Page 1 of 10
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 0-20133
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)
March 31, December 31,
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 1,356 $ 3,131
Accounts receivable (net of allowance for
losses on accounts receivable of $161
and $194 at March 31, 1996 and December 31,
1995, respectivel 331 372
Notes receivable (net of allowance for losses
on notes receivable of $55 at March 31, 1996
and December 31, 1995) 2,677 1,487
Equipment on operating leases and held for lease
(net of accumulated depreciation of $10,392 and
$12,330 at March 31, 1996 and December 31, 1995,
respectively) 2,419 3,381
Net investment in financing leases (net of allowance
for early terminations of $313 and $238 at March 31,
1996 and December 31, 1995, respectively) 19,933 19,914
Investment in joint ventures 1,470 1,449
Capitalized acquisition fees (net of accumulated
amortization of $1,748 and $1,643 at March 31, 1996
and December 31, 1995, respectively) 760 751
Other assets 849 722
------- --------
Total Assets $29,795 $ 31,207
======= ========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 1,480 $ 1,045
Notes payable 2,659 3,594
------- --------
Total Liabilities 4,139 4,639
------- --------
Partners' Capital
General Partner (94) (96)
Limited Partners, 5,000,000 units authorized,
2,045,838 units issued, 1,977,518 and 2,002,101
units outstanding at March 31, 1996 and December 31,
1995, respectively 25,130 26,176
Unrealized gains on available-for-sale securities 620 488
------- --------
Total Partners' Capital 25,656 26,568
------- --------
Total Liabilities and Partners' Capital $29,795 $ 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
March 31,
1996 1995
---- ----
INCOME
Rental income $ 1,097 $ 1,620
Earned income, financing leases 705 847
Equity in earnings from joint ventures, net 118 86
Gain on sale of securities 147 --
Other income 159 131
------- -------
Total Income 2,226 2,684
------- -------
EXPENSES
Depreciation 1,311 2,229
Amortization of acquisition fees 105 150
Lease related operating expenses 104 102
Management fees to General Partner 128 148
Reimbursed administrative costs to General Partner 103 125
Interest expense 61 193
Provision for losses on receivables 76 --
General and administrative expenses 53 60
------- -------
Total Expenses 1,941 3,007
------- -------
NET INCOME (LOSS) $ 285 $ (323)
======= =======
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ .13 $ (.17)
======= =======
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $ .50 $ .50
======= =======
ALLOCATION OF NET INCOME (LOSS):
General Partner $ 34 $ 28
Limited Partners 251 (351)
------- -------
$ 285 $ (323)
======= =======
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)
Three Months Ended
March 31,
1996 1995
---- ----
Operating Activities:
Net income (loss) $ 285 $ (323)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 1,311 2,229
Amortization of acquisition fees 105 150
Loss on sale of equipment 145 112
Gain on sale of securities (147) --
Equity in earnings from joint ventures (118) (86)
Provision for early termination,
financing leases 76 --
Decrease in accounts receivable 41 37
Increase (decrease) in accounts payable and
accrued expenses 365 (128)
Decrease (increase) in other assets 6 (52)
------- -------
Net cash provided by operating activities 2,069 1,939
------- -------
Investing Activities:
Principal payments, financing leases 1,666 1,654
Principal payments, notes receivable 170 79
Proceeds from sale of equipment 219 533
Proceeds from sale of securities 160 --
Distributions from joint ventures 97 265
Purchase of equipment (20) (4)
Investment in financing leases (2,454) (2,256)
Investment in notes receivable (1,360) (303)
Investment in securities (13) --
Payment of acquisition fees (45) (118)
------- -------
Net cash used by investing activities (1,580) (150)
------- -------
Financing Activities:
Payments of principal, notes payable (935) (3,065)
Redemptions of capital (299) (122)
Distributions to partners (1,030) (1,043)
------- -------
Net cash used by financing activities (2,264) (4,230)
------- -------
Decrease in cash and cash equivalents (1,775) (2,441)
Cash and cash equivalents, beginning of period 3,131 4,055
------- -------
Cash and cash equivalents, end of period $ 1,356 $ 1,614
======= =======
Supplemental Cash Flow Information:
Cash paid for interest expense $ 60 $ 211
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 three months ended March
31, 1996 and 1995, are $421,000 and $875,000, respectively ($.21 and $.43 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 2,000,269 and 2,023,515 for
the three months ended March 31, 1996 and 1995 respectively. For purposes of
allocating income (loss) to each individual partner, the Partnership allocates
net 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 is presented
below:
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STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended
March 31,
1996 1995
---- ----
INCOME
Rental income $431 $623
Gain on sale of equipment 50 43
Other income 66 58
---- ----
Total income 547 724
---- ----
EXPENSES
Depreciation 24 12
Lease related operating expenses 1 4
Management fees to General Partner 53 80
Interest expense 110 314
General and administrative expenses 29 84
---- ----
Total expenses 217 494
---- ----
Net income $330 $230
==== ====
Financing Joint Venture
The statements of operations of the financing joint venture is presented
below:
STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three MonthsEnded
March 31,
1996 1995
---- ----
INCOME
Interest income - notes receivable $43 $49
Other income 1 1
--- ---
Total income 44 50
--- ---
EXPENSES
Management fees 1 --
General and administrative expenses -- 6
--- ---
Total expenses 1 6
--- ---
Net income $43 $44
=== ===
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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 $285,000 during the three months
ended March 31, 1996, as compared to a net loss of $323,000 during the three
months ended March 31, 1995. The increase in net income during the three months
ended March 31, 1996, as compared to 1995, is due to a decrease in total
expenses.
