 99.8% | – |
Semele Group, Inc. (3). | 14,450 | * | 3,019,220 | 99.8% | 100% |
Gary D. Engle(4). | 14,450 | * | 3,019,220 | 99.8% | – |
James A. Coyne(5). | 14,450 | * | 3,019,220 | 99.8% | – |
Company SEC Filings | Period | Annex |
Annual Report on Form 10-KSB | Year ended December 31, 2003 | E |
Title:
Title:
EQUIPMENT LEASING BUSINESS |
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| ACTUAL |
| PROJECTED | |||||
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| FYE | 1/1 - 9/30(1) |
| 10/1 - 12/31 | FYE | |||
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| 2002 | 2003 |
| 2003 | 2004 | 2005 | 2006 | 2007 |
Revenues: |
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Management Fees |
| $ 4,494 | $ 2,166 |
| $ 951 | $ 4,011 | $ 3,650 | $ 3,284 | $ 1,171 |
Partnership Interests and Other Fees |
| 24 | 541 |
| 219 | 1,448 | 1,097 | 7,692 | 7,518 |
Operating Leases |
| 122 | 108 |
| 50 | - | - | - | - |
Acquisition Fees |
| - | 517 |
| 550 | 1,100 | - | - | - |
Gain on Sale |
| - | 157 |
| - | - | - | - | - |
Other |
| 588 | 250 |
| - | 70 | - | - | - |
Total Revenues |
| 5,228 | 3,739 |
| 1,770 | 6,629 | 4,747 | 10,976 | 8,689 |
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Costs and Expenses: |
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Impairment of Managed Programs |
| 368 | 277 |
| - | - | - | - | - |
Depreciation and Amortization |
| 177 | 258 |
| - | - | - | - | - |
Trust C & D Related Expenses |
| - | - |
| - | - | - | - | - |
General and Administrative |
| 2,800 | 1,721 |
| 683 | 2,829 | 2,928 | 3,031 | 1,770 |
Total Costs and Expenses |
| 3,345 | 2,256 |
| 683 | 2,829 | 2,928 | 3,031 | 1,770 |
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EBIT |
| 1,883 | 1,483 |
| 1,087 | 3,800 | 1,818 | 7,945 | 6,919 |
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Less: Taxes |
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| (108) | (5,900) | (1,836) | (4,175) | (8,254) |
Plus: Depreciation |
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| - | - | - | - | - |
Change in Net Working Capital |
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| (2) | (42) | 57 | 101 | 281 |
Free Cash Flow |
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| 977 | (2,142) | 40 | 3,872 | (1,054) |
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Present Value of Projected Cash Flows @ 20.0% Discount Rate |
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| $ 934 | $ (1,735) | $ 43 | $ 2,029 | $ (735) | ||
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Present Value of Projected Cash Flows @ 25.0% Discount Rate |
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| $ 924 | $ (1,654) | $ 42 | $ 1,753 | $ (668) | ||
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| Discount Rate |
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| 20.0% | 25.0% |
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Net Present Value of Equipment Leasing Projected Cash Flows | $ 536 | $ 398 |
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RANCHOMALIBU PARTNERSHIP |
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| ACTUAL |
| PROJECTED | |||||
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| FYE | 1/1 - 9/30(1) |
| 10/1 - 12/31 | FYE | |||
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| 2002 | 2003 |
| 2003 | 2004 | 2005 | 2006 | 2007 |
Partnership Revenues: |
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Rancho Malibu Return of Capital & Interest |
| $ - | $ - |
| $ - | $ - | $ - | $ 8,276 | $ 1,434 |
Rancho Malibu Partnership Income |
| - | - |
| - | - | - | - | 5,210 |
Total Partnership Revenues |
| - | - |
| - | - | - | 8,276 | 6,644 |
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Plus: Tax Benefit |
| - | - |
| - | - | 1,901 | 3,924 | 307 |
Free Cash Flow |
| - | - |
| - | - | 1,901 | 12,200 | 6,950 |
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Present Value of Projected Cash Flows @ 20.8% Discount Rate |
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| $ - | $ - | $ 1,335 | $ 6,803 | $ 3,518 | ||
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Net Present Value of RanchoMalibu Partnership Projected Cash Flows | $ 11,657 |
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(1) The nine months ended September 30, 2003, includes six months of actual results (1/1 - 6/30) and three months of estimated results (7/1 - 9/30) |
Implied Equity Value Discounting Equipment Leasing @ 25% | ||||
Net Present Value of Equipment Leasing Projected Cash Flows.......... | $ | 398 | ||
Net Present Value of Rancho Malibu Partnership Projected Cash Flows...... | 11,657 | |||
Net Present Value of MILPI’s Consolidated Cash Flows........... | 12,055 | |||
Current Assets............................... | 18,320 | |||
Cash Surrender Value of Officer’s Life Insurance Policies.......... | 3,034 | |||
Estimated Total Enterprise Value..................... | 33,409 | |||
Less: Debt & Other Obligations............................. | (13,639 | ) | ||
Less: Stock Split Payable....................... | (504 | ) | ||
Less: PDS Liability......................... | (352 | ) | ||
Less: Tender Offer Payable...................... | (1,674 | ) | ||
Less: Note Payable to Semele..................... | (2,596 | ) | ||
Estimated Fair Market Value of Equity................... | $ | 14,644 | ||
Implied Equity Value Discounting Equipment Leasing @ 20% | ||||
Net Present Value of Equipment Leasing Projected Cash Flows........ | $ | 536 | ||
Net Present Value of Rancho Malibu Partnership Projected Cash Flows.... | 11,657 | |||
Net Present Value of MILPI’s Consolidated Cash Flows.......... | 12,192 | |||
Current Assets............................. | 18,320 | |||
Cash Surrender Value of Officer’s Life Insurance Policies.......... | 3,034 | |||
Estimated Total Enterprise Value................... | 33,546 | |||
Less: Debt & Other Obligations...................... | (13,639 | ) | ||
Less: Stock Split Payable........................ | (504 | ) | ||
Less: PDS Liability......................... | (352 | ) | ||
Less: Tender Offer Payable..................... | (1,674 | ) | ||
Less: Note Payable to Semele....................... | (2,596 | ) | ||
Estimated Fair Market Value of Equity | $ | 14,781 | ||
MILPI Holdings LLC | ||||||||||||||||||||||||||
FINANCIAL PROJECTION | ||||||||||||||||||||||||||
CASH FLOW PROJECTION | ||||||||||||||||||||||||||
(In $000's ) | ||||||||||||||||||||||||||
Actual | Projected | |||||||||||||||||||||||||
Total 2002 | 1/1 - 6/30 2003 | 7/1 - 12/31 2003 | Total 2004 | Total 2005 | Total 2006 | Total 2007 | TOTAL PROJECTED | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||
Operating Leases | 122 | 108 | 220 | - | - | - | - | 220 | ||||||||||||||||||
Management Fees | 4,494 | 2,166 | 1,897 | 4,011 | 3,650 | 3,284 | 1,171 | 14,014 | ||||||||||||||||||
Partnership Interests and Other Fees | 24 | 541 | 439 | 1,448 | 1,097 | 7,692 | 7,518 | 18,193 | ||||||||||||||||||
Acquisition Fees | - | 517 | 715 | 1,100 | - | - | - | 1,815 | ||||||||||||||||||
