Page 1 of 12
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ----- ACT OF 1934
For the quarterly period ended September 30, 1996
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 0-11170
-------
PHOENIX LEASING GROWTH FUND 1982
- --------------------------------------------------------------------------------
Registrant
California 68-2735710
- ------------------------ ----------------------------------
State of Jurisdiction I.R.S. Employer Identification No.
2401 Kerner Boulevard, San Rafael, California 94901-5527
- --------------------------------------------------------------------------------
Address of Principal Executive Offices Zip Code
Registrant's telephone number, including area code: (415) 485-4500
--------------
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
preceding requirements for the past 90 days.
Yes _X_ No ___
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Part I. Financial Information
-----------------------------
Item 1. Financial Statements
PHOENIX LEASING GROWTH FUND 1982
BALANCE SHEETS
(Amounts in Thousands Except for Unit Amounts)
(Unaudited)
September 30, December 31,
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 598 $ 1,078
Accounts receivable 3 27
Equipment on operating leases and held for
lease (net of accumulated depreciation of
$525 and $578 at September 30, 1996 and
December 31, 1995 respectively) -- --
Investment in joint ventures 150 283
Securities, available-for-sale 54 60
Other assets 6 5
------- -------
Total Assets $ 811 $ 1,453
======= =======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 1,875 $ 1,949
------- -------
Total Liabilities 1,875 1,949
------- -------
Partners' Capital (Deficit):
General Partner (408) (410)
Limited Partners, 44,000 units authorized,
41,798 units issued and 40,343 units
outstanding at September 30, 1996
and December 31, 1995 (663) (63)
Unrealized gains (losses) on available-for-sale
securities 7 (23)
------- -------
Total Partners' Capital (Deficit) (1,064) (496)
------- -------
Total Liabilities and Partners' Capital (Deficit) $ 811 $ 1,453
======= =======
The accompanying notes are an integral part of
these statements.
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PHOENIX LEASING GROWTH FUND 1982
STATEMENTS OF OPERATIONS
(Amounts in Thousands Except for Per Unit Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Rental income $ 1 $ 13 $ 5 $ 157
Equity in earnings from joint
ventures, net 46 61 210 174
Gain on sale of equipment -- 1 -- 12
Gain on sale of securities -- -- 11 --
Interest income, notes receivable -- 21 -- 21
Other income 8 14 25 44
----- ----- ------ ------
Total Income 55 110 251 408
----- ----- ------ ------
EXPENSES
Lease related operating expenses -- -- -- 8
Management fees to General Partner 1 9 4 24
Provision for losses on receivables 2 (7) 2 (59)
General and administrative expenses 11 15 36 50
----- ----- ------ ------
Total Expenses 14 17 42 23
----- ----- ------ ------
NET INCOME $ 41 $ 93 $ 209 $ 385
===== ===== ====== ======
NET INCOME PER LIMITED
PARTNERSHIP UNIT $1.01 $2.28 $ 5.14 $ 9.45
===== ===== ====== ======
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $-- $-- $20.01 $30.31
===== ===== ====== ======
ALLOCATION OF NET INCOME:
General Partner $ 1 $ 1 $ 2 $ 4
Limited Partners 40 92 207 381
----- ----- ------ ------
$ 41 $ 93 $ 209 $ 385
===== ===== ====== ======
The accompanying notes are an integral part of
these statements.
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PHOENIX LEASING GROWTH FUND 1982
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Nine Months Ended
September 30,
1996 1995
---- ----
Operating Activities:
Net income $ 209 $ 385
Adjustments to reconcile net income to net cash
used by operating activities:
Gain on sale of equipment -- (12)
Gain on sale of securities (11) --
Equity in earnings from joint ventures, net (210) (174)
Provision for early termination, financing leases -- (1)
Recovery of losses on notes receivable -- (69)
Provision for doubtful accounts receivable 2 11
Decrease (increase) in accounts receivable 22 (2)
Decrease in accounts payable and accrued expenses (74) (322)
Decrease (increase) in other assets (1) 17
------- -------
Net cash used by operating activities (63) (167)
------- -------
Investing Activities:
Principal payments, financing leases -- 1
Principal payments, notes receivable -- 184
Proceeds from sale of equipment -- 12
Proceeds from sale of securities 47 --
Distributions from joint ventures 343 272
------- -------
Net cash provided by investing activities 390 469
------- -------
Financing Activities:
Distributions to partners (807) (1,223)
------- -------
Net cash used by financing activities (807) (1,223)
------- -------
Decrease in cash and cash equivalents (480) (921)
Cash and cash equivalents, beginning of period 1,078 1,975
------- -------
Cash and cash equivalents, end of period $ 598 $ 1,054
======= =======
The accompanying notes are an integral part of
these statements.
