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 The Quarter Ended June 30, 1996 Commission File No. 2-97907
COLUMBIA LEASE INCOME FUND II-B L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3263135
(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
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<CAPTION>
COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware Limited Partnership)
INDEX Page No.
<S> <C> <C>
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 - 10
Part II. OTHER INFORMATION
Items 1 - 6 11
Signature 12
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<CAPTION>
PART I. FINANCIAL INFORMATION
COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware Limited Partnership)
Balance Sheets
Assets (Unaudited) (Audited)
6/30/96 12/31/95
<S> <C> <C>
Investment property, at cost (note 3):
Computer equipment $ 1,387,832 $ 2,077,781
Less accumulated depreciation 943,902 1,470,538
--------------- ---------------
Investment property, net 443,930 607,243
Cash and cash equivalents 22,093 110,280
Net investment in sales-type and direct financing leases - 359
Rents receivable, net (note 2) 2,358 12,186
Sales receivable - 975
Accounts receivable - affiliates (note 4) 1,890 1,777
--------------- ---------------
Total assets $ 470,271 $ 732,820
=============== ===============
Liabilities and Partners' Equity
Liabilities:
Current portion of long-term debt (note 5) $ 180,356 $ 208,083
Accounts payable and accrued expenses - affiliates (note 4) 36,250 37,608
Accounts payable and accrued expenses 23,136 51,962
Distributions payable (note 6) 26,601 79,805
Long-term debt, less current portion (note 5) 197,460 289,416
--------------- ---------------
Total liabilities 463,803 666,874
--------------- ---------------
Partners' equity:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 58,985 57,969
Cumulative cash distributions (404,911) (400,921)
Reallocation of capital accounts 344,926 341,952
--------------- ---------------
- -
--------------- ---------------
Limited Partners (20,217 units):
Capital contribution, net of
offering costs 8,844,937 8,844,937
Cumulative net income 1,120,740 1,101,431
Cumulative cash distributions (9,614,283) (9,538,470)
Reallocation of capital accounts (344,926) (341,952)
--------------- ---------------
6,468 65,946
--------------- ---------------
Total partners' equity 6,468 65,946
--------------- ---------------
Total liabilities and partners' equity $ 470,271 $ 732,820
=============== ===============
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See accompanying notes to financial statements.
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<CAPTION>
COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware 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 on operating leases $ 114,051 $ 118,757 $ 249,055 $ 233,460
Earned income on sales-type and
direct financing lease - 68 - 405
Interest income 237 658 1,375 1,906
Net gain on sale of equipment 1,750 1,600 2,090 15,644
------------ ------------ ------------ ------------
Total revenue 116,038 121,083 252,520 251,415
------------ ------------ ------------ ------------
Costs and expenses:
Depreciation 64,223 70,293 163,313 156,904
Interest 8,236 2,050 18,750 4,041
Related party expenses (note 4):
Management fees 8,085 4,471 14,548 13,328
General and administrative 18,501 16,532 36,915 27,870
(Reversal of) provision for
doubtful accounts (1,331) (1,647) (1,331) 377
------------ ------------ ------------ ------------
Total costs and expenses 97,714 91,699 232,195 202,520
------------ ------------ ------------ ------------
Net income $ 18,324 $ 29,384 $ 20,325 $ 48,895
============ ============ ============ ============
Net income per Limited
Partnership Unit $ 0.87 $ 1.38 $ 0.96 $ 2.30
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
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<CAPTION>
COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware 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 $ 20,325 $ 48,895
--------------- ----------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 163,313 156,904
(Reversal of) provision for doubtful accounts (1,331) 377
Net gain on sale of equipment (2,090) (15,644)
Net decrease in current assets 12,380 7,004
Net (decrease) increase in current liabilities (30,184) 3,364
--------------- ----------------
Total adjustments 142,088 152,005
--------------- ----------------
Net cash provided by operating activities 162,413 200,900
--------------- ----------------
Cash flows from investing activities:
Purchases of investment property - (249,079)
Proceeds from sales of investment property 2,090 43,144
--------------- ----------------
Cash provided by (used in) investing activities 2,090 (205,935)
--------------- ----------------
Cash flows from financing activities:
Proceeds from borrowing on notes payable - affiliates - 96,428
Principal payments on long-term debt (119,683) (32,990)
Cash distributions to partners (133,007) (273,993)
--------------- ----------------
Cash used in financing activities (252,690) (210,555)
--------------- ----------------
Net decrease in cash and cash equivalents (88,187) (215,590)
Cash and cash equivalents at beginning of period 110,280 244,809
--------------- ----------------
Cash and cash equivalents at end of period $ 22,093 $ 29,219
=============== ================
Supplemental cash flow information:
Interest paid during period $ 18,750 $ 3,647
=============== ================
Non-cash investing activities:
Reclassification of expired direct financing
lease to operating lease $ - $ 4,318
=============== ================
</TABLE>
See accompanying notes to financial statements.
