SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 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
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 60,000
Title of Each Class
Units of Limited Partnership Interest
$500 per unit
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
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
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 shared outstanding of each of Registrant's classes of
securities:
Number of Units at
Title of Each Class December 31, 1995
Units of Limited Partnership
Interest: $500 per unit 60,000
DOCUMENTS INCORPORATED BY REFERENCE
Parts III and IV - Form S-1 Registration Statement
and all amendments and supplements thereto
File No. 33-10604
Exhibit Index: Page 21-27
PART I
Item 1. Business
General Development of Business -
The Registrant is a limited partnership (the "Partnership")
composed of CIS Investors Partnership (the "General Partner"), a
Florida general partnership, as the General Partner and purchasers
of partnership units as Limited Partners. The General Partner is
comprised of CIS Equipment Management Corporation, a Delaware
corporation, a wholly-owned subsidiary of CIS Corporation, which is
itself a wholly-owned subsidiary of Continental Information Systems
Corporation, a New York corporation, whose shares are listed on the
NASDAQ and RJ Leasing, Inc., a Florida corporation which is wholly-
owned by Raymond James Financial, Inc., a Florida corporation, whose
shares are listed on the New York Stock Exchange. The Partnership
was formed November 25, 1986, under the laws of California and
commenced operations on July 1, 1987.
Financial Information about Industry Segments -
The Registrant is engaged in only one segment, to acquire
transportation, manufacturing, industrial and other capital
equipment (the "Equipment") and lease the Equipment to third parties
generally for lease terms of four to eight years.
Narrative Description of Business -
The Partnership's business is to acquire and lease equipment,
primarily through operating leases expected to generate income over
the useful life of the Equipment, and to generate cash distributions
to the Limited Partners from leasing revenues and proceeds from the
sale or other disposition of the Equipment owned by the Partnership.
The Registrant has no direct employees. The General Partner
has full and exclusive discretion in management and control of the
Partnership.
The equipment leasing industry is highly competitive and
offers to users an alternative to the purchase of nearly every type
of equipment. In initiating its leasing transactions, the
Partnership competes with leasing companies, manufacturers that
lease their products directly, equipment brokers and dealers, and
financial institutions including commercial banks and insurance
companies. Many competitors will be larger than the Partnership and
will have access to more favorable financing. Competitive factors
in the equipment leasing business primarily involve pricing and
other financial arrangements. Marketing capability is also a
factor.
Item 2. Properties
The Registrant commenced operations in July 1987, and as of
December 31, 1995, the original cost of Equipment owned by the
Partnership was $10,076,053. As of December 31, 1995, Equipment
primarily located within the United States was leased to four
lessees during the year. Equipment owned by the Partnership at
December 31, 1995, consists of steel manufacturing equipment, one
McDonnell Douglas DC-9-32 aircraft, and other capital equipment.
The lessees and the percentages of total equipment owned are as
follows:
Northwest Aircraft, Inc. 75.0%
Lucas Western Corporation 10.8%
Chrysler Motor Company 10.1%
Offlease Motor Company 4.1%
100.0%
Item 3. Legal Proceedings
The Registrant is not a party to any material pending legal
proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders
through the solicitation of proxies or otherwise during the fourth
quarter of 1995.
PART II
Item 5. Market for the Registrant's Securities and Related
Security Holder Matters
(a) The Registrant's limited partnership interests are not
publicly traded. There is no market for the Registrant's
limited partnership interests and it is unlikely that any will
develop.
(b) Approximate number of Equity Security Holders:
Number of Record Holders
Title of Each Class as of December 31, 1995
Units of Limited Partnership Interest 1930
General Partner Interest 1
Item 6. Selected Financial Data
1995 1994 1993 1992 1991
Total Revenues
$7,934,924 $4,334,921 $4,736,695 $6,126,805 $7,715,207
Net Income (Loss)
7,247,913 2,903,402 753,718 (41,692) (1,669,422)
Total Assets
3,097,331 8,564,600 11,029,940 17,784,367 23,324,093
Notes Payable
0 0 2,771,526 5,204,161 7,974,460
Distributions to Limited Partners Per Partnership Unit Outstanding
208.41 44.70 82.75 35.00 48.78
Income (Loss) Per Limited Partnership Unit Outstanding
119.59 47.91 12.44 (.69) (27.55)
The selected financial data should be read in conjunction with the
financial statements and related notes appearing elsewhere in this
report. This statement is not covered by the auditor's opinion
included elsewhere in this report.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Rental income decreased from $2,618,050 for the year ended
December 31, 1994, to $1,348,633 for the year ended December 31,
1995. This decrease resulted primarily because equipment was sold
during 1994 which provided no rental income in 1995 and because
equipment was sold during 1995 which provided less rental income in
1995 than it did in 1994. The remaining decrease was attributable
to equipment which was re-leased during 1994 providing less rental
income in 1995 than it did in 1994.
Equipment with a book value of $1,667,596 was sold for a gain
of $6,376,380 during the year ended December 31, 1995. Interest
income increased for the year ended December 31, 1995, as compared
to the year ended December 31, 1994, because the Partnership had a
larger average balance of cash available for investment in 1995.
Interest expense decreased from $101,212 for the year ended
December 31, 1994 to $0 for the year ended December 31, 1995. This
decrease resulted from all debt being paid prior to December 31,
1994. Management fees decreased due to lower rental income.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Results of Operations (Continued)
Depreciation expense decreased for the year ended December 31,
1995, versus 1994 because the Partnership had a lower depreciable
basis of equipment in 1995.
The net effect of the above revenue and expense items resulted
in net income of $7,247,913 for the year ended December 31, 1995,
compared to a net income of $2,903,402 for the year ended December
31, 1994.
Liquidity and Capital Resources
The primary sources of funds for the year ended December 31,
1995, were rental income and sale proceeds which were used to pay
expenses and to make cash distributions. As of December 31, 1995,
the Partnership owned $10,076,053 in original cost of
transportation, manufacturing, and other equipment.
