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-E L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3418894
(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-E 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 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 II-E 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 $ 1,046,437 $ 898,748
Less accumulated depreciation 486,782 492,339
--------------- ---------------
Investment property, net 559,655 406,409
Cash and cash equivalents 5,832 150,957
Rents receivable, net (note 2) 13,698 870
Sales receivable 3,048 3,836
--------------- ---------------
Total assets $ 582,233 $ 562,072
=============== ===============
Liabilities and Partners' Equity
Liabilities:
Current portion of long-term debt (note 5) $ 197,205 $ 171,107
Note payable - affiliate (note 6) 11,000 -
Accounts payable and accrued expenses - affiliates (note 4) 30,416 15,212
Accounts payable and accrued expenses 20,014 16,694
Distributions payable (note 7) 14,040 32,758
Long-term debt, less current portion (note 5) 126,277 153,040
--------------- ---------------
Total liabilities 398,952 388,811
--------------- ---------------
Partners' equity:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 1,751 626
Cumulative cash distributions (70,770) (70,146)
Reallocation of capital accounts 68,019 68,520
--------------- ---------------
- -
--------------- ---------------
Limited Partners (4,742 units):
Capital contribution, net of
offering costs 2,074,625 2,074,625
Cumulative net loss (42,818) (64,192)
Cumulative cash distributions (1,780,507) (1,768,652)
Reallocation of capital accounts (68,019) (68,520)
--------------- ---------------
183,281 173,261
--------------- ---------------
Total partners' equity 183,281 173,261
--------------- ---------------
Total liabilities and partners' equity $ 582,233 $ 562,072
=============== ===============
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See accompanying notes to financial statements.
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<CAPTION>
COLUMBIA LEASE INCOME FUND II-E L.P.
(A Delaware Limited Partnership)
Statements of Operation
For the Quarters Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
--------------- ---------------
<S> <C> <C>
Revenue:
Rental income on operating leases $ 89,923 $ 51,460
Earned income on direct
financing leases - 608
Interest income 484 270
Net gain on sale of equipment 6,141 609
--------------- ---------------
Total revenue 96,548 52,947
--------------- ---------------
Costs and expenses:
Depreciation 51,163 42,922
Interest expense 6,018 -
Related party expenses (note 4):
Management fees 4,266 2,839
General and administrative 12,602 6,873
Provision for doubtful accounts - 2,598
--------------- ---------------
Total costs and expenses 74,049 55,232
--------------- ---------------
Net income (loss) $ 22,499 $ (2,285)
=============== ===============
Net income (loss) per Limited
Partnership Unit $ 4.51 $ (0.46)
=============== ===============
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See accompanying notes to financial statements.
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<CAPTION>
COLUMBIA LEASE INCOME FUND II-E 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) $ 22,499 $ (2,285)
------------- -------------
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation 51,163 42,922
Provision for doubtful accounts - 2,598
Net gain on sale of equipment (6,141) (609)
Net (increase) decrease in current assets (12,040) 6,060
Net increase (decrease) in current liabilities 18,524 (9,231)
------------- -------------
Total adjustments 51,506 41,740
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Net cash provided by operating activities 74,005 39,455
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Cash flows from investing activities:
Purchases of investment property (204,409) (2,731)
Proceeds from sales of investment property 6,141 609
------------- -------------
Net cash used in investing activities (198,268) (2,122)
------------- -------------
Cash flows from financing activities:
Proceeds from borrowing on note payable - affiliate 11,000 -
Proceeds from borrowing on long-term debt 39,668 -
Principle payments on long-term debt (40,333) -
Cash distributions to partners (31,197) (46,796)
------------- -------------
Net cash used in financing activities (20,862) (46,796)
------------- -------------
Net decrease in cash and cash equivalents (145,125) (9,463)
Cash and cash equivalents at beginning of period 150,957 48,925
------------- -------------
Cash and cash equivalents at end of period $ 5,832 $ 39,462
============= =============
Supplemental cash flow information:
Interest paid during the period $ 6,018 $ -
============= =============
Non-cash investing activities:
Reclassification of residual value of expired
direct financing lease to operating lease $ - $ 1,840
============= =============
</TABLE>
See accompanying notes to financial statements.
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COLUMBIA LEASE INCOME FUND II-E 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-E 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 this allowance. At March 31, 1996 and December 31, 1995,
the allowance for doubtful accounts included in rents receivable was $479.
