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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 10-QSB
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ----- ACT OF 1934
For the quarterly period ended June 30, 1997
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 ___
1,933,675 Units of Limited Partnership Interest were outstanding as of June 30,
1997.
Transitional small business disclosure format:
Yes ___ No _X_
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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,
1997 1996
------ ------
ASSETS
Cash and cash equivalents $ 5,025 $ 3,140
Accounts receivable (net of allowance
for losses on accounts receivable
of $139 and $153 at June 30, 1997 and
December 31, 1996, respectively) 310 187
Notes receivable (net of allowance for
losses on notes receivable of $168 and
$124 at June 30, 1997 and December 31,
1996, respectively) 4,267 3,333
Equipment on operating leases and
held for lease (net of accumulated
depreciation of $7,914 and $8,389 at June 30,
1997 and December 31, 1996, respectively) 325 719
Net investment in financing leases (net of
allowance for early terminations of $308
and $519 at June 30, 1997 and December 31,
1996, respectively) 12,587 15,139
Investment in joint ventures 733 1,383
Capitalized acquisition fees (net of
accumulated amortization of $2,179
and $2,015 at June 30, 1997 and
December 31, 1996, respectively) 524 591
Other assets 668 496
--------- ---------
Total Assets $ 24,439 $ 24,988
========= =========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 892 $ 1,126
--------- ---------
Total Liabilities 892 1,126
--------- ---------
Partners' Capital
General Partner (60) (76)
Limited Partners, 5,000,000 units
authorized, 2,045,838 units issued,
1,933,675 and 1,946,243 units outstanding
at June 30, 1997 and December 31, 1996,
respectively 23,009 23,569
Unrealized gains on available-for-sale
securities 598 369
--------- ---------
Total Partners' Capital 23,547 23,862
--------- ---------
Total Liabilities and Partners' Capital $ 24,439 $ 24,988
========= =========
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,
1997 1996 1997 1996
---- ---- ---- ----
INCOME
Rental income $ 508 $ 862 $ 961 $1,958
Earned income, financing leases 557 688 1,147 1,394
Equity in earnings from joint
ventures, net 52 58 146 176
Interest income, notes receivable 143 99 334 174
Gain on sale of securities 20 221 20 368
Other income 96 62 152 145
------ ------ ------ ------
Total Income 1,376 1,990 2,760 4,215
------ ------ ------ ------
EXPENSES
Depreciation 130 932 273 2,242
Amortization of acquisition fees 71 90 164 196
Lease related operating expenses 18 32 47 136
Management fees to General Partner 101 119 220 247
Reimbursed administrative costs
to General Partner 92 85 182 188
Interest expense -- 46 -- 107
Provision for losses on receivables 141 76 141 151
General and administrative expenses 74 64 139 117
------ ------ ------ ------
Total Expenses 627 1,444 1,166 3,384
------ ------ ------ ------
NET INCOME $ 749 $ 546 $1,594 $ 831
====== ====== ====== ======
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ .37 $ .25 $ .78 $ .38
====== ====== ====== ======
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $ .50 $ .50 $ 1.00 $ 1.00
====== ====== ====== ======
ALLOCATION OF NET INCOME:
General Partner $ 38 $ 36 $ 76 $ 70
Limited Partners 711 510 1,518 761
------ ------ ------ ------
$ 749 $ 546 $1,594 $ 831
====== ====== ====== ======
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,
1997 1996
---- ----
Operating Activities:
Net income $ 1,594 $ 831
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 273 2,242
Amortization of acquisition fees 164 196
Gain on sale of equipment (83) (21)
Gain on sale of securities (20) (368)
Equity in earnings from joint ventures, net (146) (176)
Provision for early termination,
financing leases 97 151
Provision for losses on notes receivable 44 -
Decrease (increase) in accounts receivable (123) 242
Increase (decrease) in accounts payable and
accrued expenses (255) 3
Decrease in other assets 57 13
-------- --------
Net cash provided by operating activities 1,602 3,113
-------- --------
Investing Activities:
Principal payments, financing leases 3,768 3,406
Principal payments, notes receivable 1,010 310
Proceeds from sale of equipment 155 585
Proceeds from sale of securities 20 381
Distributions from joint ventures 796 130
Purchase of equipment - (20)
Investment in financing leases (1,264) (2,474)
Investment in notes receivable (1,988) (1,359)
Investment in securities - (13)
Payment of acquisition fees (76) (166)
--------- ---------
Net cash provided by investing activities 2,421 780
-------- --------
Financing Activities:
Payments of principal, notes payable - (1,472)
Redemptions of capital (133) (495)
Distributions to partners (2,005) (2,050)
--------- ---------
Net cash used by financing activities (2,138) (4,017)
--------- ---------
Increase (decrease) in cash and cash equivalents 1,885 (124)
Cash and cash equivalents, beginning of period 3,140 3,131
-------- --------
Cash and cash equivalents, end of period $ 5,025 $ 3,007
======== ========
Supplemental Cash Flow Information:
Cash paid for interest expense $ - $ 100
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 1996 amounts have been reclassified to
conform to the 1997 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. Notes Receivable.