Rancho Malibu Income | - | - | - | - | - | - | 5,210 | 5,210 | ||||||||||||||||||
Rancho Malibu Return of Capital & Interest | - | - | - | - | - | 8,276 | 1,434 | 9,710 | ||||||||||||||||||
$0 | - | 157 | 440 | - | - | - | - | 440 | ||||||||||||||||||
Other | 588 | 250 | - | 70 | - | - | - | 70 | ||||||||||||||||||
Total Revenues | 5,228 | 3,739 | 3,711 | 6,629 | 4,747 | 19,252 | 15,333 | 49,671 | ||||||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||||
368 | 277 | - | - | - | - | - | - | |||||||||||||||||||
Depreciation and Amortization | 177 | 258 | - | - | - | - | - | - | ||||||||||||||||||
Trust C & D Related Expenses | - | 200 | - | - | - | - | 200 | |||||||||||||||||||
General and Administrative | 2,800 | 1,721 | 1,367 | 2,829 | 2,928 | 3,031 | 1,770 | 11,926 | ||||||||||||||||||
Total Costs and Expenses | 3,345 | 2,256 | 1,567 | 2,829 | 2,928 | 3,031 | 1,770 | 12,126 | ||||||||||||||||||
OPERATING INCOME | 1,883 | 1,483 | 2,144 | 3,800 | 1,818 | 16,221 | 13,563 | 37,545 | ||||||||||||||||||
INTEREST EXPENSE | - | (21) | (150) | - | - | (656) | - | (806) | ||||||||||||||||||
OTHER INCOME (EXPENSE), NET | (55) | 68 | - | - | - | - | - | - | ||||||||||||||||||
INTEREST INCOME | 283 | 112 | - | - | - | - | - | - | ||||||||||||||||||
INCOME (LOSS) BEFORE TAXES | 2,111 | 1,642 | 1,994 | 3,800 | 1,818 | 15,565 | 13,563 | 36,739 | ||||||||||||||||||
PAYMENT OF TAXES (EXCLUDING RMLP) | - | - | (430) | (5,900) | (1,836) | (4,175) | (8,254) | (20,595) | ||||||||||||||||||
WORKING CAPITAL | - | - | 3,058 | - | - | - | - | 3,058 | ||||||||||||||||||
TOTAL CASH AND WORKING CAPITAL | 2,111 | 1,642 | 4,622 | (2,100) | (17) | 11,390 | 5,308 | 19,202 | ||||||||||||||||||
BEGINNING CASH BALANCE | 3,058 | 4,622 | 2,521 | 2,504 | 13,894 | 3,058 | ||||||||||||||||||||
ENDING CASH BALANCE | 4,622 | 2,521 | 2,504 | 13,894 | 19,202 | 19,202 | ||||||||||||||||||||
BENEFIT OF RANCHO MALIBU | ||||||||||||||||||||||||||
Federal | - | - | 1,680 | 3,468 | 271 | 5,418 | ||||||||||||||||||||
State | - | - | 221 | 456 | 36 | 713 | ||||||||||||||||||||
TOTAL CASH AFTER RMLP | 4,622 | 2,521 | 4,404 | 17,818 | 19,509 | 25,333 | ||||||||||||||||||||
Income Before taxes | 3,636 | 3,800 | 1,818 | 15,565 | 13,563 | 38,381 | ||||||||||||||||||||
Reversing Differences | 3,332 | 11,657 | 2,483 | (3,068) | 6,806 | 21,210 | ||||||||||||||||||||
Originating differences | (6,500) | (6,500) | ||||||||||||||||||||||||
State Income taxes | (411) | (977) | (565) | 112 | (2,013) | (3,854) | ||||||||||||||||||||
TAXABLE INCOME | 57 | 14,480 | 3,736 | 12,609 | 18,356 | 49,237 | ||||||||||||||||||||
State Taxes | 411 | 977 | 565 | (112) | 2,013 | 3,854 | ||||||||||||||||||||
Federal Taxes | 19 | 4,923 | 1,270 | 4,287 | 6,241 | 16,741 | ||||||||||||||||||||
Notes: | ||||||||||||||||||||||||||
The Rancho Malibu benefit is calculated using the tax basis of $24,445,567 less the capital projected to be returned of $8,591,000, spread over 2005-2007. | ||||||||||||||||||||||||||
The state benefit is limited because the deductions will be generated in Cal, and apportionment rules will limit the use of losses. |
MILPI Holdings LLC |
FINANCIAL PROJECTION |
CASH FLOW PROJECTION |
(In $000's) |
Actual | Actual | |||||||||||
Year | 1/1 - 6/30 | 9/30 | 12/31 | 03/31 | 06/30 | 09/30 | ||||||
2002 | 2003 | 2003 | 2003 | 2004 | 2004 | 2004 | ||||||
REVENUES: | ||||||||
Operating Leases | $122 | $108 | $170 | $50 | $-- | $-- | $-- | |
Management Fees | 4,494 | 2,166 | 946 | 951 | 917 | 974 | 1,060 | |
Partnership Interests and Other Fees | 24 | 541 | 219 | 219 | 790 | 219 | 219 | |
Acquisition Fees | -- | 517 | 165 | 550 | 1,100 | -- | -- | |
Rancho Malibu Income | -- | -- | -- | -- | -- | -- | -- | |
Rancho Malibu Return of Capital & Interest | -- | -- | -- | -- | -- | -- | -- | |
Gain on sale | -- | 157 | 440 | -- | -- | -- | -- | |
Other | 588 | 250 | -- | -- | 70 | -- | -- | |
Total Revenues | 5,228 | 3,739 | 1,940 | 1,770 | 2,877 | 1,193 | 1,279 | |
COSTS AND EXPENSES: | ||||||||
Impairment of Managed Programs | 368 | 277 | -- | -- | -- | -- | -- | |
Depreciation and Amortization | 177 | 258 | -- | -- | -- | -- | -- | |
Trust C & D Related Expenses | -- | -- | 200 | -- | -- | -- | -- | |
General and Administrative | 2,800 | 1,721 | 683 | 683 | 707 | 707 | 707 | |
Total Costs and Expenses | 3,345 | 2,256 | 883 | 683 | 707 | 707 | 707 | |
OPERATING INCOME | $1,883 | $1,483 | $1,057 | $1,087 | 2,170 | 486 | $572 | |
Interest expense | -- | (21) | (75) | (75) | -- | -- | -- | |
Other income (expense), net | (55) | 68 | -- | -- | -- | -- | -- | |
Interest income | 283 | 112 | -- | -- | -- | -- | -- | |
Income (loss) before taxes | 2,111 | 1,642 | 982 | 1,012 | 2,170 | 486 | 572 | |
Payment of taxes | -- | -- | -- | (430) | -- | -- | -- | |
Working capital | -- | -- | 3,058 | -- | -- | -- | -- | |
TOTAL CASH AND WORKING CAPITAL | $2,111 | $1,642 | $4,040 | $582 | $2,170 | $486 | $572 | |
BENEFIT OF RANCHO MALIBU | ||||||||
Federal | -- | -- | -- | -- | -- | -- | -- | |
State | -- | -- | -- | -- | -- | -- | -- | |
TOTAL CASH AFTER RMLP | $2,111 | $1,642 | $4,040 | $582 | $2,170 | $486 | $572 | |
Income Before taxes | 2,111 | 1,642 | 2,624 | 1,012 | 2,170 | 486 | 572 | |
Reversing Differences | -- | -- | -- | 3,332 | -- | -- | -- | |
Originating differences | -- | -- | -- | (6,500) | -- | -- | -- | |
State Income taxes | -- | -- | -- | (411) | -- | -- | -- | |
TAXABLE INCOME | $2,111 | $1,642 | $2,624 | $(2,567) | $2,170 | $486 | $572 | |
State Taxes | -- | -- | -- | 411 | -- | -- | -- | |
Federal Taxes | -- | -- | -- | 19 | -- | -- | -- | |
Notes: |
MILPI Holdings LLC |
FINANCIAL PROJECTION |
CASH FLOW PROJECTION |
(In $000's) |
12/31 | 03/31 | 06/30 | 09/30 | 12/31 | 03/31 | 06/30 | ||||||||||
2004 | 2005 | 2005 | 2005 | 2005 | 2006 | 2006 | ||||||||||
REVENUES: | ||||||||
Operating Leases | $-- | $-- | $-- | $-- | $-- | $-- | $-- | |
Management Fees | 1,060 | 922 | 916 | 907 | 905 | 875 | 866 | |
Partnership Interests and Other Fees | 219 | 439 | 219 | 219 | 219 | 219 | 219 | |
Acquisition Fees | -- | -- | -- | -- | -- | -- | -- | |
Rancho Malibu Income | -- | -- | -- | -- | -- | -- | -- | |
Rancho Malibu Return of Capital & Interest | -- | -- | -- | -- | -- | -- | -- | |
Other | -- | -- | -- | -- | -- | -- | -- | |
Total Revenues | 1,279 | 1,361 | 1,135 | 1,126 | 1,124 | 1,094 | 1,085 | |
COSTS AND EXPENSES: | ||||||||
Impairment of Managed Programs | -- | -- | -- | -- | -- | -- | -- | |
Depreciation and Amortization | -- | -- | -- | -- | -- | -- | -- | |
Trust C & D Related Expenses | -- | -- | -- | -- | -- | -- | -- | |
General and Administrative | 707 | 732 | 732 | 732 | 732 | 758 | 758 | |
Total Costs and Expenses | 707 | 732 | 732 | 732 | 732 | 758 | 758 | |
OPERATING INCOME | $572 | $629 | $403 | 394 | 392 | $336 | $327 | |
Interest expense | -- | -- | -- | -- | -- | -- | -- | |
Other income (expense), net | -- | -- | -- | -- | -- | -- | -- | |
Interest income | -- | -- | -- | -- | -- | -- | -- | |
Income (loss) before taxes | 572 | 629 | 403 | 394 | 392 | 336 | 327 | |
