Page 1 of 12
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
- ----- OF 1934
For the quarterly period ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________.
Commission file number 0-16615
-------
PHOENIX LEASING CASH DISTRIBUTION FUND III,
A CALIFORNIA LIMITED PARTNERSHIP
- --------------------------------------------------------------------------------
Registrant
California 68-0062480
- ------------------------------ ----------------------------------
State of Jurisdiction I.R.S. Employer Identification No.
2401 Kerner Boulevard, San Rafael, California 94901-5527
- --------------------------------------------------------------------------------
Address of Principal Executive Offices Zip Code
Registrant's telephone number, including area code: (415) 485-4500
-------------
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
preceding requirements for the past 90 days.
Yes __X__ No _____
<PAGE>
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Part I. Financial Information
-----------------------------
Item 1. Financial Statements
PHOENIX LEASING CASH DISTRIBUTION FUND III,
A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands Except for Unit Amounts)
(Unaudited)
June 30, December 31,
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 4,859 $ 3,619
Accounts receivable (net of allowance for
losses on accounts receivable of $57
and $63 at June 30, 1996 and December 31,
1995, respectively) 309 254
Notes receivable (net of allowance for losses
on notes receivable of $1,845 and $3,880 at
June 30, 1996 and December 31, 1995, respectively) 1,286 13,153
Equipment on operating leases and held for lease
(net of accumulated depreciation of $14,191
and $17,004 at June 30, 1996 and December 31,
1995, respectively) 15 79
Net investment in financing leases (net of
allowance for early terminations of $0 and $81
at June 30, 1996 and December 31, 1995, respectively) -- 227
Cable systems, property and equipment (net of
accumulated depreciation of $344 and $548 at
June 30, 1996 and December 31, 1995, respectively) 10,199 1,449
Cable subscriber lists (net of accumulated
amortization of $198 and $0 at June 30, 1996
and December 31, 1995, respectively) 3,613 --
Investment in joint ventures 756 742
Capitalized acquisition fees (net of accumulated
amortization of $8,237 and $7,994 at June 30,
1996 and December 31, 1995, respectively) 39 283
Other assets 357 575
-------- --------
Total Assets $ 21,433 $ 20,381
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 4,322 $ 3,637
Notes payable -- 329
Minority interest in subsidiary 143 311
-------- --------
Total Liabilities 4,465 4,277
-------- --------
Partners' Capital
General Partner (41) (71)
Limited Partners, 600,000 units authorized,
528,151 units issued and 516,716 units
outstanding at June 30, 1996 and December 31,
1995 16,672 15,618
Unrealized gains on available-for-sale securities 337 557
-------- --------
Total Partners' Capital 16,968 16,104
-------- --------
Total Liabilities and Partners' Capital $ 21,433 $ 20,381
======== ========
The accompanying notes are an integral
part of these statements.
<PAGE>
Page 3 of 12
PHOENIX LEASING CASH DISTRIBUTION FUND III,
A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands Except for Per Unit Amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Rental income $ 175 $ 400 $ 588 $ 1,189
Gain (adjustment to gain) on sale
of cable system (37) -- 1,203 --
Cable subscriber revenue 1,066 174 1,732 343
Interest income, notes receivable 13 604 63 702
Equity in earnings from joint
ventures, net 73 96 128 129
Other income 109 187 206 239
------- ------- ------- -------
Total Income 1,399 1,461 3,920 2,602
------- ------- ------- -------
EXPENSES
Depreciation and amortization 410 349 1,174 744
Lease related operating expenses 24 81 72 150
Program service, cable system 328 43 511 86
Management fees to General Partner
and affiliate 64 270 246 350
Reimbursed administrative costs
to General Partner 42 80 87 181
Provision for (recovery of) losses
on receivables 11 (1,848) (2,099) (1,846)
Legal expense 78 139 200 383
General and administrative expenses 276 125 488 258
------- ------- ------- -------
Total Expenses 1,233 (761) 679 306
------- ------- ------- -------
NET INCOME BEFORE MINORITY INTEREST 166 2,222 3,241 2,296
Minority interest in losses (earnings)
of subsidiary 5 (7) (203) (12)
------- ------- ------- -------
NET INCOME $ 171 $ 2,215 $ 3,038 $ 2,284
======= ======= ======= =======
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ .33 $ 4.25 $ 5.82 $ 4.38
======= ======= ======= =======
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $ -- $ 3.70 $ 3.78 $ 7.48
======= ======= ======= =======
ALLOCATION OF NET INCOME:
General Partner $ 1 $ 22 $ 31 $ 23
Limited Partners 170 2,193 3,007 2,261
------- ------- ------- -------
$ 171 $ 2,215 $ 3,038 $ 2,284
======= ======= ======= =======
The accompanying notes are an integral
part of these statements.
