-----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, TScMicuUCdJwpZa0Y81OjhPiibkz8MixT0Q4RIrOS/l09+Uls6sPKMc0Z6MCRHIT 4tPBVNzjciOwxvmWLlzmrg== 0000912057-96-026452.txt : 19961118 0000912057-96-026452.hdr.sgml : 19961118 ACCESSION NUMBER: 0000912057-96-026452 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN INCOME PARTNERS V D LTD PARTNERSHIP CENTRAL INDEX KEY: 0000847560 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 043090151 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19135 FILM NUMBER: 96665028 BUSINESS ADDRESS: STREET 1: 98 NORTH WASHINGTON ST. CITY: BOSTON STATE: MA ZIP: 02114 BUSINESS PHONE: 6175421200 MAIL ADDRESS: STREET 1: 98 N WASHINGTON STREET CITY: BOSTON STATE: MA ZIP: 02114 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 _________________________________________________ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to _____________________ _____________________ For Quarter Ended September 30, 1996 Commission File No. 0-19135 American Income Partners V-D Limited Partnership _______________________________________________________________________________ (Exact name of registrant as specified in its charter) Massachusetts 04-3090151 ________________________________________ ___________________ (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 98 North Washington Street, Boston, MA 02114 ________________________________________ ___________________ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 854-5800 _____________________________ _______________________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report.) 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 requirements for the past 90 days. Yes X No ------ ------ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court 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 ----- ----- AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP FORM 10-Q INDEX Page ---- PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Statement of Financial Position at September 30, 1996 and December 31, 1995 3 Statement of Operations for the three and nine months ended September 30, 1996 and 1995 4 Statement of Cash Flows for the nine months ended September 30, 1996 and 1995 5 Notes to the Financial Statements 6-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-12 PART II. OTHER INFORMATION: Items 1 - 6 13 2 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP STATEMENT OF FINANCIAL POSITION September 30, 1996 and December 31, 1995 (Unaudited)
September 30, December 31, 1996 1995 ------------- ------------ ASSETS Cash and cash equivalents $3,255,841 $1,108,982 Rents receivable 62,395 49,874 Accounts receivable - affiliate 69,376 130,677 Equipment at cost, net of accumulated depreciation of $5,389,409 and $9,947,876 at September 30, 1996 and December 31, 1995, respectively 1,762,230 2,842,904 ---------- ---------- Total assets $5,149,842 $4,132,437 ---------- ---------- ---------- ---------- LIABILITIES AND PARTNERS' CAPITAL Notes payable $ 335,557 $ 86,802 Accrued interest 7,643 2,029 Accrued liabilities 18,750 20,000 Accrued liabilities - affiliate 5,044 11,673 Deferred rental income 201,138 203,248 Cash distributions payable to partners 1,829,918 252,751 ---------- ---------- Total liabilities 2,398,050 576,503 ---------- ---------- Partners' capital (deficit): General Partner (394,463) (354,256) Limited Partnership Interests (480,227 Units; initial purchase price of $25 each) 3,146,255 3,910,190 ---------- ---------- Total partners' capital 2,751,792 3,555,934 ---------- ---------- Total liabilities and partners' capital $5,149,842 $4,132,437 ---------- ---------- ---------- ----------
The accompanying notes are an integral part of these financial statements. 3 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP STATEMENT OF OPERATIONS for the three and nine months ended September 30, 1996 and 1995 (Unaudited)
Three Months Nine Months Ended September 30, Ended September 30, 1996 1995 1996 1995 ---- ---- ---- ---- Income: Lease revenue $ 762,891 $523,410 $1,577,362 $1,627,330 Interest income 34,894 10,988 69,964 31,341 Gain on sale of equipment 474,581 119,552 530,328 124,998 ---------- ---------- ---------- ---------- Total income 1,272,366 653,950 2,177,654 1,783,669 ---------- ---------- ---------- ---------- Expenses: Depreciation and amortization 142,954 336,818 619,178 1,142,753 Interest expense 7,643 9,944 7,643 53,635 Equipment management fees - affiliate 37,171 22,605 80,561 68,477 Operating expenses - affiliate 26,707 36,298 65,370 94,030 ---------- ---------- ---------- ---------- Total expenses 214,475 405,665 772,752 1,358,895 ---------- ---------- ---------- ---------- Net income $1,057,891 $248,285 $1,404,902 $ 424,774 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income per limited partnership unit $ 2.09 $ 0.49 $ 2.78 $ 0.84 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Cash distributions declared per limited partnership unit $ 3.62 $ 0.50 $ 4.37 $ 1.50 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
The accompanying notes are an integral part of these financial statements. 4 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP STATEMENT OF CASH FLOWS for the nine months ended September 30, 1996 and 1995 (Unaudited)
