UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
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Commission File No. 33-21977
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POLARIS AIRCRAFT INCOME FUND V,
a California Limited Partnership
State of Organization: California
IRS Employer Identification No. 94-3068259
201 High Ridge Road, Stamford, Connecticut 06927
Telephone - (203) 357-3776
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes _X_ No ___
This document consists of 11 pages.
<PAGE>
POLARIS AIRCRAFT INCOME FUND V,
A California Limited Partnership
FORM 10-Q - For the Quarterly Period Ended March 31, 1998
INDEX
Part I. Financial Information Page
Item 1. Financial Statements
a) Balance Sheets - March 31, 1998 and
December 31, 1997.............................................. 3
b) Statements of Operations - Three Months Ended
March 31, 1998 and 1997........................................ 4
c) Statements of Changes in Partners' Capital
(Deficit) - Year Ended December 31, 1997
and Three Months Ended March 31, 1998.......................... 5
d) Statements of Cash Flows - Three Months
Ended March 31, 1998 and 1997.................................. 6
e) Notes to Financial Statements.................................. 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........ 9
Part II. Other Information
Item 1. Legal Proceedings........................................... 10
Item 6. Exhibits and Reports on Form 8-K............................ 10
Signature ........................................................ 11
2
<PAGE>
Part I. Financial Information
-----------------------------
Item 1. Financial Statements
POLARIS AIRCRAFT INCOME FUND V,
A California Limited Partnership
BALANCE SHEETS
(Unaudited)
March 31, December 31,
1998 1997
---- ----
ASSETS:
CASH AND CASH EQUIVALENTS $ 1,934,238 $ 53,802,187
RECEIVABLES 1,363 2,012
------------ ------------
$ 1,935,601 $ 53,804,199
============ ============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT):
PAYABLE TO AFFILIATES $ 87,042 $ 103,569
ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES 178,844 53,436
------------ ------------
Total Liabilities 265,886 157,005
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner (6,886,705) (1,674,489)
Limited Partners, 500,000 units
issued and outstanding 8,556,420 55,321,683
------------ ------------
Total Partners' Capital 1,669,715 53,647,194
------------ ------------
$ 1,935,601 $ 53,804,199
============ ============
The accompanying notes are an integral part of these statements.
3
<PAGE>
POLARIS AIRCRAFT INCOME FUND V,
A California Limited Partnership
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
----------------------------
1998 1997
---- ----
REVENUES:
Rent from operating leases $ - $2,409,899
Interest 346,805 581,742
---------- ----------
Total Revenues 346,805 2,991,641
---------- ----------
EXPENSES:
Depreciation - 978,807
Management fees to general partner - 120,495
Operating 92,505 114,627
Administration and other 87,335 72,982
---------- ----------
Total Expenses 179,840 1,286,911
---------- ----------
NET INCOME $ 166,965 $1,704,730
========== ==========
NET INCOME ALLOCATED TO
THE GENERAL PARTNER $ 2,228 $ 267,022
========== ==========
NET INCOME ALLOCATED
TO LIMITED PARTNERS $ 164,737 $1,437,708
========== ==========
NET INCOME PER
LIMITED PARTNERSHIP UNIT $ 0.33 $ 2.88
========== ==========
The accompanying notes are an integral part of these statements.
4
<PAGE>
POLARIS AIRCRAFT INCOME FUND V,
A California Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
Year Ended December 31, 1997 and
Three Months Ended March 31, 1998
---------------------------------
General Limited
Partner Partners Total
------- -------- -----
Balance, December 31, 1996 $ (1,505,679) $ 72,014,095 $ 70,508,416
Net income 2,022,302 3,027,587 5,049,889
Cash distributions to partners (2,191,112) (19,719,999) (21,911,111)
------------ ------------ ------------
Balance, December 31, 1997 (1,674,489) 55,321,683 53,647,194
Net income 2,228 164,737 166,965
Cash distributions to partners (5,214,444) (46,930,000) (52,144,444)
------------ ------------ ------------
Balance, March 31, 1998 $ (6,886,705) $ 8,556,420 $ 1,669,715
============ ============ ============
The accompanying notes are an integral part of these statements.
