<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter ended Commission File Number
March 31, 1998 33-19038
PERSHING LEASE INCOME LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
MISSOURI
(State or other jurisdiction of incorporation or organization)
43-1463913
(I.H.S.. Employer Identification No.)
6300 Lamar, Shawnee Mission, Kansas 66202 (913) 236-2000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
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
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PERSHING LEASE INCOME LIMITED PARTNERSHIP
(A Missouri Limited Partnership)
Table of Contents
Part I - Financial Information
Financial Statements: Page
Balance Sheet - March 31, 1998 and
December 31, 1997 3
Statements of Operations for the Quarters
Ended March 31, 1998 and 1997 4
Statement of Cash Flows for the Quarters
Ended March 31, 1998 and 1997 5
Notes to Financial Statements 6-7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Equipment Summary 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. 9
Item 2. Changes in Securities. 9
Item 3. Default Upon Senior Securities. 9
Item 4. Submission of Matters to a Vote of Security
Holders. 9
Item 5. Other Information. 9
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits 9
(b) Reports on Form 8-K 9
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Pershing Lease Income Limited Partnership
(A Missouri Limited Partnership)
Balance Sheets
March 31, December 31,
1998 1997
Assets (Unaudited)
Investment property:
Cost $ 801,339 $ 801,339
Less accumulated depreciation 795,468 791,882
Investment property, net 5,871 9,457
Cash and cash equivalents 127,331 137,247
Rents and other receivables 6,741 9,227
Prepaid insurance 918 1,270
Total assets $ 140,861 $ 157,201
========== ===========
Liabilities and Partners' Equity
Liabilities:
Due to affiliates 4,503 $ 4,562
Total liabilities 4,503 4,562
Partners' Equity (Deficit):
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 1,104,733 1,104,430
Cumulative cash distributions (1,316,610) (1,316,610)
(210,877) (211,180)
Limited Partners (62,840 units):
Capital contributions, net of
offering costs 27,738,501 27,738,501
Cumulative net income 5,571,050 5,587,634
Cumulative cash distributions (32,962,316) (32,962,316)
347,235 363,819
Total partners' equity 136,358 152,639
Total liabilities and partners'
equity $ 140,861 $ 157,201
========== ===========
See accompanying notes to financial statements.
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PERSHING LEASE INCOME LIMITED PARTNERSHIP
(A Missouri Limited Partnership)
Statements of Operations
(Unaudited)
For the Quarters Ended March 31, 1998 and 1997
1998 1997
Revenue:
Rental income $ - $ 129,858
Interest income 303 6,212
Net gain on sale of investment property - 47,500
Total revenue 303 183,570
Expenses:
Depreciation 3,586 28,609
General and administrative 12,998 30,960
Total expenses 16,584 59,569
Net income $ (16,281) $ 124,001
======== =========
See accompanying notes to financial statements.
<PAGE>
PERSHING LEASE INCOME LIMITED PARTNERSHIP
(A Missouri Limited Partnership)
Statement of Cash Flows
(Unaudited)
For the Quarters Ended March 31, 1998 and 1997
1998 1997
Cash flows from operating activities:
Net income (loss) $ (16,281) $ 124,001
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation 3,586 28,609
Net gain on sale of investment
property - (47,500)
Changes in assets and liabilities:
Receivables 2,486 (2,069)
Prepaid insurance 352 362
Due to affiliates (59) 560
Unearned rental revenue - 36,100
Net cash provided by operating
activities 9,916 140,063
Cash flows from investing activities:
Disposition of investment property - 47,500
Cash flows from financing activities:
Cash distributions to Partners - (261,717)
Net increase (decrease) in cash and
cash equivalents (9,916) (74,154)
Cash and cash equivalents at beginning
of period 137,247 639,226
Cash and cash equivalents at end of
period $ 127,331 $ 565,072
========== ==========
See accompanying notes to financial statements.
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PERSHING LEASE INCOME LIMITED PARTNERSHIP
(A Missouri Limited Partnership)
Notes to Financial Statements
(Unaudited)
In the opinion of the General Partner, the accompanying unaudited
financial statements contain all adjustments necessary to present
fairly the financial position, results of operations and cash flows.
(1) Summary of Significant Accounting Policies
Organization
Pershing Lease Income Limited Partnership (the "Partnership") was
organized under the Missouri Revised Uniform Limited Partnership Act on
November 30, 1987. The Partnership was formed to invest primarily in
equipment to be leased to third parties. The Amended Agreement of
Limited Partnership authorized the issuance of up to 60,000 Limited
Partnership units at a price of $500 per unit and up to 20,000
additional units. The Partnership had an initial closing and thirteen
subsequent closings. The closings occurred on May 3, 1988, June 3,
1988, July 8, 1988, August 5, 1988, September 8, 1988, October 7, 1988,
November 7, 1988, December 7, 1988, January 9, 1989, February 7, 1989,
March 7, 1989, April 7, 1989, May 5, 1989, and June 14, 1989 with
10,732, 6,712, 3,984, 4,268, 5,011, 3,822, 2,562, 2,701, 4,001, 3,256,
3,604, 4,014, 3,592, and 4,581 units, respectively.
