<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[XX] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------------- -------------------------
For Quarter Ended June 30, 1998 Commission File No. 0-19135
American Income Partners V-D Limited Partnership
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3090151
- --------------------------------------- ----------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
88 Broad Street Street, Boston, MA 02110
- --------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 854-5800
----------------------------
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
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 requirements for the past 90 days. Yes X No______
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court 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 requirements for the past 90 days. Yes_____ No______
<PAGE>
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
FORM 10-Q
INDEX
Page
----
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Statement of Financial Position
at June 30, 1998 and December 31, 1997 3
Statement of Operations
for the three and six months ended June 30, 1998 and 1997 4
Statement of Cash Flows
for the six months ended June 30, 1998 and 1997 5
Notes to the Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II. OTHER INFORMATION:
Items 1 - 6 13
2
<PAGE>
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
STATEMENT OF FINANCIAL POSITION
June 30, 1998 and December 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 2,781,574 $ 2,772,762
Rents receivable 39,841 38,705
Accounts receivable - affiliate 954,422 36,232
Equipment at cost, net of accumulated depreciation
of $1,796,763 and $2,918,957 at June 30, 1998
and December 31, 1997, respectively 239,519 595,338
----------- -----------
Total assets $ 4,015,356 $ 3,443,037
----------- -----------
LIABILITIES AND PARTNERS' CAPITAL
Accrued liabilities $ 273,861 $ 9,200
Accrued liabilities - affiliate 1,449 12,822
Deferred rental income 420 440
Cash distributions payable to partners 56,869 56,869
----------- -----------
Total liabilities 332,599 79,331
----------- -----------
Partners' capital (deficit):
General Partner (347,915) (363,867)
Limited Partnership Interests
(480,227 Units; initial purchase price of $25 each) 4,030,672 3,727,573
----------- -----------
Total partners' capital 3,682,757 3,363,706
----------- -----------
Total liabilities and partners' capital $ 4,015,356 $ 3,443,037
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part
of these financial statements.
3
<PAGE>
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
for the three and six months ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Income:
Lease revenue $ 95,622 $183,537 $189,122 $367,319
Interest income 34,297 32,501 70,922 62,211
Gain on sale of equipment 646,599 2,475 655,199 195,650
-------- -------- -------- --------
Total income 776,518 218,513 915,243 625,180
-------- -------- -------- --------
Expenses:
Depreciation 36,331 73,528 83,241 149,901
Interest expense -- 7,042 -- 14,428
Equipment management fees
- affiliate 4,145 8,560 8,184 17,113
Operating expenses - affiliate 358,808 43,375 391,029 67,776
-------- -------- -------- --------
Total expenses 399,284 132,505 482,454 249,218
-------- -------- -------- --------
Net income $377,234 $ 86,008 $432,789 $375,962
-------- -------- -------- --------
-------- -------- -------- --------
Net income
per limited partnership unit $ 0.75 $ 0.17 $ 0.86 $ 0.74
-------- -------- -------- --------
-------- -------- -------- --------
Cash distributions declared
per limited partnership unit $ 0.11 $ 0.15 $ 0.23 $ 0.30
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
The accompanying notes are an integral part
of these financial statements.
4
<PAGE>
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
for the six months ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from (used in) operating activities:
Net income $ 432,789 $ 375,962
Adjustments to reconcile net income
to net cash from (used in) operating activities:
Depreciation 83,241 149,901
Gain on sale of equipment (655,199) (195,650)
Changes in assets and liabilities
Increase in:
rents receivable (1,136) (15,611)
accounts receivable--affiliate (918,190) (20,921)
Increase (decrease) in:
accrued interest -- 5,708
accrued liabilities 264,661 (8,245)
accrued liabilities--affiliate (11,373) (6,983)
deferred rental income (20) 392
----------- -----------
Net cash from (used in) operating activities (805,227) 284,553
----------- -----------
Cash flows from investing activities:
Proceeds from equipment sales 927,777 707,900
----------- -----------
Net cash from investing activities 927,777 707,900
----------- -----------
Cash flows used in financing activities:
Principal payments--notes payable -- (16,185)
Distributions paid (113,738) (151,650)
----------- -----------
Net cash used in financing activities (113,738) (167,835)
----------- -----------
Net increase in cash and cash equivalents 8,812 824,618
Cash and cash equivalents at beginning of period 2,772,762 1,867,874
----------- -----------
Cash and cash equivalents at end of period $ 2,781,574 $ 2,692,492
----------- -----------
----------- -----------
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ -- $ 8,720
----------- -----------
----------- -----------
</TABLE>
Supplemental disclosure of non-cash activities:
The Partnership received $194,092 from a lessee prior to 1997, representing
an equipment purchase option. These funds were classified as deferred
rental income on the Statement Financial Position at December 31, 1996.
