Page 1 of 11
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 March 31, 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 0-12594
-------
PHOENIX LEASING INCOME FUND VI
- --------------------------------------------------------------------------------
Registrant
California 94-2869603
- ---------------------------- ----------------------------------
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
requirements for the past 90 days.
Yes __X__ No _____
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Part I. Financial Information
-----------------------------
Item 1. Financial Statements
PHOENIX LEASING INCOME FUND VI
BALANCE SHEETS
(Amounts in Thousands Except for Unit Amounts)
(Unaudited)
March 31, December 31,
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 447 $2,708
Accounts receivable (net of allowance for
losses on accounts receivable of $12 and
$22 at March 31, 1996 and December 31, 1995,
respectively) 28 30
Equipment on operating leases and held for
lease (net of accumulated depreciation of
$686 and $746 at March 31, 1996 and December
31, 1995, respectively) 3 4
Investment in joint ventures 372 415
Marketable securities, available for sale 143 121
Other assets 10 9
------ ------
Total Assets $1,003 $3,287
====== ======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities
Accounts payable and accrued expenses $1,358 $1,471
------ ------
Total Liabilities 1,358 1,471
------ ------
Partners' Capital (Deficit)
General Partner 399 394
Limited Partners, 320,000 units authorized
and issued, 297,165 units outstanding at
March 31, 1996 and December 31, 1995 (738) 1,460
Unrealized losses on available-for-sale securities (16) (38)
------ ------
Total Partners' Capital (Deficit) (355) 1,816
------ ------
Total Liabilities and Partners' Capital (Deficit) $1,003 $3,287
====== ======
The accompanying notes are an integral part of these statements.
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PHOENIX LEASING INCOME FUND VI
STATEMENTS OF OPERATIONS
(Amounts in Thousands Except for Per Unit Amounts)
(Unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
INCOME
Rental income $ 4 $ 71
Gain on sale of equipment 2 32
Equity in earnings from joint ventures, net 52 63
Other income 10 17
----- -----
Total Income 68 183
----- -----
EXPENSES
Depreciation 1 3
Lease related operating expenses 4 1
Management fees to General Partner - 7
General and administrative expenses 28 31
----- -----
Total Expenses 33 42
----- -----
NET INCOME $ 35 $ 141
===== =====
NET INCOME PER LIMITED PARTNERSHIP UNIT $ .10 $ .40
===== =====
DISTRIBUTIONS PER LIMITED PARTNERSHIP UNIT $7.50 $7.50
===== =====
ALLOCATION OF NET INCOME:
General Partner $ 5 $ 21
Limited Partners 30 120
----- -----
$ 35 $ 141
===== =====
The accompanying notes are an integral part of these statements.
<PAGE>
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PHOENIX LEASING INCOME FUND VI
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Operating Activities:
Net income $ 35 $ 141
Adjustments to reconcile net income to net
cash used by operating activities:
Depreciation 1 3
Gain on sale of equipment (2) (32)
Equity in earnings from joint ventures, net (52) (63)
Decrease in accounts receivable 2 -
Decrease in accounts payable and accrued expenses (113) (919)
Decrease (increase) in other assets (1) 10
------ ------
Net cash used by operating activities (130) (860)
------ ------
Investing Activities:
Principal payments, notes receivable - 24
Proceeds from sale of equipment 2 32
Distributions from joint ventures 95 102
------ ------
Net cash provided by investing activities 97 158
------ ------
Financing Activities:
Distributions to partners (2,228) (2,228)
------- ------
Net cash used by financing activities (2,228) (2,228)
------- ------
Decrease in cash and cash equivalents (2,261) (2,930)
Cash and cash equivalents, beginning of period 2,708 3,892
------ ------
Cash and cash equivalents, end of period $ 447 $ 962
====== ======
The accompanying notes are an integral part of these statements.
<PAGE>
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PHOENIX LEASING INCOME FUND VI
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 1996 amounts have been reclassified to conform
to the 1995 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 partner's share of net income and distributions, and the weighted
average number of units outstanding of 297,165 for the three month periods ended
March 31, 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>
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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
March 31,
1996 1995
---- ----
INCOME
Rental income $ 672 $ 919
Gain on sale of equipment 248 578
Other income 41 61
------ ------
Total income 961 1,558
------ ------
EXPENSES
Depreciation 89 347
Lease related operating expenses 464 731
Management fees to General Partner 31 64
General and administrative expenses 3 5
------ ------
Total expenses 587 1,147
------ ------
Net income $ 374 $ 411
====== ======
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
March 31,
1996 1995
---- ----
INCOME
Interest income - notes receivable $ 17 $ 28
Other income 2 4
---- ----
Total income 19 32
---- ----
EXPENSES
Management fees to General Partner - 2
General and administrative expenses 4 6
---- ----
Total expenses 4 8
---- ----
Net income $ 15 $ 24
==== ====
<PAGE>
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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
March 31,
1996 1995
---- ----
INCOME
Subscriber revenue $ 54 $ 170
Gain on sale cable system 1,240 -
Other income 9 3
------ -----
Total income 1,303 173
------ -----
EXPENSES
Depreciation and amortization 13 38
Program services 12 44
Management fees to an affiliate of the General Partner 120 8
General and administrative expenses 46 55
Provision for losses on accounts receivable - 2
------ -----
Total expenses 191 147
------ -----
Net income $1,112 $ 26
====== =====
<PAGE>
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PHOENIX LEASING INCOME FUND VI
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
The Partnership reported a decrease in net income of $106,000 during the
three months ended March 31, 1996, compared to the same period in 1995. The
decrease in net income during the three months ended March 31, 1996, compared to
the same period in 1995, is attributable to an overall decline in revenues.
