-----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, ANJogddahSLQOLjaURRLl3B7QRtIVEa/mS0o4PkJC7L8qU+wJj0vun/AUGgmL27+ pAT7r/jrYBDITbLg2kfHPQ== 0000950149-03-002712.txt : 20031114 0000950149-03-002712.hdr.sgml : 20031114 20031113190426 ACCESSION NUMBER: 0000950149-03-002712 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POLARIS AIRCRAFT INCOME FUND II CENTRAL INDEX KEY: 0000789895 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 942985086 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-02794 FILM NUMBER: 03999882 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 f94623ae10vq.txt 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 September 30, 2003 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. 33-2794 ----------------------------------- POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP State of Organization: California IRS Employer Identification No. 94-2985086 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 [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act). Yes [ ] No [X] This document consists of 15 pages. POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP FORM 10-Q - FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003 INDEX
PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) a) Condensed Balance Sheets - September 30, 2003 and December 31, 2002.............................................................................. 3 b) Condensed Statements of Operations - Three and Nine Months Ended September 30, 2003 and 2002.............................................................. 4 c) Condensed Statements of Changes in Partners' Capital (Deficit) - Year Ended December 31, 2002 and Nine Months Ended September 30, 2003....................................................... 5 d) Condensed Statements of Cash Flows - Nine Months Ended September 30, 2003 and 2002.............................................................. 6 e) Notes to Condensed Financial Statements........................................................ 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...... 10 Item 4. Controls and Procedures.................................................................... 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings.......................................................................... 14 Item 6. Exhibits and Reports on Form 8-K........................................................... 14 Signature ........................................................................................... 15
2 PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP CONDENSED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, DECEMBER 31, 2003 2002 ---- ---- ASSETS: CASH AND CASH EQUIVALENTS $ 4,635,067 $ 10,605,028 RENT AND OTHER RECEIVABLES 41,612 241,560 AIRCRAFT HELD FOR SALE 900,000 740,000 AIRCRAFT ON OPERATING LEASE, net of accumulated depreciation of $8,170,489 in 2003 and $46,906,230 in 2002 100,000 2,318,650 PREPAID EXPENSE 3,871 - ------------- ------------ Total Assets $ 5,680,550 $ 13,905,238 ============= ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT): PAYABLE TO AFFILIATES $ 120,256 $ 81,151 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 119,755 551,766 DEFERRED INCOME 665 475,788 ------------- ------------ Total Liabilities 240,676 1,108,705 ------------- ------------ PARTNERS' CAPITAL (DEFICIT): General Partner (3,651,935) (3,555,808) Limited Partners, 499,812 units in 2003 and 499,910 units in 2002 issued and outstanding 9,091,809 16,352,341 ------------- ------------ Total Partners' Capital 5,439,874 12,796,533 ------------- ------------ Total Liabilities and Partners' Capital $ 5,680,550 $ 13,905,238 ============= ============
The accompanying notes are an integral part of these condensed statements. 3 POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2003 2002 2003 2002 ---- ---- ---- ---- REVENUES: Rent from operating leases $ 305,003 $ 1,255,824 $ 1,924,456 $ 4,319,561 Interest 10,746 40,670 38,769 120,221 Gain on sale of aircraft - - - 65,000 Lessee return condition settlements 56,952 55,290 177,697 191,615 Lessee settlement - 73,448 69,346 73,448 ------------- -------------- ------------- ------------ Total Revenues 372,701 1,425,232 2,210,268 4,769,845 ------------- -------------- ------------- ------------ EXPENSES: Depreciation 1,046,155 813,485 2,058,650 2,818,345 Management fees to general partner 8,357 30,149 50,428 98,534 Operating 161,969 50,011 278,423 113,004 Legal 11,822 1,153 13,804 18,728 Administration and other 63,573 50,770 222,427 195,395 ------------- -------------- ------------- ------------ Total Expenses 1,291,876 945,568 2,623,732 3,244,006 ------------- -------------- ------------- ------------ NET INCOME (LOSS) $ (919,175) $ 479,664 $ (413,464) $ 1,525,839 ============= ============== ============= ============ NET INCOME (LOSS) ALLOCATED TO THE GENERAL PARTNER $ (9,192) $ 4,796 $ 598,192 $ 528,679 ============= ============== ============= ============ NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS $ (909,983) $ 474,868 $ (1,011,656) $ 997,160 ============= ============== ============= ============ NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT $ (1.82) $ 0.95 $ (2.02) $ 1.99 ============= ============== ============= ============
