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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 September 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 0-20133
-------
PHOENIX LEASING CASH DISTRIBUTION FUND V, L.P.
- --------------------------------------------------------------------------------
Registrant
California 68-0222136
- ------------------------- ----------------------------------
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 LEASING CASH DISTRIBUTION FUND V, L.P.
BALANCE SHEETS
(Amounts in Thousands Except for Unit Amounts)
(Unaudited)
September 30, December 31,
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 2,106 $ 3,131
Accounts receivable (net of allowance
for losses on accounts receivable of
$152 and $194 at September 30, 1996
and December 31, 1995, respectively) 217 372
Notes receivable (net of allowance for
losses on notes receivable of $55 at
September 30, 1996 and December 31, 1995) 2,941 1,487
Equipment on operating leases and held for
lease (net of accumulated depreciation of
$8,663 and $12,330 at September 30, 1996 and
December 31, 1995, respectively) 1,216 3,381
Net investment in financing leases (net of
allowance for early terminations of $458 and
$238 at September 30, 1996 and December 31,
1995, respectively) 16,180 19,914
Investment in joint ventures 1,658 1,449
Capitalized acquisition fees (net of accumulated
amortization of $1,929 and $1,643 at September 30,
1996 and December 31, 1995, respectively) 624 751
Other assets 608 722
----------- -----------
Total Assets $ 25,550 $ 31,207
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 1,210 $ 1,045
Notes payable -- 3,594
----------- -----------
Total Liabilities 1,210 4,639
----------- -----------
Partners' Capital
General Partner (82) (96)
Limited Partners, 5,000,000 units authorized,
2,045,838 units issued, 1,952,068 and
2,002,101 units outstanding at September 30,
1996 and December 31, 1995, respectively 23,983 26,176
Unrealized gains on available-for-sale
securities 439 488
----------- -----------
Total Partners' Capital 24,340 26,568
----------- -----------
Total Liabilities and Partners' Capital $ 25,550 $ 31,207
=========== ===========
The accompanying notes are an integral part of
these statements.
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PHOENIX LEASING CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF OPERATIONS
(Amounts in Thousands Except for Per Unit Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Rental income $ 763 $1,508 $2,722 $4,288
Earned income, financing leases 596 749 1,989 2,411
Equity in earnings from joint
ventures, net 139 136 315 369
Interest income, notes receivable 120 53 295 96
Gain on sale of securities -- -- 368 --
Other income 55 52 200 139
------ ------ ------ ------
Total Income 1,673 2,498 5,889 7,303
------ ------ ------ ------
EXPENSES
Depreciation 527 1,519 2,769 5,159
Amortization of acquisition fees 90 112 286 368
Lease related operating expenses 35 75 171 241
Management fees to General Partner 119 136 366 407
Reimbursed administrative costs
to General Partner 87 105 275 331
Interest expense 24 117 132 464
Provision for losses on receivables 69 -- 220 28
General and administrative expenses 62 42 179 147
------ ------ ------ ------
Total Expenses 1,013 2,106 4,398 7,145
------ ------ ------ ------
NET INCOME $ 660 $ 392 $1,491 $ 158
====== ====== ====== ======
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ .32 $ .18 $ .70 $ .03
====== ====== ====== ======
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $ .50 $ .50 $ 1.50 $ 1.50
====== ====== ====== ======
ALLOCATION OF NET INCOME:
General Partner $ 36 $ 35 $ 106 $ 95
Limited Partners 624 357 1,385 63
------ ------ ------ ------
$ 660 $ 392 $1,491 $ 158
====== ====== ====== ======
The accompanying notes are an integral part of
these statements.
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PHOENIX LEASING CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Nine Months Ended
September 30,
1996 1995
---- ----
Operating Activities:
Net income $ 1,491 $ 158
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 2,769 5,159
Amortization of acquisition fees 286 368
Loss (gain) on sale of equipment (60) 229
Gain on sale of securities (368) --
Equity in earnings from joint ventures, net (315) (369)
Provision for early termination, financing leases 220 --
Provision for losses on accounts receivable -- 28
Decrease in accounts receivable 155 49
Increase (decrease) in accounts payable and
accrued expenses 191 (345)
Decrease in other assets 65 31
------- -------
Net cash provided by operating activities 4,434 5,308
------- -------
Investing Activities:
Principal payments, financing leases 5,486 5,139
Principal payments, notes receivable 538 412
Proceeds from sale of equipment 805 937
Proceeds from sale of securities 381 --
Distributions from joint ventures 151 470
Purchase of equipment (20) (2)
Investment in financing leases (3,301) (2,984)
Investment in notes receivable (1,992) (756)
Investment in joint ventures (45) --
Investment in securities (13) --
Payment of acquisition fees (185) (185)
------- -------
Net cash provided by investing activities 1,805 3,031
------- -------
Financing Activities:
Payments of principal, notes payable (3,594) (6,497)
Redemptions of capital (611) (166)
Distributions to partners (3,059) (3,123)
------- -------
Net cash used by financing activities (7,264) (9,786)
------- -------
Decrease in cash and cash equivalents (1,025) (1,447)
Cash and cash equivalents, beginning of period 3,131 4,055
------- -------
Cash and cash equivalents, end of period $ 2,106 $ 2,608
======= =======
Supplemental Cash Flow Information:
Cash paid for interest expense $ 130 $ 480
The accompanying notes are an integral part of
these statements.
