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 September 30, 1995 Commission File No. 2-92914
COLUMBIA LEASE INCOME FUND A L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3263094
(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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COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware Limited Partnership)
<S> <C> <C>
INDEX Page No.
Part I. FINANCIAL INFORMATION
Financial Statements
Balance Sheets as of September 30, 1995 and December 31, 1994 3
Statements of Operations For the Quarters Ended
September 30, 1995 and 1994 and the Nine Months Ended
September 30, 1995 and 1994 4
Statements of Cash Flows For the Nine Months Ended
September 30, 1995 and 1994 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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<CAPTION>
Part I. FINANCIAL INFORMATION
COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware Limited Partnership)
Balance Sheets
Assets
(Unaudited) (Audited)
9/30/95 12/31/94
Investment property, at cost (note 3):
<S> <C> <C>
Computer equipment $ 1,825,457 $ 2,700,427
Less accumulated depreciation 1,614,338 2,151,408
--------- ---------
Investment property, net 211,119 549,019
Cash and cash equivalents 90,684 227,793
Net investment in direct financing lease - 58,080
Rents receivable, net (note 2) 17,541 9,667
Accounts receivable - affiliates, net (notes 2 & 4) 2,550 20,656
Sales receivable 501 -
------- -------
Total assets $ 322,395 $ 865,215
= ======= = =======
Liabilities and Partners' Equity
Liabilities:
Current portion of long-term debt $ - $ 37,801
Accounts payable and accrued expenses - affiliates (note 4) 41,499 44,794
Accounts payable and accrued expenses 15,683 52,159
Distributions payable (note 5) 72,187 168,436
------ -------
Total liabilities 129,369 303,190
------- -------
Partners' equity:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 229,092 228,292
Cumulative cash distributions (627,691) (608,441)
Reallocation of capital accounts 397,599 379,149
------- -------
- -
Limited Partners (24,383 units): ------- -------
Capital contribution, net of
offering costs 10,484,690 10,484,690
Cumulative net income 4,352,739 4,337,542
Cumulative cash distributions (14,246,804) (13,881,058)
Reallocation of capital accounts (397,599) (379,149)
-------- --------
193,026 562,025
------- -------
Total partners' equity 193,026 562,025
------- -------
Total liabilities and partners' equity $ 322,395 $ 865,215
= ======= = =======
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See accompanying notes to financial statements.
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COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware Limited Partnership)
Statements of Operations
(Unaudited)
<CAPTION>
Quarters Ended Nine Months Ended
September 30, September 30,
------------- -------------
1995 1994 1995 1994
---- ---- ---- ----
Revenue:
<S> <C> <C> <C> <C>
Rental income on operating leases $ 97,528 $ 195,007 $ 421,962 $ 569,801
Earned income on
direct financing lease - 2,313 7,018 8,009
Interest income 1,278 1,254 4,342 7,295
----- ----- ----- -----
Total revenue 98,806 198,574 433,322 585,105
------ ------- ------- -------
Costs and expenses:
Depreciation 52,383 113,274 239,243 328,341
Interest 103 1,283 1,215 4,681
Related party expenses (note 4):
Management fees 9,096 14,033 30,052 40,477
General and administrative 20,689 24,806 57,812 55,882
Net loss (gain) on sale
of equipment 94,121 22,273 87,974 (4,871)
(Reversal of) provision for
doubtful accounts - (2,304) 1,029 13,319
- ------ ----- ------
Total costs and expenses 176,392 173,365 417,325 437,829
------- ------- ------- -------
Net (loss) income $ (77,586) $ 25,209 $ 15,997 $ 147,276
= ======= = ====== = ====== = =======
Net (loss) income per Limited
Partnership Unit $ (3.02) $ 0.98 $ 0.63 $ 5.74
= ===== = ==== = ==== = ====
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See accompanying notes to financial statements.