The accompanying notes are an integral part of these condensed statements. 4 POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (UNAUDITED)
YEAR ENDED DECEMBER 31, 2002 AND NINE MONTHS ENDED SEPTEMBER 30, 2003 GENERAL LIMITED PARTNER PARTNERS TOTAL ------- -------- ----- Balance, December 31, 2001 $ (3,531,847) $ 20,069,934 $ 16,538,087 Net income 531,557 1,282,066 1,813,623 Cash distribution to partners (555,518) (4,999,659) (5,555,177) ------------- -------------- ------------- Balance, December 31, 2002 (3,555,808) 16,352,341 12,796,533 Net income (loss) 598,192 (1,011,656) (413,464) Cash distribution to partners (694,319) (6,248,876) (6,943,195) ------------- -------------- ------------- Balance, September 30, 2003 $ (3,651,935) $ 9,091,809 $ 5,439,874 ============= ============== =============
The accompanying notes are an integral part of these condensed statements. 5 POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2003 2002 ---- ---- OPERATING ACTIVITIES: Net income (loss) $ (413,464) $ 1,525,839 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 2,058,650 2,818,345 Gain on sale of aircraft - (65,000) Changes in operating assets and liabilities: Decrease in rent and other receivables 199,948 123,262 Increase in prepaid expense (3,871) - Increase (decrease) in payable to affiliates 39,105 (504,208) Decrease in accounts payable and accrued liabilities (432,011) (117,359) Decrease in deferred income (475,123) (1,236,894) ------------- ------------- Net cash provided by operating activities 973,234 2,543,985 ------------- ------------- INVESTING ACTIVITIES: Proceeds from sale of aircraft - 250,000 ------------- ------------- Net cash provided by investing activities - 250,000 ------------- ------------- FINANCING ACTIVITIES: Cash distributions to partners (6,943,195) (5,555,177) ------------- ------------- Net cash used in financing activities (6,943,195) (5,555,177) ------------- ------------- CHANGES IN CASH AND CASH EQUIVALENTS (5,969,961) (2,761,192) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 10,605,028 12,639,824 ------------- ------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,635,067 $ 9,878,632 ============= ============= NON-CASH INVESTING AND FINANCING ACTIVITIES: Transfer of operating lease assets to assets held for sale $ 500,000 $ - ============= ============
The accompanying notes are an integral part of these condensed statements. 6 POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. ORGANIZATION AND THE PARTNERSHIP Polaris Aircraft Income Fund II, A California Limited Partnership (the Partnership), was formed on June 27, 1984 for the purpose of acquiring and leasing aircraft. The Partnership will terminate no later than December 2010. Upon organization, both the General Partner and the initial Limited Partner contributed $500. The Partnership recognized no profits or losses during the periods ended December 31, 1985 and 1984. The offering of Limited Partnership units terminated on December 31, 1986, at which time the Partnership had sold 499,997 units of $500, representing $249,998,500. All partners were admitted to the Partnership on or before December 1, 1986. During January 1998, 24 units were redeemed by the Partnership in accordance with section 18 of the Limited Partnership Agreement (the Agreement). During the three months ended September 30, 2003, 28 units were abandoned. At September 30, 2003, there were 499,812 units outstanding, net of redemptions. Polaris Investment Management Corporation (PIMC), the sole General Partner of the Partnership (the General Partner), supervises the day-to-day operations of the Partnership. PIMC is a wholly-owned subsidiary of Polaris Aircraft Leasing Corporation (PALC). Polaris Holding Company (PHC) is the parent company of PALC. General Electric Capital Corporation (GE Capital), an affiliate of General Electric Company, owns 100% of PHC's outstanding common stock. PIMC has entered into a services agreement dated as of July 1, 1994 with GE Capital Aviation Services, Inc. (GECAS). Amounts paid and allocations to related parties are described in Notes 3 and 4. At September 30, 2003, the Partnership owned a portfolio of 10 used McDonnell Douglas DC-9-30 commercial jet aircraft, and an inventory of spare parts out of its original portfolio of 30 aircraft. One of these aircraft was on lease to TWA Airlines, LLC (TWA LLC), a wholly owned subsidiary of American Airlines, Inc. (American). The nine remaining aircraft were stored in New Mexico and were being remarketed for sale. NOTE 2. ACCOUNTING PRINCIPLES AND POLICIES In the opinion of management, the condensed financial statements presented herein include all adjustments, consisting only of normal recurring items, necessary to summarize fairly 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. The condensed balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and note disclosures required by accounting principles generally accepted in the United States (GAAP). These statements should be read in conjunction with the financial statements and notes thereto for the years ended December 31, 2002, 2001, and 2000 included in the Partnership's 2002 Annual Report to the SEC on Form 10-K. Certain prior period amounts have been reclassified to conform to the current period presentation. 