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COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware Limited Partnership)
Notes to Financial Statements
For the Six Months Ended June 30, 1996 and June 30, 1995
(Unaudited)
(1) Organization
The foregoing financial statements of Columbia Lease Income Fund II-B 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, 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 rents receivable was $2,351 and
$3,682, respectively.
(3) Investment Property
At June 30, 1996, the Partnership owned computer equipment with a cost basis of
$1,363,971 subject to existing leases and equipment with a cost basis of $23,861
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.
<PAGE>
COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware Limited Partnership)
Notes to Financial Statements
For the Six Months Ended June 30, 1996 and June 30, 1995
(Unaudited)
(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 six months ended
June 30, 1996 and 1995 are as follows:
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<CAPTION>
1996 1995
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Equipment acquisition fees $ - $ 6,075
Management fees 14,548 13,328
Reimbursable expenses paid 40,395 30,749
------------ --------------
$ 54,943 $ 50,152
============ ==============
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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% of the monthly rental billings, paid monthly, based
on rents received. The Partnership reimburses the General Partner and its
affiliates for certain expenses incurred by them in connection with the
operation of the Partnership.
(5) Long-Term Debt
Long-term debt at June 30, 1996 consists of three installment notes for $33,162,
$48,685 and $295,969 from Liberty Bank, each with an interest rate of 8.250%,
8.250% and 7.750%, respectively, collateralized by the equipment on lease.
The annual maturities of long-term debt for the next three years are as follows:
1996 $ 88,400
1997 177,540
1998 111,876
------------
$ 377,816
============
(6) Distributions to Partners
For the six months ended June 30, 1996, the declaration of Distributable Cash
was as follows:
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Limited Partners
General
Date Paid Distribution Partner
Quarter Ended or Payable Per $500 Unit Total Total
- ------------- ---------- ------------- ----- -----
<S> <C> <C> <C> <C>
March 31, 1996 May 15, 1996 $ 2.50 $ 50,542 $ 2,660
June 30, 1996 August 15, 1996 $ 1.25 $ 25,271 $ 1,330
</TABLE>
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COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operation
(Unaudited)
Results of Operations
The following discussion relates to Partnership's operations for the quarter and
six month periods ended June 30, 1996 in comparison to the same periods in 1995.
The Partnership realized net income of $18,324 and $29,384 for the three month
periods ended June 30, 1996 and 1995, respectively. Rental income on operating
leases decreased $4,706 or 4% between the three month periods. The decrease is
primarily due to lower rental rates generated on equipment lease extensions and
remarketings resulting after the initial lease term expires. Interest income has
decreased as a result of lower average cash balances held during the current
quarter.
Total costs and expenses increased $6,015 or 7% between the three month periods.
The increase in costs and expenses is the result of increased interest,
management fees and general and administrative expenses combined, which more
than offset the decrease in depreciation expense. Interest expense increased
$6,186 as the Partnership continued to paydown its long-term debt during the
current quarter. The long-term debt balance at June 30, 1996 was $377,816 versus
a balance of $70,137 at June 30, 1995. Management fees increased $3,614 with the
decrease in the outstanding rent receivable balance during the current quarter.
General and administrative expenses increased $1,969 or 12%. A major factor
contributing to this increase is that salaries and expenses of the partnership
accounting and reporting personnel, of the General Partner, which are
reimbursable by the various partnerships under management are being allocated
over a diminishing number of partnerships. Depreciation expense decreased $6,070
or 9% due to a portion of the equipment portfolio having become fully
depreciated. The Partnership was able to reverse its provision for doubtful
accounts for the three month periods ended June 30, 1996 and 1995, due to
successful collection efforts on delinquent accounts.
