SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE
REQUIRED]
For Fiscal Year Ended Commission File
December 31, 1995 Number 0-14409
DELPHI FILM ASSOCIATES V
(Exact name of registrant as specified in its charter)
New York 13-3276727
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
666 Third Avenue, New York, New York 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 983-
9040
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interests
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
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[x]
As of March 15, 1996, there were 8,000 units of limited
partnership interests outstanding, all held by non-affiliates.
The aggregate market value of those interests is not determinable
because there is no active public trading market for the units.
See Item 5. Market for the Registrant's Common Equity and
Related Security Holder Matters.
<PAGE>
PART I.
Item 1. Business.
Introduction.
Delphi Film Associates V (the "Partnership") is a limited
partnership which was organized under the law of the State of New
York in June 1985 to participate in the production, acquisition,
ownership and exploitation of feature length motion pictures
through a joint venture with Columbia Pictures Industries, Inc.
("Columbia"), known as Columbia-Delphi V Productions (the
"Columbia Joint Venture"), and through a joint venture with
TriStar Pictures, Inc. ("TriStar"), known as Tri-Star-Delphi V
Productions (the "Tri-Star Joint Venture"). The terms of the Tri-
Star Joint Venture and the Columbia Joint Venture are
substantially the same. Those two joint ventures are referred to
collectively as the "Joint Ventures" and sometimes individually
as a "Joint Venture," and the Partnership's co-venturer in each
of the joint ventures is sometimes referred to as the "Studio
Venturer."
A public offering (the "Offering") of limited partnership
interests in the Partnership, at $5,000 per unit, was completed
in December 1985 with the sale of 8,000 units. Net proceeds to
the Partnership after selling commissions, organizational
expenses and other expenses of the Offering were approximately
$35,300,000. The general partner of the Partnership, Delphi
Management Associates (the "General Partner"), contributed
approximately $404,000 as its capital contribution to the
Partnership.
Production and Acquisition of Films.
The Partnership has an interest in 25 films (11 through the
Columbia Joint Venture and l4 through the Tri-Star Joint
Venture), all of which have been released. See "Films in
Release." The Partnership's contributions (including interest)
for the production of, and acquisition of interests in, films
have aggregated approximately $46,398,000. Approximately one-
half of the Partnership's contributions were made to each Joint
Venture.
TriStar agreed that the Tri-Star Joint Venture would have the
right to produce and exploit films (provided the film met certain
criteria) for which TriStar commenced production after the
expiration of a similar commitment to an earlier joint venture
between TriStar and Delphi Film Associates IV ("Delphi IV"). The
Columbia Joint Venture acquired the right to participate in
completing the production of, and to exploit, certain specified
films, and it also acquired the right to produce, or participate
in completing the production of, and exploit, films (providing
the film met certain criteria) for which Columbia commenced
production subsequent to August 21, 1985. Each Joint Venture
also acquired interests in certain films produced by independent
producers that were distributed by the distribution arm of its
Studio Venturer. The Partnership has also acquired an interest
in or co-produced certain films in which Delphi IV has an
interest through Delphi IV's joint ventures with Columbia and
TriStar. Another public limited partnership, ML Delphi Premier
Partners, L.P. ("ML Delphi"), which was organized in June 1986,
participates in a joint venture with TriStar ("Tri-Star-ML
Delphi"). During 1986 and 1987, the Tri-Star Joint Venture
entered into agreements with Tri-Star-ML Delphi pursuant to which
Tri-Star-ML Delphi acquired interests in six of the Tri-Star
Joint Venture's films.
The Partnership has an interest ranging from approximately 5%
to 25% in each of the Joint Ventures' films. See "Films In
Release." The Partnership's ownership interest with respect to
each film is generally equal to the percentage the Partnership's
cash contributions for the production or the acquisition of a
film bears to the total cash contributions for production or
acquisition of that film.
In May 1988, the Partnership, through the Tri-Star
Joint Venture, was granted a participation interest by
TriStar in the motion picture "Short Circuit 2." See "Films
In Release." The Partnership made no capital contribution
for its interest in this film, but is entitled to a share of
any net proceeds of this film beyond certain performance
levels. The Partnership does not anticipate receiving any
revenues with respect to this participation interest, but any
payments that do become due will be payable to the
Partnership in June 1996, subject to being paid earlier under
certain circumstances.
Distribution of Films.
The films of the Columbia Joint Venture and the Tri-
Star Joint Venture are distributed pursuant to distribution
agreements between Columbia Pictures, a division of Columbia
("Columbia Pictures"), and the Columbia Joint Venture, and
between TriStar and the Tri-Star Joint Venture, respectively.
Columbia Pictures and TriStar, as distributors, are sometimes
referred to collectively as the "Distributors" and
individually as a "Distributor."
The Distributor has the ultimate authority for all
decisions with respect to the distribution of the films. For
each film, the Partnership, through a Joint Venture, is
generally entitled to receive an amount equal to the greater of
the product of the Partnership's percentage interest in a film
multiplied by (a) an amount equal to l00% of the net proceeds
from the distribution of the film and (b) an amount equal to 32%
of the gross receipts from the distribution of the film.
Distribution arrangements with respect to films in which a Joint
Venture has an interest that were produced by independent
producers may vary from those set forth above. The Partnership
and the Studio Venturer share in the amount to which the Joint
Ventures are entitled from the distribution of any film in
proportion to their respective interests in the film. The
distribution agreements provide, with certain exceptions, that
gross receipts consist of all sums received by the Distributor
from the exploitation of a film throughout the world. Net
proceeds with respect to each film generally are determined by
deducting from gross receipts:
(a) a distribution fee equal to 17-1/2% of substantially
all of the gross receipts of the film. The Distributor's
entitlement to this distribution fee is deferred until the Joint
Venture has received from the distribution of that film an
amount equal to the amounts contributed by the Joint Venture to
produce or acquire an interest in the film, other than amounts
paid in the nature of interest;
(b) all expenses incurred in the distribution, promotion
and marketing of the film, including expenditures for prints and
advertising; and
(c) payments to third party participants who have a
contingent participation in a film. The extent to which
payments to third party participants may be deducted from the
gross receipts of a film in determining net proceeds is limited
by the distribution agreements.
Many of the Columbia Joint Venture's and Tri-Star Joint
Venture's films have been licensed to Home Box Office, Inc.
("HBO") for exhibition on its pay television services. The
distribution agreement with each Joint Venture provides that the
gross receipts of a film with respect to pay television
exhibition by HBO shall be an amount equal to specified
percentages of the first year's domestic theatrical gross
receipts of that film, regardless of the actual license fee
payable to Columbia or TriStar under its license agreement with
HBO. The amount initially included in gross receipts may be
less (and in some instances substantially less) than the amount
actually received by Columbia or TriStar under their agreements
with HBO. See the "Additional Payments" provision described
below, for information concerning additional amounts that gross
receipts may be credited with in connection with pay television
exhibition by HBO.
Columbia Pictures has entered into an arrangement with
CBS Inc. ("CBS") for CBS to license for exhibition on the CBS
television network, a specified number of motion pictures from
among a specified number of groups of Columbia's motion
pictures. The arrangement provides for CBS to pay a specified
average license fee for the motion pictures in each group
licensed by CBS. The Columbia Joint Venture and its Distributor
have agreed that, subject to adjustment in certain
circumstances, gross receipts for films licensed to CBS under
this arrangement would include an amount equal to the higher of
the license fees paid by CBS and the comparable fair market
value for the license rights involved for the relevant license
period. Certain films in which the Partnership owns an interest
have been licensed for network television exhibition under this
arrangement. Certain of the Tri-Star Joint Venture's films have
been licensed for network television exhibition on CBS or on
other television networks on a film-by-film basis.
The films in which the Partnership owns an interest are
subject to agreements between each Distributor and Columbia
TriStar Home Video (formerly known as RCA/Columbia Pictures Home
Video) and Columbia TriStar Home Video (International) Inc.
(formerly known as RCA/Columbia Pictures International Video).
The distribution agreements between each Joint Venture and its
respective Distributor provide for the inclusion in gross
receipts of a percentage royalty for video cassettes and video
discs, regardless of the amounts payable to TriStar or Columbia
under their respective arrangements with such joint ventures
(which may exceed the amounts includable in gross receipts).
Many films in which the Partnership has an interest have
been licensed by their respective Distributors for exhibition on
other cable television services, independent television stations
in the United States and on foreign television stations.
Generally, these films have been made available for foreign
television exhibition and domestic independent television
exhibition approximately three and five years, respectively,
after a film's domestic theatrical release.
Each Distributor reports gross receipts and net proceeds
for each film to the Joint Venture on behalf of which it acts,
on a quarterly basis, and makes payments to that Joint Venture
based on those reports when the reports are delivered. In
addition to distributing motion pictures produced or acquired by
the Joint Ventures, each Distributor distributes films in which
joint ventures between each of Columbia and TriStar and certain
other limited partnerships (the "Delphi Partnerships") own an
interest, as well as films in which neither the Partnership nor
any of the Delphi Partnerships own an interest.
Additional Payments.
The terms of the distribution agreements between the
Joint Ventures and the Distributors, provide that the
Partnership would be entitled to receive, through each Joint
Venture, a payment (an "Additional Payment") from that Joint
Venture's Distributor for each film (an "Unrecouped Film"), if
by September 1993, in the case of the Columbia Joint Venture,
and if by June l994, in the case of the Tri-Star Joint Venture,
for which the Joint Venture has not received from the
distribution of that film (or its sale) an amount equal to the
amount spent by the Joint Venture to produce or acquire an
interest in that film, other than amounts spent for payments in
the nature of interest ("Cost Return"). Each Additional Payment
had been in the amount necessary for the Partnership to be
repaid (without interest) its unrecouped contributions to the
Joint Venture with respect to the production or acquisition of
an interest in an Unrecouped Film (other than contributions for
payments in the nature of interest), but not more than the
amount specified below. Each Additional Payment was payable
only to the extent of the distribution fees received by the
Distributor from the distribution of all of its Joint Venture's
films. The Additional Payments to each Joint Venture based on
distribution fees have been allocated by each Joint Venture
first to the Partnership, to the extent necessary for the
Partnership to recoup (without interest) the amount of its
contributions to each Joint Venture for the production or
acquisition of the Unrecouped Films (other than contributions
for payments in the nature of interest); any excess has been
allocated to the Studio Venturer. As these distribution fees
were insufficient to enable a Distributor to make the Additional
Payments with respect to all of its Joint Venture's Unrecouped
Films, gross receipts and net proceeds of each remaining
Unrecouped Film distributed by that Distributor were
recalculated by including as gross receipts the minimum license
fees under its license agreement with HBO and certain minimum
amounts in respect of video cassette and video disc exploitation
with respect to that Unrecouped Film. Each Additional Payment
made on the basis of such recalculation has been allocated
between the Partnership and the Studio Venturer in proportion to
their respective interests in the applicable Unrecouped Film.