<PAGE>
Page 4 of 12
PHOENIX LEASING CASH DISTRIBUTION FUND III,
A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Six Months Ended
June 30,
1996 1995
---- ----
Operating Activities:
Net income $ 3,038 $ 2,284
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,174 744
Gain on sale of cable system (1,203) --
Gain on sale of equipment (36) (151)
Equity in earnings from joint ventures, net (128) (129)
Recovery of losses on notes receivable (2,035) (2,000)
Provision for losses on accounts receivable 17 154
Recovery of early termination, financing leases (81) --
Gain on sale of securities (24) --
Decrease (increase) in accounts receivable (131) 338
Increase (decrease) in accounts payable and
accrued expenses 170 (545)
Decrease (increase) in other assets (2) 32
Minority interest in earnings of subsidiary 203 12
Other 218 --
------- -------
Net cash provided by operating activities 1,180 739
------- -------
Investing Activities:
Principal payments, financing leases -- 535
Principal payments, notes receivable 566 6,579
Proceeds from sale of cable system 2,611 --
Proceeds from sale of equipment 57 485
Proceeds from sale of securities 24 --
Distributions from joint ventures 114 205
Cable systems, property and equipment (124) (32)
------- -------
Net cash provided by investing activities 3,248 7,772
------- -------
Financing Activities:
Payments of principal, notes payable (729) --
Distributions to partners (1,954) (3,865)
Distributions to minority partners (505) (24)
------- -------
Net cash used by financing activities (3,188) (3,889)
------- -------
Increase in cash and cash equivalents 1,240 4,622
Cash and cash equivalents, beginning of period 3,619 4,636
------- -------
Cash and cash equivalents, end of period $ 4,859 $ 9,258
======= =======
Supplemental Cash Flow Information:
Cash paid for interest expense $ 26 $ --
The accompanying notes are an integral
part of these statements.
<PAGE>
Page 5 of 12
PHOENIX LEASING CASH DISTRIBUTION FUND III,
A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. General.
The accompanying unaudited condensed financial statements have been
prepared by the Partnership in accordance with generally accepted accounting
principles, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Although management believes that the disclosures are adequate to make
the information presented not misleading, it is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes included in the Partnership's Financial Statement, as filed with the
SEC in the latest annual report on Form 10-K.
Non-Cash Investing Activities. The Partnership foreclosed upon two cable
television systems during the six months ended June 30, 1996, as discussed in
Note 2 in the consolidated financial statements.
Note 2. Summary of Significant Accounting Policies.
Principles of consolidation. The 1996 financial statements include the
accounts of Phoenix Leasing Cash Distribution Fund III and its majority owned
subsidiaries, Phoenix Black Rock Cable J.V. (a California partnership) and
Phoenix Grassroots Cable Systems, L.L.C. (a Delaware limited liability company)
and its wholly owned subsidiary, Phoenix Concept Cablevision of Indiana, L.L.C.
(a Delaware limited liability company). Hereinafter these entities are
collectively referred to as "the Partnership". All significant intercompany
accounts and transactions have been eliminated in consolidation.
Sale of Cable Television System. On January 17, 1996, Phoenix Black Rock
Cable J.V., a majority owned subsidiary of the Partnership, sold its cable
television systems receiving net proceeds of approximately $2.6 million,
recognizing a gain on sale of this cable system of $1,203,000.
Foreclosures of Cable Television Systems. On February 2, 1996, Phoenix
Leasing Cash Distribution Fund III and Phoenix Concept Cablevision of Indiana,
L.L.C. entered into a Commercial Code Section 9505 Agreement (the "Agreement")
with Concept Cablevision of Indiana, Inc., a cable television company that the
Partnership had extended credit. Phoenix Concept Cablevision of Indiana, L.L.C.
is a newly formed limited liability company and wholly owned subsidiary of
Phoenix Leasing Cash Distribution Fund III. The closing date of the Agreement
was February 2, 1996. This Agreement allowed the Partnership to foreclose upon
the cable television system (the collateral for the note) of Concept Cablevision
of Indiana, Inc. The Partnership's net carrying value for this outstanding note
receivable was $4,321,000 at February 2, 1996, for which the Partnership had no
related allowance. In addition, the Partnership is required to make a cash
payment of $200,000, assume certain liabilities including a note payable of
$600,000 and certain other miscellaneous accounts payable as specified in the
agreement.