1996 1995 ---- ---- Cash flows from (used in) operating activities: Net income $1,404,902 $ 424,774 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 619,178 1,142,753 Gain on sale of equipment (530,328) (124,998) Changes in assets and liabilities Decrease (increase) in: rents receivable (12,521) 79,179 accounts receivable - affiliate 61,301 54,520 Increase (decrease) in: accrued interest 5,614 (11,156) accrued liabilities (1,250) (1,750) accrued liabilities - affiliate (6,629) (80,880) deferred rental income (2,110) (19,909) ---------- ---------- Net cash from operating activities 1,538,157 1,462,533 ---------- ---------- Cash flows from investing activities: Proceeds from equipment sales 1,327,381 207,605 ---------- ---------- Net cash from investing activities 1,327,381 207,605 ---------- ---------- Cash flows used in financing activities: Principal payments - notes payable (86,802) (838,076) Distributions paid (631,877) (821,441) ---------- ---------- Net cash used in financing activities (718,679) (1,659,517) ---------- ---------- Net increase in cash and cash equivalents 2,146,859 10,621 Cash and cash equivalents at beginning of period 1,108,982 896,516 ---------- ---------- Cash and cash equivalents at end of period $3,255,841 $ 907,137 ---------- ---------- ---------- ---------- Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 2,029 $ 64,791 ---------- ---------- ---------- ---------- Supplemental disclosure of non-cash investing and financing activities: See Note 4 to the Financial Statements.
The accompanying notes are an integral part of these financial statements. 5 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP Notes to the Financial Statements September 30, 1996 (Unaudited) NOTE 1 - BASIS OF PRESENTATION The financial statements presented herein are prepared in conformity with generally accepted accounting principles and the instructions for preparing Form 10-Q under Rule 10-01 of Regulation S-X of the Securities and Exchange Commission and are unaudited. As such, these financial statements do not include all information and footnote disclosures required under generally accepted accounting principles for complete financial statements and, accordingly, the accompanying financial statements should be read in conjunction with the footnotes presented in the 1995 Annual Report. Except as disclosed herein, there has been no material change to the information presented in the footnotes to the 1995 Annual Report. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary to present fairly the financial position at September 30, 1996 and December 31, 1995 and results of operations for the three and nine month periods ended September 30, 1996 and 1995 have been made and are reflected. NOTE 2 - CASH At September 30, 1996, the Partnership had $3,135,000 invested in reverse repurchase agreements secured by U.S. Treasury Bills or interests in U.S. Government securities. NOTE 3 - REVENUE RECOGNITION Rents are payable to the Partnership monthly, quarterly or semi-annually and no significant amounts are calculated on factors other than the passage of time. The leases are accounted for as operating leases and are noncancellable. Rents received prior to their due dates are deferred. Future minimum rents of $616,424 are due as follows: For the year ending September 30, 1997 $257,221 1998 120,639 1999 86,528 2000 84,778 2001 67,258 --------- Total $616,424 --------- --------- NOTE 4 - EQUIPMENT The following is a summary of equipment owned by the Partnership at September 30, 1996. In the opinion of American Finance Group ("AFG"), the acquisition cost of the equipment did not exceed its fair market value. 6 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP Notes to the Financial Statements (Continued) Lease Term Equipment Equipment Type (Months) at Cost - ------------------------------------- ---------- ---------- Locomotives 78 $1,656,854 Materials handling 1-60 1,582,923 Aircraft 1-19 1,160,990 Furniture and fixtures 60-84 686,786 Computers and peripherals 12-60 371,579 Construction and mining 12-60 364,308 Trailers and intermodal containers 12-60 357,884 Tractors and heavy duty trucks 24-60 301,746 Manufacturing 60 268,764 Communications 23-60 229,633 Research and test 9-24 105,805 Motor vehicles 60 64,367 ---------- Total equipment cost 7,151,639 Accumulated depreciation (5,389,409) ---------- Equipment, net of accumulated depreciation $1,762,230 ---------- ---------- During the three months ended March 31, 1996 the Partnership transferred its ownership interest in a trailer, previously leased to The Atchison Topeka and Santa Fe Railroad, having a net book value of $6,787, to a third party for cash consideration of $8,750 which resulted in a net gain of $1,963. The gain was deferred in anticipation of completing a like-kind exchange during the three months ended June 30, 1996. The Partnership intended to replace this trailer with a comparable trailer and lease such equipment to a new lessee. The Partnership had accounted for this transaction as a like-kind exchange for income tax reporting purposes. Accordingly, the net cash consideration of $8,750 was deposited in a special-purpose escrow account through a third-party Exchange Agent pending completion of the equipment exchange. The Partnership subsequently