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 Quarter Ended September 30, 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 0-11915
DELPHI FILM ASSOCIATES II
(Exact name of registrant as specified in its charter)
New York 13-3133772
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
666 Third Avenue, New York, New York 10017
(Address of principal executive offices) (Zip Code)
(212) 983-9040
(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____
<PAGE>
DELPHI FILM ASSOCIATES II
(A New York Limited Partnership)
BALANCE SHEETS
(000's Omitted)
Unaudited
<TABLE>
<CAPTION>
September December
30, 31,
1995 1994
<S> <C> <C>
ASSETS
Cash $ $
99 124
Short-Term Investments 333 545
Receivable from Columbia-Delphi
Productions II 388 374
Receivable from Tri-Star-Delphi
II
Productions
4 4
Total $ $
Assets 824 1,047
LIABILITIES AND PARTNERS'
CAPITAL
Liabilities:
Accrued Expenses and Accounts $ $
Payable 37 57
Total
Liabilities 37 57
Partners' Capital (Note 2):
General Partner 73 75
Limited Partners
714 915
Total
Partners' Capital 787 990
Total
Liabilities and Partners'
$ $
Capital 824 1,047
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
DELPHI FILM ASSOCIATES II
(A New York Limited Partnership)
STATEMENTS OF OPERATIONS
(000's Omitted, except net (loss) profit per unit)
Unaudited
<TABLE>
<CAPTION>
For
the Three Months For the Nine Months
Ended September 30, Ended September 30,
1995
1994 1995 1994
<S> <C> <C> <C> <C>
Interest Income $ $ $ $
6 6 20 16
Expenses:
Operating Expenses
75 27 237 95
75 27 237 95
Loss before Share of
Profit in
Motion Picture (69) (21) (217) (79)
Venture
Share of Profit in
Motion
Picture Venture--
Columbia-
Delphi Productions II
3 59 14 45
Net (Loss) Profit $ $ $ $
(66) 38 (203) (34)
Net (Loss) Profit Per
Unit of
Limited Partnership
Interest
(12,000 units) $ $ $ $
(6) 3 (17) (3)
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
DELPHI FILM ASSOCIATES II
(A New York Limited Partnership)
STATEMENTS OF CASH FLOWS
(000's Omitted)
Unaudited
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
1995 1994
<S>
<C> <C>
Cash Flow From Operating
Activities:
Net Loss $ $
(203) (34)
Adjustments to reconcile Net Loss
to net cash
used by operating activities:
Share of Profit in Motion (14) (45)
Picture Venture
Distributions from Joint 14 45
Venture
Changes in Assets and
Liabilities:
Increase in Receivables (14) (44)
from Joint Venture
Increase in Prepaid 0 (19)
Expenses
Decrease in Accrued
Expenses and
Accounts Payable
(20) (23)
Net Cash Used by
Operating Activities (237) (120)
Cash Flow From Investing
Activities:
Purchases of Short-Term (998) (594)
Investments
Redemptions of Short-Term
Investments 1,210 634
Net Cash Provided by
Investing Activities 212 40
Decrease In Cash (25) (80)
Cash at beginning of period
124 154
Cash at end of period $ $
99 74
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
DELPHI FILM ASSOCIATES II
(A New York Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
Unaudited
1. Basis of Presentation
The accompanying unaudited financial statements have
been prepared in accordance with generally accepted
accounting principles for interim financial information.
They do not include all information and notes required by
generally accepted accounting principles for complete
financial statements. There has been no material change in
the information disclosed in the notes to financial
statements of the Partnership included in the Annual Report
on Form 10-K for the year ended December 31, 1994. The
information furnished includes all adjustments which are, in
the opinion of management, necessary to present fairly the
financial position of the Partnership as of September 30,
1995 and the results of operations and cash flows for the
periods ended September 30, 1995 and 1994. Results of
operations for the period ended September 30, 1995 are not
necessarily indicative of the results that may be expected
for the entire fiscal year.
2. Current Operations
The Partnership owns an interest in thirty-five films.
All of these films have completed their theatrical release
and are being distributed in various ancillary markets.