Payment of taxes | (5,900) | -- | -- | -- | (1,836) | -- | ||
Working capital | -- | -- | -- | -- | -- | -- | -- | |
-- | -- | -- | -- | -- | -- | |||
TOTAL CASH AND WORKING CAPITAL | $(5,328) | $629 | $403 | $394 | $(1,444) | $336 | $327 | |
BENEFIT OF RANCHO MALIBU | ||||||||
Federal | -- | -- | -- | -- | 1,680 | -- | -- | |
State | -- | -- | -- | -- | 221 | -- | -- | |
TOTAL CASH AFTER RMLP | $(5,328) | $629 | $403 | $394 | $457 | $336 | $327 | |
Income Before taxes | 572 | 629 | 403 | 394 | 392 | 336 | 327 | |
Reversing Differences | 11,657 | -- | -- | -- | 2,483 | -- | -- | |
Originating differences | -- | -- | -- | -- | -- | -- | -- | |
State Income taxes | (977) | -- | -- | -- | (565) | -- | -- | |
TAXABLE INCOME | $11,252 | $629 | $403 | $394 | $2,310 | $336 | $327 | |
State Taxes | 977 | -- | -- | -- | 565 | -- | -- | |
Federal Taxes | 4,923 | -- | -- | -- | 1,270 | -- | -- | |
Notes: |
MILPI Holdings LLC |
FINANCIAL PROJECTION |
CASH FLOW PROJECTION |
(In $000's) |
09/30 | 12/31 | 03/31 | 06/30 | 09/30 | 12/31 | ||||||||||||||
2006 | 2006 | 2007 | 2007 | 2007 | 2007 | ||||||||||||||
REVENUES: | |||||||||||||||||||
Operating Leases | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||
Management Fees | 893 | 652 | 341 | 342 | 344 | 146 | |||||||||||||
Partnership Interests and Other Fees | 219 | 7,034 | 219 | 219 | 219 | 6,860 | |||||||||||||
Acquisition Fees | -- | -- | -- | -- | -- | -- | |||||||||||||
Rancho Malibu Income | -- | -- | 2,767 | 2,443 | -- | -- | |||||||||||||
Rancho Malibu Return of Capital & Interest | 1,612 | 6,664 | 1,434 | -- | -- | -- | |||||||||||||
Other | -- | -- | -- | -- | -- | -- | |||||||||||||
Total Revenues | 2,724 | 14,350 | 4,761 | 3,004 | 563 | 7,006 | |||||||||||||
COSTS AND EXPENSES: | |||||||||||||||||||
Impairment of Managed Programs | -- | -- | -- | -- | -- | -- | |||||||||||||
Depreciation and Amortization | -- | -- | -- | -- | -- | -- | |||||||||||||
Trust C & D Related Expenses | -- | -- | -- | -- | -- | -- | |||||||||||||
General and Administrative | 758 | 758 | 443 | 443 | 443 | 443 | |||||||||||||
Total Costs and Expenses | 758 | 758 | 443 | 443 | 443 | 443 | |||||||||||||
OPERATING INCOME | $ | 1,966 | $ | 13,592 | $ | 4,318 | $ | 2,561 | $ | 120 | $ | 6,563 | |||||||
Interest expense | -- | (656 | ) | -- | -- | -- | -- | ||||||||||||
Other income (expense), net | -- | -- | -- | -- | -- | -- | |||||||||||||
Interest income | -- | -- | -- | -- | -- | -- | |||||||||||||
Income (loss) before taxes | 1,966 | 12,936 | 4,318 | 2,561 | 120 | 6,563 | |||||||||||||
Payment of taxes | -- | (4,175 | ) | -- | -- | -- | (8,254 | ) | |||||||||||
Working capital | -- | -- | -- | -- | -- | -- | |||||||||||||
-- | -- | -- | -- | -- | |||||||||||||||
TOTAL CASH AND WORKING CAPITAL | $ | 1,966 | $ | 8,761 | $ | 4,318 | $ | 2,561 | $ | 120 | $ | (1,691 | ) | ||||||
BENEFIT OF RANCHO MALIBU | |||||||||||||||||||
Federal | -- | 3,468 | -- | -- | -- | 271 | |||||||||||||
State | -- | 456 | -- | -- | -- | 36 | |||||||||||||
TOTAL CASH AFTER RMLP | $ | 1,966 | $ | 12,685 | $ | 4,318 | $ | 2,561 | $ | 120 | $ | (1,384 | ) | ||||||
Income Before taxes | 1,966 | 12,936 | 4,318 | 2,561 | 120 | 6,563 | |||||||||||||
Reversing Differences | -- | (3,068 | ) | -- | -- | -- | 6,806 | ||||||||||||
Originating differences | -- | -- | -- | -- | -- | -- | |||||||||||||
State Income taxes | -- | 112 | -- | -- | -- | (2,013 | ) | ||||||||||||
TAXABLE INCOME | $ | 1,966 | $ | 9,980 | $ | 4,318 | $ | 2,561 | $ | 120 | $ | 11,356 | |||||||
State Taxes | -- | (112 | ) | -- | -- | -- | 2,013 | ||||||||||||
Federal Taxes | -- | 4,287 | -- | -- | -- | 6,241 | |||||||||||||
Notes: |
REVENUE FROM MANAGEMENT OF PROGRAMS | ||||||||
(In $000's) | ||||||||
9/03 - 12/03 | 2004 | 2005 | 2006 | 2007 | Total | |||
Management Fees | $ 1,897,005 | $ 4,011,327 | $ 3,649,978 | $ 3,284,256 | $ 1,171,270 | $ 14,013,835 | ||
EGF I | 64,000 | 32,000 | - | - | - | 96,000 | ||
EGF II | 50,000 | 25,000 | - | - | - | 75,000 | ||
EGF III | 6,000 | 3,000 | - | - | - | 9,000 | ||
EGF IV | 46,000 | 23,000 | - | - | - | 69,000 | ||
EGF V | 224,633 | 450,100 | 425,267 | 310,533 | - | 1,410,533 | ||
EGF VI | 233,612 | 619,220 | 700,884 | 598,996 | - | 2,152,712 | ||
EGF VII | 364,843 | 770,600 | 383,532 | 343,756 | - | 1,862,731 | ||
No Load | 566,459 | 1,104,004 | 1,092,098 | 1,035,500 | 579,407 | 4,377,468 | ||
Ex-partnership railcars | 192,067 | 709,395 | 801,436 | 772,477 | 390,345 | 2,865,719 | ||
RIPS | 149,390 | 275,009 | 246,761 | 222,995 | 201,518 | 1,095,672 | ||
Partnership Interests and Other Fees (Analysis below was compiled on a cashflow basis) | ||||||||
9/03 - 12/03 | 2004 | 2005 | 2006 | 2007 | Total | |||
EGF I | - | 114,680 | - | - | - | 114,680 | ||
EGF II | - | 319,900 | - | - | - | 319,900 | ||
EGF III | - | 114,000 | - | - | - | 114,000 | ||
EGF IV | - | 226,600 | - | - | - | 226,600 | ||
EGF V | - | - | - | 1,838,879 | - | 1,838,879 | ||
EGF VI | - | - | - | 2,324,697 | - | 2,324,697 | ||
EGF VII | - | - | - | 2,650,906 | - | 2,650,906 | ||
No Load | 438,637 | 657,955 | 1,096,591 | 877,273 | 7,517,857 | 10,588,313 | ||
IP 80 | - | 14,530 | - | - | - | 14,530 | ||
Total | 438,637 | 1,447,665 | 1,096,591 | 7,691,756 | 7,517,857 | 18,192,506 | ||
Acquisition Fees (Analysis below was compiled on a cashflow basis) | ||||||||
9/03 - 12/03 | 2004 | 2005 | 2006 | 2007 | Total | |||
EGF I | - | - | - | - | - | - | ||
EGF II | - | - | - | - | - | - | ||
EGF III | - | - | - | - | - | - | ||
EGF IV | - | - | - | - | - | - | ||
EGF V | 715,000 | - | - | - | - | 715,000 | ||
EGF VI | - | 715,000 | - | - | - | 715,000 | ||
EGF VII | - | 385,000 | - | - | - | 385,000 | ||
No Load | - | - | - | - | - | - | ||
Rail Investors I | - | - | - | - | - | - | ||
Total | 715,000 | 1,100,000 | - | - | - | 1,815,000 | ||
REVENUE FROM |
MANAGEMENT OF |
PROGRAMS |
(In $000's) |
09/30 | 12/31 | 03/31 | 06/30 | 09/30 | 12/31 | 03/31 | |||||||
2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | |||||||
Management Fees | $946 | $951 | $918 | $974 | $1,060 | $1,060 | $922 | |
EGF I | 32 | 32 | 32 | -- | -- | -- | -- | |
EGF II | 25 | 25 | 25 | -- | -- | -- | -- | |
EGF III | 3 | 3 | 3 | -- | -- | -- | -- | |
EGF IV | 23 | 23 | 23 | -- | -- | -- | -- | |
EGF V | 110 | 115 | 97 | 96 | 129 | 129 | 109 | |
EGF VI | 117 | 117 | 116 | 137 | 183 | 182 | 175 | |
EGF VII | 183 | 182 | 181 | 197 | 197 | 196 | 98 | |
No Load | 282 | 284 | 279 | 269 | 277 | 279 | 276 | |
Ex-partnership railcars | 96 | 96 | 89 | 206 | 207 | 208 | 200 | |
RIPS | 75 | 74 | 73 | 69 | 67 | 66 | 64 |
09/30 | 12/31 | 03/31 | 06/30 | 09/30 | 12/31 | 03/31 | |||||||
2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | |||||||
EGF I | -- | -- | 115 | -- | -- | -- | -- | |
EGF II | -- | -- | 320 | -- | -- | -- | -- | |
EGF III | -- | -- | 114 | -- | -- | -- | -- | |
EGF IV | -- | -- | 226 | -- | -- | -- | -- | |
EGF V | -- | -- | -- | -- | -- | -- | -- | |
EGF VI | -- | -- | -- | -- | -- | -- | -- | |
EGF VII | -- | -- | -- | -- | -- | -- | -- | |