Each Distributor made an Additional Payment to the Partnership,
through its Joint Venture, with respect to each Unrecouped Film
to the extent of the Partnership's share of additional gross
receipts or net proceeds payable to the Joint Venture as a
result of the recalculation but only up to the amount of the
unrecouped contributions (other than contributions for payments
in the nature of interest) by the Partnership for the production
or acquisition of that Unrecouped Film.
The distribution agreements provide that each Distributor
is entitled to recoup the Additional Payments made to the
Partnership in respect of each Unrecouped Film, with interest
calculated at 110% of the prime rate from time to time, from the
Partnership's share of subsequent gross receipts or net proceeds
of that Unrecouped Film and from the proceeds of any sale of the
Partnership's interest in that Unrecouped Film or amounts
allocable to that Unrecouped Film upon a sale of the
Partnership's interest in the Joint Venture. Except for
Unrecouped Films, the Distributor does not have the right to
recoup amounts from the proceeds of the sale of any film. In
calculating the amount of distribution fees available for the
Additional Payments, no distribution fee is deemed received by a
Distributor (and therefore no distribution fee is deemed
available for the Additional Payment) from (i) a film with
respect to which the most recent payment to that Distributor's
Joint Venture was based on gross receipts or (ii) a film that
did not reach Cost Return. In addition, for these purposes, no
distribution fee is considered to have been received by the
Distributor for this purpose from "Short Circuit 2." The
Partnership received approximately $7,400,000 in June 1994
representing its share of the Tri-Star Joint Venture's
Additional Payments relating to all but one film. Based on the
anticipated performance of this one film, as of December 31,
1995, approximately $353,000 has been accrued by the Tri-Star
Joint Venture as an Additional Payment allocable to the
Partnership. During the year ended December 31, 1993, the
Partnership received approximately $11,356,000 representing its
share of the Columbia Joint Venture's Additional Payments. The
Additional Payments from the Distributors are expected to enable
the Partnership, through each Joint Venture, to achieve Cost
Return for each Unrecouped Film and are not intended to enable
the Partnership to recoup any amounts paid by the Partnership
for management fees or other expenses of the Partnership. The
Columbia and TriStar Distributors are not expected to fully
recoup these Additional Payments.
Films in Release.
All 11 films in which the Columbia Joint Venture has
an interest have been released. Certain information
concerning these films is set forth below:
Initial Partnership's
Release Approximate
Title Date
Percentage Interest
Jagged Edge October 1985
10%
White Nights November 1985
15%
Murphy's Romance December 1985 15%
Care Bears II:
The New Generation March 1986 25%
A Fine Mess August 1986
15%
Jo Jo Dancer
Your Life is Calling May 1986
15%
Out of Bounds July 1986
15%
Stewardess School August 1986 15%
Armed and Dangerous August 1986 5.7%
Ishtar May 1987 8.3%
White Water Summer July 1987 14.4%
All 14 films in which the Tri-Star Joint Venture has an
interest have been released. Certain information concerning
those films is set forth below:
Initial Partnership's
Release Approximate
Title Date
Percentage Interest
Santa Claus: The Movie November 1985
5%
Band of the Hand April 1986
10%
Short Circuit May l986 5%
Labyrinth June 1986
10%
About Last Night... July 1986 22.5%
Nothing In Common July 1986 10%
Night of the Creeps August 1986 10%
Let's Get Harry October l986
l7%
Peggy Sue Got Married October 1986
10%
Everytime We Say
Goodbye November l986
5%
The Boss' Wife November l986
25%
No Mercy December l986
17.9%
Blind Date March 1987
15.6%
Short Circuit 2 July 1988
(See Below)
The Partnership, through the Tri-Star Joint Venture,
has a participation interest in the film "Short Circuit 2."
The Partnership is entitled to 3.2% of net proceeds after
"Breakeven" has been reached. For these purposes "Breakeven"
is defined as the point at which 5.6% of net proceeds (after
recoupment of deferred distribution fees) of "Short Circuit
2" equals 5% of the production cost of the film (including an
overhead charge of 12-1/2%). The Partnership does not
anticipate receiving any revenues with respect to its
participation interest in "Short Circuit 2".
All of the Partnership's films of both Joint Ventures
have been released theatrically both domestically and in
foreign markets. In addition, all of these films have been
made available on video cassettes and have been exhibited on
pay television. Many of these films have been exhibited on
network television, and certain of these films are currently
under license for domestic syndicated television exhibition
and foreign television exhibition. See "Distribution of
Films."
Competition.
Competition in the motion picture industry is intense,
both in theatrical distribution as well as in the ancillary
markets where the Partnership's films are now being
distributed. All of the "major" studios and independent
distribution companies are distributing films that compete
for the attention of purchasers of product for these
ancillary markets which include pay cable television, home
video, network television exhibition, and syndicated
television exhibition both foreign and domestic. The
Partnership's films compete in many of these markets not only
with films that were released contemporaneously, but also
with many films that were released in prior and subsequent
years. The level of theatrical success that a film enjoyed is
often an important factor with respect to results achieved in
these ancillary markets.
Employees.
The Partnership has no employees. The General
Partner, however, retains the services of Magera Management
Corporation ("Magera") to provide operational and financial
services to it. See Item l0 "Directors and Executive
Officers of the Partnership-Operational and Financial
Services." Magera has eight employees who perform services
for the General Partner and for the general partners of other
private and public limited partnerships, including the other
Delphi Partnerships.
Item 2. Properties.
The executive offices of the Partnership and the
General Partner are located at 666 Third Avenue, New York,
New York 10017. The Partnership pays no rent.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
<PAGE>
PART II.
Item 5. Market for the
Registrant's Common Equity and
Related Security Holder Matters.
The Partnership is a limited partnership; there is no
established public market for limited partnership units of
the Partnership.
Effective November 9, 1992, the Partnership was
advised that Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") introduced a new limited
partnership secondary service available to its clients
through Merrill Lynch's Limited Partnership Secondary
Transaction Department.
Beginning with the December 1994 client account
statements, Merrill Lynch implemented new guidelines for
providing estimated values of limited partnerships and other
direct investments reported on client account statements. As
a result, Merrill Lynch no longer reports general partner
estimates of limited partnership net asset value on its
client account statements. Pursuant to the guidelines,
estimated values for limited partnership interests originally
sold by Merrill Lynch (such as the Partnership's Units) will
be provided two times per year to Merrill Lynch by
independent valuation services. The estimated values will be
based on financial and other information available to the
independent services on the prior August l5th for reporting
on December year-end client account statements, and on
information available to the services on March 31st for
reporting on June month-end Merrill Lynch client account
statements. Merrill Lynch clients may contact their Merrill
Lynch Financial Consultants or telephone the number provided
to them on their account statements to obtain a general
description of the methodology used by the independent
valuation services to determine their estimates of value.
The estimated values provided by the independent services are
not market values and Unit holders may not be able to sell
Units or realize the amount upon a sale. In addition, Unit
holders may not realize the independent estimated value upon
the liquidation of the Partnership over its remaining life.
As of March 15, 1996, there were approximately 4,200
holders of record of limited partnership units of the
Partnership.
Cash Distributions
The Partnership commenced making cash distributions in
October 1987. The following chart sets forth the cash
distributions made by the Partnership through March 15, 1996:
Year Amount Per Unit
1987 $ 100
1988 500
1989 100
1990 100
1991 100
1992 100
1993 1,450
1994 850
1995 0
1996 (through March 15) 0
Total $ 3,300
Accordingly, as of March 15, 1996, the partners have
received distributions aggregating 66% of their original
investment in the Partnership. The Partnership does not
currently anticipate that the partners will receive cash
distributions in an aggregate amount sufficient to recover
their capital contribution to the Partnership.
<PAGE>
<TABLE>
<CAPTION>
Item 6. Selected Financial Data.
(000's omitted except for per unit information)
Year
Ended December 31,
1995 1994 1993
1992 1991
<S> <C> <C> <C> <C>
<C>
Operating
revenues (1): $ 0 $
0 $ 0 $ 0 $ 0
Share of profit
in motion
picture ventures,
net: $ 117 $ 1,146 $
2,105 $ 1,987 $ 1,010
Net (loss) profit: $ (306) $ 769
$ 1,666 $ 1,473 $ 692
Net (loss) profit
per unit: $ (38) $
95 $ 206 $ 182 $ 86
Total assets: $ 1,949 $ 2,268 $
8,366 $ 18,428 $17,701
Total liabilities: $ 91 $ 104
$ 102 $ 113 $ 51
Cash distributions
per unit: $ 0 $ 850
$ 1,450 $ 100 $ 100
(1) The Partnership's interests in the Joint Ventures are not
included in Operating Revenues as they are accounted for
by the equity method.
</TABLE>
Item 7. Management's Discussion and Analysis of
Financial
Condition and Results of Operations.
1. Liquidity and Capital Resources.
The Partnership has satisfied its commitment to
contribute funds to the Joint Ventures for the production of,
and acquisition of interests in, films. As of December 31,
1995, the Partnership held cash of approximately $191,000 and
short-term investments of approximately $1,079,000. Short-
term investments consist solely of U.S. government
securities.
In March 1988, a non-interest bearing advance of
$1,300,000 was made to the Tri-Star Joint Venture by its
Distributor. This advance was allocated to the Partnership
to enable it to make a cash distribution to its partners.
The advance was to be repaid by the Partnership according to
a formula, which takes into consideration the Partnership's
receipts from the Joint Ventures, its expenses and the
federal income tax liability of its partners relating to
Partnership income. As of December 31, 1993, the entire
amount of this advance was repaid.
Since the Partnership's obligations to make
contributions to the Joint Ventures for the production of,
and acquisition of interests in, films has been satisfied,
all revenue received by the Partnership (for other than
Unrecouped Films) is used to pay operating expenses of the
Partnership, and to make cash distributions to partners. The
Partnership does not anticipate significant future revenues
and accordingly, the Partnership does not currently
anticipate making cash distributions to partners on a
quarterly basis. However, the Partnership may make future
distributions if it realizes proceeds from its interest in
other than Unrecouped Films. The last distribution was made
in August 1994.
The Partnership received approximately $7,400,000 in
June 1994 representing its share of the Tri-Star Joint
Venture's Additional Payments relating to all but one film.