The cable television system owned by Phoenix Concept Cablevision of
Indiana, L.L.C. is located in the counties of Benton, Parke, Greene, Montgomery,
Putnam, Boone, Hendricks, Clinton, Hamilton and Madison in the state of Indiana.
The cable television systems consist of headend equipment and 166 miles of plant
passing approximately 9,449 homes with approximately 5,648 subscribers. The
Subsidiary operates under non-exclusive franchise agreements with several of
these counties and with communities located within these counties.
On February 14, 1996, Phoenix Leasing Cash Distribution Fund III and
Phoenix Grassroots Cable Systems, L.L.C. entered into a Settlement Agreement and
Releases (the "Agreement") with Grassroots Cable Systems, Inc., a cable
television company that the Partnership had extended credit. Phoenix Grassroots
Cable Systems, L.L.C. is a newly formed limited liability company and majority
owned (98.5%) subsidiary of Phoenix Leasing Cash Distribution Fund III. The
closing date of the Agreement was February 14, 1996. This Agreement allowed the
Partnership to foreclose upon the cable television system (the collateral for
the note) of Grassroots Cable Systems, Inc. The Partnership's net carrying value
for this outstanding note receivable was $9,014,000 at February 14, 1996, for
which the Partnership had an allowance for losses on notes of $2,035,000. In
addition, the Partnership assumed certain liabilities and miscellaneous payables
as specified in the agreement.
<PAGE>
Page 6 of 12
The cable television system owned by Phoenix Grassroots Cable Systems,
L.L.C. is located in the counties of Franklin, Hancock, Kennebec, Knox, Oxford
and Penobscot in the state of Maine and the counties of Carroll, Coos, Grafton,
Merrimack, Strafford and Sullivan in the State of New Hampshire. The cable
television systems consist of headend equipment and 676 miles of plant passing
approximately 12,429 homes with approximately 7,197 subscribers. The Subsidiary
operates under non-exclusive franchise agreements with several of these counties
and with communities located within these counties.
Phoenix Cable Management Inc.(PCMI), an affiliate of the General
Partner, provides day to day management services in connection with the
operation of these systems.
Note 3. Reclassification.
Reclassification - Certain 1995 amounts have been reclassified to
conform to the 1996 presentation.
Note 4. Income Taxes.
Federal and state income tax regulations provide that taxes on the
income or loss of the Partnership are reportable by the partners in their
individual income tax returns. Accordingly, no provision for such taxes has been
made in the accompanying financial statements.
Note 5. Notes Receivable.
Impaired Notes Receivable. At June 30, 1996, the recorded investment in
notes that are considered to be impaired under Statement 114 was $2,396,000 for
which the related allowance for losses is $1,584,000. The average recorded
investment in impaired loans during the six months ended June 30, 1996 was
approximately $2,496,000.
The activity in the allowance for losses on notes receivable during the
six months ended June 30, is as follows:
1996 1995
---- ----
(Amounts in Thousands)
Beginning balance $ 3,880 $ 8,357
Provision for losses (2,035) (2,000)
Write downs - (1,952)
------- --------
Ending balance $ 1,845 $ 4,405
======= ========
Note 6. Net Income (Loss) and Distributions Per Limited Partnership Unit.
Net income and distributions per limited partnership unit were based on
the limited partners' share of net income and distributions, and the weighted
average number of units outstanding of 516,716 for the six months ended June 30,
1996 and 1995. For purposes of allocating net income (loss) and distributions to
each individual limited partner, the Partnership allocates net income (loss) and
distributions based upon each respective limited partner's net capital
contributions.
<PAGE>
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Note 7. Investment in Joint Ventures.