Actual cash distributions amounted to $12,504,600 in 1995,
$2,682,000 in 1994, and $4,965,000 in 1993.
The Partnership anticipates that Cash and Cash Equivalents as
of December 31, 1995, and funds from operations in 1996 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. Dissolution is expected in 1996 or
1997.
Travel Dynamics, the lessor of the cruise ship "Illiria",
began experiencing financial difficulties in December 1990. From
December 1990 until July 1991, the cash reserve established by
Travel Dynamics for the benefit of the lender was used to make the
debt service payments to the lender. From August 1991 until
December 1991, Travel Dynamics made the monthly payment to the
financial institution, which retained all of the cash. From January
1992 through July 1993, Travel Dynamics made all monthly payments as
scheduled to the Fund. In August 1993, all regular payments again
ceased and did not resume. In November 1993, the financial
institution applied the remaining reserves of approximately
$1,500,000 to the loan, interest and collection expenses. For the
period of December 1993 through July 1994, Travel Dynamics paid
interest only to the financial institution in the amount of $96,000.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Liquidity and Capital Resources (Continued)
On September 2, 1994, the sale of the cruise ship "Illiria" on
lease to Travel Dynamics was completed. The sale price of the
vessel was $3,600,000 and was used to retire the remaining debt of
$2,355,000, pay a brokerage commission of $108,000, pay lender's
expenses of $120,000, and to pay transportation and other expenses
of $367,000. The remaining $650,000 was remitted to the Fund.
The Partnership's equipment lease with Cooper Companies, Inc.,
expired in late 1991. Upon return and inspection of the equipment,
it was determined that a portion of the leased equipment was lost or
damaged during the lease term. Because the Partnership had been
unable to negotiate a fair settlement for damages, a complaint was
filed in California Superior Court Los Angeles in February 1993,
against Cooper Companies, Inc., seeking both compensatory and
punitive damages. In 1994, the Partnership received proceeds of
approximately $230,000 in settlement of this claim.
On January 13, 1989, Continental Information Systems
Corporation ("Continental"), the ultimate parent company of CIS
Equipment Management Corporation, and certain of its affiliates
(collectively, the "Debtors") voluntarily filed separate petitions
for reorganization under Chapter 11 of the Federal Bankruptcy Code
("Chapter 11"). On October 24, 1989, the United States Bankruptcy
Court for the Southern District of New York issued an order
appointing James Hassett as Trustee for the Debtors' proceedings
under Chapter 11 of the Bankruptcy Code. Prior to the Trustee's
appointment, the Debtors had been operating as debtors-in-
possession.
On August 23, 1994, the Trustee in Chapter 11 Bankruptcy of
Continental Information Systems Corporation ("Continental") filed a
Proposed Joint Plan of Reorganization and Disclosure Statement
("Plan"). At a hearing on October 4, 1994, the Bankruptcy Court
approved the sufficiency of the Disclosure Statement. Ballots were
sent to voting creditors for approval of the Plan and the Bankruptcy
Court had set November 29, 1994, as the hearing date for
confirmation. The Plan was confirmed at that time and became
effective on December 21, 1994. Continental is the ultimate parent
company of CIS Equipment Management Corporation, one of the co-
general partners of CIS Investors Partnership, the General Partner
of CIS 2.
Item 8. Financial Statements and Supplementary Data
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Page
Number
Independent Auditor's Report 8
Balance Sheet as of December 31, 1995 and 1994 9
Statements for the Three Years Ended December 31, 1995, 1994
and 1993:
Operations 10
Partners' Equity 11
Cash Flows 12-13
Notes to Financial Statements 14-20
Financial Statement Schedules:
Schedule V - Rental Equipment 28
Schedule VI - Accumulated Depreciation of Rental Equipment 28
All other schedules have been omitted as not
required, not applicable, or the information
required to be shown therein is included in
the financial statements and related notes.
INDEPENDENT AUDITOR'S REPORT
To the Partners of
CIS Capital Equipment Fund, Ltd. 2, a California Limited
Partnership
We have audited the accompanying balance sheets of CIS Capital
Equipment Fund, Ltd. 2, a California Limited Partnership, as of
December 31, 1995 and 1994, and the related statements of
operations, partners' equity, and cash flows for each of the three
years in the 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
CIS Capital Equipment Fund, Ltd. 2, a California Limited
Partnership, as of 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.
Our audits were made for the purpose of forming an opinion
on the basic financial statements taken as a whole. The schedules
listed under Item 14 are presented for purposes of complying with
the Securities and Exchange Commission's rules and are not part of
the basic financial statements. These schedules have been subjected
to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a
whole.
As discussed in Note 7, the Partnership is winding down its
operations.
/s/SPENCE, MARSTON, BUNCH, MORRIS & CO.