Impaired Notes Receivable. At June 30, 1997, the recorded investment in
notes that are considered to be impaired was $71,000 for which the related
allowance for losses is $0. There were no impaired notes receivable at June 30,
1996. The average recorded investment in impaired loans during the six months
ended June 30, 1997 was approximately $36,000.
The activity in the allowance for losses on notes receivable during the
six months ended June 30, is as follows:
1997 1996
---- ----
(Amounts in Thousands)
Beginning balance $124 $ 55
Provision for losses 44 --
Write downs -- --
---- ----
Ending balance $168 $ 55
==== ====
Note 5. 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,
1997 and 1996, are $0 and $758,000, respectively ($0 and $.38 per limited
partnership unit, respectively).
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Note 6. 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 1,943,523 and 1,993,750 for the six
months ended June 30, 1997 and 1996, 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 7. Investment in Joint Ventures.
Equipment Joint Venture
The aggregate combined financial information of the equipment
joint ventures is presented as follows:
June 30, December 31,
1997 1996
---- ----
(Amounts in Thousands)
Assets $ 2,024 $ 4,002
Liabilities 352 382
Partners' Capital 1,672 3,620
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
---- ---- ---- ----
(Amounts in Thousands)
Revenue $ 237 $ 491 $ 582 $ 1,039
Expenses 97 343 181 561
Net Income 140 148 401 478
Financing Joint Ventures
The aggregate combined financial information of the financing
joint ventures is presented as follows:
June 30, December 31,
1997 1996
---- ----
(Amounts in Thousands)
Assets $ 927 $ 1,023
Liabilities 142 130
Partners' Capital 785 893
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
---- ---- ---- ----
(Amounts in Thousands)
Revenue $ 33 $ 42 $ 68 $ 85
Expenses 3 2 17 2
Net Income 30 40 51 83
<PAGE>
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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
Phoenix Leasing Cash Distribution Fund V, L.P. reported net income of
$749,000 and $1,594,000 during the three and six months ended June 30, 1997,
respectively, as compared to net income of $546,000 and $831,000 during the same
periods in 1996. The increase in net income during the three and six months
ended June 30, 1997, as compared to 1996, is due to a decrease in depreciation
expense.
Total revenues decreased by $614,000 and $1,455,000 for the three and
six months ended June 30, 1997, respectively, as compared to the same periods in
1996 primarily as a result of a decline in rental income. Rental income
decreased by $354,000 and $997,000 during the three and six months ended June
30, 1997, respectively, as compared to the same periods in 1996. The decrease in
rental income is attributable to a decrease in the amount of equipment owned. At
June 30, 1997, the Partnership owned equipment having an aggregate original cost
of approximately $38.1 million, as compared to $45.9 million at June 30, 1996.
The decreases in earned income from financing leases and gain on sale
of securities also contributed to the decline in total revenues for the three
and six months ended June 30, 1997, as compared to the same periods in the prior
year. Earned income from financing leases decreased by $131,000 and $247,000
during the three and six months ended June 30, 1997, respectively, as compared
to the same periods in 1996, due to a decrease in the Partnership's investment
in financing leases. The investment in financing leases was $12.6 million at
June 30, 1997, as compared to $17.9 million at June 30, 1996. 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 and six months ended June 30, 1997, the Partnership
recognized a gain on the sale of marketable securities of $20,000 for both the
three and six months ended June 30, 1997, compared to $221,000 and $368,000 for
the same periods in the previous year, respectively. These securities sold
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, the Partnership owns shares of stock and stock
warrants in emerging growth companies that are publicly traded with an
unrealized gain of $598,000 at June 30, 1997 compared to $597,000 at June 30,
1996. These investments in stock and stock warrants carry certain restrictions,
but generally can be exercised within a one year period.