5
<PAGE>
POLARIS AIRCRAFT INCOME FUND V,
A California Limited Partnership
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
----------------------------
1998 1997
---- ----
OPERATING ACTIVITIES:
Net income $ 166,965 $ 1,704,730
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation - 978,807
Changes in operating assets and
liabilities:
Decrease (increase) in rent and other
receivables 649 (443,079)
Increase in other assets - (31,877)
Increase (decrease) in payable to
affiliates (16,527) 117,456
Increase (decrease) in accounts payable
and accrued liabilities 125,408 (55,474)
Decrease in security deposits - (250,000)
Decrease in maintenance reserves - (128,611)
------------ ------------
Net cash provided by operating
activities 276,495 1,891,952
------------ ------------
INVESTING ACTIVITIES:
Proceeds from sale of aircraft - 1,555,694
Principal payments on finance sale of
aircraft - 354,369
------------ ------------
Net cash provided by investing
activities - 1,910,063
------------ ------------
FINANCING ACTIVITIES:
Cash distributions to partners (52,144,444) (2,777,778)
------------ ------------
Net cash used in financing
activities (52,144,444) (2,777,778)
------------ ------------
CHANGES IN CASH AND CASH
EQUIVALENTS (51,867,949) 1,024,237
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 53,802,187 23,252,136
------------ ------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 1,934,238 $ 24,276,373
============ ============
The accompanying notes are an integral part of these statements.
6
<PAGE>
POLARIS AIRCRAFT INCOME FUND V,
A California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Accounting Principles and Policies
In the opinion of management, the financial statements presented herein include
all adjustments, consisting only of normal recurring items, necessary to
summarize fairly Polaris Aircraft Income Fund V's (the Partnership's) financial
position and results of operations. The financial statements have been prepared
in accordance with the instructions of the Quarterly Report to the Securities
and Exchange Commission (SEC) Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles (GAAP). These statements should be read in conjunction with the
financial statements and notes thereto for the years ended December 31, 1997,
1996, and 1995 included in the Partnership's 1997 Annual Report to the SEC on
Form 10-K.
2. Related Parties
Under the Limited Partnership Agreement, the Partnership paid or agreed to pay
the following amounts for the current quarter to the general partner, Polaris
Investment Management Corporation, in connection with services rendered or
payments made on behalf of the Partnership:
Payments for
Three Months Ended Payable at
March 31, 1998 March 31, 1998
-------------- --------------
Out-of-Pocket Administrative Expense
Reimbursement $ 64,830 $ 59,681
Out-of-Pocket Operating and
Remarketing Expense Reimbursement 46,140 27,361
-------- --------
$110,970 $ 87,042
======== ========
3. Partners' Capital
The Partnership Agreement (the Agreement) stipulates different methods by which
revenue, income and loss from operations and gain or loss on the sale of
aircraft are to be allocated to the general partner and the limited partners.
Such allocations are made using income or loss calculated under GAAP for book
purposes, which varies from income or loss calculated for tax purposes.
Cash available for distributions, including the proceeds from the sale of
aircraft, is distributed 10% to the general partner and 90% to the limited
partners.
The different methods of allocating items of income, loss and cash available for
distribution combined with the calculation of items of income and loss for book
7
<PAGE>
and tax purposes result in book basis capital accounts that may vary
significantly from tax basis capital accounts. The ultimate liquidation and
distribution of remaining cash will be based on the tax basis capital accounts
following liquidation, in accordance with the Agreement.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
As discussed below under "Liquidity and Cash Distributions", Polaris Investment
Management Corporation (PIMC or the General Partner), is in the process of
winding up the business of Polaris Aircraft Income Fund V (the Partnership).
