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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 June 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)
June 30, December 31,
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 3,007 $ 3,131
Accounts receivable (net of allowance for
losses on accounts receivable of $159
and $194 at June 30, 1996 and
December 31, 1995, respectively) 130 372
Notes receivable (net of allowance for losses
on notes receivable of $55 at June 30, 1996
and December 31, 1995) 2,536 1,487
Equipment on operating leases and held
for lease (net of accumulated depreciation
of $9,780 and $12,330 at June 30, 1996 and
December 31, 1995, respectively) 1,519 3,381
Net investment in financing leases (net of
allowance for early terminations of $389
and $238 at June 30, 1996 and December 31,
1995, respectively) 17,907 19,914
Investment in joint ventures 1,495 1,449
Capitalized acquisition fees (net of accumulated
amortization of $1,838 and $1,643 at June 30,
1996 and December 31, 1995, respectively) 670 751
Other assets 818 722
-------- --------
Total Assets $ 28,082 $ 31,207
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 997 $ 1,045
Notes payable 2,122 3,594
-------- --------
Total Liabilities 3,119 4,639
-------- --------
Partners' Capital
General Partner (88) (96)
Limited Partners, 5,000,000 units authorized,
2,045,838 units issued, 1,961,818 and 2,002,101
units outstanding at June 30, 1996 and
December 31, 1995, respectively 24,454 26,176
Unrealized gains on available-for-sale securities 597 488
-------- --------
Total Partners' Capital 24,963 26,568
-------- --------
Total Liabilities and Partners' Capital $ 28,082 $ 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 Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Rental income $ 862 $ 1,160 $ 1,958 $ 2,780
Earned income, financing leases 688 814 1,394 1,661
Equity in earnings from
joint ventures, net 58 147 176 233
Interest income, notes receivable 99 10 174 44
Gain on sale of securities 221 -- 368 --
Other income 62 50 145 148
------- ------- ------- -------
Total Income 1,990 2,181 4,215 4,866
------- ------- ------- -------
EXPENSES
Depreciation 932 1,410 2,242 3,640
Amortization of acquisition fees 90 106 196 257
Lease related operating expenses 32 65 136 166
Management fees to General Partner 119 122 247 270
Reimbursed administrative costs
to General Partner 85 101 188 227
Interest expense 46 154 107 347
Provision for losses on receivables 76 28 151 28
General and administrative expenses 64 106 117 165
------- ------- ------- -------
Total Expenses 1,444 2,092 3,384 5,100
------- ------- ------- -------
NET INCOME (LOSS) $ 546 $ 89 $ 831 $ (234)
======= ======= ======= =======
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ .25 $ .03 $ .38 $ (.15)
======= ======= ======= =======
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $ .50 $ .50 $ 1.00 $ 1.00
======= ======= ======= =======
ALLOCATION OF NET INCOME (LOSS):
General Partner $ 36 $ 32 $ 70 $ 60
Limited Partners 510 57 761 (294)
------- ------- ------- -------
$ 546 $ 89 $ 831 $ (234)
======= ======= ======= =======
The accompanying notes are an integral
part of these statements.
<PAGE>
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PHOENIX LEASING CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Six Months Ended
June 30,
1996 1995
---- ----
Operating Activities:
Net income (loss) $ 831 $ (234)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation 2,242 3,640
Amortization of acquisition fees 196 257
Loss (gain) on sale of equipment (21) 178
Gain on sale of securities (368) --
Equity in earnings from joint ventures, net (176) (233)
Provision for early termination, financing leases 151 --
Provision for losses on accounts receivable -- 28
Decrease (increase) in accounts receivable 242 (95)
Increase (decrease) in accounts payable and
accrued expenses 3 (152)
Decrease in other assets 13 13
------- -------
Net cash provided by operating activities 3,113 3,402
------- -------
Investing Activities:
Principal payments, financing leases 3,406 3,386
Principal payments, notes receivable 310 216
Proceeds from sale of equipment 585 730
Proceeds from sale of securities 381 --
Distributions from joint ventures 130 455
Purchase of equipment (20) (2)
Investment in financing leases (2,474) (2,764)
Investment in notes receivable (1,359) (756)
Investment in securities (13) --
Payment of acquisition fees (166) (165)
------- -------
Net cash provided by investing activities 780 1,100
------- -------
Financing Activities:
Payments of principal, notes payable (1,472) (4,674)
Redemptions of capital (495) (123)
Distributions to partners (2,050) (2,084)
------- -------
Net cash used by financing activities (4,017) (6,881)
------- -------
Decrease in cash and cash equivalents (124) (2,379)
Cash and cash equivalents, beginning of period 3,131 4,055
------- -------
Cash and cash equivalents, end of period $ 3,007 $ 1,676
======= =======
Supplemental Cash Flow Information:
Cash paid for interest expense $ 100 $ 364
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 six months ended June 30,
1996 and 1995, is $758,000 and $1,105,000, respectively ($.38 and $.55 per
limited partnership unit, respectively).
Note 5. Net Income (Loss) and Distributions per Limited Partnership Unit.
Net income (loss) and distributions per limited partnership unit were
based on the limited partners' share of net income (loss) and distributions and
the weighted average number of units outstanding of 1,993,750 and 2,020,939 for
the six months ended June 30, 1996 and 1995, respectively. For purposes of
allocating income (loss) based upon each respective limited partner's net
capital contributions.