elected not to replace the trailer and, accordingly, the deferred gain of $1,963 was recognized as Gain on Sale of Equipment on the Statement of Operations during the second quarter of 1996. In addition, the cash consideration of $8,750, which was reported as Contractual Right for Equipment on the Statement of Financial Position at March 31, 1996, was recognized as proceeds from equipment sales. During July 1996, the Partnership transferred its ownership interest in certain additional trailers, previously leased to The Atchison Topeka and Santa Fe Railroad, to a third party for cash consideration of $60,170. The trailers had a net book value of $22,808 at the time of the transfer, which resulted in a net gain of $37,362. In September 1996, the Partnership replaced these trailers with comparable trailers and leased such to a new lessee. The transaction was accounted for as a like-kind exchange for income tax reporting purposes. The cost of the new trailers, $357,884, was reduced by $36,574, representing the proportionate amount of gain deferred on the original trailers. The Partnership funded this transaction with $58,901 of cash consideration and long-term financing of $335,557. The unused cash consideration of $1,269 was recognized as proceeds from equipment sales. The associated deferred gain of $788 was recognized as Gain on Sale of Equipment on the Statement of Operations for the three months ended September 30, 1996. At September 30, 1996, the Partnership's equipment portfolio included equipment having a proportionate original cost of $2,989,926 representing approximately 42% of total equipment cost. 7 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP Notes to the Financial Statements (Continued) The summary above includes equipment held for sale or re-lease with an original cost and net book value of approximately $1,696,000 and $482,000, respectively, at September 30, 1996. The General Partner is actively seeking the sale or re-lease of all equipment not on lease. NOTE 5 - RELATED PARTY TRANSACTIONS All operating expenses incurred by the Partnership are paid by AFG on behalf of the Partnership and AFG is reimbursed at its actual cost for such expenditures. Fees and other costs incurred during each of the nine month periods ended September 30, 1996 and 1995, which were paid or accrued by the Partnership to AFG or its Affiliates, are as follows: 1996 1995 ---- ---- Equipment management fees $ 80,561 $ 68,477 Administrative charges 15,408 15,408 Reimbursable operating expenses due to third parties 49,962 78,622 -------- -------- Total $145,931 $162,507 -------- -------- -------- -------- All rents and proceeds from the sale of equipment are paid directly to either AFG or to a lender. AFG temporarily deposits collected funds in a separate interest-bearing escrow account prior to remittance to the Partnership. At September 30, 1996, the Partnership was owed $69,376 by AFG for such funds and the interest thereon. These funds were remitted to the Partnership in October 1996. NOTE 6 - NOTES PAYABLE Notes payable at September 30, 1996 consisted of installment notes payable to banks of $335,557. The installment notes are non-recourse, with interest rates ranging between 9.75% and 9.9% and are collateralized by the equipment and assignment of the related lease payments. All of the notes were originated in connection with the like-kind exchange transaction (see Note 4) and will be fully amortized by noncancellable rents. The carrying amount of notes payable approximates fair value at September 30, 1996. The annual maturities of the installment notes payable are as follows: For the year ending September 30, 1997 $ 68,030 1998 61,189 1999 64,438 2000 77,461 2001 64,439 -------- Total $335,557 -------- -------- 8 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP FORM 10-Q PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995: OVERVIEW As an equipment leasing partnership, the Partnership was organized to acquire a diversified portfolio of capital equipment subject to lease agreements with third parties. The Partnership was designed to progress through three principal phases: acquisitions, operations, and liquidation. During the operations phase, a period of approximately six years, all equipment in the Partnership's portfolio will progress through various stages. Initially, all equipment will generate rental revenues under primary term lease agreements. During the life of the Partnership, these agreements will expire on an intermittent basis and equipment held pursuant to the related leases will be renewed, re-leased or sold, depending on prevailing market conditions and the assessment of such conditions by AFG to obtain the most advantageous economic benefit. Over time, a greater portion of the Partnership's original equipment portfolio will become available for remarketing and cash generated from operations and from sales or refinancings will begin to fluctuate. Ultimately, all equipment will be sold and the Partnership will be dissolved. The Partnership's operations commenced in 1990. RESULTS OF OPERATIONS For the three and nine months ended September 30, 1996, the Partnership recognized lease revenue of $762,891 and $1,577,362, respectively, compared to $523,410 and $1,627,330 for