UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the United States Securities Exchange Act of 1934
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For The Quarter Ended June 30, 1996 Commission File No. 2-84106
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(Exact name of registrant as specified in its charter)
Massachusetts 04-2794296
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Financial Center, 21st Floor, Boston, MA 02111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 482-8000
------------------------------
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
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 ___
There are no Exhibits.
Page 1 of 11
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WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
<S> <C> <C>
INDEX Page No.
Part I. FINANCIAL INFORMATION
Financial Statements
Balance Sheets as of June 30, 1996 and December 31, 1995 3
Statements of Operations For the Quarters Ended
June 30, 1996 and 1995 and the Six Months Ended
June 30, 1996 and 1995 4
Statements of Cash Flows For the Six Months Ended
June 30, 1996 and 1995 5
Notes to Financial Statements 6 - 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 - 9
Part II. OTHER INFORMATION
Items 1 - 6 10
Signature 11
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PART I. FINANCIAL INFORMATION
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Balance Sheets
Assets (Unaudited) (Audited)
6/30/96 12/31/95
<S> <C> <C>
Investment property, at cost:
Computer equipment $ - $ -
Less accumulated depreciation - -
---------------- ----------------
Investment property, net - -
Cash and cash equivalents 93,874 75,688
Accounts receivable - affiliates, net (notes 2 and 4) 1,555 -
---------------- -----------------
Total assets $ 95,429 $ 75,688
================ ================
Partners' Equity
Partners' equity:
General Partner:
Capital contribution $ 1,000 $ 1,000
Cumulative net income 1,259,006 1,258,019
Cumulative cash distributions (1,259,019) (1,259,019)
---------------- ----------------
987 -
---------------- ----------------
Limited Partners (36,463 units):
Capital contribution, net of offering costs 16,259,064 16,259,064
Cumulative net income 7,756,566 7,737,812
Cumulative cash distributions (23,921,188) (23,921,188)
---------------- ----------------
94,422 75,688
---------------- ----------------
Total partners' equity $ 95,429 $ 75,688
================ ================
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See accompanying notes to financial statements.
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<CAPTION>
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Statements of Operations
(Unaudited)
Quarters Ended Six Months Ended
June 30, June 30,
------------------------------- ---------------------------------
1996 1995 1996 1995
------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Revenue:
Rental income $ - $ 38,411 $ - $ 133,676
Interest income 797 2,853 1,763 8,290
Other income - 8,530 -
Net gain on sale
of equipment - 33,060 - 61,057
Recovery of unsecured
pre-petition claim (note 4) 6,673 44,593 10,208 44,593
------------ ------------ ------------ ------------
Total revenue 7,470 118,917 20,501 247,616
------------ ------------ ------------ ------------
Costs and expenses:
Depreciation - 22,118 - 47,414
Interest - - - 43
Related party expenses (note 3):
Management fees - 2,618 - 8,058
General and administrative 410 22,694 760 39,785
Reversal of provision for
doubtful accounts - (23,334) - (24,448)
------------ ------------ ------------ ------------
Total costs and expenses 410 24,096 760 70,852
------------ ------------ ------------ ------------
Net income $ 7,060 $ 94,821 $ 19,741 $ 176,764
============ ============ ============ ============
Net income per Limited
Partnership Unit $ 0.18 $ 2.34 $ 0.51 $ 3.25
============ ============ ============ ============
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See accompanying notes to financial statements.
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<CAPTION>
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Statements of Cash Flows
For the Six Months Ended June 30, 1996 and 1995
(Unaudited)
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 19,741 $ 176,764
------------ -------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation - 47,414
Reversal of provision for doubtful accounts - (24,448)
Net gain on sale of equipment - (61,057)
Net increase in current assets (1,555) (28,254)
Net decrease in current liabilities - (57,340)
------------ -------------
Total adjustments (1,555) (123,685)
------------ -------------
Net cash provided by operating activities 18,186 53,079
------------ -------------
Cash flows from investing activities:
Proceeds from sales of investment property - 69,308
------------ -------------
Net cash provided by investing activities - 69,308
------------ -------------
Cash flows from financing activities:
Cash distributions to partners - (422,203)
------------ -------------
Net cash used in financing activities - (422,203)
------------ -------------
Net increase (decrease) in cash and cash equivalents 18,186 (299,816)
Cash and cash equivalents at beginning of period 75,688 434,029
------------ -------------
Cash and cash equivalents at end of period $ 93,874 $ 134,213
============ =============
Supplemental cash flow information:
Interest paid during the period $ - $ 1,120
============ =============
</TABLE>
See accompanying notes to financial statements.