Partially offsetting the factors contributing to the decrease in total
revenues is the increase in interest income from notes receivable of $44,000 and
$160,000 for the three and six months ended June 30, 1997, respectively,
compared to the same periods in 1996. This increase is attributable to new
investments made in notes receivable during 1996 and 1997.
Total expenses decreased by $817,000 and $2,218,000 during the three
and six months ended June 30, 1997, respectively, when compared to the same
periods in 1996. The decline in depreciation of $802,000 and $1,969,000 for the
three and six months ended June 30, 1997, respectively, as compared to the same
periods in the previous year, is the primary cause for the reduction in total
expenses. 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 and six months ended June 30, 1997, as
compared to the same periods in 1996, 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
<PAGE>
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value was not expected to exceed the net book value of such leases. Included in
depreciation expense for the three and six months ended June 30, 1997 was $0 of
additional depreciation expense, as compared to $338,000 and $758,000 for the
same periods in 1996, respectively.
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, 1997 and 1996 was $6,380,000 and $6,829,000, respectively.
During the six months ended June 30, 1996, the net cash generated from leasing
and financing activities, 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. The Partnership's outstanding debt was paid off in full in
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, 1997, the
Partnership invested $1,264,000 in equipment leases and $1,988,000 in notes
receivable, as compared to investments of $2,474,000 in equipment leases and
$1,359,000 in notes receivable during the same period in 1996.
As of June 30, 1997, the Partnership owned equipment being held for
lease with an original cost of $4,118,000 and a net book value of $146,000,
compared to $3,940,000 and $335,000, respectively, at June 30, 1996. The General
Partner is actively engaged, on behalf of the Partnership, in remarketing and
selling the Partnership's equipment as it becomes available.
Distributions from joint ventures increased by $666,000 during the six
months ended June 30, 1997, compared to the same period in 1996. In November of
1996, one equipment joint venture's outstanding debt was repaid in full. As a
result, this equipment joint venture has begun making distributions.
The cash distributed to partners for the six months ended June 30, 1997
was $2,005,000, as compared to $2,050,000 during the six months ended June 30,
1996. 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 $1,945,000 and
$1,988,000 in distributions during the six months ended June 30, 1997 and 1996,
respectively. The cumulative distributions to the Limited Partners are
$18,294,000 and $14,396,000 as of June 30, 1997 and 1996, respectively. The
General Partner received $60,000 and $62,000 in cash distributions for the six
months ended June 30, 1997 and 1996, respectively. The Partnership anticipates
making distributions to partners during 1997 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.
<PAGE>
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PHOENIX LEASING CASH DISTRIBUTION FUND V, L.P.
June 30, 1997
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:
One report, dated June 16, 1997, on Form 8-K was filed during the
quarter ending June 30, 1997, pursuant to Item 4 and Item 7 of that form. No
financial statements were filed as part of that report.
<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
---- ----- ---------
August 13, 1997 Senior Vice President and /S/ GARY W. MARTINEZ
- ----------------- a Director of --------------------
Phoenix Leasing Associates II, Inc (Gary W. Martinez)
August 13, 1997 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, 1997 Senior Vice President, /S/ BRYANT J. TONG
- ----------------- Financial Operations of ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Associates II, Inc.
August 13, 1997 Partnership Controller of /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-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 5,025
<SECURITIES> 0
<RECEIVABLES> 4,884
<ALLOWANCES> 307
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 8,239
<DEPRECIATION> 7,914
<TOTAL-ASSETS> 24,439
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 23,547
<TOTAL-LIABILITY-AND-EQUITY> 24,439
<SALES> 0
<TOTAL-REVENUES> 2,760
<CGS> 0
<TOTAL-COSTS> 1,594
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 141
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,594
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,594
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,594
<EPS-PRIMARY> .78
<EPS-DILUTED> 0
</TABLE>