7 NOTE 3. RELATED PARTIES Under the Agreement, the Partnership paid or agreed to pay the following amounts for the current quarter to the General Partner, PIMC, in connection with services rendered or payments made on behalf of the Partnership:
PAYMENTS MADE DURING THE THREE MONTHS ENDED PAYABLE AT SEPTEMBER 30, 2003 SEPTEMBER 30, 2003 ------------------------ ------------------ Aircraft Management Fees $ 17,267 $ 2,019 Out-of-Pocket Operating Expense Reimbursement 133,582 113,307 Out-of-Pocket Administrative Expense Reimbursement 68,740 4,930 ---------- --------- $ 219,589 $ 120,256 ========== =========
NOTE 4. PARTNERS' CAPITAL 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. 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. NOTE 5. AIRCRAFT AND DEPRECIATION The Partnership periodically reviews the estimated realizability of the residual values at the projected end of each aircraft's economic life. For any downward adjustment in estimated residual value or decrease in the projected remaining economic life, the depreciation expense over the projected remaining economic life of the aircraft will be increased. If the projected net cash flow for each aircraft (projected rental revenue, net of management fees, less projected maintenance costs, if any, plus the estimated residual value) is less than the carrying value of the aircraft, an impairment loss is recognized. Pursuant to Statement of Financial Accounting Standards No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS 144), measurement of an impairment loss will be based on the "fair value" of the asset as defined in the 8 statement. During the nine months ended September 30, 2003, the Partnership recognized additional depreciation expense of $88,293 as a result of determining that future net cash flows were less than the carrying value of aircraft on operating lease. Aircraft held for sale are carried at the lower of cost or fair value less cost to sell. During the nine months ended September 30, 2003, the Partnership also recognized additional depreciation expense of $765,000 on aircraft held for sale due to changes in estimated fair market values. Management believes the assumptions related to the fair value of impaired assets represents the best estimates based on reasonable and supportable assumptions and projections. NOTE 6. SALE OF AIRCRAFT On February 13, 2002, the General Partner, on behalf of the Partnership, sold one DC-9-30 aircraft to Amtec Corporation for $250,000 in cash. The Partnership recognized a gain on the sale of $65,000. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS BUSINESS OVERVIEW At September 30, 2003, Polaris Aircraft Income Fund II, A California Limited Partnership (the Partnership), owned a portfolio of 10 used McDonnell Douglas DC-9-30 commercial jet aircraft, and an inventory of spare parts out of its original portfolio of 30 aircraft. One of these aircraft was on lease to TWA Airlines, LLC (TWA LLC), a wholly owned subsidiary of American Airlines Inc. (American). The one remaining lease will expire by October 3, 2003, after which this aircraft will be remarketed for sale. The nine remaining aircraft were being stored in New Mexico and were being remarketed for sale. The Partnership plans to liquidate all its assets in an orderly manner, make a final distribution, and terminate the Partnership thereafter; however, it is uncertain when this liquidation will occur because the General Partner is unable to predict when all of the Partnership's remaining assets will be sold. This discussion should be read in conjunction with the management's discussion included in the Partnership's 2002 Annual Report to the SEC on Form 10-K. PARTNERSHIP OPERATIONS The Partnership recorded a net loss of $919,175, or $1.82 per limited partnership unit, for the three months ended September 30, 2003, compared to net income of $479,664, or $0.95 per limited partnership unit, for the three months ended September 30, 2002. The Partnership recorded a net loss of $413,464, or $2.02 per limited partnership unit, for the nine months ended September 30, 2003, compared to net income of $1,525,839, or $1.99 per limited partnership unit, for the nine months ended September 30, 2002. The decreases in net income are primarily due to write downs on aircraft, decreases in rental and interest income, and no recognized gains on sale of aircraft along with an increase in operating expenses, partially offset by decreases in depreciation and management fees to the General