These funds less a reserve for Partnership operating expenses
were distributed to partners in August 1994. The Partnership
received approximately $11,356,000 in September 1993
representing its share of the Columbia Joint Venture's
Additional Payments. These funds less a reserve for
Partnership operating expenses were distributed to partners
in November 1993. The Columbia and TriStar Distributors are
not expected to fully recoup these Additional Payments and it
is therefore currently expected that the Partnership will not
receive any additional revenue with respect to the Columbia
and Tri-Star Joint Venture's Unrecouped Films. Based on the
anticipated performance of one film in which the Tri-Star
Joint Venture has an interest, as of December 31, 1995,
approximately $353,000 had been accrued by the Tri-Star Joint
Venture as an Additional Payment allocable to the
Partnership.
The Additional Payments from the Distributors are
expected to enable the Partnership, through each Joint
Venture, to achieve Cost Return for each Unrecouped Film and
are not intended to enable the Partnership to recoup any
amounts paid by the Partnership for management fees or other
expenses of the Partnership.
2. Results of Operations.
The Partnership's operating results are primarily
dependent upon the operating results of the Joint Ventures
and are significantly impacted by the Joint Ventures'
policies.
The performance of each film is based upon the amount
expended for production and other costs associated with a
film and the revenue generated by a film. The amount and
timing of revenue generated by each film is dependent upon
the degree of acceptance by the consumer public and the
particular ancillary market in which the film is then being
exhibited.
Amounts contributed toward each film are compared
periodically to the expected total revenue to be generated
for that film, and write-downs may occur to the extent the
amounts invested exceed the expected total revenue for that
film.
Additionally, each Joint Venture may record income
with respect to Additional Payments, to the extent available,
which may allow it to recover its investment in films.
For the year ended December 31, 1995, the Columbia
Joint Venture had a net loss; however,the Partnership
reported a net profit from that Joint Venture of
approximately $61,000, due primarily to the profitable
results of one film. The Tri-Star Joint Venture had a net
profit of which the Partnership's share was approximately
$56,000, due primarily to the profitable results of certain
films offset, in part, by the recapture of Additional
Payments. In addition, the Partnership earned approximately
$64,000 of interest income from its short-term investments
and incurred approximately $487,000 of expenses from its
operations, resulting in an overall net loss to the
Partnership of approximately $306,000.
For the year ended December 31, 1994, the Columbia
Joint Venture had a net profit of which the Partnership's
share was approximately $47,000, due primarily to the
profitable results of one film offset, in part, by expenses
related to foreign exchange losses. The Tri-Star Joint
Venture had a net profit of which the Partnership's share was
approximately $1,099,000, due primarily to the accrual of
Additional Payments and related interest income and the
profitable results of one film offset, in part, by expenses
related to foreign exchange losses. In addition, the
Partnership earned approximately $101,000 of interest income
from its short-term investments and incurred approximately
$478,000 of expenses from its operations, resulting in an
overall net profit to the Partnership of approximately
$769,000.
For the year ended December 31, 1993, the Columbia
Joint Venture had a net profit, of which the Partnership's
share was approximately $1,155,000, due primarily to the
accrual of Additional Payments and related interest income,
the recognition of distributions accrued in excess of the
Partnership's investment in the Columbia Joint Venture and
the profitable results of one film offset, in part, by the
write down to net realizable value of certain films. The Tri-
Star Joint Venture had a net profit of which the
Partnership's share was approximately $950,000, due primarily
to the accrual of Additional Payments and related interest
income and the profitable results of certain films. In
addition, the Partnership earned approximately $128,000 of
interest income from its short-term investments and incurred
approximately $567,000 of expenses from its operations,
resulting in an overall net profit to the Partnership of
approximately $1,666,000.
The decrease in interest income for the years ended
December 31, 1995 and 1994 as compared with the prior years
1994 and 1993, respectively, was due primarily to the
availability of less funds for short-term investments.
The increase in total expenses for the year ended
December 31, 1995 as compared with the prior year, was due
primarily to an increase in Other Expenses. The increase in
Other Expenses is primarily attributable to an increase in
professional fees. The decrease in total expenses for the
year ended December 31, 1994 as compared with the prior year,
was due primarily to a decrease in Other Expenses. The
decrease in Other Expenses is primarily attributable to a
decrease in professional fees resulting from the performance
of fewer production and distribution audits in 1994.
The Partnership does not believe that the impact of
inflation on the results of its operations has been material.
Item 8. Financial Statements and Supplementary Data.
See the financial statements set forth in Item 14 of
this annual report.
Item 9.Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
<PAGE>
PART III.
Item 10. Directors and Executive Officers of the
Partnership.
The General Partner of the Partnership is Delphi
Management Associates, a New York general partnership
originally formed in June 1985 by Lewis J. Korman, Richard M.
Mason and two other individuals. In January 1987, ML Film
Entertainment Inc. ("ML Film"), a Delaware corporation, and a
wholly-owned subsidiary of ML Leasing Equipment Corp. (which
is an indirect wholly-owned subsidiary of Merrill Lynch & Co.
Inc., and the successor in interest to Merrill Lynch Leasing
Corp.) and an affiliate of Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") was admitted as a
partner in the General Partner and replaced Mr. Korman as
managing partner of the General Partner (the "Managing
Partner"). Set forth below is certain information regarding
the management of the General Partner.
ML Film.
The executive officers and directors of ML Film are:
Kevin K. Albert . . . . . President, Director
Robert F. Aufenanger . Executive Vice President, Director
Steven N. Baumgarten. Vice President, Director
Michael E. Lurie. . . . .. Vice President, Director
Diane T. Herte . . . . . . . Treasurer
Kevin K. Albert, 43, a Managing Director of
Merrill Lynch Investment Banking Group ("ML Investment
Banking"), joined Merrill Lynch in 1981. Mr. Albert
works in the Equity Private Placement Group and is
involved in structuring and placing a diversified array
of private equity financings including common stock,
preferred stock, limited partnership interests and other
equity related securities. Mr. Albert is also a director
of ML Media Management Inc. ("ML Media"), an affiliate
of ML Film and a joint venturer of Media Management
Partners, the general partner of ML Media Partners, L.P.;
a director of ML Opportunity Management Inc. ("ML
Opportunity"), an affiliate of ML Film and a joint
venturer in Media Opportunity Management Partners, the
general partner of ML Media Opportunity Partners, L.P.; a
director of ML Mezzanine II Inc. ("ML Mezzanine II"), an
affiliate of ML Film and the general partner of the
managing general partner of ML Lee Acquisition Fund II,
L.P. and ML Lee Acquisition Fund (Retirement Accounts)
II, L.P.; a director of ML Mezzanine Inc. ("ML
Mezzanine"), an affiliate of ML Film and the general
partner of the managing general partner of ML Lee
Acquisition Fund, L.P.; a director of Merrill Lynch
Venture Capital Inc. ("ML Venture"), an affiliate of ML
Film and the general partner of the Managing General
Partner of ML Venture Partners I, L.P. ("Venture I"), ML
Venture Partners II, L.P. ("Venture II"), and ML Oklahoma
Venture Partners Limited Partnership ("Oklahoma"); and a
director of Merrill Lynch R&D Management Inc. ("ML R&D"),
an affiliate of ML Film and the general partner of the
Managing General Partner of ML Technology Ventures, L.P.
Mr. Albert also serves as an independent general partner
of Venture I and Venture II.
Robert F. Aufenanger, 42, a Vice President of
Merrill Lynch & Co. Corporate Credit and a Director of
the Partnership Management Department, joined Merrill
Lynch in 1980. Mr. Aufenanger is responsible for the
ongoing management of the operations of the equipment and
project related limited partnerships for which affiliates
of ML Film serve as general partners. Mr. Aufenanger is
also a director of ML Media, ML Opportunity, ML Venture,
ML R&D, ML Mezzanine and ML Mezzanine II.
Steven N. Baumgarten, 40, a Vice President of
Merrill Lynch & Co. Corporate Credit, joined Merrill
Lynch in 1986. Mr. Baumgarten shares responsibility for
the ongoing management of the operations of the equipment
and project related limited partnerships for which
subsidiaries of ML Leasing Equipment Corp., an affiliate
of Merrill Lynch, are general partners.
Michael E. Lurie, 52, a First Vice President of
Merrill Lynch & Co. Corporate Credit and the Director of
the Asset Recovery Management Department, joined Merrill
Lynch in 1970. Prior to his present position, Mr. Lurie
was the Director of Debt and Equity Markets Credit
responsible for the global allocation of credit limits
and the approval and structuring of specific transactions
relating to debt and equity products. He also served as
Chairman of the Merrill Lynch International Bank Credit
Committee. Mr. Lurie is also a director of ML Media, ML
Opportunity, ML Venture and ML R&D.
Diane T. Herte, 35, an Assistant Vice President of
Merrill Lynch & Co., Corporate Credit since 1992, joined
Merrill Lynch in 1984. Ms. Herte's responsibilities
include controllership and financial management functions
for certain partnerships for which subsidiaries of ML
Leasing Equipment Corp., an affiliate of Merrill Lynch,
are general partners.
Mr. Aufenanger is an executive officer of Mid-
Miami Diagnostics Inc. ("Mid-Miami Inc."). On October
28, 1994 both Mid-Miami Inc. and Mid-Miami Diagnostics,
L.P. filed voluntary petitions for protection from
creditors under Chapter 7 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the
Southern District of New York.
Merrill Lynch was a co-managing underwriter of the
initial public offering of Sony Pictures Entertainment,
Inc. ("SPE") (then known as "Tri-Star Pictures, Inc.")
securities and of several subsequent public offerings of
additional SPE securities. In addition, an affiliate of
the Managing Partner serves as a manager for certain film
financing transactions conducted on behalf of SPE in
Japan. Therefore, ML Film and its affiliates could have
interests that may conflict with those of the
Partnership.
Merrill Lynch, or an affiliate, has served as a
selling agent for the public offerings of units in each
of the Delphi Partnerships.
Operational and Financial Services.
To assist it in the performance of its duties, the
General Partner has engaged Magera, subject to the
direction and supervision of the General Partner, to
provide operational and financial services which are
provided at no additional cost to the Partnership for
each year for which there is a management fee. Magera is
owned by Richard M. Mason and Aaron German. Mr. Mason, a
partner of the non-managing partner of the General
Partner and the President of Magera, and Mr. German, the
Executive Vice President, of Magera, also previously
acted as consultants to SPE. Magera also provides
operational and financial services to the general
partners of other private and public limited
partnerships, including the other Delphi Partnerships,
and serves as a consultant to others engaged in the
entertainment industry.
Item 11. Executive Compensation.