Equipment Joint Ventures
- ------------------------
The aggregate combined statements of operations of the equipment joint
ventures are presented below:
COMBINED STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Rental income $ 665 $1,132 $1,270 $1,955
Gain on sale of equipment 295 289 543 805
Other income 34 51 74 105
------ ------ ------ ------
Total income 994 1,472 1,887 2,865
------ ------ ------ ------
EXPENSES
Depreciation 84 112 173 458
Lease related operating expenses 400 758 843 1,416
Management fees to General Partner 36 64 67 128
General and administrative expenses 2 4 5 6
------ ------ ------ ------
Total expenses 522 938 1,088 2,008
------ ------ ------ ------
Net income $ 472 $ 534 $ 799 $ 857
====== ====== ====== ======
Foreclosed Cable Systems Joint Ventures
- ---------------------------------------
The aggregate combined statements of operations of the foreclosed cable
systems joint ventures are presented below:
COMBINED STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Subscriber revenue $ 260 $ 262 $ 499 $ 528
Gain on sale of cable system 10 -- 10 --
Other income 7 2 15 5
----- ----- ----- -----
Total income 277 264 524 533
----- ----- ----- -----
EXPENSES
Depreciation and amortization 81 77 160 160
Program services 90 74 173 157
Management fees to an affiliate of the
General Partner 12 12 31 24
General and administrative expenses 79 67 174 149
Provision for losses on accounts
receivable 2 2 5 5
----- ----- ----- -----
Total expenses 264 232 543 495
----- ----- ----- -----
Net income (loss) before income taxes 13 32 (19) 38
Income tax benefit (expense) (3) 8 -- (8)
----- ----- ----- -----
Net income (loss) $ 10 $ 40 $ (19) $ 30
===== ===== ===== =====
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Note 8. Pro Forma Information.
On February 2, 1996, the Partnership entered into a Commercial Code
Section 9505 Agreement with Concept Cablevision of Indiana, Inc., a cable
television company that the Partnership had extended credit. As a result of this
agreement, Phoenix Concept Cablevision of Indiana, L.L.C., a limited liability
company and wholly owned subsidiary of the Partnership, was formed.
On February 14, 1996, the Partnership, along with two other affiliated
partnerships managed by the General Partner, entered into a Settlement Agreement
and Releases with Grassroots Cable Systems, Inc., a cable television company
that the Partnership had extended credit. As a result of this agreement, Phoenix
Grassroots Cable Systems, L.L.C., a limited liability company and majority owned
subsidiary of the Partnership, was formed.
A summary of the unaudited pro forma consolidated results of operations
of the Partnership for the year ended December 31, 1995, as if these cable
television systems had been acquired at the beginning of the year, is as
follows:
(Amounts in Thousands Except
for Per Unit Amounts)
Cable subscriber revenue $5,322
Total income 9,765
Depreciation and amortization 2,699
Program service, cable systems 2,263
General and administrative expenses 1,719
Total expenses 6,178
Net income before minority interest 3,587
Minority interest in earnings of subsidiary 20
Net income 3,567
Net income per limited partnership unit $ 6.83
These pro forma results reflect certain adjustments which, among other
things, include an increase in operating revenues from cable subscribers,
increases in operating expenses of cable systems, depreciation and amortization
of tangible and intangible assets and adjustments of interest expense on
outstanding debt.
The above pro forma consolidated statement should not necessarily be
considered as indicative of the results that would have occurred had the
acquisitions been made at the beginning of the year and their operations
consolidated for the twelve month period.
<PAGE>
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PHOENIX LEASING CASH DISTRIBUTION FUND III,
A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
Phoenix Leasing Cash Distribution Fund III, a California limited
partnership and Subsidiaries (the Partnership) reported net income of $171,000
and $3,038,000 for the three and six months ended June 30, 1996, respectively,
as compared to net income of $2,215,000 and $2,284,000 for the same periods in
1995. The decrease in net income during the three months ended June 30, 1996, as
compared to the same period in 1995, is primarily attributable to an increase in
provision for losses on receivables and a decline in rental income. In contrast,
the increase in net income for the six months ended June 30, 1996, as compared
to the prior year, is due to a gain on the sale of a cable system, as well as an
increase in subscriber revenue.
During the six months ended June 30, 1996, Phoenix Black Rock Cable
J.V., a wholly owned subsidiary of Phoenix Leasing Cash Distribution Fund III,
sold its cable television system for $2.6 million in cash. As a result of this
sale, the Partnership recognized a gain on sale of $1,203,000.
