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
_______________________
For Quarter Ended March 31, 1995 Commission File No. 2-89177
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP II-D
(Exact name of registrant as specified in its charter)
Massachusetts 04-2819913
(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 12
(Page 2)
<TABLE>
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP II-D
(A Massachusetts Limited Partnership)
<CAPTION>
INDEX Page No.
Part I. FINANCIAL INFORMATION
Financial Statements
<S> <C>
Balance Sheets as of March 31, 1995
and December 31, 1994 3
Statements of Operations For the Quarters Ended
March 31, 1995 and 1994 4
Statements of Cash Flows For the Quarters Ended
March 31, 1995 and 1994 5
Notes to Financial Statements 6 - 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 9
Computer Equipment Portfolio 10
Part II. OTHER INFORMATION
Items 1 - 6 11
Signature 12
</TABLE>
(Page 3)
<TABLE>
PART I. FINANCIAL INFORMATION
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP II-D
(A Massachusetts Limited Partnership)
Balance Sheets
<CAPTION>
Assets
(Unaudited) (Audited)
3/31/95 12/31/94
<S> <C> <C>
Investment property, at cost (note 3):
Computer equipment $ 901,473 $ 966,011
Less accumulated depreciation 865,505 924,484
-------------------------
Investment property, net 35,968 41,527
Cash and cash equivalents 341,842 871,445
Rents receivable, net of allowance for
doubtful accounts (note 2) 4,332 2,946
-------------------------
Total assets $ 382,142 $ 915,918
-------------------------
-------------------------
Liabilities and Partners' Equity
Liabilities:
<S> <C> <C>
Accounts payable and accrued
expenses - affiliates (note 5) $ 30,002 $ 43,219
Accrued expenses 3,657 11,901
Accounts payable 51,819 58,420
Distribution payable 28,974 -
Unearned rental revenue 4,966 4,769
-------------------------
Total liabilities 119,418 118,309
-------------------------
Partners' equity:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 1,470,799 1,414,723
Cumulative cash distributions (1,471,799) (1,442,825)
- (27,102)
-------------------------
Limited Partners (55,050 units):
Capital contribution, net of offering costs 24,523,033 24,523,033
Cumulative net income 3,703,992 3,715,479
Cumulative cash distributions (27,964,301) (27,413,801)
-------------------------
262,724 824,711
-------------------------
Total partners' equity 262,724 797,609
-------------------------
Total liabilities and partners' equity $ 382,142 $ 915,918
-------------------------
-------------------------
</TABLE>
See accompanying notes to financial statements.
(Page 4)
<TABLE>
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP II-D
(A Massachusetts Limited Partnership)
Statements of Operations
For the Quarters Ended March 31, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
Revenue:
<S> <C> <C>
Rental income $ 71,048 $ 94,495
Interest income 10,517 232
Net gain on sale of equipment 1,755 6,455
----------------------
Total revenue 83,320 101,182
Costs and expenses:
Depreciation 12,056 37,770
Interest 43 767
Related party expenses (note 5):
Management fees 2,984 6,652
General and administrative 23,648 25,878
----------------------
Total costs and expenses 38,731 71,067
----------------------
Net income $ 44,589 $ 30,115
----------------------
----------------------
Net loss per Limited
Partnership Unit $ (0.21) $ (6.03)
----------------------
----------------------
</TABLE>
See accompanying notes to financial statements.