No Load | 219 | 219 | -- | 219 | 219 | 219 | 219 | |
IP 80 | -- | -- | 15 | -- | -- | -- | -- | |
Total | $219 | $219 | $790 | $219 | $219 | $219 | $219 | |
09/30 | 12/31 | 03/31 | 06/30 | 09/30 | 12/31 | 03/31 | |||||||
2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | |||||||
EGF I | -- | -- | -- | -- | -- | -- | -- | |
EGF II | -- | -- | -- | -- | -- | -- | -- | |
EGF III | -- | -- | -- | -- | -- | -- | -- | |
EGF IV | -- | -- | -- | -- | -- | -- | -- | |
EGF V | 165 | 550 | -- | -- | -- | -- | -- | |
EGF VI | -- | -- | 715 | -- | -- | -- | -- | |
EGF VII | -- | -- | 385 | -- | -- | -- | -- | |
No Load | -- | -- | -- | -- | -- | -- | -- | |
IP 80 | -- | -- | -- | -- | -- | -- | -- | |
Total | $165 | $550 | $1,100 | $-- | $-- | $-- | $-- | |
REVENUE FROM |
MANAGEMENT OF |
PROGRAMS |
(In $000's) |
06/30 | 09/30 | 12/31 | 03/31 | 06/30 | 09/30 | 12/31 | ||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2006 | ||
Management Fees | $916 | $907 | $905 | $874 | $866 | $893 | $651 | |
EGF I | -- | -- | -- | -- | -- | -- | -- | |
EGF II | -- | -- | -- | -- | -- | -- | -- | |
EGF III | -- | -- | -- | -- | -- | -- | -- | |
EGF IV | -- | -- | -- | -- | -- | -- | -- | |
EGF V | 109 | 104 | 104 | 96 | 91 | 86 | 38 | |
EGF VI | 175 | 175 | 175 | 172 | 172 | 172 | 84 | |
EGF VII | 98 | 94 | 94 | 79 | 79 | 105 | 80 | |
No Load | 269 | 272 | 274 | 277 | 274 | 282 | 202 | |
Ex-partnership railcars | 202 | 201 | 199 | 192 | 194 | 193 | 193 | |
RIPS | 63 | 61 | 59 | 58 | 56 | 55 | 54 |
06/30 | 09/30 | 12/31 | 03/31 | 06/30 | 09/30 | 12/31 | ||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2006 | ||
EGF I | -- | -- | -- | -- | -- | -- | -- | |
EGF II | -- | -- | -- | -- | -- | -- | -- | |
EGF III | -- | -- | -- | -- | -- | -- | -- | |
EGF IV | -- | -- | -- | -- | -- | -- | -- | |
EGF V | -- | -- | -- | -- | -- | -- | 1,839 | |
EGF VI | -- | -- | -- | -- | -- | -- | 2,325 | |
EGF VII | -- | -- | -- | -- | -- | -- | 2,651 | |
No Load | 219 | 219 | 219 | 219 | 219 | 219 | 219 | |
IP 80 | -- | -- | -- | -- | -- | -- | -- | |
Total | $219 | $219 | $219 | $219 | $219 | $219 | $7,034 | |
06/30 | 09/30 | 12/31 | 03/31 | 06/30 | 09/30 | 12/31 | ||
2005 | 2005 | 2005 | 2006 | 2006 | 2006 | 2006 | ||
EGF I | -- | -- | -- | -- | -- | -- | -- | |
EGF II | -- | -- | -- | -- | -- | -- | -- | |
EGF III | -- | -- | -- | -- | -- | -- | -- | |
EGF IV | -- | -- | -- | -- | -- | -- | -- | |
EGF V | -- | -- | -- | -- | -- | -- | -- | |
EGF VI | -- | -- | -- | -- | -- | -- | -- | |
EGF VII | -- | -- | -- | -- | -- | -- | -- | |
No Load | -- | -- | -- | -- | -- | -- | -- | |
IP 80 | -- | -- | -- | -- | -- | -- | -- | |
Total | $-- | $-- | $-- | $-- | $-- | $-- | $-- | |
REVENUE FROM |
MANAGEMENT OF |
PROGRAMS |
(In $000's) |
03/31 | 06/30 | 09/30 | 12/31 | |||||||||||||
2007 | 2007 | 2007 | 2007 | Total | ||||||||||||
Management Fees | $ | 341 | $ | 342 | $ | 343 | $ | 146 | $ | 14,014 | ||||||
EGF I | -- | -- | -- | -- | 96 | |||||||||||
EGF II | -- | -- | -- | -- | 75 | |||||||||||
EGF III | -- | -- | -- | -- | 9 | |||||||||||
EGF IV | -- | -- | -- | -- | 69 | |||||||||||
EGF V | -- | -- | -- | -- | 1,410 | |||||||||||
EGF VI | -- | -- | -- | -- | 2,153 | |||||||||||
EGF VII | -- | -- | -- | -- | 1,863 | |||||||||||
No Load | 191 | 193 | 195 | -- | 4,377 | |||||||||||
Ex-partnership railcars | 98 | 98 | 98 | 98 | 2,866 | |||||||||||
RIPS | 52 | 51 | 50 | 48 | 1,096 |
03/31 | 06/30 | 09/30 | 12/31 | |||||||||||||
2007 | 2007 | 2007 | 2007 | Total | ||||||||||||
EGF I | -- | -- | -- | -- | 115 | |||||||||||
EGF II | -- | -- | -- | -- | 320 | |||||||||||
EGF III | -- | -- | -- | -- | 114 | |||||||||||
EGF IV | -- | -- | -- | -- | 227 | |||||||||||
EGF V | -- | -- | -- | -- | 1,839 | |||||||||||
EGF VI | -- | -- | -- | -- | 2,324 | |||||||||||
EGF VII | -- | -- | -- | -- | 2,651 | |||||||||||
No Load | 219 | 219 | 219 | 6,860 | 10,588 | |||||||||||
IP 80 | -- | -- | -- | -- | 15 | |||||||||||
Total | $ | 219 | $ | 219 | $ | 219 | $ | 6,860 | $ | 18,193 | ||||||
03/31 | 06/30 | 09/30 | 12/31 | |||||||||||||
2007 | 2007 | 2007 | 2007 | Total | ||||||||||||
EGF I | -- | -- | -- | -- | -- | |||||||||||
EGF II | -- | -- | -- | -- | -- | |||||||||||
EGF III | -- | -- | -- | -- | -- | |||||||||||
EGF IV | -- | -- | -- | -- | -- | |||||||||||
EGF V | -- | -- | -- | -- | 715 | |||||||||||
EGF VI | -- | -- | -- | -- | 715 | |||||||||||
EGF VII | -- | -- | -- | -- | 385 | |||||||||||
No Load | -- | -- | -- | -- | -- | |||||||||||
IP 80 | -- | -- | -- | -- | -- | |||||||||||
Total | $ | -- | $ | -- | $ | -- | $ | -- | $ | 1,815 | ||||||
MILPI Holdings LLC | |||
OPERATIONS SUPPORT EXPENSE | |||
(In $000's) | |||
2003 Annualized | |||
RMSI Canada | 50 | ||
RMSI US | 500 | ||
RMSI Marketing | 100 | ||
Admin Expenses | |||
Compensation & Benefits | 213 | ||
Travel & Entertainment | 53 | ||
Office Communication | 9 | ||
Semele Allocation | 449 | ||
Airem Fees | 203 | ||
Semele Mgmt Fees | 413 | ||
Other Office Exp/Delivery | 27 | ||
Audit Fees | 133 | ||
D&O Insurance | 200 | ||
Property Insurance | 1 | ||
Other Liabilities Insurance | 23 | ||
Fees | 20 | ||
Other | 13 | ||
Legal | 75 | ||
Non-Budgeted Expense | 250 | ||
2,734 |
PLM | ||||||||||||||||
Estimated Liquidation Value (Based on preliminary September 30, 2003 balance sheets) | ||||||||||||||||
GF 1-4 | ||||||||||||||||
GF 1 | GF 2 | GF 3 | GF 4 | Total | ||||||||||||
Cash | $ | 3,208 | $ | 4,327 | $ | 2,267 | $ | 3,146 | ||||||||
A/R | 333 | 328 | 266 | 115 | ||||||||||||
Trailers | - | 1,224 | 320 | - | ||||||||||||
Railcars-seal weld -scrap | 210 | - | - | 90 | ||||||||||||
Railcars-all other | 5,981 | 1,560 | - | 1,898 | ||||||||||||
Railcars-residual sharing | - | - | 500 | - | ||||||||||||
Sahara litigation | - | - | - | - | ||||||||||||
Aircraft | - | - | - | 232 | ||||||||||||
Liabilities | (114 | ) | (291 | ) | (73 | ) | (199 | ) | ||||||||
JoAnne M litigation | - | - | (500 | ) | - | |||||||||||
Estimated liquidation costs | (750 | ) | (750 | ) | (500 | ) | (750 | ) | ||||||||
Nets Assets | 8,868 | 6,398 | 2,280 | 4,532 | ||||||||||||
GP share (%) | 1 | % | 5 | % | 5 | % | 5 | % | ||||||||
GP ($) | 89 | 320 | 114 | 227 | ||||||||||||
Plus GP dist. Q3 2003 | 26 | - | - | - | ||||||||||||
Total | $ | 115 | $ | 320 | $ | 114 | $ | 227 | $ | 775 | ||||||
CLASS A AND B BENEFICIARIES By: AFG ASIT Corporation, as Attorney-in-Fact for each of the Beneficiaries pursuant to Article XIII of the Trust Agreement By:________________________________________ Name: Title: | |
AFG ASIT Corporation, as Managing Trustee By:________________________________________ Name: Title: | |
Wilmington Trust Company, as Delaware Trustee By: _______________________________________ Name: Title: | |
Semele Group Inc., as Special Beneficiary By: _______________________________________ Name: Title: |
Definitions
Purchase and Sale of Membership Interests; Purchase Price
Representations and Warranties of the Sellers and Purchasers
Conditions to the Purchaser’s Obligations
General Provisions
Title: Senior Vice President