During the six months ended June 30 ,1997, the Partnership sold the
equipment and such funds were recognized as sales proceeds.
The accompanying notes are an integral part
of these financial statements.
5
<PAGE>
NOTE 1--BASIS OF PRESENTATION
The financial statements presented herein are prepared in conformity with
generally accepted accounting principles and the instructions for preparing Form
10-Q under Rule 10-01 of Regulation S-X of the Securities and Exchange
Commission and are unaudited. As such, these financial statements do not include
all information and footnote disclosures required under generally accepted
accounting principles for complete financial statements and, accordingly, the
accompanying financial statements should be read in conjunction with the
footnotes presented in the 1997 Annual Report. Except as disclosed herein, there
has been no material change to the information presented in the footnotes to the
1997 Annual Report.
In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary to present fairly the financial
position at June 30, 1998 and December 31, 1997 and results of operations for
the three and six month periods ended June 30, 1998 and 1997 have been made and
are reflected.
NOTE 2--CASH
At June 30, 1998, the Partnership had $2,674,628 invested in federal agency
discount notes and in reverse repurchase agreements secured by U.S. Treasury
Bills or interests in U.S. Government securities.
NOTE 3--REVENUE RECOGNITION
Rents are payable to the Partnership monthly or quarterly and no
significant amounts are calculated on factors other than the passage of time.
The leases are accounted for as operating leases and are noncancellable. Rents
received prior to their due dates are deferred. Future minimum rents of $307,059
are due as follows:
<TABLE>
<S> <C>
For the year ending June 30, 1999 $ 129,248
2000 89,358
2001 84,778
2002 3,675
-------------
Total $ 307,059
-------------
-------------
</TABLE>
NOTE 4--EQUIPMENT
The following is a summary of equipment owned by the Partnership at June
30, 1998. Remaining Lease Term (Months), as used below, represents the number of
months remaining from June 30, 1998 under contracted lease terms and is
presented as a range when more than one lease agreement is contained in the
stated equipment category. A Remaining Lease Term equal to zero reflects
equipment either held for sale or re-lease or being leased on a month-to-month
basis. In the opinion of EFG, the acquisition cost of the equipment did not
exceed its fair market value.
6
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<TABLE>
<CAPTION>
Remaining
Lease Term Equipment
Equipment Type (Months) At Cost
- ------------------------------ ---------- ---------
<S> <C> <C>
Materials handling 0-2 $ 905,826
Trailers/intermodal containers 36-37 357,884
Communications 0 229,633
Construction and mining 0-7 151,097
Research and test 0 105,805
Manufacturing 8 95,459
Computers and peripherals 0 79,291
Motor vehicles 8 64,367
Tractors and heavy duty trucks 8 46,920
-------------
Total equipment cost 2,036,282
Accumulated depreciation (1,796,763)
-------------
Equipment, net of accumulated depreciation $ 239,519
-------------
-------------
</TABLE>
At June 30, 1998, the Partnership's equipment portfolio included equipment
having a proportionate original cost of $171,719 representing approximately 8%
of total equipment cost.
The summary above includes fully depreciated equipment held for re-lease or
sale with an original cost of approximately $78,000 at June 30, 1998.
NOTE 5--RELATED PARTY TRANSACTIONS
All operating expenses incurred by the Partnership are paid by EFG on
behalf of the Partnership and EFG is reimbursed at its actual cost for such
expenditures. Fees and other costs incurred during each of the six month periods
ended June 30, 1998 and 1997, which were paid or accrued by the Partnership to
EFG or its Affiliates, are as follows:
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Equipment management fees $ 8,184 $ 17,113
Administrative charges 30,882 27,420
Reimbursable operating expenses
due to third parties 360,147 40,356
-------- --------
Total $399,213 $ 84,889
-------- --------
-------- --------
</TABLE>
All rents and proceeds from the sale of equipment are paid directly to
either EFG or to a lender. EFG temporarily deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the Partnership.