(3) Investment Property
At March 31, 1996, the Partnership owned computer equipment with a cost basis of
$551,561 subject to existing leases and equipment with a cost basis of $8,094 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 three months ended
March 31, 1996 and 1995 are as follows:
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<CAPTION>
1996 1995
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Equipment acquisition fees $ 4,986 $ 67
Management fees 4,266 2,839
Reimbursable expenses paid 13,507 6,641
------------ ------------
$ 22,759 $ 9,547
============ ============
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COLUMBIA LEASE INCOME FUND II-E L.P.
(A Delaware Limited Partnership)
Notes to Financial Statements
For the Quarters Ended March 31, 1996 and March 31, 1995
(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% 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 loan for $170,901
from Pullman Capital Corporation bearing interest at a rate of 8.00% and three
installment loans totaling $152,581 from Liberty Bank, two bearing interest at a
rate of 8.25% and the third bearing a rate of 11.00%. 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 $ 141,106
1997 136,123
1998 46,253
--------------
$ 323,482
==============
(6) Note Payable - Affiliate
Note payable - affiliate at March 31, 1996, consists of one non-recourse
promissory note payable to TLP Leasing Programs, Inc. in the total amount of
$11,000, bearing interest at the rate of 8.75%. The note payable matures in
1996.
(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 $ 2.50 $ 11,855 $ 624
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COLUMBIA LEASE INCOME FUND II-E 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 the Partnership's operations for the three
month period ended March 31, 1996 compared to the same period in 1995.
The Partnership realized net income of $22,499 and a net loss of $2,285 for the
three month periods ended March 31, 1996 and 1995, respectively. Rental income
on operating leases increased $38,463 or 75% between the three month periods.
The significant increase in rental income can be attributed to leases resulting
from equipment acquisitions in the latter part of 1995 and the first quarter of
1996. The net gain on sale of equipment of $6,141 recognized during the current
quarter resulted from sales of fully depreciated equipment.
Total costs and expenses increased $18,817 or 34% between the three month
periods. This increase in costs and expenses is primarily the result of higher
deprecation expense. The increase in depreciation expense was directly related
to equipment purchases during 1995 and 1996, as mentioned above. Interest
expense of $6,018 was incurred during the current quarter as the Partnership
received additional financing of $39,668 and continued to paydown its existing
debt. The Partnership did not have any long-term debt as of March 31, 1995.
Management fees have increased due to management fees incurred on rentals
generated from new equipment leases. General and administrative expenses
increased $5,729. 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.
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.
Rental income on existing operating leases may decline 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 and
note payable - affiliate 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 from
operating leases amount to $834,583 and are to be received over the next seven
years.
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COLUMBIA LEASE INCOME FUND II-E L.P.
(A Delaware Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operation
(Unaudited)
In the first quarter of 1996, the Partnership's investing activities resulted in
equipment purchases of $204,409, and sales of fully depreciated equipment,
generating $6,141 in proceeds. The Partnership has no material capital
expenditure commitments, but expects to continue to purchase equipment as new
leases are presented.
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 $12,479, of which $624 was allocated to the General Partner and
$11,855 was allocated to the Limited Partners. The distribution is payable on
May 15, 1996. The Partnership expects to continue paying 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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COLUMBIA LEASE INCOME FUND II-E 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-E 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> 0000769336
<NAME> COLUMBIA LEASE INCOME FUND II-E FDS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 5,832
<SECURITIES> 0
<RECEIVABLES> 17,225
<ALLOWANCES> 479
<INVENTORY> 0
<CURRENT-ASSETS> 22,578
<PP&E> 1,046,437
<DEPRECIATION> 486,782
<TOTAL-ASSETS> 582,233
<CURRENT-LIABILITIES> 64,470
<BONDS> 334,482
<COMMON> 2,075,625
0
0
<OTHER-SE> (1,892,344)
<TOTAL-LIABILITY-AND-EQUITY> 582,233
<SALES> 89,923
<TOTAL-REVENUES> 96,548
<CGS> 0
<TOTAL-COSTS> 4,266
<OTHER-EXPENSES> 63,765
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,018
<INCOME-PRETAX> 22,499
<INCOME-TAX> 0
<INCOME-CONTINUING> 22,499
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,499
<EPS-PRIMARY> 4.51
<EPS-DILUTED> 0
</TABLE>