During the six months ended June 30, 1996, the Partnership entered into
agreements with two cable television system operators to transfer all of the
assets of the cable television systems in satisfaction of defaulted notes
receivable from these cable television system operators. The assets of these
cable television systems were transferred to newly formed limited liability
companies that are majority owned by the Partnership. The assets received
through foreclosure generally consists of headend equipment, cable plant,
franchise agreements, subscriber lists, leased property, land, tools, vehicles
and miscellaneous other assets. The Partnership plans to continue the operations
of the cable television company received through foreclosure. For further
information please see the notes to the financial statements. The Partnership
reduced its allowance for loan losses by $2,035,000 during the six months ended
June 30, 1996 as a result of the transfer of one of the cable systems. This
reduction in the allowance for loan losses was recognized as income during the
period.
Total revenues had a slight decrease of $62,000 for the three months
ended June 30, 1996, when compared to the same period in 1995. This decrease is
due to a decline in all revenue items with the exception of cable subscriber
revenue. In contrast, total revenues increased by $1,318,000 for the six months
ended June 30, 1996, compared to the same period in 1995. The increase in total
revenues experienced during the six months ended June 30, 1996 is attributable
to a gain on the sale of a cable system of $1,203,000 and an increase in cable
subscriber revenues of $1,389,000. Cable subscriber revenues increased due to
the addition of two new cable systems that were transferred to the Partnership
in satisfaction of two defaulted notes receivable from cable television system
operators.
The decline in total revenues for the three months ended June 30, 1996
is primarily a result of a decrease in interest income from notes receivable of
$591,000 and rental income of $225,000, compared to the same period in 1995.
Interest income from notes receivable and rental income also experienced a
decline of $639,000 and $601,000, respectively, during the six months ended June
30, 1996 as compared to the same period in 1995. During the three months ended
June 30, 1995, the Partnership recognized interest income from the receipt of a
final payoff from one of its notes receivable which was considered to be
impaired. This payoff caused interest income from notes receivable to be higher
than expected during the three and six months ended June 30, 1995. There have
been no payoffs from impaired notes receivable during 1996.
The reduction in rental income experienced for both the three and six
months ended June 30, 1996 is primarily the result of a decrease in the amount
of equipment owned by the Partnership. At June 30, 1996, the Partnership owned
equipment, excluding the Partnership's pro rata interest in joint ventures, with
an aggregate original cost of $16.4 million, as compared to $33.3 million at
June 30, 1995.
Total expenses increased by $1,994,000 and $373,000 for both the three
and six months ended June 30, 1996, respectively, as compared to the same
periods in 1995. The increase in total expenses during the three months ended
June 30, 1996, compared to 1995, is primarily due to the absence of a recovery
of losses on receivables as experienced during the three months ended June 30,
1995. During the quarter ended June 30, 1995, the Partnership received a
settlement payment of $2.7 million on a defaulted note receivable from a cable
television system operator. The Partnership had provided a loan loss reserve in
the amount equal to the net carrying value of this note in a prior year. Upon
recovery of a portion of this defaulted note receivable, the Partnership reduced
<PAGE>
Page 10 of 12
the allowance for loan losses by $2 million during the quarter ended June 30,
1995. This reduction in the allowance (recovery of) for loan losses was
recognized as income during three and six months ended June 30, 1995.
The increase in total expenses for the six months ended June 30, 1996,
as compared to the prior year, is primarily the result of an increase in
depreciation and amortization expense, as well as program service and general
and administrative expenses. These expenses also increased for the three months
ended June 30, 1996. Depreciation and amortization increased by $61,000 for the
three months ended June 30, 1996 as compared to the same period in 1995 and
increased by $430,000 for the six months ended June 30, 1996 as compared to the
same period in 1995; program service increased by $285,000 and $425,000,
respectively; general and administrative expenses increased by $151,000 and
$230,000, respectively. These increases are attributable to the Partnership
owning and operating two new cable television systems during the three and six
months ended June 30, 1996, as previously discussed.
The Partnership has also foreclosed upon the collateral of several notes
receivable to certain cable television system operators. As a result, the
Partnership has an ownership interest in the operating cable television systems
organized as joint ventures. The Partnership's equity interest in the earnings
from the foreclosed cable system joint ventures was minimal during the three and
six months ended June 30, 1996 and 1995.
Liquidity and Capital Resources
The Partnership's primary source of liquidity comes from cable
subscriber revenues and from its contractual obligations with lessees and
borrowers for fixed payment terms. As the initial lease terms of the leases
expire, the Partnership will continue to renew, remarket or sell the equipment.
The future liquidity of the Partnership will depend upon the General Partner's
success in collecting contractual amounts and re-leasing and selling the
Partnership's equipment as it comes off lease. As another source of liquidity,
the Partnership has investments in joint ventures.