Name and Address of Member(1) | Total MembershipInterests Prior to Sale(2) | Total MembershipInterests after Sale(3) | Purchase Price |
AFG Investment Trust C | 50% | 0% | $8,300,000 |
AFG Investment Trust D | 50% | 0% | $8,300,000 |
PLM MILPI Holdings LLC | 0% | 100% | N/A |
Total | 100% | 100% | $16,600,000 |
Page | ||
PART I | ||
Item 1. | Business | 3 |
Item 2. | Properties | 6 |
Item 3. | Legal Proceedings | 6 |
Item. 4 | Submission of Matters to a Vote of Security Holders | 6 |
PART II | ||
Item 5. | Market for the Trust's Securities and Related Security Holder Matters | 6 |
Item 6. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 7 |
Item 7. | Financial Statements | 7 |
Item 8. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 7 |
Item 8a. | Controls and Procedures | 7 |
PART III | ||
Item 9. | Directors and Executive Officers of the Trust | 8 |
Item 10. | Executive Compensation | 9 |
Item 11. | Security Ownership of Certain Beneficial Owners and Management | 10 |
Item 12. | Certain Relationships and Related Transactions | 11 |
Item 13. | Exhibits and Reports on Form 8-K | 12 |
Item 14. | Principle Accountant Fees and Services | 14 |
Annual Reports to Participants | 19 | |
Name | Title | Age | Term |
Gary D. Engle | President and Chief Executive Officer of the general partner of EFG and President and Director of Managing Trustee | 55 | Until a successor is duly elected and qualified |
. | |||
James A. Coyne . | Executive Vice President of the general partner of EFG and Senior Vice President of the Managing Trustee | 43 | |
. | |||
Richard K Brock . | Chief Financial Officer and Treasurer of AFG ASIT Corporation | 41 | |
Gail D. Ofgant . | Senior Vice President, Lease Operations of the general partner of EFG and Senior Vice President of the Managing Trustee | 38 |
Title | Name and | Amount of | Percent |
of | Address of | Beneficial | of |
Class | Beneficial Owner | Ownership | Class |
Class B | Equis II Corporation | ||
Beneficiary Interests | 200 Nyala Farms | 3,019,220 Interests | 99.82% |
Westport, CT 06880 |
2003 | 2002 | ||||||
Acquisition fees | $ | - | $ | 24 | |||
Management fees | 372 | 434 | |||||
Administrative charges | 131 | 201 | |||||
Total | $ | 503 | $ | 659 | |||
Report of Independent Certified Public Accountants | * |
Statements of Financial Position | |
at December 31, 2003 and 2002 | * |
Statements of Operations | |
for the years ended December 31, 2003 and 2002 | * |
Statements of Changes in Participants' Capital | |
for the years ended December 31, 2003 and 2002 | * |
Statements of Cash Flows | |
for the years ended December 31, 2003 and 2002 | * |
Notes to the Financial Statements | * |
Exhibit | |
Number | |
2 | Agreement and Plan of Merger, dated as of December 22, 2000, between MILPI Acquisition Corp. and PLM International, Inc. was filed in the Registrant's Form 8-K dated December 28, 2000 as Exhibit 2.1 and is incorporated by reference. |
4 | Second Amended and Restated Declaration of Trust was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1998 as Exhibit 4 and is incorporated herein by reference. |
4.1 | Amendment No. 2 to Second Amended and Restated Declaration of Trust is filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 2000 as Exhibit 4.1 and is incorporated herein by reference. |
4.2 | Third Amended and Restated Declaration of Trust dated October 1, 2003 is included herein. |
13 | The 2003 Annual Report to security holders, a copy of which is furnished for the information of the Securities and Exchange Commission. Such Report, except for those portions thereof which are incorporated herein by reference, is not deemed "filed" with the Commission. |
14 | Code of Ethics is included herein. |
99(a) | Lease agreement with Hyundai Electronics America, Inc. was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1999 as Exhibit 99 (a) and is incorporated herein by reference. |
99(b) | Lease agreement with Scandinavian Airlines System was filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1998 as Exhibit 99 (a) and is incorporated herein by reference. |
99(c) | Lease agreement with Scandinavian Airlines System Amendment No. 3 is filed in the Registrant's Annual Report on Form 10-K for the year ended December 31, 2000 as Exhibit 99 (b) and is incorporated herein by reference. |
99(d) | Operating Agreement of MILPI Holdings, LLC dated as of December 13, 2000 by and among the persons identified on Schedule A thereto was filed in the Registrant's Amendment No. 1 as Schedule TO dated January 29, 2001 ("Schedule TO/A No. 1") as Exhibit (b)(1) and is incorporated herein by reference. |
99(e) | Subscription Agreement dated as of December 15, 2000 by and among MILPI Holdings, LLC and MILPI Acquisition Corp. was filed in the Registrant's Schedule TO/A No. 1 as Exhibit (b)(2) and is incorporated herein by reference. |
99(f) | C&T IT LLC Operating Agreement, dated March 1, 2002 between AFG Investment Trust C and AFG Investment Trust D was filed on Form 10-K for the year ended December 31, 2001 and is incorporated herein by reference. |
99(g) | Operating Agreement of EFG Kirkwood LLC, dated May 1, 1999 was filed on Form 10-K for the year ended December 31, 2002 and is incorporated herein by reference. |
99(h) | Amended and Restated Operating Agreement of Mountain Springs, LLC dated October 24, 2002 was filed on Form 10-K for the year ended December 31, 2002 is incorporated herein by reference. |
99.1 | Certificate of the Chief Executive Officer pursuant to Section 906 of Sarbanes - Oxley |
99.2 | Certificate of the Chief Executive Officer pursuant to Section 906 of Sarbanes - Oxley |
Exhibit | |
Number | |
4.2 | Third Amended and Restated Declaration of Trust dated October 1, 2003 |
13 | The 2003 Annual Report |
14 | Code of Ethics |
99.1 | Certificate of Chief Executive Officer pursuant to Section 906 of Sarbanes - Oxley Act |
99.2 | Certificate of Chief Financial Officer pursuant to Section 906 of Sarbanes - Oxley Act |
AFG Investment Trust C | |
INDEX TO ANNUAL REPORT TO THE PARTICIPANTS | |
Page | |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL | |
CONDITION AND RESULTS OF OPERATIONS | 21 |
FINANCIAL STATEMENTS | |
Report of Independent Certified Public Accountants | 33 |
Statements of Financial Position | |
at December 31, 2003 and 2002 | 35 |
Statements of Operations | |
for the years ended December 31, 2003 and 2002 | 36 |
Statements of Changes in Participants' Capital | |
for the years ended December 31, 2003 and 2002 | 37 |
Statements of Cash Flows | |
for the years ended December 31, 2003 and 2002 | 38 |
Notes to the Financial Statements | 39 |
For the year ended December 31, 2003, Mountain Springs recorded net income of $5,000, comprised of $20.5 million in revenues net of $20.5 million in expenses, compared to a net loss of $2.6 million for the year ended December 31, 2002, comprised of $17.5 million in revenues net of $20.1 million in expenses.
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 and the report of other auditors provide a reasonable basis for our opinion.