At June 30, 1998, the Partnership was owed $954,422 by EFG for such funds and
the interest thereon. Included in these funds are sale proceeds of $902,527
received in connection with the sale of the Partnership's proportionate interest
in a Pratt & Whitney JT9D-7J jet engine which the Partnership sold in June 1998.
These funds were remitted to the Partnership in July 1998.
7
<PAGE>
NOTE 6--LEGAL PROCEEDINGS
On or about January 15, 1998, certain plaintiffs (the "Plaintiffs") filed a
class and derivative action, captioned Leonard Rosenblum, et al. v. Equis
Financial Group Limited Partnership, et al., in the United States District Court
for the Southern District of Florida (the "Court") on behalf of a proposed class
of investors in 28 equipment leasing programs sponsored by EFG, including the
Partnership (collectively, the "Nominal Defendants"), against EFG and a number
of its affiliates, including the General Partner, as defendants (collectively,
the "Defendants"). Certain of the Plaintiffs, on or about June 24, 1997, had
filed an earlier derivative action, captioned Leonard Rosenblum, et al. v. Equis
Financial Group Limited Partnership, et al., in the Superior Court of the
Commonwealth of Massachusetts on behalf of the Nominal Defendants against the
Defendants. Both actions are referred to herein collectively as the "Class
Action Lawsuit."
The Plaintiffs have asserted, among other things, claims against the
Defendants on behalf of the Nominal Defendants for violations of the Securities
Exchange Act of 1934, common law fraud, breach of contract, breach of fiduciary
duty, and violations of the partnership or trust agreements that govern each of
the Nominal Defendants. The Defendants have denied, and continue to deny, that
any of them have committed or threatened to commit any violations of law or
breached any fiduciary duties to the Plaintiffs or the Nominal Defendants.
On July 16, 1998, counsel for the Defendants and the Plaintiffs executed a
Stipulation of Settlement setting forth the terms pursuant to which a settlement
of the Class Action Lawsuit is intended to be achieved and which, among other
things, is expected to reduce the burdens and expenses attendant to continuing
litigation. The Stipulation of Settlement was based upon and supersedes a
Memorandum of Understanding between the parties dated March 9, 1998 which
outlined the terms of a possible settlement.
The Stipulation of Settlement was filed with the Court on July 23, 1998 and
remains pending. Ultimately, the Court must review and approve the Stipulation
of Settlement prior to its becoming effective. The Stipulation of Settlement
contemplates various changes that, if effected, would alter the future
operations of the Nominal Defendants. With respect to the Partnership and 10
affiliated partnerships (hereafter referred to as the "Exchange Partnerships"),
the Stipulation of Settlement provides for the restructuring of their respective
business operations into a single successor company whose securities would be
listed and traded on a national securities exchange. The partners of the
Exchange Partnerships would receive both common stock in the new company and a
cash distribution in exchange for their existing partnership interests. Such a
transaction would, among other things, allow for the consolidation of the
Partnership's operating expenses with other similarly organized equipment
leasing programs. The Stipulation of Settlement prescribes certain conditions
necessary to effecting the settlement, including providing the partners of the
Exchange Partnerships with the opportunity to vote on the participation of their
partnership in the restructuring. To the extent that the Stipulation of
Settlement is approved by the Court, the complete terms thereof will be
communicated to all of the partners of the Exchange Partnerships to enable them
to vote on the restructuring.
There can be no assurance that the Stipulation of Settlement will be
approved by the Court, or that the outcome of the voting by the partners of the
Exchange Partnerships, including the Partnership, will result in a settlement
finally being effected or in the Partnership being included in the
restructuring. The General Partner and its affiliates, in consultation with
counsel, concur that there is a reasonable basis to believe that the Stipulation
of Settlement will be approved by the Court. In the absence of a Stipulation of
Settlement approved by the Court, the Defendants intend to defend vigorously
against the claims asserted in the Class Action Lawsuit. The General Partner and
its affiliates cannot predict with any degree of certainty the ultimate outcome
of such litigation.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Certain statements in this quarterly report of American Income Partners V-D
Limited Partnership (the "Partnership") that are not historical fact constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and are subject to a variety of risks and
uncertainties. There are a number of important factors that could cause actual
results to differ materially from those expressed in any forward-looking
statements made herein. These factors include, but are not limited to, the
outcome of the Class Action Lawsuit described in Note 6 to the accompanying
financial statements and the ability of Equis Financial Group Limited
Partnership (formerly American Finance Group), a Massachusetts limited
partnership ("EFG"), to collect all rents due under the attendant lease
agreements and successfully remarket the Partnership's equipment upon the
expiration of such leases.