<PAGE>
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PHOENIX LEASING GROWTH FUND 1982
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. General.
The accompanying unaudited condensed financial statements have been
prepared by the Partnership in accordance with generally accepted accounting
principles, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Although management believes that the disclosures are adequate to make
the information presented not misleading, it is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes included in the Partnership's Financial Statement, as filed with the
SEC in the latest annual report on Form 10-K.
Note 2. Reclassification.
Reclassification - Certain 1995 amounts have been reclassified to
conform to the 1996 presentation.
Note 3. Income Taxes.
Federal and state income tax regulations provide that taxes on the
income or loss of the Partnership are reportable by the partners in their
individual income tax returns. Accordingly, no provision for such taxes has been
made in the accompanying financial statements.
Note 4. Net Income (Loss) and Distributions per Limited Partnership Unit.
Net income and distributions per limited partnership unit were based
on the limited partners' share of net income and distributions, and the weighted
average number of units outstanding of 40,343 for the nine month periods ended
September 30, 1996 and 1995. For purposes of allocating income (loss) and
distributions to each individual limited partner, the Partnership allocates net
income (loss) and distributions based upon each respective limited partner's
ending capital account balance. The use of this method accurately reflects each
limited partner's participation in the partnership including reinvestment
through the Capital Accumulation Plan. As a result, the calculation of net
income (loss) and distributions per limited partnership unit is not indicative
of per unit income (loss) and distributions due to reinvestments through the
Capital Accumulation Plan.
<PAGE>
Page 6 of 12
Note 5. Investment in Joint Ventures.
Equipment Joint Ventures
The aggregate combined statements of operations of the equipment
joint ventures is presented below:
COMBINED STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Rental income $ 631 $1,064 $2,038 $3,200
Gain on sale of equipment 159 397 702 1,273
Other income 32 572 114 681
------ ------ ------ ------
Total income 822 2,033 2,854 5,154
------ ------ ------ ------
EXPENSES
Depreciation 81 629 254 1,089
Lease related operating expenses 283 710 1,167 2,241
Management fees to General Partner 33 94 101 220
General and administrative expenses 3 4 8 12
------ ------ ------ ------
Total expenses 400 1,437 1,530 3,562
------ ------ ------ ------
Net income $ 422 $ 596 $1,324 $1,592
====== ====== ====== ======
Financing Joint Ventures
The aggregate combined statements of operations of the financing joint
ventures is presented below:
COMBINED STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Interest income - notes receivable $ 9 $ 14 $ 32 $ 62
Other income 6 7 24 74
---- ---- ---- ----
Total income 15 21 56 136
---- ---- ---- ----
EXPENSES
Management fees to General Partner 1 2 1 7
General and administrative expenses 2 3 10 15
---- ---- ---- ----
Total expenses 3 5 11 22
---- ---- ---- ----
Net income $ 12 $ 16 $ 45 $114
==== ==== ==== ====
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Foreclosed Cable Systems Joint Venture
The statements of operations of the foreclosed cable systems joint
venture is presented below:
STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Subscriber revenue $ -- $ 166 $ 54 $ 508
Gain (adjustment to gain) on sale
of cable system 3 -- 1,205 --
Other income -- 3 10 9
------ ------ ------ ------
Total income 3 169 1,269 517
------ ------ ------ ------
EXPENSES
Depreciation and amortization -- 39 13 115
Program services -- 48 12 135
Management fees to an affiliate of
the General Partner -- 8 121 23
General and administrative expenses -- 42 43 144
Provision for losses on accounts
receivable -- 2 1 5
------ ------ ------ ------
Total expenses -- 139 190 422
------ ------ ------ ------
Net income $ 3 $ 30 $1,079 $ 95
====== ====== ====== ======
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PHOENIX LEASING GROWTH FUND 1982
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
Phoenix Leasing Growth Fund 1982 (the Partnership) reported net income of
$41,000 and $209,000 for the three and nine months ended September 30, 1996,
respectively, compared to net income of $93,000 and $385,000 during the same
periods in the prior year. The decrease in earnings is primarily attributable to
a decrease in rental income for both the three and nine months ended September
30, 1996. In addition to a decrease in rental income, the absence of interest
income from notes receivable also contributed to the decline in net income for
the quarter ended September 30, 1996.