Total revenues decreased by $115,000 during the three months ended March
31, 1996, when compared to the same period in 1995. The decrease in total
revenues during the three months ended March 31, 1996 was primarily attributable
to decreases in rental income of $67,000 and a decrease in gain on sale of
equipment of $30,000. This decrease in rental income is attributable to the
decrease in the equipment owned by the Partnership. At March 31, 1996, the
Partnership owned equipment with an aggregate original cost $965,000 as compared
to $3.4 million at March 31, 1995. The Partnership is currently in its
liquidation phase. As a result, the equipment portfolio will continue to decline
as the Partnership continues to liquidate its remaining equipment as it comes
off lease. The decreased gain on sale of equipment is the result of a decrease
in the amount of equipment sold during the three months ended March 31, 1996, as
compared to the same period in 1995.
Total expenses decreased by $9,000 during the three months ended March 31,
1996, as compared to the same period in 1995. The decrease during the three
months ended March 31, 1996, as compared to the same period in 1995, is due to a
$7,000 decrease in management fees, the result of decreased revenues earned by
the Partnership. The Partnership experienced decreases in most other expense
categories during the three months ended March 31, 1996, when compared to the
same period in 1995.
Because the Partnership is in its liquidation stage, it is not expected
that the Partnership will acquire any additional equipment. As a result, lease
related revenues and expenses are expected to continue to decline as the
portfolio is liquidated and the remaining equipment is re-leased at lower rental
rates. The Partnership will reach the end of its term on December 31, 1997.
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
re-leased at lower rental rates and eventually liquidated.
Earnings from joint ventures decreased by $11,000 during the three months
ended March 31, 1996, compared to the same period in 1995. This decrease was due
to a decrease in the earnings from an investment in a new joint venture that was
formed upon the receipt of a legal settlement during October of 1994.
Liquidity and Capital Resources
During the three months ended March 31, 1996, the net cash used by leasing and
financing activities was $130,000, as compared to the net cash used by leasing
and financing activities of $836,000 during the three months ended March 31,
1995. The use of cash during both periods was attributable to the decrease in
accounts payable and accrued expenses. The decrease in accounts payable and
accrued expenses is the result of the payment of liquidation fees payable to the
General Partner.
<PAGE>
Page 9 of 11
The distributions from joint ventures continues to be one of the primary
sources of cash generated by the Partnership. Cash distributions from joint
ventures decreased by $7,000 for the three months ended March 31, 1996, compared
to the same period in 1995.
As of March 31, 1996, the Partnership owned equipment held for lease with
a purchase price of $807,000 and a net book value of $3,000, as compared to
$2,388,000 and $0 at March 31, 1995, respectively. The General Partner is
actively engaged, on behalf of the Partnership, in remarketing and selling the
Partnership's off-lease equipment portfolio.
The Limited Partners received their annual distributions of $2,228,000
during both the three months ended March 31, 1996 and 1995. As a result, the
cumulative cash distributions to the Limited Partners are $75,915,000 and
$73,687,000 at March 31, 1996 and 1995, respectively. The General Partner did
not receive distributions during the three months ended March 31, 1996 and 1995.
Distributions are made on an annual basis with a distribution date of
January 15. The distribution made in January of 1996 was at approximately the
same rate as January of 1995. The distribution to be made in January of 1997 has
not yet been determined.
As the Partnership's asset portfolio continues to decline as a result of
the on-going liquidation of assets, it is expected that the cash generated from
operations will also decline. Cash generated from leasing and financing
operations has been and is anticipated to continue to be sufficient to meet the
Partnership's on-going operational expenses.
<PAGE>
Page 10 of 11
PHOENIX LEASING INCOME FUND VI
March 31, 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 11 of 11
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 INCOME FUND VI
------------------------------
(Registrant)
Date Title Signature
---- ----- ---------
May 13, 1996 Chief Financial Officer, /S/ PARITOSH K. CHOKSI
- --------------------- Senior Vice President -----------------------
and Treasurer of (Paritosh K. Choksi)
Phoenix Leasing Incorporated
General Partner
May 13, 1996 Senior Vice President, /S/ BRYANT J. TONG
- --------------------- Financial Operations ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Incorporated
General Partner
May 13, 1996 Senior Vice President of /S/ GARY W. MARTINEZ
- --------------------- Phoenix Leasing Incorporated ----------------------
General Partner (Gary W. Martinez)
May 13, 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 447
<SECURITIES> 143
<RECEIVABLES> 40
<ALLOWANCES> 12
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 689
<DEPRECIATION> 686
<TOTAL-ASSETS> 1,003
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (355)
<TOTAL-LIABILITY-AND-EQUITY> 1,003
<SALES> 0
<TOTAL-REVENUES> 68
<CGS> 0
<TOTAL-COSTS> 33
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 35
<INCOME-TAX> 0
<INCOME-CONTINUING> 35
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35
<EPS-PRIMARY> .10
<EPS-DILUTED> 0
</TABLE>