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four digits to define the applicable year. EFG's computer
programs were designed and written using four digits to define the applicable
year. As a result, EFG does not anticipate system failure or miscalculations
causing disruptions of operations. Based on recent assessments, EFG determined
that minimal modification of software is required so that its network operating
system will function properly with respect to dates in the year 2000 and
thereafter. EFG believes that with these modifications to the existing operating
system, the Year 2000 Issue will not pose significant operational problems for
its computer systems. EFG will utilize internal resources to upgrade software
for Year 2000 modifications and anticipates completing the Year 2000 project by
December 31, 1998, which is prior to any anticipated impact on its operating
system. The total cost of the Year 2000 project is expected to be insignificant
and have no effect on the results of operations of the Partnership.
Three and six months ended June 30, 1998 compared to the three and six months
ended June 30, 1997:
Overview
The Partnership was organized in 1990 as a direct-participation equipment
leasing program to acquire a diversified portfolio of capital equipment subject
to lease agreements with third parties. The value of the Partnership's equipment
portfolio decreases over time due to depreciation resulting from age and usage
of the equipment, as well as technological changes and other market factors. In
addition, the Partnership does not replace equipment as it is sold; therefore,
its aggregate investment value in equipment declines from asset disposals
occurring in the normal course. The Partnership's stated investment objectives
and policies contemplated that the Partnership would wind-up its operations
within approximately seven years of its inception. Presently, the Partnership is
a Nominal Defendant in a Class Action Lawsuit. The outcome of the Class Action
Lawsuit could alter the nature of the Partnership's organization and its future
business operations. See Note 6 to the accompanying financial statements.
Results of Operations
For the three and six months ended June 30, 1998, the Partnership
recognized lease revenue of $95,622 and $189,122, respectively, compared to
$183,537 and $367,319 for the same periods in 1997. The decrease in lease
revenue from 1997 to 1998 was expected and resulted principally from renewal
lease term expirations and the sale of equipment. The Partnership also earns
interest income from temporary investments of rental receipts and equipment
sales proceeds in short-term instruments.
The Partnership's equipment portfolio includes certain assets in which the
Partnership holds a proportionate ownership interest. In such cases, the
remaining interests are owned by an affiliated equipment leasing program
sponsored by EFG. Proportionate equipment ownership enables the Partnership to
further diversify its equipment
9
<PAGE>
portfolio by participating in the ownership of selected assets, thereby reducing
the general levels of risk which could result from a concentration in any single
equipment type, industry or lessee. The Partnership and each affiliate
individually report, in proportion to their respective ownership interests,
their respective shares of assets, liabilities, revenues, and expenses
associated with the equipment.
For the three months ended June 30, 1998, the Partnership sold equipment
having a net book value of $272,578 to existing lessees and third parties. These
sales resulted in a net gain, for financial statement purposes, of $646,599
compared to a net gain of $2,475 on equipment having a net book value of $3,525
for the same period in 1997.
For the six months ended June 30, 1998, the Partnership sold equipment
having a net book value of $272,578 to existing lessees and third parties. These
sales resulted in a net gain, for financial statement purposes, of $655,199
compared to a net gain of $195,650 on equipment having a net book value of
$706,342 for the same period in 1997.
It cannot be determined whether future sales of equipment will result in a
net gain or a net loss to the Partnership, as such transactions will be
dependent upon the condition and type of equipment being sold and its
marketability at the time of sale. In addition, the amount of gain or loss
reported for financial statement purposes is partly a function of the amount of
accumulated depreciation associated with the equipment being sold.
The ultimate realization of residual value for any type of equipment is
dependent upon many factors, including EFG's ability to sell and re-lease
equipment. Changing market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from asset values at
any given time. EFG attempts to monitor these changes in order to identify
opportunities which may be advantageous to the Partnership and which will
maximize total cash returns for each asset.
