SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995
Commission File Number 0-16763
CIS Capital Equipment Fund, Ltd. 2, a California Limited Partnership
(Exact name of Registrant as specified in its charter)
California 59-2737253
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (813) 573-3800
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
Number of Units at
Title of Each Class March 31, 1995
Units of Limited Partnership
Interest: $500 per unit 60,000
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1994 Form 10-K, filed with the
Securities and Exchange Commission on March 29, 1995
Parts III and IV - Form S-1 Registration Statement
and all amendments and supplements thereto
File No. 33-10604
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
INDEX
Page
Number
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets -
As of March 31, 1995, and December 31, 1994 4
Statements of Operations -
For the Three Months Ended March 31, 1995 and 1994 5
Statements of Cash Flows -
For the Three Months Ended March 31, 1995 and 1994 6
Notes to Financial Statements 7-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 10
<PAGE>
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
BALANCE SHEETS
March 31, December 31,
1995 1994
(Unaudited) (Audited)
ASSETS
Rental Equipment, at Cost $ 10,076,053 $ 15,890,630
Less: Accumulated Depreciation (8,478,340) (12,448,352)
1,597,713 3,442,278
Net Investment in Sales-Type Lease 186,703 197,328
Deferred Debt Cost (Net of Accumulated
Amortization of $34,778 and $34,113,
Respectively) 0 665
Prepaid Expenses 0 482
Rent Receivable 34,843 55,575
Cash and Cash Equivalents 10,422,507 4,868,272
Total Assets $ 12,241,766 $ 8,564,600
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts Payable $ 722 $ 88,013
Payable to General Partner 21,323 38,889
Unearned Revenue 0 106,128
Total Liabilities 22,045 233,030
Partners' Equity:
Limited Partners (60,000 units outstanding
at March 31, 1995, and December 31, 1994) 12,123,939 8,305,660
General Partner 95,782 25,910
Total Partners' Equity 12,219,721 8,331,570
Total Liabilities and Partners' Equity $ 12,241,766 $ 8,564,600
The accompanying notes are an integral part
of these financial statements.
<PAGE>
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
1995 1994
Revenues:
Rental Income $ 825,012 $ 556,582
Interest Income 54,371 34,747
Gain on Sale of Equipment 6,383,606 0
Total Revenues 7,262,989 591,329
Operating Expenses:
Interest Expense 0 14,544
Management Fees - General Partner 38,337 35,638
General and Administrative - Affiliate 7,497 5,467
- Other 52,369 8,624
Depreciation and Amortization 177,635 231,567
Loss on Sale of Equipment 0 18,585
Total Operating Expenses 275,838 314,425
Net Income $ 6,987,151 $ 276,904
Allocation of Net Income -
Limited Partners $ 6,917,279 $ 274,135
General Partner 69,872 2,769
$ 6,987,151 $ 276,904
Net Income (Loss) Per $500 Limited
Partnership Unit $ 115.29 $ 4.57
Number of Limited Partnership Units 60,000 60,000
The accompanying notes are an integral part
of these financial statements.
<PAGE>
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
1995 1994
Cash Flows from Operating Activities:
Net Income $ 6,987,151 $ 276,904
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
(Gain) Loss on Sale of Equipment (6,383,606) 18,585
Depreciation and Amortization 177,635 231,567
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Rental Equipment
Held for Sale 0 74,605
(Increase) Decrease in Rent Receivable 20,732 9,693
(Increase) Decrease in Interest Receivable 0 (9,043)
(Increase) Decrease in Prepaid Expenses 482 274
Increase (Decrease) in Accounts Payable (87,291) (923)
Increase (Decrease) in Payable to
General Partner (17,566) (28,069)
Increase (Decrease) in Unearned Revenue (106,128) 0
Net Cash Provided by Operating
Activities 591,409 573,593
Cash Flows from Investing Activities:
Proceeds from Sale of Equipment 8,051,201 47,500
Decrease in Net Investment in Sales-Type Lease 10,625 7,753
Net Cash Provided by Investing
Activities 8,061,826 55,253
Cash Flows from Financing Activities:
Payment of Notes Payable 0 (117,607)
Distributions to Limited Partners (3,099,000) (633,000)
Net Cash (Used in) Financing
Activities (3,099,000) (750,607)
Increase (Decrease) in Cash 5,554,235 (121,761)
Cash and Cash Equivalents at Beginning of Period 4,868,272 2,384,031
Cash and Cash Equivalents at End of Period $ 10,422,507 $ 2,262,270
Supplemental Cash Flow Information:
Interest Paid $ 0 $ 14,544
The accompanying notes are an integral part
of these financial statements.
<PAGE>
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
March 31, 1995
NOTE 1 - BASIS OF PREPARATION
The unaudited financial statements for CIS Capital Equipment Fund, Ltd. 2
(the "Partnership") presented herein have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the information and note
disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the financial statements and notes
thereto included in the Partnership's Form 10-K for the year ended December 31,
1994. In the opinion of management, these financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary to
summarize fairly the Partnership's financial position and results of operations.