The net cash generated by operating activities was $1,180,000 during the
six months ended June 30, 1996, as compared to $739,000 during the same period
in 1995. This increase is primarily due to an increase in cable subscriber
revenues.
Proceeds from the sale of cable system is related to the sale of a cable
system owned by Phoenix Black Rock Cable J.V., a majority owned subsidiary of
the Partnership. This cable system was sold on January 17, 1996.
Proceeds from the sale of equipment declined by $428,000 as a result of
a reduction in the amount of equipment sold during the six months ended June 30,
1996, as compared to 1995. During 1996, the Partnership sold equipment with an
aggregate original cost of $4.1 million, as compared to $15.3 million of
equipment sold during the same period in 1995.
During the six months ended June 30, 1996, the Partnership reported
decreases in principal payments from financing leases and notes receivable of
$535,000 and $6,013,000, respectively, as compared to the prior year. These
decreases are reflective of the decrease in the net investment in financing
leases and the decrease in notes receivable, as reported on the balance sheet at
June 30, 1996.
As of June 30, 1996, the Partnership owned equipment held for lease with
an aggregate original cost of $3,653,000 and a net book value of $1,000,
compared to $11,365,000 and $93,000, respectively, as of June 30, 1995. The
General Partner is actively engaged, on behalf of the Partnership, in
remarketing and selling the Partnership's off-lease portfolio.
The cash distributed to limited partners during the six months ended
June 30, 1996 and 1995 were $1,954,000 and $3,865,000, respectively. As a
result, the cumulative cash distributions to the limited partners are
$98,179,000 and $92,340,000 as of June 30, 1996 and 1995, respectively. The
General Partner did not receive cash distributions during the six months ended
June 30, 1996 and 1995. The General Partner has elected not to receive payment,
at this time, for its share of the cash available for distribution due to its
negative capital account.
The Partnership's asset portfolio continues to decline as a result of
the ongoing liquidation of assets, and therefore it is expected that the cash
generated from Partnership leasing operations will also decline. As the cash
generated by operations continues to decline, the rate of cash distributions
made to limited partners will also decline. The Partnership has switched to an
annual distribution plan with the next distribution expected to be made on
January 15, 1997.
Cash generated from leasing and financing operations has been and is
anticipated to continue to be sufficient to meet the Partnership's continuing
operational expenses and to provide for distributions to partners.
<PAGE>
Page 11 of 12
PHOENIX LEASING CASH DISTRIBUTION FUND III,
A CALIFORNIA LIMITED PARTNERSHIP
June 30, 1996
Part II. Other Information.
------------------
Item 1. Legal Proceedings. Inapplicable
Item 2. Changes in Securities. Inapplicable
Item 3. Defaults Upon Senior Securities. Inapplicable
Item 4. Submission of Matters to a Vote of Securities Holders. Inapplicable
Item 5. Other Information. Inapplicable
Item 6. Exhibits and Reports on 8-K:
a) Exhibits:
(27) Financial Data Schedule
b) Reports on 8-K:
One report, dated February 2, 1996, on Form 8-K/A was filed
during the quarter ending June 30, 1996, pursuant to Item 2 and Item 7 of that
form. No financial statements were filed as part of that report.
One report, dated February 14, 1996, on Form 8-K/A was filed
during the quarter ending June 30, 1996, pursuant to Item 2 and Item 7 of that
form. No financial statements were filed as part of that report.
<PAGE>
Page 12 of 12
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.
PHOENIX LEASING CASH DISTRIBUTION FUND III,
-------------------------------------------
A CALIFORNIA LIMITED PARTNERSHIP
--------------------------------
(Registrant)
Date Title Signature
---- ----- ---------
August 13, 1996 Chief Financial Officer, /S/ PARITOSH K. CHOKSI
- --------------- Senior Vice President ----------------------
and Treasurer of (Paritosh K. Choksi)
Phoenix Leasing Incorporated
General Partner
August 13, 1996 Senior Vice President, /S/ BRYANT J. TONG
- --------------- Financial Operations ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Incorporated
General Partner
August 13, 1996 Partnership Controller /S/ MICHAEL K. ULYATT
- --------------- Phoenix Leasing Incorporated ----------------------
General Partner (Michael K. Ulyatt)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,859
<SECURITIES> 0
<RECEIVABLES> 3,497
<ALLOWANCES> 1,902
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0
0
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