Partner, as discussed below. Rent from operating leases decreased to $305,003 and $1,924,456 in the three and nine months ended September 30, 2003, respectively, as compared to $1,255,824 and $4,319,561 for the respective periods in 2002, primarily due to fewer aircraft on lease. Additionally, the decrease in rent from operating leases was also caused by lower recognition of deferred revenue of $71,670 and $475,123 in the three and nine months ended September 30, 2003, respectively, as compared to $338,490 and $1,236,894 in the respective periods in 2002. Interest income decreased during the three and nine months ended September 30, 2003, as compared to the same periods in 2002, primarily due to lower average cash reserves and a lower rate of return on those cash reserves. There was no recognized gain on sale of aircraft during the nine months ended September 30, 2003, as compared to the same period in 2002, due to the sale of one of the Partnership's aircraft on February 13, 2002 for $250,000 resulting in a gain on the sale of $65,000. There were no aircraft sales during the nine months ended September 30, 2003. Lessee return condition settlements increased slightly during the three months ended September 30, 2003, as compared to the same period in 2002. Two aircraft were returned to the Partnership during the 2003 period as compared to one aircraft during the 2002 period; however, one of the aircraft returned during the 2003 period was not assessed a return condition settlement. Lessee return condition 10 settlements decreased during the nine months ended September 30, 2003, as compared to the same period in 2002. Five aircraft were returned to the Partnership during the 2003 period as compared to three aircraft during the 2002 period. The amount of return condition settlement for each aircraft can vary significantly due to the fact that TWA LLC is required to return the installed engines on each aircraft with a target level of average cycle life remaining to replacement for all life limited parts. If the average cycle life remaining on the installed engines on an aircraft is below the target level, a financial adjustment is payable by TWA LLC to the Partnership (but no payment will be owed by the Partnership to TWA LLC if cycle life remaining at return exceeds the target level). Lessee settlement income decreased during the three and nine months ended September 30, 2003, as compared to the same periods in 2002, due to a payment received during the three and nine months ended September 30, 2002 in the amount of $73,448 as compared to $0 and $69,346 received during the three and nine months ended September 30, 2003, respectively. The payment during the 2002 period represents settlement of an administrative claim filed in the TWA bankruptcy proceeding in connection with certain legal expenses incurred by the Partnership. The payment received during the 2003 period resulted from a distribution by TWA's bankrupt estate of a portion of the $422,989 administrative rent claims. Depreciation expense increased during the three months ended September 30, 2003, as compared to the same period in 2002. The increase during the 2003 period occurred because the General Partner determined that the carrying value of the aircraft on lease and held for sale exceeded current fair market value based on recent purchase offers on the aircraft held for sale and therefore recognized additional depreciation expense. Depreciation expense decreased during the nine months ended September 30, 2003, as compared to the same period in 2002, primarily due to fewer aircraft remaining on lease, partly offset by the additional depreciation expense due to changes in fair market value during the 2003 period. No such adjustments to market value through additional depreciation expense were made during the 2002 periods. Operating expenses increased during the three and nine months ended September 30, 2003, primarily due to increased maintenance and storage related costs associated with the aircraft as they come off lease and are held for sale. As of September 30, 2003, nine aircraft remain in storage while being remarketed for sale. Administration and other expense increased during the three and nine months ended September 30, 2003, as compared to the same periods in 2002, primarily due to increased audit fees. Legal fees increased during the three months ended September 30, 2003, as compared to the same period in 2002, primarily due to higher legal costs related to various SEC and investor reporting matters. Legal expense decreased during the nine months ended September 30, 2003, as compared to the same period in 2002. In the 2002 period, legal fees were incurred in connection with an SEC prompted court order related to transfers of units to entities owned by an investor. There were no such fees incurred in the 2003 period. LIQUIDITY AND CASH DISTRIBUTIONS LIQUIDITY - The Partnership received all payments due from its sole lessee, TWA Airlines LLC, for the aircraft remaining on lease during the nine months ended September 30, 2003. PIMC, the General Partner, has determined that cash reserves be maintained as a prudent measure to ensure that the Partnership has available funds for winding up the affairs of the Partnership and for 11 other contingencies. The Partnership plans to liquidate all its assets in an orderly manner, make a final distribution, and terminate the Partnership thereafter; however, it is uncertain when this liquidation will occur because the General Partner is unable to predict when all of the Partnership's remaining assets will be sold. 