The Partnership realized net income of $20,325 and $48,895 for the six month
periods ended June 30, 1996 and 1995, respectively. Rental income increased
$15,595 or 7% between the six month periods. The increase in rental income can
be attributed to leases resulting from equipment acquisitions during 1995. No
earned income on direct financing leases has been recognized during the current
six month period due to the complete allocation of the lease payments to the
fair market value of the equipment over the lease terms in 1995. Interest income
decreased due to the Partnership carrying lower average short-term investment
balances during the first six months of 1996. The net gain on sale of equipment
decreased during the current year due to fewer sales of equipment carrying a
high market value.
<PAGE>
COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operation
(Unaudited)
Total costs and expenses increased $29,675 or 15% between the six month periods.
The increase in costs and expenses is primarily the result of increased interest
expense and general and administrative expenses. Interest expense increased
$14,709, as the Partnership continued to paydown its long-term debt during the
six month period ended June 30, 1996. General and administrative expenses
increased $9,045 or 33%. A major factor contributing to this increase is that
salaries and expenses of the partnership accounting and reporting personnel, of
the General Partner, which are reimbursable by the various partnerships under
management are being allocated over a diminishing number of partnerships. The
slight increase in depreciation expense between the six month periods is due to
the depreciation taken on new equipment purchases in 1995. Management fees have
increased as a result of the increase in rental income and the increased
collections of rents receivable in the second quarter of 1996. As was discussed
in the quarter analysis above, the Partnership was able to reverse its provision
for doubtful accounts in 1996 due to successful collection efforts on delinquent
accounts.
The Partnership recorded net income per Limited Partnership Unit of $0.87 and
$1.38 for the quarters ended June 30, 1996 and 1995, respectively, and $0.96 and
$2.30 for the six month periods ended June 30, 1996 and 1995, respectively.
Liquidity and Capital Resources
For the six months ended June 30, 1996, 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 increased due to rentals generated from
equipment lease acquisitions in 1995. Future rental revenues on operating leases
amount to $665,830 and are to be received over the next five years.
For the six months ended June 30, 1996, the Partnership's investing activities
resulted in fully depreciated equipment sales, generating $2,090 in sales
proceeds. 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 a paydown on long-term debt
of $119,683 for the six months ended June 30, 1996. The Partnership will payoff
its remaining long-term debt of $377,816 by 1998.
<PAGE>
COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operation
(Unaudited)
Cash distributions are currently at an annual level of 1% per Limited
Partnership Unit, or $1.25 per Limited Partnership Unit on a quarterly basis.
For the quarter ended June 30, 1996, the Partnership declared a cash
distribution of $26,601, of which $25,271 was allocated to the General Partner
and $1,330 was allocated to the Limited Partners. The distribution is payable on
August 15, 1996. The Partnership expects to continue paying distributions near
this level. 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.
<PAGE>
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<CAPTION>
PART II. OTHER INFORMATION
COLUMBIA LEASE INCOME FUND II-B 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
</TABLE>
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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 II-B L.P.
(Registrant)
By: TLP Columbia Management Corporation,
its General Partner
Date: August 14, 1996
By: Arthur P. Beecher,
President
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000769333
<NAME> COLUMBIA LSE INCOME FUND II-B FDS 6/30/96
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 22,093
<SECURITIES> 0
<RECEIVABLES> 6,599
<ALLOWANCES> 2,351
<INVENTORY> 0
<CURRENT-ASSETS> 26,341
<PP&E> 1,387,832
<DEPRECIATION> 943,902
<TOTAL-ASSETS> 470,271
<CURRENT-LIABILITIES> 85,987
<BONDS> 377,816
<COMMON> 8,845,937
0
0
<OTHER-SE> (8,839,469)
<TOTAL-LIABILITY-AND-EQUITY> 470,271
<SALES> 249,055
<TOTAL-REVENUES> 252,520
<CGS> 0
<TOTAL-COSTS> 14,548
<OTHER-EXPENSES> 200,228
<LOSS-PROVISION> (1,331)
<INTEREST-EXPENSE> 18,750
<INCOME-PRETAX> 20,325
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,325
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,325
<EPS-PRIMARY> 0.96
<EPS-DILUTED> 0
</TABLE>