the same periods in 1995. Lease revenue increased during the three months ended September 30, 1996, due to the receipt of $516,712 of lease termination rents received in connection with the sale of the Partnership's interest in two Boeing 727-251 Advanced aircraft in July 1996 (see discussion below). The overall decrease in lease revenue from 1995 to 1996 was expected and resulted principally from primary lease term expirations and the sale of equipment. The Partnership also earns interest income from temporary investments of rental receipts and equipment sales proceeds in short-term instruments. The Partnership's equipment portfolio includes certain assets in which the Partnership holds a proportionate ownership interest. In such cases, the remaining interests are owned by AFG or an affiliated equipment leasing program sponsored by AFG. Proportionate equipment ownership enables the Partnership to further diversify its equipment portfolio by participating in the ownership of selected assets, thereby reducing the general levels of risk which could result from a concentration in any single equipment type, industry or lessee. The Partnership and each affiliate individually report, in proportion to their respective ownership interests, their respective shares of assets, liabilities, revenues, and expenses associated with the equipment. For the three and nine months ended September 30, 1996, the Partnership sold equipment having a net book value of $752,405 and $789,785, respectively, to existing lessees and third parties. These sales resulted in net gains for financial statement purposes of $473,793 and $527,577, respectively. These equipment sales included the sale of the Partnership's interest in two Boeing 727-251 Advanced aircraft with an original cost and net book value of $4,536,732 and $740,021, respectively, sold to the existing lessee in July 1996. In connection with this sale, the Partnership realized sale proceeds of $1,195,994, which resulted in a net gain, for financial statement purposes, of $455,973. This equipment was sold prior to the expiration of the related lease term, resulting in the receipt by the Partnership of lease termination rents, described above. 9 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP FORM 10-Q PART I. FINANCIAL INFORMATION During the three months ended March 31, 1996, the Partnership transferred its ownership interest in a trailer previously leased to The Atchison Topeka and Santa Fe Railroad. The Partnership intended to replace the trailer with a comparable trailer and account for the transaction as a like-kind exchange for income tax reporting purposes. A gain of $1,963, was deferred in anticipation of completing the exchange during the three months ended June 30, 1996. The Partnership subsequently elected not to replace the trailer and, accordingly, the deferred gain of $1,963 was recognized as Gain on Sale of Equipment on the Statement of Operations during the second quarter of 1996. During July 1996, the Partnership transferred its ownership interest in certain additional trailers to a third party for cash consideration of $60,170 (See Note 4 to the financial statements). The trailers had a net book value of $22,808 at the time of the transfer, resulting in a net gain of $37,362. In September 1996, the Partnership replaced these trailers with comparable trailers and leased such to a new lessee. The transaction was accounted for as a like-kind exchange for income tax reporting purposes. The cost of the new trailers, $357,884, was reduced by $36,574, representing the proportionate amount of gain deferred on the original trailers. The Partnership funded this transaction with $58,901 of cash consideration and long-term financing of $335,557. The unused cash consideration of $1,269 was recognized as proceeds from equipment sales. The associated deferred gain of $788 was recognized as Gain on Sale of Equipment on the Statement of Operations for the three months ended September 30, 1996. For the three and nine months ended September 30, 1995, the Partnership sold equipment having a net book value of $51,299 and $82,607, respectively, to existing lessees and third parties. These sales resulted in net gains, for financial statement purposes, of $119,552 and $124,998, respectively. It cannot be determined whether future sales of equipment will result in a net gain or a net loss to the Partnership, as such transactions will be dependent upon the condition and type of equipment being sold and its marketability at the time of sale. In addition, the amount of gain or loss reported for financial statement purposes is partly a function of the amount of accumulated depreciation associated with the equipment being sold. The ultimate realization of residual value for any type of equipment is dependent upon many factors, including AFG's ability to sell and re-lease equipment. Changing market conditions, industry trends, technological advances, and many other events can converge to enhance or detract from asset values at any given time. AFG attempts to monitor these changes in order to identify opportunities which may be advantageous to the Partnership and which will maximize total cash returns for each asset. The total economic value realized upon final disposition