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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 March 31, 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 0-17989
-------
PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
- --------------------------------------------------------------------------------
Registrant
California 68-0166383
- -------------------------------- ----------------------------------
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 ___
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Part I. Financial Information
------------------------------
Item 1. Financial Statements
PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
BALANCE SHEETS
(Amounts in Thousands Except for Unit Amounts)
(Unaudited)
March 31, December 31,
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 650 $ 655
Accounts receivable (net of allowance for
losses on accounts receivable of $0 at
March 31, 1996 and December 31, 1995) 9 18
Notes receivable (net of allowance for losses
on notes receivable of $706 at March 31, 1996
and December 31, 1995) 581 581
Marketable Securities, available-for-sale 109 149
Net investment in financing leases 253 311
Investment in joint ventures 228 266
Capitalized acquisition fees (net of accumulated
amortization of $262 and $260 at March 31, 1996
and December 31, 1995, respectively) 33 36
Other assets 2 1
------- -------
Total Assets $ 1,865 $ 2,017
======= =======
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 37 $ 44
------- -------
Total Liabilities 37 44
------- -------
Partners' Capital
General Partner (5) (14)
Limited Partners, 25,000 units authorized,
7,526 units issued and outstanding at
March 31, 1996 and December 31, 1995 1,724 1,838
Unrealized gains on marketable securities
available-for-sale 109 149
------- -------
Total Partners' Capital 1,828 1,973
------- -------
Total Liabilities and Partners' Capital $ 1,865 $ 2,017
======= =======
The accompanying notes are an integral part of these statements.
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PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Amounts in Thousands Except for Per Unit Amounts)
(Unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
INCOME
Earned income, financing leases $ 12 $ 22
Gain on sale of equipment 12 3
Equity in earnings from joint ventures 26 1
Other income 8 6
----- -----
Total Income 58 32
----- -----
EXPENSES
Depreciation and amortization 2 5
Management fees to General Partner 3 3
Reimbursed administrative costs to General Partner 4 6
Legal expense 7 8
General and administrative expenses 5 7
----- -----
Total Expenses 21 29
----- -----
NET INCOME $ 37 $ 3
===== =====
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 3.64 $ --
===== =====
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $18.74 $51.68
===== =====
ALLOCATION OF NET INCOME:
General Partner $ 10 $ 3
Limited Partners 27 --
----- -----
$ 37 $ 3
===== =====
The accompanying notes are an integral part of these statements.
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PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Three Months Ended
March 31,
1996 1995
---- ----
Operating Activities:
Net income $ 37 $ 3
Adjustments to reconcile net income to
net cash provided (used) by operating
activities:
Depreciation and amortization 3 5
Gain on sale of equipment (12) (3)
Equity in earnings from joint ventures, net (26) (1)
Decrease (increase) in accounts receivable 9 (2)
Decrease in accounts payable and accrued expenses (7) (32)
Decrease (increase) in other assets (1) 1
----- -----
Net cash provided (used) by operating activities 3 (29)
----- -----
Investing Activities:
Principal payments, financing leases 58 56
Principal payments, notes receivable -- 11
Proceeds from sale of equipment 12 6
Distributions from joint ventures 64 10
----- -----
Net cash provided by investing activities 134 83
----- -----
Financing Activities:
Distributions to partners (142) (393)
----- -----
Net cash used by financing activities (142) (393)
----- -----
Decrease in cash and cash equivalents (5) (339)
Cash and cash equivalents, beginning of period 655 755
----- -----
Cash and cash equivalents, end of period $ 650 $ 416
===== =====
The accompanying notes are an integral part of these statements.
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PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO 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.
Note 2. Reclassification.
Reclassification - Certain 1995 amounts have been reclassified to
conform to the 1996 presentation.
Note 3. 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 4. Notes Receivable.
Impaired Notes Receivable. At March 31, 1996, the recorded investment in
notes that are considered to be impaired under Statement No. 114 was $1,287,000.
The related allowance for losses is $706,000. The average recorded investment in
impaired loans during the three months ended March 31, 1996 was approximately
$1,287,000.
The activity in the allowance for losses on notes receivable during the
three months ended March 31, is as follows:
1996 1995
---- ----
Beginning balance $706 $202
Provision for losses -- --
Write downs -- --
---- ----
Ending balance $706 $202
==== ====
Note 5. Net Income (Loss) and Distribution 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
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average number of units outstanding of 7,526 for the three months ended March
31, 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.
Note 6. Investment in Joint Ventures.
Foreclosed Cable System Joint Ventures
The aggregate combined statements of operations of the foreclosed cable
systems joint ventures is presented below:
COMBINED STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended
March 31,
1996 1995
---- ----
Subscriber revenue $ 160 $ 241
Gain on sale of cable system 1,240 --
Other income 12 5
------ ------
Total income 1,412 246
------ ------
EXPENSES
Depreciation and amortization 44 54
Program services 51 64
Management fees to an affiliate of the General Partner 125 10
General and administrative expenses 88 85
Provision for losses on accounts receivable 1 3
------ ------
Total expenses 309 216
------ ------
Net income $1,103 $ 30
====== ======
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PHOENIX HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Partnership reported net income of $37,000 for the three months ended
March 31, 1996, as compared to net income of $3,000 for the same period in 1995.
