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-C L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3270727
(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-C L.P.
(A Delaware Limited Partnership)
INDEX Page No.
<S> <C> <C>
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 - 8
Management's Discussion and Analysis of Financial Condition and
Results of Operations 9 -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-C 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 $ 3,686,437 $ 3,632,277
Less accumulated depreciation 2,180,308 2,026,906
--------------- ---------------
Investment property, net 1,506,129 1,605,371
Cash and cash equivalents 122,957 108,173
Rents receivable, net (note 2) 104,545 37,391
Accounts receivable - affiliates (note 4) 44,104 15,037
Other assets 64,390 70,860
--------------- ---------------
Total assets $ 1,842,125 $ 1,836,832
=============== ===============
Liabilities and Partners' Equity
Liabilities:
Current portion of long-term debt (note 6) $ 324,218 $ 260,384
Notes payable - affiliate (note 5) 224,512 224,512
Accounts payable and accrued expenses - affiliates (note 4) 79,120 83,950
Accounts payable and accrued expenses 109,689 78,943
Distributions payable (note 7) 75,231 85,261
Long-term debt, less current portion (note 6) 295,051 351,768
--------------- ---------------
Total liabilities 1,107,821 1,084,818
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Partners' equity:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 59,324 56,448
Cumulative cash distributions (178,138) (174,377)
Reallocation of capital accounts 117,814 116,929
--------------- ---------------
- -
--------------- ---------------
Limited Partners (9,529 units):
Capital contribution, net of
offering costs 4,168,940 4,168,940
Cumulative net income 963,121 908,478
Cumulative cash distributions (4,279,943) (4,208,475)
Reallocation of capital accounts (117,814) (116,929)
--------------- ---------------
734,304 752,014
--------------- ---------------
Total partners' equity 734,304 752,014
--------------- ---------------
Total liabilities and partners' equity $ 1,842,125 $ 1,836,832
=============== ===============
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See accompanying notes to financial statements.
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<CAPTION>
COLUMBIA LEASE INCOME FUND II-C L.P.
(A Delaware Limited Partnership)
Statements of Operations
For the Quarters Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
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Revenue:
Rental income on operating leases $ 283,990 $ 206,288
Earned income on sales-type and
direct financing leases - 208
Interest income 1,023 1,683
--------------- ---------------
Total revenue 285,013 208,179
--------------- ---------------
Costs and expenses:
Depreciation 163,477 200,857
Interest 17,552 3,779
Related party expenses (note 4):
Management fees 14,077 12,094
General and administrative 31,780 11,523
Provision for doubtful accounts - 3,109
Net loss (gain) on sale of equipment 608 (497)
--------------- ---------------
Total costs and expenses 227,494 230,865
--------------- ---------------
Net income (loss) $ 57,519 $ (22,686)
=============== ===============
Net income (loss) per Limited Partnership Unit $ 5.73 $ (2.26)
=============== ===============
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See accompanying notes to financial statements.
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<CAPTION>
COLUMBIA LEASE INCOME FUND II-C 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 (loss) $ 57,519 $ (22,686)
------------- -------------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation 163,477 200,857
Net loss (gain) on sale of equipment 608 (497)
Provision for doubtful accounts - 3,109
Net increase in current assets (89,751) (5,698)
Net increase (decrease) in current liabilities 25,916 (976)
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Total adjustments 100,250 196,795
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Net cash provided by operating activities 157,769 174,109
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Cash flows from investing activities:
Purchases of investment property (69,346) (326,947)
Proceeds from sales of investment property 4,503 1,979
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Net cash used in investing activities (64,843) (324,968)
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Cash flows from financing activities:
Proceeds from borrowings on note payable - affiliate - 270,000
Principal payments on note payable - affiliate - (13,147)
Proceeds from borrowings on long-term debt 83,121 -
Principal payments on long-term debt (76,004) -
Cash distributions to partners (85,259) (125,382)
------------- -------------
Net cash (used in) provided by financing activities (78,142) 131,471
------------- -------------
Net increase (decrease) in cash and cash equivalents 14,784 (19,388)
Cash and cash equivalents at beginning of period 108,173 205,090
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Cash and cash equivalents at end of period $ 122,957 $ 185,702
============= =============
Supplemental cash flow information:
Interest paid during the period $ 12,780 $ 3,779
============= =============
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See accompanying notes to financial statements.
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COLUMBIA LEASE INCOME FUND II-C 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-C 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 $6,757.
(3) Investment Property
At March 31, 1996, the Partnership owned computer equipment with a cost basis of
$3,178,856, subject to existing leases and equipment with a cost basis of
$507,581 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.