of each asset is comprised of all primary lease term revenue generated from that asset, together with its residual value. The latter consists of cash proceeds realized upon the asset's sale in addition to all other cash receipts obtained from renting the asset on a re-lease, renewal or month-to-month basis. The Partnership classifies such residual rental payments as lease revenue. Consequently, the amount of gain or loss reported in the financial statements is not necessarily indicative of the total residual value the Partnership achieved from leasing the equipment. Depreciation and amortization expense was $142,954 and $619,178 for the three and nine months ended September 30, 1996, respectively, compared to $336,818 and $1,142,753 for the same periods in 1995. For financial reporting purposes, to the extent that an asset is held on primary lease term, the Partnership depreciates the difference between (i) the cost of the asset and (ii) the estimated residual value of the asset on a straight-line basis over such term. For purposes of this policy, estimated residual values represent estimates of equipment values at the date of primary lease expiration. To the extent that an asset is held beyond its primary lease term, 10 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP FORM 10-Q PART I. FINANCIAL INFORMATION the Partnership continues to depreciate the remaining net book value of the asset on a straight-line basis over the asset's remaining economic life. Interest expense was $7,643 during each of the three and nine months ended September 30, 1996 (1% and less than 1% of lease revenue for the respective periods). In 1995, interest expense was $9,944 and $53,635 or 1.9% and 3.3% of lease revenue for the same periods. Interest expense in 1996 resulted from financing obtained from a third-party lender in connection with the like-kind exchange transaction which occurred during the three months ended September 30, 1996, described above. Interest expense in future periods will decline as the principal balance of notes payable is reduced through the application of rent receipts to outstanding debt. Management fees were 4.9% and 5.1% of lease revenue for the three and nine months ended September 30, 1996, respectively, compared to 4.3% and 4.2% of lease revenue for the same periods in 1995. Management fees during the nine months ended September 30, 1996 include $4,617, resulting from an underaccrual in 1995. Management fees are based on 5% of gross lease revenue generated by operating leases and 2% of gross lease revenue generated by full payout leases. Operating expenses consist principally of administrative charges, professional service costs, such as audit and legal fees, as well as printing, distribution and remarketing expenses. In certain cases, equipment storage or repairs and maintenance costs may be incurred in connection with equipment being remarketed. Collectively, operating expenses represented 3.5% and 4.1% of lease revenue for the three and nine months ended September 30, 1996, respectively, compared to 6.9% and 5.8%, respectively, of lease revenue for the same periods in 1995. The amount of future operating expenses cannot be predicted with certainty; however, such expenses are usually higher during the acquisition and liquidation phases of a partnership. Other fluctuations typically occur in relation to the volume and timing of remarketing activities. LIQUIDITY AND CAPITAL RESOURCES AND DISCUSSION OF CASH FLOWS The Partnership by its nature is a limited life entity which was established for specific purposes described in the preceding "Overview". As an equipment leasing program, the Partnership's principal operating activities derive from asset rental transactions. Accordingly, the Partnership's principal source of cash from operations is provided by the collection of periodic rents. These cash inflows are used to satisfy debt service obligations associated with leveraged leases, and to pay management fees and operating costs. Operating activities generated net cash inflows of $1,538,157 and $1,462,533 for the nine months ended September 30, 1996 and 1995, respectively. Future renewal, re-lease and equipment sale activities will cause a decline in the Partnership's lease revenue and corresponding sources of operating cash. Overall, expenses associated with rental activities, such as management fees, and net cash flow from operating activities will also decline as the Partnership experiences a higher frequency of remarketing events. Ultimately, the Partnership will dispose of all assets under lease. This will occur principally through sale transactions whereby each asset will be sold to the existing lessee or to a third party. Generally, this will occur upon expiration of each asset's primary or renewal/re-lease term. In certain instances, casualty or early termination events may result in the disposal of an asset. Such circumstances are infrequent and usually result in the collection of stipulated cash settlements pursuant to terms and conditions contained in the underlying lease agreements. Cash realized from asset disposal transactions is reported under investing activities on the accompanying Statement of Cash Flows. During the nine months ended September 30, 1996, the