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COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware Limited Partnership)
Statements of Cash Flows
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
<CAPTION>
1995 1994
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income $ 15,997 $ 147,276
- ------ - -------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 239,243 328,341
Provision for doubtful accounts 1,029 13,319
Net loss (gain) on sale of equipment 87,974 (4,871)
Net decrease in current assets 62,584 11,844
Net decrease in current liabilities (39,771) (66,861)
------- -------
Total adjustments 351,059 281,772
------- -------
Net cash provided by operating activities 367,056 429,048
------- -------
Cash flows from investing activities:
Purchases of investment property - (254,753)
Proceeds from sales of investment property 14,881 57,446
------ ------
Net cash provided by (used in) investing activities 14,881 (197,307)
------ --------
Cash flows from financing activities:
Principal payments on long-term debt (37,801) (39,212)
Cash distributions to partners (481,245) (713,973)
-------- --------
Net cash used in financing activities (519,046) (753,185)
-------- --------
Net decrease in cash and cash equivalents (137,109) (521,444)
Cash and cash equivalents at beginning of period 227,793 716,108
------- -------
Cash and cash equivalents at end of period $ 90,684 $ 194,664
= ====== = =======
Supplemental cash flow information:
Interest paid during the period $ 1,215 $ 4,681
= ===== = =====
Non-cash investing activities:
Reclassification of expired direct financing
lease to operating lease $ 4,198 $ 22,049
= ===== = ======
</TABLE>
See accompanying notes to financial statements.
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COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware Limited Partnership)
Notes to Financial Statements
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
(1) Basis of Presentation
The foregoing financial statements of Columbia Lease Income Fund A L.P. (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 allowances for estimated losses on receivable
balances. The allowances for doubtful accounts are 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 September 30, 1995 and December 31, 1994,
the allowance for doubtful accounts included in rents receivable was $2,426 and
$1,397, respectively, and $220,000 included in accounts receivable - affiliates,
respectively.
(3) Investment Property
At September 30, 1995, the Partnership owned computer equipment, with a cost
basis of $1,816,984, subject to existing leases and equipment with a cost basis
of $8,473 in inventory, awaiting re-lease or sale. All purchases of computer
equipment are subject to a 2.5% acquisition fee paid to the General Partner.
(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 nine months ended
September 30, 1995 and 1994 are as follows:
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<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Equipment acquisition fees $ - $ 6,213
Management fees 30,052 40,477
Reimbursable expenses paid 59,285 32,927
------ ------
$ 89,337 $ 79,617
= ====== = ======
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COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware Limited Partnership)
Notes to Financial Statements
(Unaudited)
Under the terms of the Partnership Agreement, the General Partner is entitled to
an equipment acquisition fee of 2.5% of the purchase price paid by the
Partnership for the equipment. The General Partner is also entitled to a
management fee equal to 6.0% of the monthly rental billings collected, paid
quarterly. In addition, the Partnership reimburses the General Partner and its
affiliates for certain expenses incurred by them in connection with the
operation of the Partnership.
(5) Distributions to Partners
For the nine months ended September 30, 1995, declarations of Distributable Cash
were as follows:
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<CAPTION>
Limited Partners
General
Date Paid Distribution Partners
Quarter Ended or Payable Per $ 500 Unit Total Totals
- ------------- ---------- -------------- ----- --------
<S> <C> <C> <C> <C>
March 31, 1995 May 15, 1995 $ 6.25 $ 152,394 $ 8,021
June 30, 1995 August 15, 1995 $ 6.25 $ 152,394 $ 8,021
September 30, 1995 November 15, 1995 $ 2.50 $ 60,958 $ 3,208
</TABLE>
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COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware 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 nine month periods ended September 30, 1995, compared to the same periods in
1994.
The Partnership realized a net loss of $77,586 and net income of $25,209 for the
three month periods ended September 30, 1995 and 1994, respectively. Rental
income on operating leases decreased $97,479 or 50% between the three month
periods. The decrease is primarily due to lower rental rates obtained on
equipment lease extensions and remarketings after the initial lease term has
expired and due to the decrease in the size of the equipment portfolio.
Total costs and expenses increased $3,027 or 2% between the three month periods.
The increase in costs and expenses is primarily due to the current quarter net
loss on sale of equipment of $94,121 versus a net loss of $22,273 in 1994. The
net loss on sale of equipment increased between the three month periods
primarily due to sales of equipment carrying higher net book values. The net
loss on sale of equipment was partially offset by the decline in depreciation
expense of $60,891. The decrease in depreciation expense is due to a large
portion of the equipment portfolio becoming fully depreciated and the reduction
in the equipment portfolio. Management fees have decreased in relation to the
decline in rental income.