The increase in net income during the three months ended March 31, 1996, as
compared to the same period in 1995, is attributable to an increase in earnings
from joint ventures.
Total revenues increased by $26,000 during the three months ended March 31,
1996, as compared to the same period in 1995. This increase was primarily the
result of an increase in earnings from joint ventures. The increase in earnings
from joint ventures is attributable to the sale of a cable television system
owned by one of the joint ventures.
The Partnership did not report interest income from notes receivable during
the three months ended March 31, 1996 and 1995. This is the result of the
Partnership's investment in notes receivable being classified as impaired and
the recognition of interest income on such notes being suspended. The
Partnership has an investment in an impaired note receivable with a net carrying
value (before consideration of the allowance for losses of $706,000) of
approximately $1,287,000 at March 31, 1996.
Total expenses decreased by $8,000 during the three months ended March 31,
1996, as compared to the same period in 1995. The decrease in expenses during
the three months ended March 31, 1996, as compared to the same period in 1995,
is due to a decrease in most expense categories. Decreases in depreciation and
amortization, and general and administrative expenses accounted for $6,000 of
the decrease in total expense.
Liquidity and Capital Resources
The Partnership's primary source of liquidity comes from its contractual
obligations with lessees and borrowers to receive rental payments and payments
of principal and interest. The future liquidity of the Partnership will depend
upon the General Partner's success in collecting scheduled contractual payments
from its lessees and borrowers. Additionally, the Partnership has investments in
foreclosed cable systems joint ventures that it receives cash distributions of
the excess cash flows.
The cash generated by leasing and financing activities was $61,000 during the
three months ended March 31, 1996, as compared to $38,000 during the same period
in 1995. The net cash generated by leasing and financing activities was lower
during 1995 due to the payment of accounts payable and accrued expenses.
During the three months ended March 31, 1996, the Partnership received cash
distributions of $64,000 from foreclosed cable systems joint ventures as
compared to cash distributions of $10,000 from foreclosed cable systems joint
ventures during the same period in 1995. This increase in distributions is
attributable to the distribution of the sale proceeds from the sale of a cable
television system owned by one of these joint ventures during the three months
ended March 31, 1996.
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As of March 31, 1996, the Partnership owned equipment being held for lease
with an original cost of $89,000 and a net book value of $0, as compared to
$244,000 and $2,000 at March 31, 1995. The General Partner is actively engaged,
on behalf of the Partnership, in remarketing and selling the Partnership's
equipment as it becomes available.
The cash distributed to partners was $142,000 and $393,000 for the three
months ended March 31, 1996 and 1995, respectively. In accordance with the
Partnership Agreement, the Limited Partners are entitled to 99% of the cash
available for distribution and the General Partner is entitled to 1%. As a
result, the Limited Partners received $141,000 and $389,000 in distributions
during the period ended March 31, 1996 and 1995, respectively. The cumulative
cash distributions to limited partners are $5,698,000 and $5,138,000 at March
31, 1996 and 1995, respectively. The General Partner received $1,000 and $4,000
for its share of the cash distributions during the period ended March 31, 1996
and 1995, respectively.
The Partnership made its quarterly distribution to partners on April 15, 1996
at the same rate as the January 15, 1996 distribution. However, the Partnership
will switch to an annual distribution method thereafter, with the first annual
distribution to be made on January 15, 1997. The Partnership's ability to
distribute cash to partners is dependent upon the Partnership receiving its
contractual payments from notes receivable and financing leases. If the cash
generated by Partnership operations decrease below expectations, the
distributions to partners will be adjusted accordingly.
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.
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PHOENIX LEASING HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
March 31, 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: None
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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 HIGH TECH/HIGH YIELD FUND,
A CALIFORNIA LIMITED PARTNERSHIP
(Registrant)
Date Title Signature
May 13, 1996 Chief Financial Officer, /S/ PARITOSH K. CHOKSI
- --------------------- Senior Vice President ----------------------
and Treasurer of (Paritosh K. Choksi)
Phoenix Leasing Incorporated
General Partner
May 13, 1996 Senior Vice President, /S/ BRYANT J. TONG
- --------------------- Financial Operations ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Incorporated
General Partner
May 13, 1996 Senior Vice President of /S/ GARY W. MARTINEZ
- --------------------- Phoenix Leasing Incorporated ----------------------
General Partner (Gary W. Martinez)
May 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 650
<SECURITIES> 109
<RECEIVABLES> 1,296
<ALLOWANCES> 706
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 253
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,865
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,828
<TOTAL-LIABILITY-AND-EQUITY> 1,865
<SALES> 0
<TOTAL-REVENUES> 58
<CGS> 0
<TOTAL-COSTS> 21
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 37
<INCOME-TAX> 0
<INCOME-CONTINUING> 37
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37
<EPS-PRIMARY> 3.64
<EPS-DILUTED> 0
</TABLE>