<PAGE>
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PHOENIX LEASING CASH DISTRIBUTION FUND V, L.P.
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 financial statements of the Partnership.
Note 4. Equipment on Operating Leases and Held for Lease.
The Partnership's policy, as disclosed on the Partnership's latest
annual report filed on Form 10-K, is to provide additional depreciation expense
where reviews of equipment indicate that rentals plus anticipated sales proceeds
will not exceed expenses, including depreciation expense, in any future period.
As a result, the Partnership has provided additional depreciation expense on
various leases that are near the end of their initial lease term where the
estimated fair market value is not expected to exceed the net book value of such
leases. The portion of additional depreciation expense included in the caption
"Depreciation" on the statements of operations for the nine months ended
September 30, 1996 and 1995, is $758,000 and $1,481,000, respectively ($.38 and
$.74 per limited partnership unit, respectively).
Note 5. 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 1,981,901 and 2,014,920 for the nine
months ended September 30, 1996 and 1995, respectively. For purposes of
allocating 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.
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Note 6. Investment in Joint Ventures.
Equipment Joint Venture
The statements of operations of the equipment joint venture is presented
below:
STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Rental income $ 331 $ 548 $1,092 $1,687
Gain on sale of equipment 247 70 405 278
Other income 38 76 158 291
------ ------ ------ ------
Total income 616 694 1,655 2,256
------ ------ ------ ------
EXPENSES
Depreciation 71 24 199 78
Lease related operating expenses 1 -- 21 7
Management fees to General Partner 41 59 149 227
Interest expense 32 197 215 767
General and administrative expenses 74 31 195 146
------ ------ ------ ------
Total expenses 219 311 779 1,225
------ ------ ------ ------
Net income $ 397 $ 383 $ 876 $1,031
====== ====== ====== ======
Financing Joint Venture
The statements of operations of the financing joint venture is presented
below:
STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Interest income - notes receivable $ 39 $ 46 $121 $142
Other income 1 1 3 2
---- ---- ---- ----
Total income 40 47 124 144
---- ---- ---- ----
EXPENSES
Management fees 2 2 4 4
General and administrative expenses -- -- -- 6
---- ---- ---- ----
Total expenses 2 2 4 10
---- ---- ---- ----
Net income $ 38 $ 45 $120 134
==== ==== ==== ====
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PHOENIX LEASING CASH DISTRIBUTION FUND V, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
The Partnership reported net income of $660,000 during the three months
ended September 30, 1996, as compared to net income of $392,000 during the same
period in 1995. During the nine months ended September 30, 1996, the Partnership
reported net income of $1,491,000, as compared to net income of $158,000 during
the same period in 1995. The increase in earnings for both periods in 1996, as
compared to 1995, is primarily due to a decrease in total expenses.
Total revenues decreased by $825,000 and $1,414,000 for the three and
nine months ended September 30, 1996, as compared to the same periods in 1995.
Total revenues are comprised primarily of rental income from operating leases
and earned income from financing leases. The decrease in total revenues is
attributable to a decrease in rental income from operating leases and earned
income from financing leases.
Earned income from financing leases decreased during the three and nine
months ended September 30, 1996, as compared to the same periods in 1995, due to
a decrease in the Partnership's investment in financing leases. The investment
in financing leases was $16.2 million at September 30, 1996, as compared to
$20.1 million at September 30, 1995. The investment in financing leases, as well
as earned income from financing leases, will decrease over the lease term as the
Partnership amortizes income over the life of the lease using the interest
method. This decrease will be offset in part by a continuous investment of the
excess cash flows of the Partnership in new leasing and financing transactions
over the life of the Partnership.
Rental income decreased by $745,000 and $1,566,000 for the three and
nine months ended September 30, 1996, respectively, as compared to the same
periods in 1995, due to the sale of equipment and an increase in equipment being
held for lease. At September 30, 1996, the Partnership owned equipment with an
aggregate original cost of $42.9 million, as compared to $51.4 million at
September 30, 1995. During 1995 and 1996, many of the initial lease terms of the
Partnership's equipment expire. As a result, the Partnership will either renew
the leases with the current lessee, remarket the equipment to a new lessee or
sell the equipment. Until new lessees or buyers of the equipment can be found,
the equipment will continue to generate depreciation expense without any
corresponding rental income. The effect will be a reduction of the Partnership's
earnings during this remarketing period.
During the nine months ended September 30, 1996, the Partnership
reported a gain on the sale of marketable securities of $368,000. These
securities consisted of common stock and warrants for the purchase of common
stock granted to the Partnership as part of financing agreements with emerging
growth companies that are publicly traded. In addition, at September 30, 1996
the Partnership had remaining interests in stock warrants with unrealized gains
of approximately $439,000. These stock warrants contain certain restrictions,
but are generally exercisable within one year.
