<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1996 Commission File Number 33-40091
--------
TELECOMMUNICATIONS INCOME FUND IX, L.P.
---------------------------------------
(Exact name of Registrant as specified in its charter)
Iowa 42-1367356
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
425 Second Street S.E., Suite 600 Cedar Rapids, Iowa 52401
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (319) 365-2506
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interest (the "Units")
------------------------------------------
Title of Class
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
filings requirements for the past 90 days.
Yes X No
--- ---
As of October 31, 1996, 68,007 Units were issued and outstanding. Based on
sales prices of $250 per Unit, the aggregate market value at October 31, 1996
was $17,001,750.
<PAGE> 2
TELECOMMUNICATIONS INCOME FUND IX, L.P.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited).
Balance sheets - September 30, 1996 and December 31, 1995.
Statements of income - three months ended September 30, 1996 and
three months ended September 30, 1995. Nine months ended September
30, 1996 and nine months ended September 30, 1995.
Statement of changes in partners' equity - nine months ended
September 30, 1996.
Statements of cash flows - nine months ended September 30, 1996 and
nine months ended September 30, 1995.
Item 2. Management's discussion and analysis of financial condition and results
of operations.
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE> 3
TELECOMMUNICATIONS INCOME FUND IX, L.P.
BALANCE SHEETS(UNAUDITED)
<TABLE>
September 30 December 31
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents $ -0- $161,866
Net investment in direct financing leases
(Note B) 17,370,395 18,491,629
Notes receivable (Note C) 1,557,559 1,691
Equipment, less accumulated depreciation
of $137,543 at September 30, 1996 and
$150,540 at December 31, 1995 (Note D) 738,918 1,329,967
Due from affiliates (Note D) 47,602 -0-
Other assets 652,126 478,971
----------- -----------
Total assets $20,366,610 $20,464,124
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Payable to affiliates $ 35,826 $ 206,895
Outstanding checks in excess of cash balances 312,107 -0-
Trade accounts payable 27,205 30,976
Other accrued expenses 37,358 9,648
Lease security deposits 442,078 541,573
Deferred gain on lease restructuring 200,008 -0-
Long term debt (Note E) 944,606 1,229,431
Line of credit agreement (Note E) 4,613,433 4,113,504
----------- -----------
Total liabilities 6,612,621 6,202,027
Partners' equity, 100,000 units authorized
General partner, 40 units issued and
outstanding 12,140 12,439
Limited partners:
67,967 units issued and outstanding 13,741,849 14,249,658
----------- -----------
Total partners' equity 13,753,989 14,262,097
----------- -----------
Total liabilities and partners' equity $20,366,610 $20,464,124
=========== ===========
See accompanying notes.
</TABLE>
<PAGE> 4
TELECOMMUNICATIONS INCOME FUND IX, L.P.
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
Three Months Ended
<S> <C> <C>
September 30 September 30
1996 1995
-------- --------
INCOME:
Lease income $703,225 $805,827
Interest income 42,967 7
Other 12,736 29,498
-------- --------
Total Income 758,928 835,332
EXPENSES:
Management fees 84,515 114,958
Administrative services 22,495 18,714
Interest 135,683 140,049
Professional fees 12,223 7,815
Provision for possible losses (Note B) 52,116 17,950
Depreciation 85,281 75,271
Other 10,878 15,425
-------- --------
Total expenses 403,191 390,182
--------
Net income $355,737 $445,150
======== ========
Net income per partnership unit $ 5.23 $ 6.55
======== ========
</TABLE>
See accompanying notes.
<PAGE> 5
TELECOMMUNICATIONS INCOME FUND IX, L.P.
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30 September 30
1996 1995
------ ------
<S> <C> <C>
INCOME:
Lease income $2,061,517 $2,141,172
Interest income 86,870 5,814
Other 93,053 65,508
---------- ----------
Total Income 2,241,440 2,212,494
EXPENSES:
Management fees 240,723 326,030
Administrative services 58,935 56,142
Interest 379,170 295,686
Professional fees 87,038 38,243
Provision for possible losses (Note B) 160,915 76,688
Depreciation 239,160 75,271
Other 53,448 56,397
---------- ----------
Total expenses 1,219,389 924,457
---------- ----------
Net income $1,022,051 $1,288,037
========== ==========
Net income per partnership unit $ 15.03 $ 18.94
========== ==========
</TABLE>
See accompanying notes.