The General Partner was paid a management fee of
$400,000 for 1995. The General Partner is responsible
for payments to all personnel employed by it, office and
travel expenses and other matters relating to the
administration of the Partnership. The General Partner
does not, however, bear professional fees rendered on
behalf of the Partnership, such as legal fees and fees to
certified public accountants which are paid directly by
the Partnership. The General Partner is being reimbursed
for out-of-pocket expenses with respect to administering
the Partnership and reporting to partners. For years
subsequent to 1995, there will be no fixed management
fee. In that regard, the General Partner, on behalf of
the Partnership, has retained Magera to provide those
services to the Partnership for years after 1995.
Until limited partners have received total cash
distributions equal to their capital contributions (the
"Capital Return"), they will receive 99% of, and the
General Partner will receive 1% of, all cash
distributions. The General Partner, in addition to
receiving distributions in respect of the 1% interest for
which it has paid, will be entitled to receive
distributions in amounts equal to 20% of all cash
distributions made after Capital Return. The payment to
the General Partner of one-third of these additional
amounts with respect to the 20% interest will be deferred
until the limited partners have received total cash
distributions equal to l50% of Capital Return and the
amounts deferred will be payable from the next cash
distributed after l50% of Capital Return is reached. If
l50% of Capital Return is not reached, the General
Partner will not receive any deferred amount.
The foregoing describes the provisions of the
partnership agreement concerning the General Partner's
right to share in cash distributions, and is not intended
to suggest that any particular level of cash
distributions will be reached.
Prior to reaching the Capital Return, income will
be allocated 99% to the limited partners and l% to the
General Partner. After Capital Return is reached,
allocations of income will be based on the aggregate
prior allocations of income and losses, the aggregate
prior cash distributions and cash available for
distribution.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
To the best of the knowledge of the Partnership,
no person beneficially owns in excess of 5% of the
limited partnership units of the Partnership. To the
best of the knowledge of the Managing Partner, as of
March 1, 1996, no person is the beneficial owner of 5%
or more of the outstanding common stock of Merrill
Lynch.
Item 13. Certain Relationships and Related
Transactions.
The Partnership's operations relating to the
ownership and exploitation of films involve Columbia or
TriStar. See Item 1 "Business."
The General Partner is entitled to management
fees and to a portion of cash distributions to
partners. The General Partner of the Partnership is
affiliated with the general partners of other Delphi
Partnerships all of which are limited partnerships
similar to the Partnership.
<PAGE>
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.
(a)(1) Financial Statements:
Delphi Film Associates V
Independent Auditors' Report
Balance Sheets at December 31, 1995 and 1994
Statements of Operations For the Years
Ended December 31, 1995, 1994 and 1993
Statements of Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993
Statements of Changes in Partners' Capital
For the Years Ended December 31, 1995,
1994 and 1993
Notes to Financial Statements
Columbia-Delphi V Productions
Independent Auditors' Report
Balance Sheets at December 31, 1995 and 1994
Statements of Operations for the Years
Ended December 31, 1995, 1994 and 1993
Statements of Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993
Statements of Venturers' Capital for the Years
Ended December 31, 1995, 1994 and 1993
Notes to Financial Statements
Tri-Star-Delphi V Productions
Independent Auditors' Report
Balance Sheets at December 31, 1995 and 1994
Statements of Operations for the Years
Ended December 31, 1995, 1994 and
l993
Statements of Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993
Statements of Venturers' Capital for
the Years Ended December 31, 1995, 1994
and 1993
Notes to Financial Statements
(a)(2) Financial Statement Schedules:
No financial statement schedules have been filed
as part of this report as none are required.
<TABLE>
<CAPTION>
(a)(3) Exhibits
Exhibit No.
<S> <C>
Amended Agreement
of Limited Partnership (1)
4.l(a)
Amendment to Amended Agreement of
Limited Partnership dated as of
December 26, 1986 (2)
4.1(b)
Joint Venture Agreements (1)
l0.1
Product Origination Agreements (l)
l0.2
Distribution Agreements (1)
l0.4(a)
Amendment to the Columbia
Distribution Agreement dated
May 4, 1987 (3)
10.4(b)
Amendment to the Tri-Star Distribution
Agreement dated June 9, 1987 (3)
10.4(c)
Amendment to the Tri-Star Distribution
Agreement dated December 2, 1987 (3)
10.4(d)
Financial Data Schedule
27
</TABLE>
(1) Incorporated by reference to the Partnership's
registration statement No. 2-98776, as amended, on file with
the Securities and Exchange Commission.
(2) Incorporated by reference to the Partnership's
Form 10-Q for the quarter ended June 30, 1987 on file with
the Securities and Exchange Commission.
(3) Incorporated by reference to the Partnership's
Form 10-K for the year ended December 31, 1987 on file with
the Securities and Exchange Commission.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last
quarter of the
Partnership's fiscal year ended December 31, 1995.
(c) Exhibits.
The Exhibits required by Item 601 of Regulation S-K
are submitted as a separate section following the
Partnership's financial statements.
(d) Financial Statement Schedules.
No financial statement schedules have been filed as
part of this report as none are required.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: March 28, 1996 DELPHI FILM
ASSOCIATES V
By: DELPHI
MANAGEMENT
ASSOCIATES
General
Partner
By: ML Film
Entertainment Inc.,
Managing
Partner
/s/ Kevin K.
Albert
(Kevin K.
Albert)
President
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant in the
capacities and on the dates indicated.
Signature Title Date
/s/ Kevin K. Albert Director and President of
March 28, 1996
(Kevin K. Albert) the Managing Partner
of the General Partner
(principal executive
officer of the Registrant)
/s/ Robert F. Aufenanger Director and Executive
Vice March 28, 1996
(Robert F. Aufenanger) President of the
Managing
Partner of the General Partner
/s/ Steven N. Baumgarten Director and Vice
President March 28, 1996
(Steven N. Baumgarten) of the Managing Partner
of the General Partner
Director and Vice
President March 28, 1996
(Michael E. Lurie) of the Managing Partner
of the General Partner
/s/ Diane T. Herte Treasurer of the March 28,
1996
(Diane T. Herte) Managing Partner
of the General Partner
(principal financial officer
and principal accounting
officer of the Registrant)
<PAGE>
EXHIBIT INDEX
Page Reference
in Sequentially
Numbered Copy
4.1(a) Amended Agreement
of Limited Partnership*
4.1(b) Amendment to the Amended Agreement
of Limited Partnership dated as of
December 26, 1986*
l0.l Joint Venture Agreements*
l0.2 Product Origination Agreements*
l0.4(a) Distribution Agreements*
10.4(b) Amendment to the Columbia Distribution
Agreement dated May 4, 1987*
10.4(c) Amendment to the Tri-Star Distribution
Agreement dated June 9, 1987*
10.4(d) Amendment to the Tri-Star Distribution
Agreement dated December 2, 1987*
27 Financial Data Schedule
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Delphi Film Associates V:
We have audited the accompanying balance sheets of Delphi
Film Associates V (a New York Limited Partnership) as of
December 31, 1995 and 1994, and the related statements of
operations, cash flows and changes in partners' capital for
each of the years in the three-year period ended December
31, 1995. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Delphi Film Associates V (a New York Limited
Partnership) at December 31, 1995 and 1994, and the results
of its operations and its cash flows for each of the years
in the three-year period ended December 31, 1995 in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
New York, New York
March 25, 1996
<PAGE>
DELPHI FILM ASSOCIATES V
(A New York Limited Partnership)
BALANCE SHEETS
(000's Omitted)
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
ASSETS
Cash $ $
191 482
Short-Term Investments (Note 2) 1,079 1,076
Receivable from Columbia-Delphi
V
Productions (Note 4) 186 198
Receivable from Tri-Star-Delphi
V
Productions (Note 4) 493 507
Interest in Motion Picture
Venture-Columbia-
Delphi V Productions (Notes 2
& 4) -- 5
Total $ $
Assets 1,949 2,268
LIABILITIES AND PARTNERS'
CAPITAL
Liabilities:
Accrued Expenses and Accounts $ $
Payable 91 104
Total
Liabilities 91 104
Partners' Capital (Note 1):
General Partner 66 69
Limited Partners
1,792 2,095
Total
Partners' Capital 1,858 2,164
Total
Liabilities and Partners'
$ $
Capital 1,949 2,268
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
DELPHI FILM ASSOCIATES V
(A New York Limited Partnership)
STATEMENTS OF OPERATIONS
(000's Omitted, except net (loss) profit per unit)
<TABLE>
<CAPTION>
For the Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Interest Income $ $ $
64 101 128
Expenses:
Management Fee 400 400 400
Other Expenses
87 78 167
487 478 567
Loss before Share of
Profit
in Motion Picture (423) (377) (439)
Ventures
Share of Profit in
Motion Picture
Venture--Columbia-
Delphi V
Productions (Notes 2 61 47 1,155
& 4)
Share of Profit in
Motion Picture
Venture--Tri-Star-
Delphi V
Productions (Notes
2 & 4) 56 1,099 950
Net (Loss) Profit $ $ $
(306) 769 1,666
Net (Loss) Profit Per
Unit of
Limited Partnership
Interest
( 8,000 Units) $ $ $
(38) 95 206
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
DELPHI FILM ASSOCIATES V
(A New York Limited Partnership)
STATEMENTS OF CASH FLOWS
(000's Omitted)
<TABLE>
<CAPTION>
For the Year Ended December 31,
1995
1994 1993
<S>
<C> <C> <C>
Cash Flow From Operating
Activities:
Net (Loss) Profit $ $ $
(306) 769 1,666
Adjustments to reconcile Net
(Loss) Profit to net
cash (used) provided by
operating activities:
Share of Income in Motion (117) (1,146) (2,105)
Picture Ventures
Distributions from Joint 122 1,155 2,157
Ventures
Changes in Assets and
Liabilities:
Decrease in Receivables
from Joint
Ventures, net 26 6,450 8,613
(Decrease) Increase in
Accrued Expenses
and Accounts Payable
(13) 2 (11)
Net Cash (Used) Provided
by Operating
Activities
(288) 7,230 10,320
Cash Flow From Investing
Activities:
Purchases of Short-Term (3,464) (17,694) (13,281)
Investments
Redemptions of Short-Term
Investments 3,461 17,359 14,634
Net Cash (Used) Provided by
Investing
Activities
(3) (335) 1,353
Cash Flow From Financing
Activities:
Distributions to Partners
-- (6,869) (11,717)
Net Cash Used by Financing
Activities -- (6,869) (11,717)
(Decrease) Increase In Cash (291) 26 (44)
Cash at beginning of year
482 456 500
Cash at end of year $ $ $
191 482 456
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
DELPHI FILM ASSOCIATES V
(A New York Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 3l, 1995, 1994 AND 1993
(000's Omitted, except distributions per unit)
<TABLE>
<CAPTION>
General Limited
Total
<S> <C> <C>
<C>
Balance January 1, 1993 $ $ $
230 18,085 18,315
Net Profit for the Year
Ended
December 31, 1993 17 1,649 1,666
Distributions to Partners
($1,450 per unit) (117) (11,600) (11,717)
Balance December 31, 1993 130 8,134 8,264
Net Profit for the Year
Ended
December 31, 1994 8 761 769
Distributions to Partners
($850 per unit) (69) (6,800) (6,869)
Balance December 31, 1994 69 2,095 2,164
Net Loss for the Year Ended
December 31, 1995
(3) (303) (306)
Balance December 31, 1995 $ $ $
66 1,792 1,858
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
DELPHI FILM ASSOCIATES V
(A New York Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. General
Delphi Film Associates V (the "Partnership") is a limited
partnership which was formed to participate in the
production, acquisition, ownership, and exploitation of
feature length motion pictures through Columbia-Delphi V
Productions (the "Columbia Joint Venture"), a joint venture
with Columbia Pictures Industries, Inc. ("Columbia"), and
through Tri-Star-Delphi V Productions (the "Tri-Star Joint
Venture"), a joint venture with TriStar Pictures, Inc.