Note 6. Investment in Joint Ventures.
Equipment Joint Venture
- -----------------------
The statements of operations of the equipment joint venture are
presented below:
STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Earned income, financing leases $ 329 $ 516 $ 761 $1,139
Gain on sale of equipment 108 165 158 209
Other income 54 156 120 214
------ ------ ------ ------
Total income 491 837 1,039 1,562
------ ------ ------ ------
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EXPENSES
Depreciation 103 42 128 54
Lease related operating expenses 19 2 20 7
Management fees to General Partner 55 88 109 167
Interest expense 73 256 183 571
General and administrative expenses 93 31 121 114
---- ---- ---- ----
Total expenses 343 419 561 913
---- ---- ---- ----
Net income $148 $418 $478 $649
==== ==== ==== ====
Financing Joint Venture
- -----------------------
The statements of operations of the financing joint venture are
presented below:
STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Interest income - notes receivable $41 $47 $83 $97
Other income 1 1 2 1
--- --- --- ---
Total income 42 48 85 98
--- --- --- ---
EXPENSES
Management fees 2 3 2 3
General and administrative expenses -- -- -- 6
--- --- --- ---
Total expenses 2 3 2 9
--- --- --- ---
Net income $40 $45 $83 $89
=== === === ===
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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 $546,000 during the three months
ended June 30, 1996, as compared to net income of $89,000 during the three
months ended June 30, 1995. During the six months ended June 30, 1996, the
Partnership reported net income of $831,000, as compared to a net loss of
$234,000 during the six months ended June 30, 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 $191,000 and $651,000 for the three and six
months ended June 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 six
months ended June 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 $17.9 million at June 30, 1996, as compared to $22.3
million at June 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.
Rental income decreased by $298,000 and $822,000 for the three and six
months ended June 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 June 30, 1996, the Partnership owned equipment with an aggregate
original cost of $45.9 million, as compared to $52.9 million at June 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 three and six months ended June 30, 1996, the Partnership
reported a gain on the sale of marketable securities of $221,000 and $368,000,
respectively. 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 June 30, 1996 the Partnership had remaining interests in stock warrants with
unrealized gains of approximately $597,000. These stock warrants contain certain
restrictions, but are generally exercisable within one year.
Total expenses decreased by $648,000 and $1,716,000 during the three and
six months ended June 30, 1996, when compared to the same periods in 1995. Total
expenses is comprised primarily of depreciation expense. Depreciation decreased
by $478,000 and $1,398,000 during the three and six months ended June 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 at June 30, 1996. Additionally, depreciation was higher
during 1995 due to the Partnership providing additional 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 six
months ended June 30, 1996 and 1995 was $6,829,000 and $7,004,000, respectively.
<PAGE>
Page 8 of 10
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 six
months ended June 30, 1996, the Partnership repaid $1,472,000 of its outstanding
debt, as compared to $4,674,000 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 June 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 six months ended June 30, 1996, the
Partnership invested $2,494,000 in equipment leases and $1,359,000 in notes
receivable, as compared to investments of $2,766,000 in equipment leases and
$756,000 in notes receivable during the same period in 1995.
As of June 30, 1996, the Partnership owned equipment being held for
lease with an original cost of $3,940,000 and a net book value of $335,000,
compared to $3,778,000 and $846,000, respectively, at June 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 six months ended June 30, 1996
was $2,050,000, as compared to $2,084,000 during the six months ended June 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 $1,988,000 and
$2,021,000 in distributions during the six months ended June 30, 1996 and 1995,
respectively. The cumulative distributions to the Limited Partners are
$14,396,000 and $10,398,000 as of June 30, 1996 and 1995, respectively. The
General Partner received $62,000 and $63,000 in cash distributions for the six
months ended June 30, 1996 and 1995, respectively. The Partnership plans to make
quarterly distributions to partners during the remainder of 1996 at the same
rate as the current distribution.
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.
<PAGE>
Page 9 of 10
PHOENIX LEASING CASH DISTRIBUTION FUND V, L.P.
June 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
<PAGE>
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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
Corporate General Partner
BY: PHOENIX LEASING ASSOCIATES II, INC.,
a Nevada corporation
Corporate General Partner
Date Title Signature
---- ----- ---------
August 13, 1996 Senior Vice President /S/ PARITOSH K. CHOKSI
- --------------- Chief Financial Officer ----------------------
Treasurer and a Director of (Paritosh K. Choksi)
Phoenix Leasing Associates II, Inc.
August 13, 1996 Senior Vice President, /S/ BRYANT J. TONG
- --------------- Financial Operations ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Associates II, Inc.
August 13, 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,007
<SECURITIES> 0
<RECEIVABLES> 2,880
<ALLOWANCES> 214
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,299
<DEPRECIATION> 9,780
<TOTAL-ASSETS> 28,082
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 24,963
<TOTAL-LIABILITY-AND-EQUITY> 28,082
<SALES> 0
<TOTAL-REVENUES> 4,215
<CGS> 0
<TOTAL-COSTS> 3,384
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 151
<INTEREST-EXPENSE> 107
<INCOME-PRETAX> 831
<INCOME-TAX> 0
<INCOME-CONTINUING> 831
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 831
<EPS-PRIMARY> .38
<EPS-DILUTED> 0
</TABLE>