Total revenues decreased by $55,000 and $157,000 for the three and nine
months ended September 30, 1996, respectively, compared to the same periods in
the prior year. The decrease in total revenues is primarily due to a decrease in
rental income and interest income from notes receivable. Rental income decreased
by $12,000 and $152,000 for the three and nine months ended September 30, 1996,
respectively, compared to the same periods in 1995. Rental income for the nine
months ended September 30, 1995 was higher than usual due to the recognition of
prepaid rent that had previously been recorded as a liability. During the nine
months ended September 30, 1995, it was determined that these payments were no
longer a liability and the amount was subsequently recognized as rental income.
An additional factor contributing to the increase in rental income for the nine
months ended September 30, 1995 was the recognition of a mandatory purchase
option which came due on one of the Partnership's leases.
The decline in rental income for the three months ended September 30, 1996
as compared to the same period in 1995 is reflective of a reduction in the size
of the equipment portfolio as a result of the ongoing liquidation of equipment.
Because the Partnership is in its liquidation stage, it is not expected to
acquire any additional equipment. As a result, rental revenues are expected to
continue to decline as the portfolio is liquidated and the remaining equipment
is re-leased at lower rental rates. At September 30, 1996, the Partnership owned
equipment with an aggregate original cost of $668,000 compared to $1,207,000 at
September 30, 1995.
The Partnership received payoffs from its two remaining notes receivable
from cable television system operators during the nine months ended September
30, 1995. The Partnership's outstanding notes receivable had been in default and
the Partnership had suspended the recognition of interest income on these notes.
During the three months ended September 30, 1995, the Partnership received a
payoff of $141,000 of which $120,000 was applied towards the outstanding note
receivable balance and the remaining $21,000 was recognized as interest income.
The remaining allowance for this note of $7,000 was recognized as income. In
addition, the remaining balance in the allowance for losses on notes receivable
of $9,000 was also recognized as income during the three months ended September
30, 1995.
In addition to the payoff previously discussed, the Partnership received a
payoff from another defaulted note receivable during the nine months ended
September 30, 1995. For this payoff, the Partnership received a partial recovery
of $56,000 which was applied towards the $87,000 outstanding note receivable
balance. The remaining $31,000 was written-off through its related allowance.
The related allowance for losses for this note receivable was provided for in a
previous year in an amount equal to the carrying value of the note. Upon receipt
of this payoff, the Partnership reduced the allowance for losses on notes
receivable by $53,000. This reduction in the allowance was recognized as income
during the nine months ended September 30, 1995.
<PAGE>
Page 9 of 12
Total expenses decreased by $3,000 for the three months ended September 30,
1996 but increased by $19,000 compared to the same periods in 1995. During the
nine months ended September 30, 1995, the Partnership reduced its provision for
losses on receivables, primarily from provision for losses on its notes
receivable, which resulted in the recognition of income of $59,000. There were
no such transactions during 1996. Most other expense items decreased during the
three and nine months ended September 30, 1996, as compared to the same periods
in 1995.
Joint Ventures
The Partnership has made investments in various equipment and financing
joint ventures along with other affiliated partnerships managed by the General
Partner for the purpose of spreading the risk of investing in certain equipment
leasing and financing transactions. These joint ventures are not currently
making any significant additional investments in new equipment leasing or
financing transactions. As a result, the earnings and cash flow from such
investments are anticipated to continue to decline as the portfolios are
released at lower rental rates and eventually liquidated.
The increase in earnings from joint ventures of $36,000 and the increase in
distributions from joint ventures of $71,000 for the nine months ended September
30, 1996, as compared to the same period in the previous year, is primarily due
to the sale of a cable system in one of the foreclosed cable systems joint
ventures in which the Partnership has an interest.