Certified Public Accountants
Clearwater, Florida
April 10, 1996
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31,
1995 1994
ASSETS
Rental Equipment, at Cost $ 9,667,362 $ 15,890,630
Less: Accumulated Depreciation (8,391,461) (12,448,352)
1,275,901 3,442,278
Rental Equipment Held for Sale 31,664 0
Net Investment in Sales-Type Lease 148,761 197,328
Deferred Debt Cost (Net of Accumulated
Amortization of $34,777 in 1995
and $34,112 in 1994) 0 665
Prepaid Expenses 0 482
Rent Receivable 50,902 55,575
Cash and Cash Equivalents 1,590,103 4,868,272
Total Assets $ 3,097,331 $ 8,564,600
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts Payable $ 1,623 $ 88,013
Payable to General Partner 8,825 38,889
Unearned Revenue 12,000 106,128
Total Liabilities 22,448 233,030
Partners' Equity:
Limited Partners (60,000 units
outstanding at December 31, 1995,
and 1994) 2,976,494 8,305,660
General Partner 98,389 25,910
Total Partners' Equity 3,074,883 8,331,570
Total Liabilities and Partners'
Equity $ 3,097,331 $ 8,564,600
The accompanying notes are an integral part
of these financial statements.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
1995 1994 1993
Revenues:
Rental Income $ 1,348,633 $ 2,618,050 $ 3,979,042
Interest Income 209,911 161,892 145,324
Gain on Sale of
Equipment 6,376,380 846,341 535,194
Gain on Sale of
Rental Equipment
Held for Sale 0 708,638 0
Other Income 0 0 77,135
Total Revenues 7,934,924 4,334,921 4,736,695
Operating Expenses:
Interest Expense 0 101,212 572,724
Management Fees 135,028 143,660 229,197
General and Administrative
- Affiliates 28,076 38,993 57,113
- Other 56,125 235,003 91,024
Loss on Sale of
Equipment Held
for Sale 0 0 118,025
Depreciation and
Amortization 467,782 912,651 2,127,318
Write Down of Rental
Equipment Held
for Sale 0 0 787,576
Total Operating
Expenses 687,011 1,431,519 3,982,977
Net Income (Loss) $ 7,247,913 $ 2,903,402 $ 753,718
Allocation of Net Income (Loss) -
Limited Partners $ 7,175,434 $ 2,874,368 $ 746,181
General Partner 72,479 29,034 7,537
$ 7,247,913 $ 2,903,402 $ 753,718
Net Income (Loss) Per
$500 Limited
Partnership Unit $ 119.59 $ 47.91 $ 12.44
Number of Limited
Partnership Units 60,000 60,000 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 PARTNERS' EQUITY
FOR THE THREE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Limited General Total
Partners' Partner's Partners'
Equity Equity Equity
Balance at
December 31, 1992 $ 12,332,111 $ (10,661) $ 12,321,450
Net Income - 1993 746,181 7,537 753,718
Distributions - 1993 (4,965,000) 0 (4,965,000)
Balance at
December 31, 1993 8,113,292 (3,124) 8,110,168
Net Income - 1994 2,874,368 29,034 2,903,402
Distributions - 1994 (2,682,000) 0 (2,682,000)
Balance at
December 31, 1994 8,305,660 25,910 8,331,570
Net Income - 1995 7,175,434 72,479 7,247,913
Distributions - 1995 (12,504,600) 0 (12,504,600)
Balance at
December 31, 1995 $ 2,976,494 $ 98,389 $ 3,074,883
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
FOR THE YEARS ENDED DECEMBER 31,
1995 1994 1993
Cash Flows from Operating Activities:
Net Income (Loss) $ 7,247,913 $ 2,903,402 $ 753,718
Adjustments to Reconcile
Net Income (Loss) to
Net Cash Provided by
(Used in) Operating
Activities:
(Gain) Loss on Sale
of Equipment (6,376,380) (846,341) (535,194)
Depreciation and
Amortization 467,782 912,651 2,127,318
Write Down of Rental
Equipment Held
for Sale 0 0 787,576
Changes in Operating
Assets and Liabilities:
(Increase) Decrease
in Rental Equipment
Held for Sale 0 2,399,420 522,778
(Increase) Decrease
in Prepaid Expenses 482 1,430 118
(Increase) Decrease
in Rent Receivable 4,673 (36,840) 192,200
(Increase) Decrease
in Interest Receivable 0 1,442 (1,308)
Increase (Decrease)
in Accounts Payable (86,390) 86,338 (12,799)
Increase (Decrease)
in Interest Payable 0 (46,018) 46,018
Increase (Decrease)
in Payable to
General Partner (30,064) (2,354) (12,779)
Increase (Decrease)
in Unearned
Revenue (94,128) 46,818 0
Net Cash Provided
by Operating
Activities 1,133,888 5,419,948 3,867,646
Cash Flows from Investing Activities:
Proceeds from Sale of
Equipment 8,043,976 2,476,776 2,497,220
Increase (Decrease) in
Deposits on Sales 0 0 (130,950)
(Increase) Decrease in
Net Investment in
Sales-Type Lease 48,567 41,043 16,072
Net Cash
Provided by
Investing
Activities 8,092,543 2,517,819 2,382,342
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31,
1995 1994 1993
Cash Flows from Financing Activities:
Payment of Notes Payable 0 (2,771,526) (1,335,645)
Distributions to
Partners (12,504,600) (2,682,000) (4,965,000)
Net Cash (Used in)
Financing Activities (12,504,600) (5,453,526) (6,300,645)
Increase (Decrease) in
Cash (3,278,169) 2,484,241 (50,657)
Cash and Cash Equivalents
at Beginning of Year 4,868,272 2,384,031 2,434,688
Cash and Cash Equivalents
at End of Year $ 1,590,103 $ 4,868,272 $ 2,384,031
Supplemental Cash Flow Information:
Interest Paid $ 0 $ 147,230 $ 526,706
Supplemental Schedule of Non Cash
Financing and Investing Activities:
In 1995 and 1993, $408,691 and $2,229,216, respectively, was
transferred from Rental Equipment to Rental Equipment Held for Sale.
In 1993, Rental Equipment originally costing $427,061 was
transferred at its Net Book Value of $96,258 as the cost included in
the $254,443 of Net Investment in Sales-Type Lease.
In 1993, the lender on the "Illiria" transaction applied $1,096,990
of a security deposit to the debt. This security deposit had been
paid to the lender by the lessee of the "Illiria".