Total revenues decreased by $458,000 for the three months ended March 31,
1996, as compared to the same period in 1995. Total revenues are comprised
primarily of rental income from operating leases and earned income from
financing leases. Rental income decreased by $523,000 during the three months
ended March 31, 1996, as compared to the same period in 1995. The decrease in
rental income is attributable to a decrease in the amount of equipment owned, as
well as an increase in the amount of equipment being held for lease. At March
31, 1996, the Partnership owned equipment having an aggregate original cost of
approximately $48.5 million, as compared to $54 million at March 31, 1995.
Earned income from financing leases decreased by $142,000 during the three
months ended March 31, 1996, as compared to the same period in 1995, due to a
decrease in the Partnership's investment in financing leases. The investment in
financing leases was $19.9 million at March 31, 1996, as compared to $24 million
at March 31, 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.
During the three months ended March 31, 1996, the Partnership recognized a
gain on the sale of marketable securities of $147,000. These securities
consisted of common stock received through the exercise of stock warrants
granted to the Partnership as part of a financing agreement with two emerging
growth companies. In addition, at March 31, 1996, the Partnership owns shares of
stock and stock warrants in emerging growth companies that are publicly traded.
These investments in stock and stock warrants carry certain restrictions, but
generally can be exercised within a one year period.
Total expenses decreased by $1,066,000 during the three months ended March
31, 1996, when compared to the same period in 1995. Total expenses is comprised
primarily of depreciation expense. Depreciation decreased by $918,000 during the
three months ended March 31, 1996, as compared to the same period in 1995. The
decrease in depreciation expense is attributable to a decrease in the amount of
equipment owned, as well as a portion of the equipment portfolio having become
fully depreciated. Another factor contributing to the decrease in depreciation
expense during the three months ended March 31, 1996, as compared to the same
period in 1995, is the result of the Partnership providing less additional
depreciation on various leases that had come to the end of their initial lease
term or had terminated early, where the estimated fair market value was not
expected to exceed the net book value of such leases. Included in depreciation
expense for the three months ended March 31, 1996 was $421,000 of additional
depreciation expense, as compared to $875,000 of additional depreciation expense
during the three months ended March 31, 1995.
The Partnership reported a decrease in interest expense of $132,000 during
the three months ended March 31, 1996, as compared to the same period in 1995.
<PAGE>
Page 8 of 10
This decrease is the result of a decrease in the outstanding debt owed by the
Partnership as it continues to make monthly payments of principal and interest.
The outstanding debt at March 31, 1996 was $2.6 million as compared to $8.2
million at March 31, 1995.
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 three
months ended March 31, 1996 and 1995 is $3,905,000 and $3,672,000, 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 three
months ended March 31, 1996, the Partnership repaid $935,000 of its outstanding
debt, as compared to $3,065,000 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 available
credit lines at March 31, 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 three months ended March 31, 1996, the
Partnership invested $2,474,000 in equipment leases and $1,360,000 in notes
receivable, as compared to investments of $2,260,000 in equipment leases and
$303,000 in notes receivable during the same period in 1995.
As of March 31, 1996, the Partnership owned equipment being held for lease
with an original cost of $5,459,000 and a net book value of $784,000, compared
to $4,610,000 and $901,000, respectively, 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 for the three months ended March 31, 1996
was $1,030,000, as compared to $1,043,000 during the three months ended March
31, 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 $999,000 and
$1,012,000 in distributions during the three months ended March 31, 1996 and
1995, respectively. The cumulative distributions to the Limited Partners are
$13,407,000 and $9,388,000 as of March 31, 1996 and 1995, respectively. The
General Partner received $31,000 in cash distributions for the three months
ended March 31, 1996 and 1995. The Partnership will continue to make
distributions to partners during 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.
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: None
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,
General Partner
BY: PHOENIX LEASING ASSOCIATES II, INC.
a Nevada corporation,
General Partner
Date Title Signature
---- ----- ---------
May 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.
May 13, 1996 Senior Vice President, /S/ BRYANT J. TONG
- - --------------------- Financial Operations ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Associates II, Inc.
May 13, 1996 Senior Vice President /S/ GARY W. MARTINEZ
- - --------------------- and a Director of ----------------------
Phoenix Leasing Associates II, Inc.(Gary W. Martinez)
May 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,356
<SECURITIES> 0
<RECEIVABLES> 3,224
<ALLOWANCES> 216
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 33,057
<DEPRECIATION> 10,705
<TOTAL-ASSETS> 29,795
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,656
<TOTAL-LIABILITY-AND-EQUITY> 29,795
<SALES> 0
<TOTAL-REVENUES> 2,226
<CGS> 0
<TOTAL-COSTS> 1,941
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 76
<INTEREST-EXPENSE> 61
<INCOME-PRETAX> 285
<INCOME-TAX> 0
<INCOME-CONTINUING> 285
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 285
<EPS-PRIMARY> .13
<EPS-DILUTED> 0
</TABLE>