The Partnership realized net income of $15,997 and $147,276 for the nine month
periods ended September 30, 1995 and 1994, respectively. Rental income on
operating leases decreased $147,839 or 26%. As discussed in the quarter analysis
above, the decrease in rental income is due to lower rental rates obtained on
equipment lease extensions and remarketings after the initial lease term has
expired and due to a decrease in the size of the equipment portfolio. Earned
income on direct financing leases has decreased due to the early termination of
the remaining direct financing lease. Interest income decreased due to the
Partnership carrying lower average short-term investment balances.
Total costs and expenses decreased $20,504 or 5% between the nine month periods.
The decrease in costs and expenses is due to the decrease in depreciation
expense, management fees and provision for doubtful accounts offset by the
increase in net loss or sale of equipment. The decrease in depreciation expense
can be attributed to an increased portion of the equipment portfolio becoming
fully depreciated and the sale of the equipment portfolio. Management fees have
decreased due to the decline in rental income. During the current nine months,
the Partnership established a provision for doubtful accounts for $1,029 to
reserve for uncollectible accounts, which is $12,290 lower than the prior year
provision. As mentioned above, net loss on sale of equipment increased from 1994
to 1995 due to the sale of equipment carrying lower net book values. Interest
expense decreased during the current year as a result of the payoff of long-term
debt during the third quarter. General and administrative expenses have remained
fairly constant.
During the quarter and nine months ended September 30, 1995, the Partnership
allocated profits losses and resulting in $(3.02) and $0.63 per Limited
Partnership Unit.
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COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Unaudited)
Liquidity and Capital Resources.
For the nine months ended September 30, 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 on operating leases 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 in
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.
This decrease however, should not affect the Partnership's ability to meet its
future cash requirements. To the extent that future cash flows should be
insufficient to meet the Partnership's operating expenses and liabilities,
additional funds could be obtained through the sale of equipment, or a reduction
in the rate of cash distributions. Future rental revenues from operating leases
amount to $404,332 and are to be received over the next three years.
For the nine months ended September 30, 1995, the Partnership's investing
activities resulted in equipment sales with a depreciated cost basis of
$132,855, generating $14,881 in proceeds. Associated with the equipment sales
were $30,000 of loss charge offs against the reserve, intially 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.
The Partnership's financing activities resulted in the paydown on long-term debt
of $37,801 during the nine months ended September 30, 1995.
Cash distributions are currently at an annual level of 2% per Limited
Partnership Unit, or $2.50 per Limited Partnership Unit on a quarterly basis.
For the quarter ended September 30, 1995, the Partnership declared a cash
distribution of $64,166, of which $3,208 was allocated to the General Partner
and $60,958 was allocated to the Limited Partners. The distribution will be made
on November 15, 1995. The Partnership expects to continue paying distributions
at or near this level in the future. The effects of inflation have not been
significant to the Partnership in the past and are not expected to have a
material impact in future periods.
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PART II. OTHER INFORMATION
COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware 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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COLUMBIA LEASE INCOME FUND A L.P.
(A Delaware Limited Partnership)
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.
COLUMBIA LEASE INCOME FUND A L.P.
(Registrant)
By: TLP-Columbia Management Corporation,
its General Partner
By: Arthur P. Beecher,
President
Date: November 14, 1995
-----------------
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000751683
<NAME> COLUMBIA LEASE INCOME FUND A
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 90,684
<SECURITIES> 0
<RECEIVABLES> 243,018
<ALLOWANCES> 222,426
<INVENTORY> 0
<CURRENT-ASSETS> 111,276
<PP&E> 1,825,457
<DEPRECIATION> 1,614,338
<TOTAL-ASSETS> 322,395
<CURRENT-LIABILITIES> 129,369
<BONDS> 0
<COMMON> 10,485,690
0
0
<OTHER-SE> (10,292,664)
<TOTAL-LIABILITY-AND-EQUITY> 322,395
<SALES> 428,980
<TOTAL-REVENUES> 433,322
<CGS> 0
<TOTAL-COSTS> 30,052
<OTHER-EXPENSES> 385,029
<LOSS-PROVISION> 1,029
<INTEREST-EXPENSE> 1,215
<INCOME-PRETAX> 15,997
<INCOME-TAX> 0
<INCOME-CONTINUING> 15,997
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,997
<EPS-PRIMARY> 0.63
<EPS-DILUTED> 0
</TABLE>