<PAGE> 6
TELECOMMUNICATIONS INCOME FUND IX, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C>
General Limited Partners
Partner ----------------
(40 Units) Units Amount Total
----------------------------- ---------- ----------------------------------
Balance at December 31, 1995 $12,439 67,967 $14,249,658 $14,262,097
Distributions (300) -0- (509,753) (510,053)
Net income 1st quarter 1996 280 -0- 475,707 475,987
---------- ------ ------------ ------------
Balance at March 31, 1996 12,419 67,967 14,215,612 14,228,031
Distributions (300) -0- (509,753) (510,053)
Net income 2nd quarter 1996 112 -0- 190,215 190,327
---------- ------ ------------ ------------
Balance at June 30, 1996 12,231 67,967 13,896,074 13,908,305
Distributions (300) -0- (509,753) (510,053)
Net income 3rd quarter 1996 209 0- 355,528 355,737
---------- ------ ------------ ------------
Balance at September 30, 1996 $12,140 67,967 $13,741,841 $13,753,989
========== ====== ============ ============
See accompanying notes.
</TABLE>
<PAGE> 7
TELECOMMUNICATIONS INCOME FUND IX, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30 September 30
1996 1995
---------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,022,051 $1,288,037
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization 3,971 7,127
Provision for possible losses 160,915 76,688
Depreciation 239,160 75,271
Gain on lease terminations (39,133) (23,355)
Changes in operating assets and liabilities:
(Increase) decrease in other assets (132,022) (70,428)
Increase in outstanding checks in excess of cash 312,107 -0-
Increase (decrease) in trade accounts payable
excluding equipment purchase cost accrued (3,771) -0-
Increase (decrease) in due to affiliates (171,069) 3,403
Increase (decrease) in accrued expenses (42,290) 698
----------- -----------
Net cash provided by operating activities 1,349,919 1,496,901
INVESTING ACTIVITIES
Acquisitions of, and purchases of equipment
for direct financing leases (4,497,038) (7,438,735)
Purchase of equipment for an operating lease (9,802) (24,939)
Repayments of direct financing leases 2,562,170 4,213,569
Proceeds from early termination of
direct financing leases 2,000,372 356,959
Advances on notes receivable (185,522) -0-
Repayments of notes receivable -0- 20,124
Net Security deposits collected (repaid) (66,910) 65,465
----------- -----------
Net cash used in investing activities (196,730) (2,807,557)
</TABLE>
<PAGE> 8
TELECOMMUNICATIONS INCOME FUND IX, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)(CONTINUED)
<TABLE>
<S> <C> <C>
FINANCING ACTIVITIES
Deferred costs incurred -0- (13,500)
Distributions paid to partners (1,530,159) (1,530,156)
Proceeds from long-term debt -0- 1,350,000
Repayment of long-term debt (284,825) (29,638)
Net (payments on) proceeds from line-of-
credit borrowings 499,929 1,518,214
----------- ------------
Net cash provided by (used in)
financing activities (1,315,055) 1,294,920
----------- ------------
Net increase (decrease) in cash and
cash equivalents (161,866) (15,736)
Cash and cash equivalents at beginning of
period 161,866 175,667
----------- ------------
Cash and cash equivalents at end of period $ -0- $ 159,931
=========== ============
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for interest $ 237,074 $ 286,723
Non-cash activities:
Direct financing lease restructured as a
note receivable $1,370,346 $ -0-
Repossession of equipment formerly
under lease $ 200,209 $ -0-
Reclassification of direct financing lease
to other receivable $ 350,000 $ -0-
Forfeiture of security deposit upon
write-off of lease $ 32,585 $ -0-
Increase in trade accounts payable
attributed to equipment purchase cost $ -0- $ 15,731
Increase in investment in direct financing
leases due to financing of residual $ -0- $ -0-
Reclassification of note receivable $ -0- $ 113,157
to other receivable
Reclassification of a direct financing $ -0- $ 1,442,627
lease to an operating lease
Publicly traded common stock $ 94,605 $ -0-
received as part of a restructured lease
Operating lease restructured as a $ 561,899 $ -0-
direct financing lease
Deferred gain recorded $ 200,009 $ -0-
as part of a lease restructured
</TABLE>
See accompanying notes.