The total economic value realized upon final disposition of each asset is
comprised of all primary lease term revenue generated from that asset, together
with its residual value. The latter consists of cash proceeds realized upon the
asset's sale in addition to all other cash receipts obtained from renting the
asset on a re-lease, renewal or month-to-month basis. The Partnership classifies
such residual rental payments as lease revenue. Consequently, the amount of gain
or loss reported in the financial statements is not necessarily indicative of
the total residual value the Partnership achieved from leasing the equipment.
Depreciation expense was $36,331 and $83,241 for the three and six months
ended June 30, 1998, respectively, compared to $73,528 and $149,901 for the same
periods in 1997. For financial reporting purposes, to the extent that an asset
is held on primary lease term, the Partnership depreciates the difference
between (i) the cost of the asset and (ii) the estimated residual value of the
asset on a straight-line basis over such term. For purposes of this policy,
estimated residual values represent estimates of equipment values at the date of
primary lease expiration. To the extent that an asset is held beyond its primary
lease term, the Partnership continues to depreciate the remaining net book value
of the asset on a straight-line basis over the asset's remaining economic life.
Interest expense was $7,042 and $14,428 or 3.8% and 3.9% of lease revenue
for the three and six months ended June 30, 1997, respectively. The
Partnership's notes payable were fully amortized during the year ending December
31, 1997.
Management fees were 4.3% of lease revenue for each of the three and six
months ended June 30, 1998 compared to 4.7% of lease revenue for each of the
same periods in 1997. Management fees are based on 5% of gross lease revenue
generated by operating leases and 2% of gross lease revenue generated by full
payout leases.
10
<PAGE>
Operating expenses consist principally of administrative charges,
professional service costs, such as audit and legal fees, as well as printing,
distribution and remarketing expenses. In certain cases, equipment storage or
repairs and maintenance costs may be incurred in connection with equipment being
remarketed. Operating expenses were $358,808 and $391,029 for the three and six
months ended June 30, 1998, respectively, compared to $43,375 and $67,776 for
the same periods in 1997. During the six months ended June 30, 1998, the
Partnership incurred or accrued approximately $271,000 for certain legal and
administrative expenses related to the Class Action Lawsuit described in Note 6
to the financial statements. The amount of future operating expenses cannot be
predicted with certainty; however, such expenses are usually higher during the
acquisition and liquidation phases of a partnership. Other fluctuations
typically occur in relation to the volume and timing of remarketing activities.
Liquidity and Capital Resources and Discussion of Cash Flows
The Partnership by its nature is a limited life entity which was
established for specific purposes described in the preceding "Overview". As an
equipment leasing program, the Partnership's principal operating activities
derive from asset rental transactions. Accordingly, the Partnership's principal
source of cash from operations is generally provided by the collection of
periodic rents. These cash inflows are used to pay management fees and operating
costs. In addition, in 1997 such cash flows were used to satisfy debt service
obligations associated with leveraged leases. Operating activities generated net
cash outflows of $805,227 and net cash inflows of $284,553 for the six months
ended June 30, 1998 and 1997, respectively. Future renewal, re-lease and
equipment sale activities will cause a decline in the Partnership's lease
revenue and corresponding sources of operating cash. Overall, expenses
associated with rental activities, such as management fees, and net cash flow
from operating activities will also decline as the Partnership experiences a
higher frequency of remarketing events.
Ultimately, the Partnership will dispose of all assets under lease. This
will occur principally through sale transactions whereby each asset will be sold
to the existing lessee or to a third party. Generally, this will occur upon
expiration of each asset's primary or renewal/re-lease term. In certain
instances, casualty or early termination events may result in the disposal of an
asset. Such circumstances are infrequent and usually result in the collection of
stipulated cash settlements pursuant to terms and conditions contained in the
underlying lease agreements.