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WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Notes to Financial Statements
For the Six Months Ended June 30, 1996 and June 30, 1995
(Unaudited)
(1) Organization and Partnership Matters
The foregoing financial statements of Wellesley Lease Income Limited Partnership
D (the "Partnership") have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission for Form 10-Q and reflect
all adjustments which are, in the opinion of management, necessary for a fair
presentation of the results for the interim periods presented. Pursuant to such
rules and regulations, certain note disclosures which are normally required
under generally accepted accounting principles have been omitted. It is
recommended that these financial statements be read in conjunction with the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1995.
(2) Significant Accounting Policies
Allowance for Doubtful Accounts
The financial statements include an allowance for estimated losses on receivable
balances. The allowance for doubtful accounts is based on past write off
experience and an evaluation of potential uncollectible accounts within the
current receivable balances. Receivable balances which are determined to be
uncollectible are charged against the allowance and subsequent recoveries, if
any, are credited to the allowance. At June 30, 1996 and December 31, 1995, the
allowance for doubtful accounts included in accounts receivable - affiliates was
$12,606 and $22,814, respectively.
(3) Related Party Transactions
Fees, commissions and other expenses paid or accrued by the Partnership to the
General Partner or affiliates of the General Partner for the six months ended
June 30, 1996 and 1995 are as follows:
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1996 1995
---- ----
<S> <C> <C>
Management fees $ - $ 8,058
Reimbursable expenses paid - 41,470
------------ -------------
$ - $ 49,528
============ =============
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Under the terms of the Partnership Agreement, the General Partner is entitled to
an equipment acquisition fee of 3% of the purchase price paid by the Partnership
for the equipment. The General Partner is also entitled to a management fee
equal to 7% of the monthly rental billings collected. The Partnership reimburses
the General Partner and its affiliates for certain expenses incurred by them in
connection with the operation of the Partnership.
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WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Notes to Financial Statements
For the Six Months Ended June 30, 1996 and June 30, 1995
(Unaudited)
(4) Bankruptcy of Continental Information Systems Corporation
On January 19, 1996 and April 19, 1996, respectively, the Partnership received
the fourth and fifth distributions from the Trustee of the Liquidating Estate,
et al, ("the Trustee") with respect to the unsecured pre-petition claim. The
fourth and fifth distributions consisted of cash proceeds of $3,535 and $6,673,
respectively. Following the Trustee's fifth distribution, the Partnership has a
remaining unsecured pre-petition claim balance of $12,606 as of June 30, 1996
(see note 5).
(5) Subsequent Events
On July 19, 1996, the Partnership received the sixth distribution from the
Trustee with respect to the net unsecured pre-petition claim. The distribution
consisted of cash proceeds of $3,434 and 69 shares of common stock in
Continental Information Systems Corporation ("CISC"). Following the Trustee's
sixth distribution, the Partnership has a remaining unsecured pre-petition claim
balance of $9,000 as of July 19, 1996. The General Partner anticipates that the
Trustee will make future distributions on the remaining outstanding claim
balance, although it is not possible at this time to determine when these
distributions will be made.
<PAGE>
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Unaudited)
Results of Operations
The following discussion relates to the Partnership's operations for the quarter
and six month periods ended June 30, 1996 compared to the same periods in 1995.
The Partnership realized net income of $7,060 and $94,821 for the three months
ended June 30, 1996, and 1995, respectively. Due to the Partnership's sale of
the equipment portfolio and the related leases during August, 1995, the
Partnership did not recognize any rental income during 1996. Interest income
decreased as a result of lower average short-term investment balances held
during the current quarter. The recovery of the unsecured pre-petition claim in
the amount of $6,673 for the quarter ended June 30, 1996, was the result of the
Trustee's fifth distribution on the fully reserved unsecured pre-petition
receivable (for further discussion refer to note 4 to the financial statements).
Total costs and expenses decreased significantly in the current quarter as a
result of the sale of the equipment portfolio in August, 1995. The current
quarter general and administrative expenses primarily pertained to filing fees
for the Commonwealth of Massachusetts. The significant reversal of provision for
doubtful accounts in the quarter ended June 30, 1995, is due to successful
collection efforts made on delinquent rents receivable.