<PAGE> 9
TELECOMMUNICATIONS INCOME FUND IX, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1996
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine months ended September 30, 1996
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1996. For further information, refer to the financial
statements and footnotes thereto included in the Partnership's annual report on
Form 10-K for the year ended December 31, 1995.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ significantly from those
estimated. Material estimates that are particularly susceptible to significant
change in the near-term relate to the determination of the allowance for
possible loan and lease losses and the estimated unguaranteed residual values
of the Partnership's leased equipment.
Most of the Partnership's leases and finance contracts are with customers that
are in the entrepreneurial stage and, therefore, are highly leveraged and
require lease or other financing in place of or to supplement financing from
banks. Although the Partnership's attempts to mitigate its credit risk through
the use of a variety of commercial credit reporting agencies when processing
the applications of its customers, failure of the Partnership's customers to
make scheduled payments under their equipment leases and finance contracts
could have a material near-term impact on the allowance for possible lease and
loan losses.
Realization of residual values depends on many factors, several of which are
not within the Partnership's control, including general market conditions at
the time of the original lease contract's expiration, whether there has been
unusual wear and tear on, or use of, the equipment, the cost of comparable new
equipment, the extent, if any, to which the equipment has become
technologically or economically obsolete during the contract term and the
effects of any additional or amended government regulations. These factors,
among others, could have a material near-term impact on the estimated
unguaranteed residual values.
<PAGE> 10
TELECOMMUNICATIONS INCOME FUND IX, L.P.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)(CONTINUED)
SEPTEMBER 30, 1996
NOTE B -- NET INVESTMENT IN DIRECT FINANCING LEASES
Components of the net investment in direct financing leases are as follows:
<TABLE>
<S> <C> <C>
September 30 September 30
1996 1995
-------------------------------------------------------------------------
Lease payments receivable $21,178,412 $21,745,015
Estimated unguaranteed residual values of
leased equipment 2,464,192 2,990,007
Unearned lease income (5,937,970) (5,879,237)
Allowance for possible losses (334,239) (364,156)
-------------- --------------
Net investment in direct financing leases $17,370,395 $18,491,629
============== ==============
</TABLE>
In October, 1995, a lessee of the Partnership, Value-Added Communications
("VAC"), filed a Voluntary Petition for Relief under Chapter 11 of the
Bankruptcy Code. At the time of the bankruptcy filing, the Partnership's net
investment in direct financing leases with VAC totaled approximately $1.8
million which amount was reduced to approximately $474,000 at June 30, 1996.
This reduction was made possible through court ordered lease payments, which
payment order expired in March, 1996, and through sales of the leases and
equipment under lease to unrelated third parties. The sales of equipment and
leases resulted in the Partnership incurring a loss of approximately $57,000
which was charged to the provision for possible losses in the first six months
of 1996. In July, 1996, management re-evaluated its estimated loss based upon
changes in the reorganization plan. The Partnership's remaining $474,000
investment in VAC leases at June 30, 1996 was secured by a $100,000 certificate
of deposit and a guaranty to the Partnership by the site owner where certain
equipment formerly under lease was located. Management estimated it would
recover approximately $350,000 and therefore, a provision for possible losses
of $124,233 was recorded in the second quarter. During the third quarter of
1996, the Partnership received the $100,000 cash from the certificate of
deposit and a note receivable with a net present value of $201,034 as final
settlement of its claims in the bankruptcy of VAC. An additional $48,966 was
therefore charged to the provision for possible losses with respect to VAC in
the third quarter.
NOTE C --NOTE RECEIVABLE
In March, 1996, the Partnership restructured one of its leases with Inn-Touch
Communications, Inc. of $1,370,346 as a note receivable and also advanced
additional funds of $94,048 to the customer under this note receivable. The
note receivable bears interest at 12% and is due in June, 2001.
<PAGE> 11
TELECOMMUNICATIONS INCOME FUND IX, L.P.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)(CONTINUED)
SEPTEMBER 30, 1996
NOTE D --EQUIPMENT
In 1995, the Partnership exercised its right to manage the assets leased to a
customer due to nonpayment of lease receivables. At the time the Partnership
assumed management of these assets, its net investment in the leases
approximated $1.4 million and the Partnership subsequently purchased
approximately $100,000 of additional equipment. Effective July 1, 1995, a new
lease was executed for this equipment with a new lessee, Payphones of America.