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COLUMBIA LEASE INCOME FUND II-C 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 $ 1,691 $ 7,974
Management fees 14,077 12,094
Reimbursable expenses paid 31,761 12,102
------------ --------------
$ 47,529 $ 32,170
============ ==============
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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) Notes Payable-Affiliate
Notes payable-affiliate at March 31, 1996, consist of five non-recourse
promissory notes payable to TLP Leasing Programs, Inc. in the amount of
$224,512, bearing interest at the rate of 8.75%. The notes payable mature in
1996.
(6) Long-term Debt
Long-term debt at March 31, 1996 consists of four installment loans totaling
$413,158 from Pullman Capital Corporation bearing interest at a rate of 8.00%
and four installment loans totaling $206,111 from Liberty Bank bearing interest
at a rate of 8.25%. All loans are non-recourse and are collateralized by
equipment on lease.
The annual maturities of long-term debt for the next three years are as follows:
1996 $ 259,628
1997 241,742
1998 117,899
--------------
$ 619,269
==============
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COLUMBIA LEASE INCOME FUND II-C L.P.
(A Delaware Limited Partnership)
Notes to Financial Statements
For the Quarters Ended March 31, 1996 and March 31, 1995
(Unaudited)
(7) Distributions to Partners
For the three months ended March 31, 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 $7.50 $71,468 $3,761
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COLUMBIA LEASE INCOME FUND II-C 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 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 $57,519 and a net loss of $22,686 for the
quarters ended March 31, 1996 and 1995, respectively. Rental income on operating
leases increased $77,702 or 38% between the three month periods. The increase in
rental income can be attributed to rents resulting from significant amount of
equipment lease acquisitions made during the last two years. Interest income
decreased $660 as a result of lower average short-term investment balances held
during the current quarter.
Total costs and expenses decreased $3,371 or 1% in 1996. The slight decrease in
costs and expenses is primarily a result of lower depreciation expense offset by
a rise in general and administrative expenses and interest expense between the
three month periods. Depreciation expense decreased $37,380 due to a portion of
the equipment portfolio becoming fully depreciated. General and administrative
expenses increased $20,257. 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
overall rise in rental income is another factor contributing to this large
increase in general and administrative expenses. Interest expense increased
$13,773 as the Partnership received additional financing of $83,121 during the
current quarter and continued to paydown its existing debt. The Partnership has
a long-term debt balance at March 31, 1996 of $619,269, in comparision to March
31, 1995, when there was no long-term debt. Management fees have increased due
to the increase in rental income on operating leases. The first quarter of 1995
reflected a provision for doubtful accounts of $3,109 to reserve against
delinquent uncollectible accounts.
The Partnership recorded net income (loss) per Limited Partnership Unit of $5.73
and $(2.26) 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.
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COLUMBIA LEASE INCOME FUND II-C L.P.
(A Delaware Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Unaudited)
Operating activities have resulted in a 38% increase in rental revenue due to
rentals received from equipment lease acquisitions in 1996 and 1995. 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 $2,388,522 and are to be
received over the next seven years.
In the first quarter of 1996, the Partnership's investing activities resulted in
equipment purchases of $69,346 and equipment sales with a depreciated cost basis
of $5,111, generating $4,503 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 proceeds from borrowing on
long-term debt in the amount of $83,121 and the paydown on the debt during the
first quarter 1996 of $76,004. The new debt bears interest of 8%, with
installments to be paid monthly, maturing in 1998.
Cash distributions are currently at an annual level of 6% per Limited
Partnership Unit, or $7.50 per Limited Partnership Unit on a quarterly basis.
For the quarter ended March 31, 1996, the Partnership declared a cash
distribution of $75,229 of which $3,761 was allocated to the General Partner and
$71,468 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 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.
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-C 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-C 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> 0000769334
<NAME> COLUMBIA II-C 03/31/96
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 122,957
<SECURITIES> 0
<RECEIVABLES> 155,406
<ALLOWANCES> 6,757
<INVENTORY> 0
<CURRENT-ASSETS> 335,996
<PP&E> 3,686,437
<DEPRECIATION> 2,180,308
<TOTAL-ASSETS> 1,842,125
<CURRENT-LIABILITIES> 264,040
<BONDS> 843,781
<COMMON> 4,169,940
0
0
<OTHER-SE> (2,327,815)
<TOTAL-LIABILITY-AND-EQUITY> 1,842,125
<SALES> 283,990
<TOTAL-REVENUES> 285,013
<CGS> 0
<TOTAL-COSTS> 14,077
<OTHER-EXPENSES> 195,865
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,552
<INCOME-PRETAX> 57,519
<INCOME-TAX> 0
<INCOME-CONTINUING> 57,519
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,519
<EPS-PRIMARY> 5.73
<EPS-DILUTED> 0
</TABLE>