For the purpose of computing the net (loss) profit per
unit, the net (loss) profit for the period is allocated 99%
to the limited partners and 1% to the General Partner.
3. Additional Information
Additional information, including the audited year end
1994 Financial Statements and the Summary of Significant
Accounting Policies, is included in the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1994 on
file with the Securities and Exchange Commission.
<PAGE>
Management's Discussion and Analysis of Financial Condition
And Results of Operations
a. Financial Condition
The Partnership has fully satisfied its commitments to
contribute funds to the Joint Ventures for the production
of, and acquisition of interests in, films.
At September 30, 1995, the Partnership held cash of
approximately $99,000 and short-term investments of
approximately $333,000.
The Partnership commenced cash distributions to its
partners in December 1984. Distributions through September
30, 1995 have aggregated $4,475 per unit (89.5% of the
limited partners' original $5,000 investment in the
Partnership).
In July 1990, the Partnership received approximately
$6,737,000 from the Columbia Joint Venture and approximately
$3,857,000 from the Tri-Star Joint Venture as a Distribution
Fee Reduction Payment in respect of each Joint Venture's
films, other than sequels. The Distributors are entitled to
recoup these Payments, with interest, from amounts otherwise
payable to the Partnership for the films to which the
Payments relate. The Distributors are not expected to fully
recoup these Payments, and it is therefore currently
expected that the Partnership will not receive any
additional revenue with respect to the Joint Venture films
(with the exception of "The Karate Kid: Part II", the
Additional Films and possibly certain amounts related to
film audits).
The Partnership has been evaluating the continued
ownership and operations of its film assets as well as the
possible sale of such assets, and has determined to pursue
opportunities for the possible sale of its assets. In
furtherance of such, the Partnership has been engaging in
negotiations with its joint venture partners for the
possible sale to them of the Partnership's film assets
currently being distributed by each of them, respectively,
with the intention of consummating such sales in the fourth
quarter of 1995. A sale of the film assets would include
all films, whether or not the Distributor has fully recouped
the Distribution Fee Reduction Payment. If such sales were
to be consummated in the fourth quarter of 1995, it is
possible that the Partnership would be liquidated by year-
end 1995. No assurance can be given, however, that such
sales will be consummated or of the timing for such sales or
liquidation. Upon the ultimate sale of the film assets, the
Partnership will commence taking steps to liquidate and
dissolve. Since the Partnership is not anticipating
significant future revenues, the Partnership's future
operating expenses must be met from current cash and short-
term investments. As a result, cash distributions to
partners are no longer being made on a quarterly basis.
Cash distributions as a result of the liquidation of the
Partnership may be made to the Partners to the extent, if
any, the proceeds from the sale of the Partnership's
interest in its film assets in connection with the
liquidation are in excess of the Distributor's entitlement
to the recoupments described above net of a reserve for the
Partnership's operating expenses.
b. Results of Operations
The Partnership's operating results are primarily
dependent upon the operating results of the Joint Ventures'
and are significantly impacted by the Joint Ventures'
policies.
The performance of each film is based upon the amount
expended for production and other costs associated with a
film and the revenue generated by a film. The amount and
timing of revenues generated by each film is dependent upon
the degree of acceptance by the consumer public and the
particular ancillary market in which the film is currently
being exhibited.
Additionally, each Joint Venture has recorded income
with respect to the reduction of distribution fees which has
allowed it to recover its investment in films.
For the three months ended September 30, 1995, the
Columbia Joint Venture had
a net profit of which the Partnership's share was $3,000 due
primarily to the profitable results of one film. The Tri-
Star Joint Venture had a net profit of which the
Partnership's share was $0. In addition, the Partnership
earned approximately $6,000 of interest income from its
short-term investments and incurred approximately $75,000 of
expenses from its operations, resulting in an overall net
loss to the Partnership of approximately $66,000.
For the three months ended September 30, 1994, the
Columbia Joint Venture had a net loss; however, the
Partnership reported a net profit from that Joint Venture of
approximately $59,000 due primarily to the profitable
results of one film. The Tri-Star Joint Venture had a net
profit of which the Partnership's share was $0. In
addition, the Partnership earned approximately $6,000 of
interest income from its short-term investments and incurred
approximately $27,000 of expenses from its operations,
resulting in an overall net profit to the Partnership of
approximately $38,000.