Partnership realized 11 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP FORM 10-Q PART I. FINANCIAL INFORMATION $1,327,381 in equipment sale proceeds compared to $207,605 for the same period in 1995. Future inflows of cash from asset disposals will vary in timing and amount and will be influenced by many factors including, but not limited to, the frequency and timing of lease expirations, the type of equipment being sold, its condition and age, and future market conditions. The Partnership obtained long-term financing in connection with certain equipment leases. The repayments of principal related to such indebtedness is reported as a component of financing activities. Each note payable is recourse only to the specific equipment financed and to the minimum rental payments contracted to be received during the debt amortization period (which period generally coincides with the lease rental term). As rental payments are collected, a portion or all of the rental payment is used to repay the associated indebtedness. In September 1996, the Partnership obtained additional long-term financing in connection with the like-kind exchange transaction involving certain trailers (see Results of Operations). Cash distributions to the General Partner and Recognized Owners are declared and generally paid within fifteen days following the end of each calendar quarter. The payment of such distributions is presented as a component of financing activities. For the nine months ended September 30, 1996, the Partnership declared total cash distributions of Distributable Cash From Operations and Distributable Cash From Sales and Refinancings of $2,209,044. In accordance with the Amended and Restated Agreement and Certificate of Limited Partnership, the Recognized Owners were allocated 95% of these distributions, or $2,098,592, and the General Partner was allocated 5%, or $110,452. The third quarter 1996 cash distribution was paid on October 15, 1996. Cash distributions paid to the Recognized Owners consist of both a return of and a return on capital. To the extent that cash distributions consist of Cash From Sales or Refinancings, substantially all of such cash distributions should be viewed as a return of capital. Cash distributions do not represent and are not indicative of yield on investment. Actual yield on investment cannot be determined with any certainty until conclusion of the Partnership and will be dependent upon the collection of all future contracted rents, the generation of renewal and/or re-lease rents, and the residual value realized for each asset at its disposal date. Future market conditions, technological changes, the ability of AFG to manage and remarket the assets, and many other events and circumstances, could enhance or detract from individual asset yields and the collective performance of the Partnership's equipment portfolio. The future liquidity of the Partnership will be influenced by the foregoing and will be greatly dependent upon the collection of contractual rents and the outcome of residual activities. The General Partner anticipates that cash proceeds resulting from these sources will satisfy the Partnership's future expense obligations. However, the amount of cash for distribution in future periods will fluctuate. Equipment lease expirations and asset disposals will cause the Partnership's net cash from operating activities to diminish over time; and equipment sale proceeds will vary in amount and period of realization. In addition, the Partnership may be required to incur asset refurbishment or upgrade costs in connection with future remarketing activities. Accordingly, fluctuations in the level of quarterly cash distributions will occur during the life of the Partnership. 12 AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP FORM 10-Q PART II. OTHER INFORMATION Item 1. Legal Proceedings Response: None Item 2. Changes in Securities Response: None Item 3. Defaults upon Senior Securities Response: None Item 4. Submission of Matters to a Vote of Security Holders Response: None Item 5. Other Information Response: None Item 6(a). Exhibits Response: None Item 6(b). Reports on Form 8-K Response: None 13 SIGNATURE PAGE Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on behalf of the registrant and in the capacity and on the date indicated. AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP By: AFG Leasing IV Incorporated, a Massachusetts corporation and the General Partner of the Registrant. By: /s/ Michael J. Butterfield ----------------------------------- Michael J. Butterfield Treasurer of AFG Leasing IV Incorporated (Duly Authorized Officer and Principal Accounting Officer) Date: November 14, 1996 ----------------------------------- By: /s/ Gary M. Romano ----------------------------------- Gary M. Romano Clerk of AFG Leasing IV Incorporated (Duly Authorized Officer and Principal Financial Officer) Date: November 14, 1996 ----------------------------------- 14 EX-27 2 EXHIBIT 27
5 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 3,255,841 0 131,771 0 0 3,387,612 7,151,639 5,389,409 5,149,842 2,062,493 335,557 0 0 0 2,751,792 5,149,842 1,577,362 2,177,654 0 0 765,109 0 7,643 1,404,902 0 1,404,902 0 0 0 1,404,902 0 0
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