-----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, PnuewO4F4+fmjFUzsYuEihTkha0gZ7/yVvA6tkT/Y6fPoQfW1+OVLveVctnm7aOq DLFOgHPutL5rQ4snqwfVCQ== 0000948524-00-000030.txt : 20000515 0000948524-00-000030.hdr.sgml : 20000515 ACCESSION NUMBER: 0000948524-00-000030 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POLARIS AIRCRAFT INCOME FUND I CENTRAL INDEX KEY: 0000748218 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 942938977 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 002-91762 FILM NUMBER: 628213 BUSINESS ADDRESS: STREET 1: 201 HIGH RIDGE ROAD STREET 2: 27TH FL CITY: STAMFORD STATE: CT ZIP: 06927 BUSINESS PHONE: (203) 357- MAIL ADDRESS: STREET 1: 201 HIGH RIDGE ROAD STREET 2: 27TH FL CITY: STAMFORD STATE: CT ZIP: 06927 10-Q 1 MARCH 31, 2000 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 10-Q ------------------ X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE --- SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 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 No. 2-91762 ----------------- POLARIS AIRCRAFT INCOME FUND I State of Organization: California IRS Employer Identification No. 94-2938977 201 High Ridge Road, Stamford, Connecticut 06927 Telephone - (203) 357-3776 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- This document consists of 12 pages. POLARIS AIRCRAFT INCOME FUND I FORM 10-Q - For the Quarterly Period Ended March 31, 2000 INDEX Part I. Financial Information Page Item 1. Financial Statements a) Balance Sheets - March 31, 2000 and December 31, 1999...........................................3 b) Statements of Operations - Three Months Ended March 31, 2000 and 1999.....................................4 c) Statements of Changes in Partners' Capital - Year Ended December 31, 1999 and Three Months Ended March 31, 2000.......................5 d) Statements of Cash Flows - Three Months Ended March 31, 2000 and 1999...............................6 e) Notes to Financial Statements...............................7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...........9 Part II. Other Information Item 1. Legal Proceedings......................................10 Item 6. Exhibits and Reports on Form 8-K.......................10 Signature .......................................................11 2 Part 1. Financial Information ----------------------------- Item 1. Financial Statements POLARIS AIRCRAFT INCOME FUND I BALANCE SHEETS (Unaudited) March 31, December 31, 2000 1999 ---- ---- ASSETS: CASH AND CASH EQUIVALENTS $3,508,360 $4,190,421 RENT AND OTHER RECEIVABLES, net of allowance for credit losses of $30,365 in 1999 -- 30,000 AIRCRAFT ENGINES, net of accumulated depreciation of $93,750 in 2000 and $90,000 in 1999 866,250 870,000 ---------- ---------- Total Assets $4,374,610 $5,090,421 ========== ========== LIABILITIES AND PARTNERS' CAPITAL: PAYABLE TO AFFILIATES $ 9,952 $ 11,216 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 362,380 374,689 SECURITY DEPOSITS 45,000 45,000 MAINTENANCE RESERVES 1,774,168 1,704,715 ---------- ---------- Total Liabilities 2,191,500 2,135,620 ---------- ---------- PARTNERS' CAPITAL: General Partner 136,407 222,894 Limited Partners, 168,729 units issued and outstanding 2,046,703 2,731,907 ---------- ---------- Total Partners' Capital 2,183,110 2,954,801 ---------- ---------- Total Liabilities and Partners' Capital $4,374,610 $5,090,421 ========== ========== The accompanying notes are an integral part of these statements. 3 POLARIS AIRCRAFT INCOME FUND I STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, ---------------------------- 2000 1999 ---- ---- REVENUES: Rent from operating leases $ 90,000 $ 90,000 Gain on sale of aircraft inventory -- 196,858 Interest 50,634 50,561 Lessee settlement (Note 4) 61,513 -- -------- -------- Total Revenues 202,147 337,419 -------- -------- EXPENSES: Depreciation 3,750 3,750 Management fees to general partner 4,500 4,500 Administration and other 28,205 25,784 -------- -------- Total Expenses 36,455 34,034 -------- -------- NET INCOME $165,692 $303,385 ======== ======== NET INCOME ALLOCATED TO THE GENERAL PARTNER $ 7,251 $ 3,034 ======== ======== NET INCOME ALLOCATED TO LIMITED PARTNERS $158,441 $300,351 ======== ======== NET INCOME PER LIMITED PARTNERSHIP UNIT $ 0.94 $ 1.78 ======== ======== The accompanying notes are an integral part of these statements. 