The terms of this new lease are such that it meets the criteria of an operating
lease. The equipment under lease is being depreciated under the straight-line
method over its estimated remaining life.
During the third quarter of 1996, Payphones of America was sold and the sale
included those pay telephones under operating lease as discussed above and
others that the Partnership had financed under direct financing leases. The
Partnership financed this purchase for the purchaser, Phone-Tel
Technologies("Phone-Tel"), via a direct financing lease which included the
Partnership advancing Phone-Tel an additional $508,905 in cash for other
payphone assets that were not then under lease resulting in the Partnership
having a direct financing lease with Phone-Tel of $3,375,000. Also as part of
this transaction, the Partnership received 22,260 shares of common stock of
Phone-Tel and was owed $47,602.09 from the general partner for monies received
by the general partner on behalf of the Partnership. These funds were repaid
in October, 1996. The Partnership recorded a deferred gain of approximately
$200,000 on this transaction. This deferred gain will be recognized over the
life of the lease with Phone-Tel.
The remaining net equipment cost of the assets which continue under operating
lease approximates $552,000 and relates to hotel satellite television equipment
which the former owners of Payphones of America maintained in a new company
they continue to own and operate under the name of Visioncomm, Inc. This
remaining amount is expected to be recovered by the Partnership through a
direct financing lease for this equipment or through a purchase option which
exists in the operating lease. The possibility exists that this transaction
will not materialize, however, management's best current information indicates
that this transaction will be completed.
In May, 1996, the Partnership exercised its right to manage the assets leased
to United Tele-Systems of Virginia, Inc. due to default under the lease
agreement. The Partnership's net investment in the leases at the time the
assets were repossessed approximated $200,000. This equipment is currently
being serviced for the Partnership under a short-term management agreement.
The Partnership's intent is to sell the equipment or re-lease the equipment to
a new lessee. The Partnership's estimate is that it will incur a loss
approximating $50,000 upon the sale or re-lease of this equipment. Although
there can be no assurances, management believes the Partnership's allowance for
possible losses is sufficient to cover any potential losses with respect to
this equipment. The Partnership's allowance for possible losses has not yet
been reduced for this estimated loss due to ongoing negotiations with potential
purchasers.
<PAGE> 12
TELECOMMUNICATIONS INCOME FUND IX, L.P.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)(CONTINUED)
SEPTEMBER 30, 1996
NOTE E --CREDIT ARRANGEMENTS
The Partnership has a line-of-credit agreement with a bank that allows the
Partnership to borrow the lesser of $6.25 million, or 32% of the Partnership's
Qualified Accounts, as defined in the agreement. The line-of-credit expires
November 30, 1997 and carries interest at 1% over prime (9.25% at June 30,
1996). The agreement carries a minimum interest charge of $7,500 per month.
The agreement is cancelable by the lender after giving a 90-day notice and is
secured by substantially all assets of the Partnership. This line-of-credit is
guaranteed by the General Partner and certain affiliates of the General
Partner.
The Partnership also has an installment loan agreement which bears interest at
8.91% and is due in monthly installments through November, 1998. The agreement
is collateralized by certain direct financing leases and a second interest in
all other Partnership assets. The agreement is also guaranteed by the General
Partner. Covenants under the agreement require the Partnership, among other
things, to be profitable, not exceed 40% debt to original equity raised ratio,
and not sell a material portion of its assets.
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Discussions herein about future performance of the Partnership are based upon
management's best expectations and estimates, given management's experience and
analysis of the Partnership's current status. Secondly, such discussions
should not be deemed to be predictions of performance of the Partnership.