2003 | 2002 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 1,698 | $ | 1,168 | |||
Accounts receivable – affiliate | 162 | 122 | |||||
Loan receivable - EFG/Kettle Development LLC | 528 | 421 | |||||
Interest in EFG/Kettle Development LLC | 4,235 | 3,675 | |||||
Interest in EFG Kirkwood LLC | 2,491 | 2,148 | |||||
Interest in MILPI Holdings, LLC | 7,686 | 9,688 | |||||
Interest in C & D IT, LLC | 1,157 | 1,000 | |||||
Investments – other | 105 | 260 | |||||
Other assets, net of accumulated amortization | |||||||
of $137 and $94 at December 31, 2003 and 2002, respectively | 173 | 286 | |||||
Equipment at cost, net of accumulated depreciation | |||||||
of $4,440 and $25,913 in 2003 and 2002, respectively | 95 | 17,756 | |||||
Total assets | $ | 18,330 | $ | 36,524 | |||
Liabilities and participants' capital | |||||||
Notes payable | $ | - | $ | 18,151 | |||
Accrued liabilities | 202 | 349 | |||||
Deferred rental income | - | 288 | |||||
Other liabilities | - | 1,597 | |||||
Total liabilities | 202 | 20,385 | |||||
Commitments and Contingencies | |||||||
Participants' capital (deficit): | |||||||
Managing Trustee | (2 | ) | (30 | ) | |||
Special beneficiary | - | - | |||||
Class A beneficiary interests (1,786,753 and 1,787,153 | |||||||
interests At December 31, 2003 and 2002, respectively, | |||||||
initial purchase price of $25 each) | 19,740 | 18,507 | |||||
Class B beneficiary interests (3,024,740 interests, | |||||||
initial purchase price of $5 each) | - | - | |||||
Treasury interests (224,261 and 223,861 Class A interests | |||||||
at December 31, 2003 and 2002, respectively, at cost) | (2,339 | ) | (2,338 | ) | |||
Accumulated other comprehensive income | 729 | - | |||||
Total participants' capital | 18,128 | 16,139 | |||||
Total liabilities and participants' capital | $ | 18,330 | $ | 36,524 | |||
2003 | 2002 | ||||||
. | |||||||
Revenue | |||||||
Lease revenue | $ | 4,214 | $ | 5,682 | |||
Interest income | 70 | 64 | |||||
Gain on disposal of equipment | 1,037 | 1,249 | |||||
Loss on disposal of equipment | (3,882 | ) | (1,474 | ) | |||
Total revenue | 1,439 | 5,521 | |||||
Expenses | |||||||
Depreciation and amortization | 1,630 | 2,775 | |||||
Impairment of equipment | - | 599 | |||||
Impairment of investment – other | 67 | - | |||||
Interest expense | 1,303 | 1,842 | |||||
Management fees - affiliates | 372 | 434 | |||||
Operating expenses | 500 | 889 | |||||
Operating expenses -affiliates | 131 | 201 | |||||
Total expenses | 4,003 | 6,740 | |||||
Other Income | |||||||
Gain on extinguishment of debt | 3,882 | - | |||||
Other income | 1,557 | - | |||||
Total other income | 5,439 | - | |||||
Income (Loss) from Equity Interests | |||||||
Equity in net loss of Investments –other | (50 | ) | - | ||||
Equity in net loss of EFG/Kettle Development LLC | (62 | ) | (241 | ) | |||
Equity in net income (loss) of EFG Kirkwood LLC | 25 | (484 | ) | ||||
Equity in net (loss) income of MILPI Holdings, LLC | (2,063 | ) | 493 | ||||
Total loss from equity interests | (2,150 | ) | (232 | ) | |||
Net income (loss) | $ | 725 | $ | (1,451 | ) | ||
Net income (loss) | |||||||
per Class A Beneficiary Interest | $ | 0.49 | $ | (0.83 | ) | ||
per Class B Beneficiary Interest | $ | (0.04 | ) | $ | - | ||
Average Class A Beneficiary Interests outstanding | 1,786,753 | 1,787,153 | |||||
Average Class B Beneficiary Interests outstanding | 3,024,740 | 3,024,740 | |||||
Accumulated | |||||||||||||||||||
Managing | Special | Other | |||||||||||||||||
Trustee | Beneficiary | Class A Beneficiaries | Class B Beneficiaries | - | Treasury | Comprehensive | |||||||||||||
Amount | Amount | Interests | Amount | Interests | Amount | Interests | Amount | Income | Total | ||||||||||
Balance at December 31, 2002 | $ (30) | $ - | 1,787,153 | $ 18,507 | 3,024,740 | $ - | 223,861 | $ (2,338) | $ - | $ 16,139 | |||||||||
Net income | 22 | (50) | - | 869 | - | (116) | - | - | - | 725 | |||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | - | - | 729 | 729 | |||||||||
Comprehensive income | 1,454 | ||||||||||||||||||
Class A Interest repurchased | - | - | (400) | - | - | - | 400 | (1) | - | (1) | |||||||||
Increase in capital related to contributions by other partners of Mountain Springs Resort, LLC | 11 | 26 | - | 221 | - | 60 | - | - | - | 318 | |||||||||
Increase in capital related to the purchase and issuance of partnership interests of equity investment in Rancho Malibu LP. | 8 | 63 | - | 547 | - | 147 | - | - | - | 765 | |||||||||
Decrease in capital related to the admittance of additional partner in Rancho Malibu LP. | (13) | (39) | - | (404) | - | (91) | - | - | - | (547) | |||||||||
Balance at December 31, 2003 | $ (2) | $ - | 1,786,753 | $ 19,740 | 3,024,740 | $ - | 224,261 | $ (2,339) | $ 729 | $ 18,128 | |||||||||
2003 | 2002 | ||||
Cash flows provided by (used in) operating activities | |||||
Net income (loss) | $ 725 | $ (1,451) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||
Depreciation and amortization | 1,630 | 2,775 | |||
Impairment of equipment | - | 599 | |||
Gain on sale of equipment | (1,037) | (1,249) | |||
Loss on sale of equipment | 3,882 | 1,474 | |||
Gain on extinguishment of debt | (3,882) | - | |||
Gain on removal of liability for residual interest in aircraft | (1,597) | - | |||
Gain on sale of investment - other | (16) | - | |||
Impairment investment – other | 67 | - | |||
Change in equity interests | 1,421 | 232 | |||
Changes in assets and liabilities: | |||||
Accounts receivable – affiliate | (40) | (18) | |||
Other assets | 124 | (21) | |||
Accrued liabilities | (146) | 175 | |||
Accrued liabilities – affiliates | - | (151) | |||
Deferred rental income | (288) | 11 | |||
Net cash provided by operating activities | 843 | 2,376 | |||
Cash flows provided by (used in) investing activities | |||||
Proceeds from equipment sales | 1,040 | 2,722 | |||
Investment – other | - | 5 | |||
Dividend received from EFG Kirkwood, LLC | - | 256 | |||
Purchase of interest in MILPI Holdings, LLC | - | (2,399) | |||
Acquisition fees paid to affiliate | - | (24) | |||
Dividend received from MILPI Holding, LLC | - | 1,747 | |||
Purchase of interest in C & D IT, LLC | - | (1,000) | |||
Net cash provided by investing activities | 1,040 | 1,307 | |||
Cash flows provided by (used in) financing activities | |||||
Repurchase of Class A beneficiary interests | (1) | - | |||
Proceeds from note payable - affiliate | - | 720 | |||
Principle payments note payable - affiliate | - | (720) | |||
Principal payments - notes payable | (2,081) | (4,232) | |||
Net cash used in financing activities | (2,082) | (4,232) | |||
Net decrease in cash and cash equivalents | (199) | (549) | |||
Effect of foreign exchange rate changes | 729 | - | |||
Cash and cash equivalents at beginning of year | 1,168 | 1,717 | |||
Cash and cash equivalents at end of year | $ 1,698 | $ 1,168 | |||
Supplemental information | |||||
Cash paid during the period for interest | $ 1,308 | $ 1,876 | |||
Noncash transactions: Increase in interest in MILPI Holdings, LLC related to issuance of partnership interests and purchase of interest in Rancho Malibu | $ 62 | $ - | |||
Increase in interest in C & D IT, LLC related to issuance of partnership interests | $ 157 | $ - | |||
Increase in capital related to the contributions by the partners of Mountain Springs Resorts, LLC | $ 318 | $ - | |||
Decrease in equipment and note payable from disposition of aircraft and extinguishment of debt from return of aircraft to the lender | $ 16,070 | $ - | |||
% of Total | % of Total | ||||
2003 | Revenue | 2002 | Revenue | ||
