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 March 31, 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 11
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<CAPTION>
COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware Limited Partnership)
<S> <C> <C>
INDEX Page No.
Part I. FINANCIAL INFORMATION
Financial Statements
Balance Sheets as of March 31, 1996 and December 31, 1995 3
Statements of Operations For the Quarters Ended
March 31, 1996 and 1995 4
Statements of Cash Flows For the Quarters Ended
March 31, 1996 and 1995 5
Notes to Financial Statements 6 - 7
Management's Discussion and Analysis of Financial Condition and
Results of Operation 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 II-B L.P.
(A Delaware Limited Partnership)
Balance Sheets
Assets (Unaudited) (Audited)
3/31/96 12/31/95
<S> <C> <C>
Investment property, at cost (note 3):
Computer equipment $ 1,696,293 $ 2,077,781
Less accumulated depreciation 1,188,140 1,470,538
--------------- ---------------
Investment property, net 508,153 607,243
Cash and cash equivalents 52,979 110,280
Net investment in sales-type and direct financing leases - 359
Rents receivable, net (note 2) 18,191 12,186
Sales receivable - 975
Accounts receivable - affiliates (note 4) 1,468 1,777
--------------- ---------------
Total assets $ 580,791 $ 732,820
=============== ===============
Liabilities and Partners' Equity
Liabilities:
Current portion of long-term debt (note 5) $ 194,905 $ 208,083
Accounts payable and accrued expenses - affiliates (note 4) 42,229 37,608
Accounts payable and accrued expenses 31,819 51,962
Distributions payable (note 6) 53,202 79,805
Long-term debt, less current portion (note 5) 243,891 289,416
--------------- ---------------
Total liabilities 566,046 666,874
--------------- ---------------
Partners' equity:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 58,069 57,969
Cumulative cash distributions (403,581) (400,921)
Reallocation of capital accounts 344,512 341,952
--------------- ---------------
- -
--------------- ---------------
Limited Partners (20,217 units):
Capital contribution, net of
offering costs 8,844,937 8,844,937
Cumulative net income 1,103,332 1,101,431
Cumulative cash distributions (9,589,012) (9,538,470)
Reallocation of capital accounts (344,512) (341,952)
--------------- ---------------
14,745 65,946
--------------- ---------------
Total partners' equity 14,745 65,946
--------------- ---------------
Total liabilities and partners' equity $ 580,791 $ 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
For the Quarters Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
--------------- ---------------
<S> <C> <C>
Revenue:
Rental income on operating leases $ 135,004 $ 114,703
Earned income on sales-type and direct
financing leases - 337
Interest income 1,138 1,248
Net gain on sale of equipment 340 14,044
--------------- ---------------
Total revenue 136,482 130,332
--------------- ---------------
Costs and expenses:
Depreciation 99,090 86,611
Interest 10,514 1,991
Related party expenses (note 4):
Management fees 6,463 8,857
General and administrative 18,414 11,338
Provision for doubtful accounts - 2,024
--------------- ---------------
Total costs and expenses 134,481 110,821
--------------- ---------------
Net income $ 2,001 $ 19,511
=============== ===============
Net income per Limited Partnership Unit $ 0.09 $ 0.92
=============== ===============
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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 Cash Flows
For the Quarters Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,001 $ 19,511
------------- -------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 99,090 86,611
Net gain on sale of equipment (340) (14,044)
Provision for doubtful accounts - 2,024
Net (increase) decrease in current assets (4,362) 18,714
Net (decrease) increase in current liabilities (15,522) 17,125
------------- -------------
Total adjustments 78,866 110,430
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Net cash provided by operating activities 80,867 129,941
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Cash flows from investing activities:
Purchases of investment property - (80,950)
Proceeds from sales of investment property 340 14,044
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Net cash provided by (used in) investing activities 340 (66,906)
------------- -------------
Cash flows from financing activities:
Principal payments on long-term debt (58,703) (16,328)
Cash distributions to partners (79,805) (164,928)
------------- -------------
Net cash used in financing activities (138,508) (181,256)
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Net decrease in cash and cash equivalents (57,301) (118,221)
Cash and cash equivalents at beginning of period 110,280 244,809
------------- -------------
Cash and cash equivalents at end of period $ 52,979 $ 126,588
============= =============
Supplemental cash flow information:
Interest paid during the period $ 10,514 $ 1,991
============= =============
Non-cash investing activities:
Reclassification of residual value of expired
direct financing lease to operating lease $ 20,797 $ 4,318
============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COLUMBIA LEASE INCOME FUND II-B L.P.