(formerly Tri-Star Pictures, Inc.) ("TriStar").
The Partnership was organized under the law of the State
of New York on June 21, 1985. Delphi Management Associates,
a New York general partnership (the "General Partner"), is
the general partner of the Partnership. The General Partner,
which has the full responsibility for the management of the
Partnership's business, received a fee for its management
services of $400,000 in each of 1995, 1994 and 1993. A
public offering (the "Offering") of limited partnership
interests was completed on December 18, 1985. The
Partnership had no substantial operations until December
l985, when the Offering was completed. A total of 8,000
units at $5,000 per unit were sold. The General Partner
contributed $404,000, an amount equal to l% of the total
capital contributions to the Partnership. Profits and losses
have been allocated l% to the General Partner and 99% to the
limited partners.
The principal business of the Partnership is the
production, acquisition, ownership, and exploitation of
motion pictures through its participation in the Joint
Ventures. Accordingly, the Partnership's operating results
are in large part dependent upon the operating results of the
Joint Ventures and are significantly impacted by the Joint
Ventures' policies (see Note 4).
2. Summary of Significant Accounting Policies
(a) Short-Term Investments
Short-Term Investments consist solely of U.S. Government
Securities which are stated at cost plus accrued interest,
which approximate market value.
(b) Accounting for Participation in Joint Ventures
The Partnership records its investment in the Joint
Ventures under the equity method of accounting. Columbia
agreed to compensate the Partnership for the unavailability
to the Columbia Joint Venture of investment tax credits with
respect to two films by paying $l83,000 to the Partnership in
l986, an amount which is equal to approximately twice the
Partnership's proportionate share of the investment tax
credits relating to those films. This payment was applied as
a reduction of the Partnership's interest in the Columbia
Joint Venture as of December 31, 1992. During the year ended
December 31, 1993, the Partnership accrued distributions from
the Columbia Joint Venture in excess of its Interest in
Motion Picture Venture. As a result, the Partnership
included an additional $l83,000 in its share of profit from
the Columbia Joint Venture for the year ended December 31,
1993.
(c) Accounting for Income Taxes
No provision for income taxes has been made as Delphi Film
Associates V is treated as a partnership for income tax
purposes, with all income tax consequences flowing directly
to its partners.
Effective January l, l993, the Partnership adopted
Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." As of December 31, 1995 and
1994, the reported amounts of the Partnership's assets less
liabilities were greater (less) than the tax bases by
approximately $976,000 and ($952,000), respectively. The
adoption of the Statement had no impact on the
Partnership's financial statements.
3. Supplemental Disclosure of Cash Flow Information
No amounts for interest were paid in l995, l994 and l993.
4. Transactions with Joint Ventures
(a) Interests in Motion Pictures
The Partnership, through each Joint Venture, generally has
interests ranging from 5% to 25% in (and bore 5% to 25% of
the cost of) motion pictures produced by the Joint Ventures
("Joint Venture Films"). The Partnership also has a
participation interest in one additional film for which it
made no cash investment (the "Additional Film").
The Partnership has satisfied its commitment to contribute
funds to the Joint Ventures for the production and
acquisition of films, approximately one-half of which was
allocated to each Joint Venture. As of December 31, 1995 the
Columbia Joint Venture had interests in eleven films for
which the Partnership's cash contributions (including
interest) aggregated $23,331,000 and the Tri-Star Joint
Venture had interests in thirteen films (exclusive of the
Additional Film) for which the Partnership's cash
contributions (including interest) aggregated $23,067,000.
(b) Current Operations
As of December 31, 1995, all twenty-five films in which
the Partnership has an interest (including the Additional
Film) had been released. All of the films have completed
their theatrical release and are being distributed in various
ancillary markets. Based on the results of the films during
the year ended December 31, l995, and after deducting the net
operating expenses of the Partnership, the Partnership is
reporting a net loss of $306,000 for the year ended December
31, 1995.
(c) Transactions with Columbia and TriStar
The films in which the Columbia Joint Venture has an
interest are distributed pursuant to a distribution agreement
between Columbia Pictures (a "Distributor"), a division of
Columbia, and the Columbia Joint Venture. The films in which
the Tri-Star Joint Venture has an interest are distributed
pursuant to a distribution agreement between TriStar
Pictures, Inc. (a "Distributor") and the Tri-Star Joint
Venture (see Note 5). The Distributors are entitled to
receive a fee of l7.5% of substantially all gross receipts
from each film, except that the Distributors' entitlement to
this distribution fee is deferred until its Joint Venture has
received from the distribution of that film an amount equal
to that spent by the Joint Venture to produce or acquire an
interest in the film, other than amounts spent for payments
in the nature of interest. In light of the results of the
Joint Venture films, net revenues have been computed without
deducting a distribution fee to the Distributor, with the
exception of five films for which a portion of the fees were
deducted and one film for which the entire distribution fee
has been deducted.
(d) Joint Venture Revenue Recognition
Each Joint Venture recognizes net revenue from the
Distributor on an accrual basis. Net revenues consist of:
(a) the portion of net proceeds (gross receipts less a
distribution fee, unless deferred, and other distribution and
releasing costs) or, if greater, the portion of gross
receipts payable to the Joint Ventures under the distribution
agreements, plus, (b) accrued gross receipts (not in excess
of the Columbia and Tri-Star Joint Venture's advertising
expenditures plus an amount intended to approximate the cost
of funds incurred by the Partnership in connection with the
Columbia and Tri-Star Joint Venture's advertising
obligation). However, certain advances received by the
Distributor which are includable in gross receipts under the
distribution agreements are not reflected in the calculation
of net revenues until those advances are earned.
(e) Joint Venture Amortization Policies
Advertising expenditures which benefit future periods were
capitalized as incurred by the Joint Ventures. Advertising
expenditures and unamortized production costs are amortized
under the individual film forecast method based upon net
revenues recognized in proportion to the Joint Venture's
estimate of ultimate net revenues to be received without
regard to any additional payments (see Note 5). Unamortized
production costs are compared with net realizable value on a
film by film basis, and losses are recognized to the extent
of any excess of costs over net realizable value.
Unamortized advertising expenditures are compared with the
total estimated gross receipts from all films in the
aggregate, and losses are recognized to the extent of any
excess of expenditures over gross receipts.
(f) Receivable from Columbia Joint Venture
This asset represents the amounts receivable by the
Partnership from the Columbia Joint Venture. The total
receivable as of December 31, 1995 and 1994 of $186,000 and
$198,000, respectively, consists of amounts accrued with
respect to net proceeds and gross receipts payments.
(g) Receivable from Tri-Star Joint Venture
This asset represents the amounts receivable by the
Partnership from the Tri-Star Joint Venture. The total
receivable as of December 31, 1995 of $493,000 consists of
$140,000 accrued with respect to net proceeds and gross
receipts payments and $353,000 accrued as Additional Payments
(as defined below). The total receivable as of December 31,
l994 of $507,000 consisted of $152,000 accrued with respect
to net proceeds and gross receipts payments and $355,000
accrued as Additional Payments (as defined below).
5. Additional Payments
The terms of the distribution agreements between each
Joint Venture and its Distributor, provide that the
Partnership would be entitled to receive, through the Joint
Venture, a payment (an "Additional Payment") from that Joint
Venture's Distributor for each film (an "Unrecouped Film"),
if by September l993, in the case of the Columbia Joint
Venture, and if by June l994, in the case of the Tri-Star
Joint Venture, for which the Joint Venture has not received
from the distribution of that film (or its sale) an amount
("Cost Return") equal to the amount spent by the Joint
Venture to produce or acquire an interest in that film, other
than amounts spent for payments in the nature of interest.
Each Additional Payment has been made in the amount necessary
for the Partnership to be repaid (without interest) its
unrecouped contributions to the Joint Venture with respect to
the production or acquisition of an interest in an Unrecouped
Film (other than contributions for payments in the nature of
interest), but not more than the amount specified below. The
Additional Payment was payable only to the extent of the
distribution fees received by the Distributor from the
distribution of all of its Joint Venture's films. The
Additional Payments to each Joint Venture based on
distribution fees were allocated by each Joint Venture first
to the Partnership, to the extent necessary for the
Partnership to recoup (without interest) the amount of its
contributions to each Joint Venture for the production or
acquisition of the Unrecouped Films (other than contributions
for payments in the nature of interest); any excess has been
allocated to the studio venturer. If these distribution fees
were insufficient to enable a Distributor to make the
Additional Payment with respect to all of its Joint Venture's
Unrecouped Films, gross receipts and net proceeds of each
remaining Unrecouped Film distributed by that Distributor
were recalculated by including as gross receipts the minimum
license fees under its license agreement with Home Box
Office, Inc. and certain minimum amounts in respect of video
cassette and video disc exploitation with respect to that
Unrecouped Film. Each Distributor made an Additional Payment
to the Partnership, through its Joint Venture, with respect
to each Unrecouped Film to the extent of the Partnership's
share of additional gross receipts or net proceeds payable to
the Joint Venture as a result of the recalculation but only
up to the amount of the unrecouped contributions (other than
contributions for payments in the nature of interest) by the
Partnership for the production and acquisition of that
Unrecouped Film. Each Additional Payment made on the basis
of such recalculation has been allocated between the
Partnership and the studio venturer in proportion to their
respective interests in the applicable Unrecouped Film.
