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, 1996
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, 1996
Units of Limited Partnership
Interest: $500 per unit 60,000
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1995 Form 10-K, filed with the
Securities and Exchange Commission on May 8, 1996
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
BALANCE SHEETS
March 31, December 31,
1996 1995
(Unaudited) (Audited)
ASSETS
Rental Equipment, at Cost $ 2,104,623 $ 9,667,362
Less: Accumulated
Depreciation (1,755,798) (8,391,461)
348,825 1,275,901
Rental Equipment Held for Sale 31,664 31,664
Net Investment in Sales-Type Lease 133,780 148,761
Deferred Debt Cost (Net of
Accumulated Amortization of
$34,778 and $34,778, Respectively) 0 0
Rent Receivable 44,732 50,902
Cash and Cash Equivalents 4,162,157 1,590,103
Total Assets $ 4,721,158 $ 3,097,331
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts Payable $ 2,346 $ 1,623
Payable to General Partner 23,036 8,825
Unearned Revenue 0 12,000
Total Liabilities 25,382 22,448
Partners' Equity:
Limited Partners (60,000 units
outstanding at March 31, 1996,
and December 31, 1995) 4,577,800 2,976,494
General Partner 117,976 98,389
Total Partners' Equity 4,695,776 3,074,883
Total Liabilities and
Partners' Equity $ 4,721,158 $ 3,097,331
The accompanying notes are an integral part
of these financial statements.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
1996 1995
Revenues:
Rental Income $ 442,045 $ 825,012
Interest Income 32,015 54,371
Gain on Sale of Equipment 1,631,616 6,383,606
Total Revenues 2,105,676 7,262,989
Operating Expenses:
Management Fees - General Partner 38,637 38,337
General and Administrative:
Affiliate 11,143 7,497
Other 8,513 52,369
Depreciation and Amortization 88,691 177,635
Total Operating Expenses 146,984 275,838
Net Income $ 1,958,692 $ 6,987,151
Allocation of Net Income -
Limited Partners $ 1,939,105 $ 6,917,279
General Partner 19,587 69,872
$ 1,958,692 $ 6,987,151
Net Income (Loss) Per $500 Limited
Partnership Unit $ 32.32 $ 115.29
Number of Limited Partnership
Units 60,000 60,000
The accompanying notes are an integral part
of these financial statements.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
1996 1995
Cash Flows from Operating Activities:
Net Income $ 1,958,692 $ 6,987,151
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
(Gain) Loss on Sale of
Equipment (1,631,616) (6,383,606)
Depreciation and
Amortization 88,691 177,635
Changes in Operating Assets
and Liabilities:
(Increase) Decrease in
Rent Receivable 6,170 20,732
(Increase) Decrease in
Prepaid Expenses 0 482
Increase (Decrease) in
Accounts Payable 723 (87,291)
Increase (Decrease) in
Payable to General
Partner 14,211 (17,566)
Increase (Decrease) in
Unearned Revenue (12,000) (106,128)
Net Cash Provided by
Operating
Activities 424,871 591,409
Cash Flows from Investing Activities:
Proceeds from Sale of Equipment 2,470,002 8,051,201
Decrease in Net Investment in
Sales-Type Lease 14,981 10,625
Net Cash Provided by
Investing
Activities 2,484,983 8,061,826
Cash Flows from Financing Activities:
Distributions to Limited
Partners (337,800) (3,099,000)
Net Cash (Used in)
Financing
Activities (337,800) (3,099,000)
Increase (Decrease) in Cash 2,572,054 5,554,235
Cash and Cash Equivalents at
Beginning of Period 1,590,103 4,868,272
Cash and Cash Equivalents at
End of Period $ 4,162,157 $ 10,422,507
The accompanying notes are an integral part
of these financial statements.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
March 31, 1996
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, 1995.
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 $4,162,157 at March 31, 1996,
represents cash of $27,056, money market mutual funds of $248,879,
and cost plus accreted interest income on commercial paper of
$3,886,222. At March 31, 1996, the estimated market value of the
commercial paper was $3,886,222, 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, 1996:
Equipment Management Fees $ 21,747
Incentive Management Fees 16,890
General and Administrative Costs 11,143
NOTE 4 - OTHER EVENTS
As all of the Partnership's leases expire during 1996 and 1997,
the Partnership is winding down its operations.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
March 31, 1996
NOTE 5 - SUBSEQUENT EVENTS
On April 30, 1996, the Partnership paid a distribution to Limited
Partners of $3,090,000 for the quarter ended March 31, 1996.
On April 1, 1996, the Partnership sold equipment with an original
cost of $302,218 for $75,000.
<PAGE>
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Rental income decreased from $825,012 for the three months ended
March 31, 1995, to $442,045 for the three months ended March 31,
1996. This decrease resulted primarily from the termination of a
lease that generated $638,533 for the quarter ended March 31, 1995
and $0 in 1996. In 1996, lower lease rates on renewal leases
decreased revenues approximately $24,300. Contributing to first
quarter 1996 revenue was early termination proceeds of $280,000 on
a lease that was terminated as of March 31, 1996. Interest income
decreased for the three months ended March 31, 1996, as compared to
the three months ended March 31, 1995, because the Partnership had
less cash available for investment.
Depreciation expense decreased for the three months ended March
31, 1996 versus 1995 because the Partnership had a lower depreciable
basis of equipment in 1996.
During the three months ended March 31, 1996, equipment with an
original cost of $7,562,739 was sold for $2,470,002 and provided
$1,631,616 of gain.
The net effect of the above revenue and expense items resulted in
a net income of $1,958,693 for the three months ended March 31,
1996, compared to a net income of $6,987,151 for the three months
ended March 31, 1995.
Liquidity and Capital Resources
The primary sources of funds for the three months ended March 31,
1996, were leasing revenues and sales proceeds, which were used to
pay operating expenses and make cash distributions. As of March 31,
1996, the Partnership owned capital equipment with an original cost
of $2,513,314. The equipment portfolio was comprised of leases
classified as full-payout and sales-type leases.
Actual cash distributions for the three month periods ended March
31, 1996 and 1995 were $337,800 and $3,099,000, respectively.
The Partnership anticipates that Cash and Cash Equivalents as of
December 31, 1995, and funds from operations will be adequate to
cover all 1996 operating contingencies.
As all of the Partnership's leases expire during 1996 and 1997,
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, 1996.
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: /s/J. Davenport Mosby, III
J. Davenport Mosby, III
Vice President
Date: By: /s/Christa Kleinrichert
Christa Kleinrichert
Secretary and Treasurer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<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, 1996.
[/LEGEND]
<CIK> 0000807060
<NAME> CIS CAPITAL EQUIPMENT FUND, LTD. 2
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 4,162,157
<SECURITIES> 0
<RECEIVABLES> 44,732
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 2,513,314
<DEPRECIATION> 2,132,825
<TOTAL-ASSETS> 4,721,158
<CURRENT-LIABILITIES> 0<F1>
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0
0
<COMMON> 0
<OTHER-SE> 4,695,776
<TOTAL-LIABILITY-AND-EQUITY> 4,721,158
<SALES> 0
<TOTAL-REVENUES> 2,105,676
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 146,984
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,958,692
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,958,692
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,958,692
<EPS-PRIMARY> 32.32<F2>
<EPS-DILUTED> 32.32<F2>
<FN>
<F1>REGISTRANT HAS AN UNCLASSIFIED BALANCE SHEET.
<F2>EPS IS NET INCOME PER $500 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