(A Delaware Limited Partnership)
Notes to Financial Statements
For the Quarters Ended March 31, 1996 and March 31, 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 March 31, 1996 and December 31, 1995, the
allowance for doubtful accounts included in rents receivable was 3,682.
(3) Investment Property
At March 31, 1996, the Partnership owned computer equipment with a cost basis of
$1,566,759 subject to existing leases and equipment with a cost basis of
$129,534 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 Quarters Ended March 31, 1996 and March 31, 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 three months ended
March 31, 1996 and 1995 are as follows:
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1996 1995
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Equipment acquisition fees $ - $ 1,974
Management fees 6,463 8,857
Reimbursable expenses paid 19,245 13,092
------------ --------------
$ 25,708 $ 23,923
============ ==============
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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. 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) Long-Term Debt
Long-term debt at March 31, 1996 consists of one installment note from Pioneer
Bank and Trust Company for $18,072 bearing interest at 8.15% and three
installment notes for $39,863, $56,231 and $324,630 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 $ 149,380
1997 177,539
1998 111,877
------------
$ 438,796
============
(6) Distributions to Partners
For the three months ended March 31, 1996, the declaration of Distributable Cash
was as follows:
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<CAPTION>
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
</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 three month
period ended March 31, 1996 in comparison to the same period in 1995.
The Partnership realized net income of $2,001 and $19,511 for the three month
periods ended March 31, 1996 and 1995, respectively. Rental income on operating
leases increased $20,301 or 18% 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. No earned income on
the direct financing leases has been recognized during the current quarter 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 has decreased as a
result of lower average cash balances. The decrease in net gain on sale of
equipment was the result of fewer equipment sales occurring during the current
quarter versus the first quarter of 1995.
Total costs and expenses increased $23,660 or 21% between the three month
periods. The increase in costs and expenses is primarily a result of the $12,479
increase in depreciation expense recognized during the current quarter in
comparison to the same period in 1995. The depreciation expense increase is a
result of the significant amount of equipment acquisitions made during the last
two years. Another element impacting the rise in costs and expenses is the
increase in interest expense. Interest expense increased $8,523 as the
Partnership continued to paydown its long-term debt during the current quarter.
The long-term debt balance at March 31, 1996 was $438,796 versus a balance of
$86,799 at March 31, 1995. Management fees decreased with the rise in the
outstanding rent receivable balance during the current quarter. General and
administrative expenses increased $7,076 or 62%. 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 Partnership recorded net income per Limited Partnership Unit of $0.09 and
$0.92 for the quarters ended March 31, 1996 and 1995, respectively.
Liquidity and Capital Resources
For the three months ended March 31, 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.
<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)
Rental income on operating leases has continued to decrease due to two factors.
The first factor is the lower rate obtained due to the remarketing of existing
equipment upon the expiration of the original lease. 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. This decrease however, should not affect the Partnership's
ability to meet its future cash requirements, including its long-term debt
obligations. 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 on operating leases amount to $748,512 and
are to be received over the next six years.
In the first quarter of 1996, the Partnership's investing activities resulted in
fully depreciated equipment sales, generating $340 in 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 $58,703 for the three months ended March 31, 1996. The Partnership will
payoff its remaining long-term debt of $438,796 in 1998.
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 March 31, 1996, the Partnership declared a cash
distribution of $53,202, of which $2,660 was allocated to the General Partner
and $50,542 was allocated to the Limited Partners. The distribution is payable
on May 15, 1996. The Partnership expects to continue paying distributions at or
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.
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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
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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
By: Arthur P. Beecher,
President
Date: May 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000769333
<NAME> COLUMBIA LEASE INCOME FUND II-B FDS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 52,979
<SECURITIES> 0
<RECEIVABLES> 23,341
<ALLOWANCES> 3,682
<INVENTORY> 0
<CURRENT-ASSETS> 72,638
<PP&E> 1,696,293
<DEPRECIATION> 1,188,140
<TOTAL-ASSETS> 580,791
<CURRENT-LIABILITIES> 127,250
<BONDS> 438,796
<COMMON> 8,845,937
0
0
<OTHER-SE> (8,831,192)
<TOTAL-LIABILITY-AND-EQUITY> 580,791
<SALES> 135,004
<TOTAL-REVENUES> 136,482
<CGS> 0
<TOTAL-COSTS> 6,463
<OTHER-EXPENSES> 117,504
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,514
<INCOME-PRETAX> 2,001
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,001
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,001
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0
</TABLE>
