-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SEwqv+vv8utwzYuO9de4dyny7+3u7w8XMSXo4RgpHVL6iyg1g3YRtxK6JJWJiHuS ZPEByEu4rqJWcjxBNeZhtg== 0000948524-97-000048.txt : 19970515 0000948524-97-000048.hdr.sgml : 19970515 ACCESSION NUMBER: 0000948524-97-000048 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHOENIX LEASING INCOME FUND 1977 CENTRAL INDEX KEY: 0000216860 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 942446904 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-08868 FILM NUMBER: 97603757 BUSINESS ADDRESS: STREET 1: 2401 KERNER BLVD CITY: SAN RAFAEL STATE: CA ZIP: 94901 BUSINESS PHONE: 4154854500 MAIL ADDRESS: STREET 1: 2401 KERNER BLVD CITY: SAN RAFAEL STATE: CA ZIP: 94901 10QSB 1 03/31/97 10-QSB Page 1 of 10 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 March 31, 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 0-8868 ------ PHOENIX LEASING INCOME FUND 1977 - -------------------------------------------------------------------------------- Registrant California 94-2446904 - ---------------------------- ----------------------------------- 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 _____ 16,521 Units of Limited Partnership Interest were outstanding as of March 31, 1997. Transitional small business disclosure format: Yes _____ No __X__ Page 2 of 10 Part I. Financial Information Item 1. Financial Statements PHOENIX LEASING INCOME FUND 1977 BALANCE SHEETS (Amounts in Thousands Except for Unit Amounts) (Unaudited) March 31, December 31, ASSETS 1997 1996 ----- ----- Cash and cash equivalents $ 376 $ 369 Accounts receivable -- 17 Notes receivable (net of allowance for losses on notes receivable of $274 at March 31, 1997 and December 31, 1996) 525 525 Equipment on operating leases and held for lease (net of accumulated depreciation of $15 at March 31, 1997 and December 31, 1996) -- -- Investment in joint ventures 33 44 Other assets 5 4 ----- ----- Total Assets $ 939 $ 959 ===== ===== LIABILITIES AND PARTNERS' CAPITAL Liabilities Accounts payable and accrued expenses $ 36 $ 39 ----- ----- Total Liabilities 36 39 ----- ----- Partners' Capital General Partners (28) (26) Limited Partners, 20,000 units authorized and issued, 16,521 units outstanding at March 31, 1997 and December 31, 1996 930 945 Unrealized gains on available-for-sale securities 1 1 ----- ----- Total Partners' Capital 903 920 ----- ----- Total Liabilities and Partners' Capital $ 939 $ 959 ===== ===== The accompanying notes are an integral part of these statements. Page 3 of 10 PHOENIX LEASING INCOME FUND 1977 STATEMENTS OF OPERATIONS (Amounts in Thousands Except for Per Unit Amounts) (Unaudited) Three Months Ended March 31, 1997 1996 ----- ----- INCOME Rental income $ 1 $ 3 Equity in earnings from joint ventures, net 3 8 Interest income - notes receivable 4 -- Other income 13 6 ----- ----- Total Income 21 17 ----- ----- EXPENSES Management fees to General Partner 1 -- Liquidation fees to General Partner -- 21 Legal expense 29 1 General and administrative expenses 8 10 ----- ----- Total Expenses 38 32 ----- ----- NET LOSS $ (17) $ (15) ===== ===== NET LOSS PER LIMITED PARTNERSHIP UNIT $(.89) $(.97) ===== ===== DISTRIBUTIONS PER LIMITED PARTNERSHIP UNIT $-- $9.95 ===== ===== ALLOCATION OF NET INCOME (LOSS): General Partners $ (2) $ 1 Limited Partners (15) (16) ----- ----- $ (17) $ (15) ===== ===== The accompanying notes are an integral part of these statements. Page 4 of 10 PHOENIX LEASING INCOME FUND 1977 STATEMENTS OF CASH FLOWS (Amounts in Thousands) (Unaudited) Three Months Ended March 31, 1997 1996 ----- ----- Operating Activities: Net loss $ (17) $ (15) Adjustments to reconcile net loss to net cash used by operating activities: Gain on sale of equipment -- (1) Equity in earnings from joint ventures, net (3) (8) Decrease in accounts receivable 17 1 Decrease in accounts payable and accrued expenses (3) (10) Increase in other assets (1) -- ----- ----- Net cash used by operating activities (7) (33) ----- ----- Investing Activities: Proceeds from sale of equipment -- 1 Distributions from joint ventures 14 13 ----- ----- Net cash provided by investing activities 14 14 ----- ----- Financing Activities: Distributions to partners -- (165) ----- ----- Net cash used by financing activities -- (165) ----- ----- Increase (decrease) in cash and cash equivalents 7 (184) Cash and cash equivalents, beginning of period 369 595 ----- ----- Cash and cash equivalents, end of period $ 376 $ 411 ===== ===== The accompanying notes are an integral part of these statements. Page 5 of 10 PHOENIX LEASING INCOME FUND 1977 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 accompanying financial statements. Note 4. Notes Receivable. Impaired Notes Receivable. At March 31, 1997 and 