The distribution agreements provide that each Distributor
is entitled to recoup the Additional Payments made to the
Partnership in respect of each Unrecouped Film, with an
amount in the nature of interest calculated at ll0% of the
prime rate from time to time, from the Partnership's share of
subsequent gross receipts or net proceeds of that Unrecouped
Film and from the proceeds of any sale of the Partnership's
interest in that Unrecouped Film or amounts allocable to that
Unrecouped Film upon a sale of the Partnership's interest in
the Joint Venture. In no event will the Distributor be able
to recoup amounts from the proceeds of any sale from a film
that is not an Unrecouped Film. In calculating the amount of
distribution fees available for the Additional Payments, no
distribution fee was deemed to have been received by a
Distributor (and therefore no distribution fee was deemed to
have been available for the Additional Payment) from a film
with respect to which the most recent payment to that
Distributor's Joint Venture was based on gross receipts or
from a film that did not reach Cost Return. In addition, for
these purposes, no distribution fee is considered to have
been received by the Distributor for this purpose from "Short
Circuit 2."
The Partnership received approximately $7,400,000 in June
l994 representing its share of the Tri-Star Joint Venture's
Additional Payments relating to all but one film. Based upon
the anticipated performance of this film in release at
December 31, 1995, $353,000 has been accrued by the Tri-Star
Joint Venture as an Additional Payment allocable to the
Partnership. During the year ended December 31, 1993, the
Partnership received approximately $11,356,000 representing
its share of the Columbia Joint Venture's Additional
Payments. The Additional Payments from the Distributors are
expected to enable the Partnership, through each Joint
Venture, to achieve Cost Return for each Unrecouped Film and
are not intended to enable the Partnership to recoup any
amounts paid by the Partnership for management fees or other
expenses of the Partnership.
Until the recoupments referred to above are complete, the
Partnership will not receive any additional revenue from the
distribution of any Unrecouped Film. The Columbia and
TriStar Distributors are not expected to fully recoup these
Additional Payments and it is therefore currently expected
that the Partnership will not receive any additional revenue
with respect to the Columbia Joint Venture's Unrecouped
Films.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Venturers
Columbia - Delphi V Productions
In our opinion, the accompanying balance sheets and the
related statements of operations, of cash flows and of
venturers' capital present fairly, in all material respects,
the financial position of Columbia - Delphi V Productions at
December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in
the period ended December 31, 1995, in conformity with
generally accepted accounting principles. These financial
statements are the responsibility of the Venture's
management; our responsibility is to express an opinion on
these financial statements based on our audits. We
conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles
used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the
opinion expressed above.
Century City, California
March 22, l996
<PAGE>
COLUMBIA - DELPHI V PRODUCTIONS
(A Joint Venture)
BALANCE SHEETS
(000's Omitted)
<TABLE>
<CAPTION>
December 31,
1995
1994
<S> <C> <C>
ASSETS
Motion Picture Production and
Advertising
Costs, net of accumulated
amortization
of $241,322 and $241,146, $ $
respectively 845 1,021
(Notes 1, 2 & 5)
Motion Picture Costs Recoverable
from
Additional Payments (Notes 921 655
3, 5 & 6)
Receivable from Columbia
Pictures
(Distributor) (Note 6)
1,158 2,369
Total $ 2,924 $
Assets 4,045
LIABILITIES AND VENTURERS'
CAPITAL
Liabilities:
Payable to Columbia Pictures
Industries, Inc.
(Note 6) $ $
1,893 2,826
Payable to Delphi Film
Associates V (Note 6) 186 198
Total
Liabilities 2,079 3,024
Venturers' Capital (Notes 1 &
3):
Columbia Pictures Industries, 845 1,016
Inc.
Delphi Film Associates V
-- 5
Total
Venturers' Capital 845 1,021
Total
Liabilities and Venturers'
$ $
Capital 2,924 4,045
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
COLUMBIA - DELPHI V PRODUCTIONS
(A Joint Venture)
STATEMENTS OF OPERATIONS
(000's Omitted)
<TABLE>
<CAPTION>
For the
Year Ended December 31,
1995
1994 1993
<S> <C> <C> <C>
Net Revenues From Motion
Picture
Exploitation (Note $ $ $
2) 603 483 1,237
Less: Amortization of
Motion
Picture
Production and
Advertising
Costs
(Notes 2 & 5)
176 408 703
Income from Operations 427 75 534
Additional Payments
Accrual
(Notes 3 & 5) 266 98 3,401
Interest Income -- -- 5,248
Other Expense (Note 7)
-- (140) --
Net Income $ $ $
693 33 9,183
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
COLUMBIA - DELPHI V PRODUCTIONS
(A Joint Venture)
STATEMENTS OF CASH FLOWS
(000's Omitted)
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1995
1994 1993
<S>
<C> <C> <C>
Cash Flow From Operating
Activities:
Net Income $ $ $
693 33 9,183
Adjustments to reconcile Net
Income
to net cash provided by
operating activities:
Amortization of Motion Picture
Production and
Advertising Costs 176 408 703
Accrued Distributions to 154 691 82,123
Venturers
Changes in Assets and
Liabilities:
Decrease in Payable to
Columbia
Pictures Industries, (933) (90) (71,691)
Inc.
Decrease in Receivable from
Columbia Pictures 1,211 179 218
(Distributor)
(Increase) Decrease in
Motion Picture Costs
Recoverable from (266) (97) 81,905
Additional Payments
(Decrease) Increase in
Payable to Delphi
Film Associates V
(12) 8 (10,432)
Net Cash Provided by
Operating Activities 1,023 1,132 92,009
Cash Flow from Financing
Activities:
Distributions to Venturers
(1,023) (1,132) (92,009)
Net Cash Used by
Financing Activities (1,023) (1,132) (92,009)
Net Change in Cash -- -- --
Cash at beginning of year
-- -- --
Cash at end of year $ $ $
-- -- --
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
COLUMBIA - DELPHI V PRODUCTIONS
(A Joint Venture)
STATEMENTS OF VENTURERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 3l, 1995, 1994 AND 1993
(000's Omitted)
<TABLE>
<CAPTION>
Columbia Delphi
Pictures Film
Total
Industries, Associates
Venturers'
Inc. V
Capital
<S> <C> <C>
<C>
Venturers' Capital as of $ $ $
January 1, 1993 1,919 213 2,132
Net Income for the Year
Ended
December 31, 1993 8,211 972 9,183
Accrued Distributions to
Venturers (8,715) (1,171) (9,886)
Venturers' Capital as of
December 31,
1993 1,415 14 1,429
Net (Loss) Income for the
Year Ended
December 31, 1994 (14) 47 33
Accrued Distributions to
Venturers (385) (56) (441)
Venturers' Capital as of
December 31,
1994 1,016 5 1,021
Net Income for the Year
Ended
December 31, 1995 632 61 693
Accrued Distributions to
Venturers (803) (66) (869)
Venturers' Capital as of
December 31,
1995 $ $ $
845 -- 845
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
COLUMBIA - DELPHI V PRODUCTIONS
(A Joint Venture)
NOTES TO FINANCIAL STATEMENTS
1. General
Columbia-Delphi V Productions (the "Joint Venture") is a
joint venture between Columbia Pictures Industries, Inc.
("Columbia") and Delphi Film Associates V, a New York limited
partnership (the "Partnership"), formed on August 15, 1985 to
engage in the business of producing, acquiring, owning and
exploiting feature length motion pictures. Columbia has
approximately a 75-94% interest and the Partnership has
approximately a 6-25% interest in ten films (the "Joint
Venture Films"). Each of Columbia and the Partnership was
responsible for those respective percentages of the production
costs of the Joint Venture Films. In addition, the Joint
Venture has acquired a 20% interest in one film produced by
Columbia in which Columbia-Delphi IV Productions, a joint
venture between Columbia and Delphi Film Associates IV, a New
York limited partnership ("Delphi IV"), holds the remaining
80% interest. The Joint Venture's interest in this film was
shared equally by Columbia and the Partnership and each was
responsible for one-half of the cost to the Joint Venture for
its interest in that film. The general partner of Delphi IV
is affiliated with the general partner of the Partnership.
As of December 31, 1995, all ten Joint Venture Films and
the film in which the Joint Venture has acquired a 20%
interest had been released.
All of the Joint Venture's films are being distributed
pursuant to a distribution agreement between Columbia
Pictures (the "Distributor"), a division of Columbia and the
Joint Venture (see Note 2).
The Partnership participates in a joint venture (the
"Other Venture") with TriStar Pictures, Inc. (formerly Tri-
Star Pictures, Inc.) ("TriStar") similar to the Joint
Venture.
Sony Pictures Entertainment Inc. the parent company of
Columbia and TriStar, is an indirect wholly-owned subsidiary
of Sony Corporation.
2. Summary of Significant Accounting Policies
Recognition of Revenue
The Joint Venture recognizes net revenues from the
Distributor on an accrual basis. Net revenues consist of:
a) the portion of net proceeds (gross receipts less a
distribution fee, unless deferred, and other distribution and
releasing costs) or, if greater, the portion of gross
receipts payable to the Joint Venture under the distribution
agreement, plus b) accrued gross receipts (not in excess of
the amount of the advertising and promotion charge paid by
the Joint Venture plus an amount intended to approximate the
cost of funds incurred by the Partnership in connection with
the payment of that charge). However, certain advances
received by the Distributor which are includable in gross
receipts under the distribution agreement are not reflected
in the calculation of net revenues until those advances are
earned. The Joint Venture's advertising and promotion charge
expenditures were recoverable (subject to certain
limitations) from gross receipts from all films in which the
Joint Venture has an interest and gross receipts from all
films in which the Other Venture has an interest.
Distribution Fee
The Distributor is entitled to receive a 17.5%
distribution fee on substantially all gross receipts in
calculating the net proceeds to which the Joint Venture is
entitled from the distribution of a film; however, the
Distributor's entitlement to this distribution fee is
deferred until the Joint Venture has received from the
distribution of that film an amount equal to the amount spent
by the Joint Venture to produce or acquire an interest in the
film, other than amounts spent for payments in the nature of
interest ("Cost Return"). After Cost Return for a film, for
purposes of determining any additional payments based on net
proceeds to which the Joint Venture is entitled in respect of
that film, the Distributor will be entitled to receive a
distribution fee equal to 17.5% of substantially all gross
receipts of the film prior to Cost Return and 17.5% of
substantially all additional gross receipts after Cost
Return.