For the nine months ended September 30, 1995, the
Columbia Joint Venture had a net profit of which the
Partnership's share was approximately $14,000 due primarily
to the profitable results of one film. The Tri-Star Joint
Venture had a net profit of which the Partnership's share
was $0. In addition, the Partnership earned approximately
$20,000 of interest income from its short-term investments
and incurred approximately $237,000 of expenses from its
operations, resulting in an overall net loss to the
Partnership of approximately $203,000.
For the nine months ended September 30, 1994, the
Columbia Joint Venture had a net loss; however, the the
Partnership reported a net profit from that Joint Venture of
approximately $45,000 due primarily to the profitable
results of one film. The Tri-Star Joint Venture had a net
profit of which the Partnership's share was $0. In
addition, the Partnership earned approximately $16,000 of
interest income from its short-term investments and incurred
approximately $95,000 of expenses from its operations,
resulting in an overall net loss to the Partnership of
approximately $34,000.
Interest income for the three month period ended
September 30, 1995 as compared with the corresponding period
in 1994 was unchanged.
The increase in interest income for the nine month
period ended September 30, 1995 as compared with the
corresponding period in 1994 is due primarily to higher
interest rates earned on short-term investments during 1995.
The increase in the Partnership's Operating Expenses
for the three and nine month periods ended September 30,
1995 as compared with the corresponding periods in 1994 is
primarily due to an increase in the out-of-pocket expenses
incurred in connection with the ongoing management of the
Partnership including the evaluation of the film assets for
a possible sale.
<PAGE>
COLUMBIA-DELPHI PRODUCTIONS II
(A Joint Venture)
BALANCE SHEETS
(000's Omitted)
Unaudited
<TABLE>
<CAPTION>
September December
30, 31,
1
1995 994
<S> <C> <C>
ASSETS
Motion Picture Production and
Advertising
Costs, net of accumulated
amortization
of $285,918 and $285,9l8, $ $
respectively 0 0
Motion Picture Costs Recoverable
from
Distribution Fees 0 0
Receivable from Columbia
Pictures
(Distributor)
7,181 18,503
Total $ $
Assets 7,181 18,503
LIABILITIES AND VENTURERS'
CAPITAL
Liabilities:
Payable to Columbia Pictures $ $
Industries, Inc. 6,793 18,129
Payable to Delphi Film
Associates II 388 374
Total
Liabilities 7,181 18,503
Venturers' Capital:
Columbia Pictures Industries, 0 0
Inc.
Delphi Film Associates II
0 0
Total
Venturers' Capital 0 0
Total
Liabilities and Venturers'
$ $
Capital 7,181 18,503
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
COLUMBIA - DELPHI PRODUCTIONS II
(A Joint Venture)
STATEMENTS OF OPERATIONS
(000's Omitted)
Unaudited
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Revenues (Loss) From
Motion
Picture Exploitation $ $ $ $
21 (2,101 3,308 (302)
)
Accrued Distribution Fee
Recapture
0 (394) 0 (497)
Net Income (Loss) $ $ $ $
21 (2,495 3,308 (799)
)
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
COLUMBIA - DELPHI PRODUCTIONS II
(A Joint Venture)
STATEMENTS OF CASH FLOWS
(000's Omitted)
Unaudited
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
1995 1994
<S>
<C> <C>
Cash Flow From Operating
Activities:
Net Income (Loss) $ $
3,308 (799)
Adjustments to reconcile Net
Income (Loss) to
net cash provided by operating
activities:
Accrued Distributions (3,308) 799
toVenturers
Changes in Assets and
Liabilities:
Increase in Payable to
Delphi Film
Associates II 14 44
Decrease in Payable to
Columbia Pictures
Industries, Inc., net (11,336) (843)
Decrease in Receivable from
Columbia
Pictures (Distributor) 11,322 302
Decrease in Motion Picture
Costs
Recoverable from
Distribution Fees 0 497
Net Cash Provided by Operating
Activities 0 0
Net Change in Cash 0 0
Cash at beginning of period
0 0
Cash at end of period $ $
0 0
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
COLUMBIA - DELPHI PRODUCTIONS II
(A Joint Venture)
NOTES TO FINANCIAL STATEMENTS
Unaudited
1. Basis of Presentation
The accompanying unaudited financial statements have
been prepared in accordance with generally accepted
accounting principles for interim financial information.