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
December 31, 1995
NOTE 1 - ORGANIZATION
CIS Capital Equipment Fund, Ltd. 2, a California Limited
Partnership (the "Partnership") is a limited partnership composed of
CIS Investors Partnership (the "General Partner"), a Florida general
partnership, as the General Partner and purchasers of partnership
units as Limited Partners. CIS Investors Partnership is comprised
of CIS Equipment Management Corporation, a Delaware corporation,
which is wholly-owned by Continental Information Systems
Corporation, a New York corporation, whose shares are listed on the
NASDAQ and RJ Leasing, Inc., a Florida corporation, which is wholly-
owned by Raymond James Financial, Inc., a Florida corporation, whose
shares are listed on the New York Stock Exchange. The Partnership
was formed November 25, 1986 for the purpose of acquiring and
leasing transportation, manufacturing, industrial and other
equipment and commenced operations on July 1, 1987. The Partnership
will terminate on December 31, 2006, or sooner, in accordance with
the terms of the Limited Partnership Agreement.
Cash distributions from cash flows, subject to payment of an
Incentive Management Fee, and cash distributions from net
disposition proceeds are allocated 100% to the Limited Partners
until the Limited Partners have received cumulative cash
distributions equal to their capital contributions plus returns of
10% or 8% as described in the Limited Partnership Agreement
("payout"). After payout, the General Partner will receive an
Incentive Management Fee equal to 15% of cash available for
distributions from cash flow. Profits and losses are allocated 99%
to the Limited Partners and 1% to the General Partner.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Partnership utilizes the accrual basis of accounting
whereby revenues are recognized when earned and expenses are
recognized when obligations are incurred.
Cash and Cash Equivalents
It is the Partnership's policy to include all investments with
an original maturity of three months or less in Cash and Cash
Equivalents. This consists of money market funds.
Concentration of Credit Risk
Financial instruments which potentially subject the
Partnership to concentrations of credit risk consist principally of
cash investments in high credit quality financial institutions and
in an interest bearing account that is managed by a wholly-owned
subsidiary of Raymond James Financial, Inc.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Concentration of Credit Risk (Continued)
The Partnership maintains deposits in excess of federally
insured limits. Statement of Financial Accounting Standards No. 105
requires disclosure regardless of the degree of risks.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
estimates that affect certain reported amounts and disclosures.
These estimates are based on management's knowledge and experience.
Accordingly, actual results could differ from these estimates.
Fair Value of Financial Instruments
The carrying values of financial instruments including cash
and cash equivalents, accounts receivable and accounts payable
approximated fair value at December 31, 1995 because of the
relatively short maturity of these instruments.
Investment in Securities
Effective January 1, 1994, the Partnership adopted Statement
of Financial Accounting Standards No. 115, Accounting for Certain
Investments in Debt and Equity Securities ("FAS 115"). Under FAS
115, the Partnership is required to categorize its debt securities
as held-to-maturity, available-for-sale or trading securities.
Classification is dependent upon the Partnership's intent in holding
the securities. All of the Partnership's debt securities, if any,
are considered held-to-maturity. There were no debt securities held
as of December 31, 1995.
Offering and Commission Costs
Offering and commission costs were charged against Limited
Partners' Equity upon the admission of Limited Partners.
Leases
Operating
Under the operating method of accounting, the leased
equipment is recorded as an asset at cost and depreciated using the
double declining balance method over eight to twenty year lives.
Rental income is recognized ratably over the term of the leases.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Leases
Operating (Continued)
The Partnership's policy is to periodically review the
estimated future rental income including remarketing of its leased
equipment ("Future Revenues"). Should such review indicate that
estimated Future Revenues will not exceed expenses including
depreciation in any future period, the Partnership will revise its
depreciation policy as appropriate.
Sales-Type Lease
The Partnership owns one sales-type lease. When the
Partnership entered into the lease, the present value of the sum of
the minimum lease payments receivable from the lessee was reported
as the sales price and the net book value of the equipment was the
cost. The Net Investment in Sales-Type Lease is reported at the
present value of the sum of the minimum lease payments, using the
interest rate implicit in the lease as the discount factor. The
difference between the sum of the minimum lease payments and the
present value of the sum of the minimum lease payments is reported
as unearned income, which is amortized over the remaining lease
term.
Rental Equipment Held for Sale
The Partnership's policy is to transfer off-lease equipment
that is held for sale to Rental Equipment Held for Sale at the lower
of its net book value or its market value. The net book value of
equipment transferred exceeded the market value resulting in a write
down of $0, $0 and $787,576 for the years ended December 31, 1995,
1994, and 1993, respectively.
Income Taxes
No provision for income taxes has been made in these financial
statements, as income taxes are a liability of the Partners rather
than of the Partnership.
Reclassifications
For comparability, the 1994 and 1993 figures have been
reclassified, where appropriate, to conform with the financial
statement presentation used in 1995.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 3 - RELATED PARTY TRANSACTIONS
General Partner
In accordance with the terms of the offering prospectus, the
General Partner was paid equipment management fees of $44,998 in
1995, $60,035 in 1994 and $115,647 in 1993 (2% of gross rentals for
full payout leases and 5% for operating leases); incentive
management fees equal to 5% of cash distributions from cash flow of
$90,030 in 1995, $83,625 in 1994 and $113,550 in 1993; and
reimbursement of general and administrative costs of $20,790 in
1995, $29,507 in 1994 and $33,960 in 1993. The General Partner will
also receive the following:
1. Incentive management fee equal to 15% of cash available for
distributions from cash flow after payout;
2. During the liquidation stage, disposition fees for arranging
the sale of equipment equal to the lesser of one-half of the
brokerage fee paid or 3% of the sales price. This fee is
deferred, without interest, until payout.
Affiliates of the General Partner
Affiliates of the General Partner were paid reimbursement of
direct costs of $7,286 in 1995, $9,486 in 1994 and $23,153 in 1993,
at .5% of gross rentals.