Net revenues accrued at December 31, l995, 1994 and 1993
have been computed without deducting a distribution fee to
the Distributor in light of the results of the films released
through those respective dates with the exception of three
films in 1995, l994 and l993 for which a portion of the
distribution fee has been deducted, and one film for each
year for which the entire distribution fee has been deducted.
Motion Picture Production and Advertising Costs
Motion picture production costs include the direct costs
of production plus an overhead charge of 12.5% of the direct
production costs; these costs are capitalized as incurred by
the Joint Venture. Payments by the Joint Venture in respect
of the advertising and promotion charge payable to the
Distributor were allocated to the films released and were
capitalized in the proportion that the advertising and
promotion costs serving as the basis for allocating those
payments benefit future periods. These costs are amortized
under the individual film forecast method based upon net
revenues to be received. Unamortized production costs are
compared with net realizable value on a film by film basis
and unamortized advertising costs are compared with net
realizable value in the aggregate; losses are recognized to
the extent of any excess of costs over net realizable value.
If losses are indicated for films, the Additional Payments
described in Note 3, to the extent available, are accrued as
Motion Picture Costs Recoverable from Additional Payments.
3. Additional Payments (See Note 5)
The Joint Venture was entitled to a payment from the
Distributor if the Joint Venture had not received net
proceeds and gross receipts (excluding amounts paid to the
Joint Venture for the recovery of advertising and promotion
charge payments) at least equal to the amount spent by the
Joint Venture for the production or acquisition of an
interest in each film (excluding certain amounts spent for
payments in the nature of interest) (an "Unrecouped Film").
Consequently, a payment of approximately $90,554,000 was made
in September l993 representing the amount available for the
Joint Venture to be repaid, without interest, its interest in
Unrecouped Films. The payment to the Joint Venture was
allocated first to the Partnership, to the extent necessary
for the Partnership to recoup (without interest), the amount
of its contributions to the Joint Venture for the production
or acquisition of the Unrecouped Films (other than
contributions for payments in the nature of interest); any
excess was then allocated to Columbia. The Partnership
recouped its interests in all Unrecouped Films, and Columbia
is still unrecouped. As a result, after Columbia recoups its
interests in Unrecouped Films, the Distributor will be
entitled to recoup these payments, with an amount in the
nature of interest, from the Joint Venture's share of
subsequent net proceeds and gross receipts from such
Unrecouped Films and from the proceeds of any subsequent sale
of the Joint Venture's interest in such Unrecouped Films. If
the gross receipts from a film do not exceed the costs of
distributing the film, or if the most recent payment to the
Joint Venture with respect to the film is based on gross
receipts, no amounts from the distribution of that film will
be available for payment to the Joint Venture for this
purpose.
4. Income Taxes
No provision for income taxes is made in the Joint
Venture's financial statements since the venturers treat the
Joint Venture as a partnership for income tax purposes, with
all income tax consequences flowing directly to the
venturers.
Effective January l, l993, the Joint Venture adopted
Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." As of October 31, 1995 and
1994 (the Joint Venture's tax year end is October 31), the
tax bases of the Joint Venture's assets less liabilities
exceeded amounts reported in the financial statements at
December 31, 1995 and l994 by approximately $3,941,000 and
$3,934,000, respectively. Management estimates that the tax
bases of the Joint Venture's assets and liabilities did not
differ significantly between October 31 and December 31 in
l995 and l994. The adoption of the Statement had no impact
on the Joint Venture's financial statements.
5. Current Operations
As of December 31, 1995, the Distributor had released all
eleven films in which the Joint Venture has an interest. The
Joint Venture is not expected to recoup its investment in
seven of these films out of the proceeds from their
distribution. However, as a result of the Additional
Payments referred to above, the Partnership has recouped its
investment in these films. For the years ended December 31,
1995, 1994 and 1993, motion picture production and
advertising costs have been reduced by amortization of
$176,000, $408,000 and $703,000, respectively.
For the year ended December 31, 1995, the Joint Venture
has recorded an increase in the Additional Payment accrual of
$266,000 due to an increase in the estimated distribution fee
to be earned by the Distributor.
6. Receivables and Payables
An analysis of the Joint Venture's receivables and
payables is as follows:
AT
DECEMBER 31, 1995
Receivable
Payable Payable
from
to to
Distributor
Columbia Partnership
(000's Omitted)
Net Proceeds and Gross Receipts $ 1,158 $ 972 $ 186
Accrued Additional Payments 921 921 0
Total $ 2,079 $ 1,893 $ 186
AT DECEMBER 31, 1994
Receivable
Payable Payable
from to
to
Distributor
Columbia Partnership
(000's Omitted)
Net Proceeds and Gross Receipts $ 2,369 $ 2,171 $ 198
Accrued Additional Payments 655 655 0
Total $ 3,024 $ 2,826 $ 198
7. Foreign Exchange Gains and Losses
The distribution agreement between the Joint Venture and
the Distributor provides that revenues earned in foreign
currencies be valued as of the date that monies are remitted
or are "freely remittable" to the United States. Other
Expense for the year ended December 31, l994 of $140,000
represents the cumulative difference between the monies
remitted in U.S. dollars and the value previously recorded
based on the exchange rate at the time of revenue recognition
in the applicable international territory. No such revenue
valuation adjustment was necessary in 1995.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Venturers
TriStar - Delphi V Productions
In our opinion, the accompanying balance sheets and the
related statements of operations, of cash flows and of
venturers' capital present fairly, in all material respects,
the financial position of TriStar - Delphi V Productions at
December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in
the period ended December 31, 1995, in conformity with
generally accepted accounting principles. These financial
statements are the responsibility of the Venture's
management; our responsibility is to express an opinion on
these financial statements based on our audits. We
conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles
used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the
opinion expressed above.
Century City, California
March 22, l996
<PAGE>
TRI-STAR-DELPHI V PRODUCTIONS
(A Joint Venture)
BALANCE SHEETS
(000's Omitted)
<TABLE>
<CAPTION>
December 31,
1995
1994
<S> <C> <C>
ASSETS
Motion Picture Production and
Advertising
Costs, net of accumulated
amortization
of $57,443 and $57,392,
respectively
(Notes 1, 2 & 5) $ $
365 416
Motion Picture Costs Recoverable
from
Additional Payments (Notes 3, 5 895 635
& 6)
Receivable from TriStar
Pictures, Inc.
(Distributor) (Note 6)
820 1,308
Total $ $
Assets 2,080 2,359
LIABILITIES AND VENTURERS'
CAPITAL
Liabilities:
Payable to TriStar Pictures, $ $
Inc. (Note 6) 1,222 1,436
Payable to Delphi Film
Associates V (Note 6) 493 507
Total
Liabilities 1,715 1,943
Venturers' Capital (Notes 1 &
3):
TriStar Pictures, Inc. 365 416
Delphi Film Associates V
-- --
Total
Venturers' Capital 365 416
Total
Liabilities and Venturers'
$ $
Capital 2,080 2,359
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
TRI-STAR-DELPHI V PRODUCTIONS
(A Joint Venture)
STATEMENTS OF OPERATIONS
(000's Omitted)
<TABLE>
<CAPTION>
For the
Year Ended December 31,
1995
1994 1993
<S> <C> <C> <C>
Net Revenues from Motion
Picture
Exploitation (Note $ $ $
2) 121 774 420
Less: Amortization of
Motion
Picture
Production and
Advertising
Costs
(Notes 2 & 5)
51 262 108
Income from Operations 70 512 312
Additional Payments
Accrual
(Notes 3 & 5) -- 1,153 5
Interest Income -- 1,082 1,978
Other Expense (Note 7)
-- (229) --
Net Income $ $ $
70 2,518 2,295
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
TRI-STAR-DELPHI V PRODUCTIONS
(A Joint Venture)
STATEMENTS OF CASH FLOWS
(000's Omitted)
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1995
1994 1993
<S>
<C> <C> <C>
Cash Flow From Operating
Activities:
Net Income $ $ $
70 2,518 2,295
Adjustments to reconcile Net
Income to
net cash provided by
operating activities:
Amortization of Motion Picture
Production and
Advertising Costs 51 262 108
Accrued Distributions to 228 15,467 (1,323)
Venturers
Changes in Assets and
Liabilities:
(Decrease) Increase in
Payable to TriStar
Pictures, Inc. (214) (9,009) 804
Decrease (Increase) in
Receivable from
TriStar Pictures, Inc. 488 (2) 660
(Distributor)
(Increase) Decrease in
Motion Picture Costs
Recoverable from (260) 15,469 (1,983)
Additional Payments
(Decrease) Increase in
Payable to Delphi
Film Associates V, net (14) (6,458) 1,819
Decrease in Advance from
TriStar
Pictures, Inc.
(Distributor) -- -- (1,300)
Net Cash Provided by
Operating Activities 349 18,247 1,080
Cash Flow from Financing
Activities:
Distributions to Venturers
(349) (18,247) (1,080)
Net Cash Used by
Financing Activities (349) (18,247) (1,080)
Net Change in Cash -- -- --
Cash at beginning of year
-- -- --
Cash at end of year $ $ $
-- -- --
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
TRI-STAR-DELPHI V PRODUCTIONS
(A Joint Venture)
FOR THE YEARS ENDED DECEMBER 3l, 1995, 1994 AND 1993
STATEMENTS OF VENTURERS' CAPITAL
(000's Omitted)
<TABLE>
<CAPTION>
Delphi
TriStar Film
Total
Pictures, Associates
Venturers'
Inc. V
Capital
<S> <C> <C>
<C>
Venturers' Capital as of $ $ $
January 1, 1993 750 36 786
Net Income for the Year
Ended
December 31, 1993 1,345 950 2,295
Accrued Distributions to
Venturers (1,417) (986) (2,403)
Venturers' Capital as of
December 31,
1993 678 -- 678
Net Income for the Year
Ended
December 31, 1994 1,419 1,099 2,518
Accrued Distributions to
Venturers (1,681) (1,099) (2,780)
Venturers' Capital as of
December 31,
1994 416 -- 416
Net Income for the Year
Ended
December 31, 1995 14 56 70
Accrued Distributions to
Venturers (65) (56) (121)
Venturers' Capital as of
December 31,
1995 $ $ $
365 -- 365
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
TRI-STAR-DELPHI V PRODUCTIONS
(A Joint Venture)
NOTES TO FINANCIAL STATEMENTS
1. General
Tri-Star-Delphi V Productions (the "Joint Venture") is a
joint venture between TriStar Pictures, Inc. (formerly Tri-
Star Pictures, Inc.) ("TriStar") ("TSPI") and Delphi Film
Associates V, a New York limited partnership (the
"Partnership"), formed in August 1985 to engage in the
business of producing, owning and exploiting feature length
motion pictures. TSPI has interests ranging from
approximately 5-85% and the Partnership has interests ranging
from approximately 5-25% in thirteen films (the "Joint
Venture Films"). These Joint Venture films include films
produced by other companies which are being distributed
theatrically in the United States and Canada by TSPI. In
addition, during l988 the Partnership, through the Joint
Venture, was granted a participation interest without cost in
one additional film distributed by TSPI.
