-----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, QXT+Ixt83WCp2rMn8QTZ3SM0+tGwt78q9vDDXNAcQX+irqzHhWkdd4vJILXAL6ba otgOL0Xt4UxsABkADquW/A== 0000821218-95-000006.txt : 19951119 0000821218-95-000006.hdr.sgml : 19951119 ACCESSION NUMBER: 0000821218-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEASTEC INCOME FUND V CENTRAL INDEX KEY: 0000821218 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER RENTAL & LEASING [7377] IRS NUMBER: 680136036 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18555 FILM NUMBER: 95589746 BUSINESS ADDRESS: STREET 1: 7175 W JEFFERSON AVE STE 3000 CITY: LAKEWOOD STATE: CO ZIP: 80235 BUSINESS PHONE: 3039801000 10-Q 1 LIFV3Q95.001 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 ------------------------------------------------- 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 0-18555 --------------------------------------------------------- Leastec Income Fund V, A California Limited Partnership ------------------------------------------------------- (Exact name of registrant as specified in its charter) California 68-0136036 ----------------------- ------------------------------------ (State of organization) (I.R.S. Employer Identification No.) 7175 West Jefferson Avenue, Suite 3000 Lakewood, Colorado 80235 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (303) 980-1000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 requirements for the past 90 days. Yes x No --- --- Exhibit Index Appears on Page 11 Page 1 of 12 Pages LEASTEC INCOME FUND V A California Limited Partnership Quarterly Report on Form 10-Q for the Quarter Ended September 30, 1995 Table of Contents PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements (Unaudited) Balance Sheets-September 30, 1995 and December 31, 1994 3 Statements of Income-Three and Nine months ended September 30, 1995 and 1994 4 Statements of Cash Flows-Nine months ended September 30, 1995 and 1994 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 11 Signature 12 2 LEASTEC INCOME FUND V A California Limited Partnership BALANCE SHEETS (Unaudited) September 30, December 31, 1995 1994 ------------- ------------ ASSETS Cash and cash equivalents $ 235,525 $ 702,210 Accounts receivable, net 46,028 95,807 Equipment held for sale or lease 60,441 74,337 Net investment in direct finance leases 1,957,836 2,467,517 Equipment on operating leases, net 3,630,129 5,349,797 ---------- ---------- Total assets $5,929,959 $8,689,668 ========== ========== LIABILITIES AND PARTNERS' CAPITAL Liabilities: Accounts payable and accrued liabilities $ 265,367 $ 271,525 Payable to affiliates 50,197 26,298 Rents received in advance 21,719 98,037 Distributions payable to partners 217,935 441,682 Discounted lease rentals 2,507,862 4,231,393 ---------- ---------- Total liabilities 3,063,080 5,068,935 ---------- ---------- Partners' Capital: General partner - - Limited partners: Class A 1,737,497 2,519,669 Class B 1,129,382 1,101,064 ---------- ---------- Total partners' capital 2,866,879 3,620,733 ---------- ---------- Total liabilities and partners' capital $5,929,959 $8,689,668 ========== ========== The accompanying notes are an integral part of these financial statements. 3 LEASTEC INCOME FUND V A California Limited Partnership STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine months ended September 30, September 30, ----------------------------- ----------------------------- 1995 1994 1995 1994 ---------- ------------ ---------- ----------- Revenue: Operating lease rentals $ 729,031 $ 1,170,142 $ 2,621,424 $ 4,265,101 Direct finance lease income 56,591 91,340 189,022 283,980 Equipment sales margin 20,364 29,259 156,165 404,974 Interest income 1,853 5,139 9,646 21,879 --------- ----------- ----------- ----------- Total revenue 807,839 1,295,880 2,976,257 4,975,934 --------- ----------- ----------- ----------- Expenses: Depreciation and amortization 441,363 789,156 1,561,429 3,275,646 Provision for losses - - - 108,615 Management fees paid to general partner 45,384 74,629 159,838 257,576 Interest on discounted lease rentals 63,245 132,717 225,634 418,700 Direct services from general partner 16,474 22,778 59,278 71,598 General and administrative 44,035 70,765 155,085 184,032 --------- ----------- ----------- ----------- Total expenses 610,501 1,090,045 2,161,264 4,316,167 --------- ----------- ----------- ----------- Net income $ 197,338 $ 205,835 $ 814,993 $ 659,767 ========= =========== =========== =========== Net income allocated: To the general partner $ 19,747 $ 39,622 $ 77,960 $ 241,670 To the Class A limited partners 170,767 159,827 708,714 402,029 To the Class B limited partner 6,824 6,386 28,319 16,068 --------- ----------- ----------- ----------- $ 197,338 $ 205,835 $ 814,993 $ 659,767 ========= =========== =========== =========== Net income per weighted average Class A limited partner unit outstanding $ 0.86 $ 0.80 $ 3.58 $ 2.02 ========= =========== =========== =========== Weighted average Class A limited partner units outstanding 198,475 198,928 197,831 199,075 ========= =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 4 LEASTEC INCOME FUND V A California Limited Partnership STATEMENTS OF CASH FLOWS (Unaudited) Nine months ended ----------------------------- September 30, September 30, 1995 1994 ------------- ------------- Net cash provided by operating activities $ 3,049,440 $ 5,466,639 ----------- ----------- Cash flows from investing activities: Net cash used in investing activities - - ----------- ----------- Cash flows from financing activities: Proceeds from the discounting of lease rentals - 616,512 Principal payments on discounted lease rentals (1,723,531) (2,293,125) Redemptions of Class A limited partner units (9,909) (19,889) Distributions to partners (1,782,685) (5,575,416) ----------- ----------- Net cash used in financing activities (3,516,125) (7,271,918) ----------- ----------- Net decrease in cash and cash equivalents (466,685) (1,805,279) Cash and cash equivalents at beginning of period 702,210 2,360,404 ----------- ----------- Cash and cash equivalents at end of period $ 235,525 $ 555,125 =========== =========== Supplemental disclosure of cash flow information: Interest paid $ 225,634 $ 418,700 The accompanying notes are an integral part of these financial statements. 