Scandinavian Airlines System | $ (809) | (56)% | $ 3,358 | 61% | |
Hyundai Electronics America, Inc. | $ 1,802 | 125% | $ 1,147 | 21% |
Accumulated | ||||||||
Managing | Special | Class A | Class B | Other | ||||
Trustee | Beneficiary | Beneficiaries | Beneficiaries | Treasury | Comprehensive | |||
Amount | Amount | Amount | Amount | Interests | Income | Total | ||
December 31, 2001 | $ (57) | $ - | $ 19,985 | $ - | $ (2,338) | $ - | $ 17,590 | |
Net income | 72 | 123 | 1,066 | 287 | - | - | 1,548 | |
March 31, 2002 | 15 | 123 | 21,051 | 287 | (2,338) | - | 19,138 | |
Net loss | (27) | (123) | (763) | (287) | - | - | (1,200) | |
June 30, 2002 | (12) | - | 20,288 | - | (2,338) | - | 17,938 | |
Net loss | (11) | - | (1,111) | - | - | - | (1,122) | |
September 30, 2002 | (23) | - | 19,177 | - | (2,338) | - | 16,816 | |
Net loss | (7) | - | (670) | - | - | - | (677) | |
December 31, 2002 | (30) | - | 18,507 | - | (2,338) | - | 16,139 | |
Class A Interest repurchased | - | - | - | - | (1) | - | (1) | |
Net income | 45 | 125 | 1,081 | 291 | - | - | 1,542 | |
March 31, 2003 | 15 | 125 | 19,588 | 291 | (2,339) | - | 17,680 | |
Foreign currency translation adjustment | - | - | - | - | - | 453 | 453 | |
Increase in capital related to the purchase of partnership interests of equity investment in Rancho Malibu LP | 13 | 111 | 959 | 258 | - | - | 1,341 | |
Net loss | (7) | (58) | - | (136) | - | - | (201) | |
June 30, 2003 | 21 | 178 | 20,547 | 413 | (2,339) | 453 | 19,273 | |
Foreign currency translation adjustment | - | - | - | - | - | (19) | (19) | |
Net loss | (11) | (91) | - | (212) | - | - | (314) | |
September 30, 2003 | 10 | 87 | 20,547 | 201 | (2,339) | 434 | 18,940 | |
Foreign currency translation adjustment | - | - | - | - | - | 295 | 295 | |
Increase in capital related to the contributions by other partners of Mountain Springs Resort, LLC. | 11 | 26 | 221 | 60 | - | - | 318 | |
Decrease in capital related to the admittance of additional partner in Rancho Malibu LP. | (18) | (87) | (816) | (201) | - | - | (1,122) | |
Net loss | (5) | (26) | (212) | (60) | - | - | (303) | |
December 31, 2003 | $ (2) | $ - | $ 19,740 | $ - | $ (2,339) | $ 729 | $ 18,128 | |
Remaining | ||||||
Lease Term as of | ||||||
December 31, 2003 | ||||||
Equipment Type | (Months) | December 31, 2003 | December 31, 2002 | |||
Manufacturing | 0 | $ 2,540 | $ 8,857 | |||
Materials handling | 0 | 1,743 | 2,003 | |||
Locomotives | 0 | 196 | 196 | |||
Aircraft | 0 | - | 30,896 | |||
Other | 0 | 56 | 1,717 | |||
Total equipment cost | - | 4,535 | 43,669 | |||
Accumulated depreciation | - | (4,440) | (25,913) | |||
Equipment, net of accumulated depreciation | - | $ 95 | $ 17,756 | |||
December 31, 2003 | December 31, 2002 | ||||||
Total assets | $ | 17,427 | $ | 15,479 | |||
Total liabilities | 4,229 | 4,339 | |||||
Net equity | $ | 13,198 | $ | 11,140 | |||
December 31, 2003 | December 31, 2002 | ||||||
Total revenues | $ | 5,852 | $ | 3,679 | |||
Total expenses | 6,094 | 4,469 | |||||
Net loss | $ | (242 | ) | $ | (790 | ) | |
December 31, 2003 | December 31, 2002 | ||||||
Total assets | $ | 6,434 | $ | 6,373 | |||
Total liabilities | - | - | |||||
Net equity | $ | 6,434 | $ | 6,373 | |||
December 31, 2003 | December 31, 2002 | ||||||
Equity income (loss) on investments | $ | 61 | $ | (1,208 | ) | ||
For the | For the | ||||||
Year Ended | Year Ended | ||||||
December 31, | December 31, | ||||||
2003 | 2002 | ||||||
Mountain Resorts | |||||||
Total revenues | $ | 32,475 | $ | 29,462 | |||
Total expenses | 30,884 | 30,502 | |||||
Net income (loss) | $ | 1,591 | $ | (1,040 | ) | ||
Mountain Springs | |||||||
Total revenues | $ | 20,473 | $ | 15,198 | |||
Total expenses | 20,468 | 17,834 | |||||
Net income (loss) | $ | 5 | $ | (2,636 | ) | ||
December 31, 2003 |
|
| December 31, 2002 | ||||
Total assets | $ | 48,324 | $ | 44,400 | |||
Total liabilities | 31,951 | 18,440 | |||||
Minority interests | 1,104 | - | |||||
Equity | $ | 15,269 | $ | 25,960 | |||
. . | Year Ended |
|
| Year Ended | |||
. | December 31, 2003 |
|
| December 31, 2002 | |||
Total revenues | $ | 7,589 | $ | 5,228 | |||
Equity income in managed programs | 729 | 133 | |||||
Total expenses | (14,142 | ) | (3,478 | ) | |||
Other income, net | 82 | 268 | |||||
Minority interests | - | (40 | ) | ||||
Provision for taxes | (147 | ) | (774 | ) | |||
Net (loss) income | $ | (5,889 | ) | $ | 1,337 | ||
Year Ended December 31, 2003 | Year Ended December 31, 2002 | ||||||
Acquisition fees | $ | - | $ | 24 | |||
Management fees | 372 | 434 | |||||
Administrative charges | 131 | 201 | |||||
Total | $ | 503 | $ | 659 | |||
2003 | 2002 | ||||||
. | |||||||
Net income (loss) | $ | 725 | $ | (1,451 | ) | ||
Tax depreciation in less than | |||||||
financial statement depreciation | 280 | (1,360 | ) | ||||
Tax gain (loss) in excess of book gain (loss) on sale | 7,757 | 1,964 | |||||
Recognize pass through income | - | 1,145 | |||||
Reverse income from corporate investment | 2,978 | 1,367 | |||||
Deferred rental income | - | 10 | |||||
Impairment of equipment | 67 | 599 | |||||
Net income for federal income tax | |||||||
reporting purposes | $ | 11,807 | $ | 2,274 | |||
. | 2003 | 2002 | |||||
. | |||||||
Participants' capital | $ | 18,128 | $ | 16,139 | |||
Add back selling commissions and organization | |||||||
and offering costs | 4,922 | 4,922 | |||||
Deferred step-down of capital basis | (690 | ) | (690 | ) | |||
Cumulative difference between federal income tax | |||||||
and financial statement net loss | (2,774 | ) | (12,592 | ) | |||
Participants' capital for federal income tax reporting purposes | $ | 19,586 | $ | 7,779 | |||
For the Twelve Months Ended | Equipment | Equipment | Real | ||||||||||
December 31, 2003 | Leasing | Management | Estate | Other | Total | ||||||||
Revenue: | |||||||||||||
Lease revenue | $ | 4,214 | $ | - | $ | - | $ | - | $ 4,214 | ||||
Interest income | 1 | - | 57 | 12 | 70 | ||||||||
Gain on disposal of equipment | 1,037 | - | - | - | 1,037 | ||||||||
Loss on disposal of equipment | (3,882 | ) | - | - | - | (3,882) | |||||||
Total revenue | 1,370 | - | 57 | 12 | 1,439 | ||||||||
Expenses: | |||||||||||||
Depreciation and amortization | 1,630 | - | - | - | 1,630 | ||||||||
Impairment of investment - other | - | - | - | 67 | 67 | ||||||||
Interest expense | 1,303 | - | - | - | 1,303 | ||||||||
Management fees - affiliates | 188 | 98 | 85 | 1 | 372 | ||||||||
Operating expenses | 45 | - | - | 455 | 500 | ||||||||
Operating expenses - affiliates | 131 | - | - | - | 131 | ||||||||
Total expenses | 3,297 | 98 | 85 | 523 | 4,003 | ||||||||
Other Income: | |||||||||||||
Gain on extinguishment of debt | 3,882 | - | - | - | 3,882 | ||||||||
Other income | 1,557 | - | - | - | 1,557 | ||||||||
Total other income | 5,439 | - | - | - | 5,439 | ||||||||
Equity Interests: | |||||||||||||
Equity in net loss of Investment - other | - | - | (50 | ) | - | (50) | |||||||
Equity in net income of EFG/Kettle Development LLC | - | - | (62 | ) | - | (62) | |||||||
Equity in net income of EFG Kirkwood LLC | - | - | 25 | - | 25 | ||||||||
Equity in net loss of MILPI Holdings, LLC | - | (1,948 | ) | (115 | ) | - | (2,063) | ||||||
Total (loss) income from equity interests | - | (1,948 | ) | (202 | ) | - | (2,150) | ||||||
Net income (loss) | $ | 3,512 | $ | (2,046 | ) | $ | (230 | ) | $ | (511 | ) | $ (725) | |
Total assets as of December 31, 2003 | $ | 280 | $ | 6,269 | $ | 10,078 | $ | 1,703 | $ 18,330 | ||||
For the Twelve Months Ended | Equipment | Equipment | Real | ||||||||||