4 POLARIS AIRCRAFT INCOME FUND I STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (Unaudited) Year Ended December 31, 1999 and Three Months Ended March 31, 2000 --------------------------------- General Limited Partner Partners Total ------- -------- ----- Balance, December 31, 1998 $ 493,422 $ 4,626,641 $ 5,120,063 Net income 6,000 594,019 600,019 Cash distributions to partners (276,528) (2,488,753) (2,765,281) ----------- ----------- ----------- Balance, December 31, 1999 222,894 2,731,907 2,954,801 Net income 7,251 158,441 165,692 Cash distributions to partners (93,738) (843,645) (937,383) ----------- ----------- ----------- Balance, March 31, 2000 $ 136,407 $ 2,046,703 $ 2,183,110 =========== =========== =========== The accompanying notes are an integral part of these statements. 5 POLARIS AIRCRAFT INCOME FUND I STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, ---------------------------- 2000 1999 ---- ---- OPERATING ACTIVITIES: Net income $ 165,692 $ 303,385 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,750 3,750 Gain on sale of aircraft inventory -- (196,858) Changes in operating assets and liabilities: Decrease in rent and other receivable 30,000 58,154 Increase (decrease) in payable to affiliates (1,264) 8,418 Decrease in accounts payable and accrued liabilities (12,309) (18,360) Increase in maintenance reserves 69,453 93,198 ----------- ----------- Net cash provided by operating activities 255,322 251,687 ----------- ----------- FINANCING ACTIVITIES: Cash distributions to partners (937,383) (2,765,281) ----------- ----------- Net cash used in financing activities (937,383) (2,765,281) ----------- ----------- CHANGES IN CASH AND CASH EQUIVALENTS (682,061) (2,513,594) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,190,421 6,418,582 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,508,360 $ 3,904,988 =========== =========== The accompanying notes are an integral part of these statements. 6 POLARIS AIRCRAFT INCOME FUND I NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. Accounting Principles and Policies In the opinion of management, the financial statements presented herein include all adjustments, consisting only of normal recurring items, necessary to summarize fairly Polaris Aircraft Income Fund I's (the Partnership's) financial position and results of operations. The financial statements have been prepared in accordance with the instructions of the Quarterly Report to the Securities and Exchange Commission (SEC) Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles (GAAP). These statements should be read in conjunction with the financial statements and notes thereto for the years ended December 31, 1999, 1998 and 1997 included in the Partnership's 1999 Annual Report to the SEC on Form 10-K. 2. Related Parties Under the Limited Partnership Agreement, the Partnership paid or agreed to pay the following amounts for the current quarter to the general partner, Polaris Investment Management Corporation, in connection with services rendered or payments made on behalf of the Partnership: Payments for Three Months Ended Payable at March 31, 2000 March 31, 2000 -------------- -------------- Aircraft Management Fees $ 4,500 $ 3,018 Out-of-Pocket Administrative Expense Reimbursement 41,426 6,934 ------- ------- $45,926 $ 9,952 ======= ======= 3. Partners' Capital The Partnership Agreement (the Agreement) stipulates different methods by which revenue, income and loss from operations and gain or loss on the sale of aircraft are to be allocated to the general partner and the limited partners. Such allocations are made using income or loss calculated under GAAP for book purposes, which varies from income or loss calculated for tax purposes. Cash available for distributions, including the proceeds from the sale of aircraft, is distributed 10% to the general partner and 90% to the limited partners. 7 The different methods of allocating items of income, loss and cash available for distribution combined with the calculation of items of income and loss for book and tax purposes result in book basis capital accounts that may vary significantly from tax basis capital accounts. The ultimate liquidation and distribution of remaining cash will be based on the tax basis capital accounts following liquidation, in accordance with the Agreement. 4. CanAir Bankruptcy Settlement On February 15, 2000, the Partnership received $61,513 in connection with the CanAir Bankruptcy Settlement, which is comprised of amounts received for rents, maintenance reserve obligations and accrued interest. A portion of the proceeds was treated as a recovery of previously reserved rents receivable. The allowance for credit losses of $30,365 was reversed and is included in "Lessee Settlement" in the statement of operations. 