(Page 5)
<TABLE>
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP II-D
(A Massachusetts Limited Partnership)
Statements of Cash Flows
For the Quarters Ended March 31, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
Cash flows from operating activities:
<S> <C> <C>
Net income $ 44,589 $ 30,115
---------------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 12,056 37,770
Net gain on sale of equipment (1,755) (6,455)
Net increase in current assets (1,386) (5,549)
Net decrease in current liabilities (27,865) (4,179)
---------------------
Total adjustments (18,950) 21,587
---------------------
Net cash provided by operating activities 25,639 51,702
---------------------
Cash flows from investing activities:
Net (refund of) proceeds from sales
of investment property (4,742) 26,613
---------------------
Net cash (used in) provided by
investing activities (4,742) 26,613
---------------------
Cash flows from financing activities:
<S> <C> <C>
Principal payments on notes payable - affiliate - (13,602)
Cash distributions to partners (550,500) (72,435)
---------------------
Net cash used in financing activities (550,500) (86,037)
---------------------
Net decrease in cash and cash equivalents (529,603) (7,722)
Cash and cash equivalents at beginning of period 871,445 43,184
----------------------
Cash and cash equivalents at end of period $ 341,842 $ 35,462
----------------------
----------------------
Supplemental cash flow information:
Interest paid during the period $ 1,120 $ 767
----------------------
----------------------
</TABLE>
See accompanying notes to financial statements.
(Page 6)
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP II-D
(A Massachusetts Limited Partnership)
Notes to Financial Statements
(Unaudited)
(1) Organization and Partnership Matters
The foregoing financial statements of Wellesley Lease Income
Limited Partnership II-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,
1994.
(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 March 31, 1995 and December 31, 1994, the
allowance for doubtful accounts included in rents receivable
$8,426, respectively.
Reclassifications
Certain prior year financial statement items have been
reclassified to conform with the current year's financial
statement presentation.
(3) Investment Property
At March 31, 1995, the Partnership owned computer equipment
with a depreciated cost basis of $17,184, subject to
existing leases, and equipment with a depreciated cost basis
of $18,784 in inventory, awaiting re-lease or sale. All
purchases of computer equipment are subject to a 3%
acquisition fee paid to the General Partner.
(Page 7)
(4) 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 quarters ended March 31, 1995 and
1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Management fees $ 2,984 $ 6,652
Reimbursable expenses paid 22,855 23,083
-------------------
$ 25,839 $ 29,735
-------------------
-------------------
</TABLE>
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. Also, the Partnership reimburses the General
Partner and its affiliates for certain expenses incurred by
them in connection with the operation of the Partnership.
(Page 8)
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP II-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 ended March 31, 1995 in
comparison to the quarter ended March 31, 1994.
The Partnership realized net income of $44,589 and $30,115
for the quarters ended March 31, 1995 and 1994,
respectively. Rental income decreased $23,447 or 25%
between the three month periods. The decrease is primarily
due to lower rental rates on equipment lease extensions and
remarketings resulting after the initial lease term expires
and due to a decrease in the overall size of the equipment
portfolio. Interest income increased as a result of higher
average short-term investment balances.
Total costs and expenses decreased 46% in 1995 primarily as
a result of lower depreciation expense. Depreciation
expense decreased due to a large portion of the equipment
portfolio becoming fully depreciated and the overall
reduction in the equipment portfolio. Management fees
expense decreased in relation to the decline in rental
income.
The Partnership recorded net loss per Limited Partnership
Unit of $0.21 and $6.03 for the quarters ended March 31,
1995 and 1994, respectively.
Liquidity and Capital Resources
For the quarter ended March 31, 1995, rental revenue
generated from operating leases was the primary source of
funds for the Partnership. As equipment leases terminate,
the General Partner determines if the equipment will be
extended to the same lessee, remarketed to another lessee,
or if it is less marketable, sold. This decision is made
upon analyzing which option would generate the most
favorable results.
Rental income will continue to decrease due to two factors.
The first factor is the rate obtained when the original
leases expire and are remarketed at a lower rate. Typically
the remarketed rates are lower due to the decrease in useful
life of the equipment. Secondly, the increasing change of
technology in the computer industry usually decreases the
demand for older equipment, thus increasing the possibility
of obsolescence. Both of these factors together will cause
remarketed rates to be lower than original rates and will
cause certain leases to terminate upon expiration.
