UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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: 2-72177
SEI II L.P.
(formerly Shearson Equipment Investors - II)
(Exact name of registrant as specified in its charter)
New York 13-3064636
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
3 World Financial Center, 29th Floor, New York, NY 10285
(Address of principal executive offices) (Zip code)
(212) 526-3237
(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
Balance Sheets
March 31, December 31,
Assets 1995 1994
Equipment $8,306,724 $8,306,724
Less-accumulated depreciation 4,430,245 4,347,178
Net Equipment 3,876,479 3,959,546
Cash and cash equivalents 3,451,148 2,931,466
Due from Equipment Manager 285,285 522,083
Total Assets $7,612,912 $7,413,095
Liabilities and Partners' Deficit
Liabilities:
Accounts payable and accrued expenses $ 31,488 $ 36,201
Accrued interest expense due to affiliate 8,129,809 7,965,512
Deferred interest payable to affiliate 512,854 512,854
Due to General Partner 648,522 642,280
Note payable to affiliate 7,839,000 7,839,000
Total Liabilities 17,161,673 16,995,847
Partners' Deficit:
General Partner (257,677) (258,017)
Limited Partners (3,614 units outstanding) (9,291,084) (9,324,735)
Total Partners' Deficit (9,548,761) (9,582,752)
Total Liabilities and Partners' Deficit $ 7,612,912 $ 7,413,095
See accompanying notes to the financial statements.
Statement of Partners' Deficit
For the three months ended March 31, 1995
General Limited
Partner Partners Total
Balance at December 31, 1994 $ (258,017) $(9,324,735) $(9,582,752)
Net Income 340 33,651 33,991
Balance at March 31, 1995 $ (257,677) $(9,291,084) $(9,548,761)
See accompanying notes to the financial statements.
Statements of Operations
For the three months ended March 31, 1995 and 1994
Revenues 1995 1994
Operating revenues $ 624,213 $ 319,627
Operating Expenses
Operating costs 338,165 188,936
Depreciation 83,067 83,067
Professional and other expenses 11,403 12,594
Equipment management fee -
Operators 30,236 22,616
General Partner 6,242 3,196
Insurance 4,211 4,211
Total Operating Expenses 473,324 314,620
Income (loss) from operations 150,889 5,007
Other Income (Expense):
Interest and miscellaneous income 47,399 16,510
Interest expense (164,297) (115,974)
Total Other Expense (116,898) (99,464)
Net Income (Loss) $ 33,991 $ (94,457)
Net Income (Loss) Allocated:
To the General Partner $ 340 $ (945)
To the Limited Partners 33,651 (93,512)
$ 33,991 $ (94,457)
Per limited partnership
unit (3,614 outstanding) $9.31 $(25.87)
See accompanying notes to the financial statements.
Statements of Cash Flows
For the three months ended March 31, 1995 and 1994
Cash Flows from Operating Activities: 1995 1994
Net income (loss) $ 33,991 $ (94,457)
Adjustments to reconcile net
income (loss) to net cash provided
by operating activities:
Depreciation 83,067 83,067
Increase (decrease) in cash
arising from changes in operating
assets and liabilities:
Due from Midwest Marine Management Company 236,798 118,267
Operating receivables, net --- ---
Prepaid expense --- ---
Accounts payable and accrued expenses (4,713) (5,422)
Accrued interest expense due to affiliate 164,297 115,974
Due to General Partner 6,242 3,197
Net cash provided by operating activities 519,682 220,626
Net increase in cash and cash equivalents 519,682 220,626
Cash and cash equivalents at beginning of period 2,931,466 2,267,849
Cash and cash equivalents at end of period $3,451,148 $2,488,475
See accompanying notes to the financial statements.
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of March 31, 1995 and the results of operations and cash flows for
the three months ended March 31, 1995 and 1994 and the statement of changes in
partners' deficit for the three months ended March 31, 1995. Results of
operations for the period are not necessarily indicative of the results to be
expected for the full year.
No significant events have occurred subsequent to fiscal year 1994 and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
(a) Liquidity and Capital Resources
The Partnership's cash and cash equivalents balance totalled $3,451,148 at
March 31, 1995, which represents an increase of $519,682 from the balance of
$2,931,466 at December 31, 1994. The increase is due to net cash flow from
operating activities.
At March 31, 1995, the amount due from the Partnership's equipment manager was
$285,285, as compared to $522,083 at December 31, 1994. The $236,798 decrease
is due to the timing of the payments of net revenue received from the equipment
manager.
On May 30, 1986, the Partnership successfully restructured its long-term debt.
Buttonwood Leasing Corporation (the "Purchaser"), an affiliate of the General
Partner, purchased from the Partnership's lenders the Promissory Note (the
"Note") originally executed by the Partnership in favor of the lenders and
which was dated December 9, 1981. Subsequent to the Note purchase, the
Purchaser entered into an understanding with the Partnership on the following
terms and conditions. First, the principal amount of the loan would remain the
same. Second, interest would be charged on the outstanding principal amount of
the Note at a rate equal to the prime rate charged by Bank America Illinois,
formerly Continental Illinois National Bank, which was 7.75% at December 31,
1994, compared to 8.5% at March 31, 1995. No interest was paid relating to the
Note for the three months ended March 31, 1995, and, as a result, the
Partnership's accrued interest expense increased to $8,129,809 at March 31,
1995, compared to $7,965,512 at December 31, 1994. The maturity date of the
Note was extended to January 3, 1996, with all other terms and conditions of
the Note remaining unchanged.
(b) Results of Operations
For the three months ended March 31, 1995, the Partnership generated net income
of $33,991 as compared to a net loss of $94,457 for the corresponding period in
1994. The change from a net loss position during the first quarter of 1994 to
a net income position during the first quarter of 1995 is primarily
attributable to an increase in operating revenues, which totalled $624,213 for
the three months ended March 31, 1995, as compared to $319,627 for the
corresponding period in 1994. The increase in operating revenues is primarily
attributable to a substantial increase in barge utilization during the first
quarter of 1995 due to the significant crop harvest during the second half of
1994. Additionally, it should be noted that the Partnership's operations
during the first quarter of 1994 were impaired by the residual effects of the
flooding in the Midwest during 1993.
Operating costs during the three months ended March 31, 1995 were $338,165,
compared to $188,936 for the corresponding period in 1994. The increase is
attributable to an increase in the level of barge utilization and improved
operating conditions as a result of the significant harvest during the second
half of 1994. It should be noted that operating costs were lower than usual in
the first quarter of 1994 due to a lower level of barge utilization which
resulted from the flooding in the Midwest in 1993, as well as lower towing
costs due to intense competition among tow operators for the reduced level of
traffic.
The Partnership's interest and miscellaneous income balance totalled $47,399
for the three months ended March 31, 1995, as compared to $16,510 for the
corresponding period in 1994. The increase is primarily attributable to an
increase in interest income as a result of the Partnership maintaining a higher
invested cash balance and as a result of an increase in interest rates.
Interest expense for the three months ended March 31, 1995 increased compared
to the corresponding period in 1994 due to an increase in the prime rate
charged on the outstanding principal amount of the Note.
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were
filed during the quarter ended March 31, 1995.
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.
SEI II L.P.
BY: SEI II EQUIPMENT INC.
General Partner
Date: May 12, 1995
BY: /s/ Rocco F. Andriola
Name: Rocco F. Andriola
Title: President and Director
Date: May 12, 1995
BY: /s/ Regina Hertl
Name: Regina Hertl
Title: Vice President, Director
and Chief Financial Officer
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
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