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 nine months ended September 30, 2003 and 2002 were $6,248,876, or $12.50 per limited partnership unit, and $4,999,659, or $10.00 per unit, respectively. The timing and amount of future cash distributions are not yet known and will depend on the Partnership's future cash requirements (including expenses of the Partnership), the need to retain cash reserves as previously discussed in the Liquidity section, the receipt of rental payments from TWA LLC, and payments generated from aircraft sales proceeds. 12 ITEM 4. CONTROLS AND PROCEDURES As required by Rule 13a-15(b), PIMC management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation as of the end of the period covered by this report, of the effectiveness of the Partnership's disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Partnership's disclosure controls and procedures were effective as of the end of the period covered by this report. As required by Rule 13a-15(d), PIMC management, including the Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of the Partnership's internal control over financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting. Based on that evaluation, there has been no such change during the quarter covered by this report. 13 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS As discussed in Item 3 of Part I of Polaris Aircraft Income Fund II's (the Partnership) 2002 Annual Report to the Securities and Exchange Commission (SEC) on Form 10-K (Form 10-K) and in Item 1 of Part II of the Partnership's Quarterly Report to the SEC on Form 10-Q (Form 10-Q) for the period ended June 30, 2003, all legal actions or proceedings involving the Partnership have been resolved or disposed of by the respective courts. OTHER PROCEEDINGS - Item 10 in Part III of the Partnership's 2002 Form 10-K and Item 1 of Part II of the Partnership's Quarterly Report to the SEC on Form 10-Q for the period ended June 30, 2003 discuss 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) 31.1 CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 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. 14 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 II, A CALIFORNIA LIMITED PARTNERSHIP (Registrant) By: Polaris Investment Management Corporation, General Partner November 14, 2003 By: /s/ Stephen E. Yost ----------------------------------------- Stephen E. Yost, Chief Financial Officer 15 EX-31.1 3 f94623aexv31w1.txt EXHIBIT 31.1 EXHIBIT 31.1 POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP QUARTERLY CERTIFICATION I, William R Carpenter, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Polaris Aircraft Income Fund II (A California Limited Partnership); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 14, 2003 By: Polaris Investment Management Corporation General Partner /s/ William R. Carpenter - -------------------------------------- William R. Carpenter President EX-31.2 4 f94623aexv31w2.txt EXHIBIT 31.2 EXHIBIT 31.2 POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP QUARTERLY CERTIFICATION I, Stephen E. Yost, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Polaris Aircraft Income Fund II (A California Limited Partnership); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 14, 2003 By: Polaris Investment Management Corporation General Partner /s/ Stephen E. Yost - ------------------------------------ Steven E. Yost Chief Financial Officer EX-32.1 5 f94623aexv32w1.txt EXHIBIT 32.1 EXHIBIT 32.1 POLARIS AIRCRAFT INCOME FUND II, A CALIFORNIA LIMITED PARTNERSHIP CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Polaris Investment Management Corporation (the General Partner), does hereby certify, to such officer's knowledge, that: The Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 of Polaris Aircraft Income Fund II (A California Limited Partnership) (the Partnership) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Partnership. Dated: November 14, 2003 /s/ William R Carpenter - ------------------------------- Name: William R. Carpenter Title: President of Polaris Investment Management Corporation (the General Partner) Dated: November 14, 2003 /s/ Stephen E. Yost - ------------------------------- Name: Stephen E Yost Title: Chief Financial Officer of Polaris Investment Management Corporation (the General Partner) A signed original of this written statement required by Section 906 or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----