During 1997, the Partnership sold its remaining portfolio of 13 used aircraft
out of its original portfolio of 14 aircraft.
Partnership Operations
The Partnership reported net income of $166,965, or $0.33 per limited
partnership unit, for the three months ended March 31, 1998, compared to net
income of $1,704,730, or $2.88 per unit, for the same period in 1997. The
significant decline in operating results for the three months ended March 31,
1998, compared to the same period in 1997, is due primarily to the sale of the
Partnership's remaining aircraft in 1997 as discussed above.
Interest income decreased during the three months ended March 31, 1998 compared
to the same period in 1997, due to the repayment of a note receivable from AIA
in November 1997.
Operating expenses decreased during the three months ended March 31, 1998
compared to the same period in 1997. The decrease was due to maintenance
expenses recorded during the three months ended March 31, 1997 related to
aircraft sold to AIA and Triton during 1997. Partially offsetting this decrease
was an increase in legal expenses during the three months ended March 31, 1998
related to the sale of aircraft to Triton.
Administration and other expenses increased during the three months ended March
31, 1998 as compared to the same period in 1997, due to increases in printing
and postage costs related to an additional distribution.
Liquidity and Cash Distributions
Liquidity - As previously discussed, the Partnership sold its remaining aircraft
during 1997. Polaris Investment Management Corporation, the general partner, has
determined that the Partnership maintain cash reserves as a prudent measure to
ensure that the Partnership has available sufficient funds to satisfy
anticipated contingencies and expenses in connection with winding up its
business. The Partnership's cash reserves will be monitored and may be revised
from time to time as further information becomes available in the future.
Cash Distributions - Cash distributions to limited partners during the three
months ended March 31, 1998 were $46,930,000, or $93.86 per limited partnership
unit, compared to $2,500,000, or $5.00 per limited partnership unit, during the
three months ended March 31, 1997. The increase, as compared to 1997, is due to
the distribution of the proceeds received from the prepayment of a note due from
Triton Aviation Services V LLC on December 30, 1997. The Partnership is now in
the process of winding up its business. With the exception of reserves
maintained for anticipated expenses and costs of winding up, the Partnership
distributed all of its available cash during 1997 and the first quarter of 1998.
Consequently the timing and amount of future cash distributions, if any, are not
yet known and will depend upon whether the Partnership's reserves exceed its
actual expenses and contingencies in winding up and on the time required to
complete the winding up process.
9
<PAGE>
Part II. Other Information
--------------------------
Item 1. Legal Proceedings
As discussed in Item 3 of Part I of Polaris Aircraft Income Fund V's (the
Partnership) 1997 Annual Report to the Securities and Exchange Commission on
Form 10-K (Form 10-K), there are a number of pending legal actions or
proceedings involving the Partnership. There have been no material developments
with respect to any such actions or proceedings during the period covered by
this report.
Other Proceedings - Item 10 in Part III of the Partnership's 1997 Form 10-K
discusses certain actions which have been filed against Polaris Investment
Management Corporation and others in connection with the sale of interests in
the Partnership and the management of the Partnership. The Partnership is not a
party to these actions. There have been no material developments with respect to
any of the actions described therein during the period covered by this report.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
27. Financial Data Schedule (in electronic format only).
b) Reports on Form 8-K
A Current Report on Form 8-K, dated December 30, 1997, reporting a
prepayment in full of the Promissory Note from Triton Aviation Services V
LLC, was filed on January 5, 1998.
10
<PAGE>
SIGNATURE
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.
POLARIS AIRCRAFT INCOME FUND V,
A California Limited Partnership
(Registrant)
By: Polaris Investment
Management Corporation,
General Partner
May 13, 1998 By: /S/Marc A. Meiches
- ----------------------------- ----------------------
Marc A. Meiches
Chief Financial Officer
(principal financial officer and
principal accounting officer of
Polaris Investment Management
Corporation, General Partner of
the Registrant)
11
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<PERIOD-END> MAR-31-1998
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