The results of operations for the period may not be indicative of the results to
be expected for the year.
NOTE 2 - CASH AND CASH EQUIVALENTS
It is the Partnership's policy to include short-term investments with an
original maturity of three months or less in Cash and Cash Equivalents. These
short-term investments are comprised of money market mutual funds and commercial
paper. All of the Partnership's securities included in Cash and Cash
Equivalents are considered held-to-maturity. The balance of $10,422,507 at
March 31, 1995, represents cash of $22,477, money market mutual funds of
$365,331, and cost plus accreted interest income on commercial paper of
$10,034,699. At March 31, 1995, the estimated market value of the commercial
paper was $10,034,699, resulting in no unrealized gain or loss.
NOTE 3 - COMPENSATION AND REIMBURSEMENTS TO GENERAL PARTNER AND AFFILIATES
The General Partner and its affiliates are entitled to the following types
of compensation and reimbursements for costs and expenses incurred for the
Partnership for the three months ended March 31, 1995:
Equipment Management Fees $15,837
Incentive Management Fees 22,500
General and Administrative Costs 7,497
NOTE 4 - OTHER EVENTS
As all of the Partnership's leases expire during 1995 and 1996, the
Partnership is winding down its operations.
NOTE 5 - SUBSEQUENT EVENTS
On April 30, 1995, the Partnership paid a distribution to Limited Partners
of $8,730,000 for the quarter ended March 31, 1995.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Rental income increased from $556,582 for the three months ended March 31,
1994, to $825,012 for the three months ended March 31, 1995. This increase
resulted from early termination proceeds of $364,000 being paid during 1995 less
$89,000 of rental income earned in 1994 for a lease for which the equipment was
sold during the intervening period. Interest income increased for the three
months ended March 31, 1995, as compared to the three months ended March 31,
1994, because the Partnership had more cash available for investment and
received a higher rate of return on investments.
Interest expense decreased from $114,524 for the three months ended March
31, 1994, to $0 for the three months ended March 31, 1995. This decrease
resulted from all debt being retired prior to the 1995 quarter. Equipment
management fees increased due to higher rental income. Depreciation expense
decreased for the three months ended March 31, 1995 versus 1994 because the
Partnership had a lower depreciable basis of equipment in 1995.
During the three months ended March 31, 1995, equipment with an original
cost of $5,814,577 was sold for $8,051,201 and provided $6,383,606 of gain.
The net effect of the above revenue and expense items resulted in a net
income of $6,987,151 for the three months ended March 31, 1995, compared to a
net income of $276,904 for the three months ended March 31, 1994.
Liquidity and Capital Resources
The primary sources of funds for the three months ended March 31, 1995,
were leasing revenues and sales proceeds, which were used to pay operating
expenses and make cash distributions. As of March 31, 1995, the Partnership
owned capital equipment with an original cost of $10,076,053. The equipment
portfolio was comprised of leases classified as operating, full-payout, and
sales-type leases.
Actual cash distributions for the three month periods ended March 31, 1995
and 1994 were $3,099,000 and $633,000, respectively.
The Partnership anticipates that Cash and Cash Equivalents as of December
31, 1994, and funds from operations will be adequate to cover all 1995 operating
contingencies.
As all of the Partnership's leases expire during 1995 and 1996, the
Partnership is winding down its operations.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits - none.
b) Reports on Form 8-K - no reports on Form 8-K were filed by the Partnership
during the quarter ended March 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CIS Capital Equipment Fund, Ltd. 2,
a California Limited Partnership
RJ Leasing, Inc.
A General Partner of
CIS Investors Partnership,
the General Partner
Date: By: J. Davenport Mosby, III
J. Davenport Mosby, III
President
Date: By: Barbara J. Lotz
Barbara J. Lotz
Secretary and Treasurer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
[DESCRIPTION] ART. 5 FDS FOR 1ST QUARTER 10-Q
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 10,422,507
<SECURITIES> 0
<RECEIVABLES> 221,546
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 10,076,053
<DEPRECIATION> 8,478,340
<TOTAL-ASSETS> 12,241,766
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 12,219,721
<TOTAL-LIABILITY-AND-EQUITY> 12,241,766
<SALES> 0
<TOTAL-REVENUES> 7,262,989
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 275,838
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 6,987,151
<INCOME-TAX> 0
<INCOME-CONTINUING> 6,987,151
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,987,151
<EPS-PRIMARY> 115.29<F3>
<EPS-DILUTED> 115.29<F3>
<FN>
<F1>REGISTRANT HAS AN UNCLASSIFIED BALANCE SHEET
<F2>REGISTRANT HAS AN UNCLASSIFIED BALANCE SHEET
<F3>EPS IS NET INCOME PER $500 LIMITED PARTNERSHIP UNIT
</FN>
</TABLE>