December 31, 2002 | Leasing | Management | Estate | Other | Total | ||||||||
Revenue: | |||||||||||||
Lease revenue | $ | 5,682 | $ | - | $ | - | $ | - | $ 5,682 | ||||
Interest income | 1 | - | 49 | 14 | 64 | ||||||||
Gain on sale of equipment | 1,249 | - | - | - | 1,249 | ||||||||
Loss on sale of equipment | (1,474 | ) | (1,474) | ||||||||||
Total revenue | 5,458 | - | 49 | 14 | 5,521 | ||||||||
Expenses: | |||||||||||||
Depreciation and amortization | 2,775 | - | - | - | 2,775 | ||||||||
Impairment of equipment | 599 | 599 | |||||||||||
Interest expense | 1,814 | 28 | - | - | 1,842 | ||||||||
Management fees - affiliates | 250 | 98 | 85 | 1 | 434 | ||||||||
Operating expenses | 86 | - | - | 803 | 889 | ||||||||
Operating expenses - affiliates | 201 | - | - | - | 201 | ||||||||
Total expenses | 5,725 | 126 | 85 | 804 | 6,740 | ||||||||
Equity Interests: | |||||||||||||
Equity in net loss of EFG/Kettle Development LLC | - | - | (241 | ) | - | (241) | |||||||
Equity in net loss of EFG Kirkwood LLC | - | - | (484 | ) | - | (484) | |||||||
Equity in net income of MILPI Holdings, LLC | - | 493 | - | - | 493 | ||||||||
Total income (loss) from equity interests | - | 493 | (725 | ) | - | (232) | |||||||
Net (loss) income | $ | (267 | ) | $ | 367 | $ | (761 | ) | $ | (790 | ) | $ (1,451) | |
Total assets as of December 31, 2002 | $ | 18,082 | $ | 9,688 | $ | 7,476 | $ | 1,278 | $ 36,524 | ||||
Capital Expenditures | $ | - | $ | 2,423 | $ | 1,000 | $ | - | $ 2,423 | ||||
Equipment Leasing | Equipment Management | Real Estate | |||||||||||||||||
Region | 2003 | 2002 | 2003 | 2002 | 2003 | 2002 | |||||||||||||
Revenues | |||||||||||||||||||
United States | $ | 2,179 | $ | 1,961 | $ | - | $ | - | $ | 57 | $ | 49 | |||||||
Sweden | (809 | ) | 3,358 | - | - | - | - | ||||||||||||
Mexico | - | 139 | - | - | - | - | |||||||||||||
Total revenues | $ | 1,370 | $ | 5,458 | $ | - | $ | - | $ | 57 | $ | 49 | |||||||
Equity Interest | |||||||||||||||||||
United States | $ | - | $ | - | $ | (1,948 | ) | $ | 493 | $ | (140 | ) | $ | (484 | ) | ||||
Canada | - | - | - | - | (62 | ) | (241 | ) | |||||||||||
Equity (loss) income | $ | - | $ | - | $ | (1,948 | ) | $ | 493 | $ | (202 | ) | $ | (725 | ) | ||||
Equipment Leasing | Equipment Management | Real Estate | |||||||||||||||||
Region | 2003 | 2002 | 2003 | 2002 | 2003 | 2002 | |||||||||||||
United States | $ | 1,983 | $ | 2,709 | $ | 6,269 | $ | 9,688 | $ | 5,209 | $ | 3,148 | |||||||
Sweden | - | 16,855 | - | - | - | - | |||||||||||||
Canada | - | - | - | - | 4,869 | 4,124 | |||||||||||||
Total assets | $ | 1,983 | $ | 19,564 | $ | 6,269 | $ | 9,688 | $ | 10,078 | $ | 7,272 | |||||||
RECITALS | 1 | |
DECLARATION | 1 | |
ARTICLE I - THE TRUST | 1 | |
1.1 | NAME | 1 |
1.2 | LOCATION | 2 |
1.3 | NATURE OF TRUST | 2 |
1.4 | PURPOSES | 2 |
1.5 | POWERS | 2 |
1.6 | TERM AND DISSOLUTION | 3 |
ARTICLE II - DEFINITIONS | 4 | |
ARTICLE III - CAPITAL | 17 | |
3.1 | CAPITAL CONTRIBUTION OF THE SPECIAL BENEFICIARY AND MANAGING TRUSTEE | 17 |
3.2 | CLASS A BENEFICIARIES; OFFERING OF CLASS B INTERESTS; BENEFICIARY INTERESTS | 17 |
3.3 | CAPITAL ACCOUNTS | 19 |
3.4 | ADDITIONAL CAPITAL CONTRIBUTIONS | 19 |
ARTICLE IV - TRUSTEES | 19 | |
4.1 | THE TRUSTEES; LIABILITY FOR TRUST OBLIGATIONS | 19 |
4.2 | EXTENT OF MANAGING TRUSTEE POWERS AND DUTIES | 20 |
4.3 | DELEGATION OF POWERS | 27 |
4.4 | RELIANCE BY THIRD PARTIES | 28 |
4.5 | LIMITATIONS ON THE EXERCISE OF POWERS OF MANAGING TRUSTEE | 28 |
4.6 | LIABILITY FOR ACTS OR OMISSIONS AND INDEMNIFICATION | 29 |
4.7 | COMPENSATION OF TRUSTEES | 30 |
4.8 | RESIGNATION OF TRUSTEES | 31 |
4.9 | REMOVAL OF TRUSTEES | 31 |
4.10 | CONSEQUENCES OF RESIGNATION OR REMOVAL | 32 |
4.11 | LIABILITY OF RESIGNED OR REMOVED TRUSTEE | 33 |
4.12 | CONTINUATION OF TRUST BUSINESS | 33 |
4.13 | POWERS AND LIMITATIONS OF DELAWARE TRUSTEE | 33 |
ARTICLE V - ADVISOR SERVICES AND COMPENSATION | 34 | |
5.1 | COMPENSATION TO ADVISOR AND CERTAIN AFFILIATES | 34 |
5.2 | OTHER INTERESTS OF THE ADVISOR AND ITS AFFILIATES | 36 |
5.3 | OTHER TRANSACTIONS INVOLVING THE TRUST, PLM, THE ADVISOR AND THEIR AFFILIATES | 38 |
ARTICLE VI - TRUST BENEFICIARIES | 38 | |
6.1 | ABSENCE OF CONTROL OVER TRUST BUSINESS | 38 |
6.2 | LIMITED LIABILITY | 39 |
6.3 | FIDUCIARY DUTY OF MANAGING TRUSTEE TO TRUST BENEFICIARIES | 39 |
ARTICLE VII - INVESTMENT OBJECTIVES AND POLICIES | 39 | |
7.1 | INVESTMENT OBJECTIVES AND POLICIES | 39 |
7.2 | ASSETS AND LESSEES | 40 |
7.3 | PURCHASES, SALES AND LEASES OF ASSETS FROM OR TO THE MANAGING TRUSTEE | |
AND ITS AFFILIATES | 40 | |
7.4 | LOANS TO OR FROM THE MANAGING TRUSTEE AND ITS AFFILIATES | 41 |
7.5 | JOINT INVESTMENTS | 41 |
7.6 | RESALES | 43 |
7.7 | IN-KIND DISTRIBUTIONS | 43 |
7.8 | ROLL-UPS | 43 |
7.9 | CHANGE IN INVESTMENT OBJECTIVE AND POLICIES | 44 |
ARTICLE VIII - DISTRIBUTIONS AND ALLOCATIONS | 44 | |
8.1 | DISTRIBUTION OF DISTRIBUTABLE CASH | 44 |
8.2 | ALLOCATION OF PROFITS AND LOSSES | 45 |
8.3 | RECOURSE TO TRUST ASSETS ONLY | 47 |
8.4 | SPECIAL PROVISIONS | 47 |
ARTICLE IX - TRANSFER OF INTERESTS | 51 | |
9.1 | WITHDRAWAL OF A BENEFICIARY | 51 |
9.2 | ASSIGNMENT | 51 |
9.3 | SUBSTITUTION | 52 |
9.4 | PROHIBITED ASSIGNMENT | 52 |
9.5 | CHANGE OF STATUS OF BENEFICIARY | 53 |
9.6 | RIGHT TO TENDER INTERESTS FOR REDEMPTION | 54 |
9.7 | STATUS OF AN ASSIGNING BENEFICIARY | 55 |
9.8 | WITHDRAWAL OF SPECIAL BENEFICIARY; SUBSTITUTION | 55 |
ARTICLE X - FISCAL MATTERS | 56 | |
10.1 | TITLE TO PROPERTY AND BANK ACCOUNTS | 56 |
10.2 | MAINTENANCE OF, AND ACCESS TO, BASIC TRUST DOCUMENTS | 56 |
10.3 | FINANCIAL BOOKS AND ACCOUNTING | 57 |
10.4 | TRUST EXPENSES | 58 |
10.5 | FISCAL YEAR | 60 |
10.6 | REPORTS AND ACCOUNTING DECISIONS | 60 |
10.7 | PARTNERSHIP CLASSIFICATION; FEDERAL TAX ELECTIONS | 62 |
ARTICLE XI - MEETINGS AND VOTING RIGHTS OF BENEFICIARIES | 63 | |
11.1 | MEETINGS | 63 |
11.2 | VOTING PROCEDURES; VOTING RIGHTS OF BENEFICIARIES | 64 |
11.3 | VALUATION OF INTERESTS OF THE MANAGING TRUSTEE | 65 |
ARTICLE XII - AMENDMENTS | 65 | |
12.1 | CERTAIN AMENDMENTS REQUIRING MAJORITY CONSENT | 65 |
12.2 | OTHER AMENDMENTS | 66 |
ARTICLE XIII - POWER OF ATTORNEY | 66 | |
13.1 | APPOINTMENT | 66 |
13.2 | AMENDMENTS TO AGREEMENT | 67 |
13.3 | POWER COUPLED WITH AN INTEREST | 67 |
13.4 | POWER OF ATTORNEY BY SUBSTITUTE BENEFICIARIES | 68 |
ARTICLE XIV - GENERAL PROVISIONS | 68 | |
14.1 | NOTICES, APPROVALS AND CONSENTS | 68 |
14.2 | FURTHER ASSURANCES | 68 |
14.3 | CAPTIONS | 69 |
14.4 | BINDING EFFECT | 69 |
14.5 | SEPARABILITY | 69 |
14.6 | INTEGRATION | 69 |
14.7 | APPLICABLE LAW | 69 |
14.8 | COUNTERPARTS | 69 |
14.9 | CREDITORS | 69 |
14.10 | INTERPRETATION | 70 |
14.11 | ARBITRATION; VENUE | 70 |
SCHEDULE A | 72 |
MANAGING TRUSTEE | BENEFICIARIES |
AFG ASIT CORPORATION | Each Person named as a Beneficiary on Schedule A attached hereto By: AFG ASIT Corporation as Attorney-in-Fact for each such Person |
By: ___________________________________ Authorized Officer | By: ____________________________________ Authorized Officer |
DELAWARE TRUSTEE | |
WILMINGTON TRUST COMPANY | |
By: ___________________________________ Authorized Officer | |
SPECIAL BENEFICIARY | |
EQUIS II CORPORATION (successor in interest to Equis Financial Group) By: ____________________________________ Authorized Officer |
If the Beneficiary is an Individual: | |||
Signature Date | Signature Date | ||
Print Name | Print Name | ||
(If Joint Tenants Or Tenants-In-Common, Both Owners Must Sign): | |||
If the Beneficiary is a Corporation, Partnership or Trust: | |||
Name of Entity | |||
By: | |||
Signature | |||
Print Name | |||
Title | Date |