5 LEASTEC INCOME FUND V A California Limited Partnership NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by generally accepted accounting principles for annual financial statements. In the opinion of the general partner, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The balance sheet at December 31, 1994 has been derived from the audited financial statements included in the Partnership's 1994 Form 10-K. For further information, refer to the financial statements of Leastec Income Fund V, A California Limited Partnership (the "Partnership"), and the related notes, included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1994 (the "1994 Form 10-K"), previously filed with the Securities and Exchange Commission. 2. Equipment Purchases The Partnership is in its liquidation period, as defined in the Partnership Agreement and as set forth in the Prospectus, and made no equipment purchases during the nine months ended September 30, 1995. It is not anticipated that the Partnership will acquire any material amount of equipment in future periods. 6 LEASTEC INCOME FUND V A California Limited Partnership Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - --------------------- Presented below are schedules (prepared solely to facilitate the discussion of results of operations that follows) showing condensed statements of income categories and analyses of changes in those condensed categories derived from the Statements of Income:
Condensed Condensed Statements of Income Statements of Income for the Three Months The effect on for the Nine months The effect of ended September 30, net income of ended September 30, net income of ---------------------- changes between ------------------------ changes between 1995 1994 periods 1995 1994 periods -------- -------- ---------------- ---------- -------- --------------- Leasing margin $ 281,014 $ 339,609 $ (58,595) $ 1,023,383 $ 854,735 $ 168,648 Equipment sales margin 20,364 29,259 (8,895) 156,165 404,974 (248,809) Interest income 1,853 5,139 (3,286) 9,646 21,879 (12,233) Management fees paid to general partner, direct services from general partner and general and administrative expenses (105,893) (168,172) 62,279 (374,201) (513,206) 139,005 Provision for losses - - - - (108,615) 108,615 ---------- ---------- ---------- ----------- ---------- ---------- Net income $ 197,338 $ 205,835 $ (8,497) $ 814,993 $ 659,767 $ 155,226 ========== ========== ========== =========== ========== ==========
Leasing Margin - -------------- The Partnership is in its liquidation period, as set forth in the Prospectus, and as expected, the Partnership is not purchasing additional equipment, initial leases are expiring and the equipment is being remarketed (i.e., re-leased, renewed or sold). As a result, the size of the Partnership's leasing portfolio and the amount of leasing revenue is declining (referred to in this discussion as "portfolio run-off"). Leasing margin consists of the following:
Three months ended Nine months ended September 30, September 30, --------------------------- --------------------------- 1995 1994 1995 1994 ---------- ------------ ------------ ------------ Operating lease rentals $ 729,031 $ 1,170,142 $ 2,621,424 $ 4,265,101 Direct finance lease income 56,591 91,340 189,022 283,980 Depreciation and amortization (441,363) (789,156) (1,561,429) (3,275,646) Interest expense on discounted lease rentals (63,245) (132,717) (225,634) (418,700) ---------- ----------- ------------ ------------ Leasing margin $ 281,014 $ 339,609 $ 1,023,383 $ 854,735 ========== =========== ============ ============ Leasing margin ratio 36% 27% 36% 19% == == == ==
7 LEASTEC INCOME FUND V A California Limited Partnership Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Leasing Margin, (continued) - --------------------------- All components of leasing margin have declined and are expected to decline further, due to portfolio run-off. However, leasing margin increased for the nine months ended September 30, 1995 compared to the corresponding period in 1994 primarily due to remarketing activities, which include the rental proceeds from renewing, extending or re-leasing equipment before and after the end of the initial lease term. Leasing margin ratio increased primarily because of (a) remarketing activities, and (b) a portion of the Partnership's portfolio consists of operating leases financed with non-recourse debt. Leasing margin and leasing margin ratio for an operating lease financed with non-recourse debt increases during the term of the lease since rents and depreciation are typically fixed while interest expense declines as the related non-recourse debt is repaid. The ultimate rate of return on leases depends, in part, on the general level of interest rates at the time the leases are originated. Because leasing is an alternative to financing equipment purchases with debt, lease rates tend to rise and fall with interest rates (although lease rate movements generally lag interest rate movements in the capital market). Interest rates declined from 1990 until the early part of 1994. The lease rates on equipment purchased by the Partnership during that period reflect that low interest rate environment. This will result in corresponding reductions in the ultimate overall yields to partners. Equipment Sales Margin - ---------------------- Equipment sales margin consists of the following:
