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 November 30, 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--November 30, 2001 and May 31, 2001
Statements of Operations--Six months ended November 30, 2001; Six
months ended November 30, 2000 and Three months ended November
30, 2001; Three months ended November 30, 2000
Statements of Cash Flow-Six months ended November 30, 2001; Six
months ended November 30, 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)
November 30, May 31,
Assets: 2001 2001
------------- ------------
Cash, restricted $ 10,269,048 $ 12,814,085
------------- -------------
Direct Financing Leases:
Minimum Lease Payments 112,095,822 154,014,636
Estimated Unguaranteed Residual Values 17,571,085 20,118,464
Unearned Income (14,593,184) (22,179,919)
Allowance for Doubtful Accounts (1,856,580) (3,739,859)
------------- -------------
Net Investment in Direct Finance Leases 113,217,143 148,213,322
------------- -------------
Capitalized Securitization Costs, net of
accumulated amortization of $1,190,323 663,177 981,051
------------- -------------
Total Assets $ 124,149,368 $ 162,008,458
============= =============
Liabilities:
Notes Payable $ 108,147,879 $ 146,329,522
Accrued Interest 225,415 304,100
Due to Affiliate 1,423,521 1,448,529
------------- -------------
Total Liabilities 109,796,815 148,082,151
------------- -------------
Members' Equity:
Paid in Capital 8,022,411 8,022,411
Retained Earnings 6,330,142 5,903,896
------------- -------------
Total Members' Equity 14,352,553 13,926,307
------------- -------------
Total Liabilities and Members' Equity $ 124,149,368 $ 162,008,458
============= =============
The accompanying notes are an integral part of these financial statements.
GreatAmerica Leasing Receivables 2000-1, L.L.C.
Statements of Operations
(Unaudited)
Six Months Ended November 30
-------------------------
Revenues: 2001 2000
----------- -----------
Direct Financing Leases $ 7,499,226 $12,643,982
Interest Income 181,159 339,916
Gain on Termination of Leases 468,005 476,674
Other Income 1,422,759 189,673
----------- -----------
Total Revenues 9,571,149 13,650,245
----------- -----------
Expenses:
Interest Expense 4,787,909 7,113,217
Selling, General and Administrative 801,245 1,265,176
----------- -----------
Total Expenses 5,589,154 8,378,393
----------- -----------
Net Income $ 3,981,995 $ 5,271,852
=========== ===========
Three Months Ended November 30
-----------------------
Revenues: 2001 2000
----------- -----------
Direct Financing Leases $ 3,476,473 $ 5,957,175
Interest Income 77,549 198,067
Gain on Termination of Leases 179,205 243,913
Other Income 741,117 165,457
----------- -----------
Total Revenues 4,474,344 6,564,612
----------- -----------
Expenses:
Interest Expense 2,217,200 3,726,102
Selling, General and Administrative 371,509 611,917
----------- -----------
Total Expenses 2,588,709 4,338,019
----------- -----------
Net Income $ 1,885,635 $ 2,226,593
=========== ===========
The accompanying notes are an integral part of these financial statements.
GreatAmerica Leasing Receivables 2000-1, L.L.C.
Statements of Cash Flows
(Unaudited)
Six Months Ended November 30
------------------------------
Cash Flows from Operating Activities: 2001 2000
------------- -------------
Net Income $ 3,981,995 $ 5,271,852
Adjustments to Reconcile Net Income to Net Cash
Flows from Operating Activities:
Gain on Termination of Leases (468,005) (476,674)
Amortization of Capitalized
Securitization Costs 335,724 444,670
Decrease in Due to Affiliate (25,008) 1,242,074
Decrease in Accrued Interest (78,685) 388,128
------------- -------------
Net Cash Flows from Operating Activities 3,746,021 6,870,050
------------- -------------
Cash Flows from Investing Activities:
Purchase of Direct Financing Leases
from Originator -- (234,462,674)
Repayment of Direct Financing Leases 30,226,265 49,374,817
Proceeds on Termination of Leases 5,237,919 5,076,885
------------- -------------
Net Cash Flows from Investing Activities 35,464,184 (180,010,972)
------------- -------------
Cash Flows from Financing Activities:
Proceeds from Notes Payable -- 235,195,755
Repayment on Notes Payable (38,181,643) (46,339,076)
Payment of Securitization Costs (17,850) (1,768,199)
Distributions to Parent (3,555,749) (1,142,880)
------------- -------------
Net Cash Flows from Financing Activities (41,755,242) 185,945,600
------------- -------------
Net Increase (Decrease) in Cash (2,545,037) 12,804,678
Cash at the Beginning of the Period 12,814,085 1,000
------------- -------------
Cash at the End of the Period $ 10,269,048 $ 12,805,678
============= =============
Supplemental Disclosures:
Cash Paid during the Period for Interest $ 4,857,669 $ 6,725,087
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, retail trade and finance,
insurance and real estate industries, representing approximately 44%, 14%,
12% and 10% of the Company's minimum lease payments receivable at November
30, 2001.