Cash realized from asset disposal transactions is reported under investing
activities on the accompanying Statement of Cash Flows. During the six months
ended June 30, 1998, the Partnership realized $927,777 in equipment sale
proceeds compared to $707,900 for the same period in 1997. In addition, the
Partnership received $194,092 from a lessee prior to 1997, representing an
equipment purchase option. These funds were classified as deferred rental income
on the Statement of Financial Position at December 31, 1996. During the six
months ended June 30, 1997, the Partnership sold the equipment and such funds
were recognized as equipment sales proceeds. Future inflows of cash from asset
disposals will vary in timing and amount and will be influenced by many factors
including, but not limited to, the frequency and timing of lease expirations,
the type of equipment being sold, its condition and age, and future market
conditions.
The Partnership obtained long-term financing in connection with certain
equipment leases. The repayments of principal related to such indebtedness are
reported as a component of financing activities. The Partnership's notes payable
were fully amortized during the year ended December 31, 1997.
Cash distributions to the General Partner and Recognized Owners are
declared and generally paid within fifteen days following the end of each
calendar quarter. The payment of such distributions is presented as a component
of financing activities. For the six months ended June 30, 1998, the Partnership
declared total cash distributions of Distributable Cash From Operations and
Distributable Cash From Sales and Refinancings of $113,738. In accordance with
the Amended and Restated Agreement and Certificate of Limited Partnership, the
11
<PAGE>
Recognized Owners were allocated 95% of these distributions, or $108,051, and
the General Partner was allocated 5%, or $5,687. The second quarter 1998 cash
distribution was paid on July 14, 1998.
Cash distributions paid to the Recognized Owners consist of both a return
of and a return on capital. Cash distributions do not represent and are not
indicative of yield on investment. Actual yield on investment cannot be
determined with any certainty until conclusion of the Partnership and will be
dependent upon the collection of all future contracted rents, the generation of
renewal and/or re-lease rents, and the residual value realized for each asset at
its disposal date. Future market conditions, technological changes, the ability
of EFG to manage and remarket the assets, and many other events and
circumstances, could enhance or detract from individual asset yields and the
collective performance of the Partnership's equipment portfolio.
The future liquidity of the Partnership will be influenced by the
foregoing, as well as the outcome of the Class Action Lawsuit described in Note
6 to the accompanying financial statements. The General Partner anticipates that
cash proceeds resulting from the collection of contractual rents and the outcome
of residual activities will satisfy the Partnership's future expense
obligations. However, the amount of cash available for distribution in future
periods will fluctuate. Equipment lease expirations and asset disposals will
cause the Partnership's net cash from operating activities to diminish over
time; and equipment sale proceeds will vary in amount and period of realization.
In addition, the Partnership may be required to incur asset refurbishment or
upgrade costs in connection with future remarketing activities. Accordingly,
fluctuations in the level of future quarterly cash distributions are
anticipated.
12
<PAGE>
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
FORM 10-Q
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Response:
Refer to Note 6 to the financial statements herein.
Item 2. Changes in Securities
Response: None
Item 3. Defaults upon Senior Securities
Response: None
Item 4. Submission of Matters to a Vote of Security Holders
Response: None
Item 5. Other Information
Response: None
Item 6(a). Exhibits
Response: None
Item 6(b). Reports on Form 8-K
Response: None
13
<PAGE>
SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on behalf of the registrant and in the capacity and
on the date indicated.
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
By: AFG Leasing IV Incorporated, a Massachusetts
corporation and the General Partner of the
Registrant.
By:
--------------------------------------------------
Michael J. Butterfield
Treasurer of AFG Leasing IV Incorporated
(Duly Authorized Officer and
Principal Accounting Officer)
Date:
-------------------------------------------------
By:
--------------------------------------------------
Gary M. Romano
Clerk of AFG Leasing IV Incorporated
(Duly Authorized Officer and
Principal Financial Officer)
Date:
-------------------------------------------------
14
<PAGE>
SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on behalf of the registrant and in the capacity and
on the date indicated.
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
By: AFG Leasing IV Incorporated, a Massachusetts
corporation and the General Partner of the
Registrant.
By: /s/ Michael J. Butterfield
--------------------------------------------------
Michael J. Butterfield
Treasurer of AFG Leasing IV Incorporated
(Duly Authorized Officer and
Principal Accounting Officer)
Date: August 14, 1998
-------------------------------------------------
By: /s/ Gary M. Romano
--------------------------------------------------
Gary M. Romano
Clerk of AFG Leasing IV Incorporated
(Duly Authorized Officer and
Principal Financial Officer)
Date: August 14, 1998
-------------------------------------------------
15
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