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations At March 31, 2000, Polaris Aircraft Income Fund I (the Partnership) owned three JT8D-9A engines and certain inventoried aircraft parts, which includes one engine, out of its original portfolio of eleven aircraft. The three JT8D-9A engines are leased to Royal Aviation Inc. and Royal Cargo, Inc. (Royal Aviation). Partnership Operations The Partnership recorded net income of $165,692, or $.94 per limited partnership unit, for the three months ended March 31, 2000, compared to net income of $303,385, or $1.78 per unit for the same period in 1999. The decline in operating results during the first quarter of 2000, as compared to the same period in 1999, was primarily the result of gains on the sale of aircraft inventory in 1999 of $196,858 offset by a settlement in the CanAir bankruptcy proceedings in February 2000, of which the Partnership received $61,513. Liquidity and Cash Distributions Liquidity - The Partnership receives maintenance reserve payments from Royal Aviation that may be reimbursed to the lessee or applied against certain costs incurred by the Partnership for maintenance work performed on the Partnership's aircraft or engines, as specified in the leases. Maintenance reserve balances remaining at the termination of the lease, if any, may be used by the Partnership to offset future maintenance expenses or recognized as revenue. The net maintenance reserve balance was $1,774,168 as of March 31, 2000. Polaris Investment Management Corporation, the general partner, has determined that the Partnership maintain cash reserves as a prudent measure to insure that the Partnership has available funds in the event that the engines presently on lease to Royal Aviation require remarketing and for other contingencies, including expenses of the Partnership. The Partnership's cash reserves will be monitored and may be revised from time to time as further information becomes available in the future. Cash Distributions - Cash distributions to limited partners during the three months ended March 31, 2000 and 1999 were $843,645, or $5.00 per limited partnership unit and $2,488,753, or $14.75 per unit, respectively. The timing and amount of future cash distributions to partners are not yet known and will depend upon the Partnership's future cash requirements, including the receipt of rental payments from Royal Aviation. 9 Part II. Other Information -------------------------- Item 1. Legal Proceedings As discussed in Item 3 of Part I of Polaris Aircraft Income Fund I's (the Partnership) 1999 Annual Report to the Securities and Exchange Commission (SEC) on Form 10-K (Form 10-K), there are several pending legal actions or proceedings involving the Partnership. There have been no material developments with respect to any such actions or proceedings during the period covered by this report. Other Proceedings - Item 10 in Part III of the Partnership's 1999 Form 10-K discusses certain actions which have been filed against Polaris Investment Management Corporation and others in connection with the sale of interests in the Partnership and the management of the Partnership. The Partnership is not a party to these actions. There have been no material developments with respect to any of the actions described therein during the period covered by this report. Item 6. Exhibits and Reports on Form 8-K a) Exhibits (numbered in accordance with Item 601 of Regulation S-K) 27. Financial Data Schedule (in electronic format only). b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the quarter for which this report is filed. 10 SIGNATURE 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. POLARIS AIRCRAFT INCOME FUND I A California Limited Partnership (Registrant) By: Polaris Investment Management Corporation, General Partner May 11, 2000 By: /S/Marc A. Meiches -------------------- -------------------------------- Marc A. Meiches Chief Financial Officer (principal financial officer and principal accounting officer of Polaris Investment Management Corporation, General Partner of the Registrant) 11 EX-27 2
5 3-MOS DEC-31-2000 MAR-31-2000 3508360 0 0 0 0 0 960000 93750 4374610 0 0 0 0 0 2183110 4374610 0 202147 0 0 36455 0 0 165692 0 165692 0 0 0 165692 0.94 0
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