Three months ended Nine months ended September 30, September 30, ------------------------ --------------------------- 1995 1994 1995 1994 ---------- ---------- ---------- ------------ Equipment sale revenue $ 44,102 $ 57,216 $ 317,034 $ 1,498,650 Cost of equipment sales (23,738) (27,957) (160,869) (1,093,676) --------- --------- ---------- ------------ Gain on sale of equipment, net $ 20,364 $ 29,259 $ 156,165 $ 404,974 ========= ========= ========== ============
The Partnership is in its liquidation period. During the liquidation period, as initial leases terminate, equipment is remarketed (i.e., re-leased or sold to either the original lessee or a third party) and, accordingly, the timing and amount of equipment sales are difficult to predict. 8 LEASTEC INCOME FUND V A California Limited Partnership Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Provision for losses - -------------------- The remarketing of equipment for an amount greater than its net book value is reported as equipment sales margin (if the equipment is sold) or as leasing margin (if the equipment is released). The realization of less than the carrying value of equipment (which is typically not known until after the initial lease termination) is recorded as provision for loss. The Partnership performs ongoing quarterly assessments of its assets to identify any other-than-temporary losses in value. The provision for losses during the nine months ended September 30, 1994 primarily related to identified "other-than-temporary" losses in value of off-lease equipment, principally telecommunication equipment and semiconductor manufacturing equipment. Expenses - -------- Management fees paid to the general partner, direct services from general partner and general and administrative expenses, decreased due to portfolio run-off. Liquidity and Capital Resources - ------------------------------- The Partnership funded its operating activities principally with cash from rents, interest income and sale of off-lease equipment. Available cash and cash reserves of the Partnership are invested in interest bearing cash accounts and short-term U.S. government securities pending distributions to the partners. During the nine months ended September 30, 1995, the Partnership declared distributions to the partners of $1,558,938 (of which $217,935 was paid in October 1995). All of such distributions constituted a return of capital. Distributions may be characterized for tax, accounting and economic purposes as a return of capital, a return on capital or both. The total return on capital over a leasing partnership's life can only be determined at the termination of the Partnership after all residual cash flows (which include proceeds from the re-leasing and sale of equipment after initial lease terms expire) have been realized. However, the general partner currently anticipates all distributions to the partners are expected to be a return of capital. The general partner currently anticipates that the Partnership will generate cash flow from rentals and equipment sales during the remainder of 1995 which, when added to cash and cash equivalents on hand, should provide sufficient cash to enable the Partnership to meet its current operating requirements and to fund distributions to the Class A limited partners. Currently, distributions to the Class A limited partners are at an annualized rate of 3% on their capital contributions (all of which will constitute a return of capital). However, because the Partnership is in liquidation, cash distributions to the Class A limited partners will be based upon cash availability and will vary beginning in October 1995. 9 LEASTEC INCOME FUND V A California Limited Partnership Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Liquidity and Capital Resources, continued - ------------------------------------------ Cash distributions to the Class B limited partner are subordinated to the Class A limited partners receiving the distributions as scheduled in the Partnership Agreement. Therefore, because of the initial decrease in cash distributions to the Class A limited partners which occurred as of July 1, 1994, CAII, the sole Class B limited partner ceased receiving any distributions as a result of this subordination. 10 LEASTEC INCOME FUND V A California Limited Partnership PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) None (b) The Partnership did not file any reports on Form 8-K during the quarter ended September 30, 1995. 11 LEASTEC INCOME FUND V A California Limited Partnership Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LEASTEC INCOME FUND V A California Limited Partnership By: CAI Partners Management Company Dated: November 13, 1995 By: /s/John F. Olmstead ------------------- John F. Olmstead President and Director By: /s/John E. Christensen ---------------------- John E. Christensen Senior Vice President, Chief Administrative Officer and Director 12 EX-27 2 FDS
5 The schedule contains summary financial information extracted from the balance sheets and statements of income and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1995 SEP-30-1995 235,525 0 46,028 0 61,282 0 3,630,129 0 5,929,959 0 0 0 0 0 2,866,879 5,929,959 156,165 2,976,257 0 2,161,264 374,201 0 225,634 814,993 0 814,993 0 0 0 814,993 3.58 3.58
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