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
---- ---- ---- ----
<TABLE>
<S> <C> <C> <C> <C>
Results of Operations
Description:
Lease income $703,225 $805,827 $2,061,517 $2,141,172
Management fees $ 84,515 $114,958 $ 240,723 $ 326,030
Interest expense $135,683 $140,049 $ 379,170 $ 295,686
Professional Fees $ 12,223 $ 7,815 $ 87,038 $ 38,243
Provision for possible losses $ 52,116 $ 17,950 $ (15,434) $ 76,688
Depreciation $ 85,281 $ 75,271 $ 239,160 $ 75,271
</TABLE>
Lease income for the nine months ended September 30, 1996 remained relatively
consistent with the same period in 1995 as the Partnership's net investment in
leases has also remained relatively consistent. Lease income will, however,
decline as the lease portfolio matures and the Partnership nears its
liquidation. The Partnership is currently in it's fourth year of operations
and the liquidation phase must begin no later than April 30, 1998. Initial
leases are expiring and the amount of equipment being re-marketed (i.e.
re-leased, renewed or sold) will increase. As a result, the size of the
Partnership lease portfolio and the amount of lease income will decline. In
addition, the equipment leased under an operating lease since July 1, 1995 has
not generated income for the Partnership since its inception. The Partnership
repossessed this equipment due to a default under the original direct financing
lease agreement and subsequently re-leased the equipment under this operating
lease in order to recover its investment. The Partnership has restructured a
portion of this equipment under operating lease to a direct financing lease as
further discussed in Note D. See Note D for further discussion and the
Partnership's plans with respect to this equipment.
Management fees are paid to the General Partner and represent 5% of the gross
rental payments received. Rental payments decreased from $6,520,600 in the
nine months ended September 30, 1995 to $4,814,460 for the nine months ended
September 30, 1996. These decreases are attributable to the early terminations
of approximately $2 million of leases in the first nine months of 1996 as well
as the termination of fully mature leases. The Partnership has reinvested the
cash received on these pay-offs, however, the reinvestments occurred
periodically over the nine months.
The increase in interest expense is a result of the Partnership borrowing more
funds to acquire equipment for investment in direct financing leases, the note
receivable and the operating lease.
<PAGE> 14
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Continued.
As discussed in Note C to the financial statements, the Partnership repossessed
certain equipment formerly under lease in the third quarter of 1995 and also in
the second quarter of 1996. This equipment is now under terms of an operating
lease or is being operated by the Partnership. As such, depreciation began to
be charged on this equipment in the third quarter of 1995 but has been present
the entire nine months of 1996.
The following table represents lease payments thirty one days or more past due
on September 30, 1996.
<TABLE>
<CAPTION>
31-60 61-90 OVER 90
LESSEE DAYS DAYS DAYS TOTAL
------ ------- ------ ---- --------
<S> <C> <C> <C> <C>
Advanced Technologies 6,501 -0- -0- 6,501
Murdock Communications Corp. 47,258 -0- -0- 47,258
North American Communications 35,921 9,576 -0- 45,497
Others 4,641 -0- -0- 4,641
------- ------ ---- --------
Total $94,321 $9,576 $-0- $103,897
======= ====== ==== ========
</TABLE>
The total past due amount represents .5% of the Partnership's lease payments
receivable. While these leases are identified as requiring additional
monitoring, they do not necessarily represent non-performing assets.
In October, 1995, a lessee of the Partnership, Value-Added Communications
("VAC"), filed a Voluntary Petition for Relief under Chapter 11 of the
Bankruptcy Code. At the time of the bankruptcy filing, the Partnership's net
investment in direct financing leases with VAC totaled approximately $1.8
million which amount was reduced to approximately $474,000 at June 30, 1996.
This reduction was made possible through court ordered lease payments, which
payment order expired in March, 1996, and through sales of the leases and
equipment under lease to unrelated third parties. The sales of equipment and
leases resulted in the Partnership incurring a loss of approximately $57,000
which was charged to the provision for possible losses in the first six months
of 1996. In July, 1996, management re-evaluated its estimated loss based upon
changes in the reorganization plan. The Partnership's remaining $474,000
investment in VAC leases at June 30, 1996 was secured by a $100,000 certificate
of deposit and a guaranty to the Partnership by the site owner where certain
equipment formerly under lease was located. Management estimated it would
recover approximately $350,000 and therefore, a provision for possible losses
of $124,233 was recorded in the second quarter. During the third quarter of
1996, the Partnership received the $100,000 cash from the certificate of
deposit and a note receivable with a net present value of $201,034 as final
settlement of its claims in the bankruptcy of VAC. An additional $48,966 was
therefore charged to the provision for possible losses with respect to VAC in
the third quarter.