The Partnership realized net income of $19,741 and $176,764 for the six month
periods ended June 30, 1996 and 1995, respectively. As discussed in the quarter
analysis above, the Partnership's sale of the equipment portfolio and the
related leases during August, 1995, resulted in the Partnership not recognizing
any rental income during 1996. Interest income decreased between the six month
periods as a result of lower average short-term balances held during the current
six month period. The $8,530 of other income recognized in 1996 resulted from
the combination of a $2,320 overaccrual of broker fees that had been originally
offset against rental income and a $6,210 reversal of management fees, which
resulted from an overstated reserve set up in a prior period. The recovery of
the unsecured pre-petition claim of $10,208, was the result of the Trustee's
fourth and fifth distributions on the fully reserved unsecured pre-petition
receivable received during the current year (for further discussion refer to
note 4 to the financial statements).
As discussed in the quarter analysis above, total costs and expenses decreased
significantly between the six month periods. As discussed above, the decrease is
due to the sale of equipment portfolio in August, 1995. General and
administrative expenses for 1996 primarily pertained to filing fees for the
Commonwealth of Massachusetts and U.S. Securities and Exchange Commission. As
mentioned above, the Partnership reversed a significant portion of the provision
for doubtful accounts in the first six months of the prior year as a result of
successful collection efforts of delinquent rents receivable.
The Partnership had net income per Limited Partnership Unit of $0.18 and $2.34
for the quarters ended June 30, 1996 and 1995, respectively, and $0.51 and $3.25
for the six months ended June 30, 1996 and 1995, respectively.
<PAGE>
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Unaudited)
Liquidity and Capital Resources
During the fourth quarter of 1994, the General Partner announced its intentions
of winding down the operations of the Partnership beginning in 1995. As of
August 31, 1995, all of the assets had been sold with the exception of the
unsecured pre-petition claim receivable and the common stock in CISC received
from the Trustee. The sales proceeds generated from the sale of the assets were
accumulated to settle all outstanding liabilities and make a distribution on
November 28, 1995, prior to the receipt of the final Trustee settlement
distribution. All future cash distributions have been halted until the remaining
claim balance has been settled and any stock received, sold. At that time, a
final distribution shall be made to the partners. As discussed in notes 4 and 5
to the financial statements, the Partnership received the fourth, fifth and
sixth distributions from the Trustee, with respect to the unsecured pre-petition
claim. The distributions consisted of total cash proceeds of $13,642 and 69
shares of common stock in CISC. Following the Trustee's sixth distribution, the
Partnership has a remaining unsecured pre-petition claim of $9,000 as of July
19, 1996.
As discussed above, the Partnership is awaiting the settlement of its
outstanding unsecured pre-petition claim balance in order to make the final
distribution to the partners. The Partnership will not be terminated until the
unsecured pre-petition claim against CIS Corporation has been settled and the
remaining proceeds have been distributed to the partners (see note 4 to the
financial statements). The effects of inflation have not been significant to the
Partnership and are not expected to have a material impact in future periods.
On January 9, 1996, TLP Holding LLC purchased all the common stock of TLP
Leasing Programs, Inc. from CMI Holding Co. Under the new ownership, it is
expected that TLP Leasing Programs, Inc. will continue to operate in the same
manner of business as it has in the past.
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PART II. OTHER INFORMATION
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
<S> <C>
Item 1. Legal Proceedings
Response: None
Item 2. Changes in the Rights of the Partnership's Security Holders
Response: None
Item 3. Defaults by the Partnership on its Senior Securities
Response: None
Item 4. Results of Votes of Security Holders
Response: None
Item 5. Other Information
Response: None
Item 6. Exhibits and Reports on Form 8-K
Response:
A. None
B. None
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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.
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(Registrant)
By: Wellesley Leasing Partnership,
its General Partner
By: TLP Leasing Programs, Inc.,
one of its Corporate General Partners
Date: August 13, 1996
By: Arthur P. Beecher,
President
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000720308
<NAME> WELLESLEY I-D 10-Q 6/30/96
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 93,874
<SECURITIES> 0
<RECEIVABLES> 14,161
<ALLOWANCES> 12,606
<INVENTORY> 0
<CURRENT-ASSETS> 95,429
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 95,429
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 16,260,064
0
0
<OTHER-SE> (16,164,635)
<TOTAL-LIABILITY-AND-EQUITY> 95,429
<SALES> 0
<TOTAL-REVENUES> 20,501
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 760
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 19,741
<INCOME-TAX> 0
<INCOME-CONTINUING> 19,741
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,741
<EPS-PRIMARY> 0.51
<EPS-DILUTED> 0
</TABLE>