Restricted Cash-The Company is required to maintain a reserve fund equal to
$2,412,264 at November 30, 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 $ 32,814,313 $ 4,031,783
2003 45,764,181 6,392,881
2004 24,468,375 3,651,358
2005 8,686,604 3,333,177
2006 277,735 143,378
Thereafter 84,614 18,508
------------ ------------
$112,095,822 $ 17,571,085
============ ============
GreatAmerica Leasing Receivables 2000-1, L.L.C.
Notes to Financial Statements
(Continued)
3. Allowance for Doubtful Accounts
Beginning balance at August 31, 2001 $ 2,502,224
Charge-offs (714,219)
Defaulted leases ---
Recoveries 68,575
----------------
Ending balance at November 30, 2001 $ 1,856,580
================
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 servicing fees for the quarters
and six months ended November 30, 2001 and 2000 totaling $219,400,
$474,447, $377,838 and $820,506, respectively. Also, the servicer has not
been reimbursed for advances of $1,423,521 as of November 30, 2001 which
are reflected on the balance sheet as due to affiliate.
5. Notes Payable
Notes payable at November 30, 2001 consisted of :
Six classes of Receivable-Backed Notes at rates of 7.36%
to 8.14% maturing through November 2005 $ 108,147,879
=============
GreatAmerica Leasing Receivables 2000-1, L.L.C.
Notes to Financial Statements
(Continued)
The aggregate maturities of the notes payable as of November 30, 2001 are as
follows:
Years Ending May 31,
--------------------
2002 $ 32,828,148
2003 43,949,236
2004 21,054,414
2005 10,316,081
-------------
Total $ 108,147,879
=============
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 $7,499,226 and $12,643,982 for the six months ended November
30, 2001 and 2000, respectively. For these periods, revenues from leasing
equipment under direct financing leases accounted for 78% and 93% 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 trend will continue throughout the remaining term
of the leases.
Other income increased by $1,233,086 as a result of the number of
customers renewing their lease contracts at the end of their contractual
payment period. In general, once customers, with true leases, have 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 $5,589,154 and $8,378,393 during the six months ended
November 30, 2001 and 2000, respectively. Interest expense comprised 86%
and 85% of total expenses during these periods. The decrease in interest
expense was entirely 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 operating and
investing activities 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.
The Company's liquidity comes primarily from lease repayments. A
substantial increase in delinquencies and defaults could deplete the
pledged assets such that payments on the contacts could be insufficient to
make payments on the notes.
Item 3. Quantitative And Qualitative Disclosures About Market Risk
The lease contracts and 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
November 30, 2001:
Years Ending May 31, Average Interest Rate
------------------- ---------------------
2002 $ 32,828,148 7.52%
2003 43,949,236 7.54%
2004 21,054,414 7.55%
2005 10,316,081 7.55%
------------------
Total $ 108,147,879
==================
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(A) Reports on Form 8-K
On September 26, 2001 the Registrant filed a report on Form 8-K
to file under Item 5 of the Form, Servicer report information.
On November 1, 2001 the Registrant filed a report on Form 8-K to
file under Item 5 of the Form, Servicer report information.
On November 28, 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: January 11, 2002