<PAGE> 15
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Continued.
Liquidity and Capital Resources
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
September 30 September 30
1996 1995
- ----------------------------------------------------------------------
<S> <C> <C>
Major Cash Sources:
Principal portion of lease
payments received $2,562,170 $4,213,569
Proceeds received on sale of
leases $2,000,372 $ 356,959
Net proceeds from debt $ 215,104 $2,838,576
Major Cash Uses:
Purchase of equipment and leases $4,497,038 $7,438,735
Distributions to partners $1,530,159 $1,530,156
- ----------------------------------------------------------------------
</TABLE>
The Partnership increased the amount owed on a $6.25 million line-of-credit
agreement by $499,929 in the nine month period ended September 30, 1996,
leaving an outstanding balance at September 30, 1996 of $4,613,433. In August,
1995, the Partnership borrowed $1,350,000 from a bank under terms of a
long-term note payable for purposes of investing in additional leases. The
balance due on this note payable at September 30, 1996 was $944,606. This note
payable requires monthly payments of $39,996 through its maturity on November
30, 1998. At the present time the Partnership has not encountered any
significant competition thus enabling the Partnership to obtain its
desired lease rates.
The Partnership is required to establish working capital reserves of no less
than 1% of the gross proceeds to satisfy general liquidity requirements,
operating costs for equipment, and the maintenance and refurbishment of
equipment. At September 30, 1996 that working capital reserve, as defined,
would be $170,018. The Partnership has these funds readily available under its
line-of-credit.
Equipment purchases for investment in direct financing leases has remained
relatively consistent with that of the corresponding period of one year ago due
to the strong demand for equipment financing. All net proceeds from the sale
of Partnership units have been used to acquire equipment. Equipment purchases
are now funded through available excess operating cash and borrowed funds.
At September 30, 1996 adequate cash is being generated to make projected
distributions and allow for reinvestment of a portion of the cash to fund
additional leases. The General Partner expects that income from future rentals
will provide sufficient cash to maintain the historic rate of distributions
into the foreseeable future prior to liquidation.
<PAGE> 16
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Continued.
Liquidity and Capital Resources (continued)
At any time after October 30, 1996, but no later than April 30, 1998, the
Partnership will cease reinvestment in equipment and leases and will begin the
orderly liquidation of Partnership assets. The Partnership must dissolve on
December 31, 1999, or earlier, upon the occurrence of certain events. To date,
the General Partner has made preliminary inquiries of certain parties with
respect to a method of liquidation of all or a portion of the Partnership's
assets. No agreements, however, have been entered into and the General Partner
will continue to pursue the best possible liquidation scenario on behalf of the
Partnership.
<PAGE> 17
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
There are no exhibits included with this Form 10-Q.
There were no reports filed on Form 8-K during the third quarter.
<PAGE> 18
SIGNATURES
Pursuant to the requirements 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.
TELECOMMUNICATIONS INCOME FUND IX, L.P.
---------------------------------------
(Registrant)
Date ---------------------------------------------
------------ Thomas J. Berthel, President
Date ---------------------------------------------
------------ Ronald O. Brendengen, Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY OF FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED STATEMENTS OF ASSETS AND LIABILITIES OF TELECOMMUNICATIONS INCOME FUND
IX, L.P. AS OF SEPTEMBER 30, 1996, AND THE UNAUDITED STATEMENT OF OPERATIONS OF
TELECOMMUNICATIONS INCOME FUND IX, L.P. FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 19,262,192
<ALLOWANCES> (334,238)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,576,199
<DEPRECIATION> (137,543)
<TOTAL-ASSETS> 20,366,610
<CURRENT-LIABILITIES> 0
<BONDS> 6,612,621
<COMMON> 0
0
0
<OTHER-SE> 13,753,989
<TOTAL-LIABILITY-AND-EQUITY> 20,366,610
<SALES> 0
<TOTAL-REVENUES> 2,241,440
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 679,304
<LOSS-PROVISION> 160,915
<INTEREST-EXPENSE> 379,170
<INCOME-PRETAX> 1,022,051
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,022,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,022,051
<EPS-PRIMARY> 15.03
<EPS-DILUTED> 15.03
</TABLE>