NOTE 4 - LEASES
Operating
The leases of equipment are generally for terms of 48 to 96
months. Future minimum rentals to be received on these leases at
December 31, 1995, are as follows:
Year Ending
December 31, Amount
1996 $ 505,180
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 4 - LEASES (Continued)
Sales-Type Lease
The components of the Partnership's Net Investment in Sales-
Type Lease at December 31, 1995, are as follows:
Total Minimum Lease
Payments to be Received$ 195,630
Unearned Income (46,869)
Net Investment in
Sales-Type Lease $ 148,761
Future minimum rentals to be received on this lease at
December 31, 1995, are as follows:
Year Ending
December 31, Amount
1996 $ 108,504
1997 87,126
$ 195,630
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 5 - TAXABLE INCOME
The following is a reconciliation between net income (loss) as
reported and Partnership income (loss) for tax purposes:
1995 1994 1993
Net income per financial
statements $ 7,247,913 $ 2,903,402 $ 753,718
Tax gain on sale of equipment
in excess of (less than)
financial gain/loss on
sale of equipment 1,485,960 (3,926,462) 1,641,819
Tax bad debt expense (in
excess of) financial bad
debt expense 0 0 (460,386)
Tax depreciation (in excess
of) financial depreciation (41,008) (308,394) (95,612)
Tax write down of equipment
less than financial write
down of equipment 0 0 787,576
Tax discharge of indebtedness
in excess of financial
discharge of indebtedness 0 0 1,096,991
Partnership income (loss)
for tax purposes $ 8,692,865 $ (1,331,454)$ 3,724,106
NOTE 6 - MAJOR LESSEE INFORMATION
Four lessees accounted for approximately $638,500, $420,000,
$151,600 and $138,450 of rental income for the year ended December
31, 1995. Three lessees accounted for approximately $1,098,933,
$420,000, and $327,360 of rental income for the year ended December
31, 1994. Three lessees accounted for approximately $1,098,933,
$1,043,586 and $492,000 of rental income for the year ended December
31, 1993.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 7 - OTHER EVENTS
Travel Dynamics, the lessor of the cruise ship "Illiria", began
experiencing financial difficulties in December 1990. From December
1990 until July 1991, the cash reserve established by Travel
Dynamics for the benefit of the lender was used to make the debt
service payments to the lender. From August 1991 until December
1991, Travel Dynamics made the monthly payment to the financial
institution, which retained all of the cash. From January 1992
through July 1993, Travel Dynamics made all monthly payments as
scheduled to the Fund. In August 1993, all regular payments again
ceased and did not resume. In November 1993, the financial
institution applied the remaining reserves of approximately
$1,500,000 to principal, interest and collection expenses. For the
period of December 1993 through July 1994, Travel Dynamics paid
interest only to the financial institution in the amount of $96,000.
On September 2, 1994, the sale of the cruise ship "Illiria" on
lease to Travel Dynamics was completed. The sale price of the
vessel was $3,600,000 and was used to retire the remaining debt of
$2,355,000, pay brokerage commission of $108,000, pay lender's
expenses of $120,000, and to pay transportation and other expenses
of $367,000. The remaining $650,000 was remitted to the Fund.
Approximately $12,500 had been used for legal fees incurred, leaving
total cash proceeds to the Fund of approximately $637,500.
The Partnership's equipment lease with Cooper Companies, Inc.,
expired in late 1991. Upon return and inspection of the equipment,
it was determined that a portion of the leased equipment was lost or
damaged during the lease term. Because the Partnership was unable
to negotiate a fair settlement for damages, a complaint was filed in
California Superior Court in Los Angeles in February 1993 against
Cooper Companies, Inc., seeking both compensatory and punitive
damages. In 1994, the Partnership received proceeds of
approximately $230,000, net of legal fees, in settlement of this
claim.
On January 13, 1989, Continental Information Systems
Corporation ("Continental"), the ultimate parent company of CIS
Equipment Management Corporation, and certain of its affiliates
(collectively, the "Debtors") voluntarily filed separate petitions
for reorganization under Chapter 11 of the Federal Bankruptcy Code
("Chapter 11"). On October 24, 1989, the United States Bankruptcy
Court for the Southern District of New York issued an order
appointing James Hassett as Trustee for the Debtors' proceedings
under Chapter 11 of the Bankruptcy Code. Prior to the Trustee's
appointment, the Debtors had been operating as debtors-in-
possession.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 7 - OTHER EVENTS (Continued)
On August 23, 1994, the Trustee in Chapter 11 Bankruptcy of
Continental Information Systems Corporation ("Continental") filed a
Proposed Joint Plan of Reorganization and Disclosure Statement
("Plan"). At a hearing on October 4, 1994, the Bankruptcy Court
approved the sufficiency of the Disclosure Statement. Ballots were
sent to voting creditors for approval of the Plan and the Bankruptcy
Court set November 29, 1994, as the hearing date for confirmation.
The Plan was confirmed at that time and became effective December
21, 1994. Continental is the ultimate parent company of CIS
Equipment Management Corporation, one of the co-general partners of
CIS Investors Partnership, the General Partner of CIS 2.
As all of the Partnership's leases expire during 1996 and 1997,
the Partnership is winding down its operations. Dissolution is
expected in 1996 or 1997.
NOTE 8 - SUBSEQUENT EVENTS
On January 31, 1996, the Partnership paid distributions of
$337,800 to the Limited Partners for the quarter ended December 31,
1995.
On March 25, 1996, the Partnership received proceeds of
$2,750,000 representing the remaining payments due under the lease
of the DC-9 aircraft and sales proceeds of $2,470,000 for the
aircraft.
On April 1, 1996, the Partnership received proceeds of $75,000
for the sale of one vertical handling machine.
Item 9. Disagreements on Accounting and Financial Disclosures
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or officers. All management
functions are performed by CIS Investors Partnership.
Item 11. Executive Compensation
The Partnership has no directors or officers. See Item 13 for
compensation to the General Partner and affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The General Partners of CIS Investors Partnership, as
purchasers of Partnership units, own 0 units of the outstanding
securities of the Partnership as of December 31, 1995. Directors
and officers of the Corporate General Partners of CIS Investors
Partnership own 0 units of the outstanding securities of the
Partnership as of December 31, 1995.