(Page 9)
During the fourth quarter of 1994, the General Partner
announced its intentions of winding down the operations of
the Partnership beginning in 1995. It is anticipated that
substantially all of the assets will be liquidated and the
proceeds will be used to settle all outstanding liabilities
and make a final distribution. The Partnership will not be
terminated until the net unsecured pre-petition claim
against CMI has been settled and the remaining proceeds have
been distributed to the Partners.
The Partnership's investing activities for the quarter
resulted in equipment sales with a cost basis of $65,138.
During the current quarter, there was a refund of sales
proceeds related to the return of damaged equipment. The
refund resulted in a net refund of sales proceeds of $4,742
for which the partnership has billed the original lessee
for damages. Associated with the equipment sales was a
$5,897 charge off of losses against the reserve, initially
set up in prior periods for estimated losses on the
ultimate disposition of equipment. The Partnership has
no material capital expenditure commitments and will not
purchase equipment in the future as the Partnership has
reached the end of its reinvestment period and has announced
its intentions of winding down the operations of the
Partnership beginning in 1995.
Cash distributions are currently at an annual level of 4%
per Limited Partnership Unit, or $5.00 per Limited
Partnership Unit on a quarterly basis. For the quarter
ended March 31, 1995, the Partnership declared a cash
distribution of $289,737, of which $14,487 was allocated to
the General Partners and $275,250 was allocated to the
Limited Partners. The distribution will be made on May 31,
1995. The Partnership expects distributions to be more
volatile as its operations are winding down.
The effects of inflation have not been significant to the
Partnership and are not expected to have a material impact
in future periods.
(Page 10)
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP II-D
(A Massachusetts Limited Partnership)
Computer Equipment Portfolio (Unaudited)
March 31, 1995
Lessee
Allnet Communication Services, Incorporated
American Telephone & Telegraph Company, Incorporated
Comdisco, Incorporated
Comsource, Incorporated
Emerson Electric Company, Incorporated
Employers Insurance of Wausau, Incorporated
FAX International, Incorporated
Genix Corporation
Infotech Corporation
J. Walter Thompson, U.S.A., Incorporated
Keystone Insurance Company, Incorporated
Louisiana Gas Services, Incorporated
Nissan Motor Manufacturing Corporation, U.S.A.
Retail Technology, Incorporated
South Carolina Electric & Gas
Superior Electric Company, Incorporated
<TABLE>
<CAPTION>
Equipment Description Acquisition Price
<S> <C>
Computer Peripherals $ 684,218
Processors & Upgrades 39,665
Telecommunications 18,931
Other 158,659
---------
$ 901,473
---------
---------
</TABLE>
(Page 11)
PART II. OTHER INFORMATION
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP II-D
(A Massachusetts Limited Partnership)
<TABLE>
<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
</TABLE>
(Page 12)
SIGNATURE
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.
WELLESLEY LEASE INCOME LIMITED
PARTNERSHIP II-D
(Registrant)
By: Wellesley Leasing Partnership,
its General Partner
By: TLP Leasing Programs, Inc.,
one of its Corporate General
Partners
Date: May 12, 1995
By: Arthur P. Beecher,
President
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000739712
<NAME> WELLESLEY 11-D
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 341842
<SECURITIES> 288794
<RECEIVABLES> 259126
<ALLOWANCES> 543588
<INVENTORY> 0
<CURRENT-ASSETS> 346174
<PP&E> 901473
<DEPRECIATION> 865505
<TOTAL-ASSETS> 382142
<CURRENT-LIABILITIES> 119418
<BONDS> 0
<COMMON> 24524033
0
0
<OTHER-SE> 24261309
<TOTAL-LIABILITY-AND-EQUITY> 382142
<SALES> 71048
<TOTAL-REVENUES> 83320
<CGS> 0
<TOTAL-COSTS> 2984
<OTHER-EXPENSES> 35704
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 43
<INCOME-PRETAX> 44589
<INCOME-TAX> 0
<INCOME-CONTINUING> 44589
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44589
<EPS-PRIMARY> (0.21)
<EPS-DILUTED> 0
</TABLE>