Pursuant to the terms of the Amended Agreement of Limited
Partnership, distributable cash from operations and profits for federal
income tax purposes from normal operations, as defined, are to be
allocated 95% to the Limited Partners and 5% to the General Partner
until payout has occurred, and 85% to the Limited Partners and 15% to
the General Partner thereafter. Any distributable cash from sales
shall be distributed 99% to the Limited Partners and 1% to the General
Partner until payout has occurred, and 85% to the Limited Partners and
15% to the General Partner thereafter. "Payout" means the time when the
aggregate amount of all distributions to the Limited Partners of
distributable cash from operations and of distributable cash from sales
or refinancing equals the aggregate amount of the Limited Partners'
original invested capital plus a cumulative 8% annual return on their
aggregate unreturned invested capital (calculated from the beginning of
the first full fiscal quarter following each Limited Partner's
admission to the Partnership). Losses for federal income tax purposes
from the normal operations of the Partnership will be allocated 99% to
the Limited Partners and 1% to the General Partner. In addition, spe-
cial cost recovery allocations may be required to reflect the differing
initial capital contributions of the General Partner and the Limited
Partners. The Partnership's books and records are in accordance with
the terms of the Amended Agreement of Limited Partnership.
The General Partner, Waddell & Reed Leasing, Inc., contributed
$1,000 for its General Partnership interest. The General Partner is
not required to make any other capital contributions except under
certain limited circumstances upon termination of the Partnership.
<PAGE>
Pershing Lease Income Limited Partnership
(A Missouri Limited Partnership)
Notes to Financial Statements, Continued
(Unaudited)
Basis of Presentation
The Partnership financial statements are presented on the accrual
basis of accounting.
Cash and Cash Equivalents
Cash and cash equivalents in the accompanying statements of cash
flows include cash on hand and short-term investments with original
maturities of less than ninety days.
Investment Property
Investment property consists of mining equipment. At March 31,
1998 and December 31, 1997, the Partnership owned investment property,
with a depreciable cost basis of $801,339. The depreciable cost basis
at March 31, 1998 and December 31, 1997, includes acquisition fees of
$36,337, which were paid to the General Partner. The equipment is
being held in inventory for sale. Depreciation on the remaining
investment property is provided using an accelerated methods and a 7
year life.
Income Taxes
The Partnership is a pass-through entity and, accordingly, taxes on
income, if any, are the responsibility of the individual partners.
Partners' equity at March 31, 1998 as reported herein has been reduced
by sales commissions and other costs of the offering which will not be
deductible by the partners until the Partnership is liquidated or the
partners' units are otherwise disposed of.
(2) Related Party Transactions
Fees, commissions and other expenses paid or payable by the
Partnership to the General Partner or affiliates of the General Partner
for the quarter ending March 31, 1998 follow:
Reimbursable operating expenses $5,574
The following costs were due to (from) affiliates as of March 31,
1998:
Reimbursable operating expenses $4,503
<PAGE>
Pershing Lease Income Limited Partnership
(A Missouri Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Partnership Operations
Due to the sale of investment property and lease expirations there
was no rental income for the first quarter of 1998; $129,858 less than
the first quarter of 1997. The Partnership's final lease for mining
equipment ended February 15, 1997 and it is being remarketed.
Depreciation was $3,586 for the period, down about $25,023 from
last year because accelerated depreciation methods have been used and
the sale of equipment. General and administrative expenses for the
quarter were $12,998 down $17,962 compared to the first quarter of 1997
due primarily to lower management fees.
As mentioned above, it is possible the Partnership may sell the remain-
ing equipment and cease operations during 1998.
Cash and Distributable Cash from Operations and Sales
Shown below is the calculation of Cash and Distributable Cash from
Operations and Sales for the quarter ended March 31, 1998 as defined by
Section 17 of the Amended Agreement of Limited Partnership:
Rental income $ -
Interest income 303
Cash from sales -
Total cash inflow 303
Operating expenses (12,998)
Cash from operations and sales (12,695)
Reserve for distributions and operations (12,695)
Partnership management fee -
Distributable cash from operations and sales $ -
========
There were no distributions made to the Limited Partners of record on
December 31, 1997.
Acquisition
Equipment Description Cost
Heavy Duty Equipment $801,339
<PAGE>
Pershing Lease Income Limited Partnership
(A Missouri Limited Partnership)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Default Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - There are no exhibits.
(b) Form 8-K - There have been no reports on Form
8-K.
<PAGE>
Pershing Lease Income Limited Partnership
(A Missouri Limited Partnership)
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.
PERSHING LEASE INCOME LIMITED PARTNERSHIP
(Registrant)
By: /s/ Michael D. Strohm
Michael D. Strohm, Executive Vice
President and Assistant Treasurer
of the General Partner
Date: May 26, 1998
By: /s/ Robert L. Hechler
Robert L. Hechler, as President,
and Treasurer of the General Partner
(Principal Accounting and Financial
Officer)
Date: May 26, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 127331
<SECURITIES> 0
<RECEIVABLES> 918
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 128249
<PP&E> 801339
<DEPRECIATION> 795468
<TOTAL-ASSETS> 140861
<CURRENT-LIABILITIES> 4503
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 136358
<TOTAL-LIABILITY-AND-EQUITY> 140861
<SALES> 303
<TOTAL-REVENUES> 303
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 16584
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16281)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16281)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16281)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