The Registrant is a Limited Partnership and therefore does not
have voting securities. To the knowledge of the Partnership, no
person owns of record or beneficially more than 5% of the
Partnership's outstanding units.
Item 13. Certain Relationships and Related Transactions
The Partnership has no officers or directors. However, under
the terms of the public offering, various kinds of compensation and
fees are payable to the General Partners and their affiliates during
the organization and operations of the Partnership. The amounts and
kinds of compensation and fees are described on pages 9 to 11 of
the Prospectus under the caption "Management Compensation", which is
incorporated herein by reference. See Note 3 of Notes to Financial
Statements in Item 8 of this Annual Report on Form 10-K for amounts
accrued or paid to the General Partners and their affiliates during
the periods ended December 31, 1995, December 31, 1994, and December
31, 1993.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
a. (1) Financial Statements - See accompanying index to
statements, Item 8.
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K(Continued)
(2) Financial Statement Schedules -
V. Rental Equipment
VI. Accumulated Depreciation of Rental Equipment
* All other schedules are omitted because they are not
applicable or not required, or because the required
information is shown in the financial statements or in
the notes thereto.
(3) Exhibit Index -
Table
Number Page
2 Plan of acquisition, organization, arrangement,
liquidation or succession ***
3 Articles of incorporation and by-laws *
4 Instruments defining the rights of security
holders, including debentures ***
9 Voting Trust Agreement ***
10 Material Contracts ***
11 Computation of per share earnings ***
12 Computation of ratios ***
13 Annual report to security holders ***
18 Letter re: change in accounting principles ***
19 Previously unfiled documents ***
22 Subsidiaries of the Registrant ***
23 Published report regarding matters submitted to
vote of security holders ***
24 Consents of experts of counsel ***
25 Power of Attorney *
28 Additional Exhibits
28.1 Master Car Lease dated as of May 15, 1987, between
PLM Railcar Management Services, Inc. (Lessor)
and CSX Transportation, Inc. (Lessee). **
28.2 Purchase and Sale Agreement and Partial Assignment
of Lease dated as of August 19, 1987 between PLM
Railcar Management Services, Inc. (Seller) and
CIS Corporation (Buyer). **
28.3 Bill of Sale and Partial Assignment of Lease dated
September 18, 1987 between PLM Railcar Management
Services, Inc. (Seller) and CIS Corporation
(Buyer). **
28.4 Bill of Sale and Partial Assignment of Lease dated
November 16, 1987 between CIS Corporation
(Seller) and CIS Capital Equipment Fund, Ltd. 2,
a California Limited Partnership (Buyer). **
28.5 Trust Agreement dated November 23, 1987 between CIS
Capital Equipment Fund, Ltd. 1 and Ltd. 2, as
Owners and Mike M. Speas as Owner Trustee. **
28.6 Conditional Sale, Loan and Security Agreement dated
as of November 23, 1987 between Mike M. Speas as
Borrower and Mellon Financial Services
Corporation #3, as Lender. **
28.7 Certificate of Owner Trustee dated
November 23, 1987. **
28.8 Non-Recourse Secured Promissory Note dated
November 25, 1987. **
28.9 Agreement of Assumption dated November 25, 1987.**
28.10 Bill of Sale dated November 25, 1987. **
28.11 Purchase Agreement dated August 28, 1987 between
Mellon Financial Services and CIS Corporation.**
28.12 Agreement and Lease dated as of December 31, 1986
between Mellon Financial Services Corporation #3
(Lessor) and The Cooper Companies (formerly
Coopervision, Inc.)(Lessee). **
28.13 Amended and Restated Certificate of Acceptance
dated as of December 31, 1986 between Mellon
Financial Services Corporation #3 (Lessor) and
The Cooper Companies, Inc. (formerly
Coopervision, Inc.) (Lessee). **
28.14 Trust Agreement dated as of December 23, 1987
between CIS Corporation as Beneficiary and First
Security Bank of Utah, National Association,
Purchaser, as Owner Trustee. **
28.15 Assignment and Purchase Agreement dated as of
December 23, 1987 between CIS Corporation,
Seller, and CIS Capital Equipment Fund 2, a
California limited partnership, Purchaser. **
28.16 Bill of Sale dated December 23, 1987 between North-
west Airlines, Inc., Seller, and First Security
Bank of Utah, National Association, Purchaser,
as Owner Trustee. **
28.17 Lease Agreement dated as of December 23, 1987
between First Security Bank of Utah, National
Association, Lessor, and Pan American World
Airways, Inc., Lessee. **
28.18 Assignment of Beneficial Interest dated as of
December 23, 1987, between CIS Corporation
(Seller) and CIS Capital Equipment Fund, Ltd. 2,
a California limited partnership (Purchaser).**
28.19 Authorization and Direction dated December 23,
1987 between CIS Corporation and CIS Capital
Equipment Fund 2, a California limited
partnership. **
28.20 Loan and Security Agreement by and among Security
Pacific Leasing, Inc. as Lender, and First
Security Bank of Utah, National Association, as
Owner Trustee ("Mortgagor"), and CIS Capital
Equipment Fund, Ltd. 2, ("Beneficiary"). **
28.21 Secured Non-Recourse Promissory Note dated February
18, 1988 between First Security Bank of Utah,
National Association as Owner Trustee
("Mortgagor") and Security Bank of Utah, National
Association as Owner Trustee. **
28.22 Trust Agreement dated as of January 29, 1988
between CIS Capital Equipment Fund, Ltd. 2, a
California limited partnership as Beneficiary,
and First Security Bank of Utah, National
Association, as Owner Trustee. **
28.23 Aircraft Purchase Agreement dated as of January 29,
1988 between CIS Corporation as Seller, and CIS
Capital Equipment Fund, Ltd. 2, a California
limited partnership as Purchaser. **
28.24 Bill of Sale (N927RC) dated February 19, 1988. **
28.25 Assignment of Lease Agreement and Consent dated as
of January 29, 1988, between and among CIS Corp-
oration ("Assignor"), First Security Bank of
Utah, National Association as Owner Trustee
("Assignee") Northwest Airlines, Inc. ("Sub
-lessee"), and Northwest Aircraft, Inc.