The decrease in earnings from joint ventures of $15,000 for the three months
ended September 30, 1996 is attributable to a decline in revenues from several
equipment joint ventures as a result of a majority of the equipment joint
ventures being in the liquidation stage.
Liquidity and Capital Resources
The Partnership reported net cash used by leasing and financing
activities of $63,000 for the nine months ended September 30, 1996 compared to
net cash provided by leasing and financing activities of $18,000 for the nine
months ended September 30, 1995. The increase experienced during the nine months
ended September 30, 1995 was the result of two payoffs of notes receivable.
During the nine months ended September 30, 1996, the Partnership
received cash distributions of $181,000 from foreclosed cable systems joint
ventures, as compared to cash distributions of $8,000 from foreclosed cable
systems joint ventures during the same period in 1995. This increase in
distributions is attributable to the distribution of the sale proceeds from the
sale of a cable television system owned by one of these joint ventures during
the first quarter of 1996.
In contrast, cash distributions from equipment and financing joint
ventures decreased by $102,000 for the nine months ended September 30, 1996,
compared to the same period in 1995. The decrease is primarily due to a decrease
in cash available.
As of September 30, 1996, the Partnership had equipment held for lease
with a purchase price of $668,000 and a net book value of $0 compared to
$986,000 and $0 at September 30, 1995. The General Partner is actively engaged,
on behalf of the Partnership, in remarketing and selling the Partnership's
off-lease equipment portfolio.
<PAGE>
Page 10 of 12
The Limited Partners received cash distributions of $807,000 and
$1,223,000 during the nine months ended September 30, 1996 and 1995,
respectively. As a result, the cumulative cash distributions to the Limited
Partners are $38,467,000 and $37,660,000 as of September 30, 1996 and 1995,
respectively. The General Partner did not receive cash distributions for the
periods ended September 30, 1996 and 1995.
Distributions to partners are being made annually on January 15. The
distribution amount to be distributed on January 15, 1997 is anticipated to be
lower than the January 15, 1996 distribution.
Cash generated from leasing and financing operations has been and is
anticipated to continue to be sufficient to meet the Partnership's continuing
operational expenses.
<PAGE>
Page 11 of 12
PHOENIX LEASING GROWTH FUND 1982
September 30, 1996
Part II. Other Information.
---------------------------
Item 1. Legal Proceedings. Inapplicable.
Item 2. Changes in Securities. Inapplicable
Item 3. Defaults Upon Senior Securities. Inapplicable
Item 4. Submission of Matters to a Vote of Securities Holders. Inapplicable
Item 5. Other Information. Inapplicable
Item 6. Exhibits and Reports on 8-K:
a) Exhibits:
(27) Financial Data Schedule
b) Reports on 8-K: None
<PAGE>
Page 12 of 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PHOENIX LEASING GROWTH FUND 1982
--------------------------------
(Registrant)
Date Title Signature
---- ----- ---------
November 12, 1996 Chief Financial Officer, /S/ PARITOSH K. CHOKSI
- ----------------- Senior Vice President ----------------------
and Treasurer of (Paritosh K. Choksi)
Phoenix Leasing Incorporated
General Partner
November 12, 1996 Senior Vice President, /S/ BRYANT J. TONG
- ----------------- Financial Operations ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Incorporated
General Partner
November 12, 1996 Senior Vice President of /S/ GARY W. MARTINEZ
- ----------------- Phoenix Leasing Incorporated ----------------------
General Partner (Gary W. Martinez)
November 12, 1996 Partnership Controller /S/ MICHAEL K. ULYATT
- ----------------- Phoenix Leasing Incorporated ----------------------
General Partner (Michael K. Ulyatt)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 598
<SECURITIES> 54
<RECEIVABLES> 3
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 525
<DEPRECIATION> 525
<TOTAL-ASSETS> 811
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (1,064)
<TOTAL-LIABILITY-AND-EQUITY> 811
<SALES> 0
<TOTAL-REVENUES> 251
<CGS> 0
<TOTAL-COSTS> 42
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 209
<INCOME-TAX> 0
<INCOME-CONTINUING> 209
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 209
<EPS-PRIMARY> 5.14
<EPS-DILUTED> 0
</TABLE>