Total expenses decreased by $1,093,000 and $2,747,000 during the three
and nine months ended September 30, 1996, when compared to the same periods in
1995. Total expenses is comprised primarily of depreciation expense.
Depreciation decreased by $992,000 and $2,390,000 during the three and nine
months ended September 30, 1996, as compared to the same periods in 1995. The
decrease in depreciation expense is attributable to a large portion of the
Partnership's equipment portfolio having been fully depreciated. Additionally,
depreciation was higher during 1995 due to the Partnership providing additional
<PAGE>
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depreciation on various leases that had come to the end of their initial lease
term, where the estimated fair market value was not expected to exceed the net
book value of such leases.
Liquidity and Capital Resources
The Partnership's primary source of liquidity comes from contractual
obligations with lessees and borrowers for fixed terms at fixed payment amounts.
The future liquidity of the Partnership is dependent upon the payment of the
Partnership's contractual obligations from its lessees and borrowers. As the
initial lease terms of the Partnership's short term operating leases expire, the
Partnership will re-lease or sell the equipment as it becomes available. The
future liquidity of the Partnership in excess of the contractual obligations
will depend upon the General Partner's success in re-leasing and selling the
Partnership's equipment when the lease terms expire.
The cash generated from leasing and financing activities during the nine
months ended September 30, 1996 and 1995 was $10,458,000 and $10,859,000,
respectively. These proceeds, combined with the cash on hand, were used for the
repayment of debt and for the payment of cash distributions to the partners.
During the nine months ended September 30, 1996, the Partnership repaid
$3,594,000 of its outstanding debt, as compared to $6,497,000 during the same
period in 1995. The Partnership's outstanding debt is secured by leased
equipment and is payable in monthly installments over 40 and 48 months. The
Partnership has no remaining credit lines at September 30, 1996.
The Partnership will continue to reinvest the cash generated by
operating and financing activities in new leasing and financing transactions
over the life of the Partnership. During the nine months ended September 30,
1996, the Partnership invested $3,321,000 in equipment leases and $1,992,000 in
notes receivable, as compared to investments of $2,986,000 in equipment leases
and $756,000 in notes receivable during the same period in 1995.
As of September 30, 1996, the Partnership owned equipment being held for
lease with an original cost of $5,125,000 and a net book value of $531,000,
compared to $4,135,000 and $693,000, respectively, at September 30, 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 for the nine months ended September 30,
1996 was $3,059,000, as compared to $3,123,000 during the nine months ended
September 30, 1995. In accordance with the Partnership Agreement, the limited
partners are entitled to 97% of the cash available for distribution and the
General Partner is entitled to 3%. As a result, the limited partners received
$2,966,000 and $3,029,000 in distributions during the nine months ended
September 30, 1996 and 1995, respectively. The cumulative distributions to the
Limited Partners are $15,375,000 and $11,406,000 as of September 30, 1996 and
1995, respectively. The General Partner received $93,000 and $94,000 in cash
distributions for the nine months ended September 30, 1996 and 1995,
respectively. The Partnership plans to make quarterly distributions to partners
during the remainder of 1996 and during 1997 at the same rate as the current
distributions.
The cash to be generated from leasing and financing operations is
anticipated to be sufficient to meet the Partnership's continuing operational
expenses and debt service.
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PHOENIX LEASING CASH DISTRIBUTION FUND V, L.P.
September 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: 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 LEASING CASH DISTRIBUTION FUND V, L.P.
----------------------------------------------
(Registrant)
BY: PHOENIX LEASING ASSOCIATES II, L.P.
a California limited partnership,
General Partner
BY: PHOENIX LEASING ASSOCIATES II, INC.,
a Nevada corporation,
Corporate General Partner
Date Title Signature
---- ----- ---------
November 12, 1996 Senior Vice President /S/ PARITOSH K. CHOKSI
- ----------------- Chief Financial Officer ----------------------
Treasurer and a Director of (Paritosh K. Choksi)
Phoenix Leasing Associates II, Inc.
November 12, 1996 Senior Vice President, /S/ BRYANT J. TONG
- ----------------- Financial Operations -----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Associates II, Inc.
November 12, 1996 Senior Vice President /S/ GARY W. MARTINEZ
- ----------------- and a Director of -----------------------
Phoenix Leasing Associates II, Inc. (Gary W. Martinez)
November 12, 1996 Partnership Controller /S/ MICHAEL K. ULYATT
- ----------------- Phoenix Leasing Incorporated -----------------------
(Parent Company) (Michael K. Ulyatt)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,106
<SECURITIES> 0
<RECEIVABLES> 3,365
<ALLOWANCES> 207
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 9,879
<DEPRECIATION> 8,663
<TOTAL-ASSETS> 25,550
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 24,340
<TOTAL-LIABILITY-AND-EQUITY> 25,550
<SALES> 0
<TOTAL-REVENUES> 5,889
<CGS> 0
<TOTAL-COSTS> 4,398
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 132
<INCOME-PRETAX> 1,491
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,491
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,491
<EPS-PRIMARY> .70
<EPS-DILUTED> 0
</TABLE>