("Lessee"). **
28.26 First Amendment to Lease Agreement dated as of
January 29, 1988 entered into between First
Security Bank of Utah, National Association
(the "Owner Trustee" or "Lessor"), and Northwest
Aircraft, Inc., a Delaware corporation
("Lessee"). **
28.27 Authorization and Direction pursuant to the
Aircraft Purchase Agreement, dated as of
February 19, 1988 between CIS Corporation, and
CIS Capital Equipment Fund, Ltd. 2, a California
limited partnership. **
28.28 Acceptance Certificate (N927RC) dated February 19,
1988 by First Security Bank of Utah, National
Association as Owner Trustee. **
28.29 Security Agreement and Assignment of Lease dated as
of January 29, 1988, among First Security Bank of
Utah, National Association as Owner Trustee, (the
"Borrower"), CIS Capital Equipment Fund, Ltd. 2,
a California limited partnership (the
"Beneficiary") and the Provident Bank (the
"Lender"). **
28.30 Non-Recourse Secured Promissory Note dated
February 19, 1988 between First Security Bank of
Utah, N.A., a National Banking Association as
Owner Trustee (the "Borrower"), and The Provident
Bank, an Ohio corporation. **
28.31 Release dated February 13, 1988 by First Bank
National Association (formerly known as First
National Bank of Minneapolis). **
28.32 Bareboat Charter Party between First Security Bank
of Utah, N.A., Owner Trustee, and Tidewater Ven-
tures, Inc., Charterer, dated as of May 20, 1988.
(Princess Tide). **
28.33 Bareboat Charter Party between First Security Bank
of Utah, N.A., Owner Trustee, and Tidewater Ven-
tures, Inc., Charterer, dated as of May 20, 1988.
(Odyssey Tide). **
28.34 Bareboat Charter Party between First Security Bank
of Utah, N.A., Owner Trustee, and Tidewater Ven-
tures, Inc., Charterer, dated as of May 20, 1988.
(Javelin Tide). **
28.35 Bareboat Charter Party between First Security Bank
of Utah, N.A., Owner Trustee, and Tidewater Ven-
tures, Inc., Charterer, dated as of May 20, 1988.
(Earl Tide). **
28.36 Trust Agreement dated as of May 20, 1988, between
CIS Capital Equipment Fund, Ltd. 2, a California
limited partnership, as Beneficiary, and First
Security Bank of Utah, National Association, as
Owner Trustee. **
28.37 Contract for Sale of Vessels between Tidewater
Navigators, Inc., ("Seller") and First Security
Bank of Utah, N.A. as Owner Trustee ("Buyer")
dated May 20, 1988. **
28.38 Bill of Sale for Petromar Princess, dated
May 20, 1988. **
28.39 Bill of Sale for Petromar Odyssey, dated
May 20, 1988. **
28.40 Bill of Sale for Petromar Javelin, dated
May 20, 1988. **
28.41 Bill of Sale for Petromar Earl, dated
May 20, 1988. **
28.42 Certificate of Acceptance by and between First
Security Bank of Utah, as Owner Trustee and Tide-
water Ventures, Inc., as Charterer, dated
May 23, 1988. **
28.43 Closing Memorandum Purchase and Charter of the
passenger vessel M/V ILLIRIA dated January 4,
1989 between Travel Dynamics Incorporated,
Charterer, First Security Bank of Utah, National
Association, as Owner Trustee, Purchaser and
Shipowner, New Frontier Cruises, Ltd., Seller and
Guarantor, DnC America Banking Corporation, Loan
Participant, CIS Capital Equipment Fund, Ltd. 2,
Beneficiary, and CIS Corporation, Beneficiary.**
28.44 Bareboat Charter Party entered into as of
January 4, 1989, by and between First Security
Bank of Utah, National Association, "Shipowner"
and Travel Dynamics Incorporated, a Delaware
corporation, "Charterer." **
28.45 Loan Agreement, dated as of January 4, 1989, among
Travel Dynamics Incorporated, a Delaware corpora-
tion (the "Charterer"), New Frontier Cruises,
Ltd. a Liberian corporation (the "Guarantor"),
First Security Bank of Utah, National Association
("FSBU"), (the "Shipowner"), CIS Capital
Equipment Fund, Ltd. 2, a California limited
partnership, ("CEF"), CIS Corporation, a New York
corporation, ("CIS") and DnC America Banking
Corporation (the "Loan Participant"). **
28.46 Bill of Sale between New Frontier Cruises, a
Liberian corporation (the "Seller"), to First
Security Bank of Utah, National Association, as
Owner Trustee under the Trust Agreement (Illiria
Trust-1988) dated as of December 9, 1988 for the
benefit of the Beneficiaries named therein (the
"Buyer"), dated as of January 4, 1989. **
28.47 Promissory Note dated January, 1989 in the amount
of $1,350,000.00, between CIS Corporation
("Maker") and First Security Bank of Utah, N.A.
("Holder"). **
28.48 Assignment of CIS Note dated as of January 4, 1989
by and between First Security Bank of Utah,
National Association, a national banking assoc-
iation, as Owner Trustee ("Assignor"), and New
Frontier Cruises, Ltd., a Liberian corporation
("Assignee"). **
28.49 Trust Agreement dated as of December 9, 1988
between CIS Capital Equipment Fund, Ltd. 2, a
California limited partnership, as Beneficiary
and First Security Bank of Utah, National
Association, as Owner Trustee.