1996, the recorded investment in notes that are considered to be impaired was $798,000 for which the related allowance for losses was $274,000 and $92,000, respectively. The average recorded investment in impaired loans during the three months ended March 31, 1997 and 1996 was approximately $798,000. The activity in the allowance for losses on notes receivable during the three months ended March 31, is as follows: 1997 1996 ------- ------- (Amounts in Thousands) Beginning balance $ 274 $ 92 Provision for losses - - Write downs - - ------- ------- Ending balance $ 274 $ 92 ======= ======= Note 5. Net Income (Loss) and Distributions per Limited Partnership Unit. Net loss and distributions per limited partnership unit were based on the limited partners' share of net loss and distributions, and the weighted average number of units outstanding of 16,521 for the three month periods ended March 31, 1997 and 1996. Page 6 of 10 Note 6. Investment in Joint Ventures. Equipment Joint Ventures The aggregate combined financial information of the equipment joint ventures is presented below: March 31, December 31, 1997 1996 ------ ------ (Amounts in Thousands) Assets $2,429 $2,700 Liabilities 333 372 Partners' Capital 2,096 2,328 Three Months Ended March 31, 1997 1996 ------ ------ (Amounts in Thousands) Revenue $ 486 $ 572 Expenses 209 336 Net Income 277 236 Financing Joint Ventures The aggregate combined financial information of the financing joint ventures is presented below: March 31, December 31, 1997 1996 ------ ------ (Amounts in Thousands) Assets $ 12 $ 17 Liabilities -- -- Partners' Capital 12 17 Three Months Ended March 31, 1997 1996 ------ ------ (Amounts in Thousands) Revenue $ 6 $ 2 Expenses 1 -- Net Income 5 2 Page 7 of 10 PHOENIX LEASING INCOME FUND 1977 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations Phoenix Leasing Income Fund 1977 (the Partnership) reported a net loss of $17,000 for the three months ended March 31, 1997, as compared to a net loss of $15,000 during the same period in 1996. The slight increase in the net loss is due to an increase in total expenses of $6,000 offset by an increase in total income of $4,000. Total revenues increased $4,000 for the three months ended March 31, 1997, compared to the same period in 1996. The increase in total revenues for the three months ended March 31, 1997, compared to the same period in 1996, is attributable to the increase in other income of $7,000 and an increase in interest income from notes receivable of $4,000, offset by a decrease in equity from joint ventures of $5,000 and a decrease in rental income of $2,000. Other income increased by $7,000 during the three months ended March 31, 1997, when compared to the same period in 1996. This was due to the receipt of settlement proceeds received on a defaulted lease. The increase in interest income from notes receivable of $4,000 during the three months ended March 31, 1997, when compared to the same period in 1996. The Partnership received a disbursement of proceeds during the three months ended March 31, 1997 which were held in escrow for a note receivable which was paid off in 1995. In 1995, a portion of the proceeds from the payoff of this note receivable was placed in escrow to cover unanticipated liabilities which may have arisen after the payoff. Rental income decreased by $2,000 during the three months ended March 31, 1997, compared to the same period in 1996. Because the Partnership is in its liquidation stage, it is not expected that the Partnership will acquire additional equipment. As a result, revenues from equipment leasing activities are expected to decline as the portfolio is liquidated. The Partnership will reach the end of its term on December 31, 1997, at which time it will liquidate its remaining assets, pay its remaining liabilities and distribute the remaining cash, if any, to the limited partners. At March 31, 1997, the Partnership owned equipment with an aggregate original cost, excluding the Partnership's pro rata interest in joint ventures, of $47,000 at March 31, 1997 and 1996. Total expenses increased by $6,000 for the three months ended March 31, 1997, compared to the same period in 1996. The increase is primarily the result of increased legal expenses of $28,000 which is primarily the result of one remaining outstanding note receivable from a cable television system operator that is in default, offset by a decrease in liquidation fees of $21,000 to the General Partner. Joint Ventures The Partnership has made investments in various equipment and financing joint ventures along with other affiliated partnerships managed by the General Partner for the purpose of spreading the risk of investing in certain equipment leasing