They do not include all information and notes required by
generally accepted accounting principles for complete
financial statements. There has been no material change in
the information disclosed in the notes to financial
statements of the Joint Venture included in the Annual
Report on Form 10-K of Delphi Film Associates II (the
"Partnership") for the year ended December 31, 1994. The
information furnished includes all adjustments which are, in
the opinion of management, necessary to present fairly the
financial position of the Joint Venture as of September 30,
1995 and the results of its operations and cash flows for
the periods ended September 30, 1995 and 1994. Results of
operations for the period ended September 30, 1995 are not
necessarily indicative of the results that may be expected
for the entire fiscal year.
2. Current Operations
All twenty-four films in which the Joint Venture has an
interest have completed their theatrical release and are
being distributed in various ancillary markets. For the
three and nine month periods ended September 30, 1995 the
Joint Venture is reporting net revenue of $21,000 and
$3,308,000, respectively, due primarily to the "The Karate
Kid: Part II" and the "The Karate Kid: Part III" in the pay
television, worldwide free television and home video
markets.
For the three and nine month periods ended September
30, 1994, the Joint Venture reported a net loss from motion
picture exploitation of $2,101,000 and $302,000,
respectively, due primarily to the decline in the
performance of "The Karate Kid: Part III" in the
international theatrical market.
3. Additional Information
Additional information, including the audited year end
1994 Financial Statements and the Summary of Significant
Accounting Policies, is included in the Annual Report on
Form 10-K of the Partnership for the year ended December 31,
1994.
<PAGE>
TRI-STAR -DELPHI II PRODUCTIONS
(A Joint Venture)
BALANCE SHEETS
(000's Omitted)
Unaudited
<TABLE>
<CAPTION>
September December
30, 31,
1 1
995 994
<S> <C> <C>
ASSETS
Motion Picture Production Costs,
net of
accumulated amortization of
$77,913
and $77,887, respectively $ $
46 72
Motion Picture Costs Recoverable
from
Distribution Fees 4,607 4,353
Receivable from TriStar
Pictures, Inc.
(Distributor)
781 627
Total $ 5,434 $
Assets 5,052
LIABILITIES AND VENTURERS'
CAPITAL
Liabilities:
Payable to TriStar Pictures, $ 5,384 $
Inc., net 4,976
Payable to Delphi Film
Associates II 4 4
Total 5,388
Liabilities 4,980
Venturers' Capital:
TriStar Pictures, Inc. 46 72
Delphi Film Associates II
0 0
Total
Venturers' Capital 46 72
Total
Liabilities and Venturers'
$ $
Capital 5,434 5,052
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
TRI-STAR-DELPHI II PRODUCTIONS
(A Joint Venture)
STATEMENTS OF OPERATIONS
(000's Omitted)
Unaudited
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Revenue From Motion
Picture
Exploitation $ $ $ $
189 419 1,146 1,047
Less: Amortization of
Motion
Picture
Production Costs 0 143 26 216
Income from Operations 189 276 831
1,120
Accrued Distribution Fee
Reduction
0 3 254 80
Net Income $ $ $ $
189 279 1,374 911
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
TRI-STAR - DELPHI II PRODUCTIONS
(A Joint Venture)
STATEMENTS OF CASH FLOWS
(000's Omitted)
Unaudited
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
1995 1994
<S>
<C> <C>
Cash Flow From Operating
Activities:
Net Income $ $
1,374 911
Adjustments to reconcile Net
Income to net cash
provided by operating
activities:
Amortization of Motion Picture
Production
Costs 26 216
Accrued Distributions (408) 6,632
toVenturers
Changes in Assets and
Liabilities:
Increase (Decrease) in
Payable to TriStar
Pictures, Inc., net 408 (6,632)
(Increase) Decrease in
Receivable from
TriStar Pictures, Inc. (154) 6,712
(Distributor)
Increase in Motion Picture
Costs
Recoverable from
Distribution Fees (254) (80)
Net Cash Provided by
Operating Activities 992 7,759
Cash Flow From Financing
Activities:
Distribution to Venturers
(992) (7,759)
Net Cash Used by
Financing Activities (992) (7,759)
Net Change in Cash 0 0
Cash at beginning of period
0 0
Cash at end of period $ $
0 0
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
TRI-STAR - DELPHI II PRODUCTIONS
(A Joint Venture)
NOTES TO FINANCIAL STATEMENTS
Unaudited
1. Basis of Presentation
The accompanying unaudited financial statements have
been prepared in accordance with generally accepted
accounting principles for interim financial information.