Seven of the Joint Venture Films have been co-produced
with Tri-Star-Delphi IV Productions ("Delphi IV"), a joint
venture between Delphi Film Associates IV ("DFA IV"), a New
York limited partnership, and TSPI. The accompanying
financial statements reflect the acquisition from the Joint
Venture of a l0% interest in two Joint Venture Films and a
50% interest in one Joint Venture Film by Tri-Star-ML Delphi
Premier Productions ("Delphi VI"), a joint venture between
TSPI and ML Delphi Premier Partners, L.P. ("MLDP") (a
Delaware limited partnership).
As of December 31, 1995 all fourteen of the films in which
the Joint Venture has an interest had been released (see Note
5).
All of the Joint Venture's films are being distributed
pursuant to a distribution agreement with TSPI (the
"Distributor"). The general partner of the Partnership is
affiliated with the general partner of DFA IV and MLDP.
The Partnership participates in a joint venture with
Columbia Pictures Industries, Inc. ("Columbia") similar to
the Joint Venture (the "Other Venture").
Sony Pictures Entertainment Inc., the parent company of
Columbia and TriStar, is an indirect wholly-owned subsidiary
of Sony Corporation.
2. Summary of Significant Accounting Policies
Recognition of Revenue
The Joint Venture recognizes net revenues from TSPI, as
Distributor, on an accrual basis. Net revenues consist of:
(a) the portion of net proceeds (gross receipts, less a
distribution fee, unless deferred, and other distribution and
releasing costs) or, if greater, the portion of gross
receipts payable to the Joint Venture under the distribution
agreement, plus (b) accrued gross receipts (not in excess of
the amount of the advertising and promotion charge paid by
the Joint Venture plus an amount intended to approximate the
cost of funds incurred by the Partnership in connection with
the payment of that charge). However, certain advances
received by the Distributor which are includable in gross
receipts under the distribution agreement are not reflected
in the calculation of net revenues until those advances are
earned. The Joint Venture's advertising and promotion charge
expenditures are recoverable (subject to certain limitations)
from gross receipts from all films in which the Joint Venture
has an interest and from gross receipts from all films in
which the Other Venture has an interest.
Distribution Fee
The Distributor is entitled to receive a distribution fee
equal to 17.5% on substantially all gross receipts of a film;
however, the Distributor's entitlement to this distribution
fee is deferred until the Joint Venture has received from the
distribution of that film an amount equal to the amount spent
by the Joint Venture to produce or acquire an interest in
that film, other than amounts spent for payments in the
nature of interest ("Cost Return"). After Cost Return for a
film, for purposes of determining any additional payments
based on net proceeds to which the Joint Venture is entitled
in respect of that film, the Distributor will be entitled to
receive a distribution fee equal to 17.5% of substantially
all gross receipts of the film prior to Cost Return and 17.5%
of substantially all additional gross receipts after Cost
Return.
Net revenues accrued at December 31, 1995, 1994 and 1993
have been computed without deducting a distribution fee to
the Distributor in light of the results of the films released
through those respective dates, with the exception of two
films in 1995, 1994 and 1993 for which a portion of the
distribution fees were deducted.
Motion Picture Production and Advertising Costs
Motion picture production costs include the direct cost of
production plus an overhead charge equivalent to 12.5% of the
direct production costs; these costs were capitalized as
incurred by the Joint Venture. Payments by the Joint Venture
in respect of the advertising and promotion charge payable to
the Distributor were capitalized as incurred by the Joint
Venture to the extent that those charges benefit future
periods. These costs are amortized under the individual
film forecast method based upon net revenue recognized in
proportion to the Joint Venture's estimate of ultimate net
revenues to be received. Unamortized production costs are
compared with net realizable value on a film by film basis
and unamortized advertising costs are compared with net
realizable value in the aggregate; losses are recognized to
the extent of any excess of costs over net realizable value.
If losses are indicated for films, the Additional Payments
described in Note 3, to the extent available, are accrued as
Motion Picture Costs Recoverable from Additional Payments.
3. Additional Payments (See Note 5)
The Joint Venture was entitled to a payment (an
"Additional Payment") from the Distributor in June l994 with
respect to each film for which the Joint Venture had not
received from such film's distribution (or its sale) an
amount equal to the amount spent by the Joint Venture to
produce or acquire an interest in the film (other than
amounts spent for payments in the nature of interest) (an
"Unrecouped Film"). Each Additional Payment would be in the
amount necessary for the Joint Venture to be repaid (without
interest) the amounts spent by it with respect to the
production or acquisition of an Unrecouped Film (other than
contributions for payments in the nature of interest), but
not more than the amount specified below. Additional
Payments would be payable only to the extent of the
distribution fees received by the Distributor from the
distribution of all of the Joint Venture's films (reduced to
the extent of the Additional Payments made with respect to
other Unrecouped Films). The Additional Payments to the
Joint Venture based on distribution fees were allocated by
the Joint Venture first to the Partnership, to the extent
necessary for the Partnership to recoup (without interest)
the amount of its contributions to the Joint Venture for the
production or acquisition of the Unrecouped Films (other than
contributions for payments in the nature of interest); any
excess was then allocated to TSPI. As those distribution
fees were insufficient to enable the Distributor to make the
Additional Payments with respect to all Unrecouped Films,
gross receipts and net proceeds of each remaining Unrecouped
Film were recalculated by including as gross receipts in
respect of that Unrecouped Film the excess, if any, of the
minimum license fees under the Distributor's license
agreement with Home Box Office, Inc. and certain minimum
amounts in respect of video cassette and video disc
exploitation over the amounts previously included in the
gross receipts of that Unrecouped Film in respect of those
arrangements. The Distributor made Additional Payments to
the Joint Venture to the extent of the additional gross
receipts or net proceeds payable to the Joint Venturers as a
result of the recalculation, but only up to the amount of the
unrecouped contributions (other than contributions for
payments in the nature of interest) for the production or
acquisition of that Unrecouped Film; each Additional Payment
made on the basis of such recalculation was allocated between
the Partnership and TSPI in proportion to their respective
interests in the applicable Unrecouped Film. The Distributor
is entitled to recoup the Additional Payments made on either
basis in respect of each Unrecouped Film, with an amount in
the nature of interest, from the Joint Venture's share of
subsequent gross receipts or net proceeds of that Unrecouped
Film and from the proceeds of any sale of the Partnership's
interest in that Unrecouped Film or amounts allocable to that
Unrecouped Film upon a sale of the Partnership's interest in
the Joint Venture. In calculating the amount of distribution
fees available for the Additional Payments, no distribution
fee was deemed received by the Distributor (and therefore no
distribution fee will be deemed available for the Additional
Payment) from a film with respect to which the most recent
payment to the Joint Venture was based on gross receipts or
from a film that did not reach Cost Return.
4. Income Taxes
No provision for income taxes is made in the Joint
Venture's financial statements since the venturers treat the
Joint Venture as a partnership for income tax purposes, with
all income tax consequences flowing directly to the
venturers.
Effective January l, l993, the Joint Venture adopted
Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." As of October 31, 1995 and
1994 (the Joint Venture's tax year end is October 31), the
tax bases of the Joint Venture's assets less liabilities
exceeded amounts reported in the financial statements at
December 31, 1995 and l994 by approximately $1,767,000 and
$1,792,000, respectively. Management estimates that the tax
bases of the Joint Venture's assets and liabilities did not
differ significantly between October 31 and December 31 in
l995 and l994. The adoption of the Statement had no impact
on the Joint Venture's financial statements.
5. Current Operations
As of December 31, 1995, the Distributor had released all
fourteen films in which the Joint Venture has an interest
(see Note 1). The Joint Venture is not expected to recoup
its investment in ten of these films out of the proceeds from
their distribution. However, as a result of the Additional
Payments referred to above and those required to be made in
future periods, the Partnership is expected to recoup its
investment in these films. For the years ended December 31,
1995, 1994 and 1993, motion picture production and
advertising costs were reduced by amortization of $51,000,
$262,000 and $108,000, respectively.
The Joint Venture received approximately $l7,704,000 in
June l994 representing the Joint Venture's Additional
Payment.
In March l988, the Distributor made a non-interest bearing
advance of $l,300,000 to the Joint Venture which was
subsequently advanced to the Partnership in order to make a
cash distribution to its partners. This advance was repaid
by the Partnership according to a formula which took into
consideration the Partnership's receipts from both the Joint
Venture and the Other Venture, its expenses and the federal
income tax liability of its partners. As of December 31,
1993, the entire amount of this advance was repaid.
6. Receivables and Payables
An analysis of the Joint Venture's receivables and
payables is as follows:
AT DECEMBER 31, 1995
Receivable Payable Payable
from to to
Distributor TriStar
Partnership
(000's omitted)
Net Proceeds and Gross Receipts$ 820$ 680 $ 140
Accrued Additional Payments 895 542 353
Total $ 1,715$ 1,222 $
493
AT DECEMBER 31, 1994
Receivable Payable Payable
from to to
Distributor TriStar
Partnership
(000's omitted)
Net Proceeds and Gross Receipts$ 1,308$ 1,156 $ 152
Accrued Additional Payments 635 280 355
Total $ 1,943$ 1,436 $
507
7. Foreign Exchange Gains and Losses
The distribution agreement between the Joint Venture and the
Distributor provides that revenues earned in foreign
currencies be valued as of the date that monies are remitted
or are "freely remittable" to the United States. Other
Expense for the year ended December 31, l994 of $229,000
represents the cumulative difference between the monies
remitted in U.S. dollars and the value previously recorded
based on the exchange rate at the time of revenue recognition
in the applicable international territory. No such revenue
valuation adjustment was necessary in 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from Balance Sheets and Statement of
Operations for the year ended December 31, 1995 Form 10K of
Delphi Film Associates V and is qualified in its entirety by
reference to such financial statements.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 191,000
<SECURITIES> 1,079,000
<RECEIVABLES> 679,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,949,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,858,000
<TOTAL-LIABILITY-AND-EQUITY> 1,949,000
<SALES> 0
<TOTAL-REVENUES> 64,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 487,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (306,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (306,000)
<EPS-PRIMARY> (38.00)
<EPS-DILUTED> 0
</TABLE>