ILLIRIA TRUST - 1988. **
28.50 Assignment and Assumption Agreement dated the 23rd
day of February, 1989, between CIS Corporation
("CIS") and CIS Capital Equipment Fund, Ltd. 2,
("Assignee"). **
28.51 Purchase Agreement entered into as of the 23rd day
of February, 1989, by and between CIS Corporation
("Seller") and CIS Capital Equipment Fund,
Ltd. 2,a California limited partnership
("Purchaser"). **
28.52 Certificate of Delivery and Acceptance, dated as of
September 2, 1994, by First Security Bank of
Utah, National Association. **
28.53 Bill of Sale, dated as of August 30, 1994, by First
Security Bank of Utah, N.A. **
28.54 Release of Mortgage, dated as of September 2, 1994,
by Den norske Bank AS, as successor in interest
to DnC America Banking Corporation. **
28.55(A) Termination Agreement dated March 30, 1995, is
among (a) Tidewater Ventures, Inc., a Louisiana
corporation (the Charterer"), charterer of the
United States flag vessels (i) EARL TIDE,
official number 628361, (ii)JAVELIN TIDE,
official number 646003, (iii) ODYSSEY TIDE,
official number 650478 and (iv) PRINCESS TIDE,
official number 651370 (each a "Vessel" and
collectively the "Vessels") pursuant to four (4)
separate Bareboat Charter Parties, each dated
May 30, 1988 (the "Charters") between the
Charterer and Shipowner defined below:
(B) Tidewater, Inc., a Delaware corporation (the
"Guarantor"); and
(C) First Security Bank of Utah, N.A. as owner
trustee (the "Shipowner"). **
28.56 Bills of Sale dated March 30, 1995, with regard to
the four (4) vessels as named and numbered in
Exhibit 28.55 (A) above. **
28.57 Railcar Purchase Agreement (this "Agreement"),
dated as of December 1, 1994, by and between CIS
Capital Equipment Fund, Ltd. 2, a California
limited partnership ("Seller") with an office and
place of business at One CIS Parkway, Syracuse,
NY 13221 and The David J. Joseph Company, a
Delaware corporation with an office and place
of business at 300 Pike Street, Cincinnati,
OH 45202-4214 ("Buyer"). **
28.58 Amendment and Supplement to Railroad Equipment
Lease (this "Amendment"), dated as of
December 1, 1994, is by and between CIS Capital
Equipment Fund, Ltd. 2, a California limited
partnership ("Lessor") and Westvaco a Delaware
corporation ("Lessee"). **
29 Information from reports furnished to state
insurance regulatory authorities. ***
* Included with Form S-1, Registration No. 33-10604
previously filed with the Securities and Exchange
Commission.
** Included with Form 8-K, as amended, previously filed with
the Securities and Exchange Commission.
*** Exhibits were omitted as not required, not applicable, or
the information required to be shown therein is included
elsewhere in this report.
b. Reports on Form 8-K - None.
c. Exhibits filed with this report - None.
CIS CAPITAL EQUIPMENT FUND, LTD. 2,
A CALIFORNIA LIMITED PARTNERSHIP
SCHEDULE V - RENTAL EQUIPMENT
FOR THE THREE YEARS ENDED DECEMBER 31,
1995 1994 1993
Balance at Beginning
of Year $ 15,890,630 $ 19,173,152 $ 34,840,156
Retirements (5,814,577) (3,282,522) (6,029,047)
Other Changes (1) (408,691) 0 (9,637,957)
Balance at
End of Year $ 9,667,362 $ 15,890,630 $ 19,173,152
SCHEDULE VI - ACCUMULATED DEPRECIATION OF RENTAL EQUIPMENT
FOR THE THREE YEARS ENDED DECEMBER 31,
1995 1994 1993
Balance at Beginning
of Year $ 12,448,352 $ 13,194,597 $ 20,576,500
Additions Charged to
Costs and Expenses 467,117 905,841 4,006,865
Retirements (4,146,981) (1,652,086) (3,812,579)
Other Changes (1) (377,027) 0 (7,576,189)
Balance at
End of Year $ 8,391,461 $ 12,448,352 $ 13,194,597
(1) Other Changes consists of transfer of offlease equipment to
Rental Equipment Held for Sale.
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 duly
authorized.
CIS Capital Equipment Fund, Ltd. 2,
a California Limited Partnership
BY: CIS Investors Partnership,
the sole General Partner
BY: RJ Leasing, Inc.,
a General Partner of
CIS Investors Partnership,
the General Partner
ATTEST:
/s/Christa Kleinrichert BY: /s/J. Davenport Mosby, III
Christa Kleinrichert J. Davenport Mosby, III
Secretary and Treasurer President
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, this report has been signed by the
following persons on behalf of the Registrant and in the capacities
and on the dates indicated.
CIS Capital Equipment Fund, Ltd. 2,
a California Limited Partnership
BY: CIS Investors Partnership,
the sole General Partner
BY: RJ Leasing, Inc.,
a General Partner of
CIS Investors Partnership,
the General Partner
Date: May 6, 1996 BY: /s/J. Davenport Mosby, III
J. Davenport Mosby, III
President
Date: May 6, 1996 BY: /s/Christa Kleinrichert
Christa Kleinrichert
Secretary and Treasurer
<TABLE> <S> <C>
<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 DECEMBER 31, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,590,103
<SECURITIES> 0
<RECEIVABLES> 50,902
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 10,076,053
<DEPRECIATION> 8,768,488
<TOTAL-ASSETS> 3,097,331
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,074,883
<TOTAL-LIABILITY-AND-EQUITY> 3,097,331
<SALES> 0
<TOTAL-REVENUES> 7,934,924
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 687,011
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 7,247,913
<INCOME-TAX> 0
<INCOME-CONTINUING> 7,247,913
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,247,913
<EPS-PRIMARY> 119.59<F2>
<EPS-DILUTED> 119.59<F2>
<FN>
<F1>REGISTRANT HAS AN UNCLASSIFIED BALANCE SHEET.
<F2>EPS IS NET INCOME PER $500 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