They do not include all information and notes required by
generally accepted accounting principles for complete
financial statements. There has been no material change in
the information disclosed in the notes to financial
statements of the Joint Venture included in the Annual
Report on Form 10-K of Delphi Film Associates II (the
"Partnership") for the year ended December 31, 1994. The
information furnished includes all adjustments which are, in
the opinion of management, necessary to present fairly the
financial position of the Joint Venture as of September 30,
1995 and the results of its operations and cash flows for
the periods ended September 30, 1995 and 1994. Results of
operations for the period ended September 30, 1995 are not
necessarily indicative of the results that may be expected
for the entire fiscal year.
2. Current Operations
All eleven films in which the Joint Venture has an
interest have completed their theatrical release and are
being distributed in various ancillary markets. For the
three
and nine month periods ended September 30, 1995, the Joint
Venture is reporting net revenue of $189,000 and
$1,146,000, respectively, due primarily to the performance
of its films in the pay television, home video and
worldwide free television markets. For the nine month
period ended September 30, 1995, the Joint Venture has
recorded an increase in the accrued Distribution Fee
Reduction Payment of $254,000 due to an increase in the
estimated distribution fee to be earned by the Distributor.
For the three and nine month periods ended September
30, 1994, the Joint Venture reported net revenue of $419,000
and $1,047,000, respectively, due primarily to the
performance of films in the home video and pay television
markets. For the nine month period ended September 30,
1994, the Joint Venture recorded an increase in the accrued
Distribution Fee Reduction Payment of $80,000 due to an
increase in the estimated distribution fee to be earned by
the Distributor.
3. Additional Information
Additional information, including the audited year end
1994 Financial Statements and the Summary of Significant
Accounting Policies, is included in the Annual Report on
Form 10-K of the Partnership for the year ended December 31,
1994.
<PAGE>
PART II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3.Defaults Upon Senior Securities
None
Item 4.Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6.Exhibits and Reports on Form 8-K
A). Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBERDESCRIPTIONPAGE NUMBER
<S> <C>
<C>
27 Financial Data Schedule
</TABLE>
B). Reports on Form 8-K
None
<PAGE>
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.
DELPHI FILM ASSOCIATES II
A New York Limited Partnership
By: THE DELPHI ORGANIZATION,
General Partner
By: ML Film Entertainment,
Inc.,
Managing Partner
November 9, 1995 /s/ Diane T.
Herte
Date Diane T. Herte
Treasurer of the Managing
Partner of the
General Partner
(principal financial officer
and principal
accounting officer of the
Registrant)
November 9, 1995 /s/ Steven N. Baumgarten
Date Steven N. Baumgarten
Director and Vice President of
the Managing Partner
of the General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from Balance Sheets and Statement of
Operations for the third quarter ended September 30, 1995
Form 10Q of Delphi Film Associates II and is qualified in
its entirety by reference to such financial statements.
<S>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 99,000
<SECURITIES> 333,000
<RECEIVABLES> 392,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 824,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 787,000
<TOTAL-LIABILITY-AND-EQUITY> 824,000
<SALES> 0
<TOTAL-REVENUES> 20,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 237,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (203,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (203,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (203,000)
<EPS-PRIMARY> (17.00)
<EPS-DILUTED> 0
</TABLE>