and financing transactions. These joint ventures are not currently making any significant additional investments in new equipment leasing or financing transactions. As a result, the earnings and cash flow from such investments are anticipated to continue to decline as the portfolios are released at lower rental rates and eventually liquidated. Earnings from joint ventures was $3,000 and $8,000 during both the three months ended March 31, 1997 and 1996, respectively. Page 8 of 10 Liquidity and Capital Resources The Partnership's primary source of liquidity comes from its contractual obligations with lessees and borrowers for fixed terms at fixed payment amounts. The Partnership also has investments in equipment leasing and financing joint ventures in which it receives a share of the profits and receives cash distributions. The future liquidity of the Partnership will depend upon the General Partner's success in collecting contractual amounts owed. The Partnership reported net cash used by leasing and financing activities of $7,000 for the three months ended March 31, 1997, as compared to $33,000 for the same period in 1996. This decrease is due to the majority of the Partnership's assets having been liquidated. Distributions from joint ventures remained approximately the same for the three months ended March 31, 1997, as compared to the same period in 1996. The Partnership owned equipment held for lease with a purchase price of $31,000 and a net book value of $0 at March 31, 1997 and 1996. The General Partner is actively engaged, on behalf of the Partnership, in remarketing and selling the Partnership's off-lease equipment portfolio. The Limited Partners received $0 and $165,000 in cash distributions during both the three months ended March 31, 1997 and 1996, respectively. As a result, the cumulative cash distributions to the Limited Partners are $28,604,000 as of March 31, 1997 and 1996. The General Partner received cash distributions of $0 and $1,000 during the three months ended March 31, 1997 and 1996, respectively. In addition, the General Partner received payment of liquidation fees of $0 and $21,000 during the three months ended March 31, 1997 and 1996, respectively. Due to the decrease in the cash generated by leasing operations, the Partnership is no longer making quarterly cash distributions to Partners. Distributions are now being made on an annual basis with the annual distribution date being January 15. However, since the Partnership is closing this year the next distribution to partners is expected to be made at the termination of the Partnership. The amount of the distribution will be dependent upon the amount of cash available after the Partnership liquidates its remaining assets and liabilities. The Partnership will reach the end of its term on December 31, 1997. The General Partner is entitled to 11.688% of all cash distributions. Distributions in excess of the General Partners' capital account are characterized as liquidation fees. The total liquidation fee paid to the General Partner will not exceed 11.688% of the sum of the net contributed capital and cumulative net profits and losses. The fee represents an expense of the Partnership and is specially allocated to the Limited Partners. Cash generated from leasing and financing operations has been and is anticipated to continue to be sufficient to meet the Partnership's on-going operational expenses. Page 9 of 10 PHOENIX LEASING INCOME FUND 1977 March 31, 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: None (27) Financial Data Schedule b) Reports on 8-K: None Page 10 of 10 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 INCOME FUND 1977 -------------------------------- (Registrant) Date Title Signature ---- ----- --------- May 13, 1997 Chief Financial Officer, /S/ PARITOSH K. CHOKSI - ------------------ Senior Vice President, ---------------------- Treasurer and a Director of (Paritosh K. Choksi) Phoenix Leasing Incorporated General Partner May 13, 1997 Senior Vice President, /S/ BRYANT J. TONG - ------------------ Financial Operations of ------------------ (Principal Accounting Officer) (Bryant J. Tong) Phoenix Leasing Incorporated General Partner May 13, 1997 Senior Vice President /S/ GARY W. MARTINEZ - ------------------- and a Director of -------------------- Phoenix Leasing Incorporated (Gary W. Martinez) General Partner May 13, 1997 Partnership Controller of /S/ MICHAEL K. ULYATT - ------------------- Phoenix Leasing Incorporated --------------------- General Partner (Michael K. Ulyatt) EX-27 2
5 1,000 3-MOS DEC-31-1997 MAR-31-1997 376 0 799 274 0 0 15 15 939 0 0 0 0 0 903 939 0 21 0 38 0 0 0 (17) 0 (17) 0 0 0 (17) (.89) 0
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