Page 1 of 11
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ----- ACT OF 1934
For the quarterly period ended June 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____________.
Commission File Number 0-11170
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PHOENIX LEASING GROWTH FUND 1982
- --------------------------------------------------------------------------------
Registrant
California 94-2735710
- ----------------------------------- ----------------------------------
State of Jurisdiction I.R.S. Employer Identification No.
2401 Kerner Boulevard, San Rafael, California 94901-5527
- --------------------------------------------------------------------------------
Address of Principal Executive Offices Zip Code
Registrant's telephone number, including area code: (415) 485-4500
--------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No _____
Page 2 of 11
Part I. Financial Information
-----------------------------
Item 1. Financial Statements
PHOENIX LEASING GROWTH FUND 1982
BALANCE SHEETS
(Amounts in Thousands Except for Unit Amounts)
(Unaudited)
June 30, December 31,
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 556 $ 1,078
Accounts receivable 12 27
Equipment on operating leases and held for
lease (net of accumulated depreciation
and obsolescence reserves of $578 at
June 30, 1996 and December 31, 1995) -- --
Investment in joint ventures 149 283
Securities, available-for-sale 55 60
Other assets 6 5
------- -------
Total Assets $ 778 $ 1,453
======= =======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 1,881 $ 1,949
------- -------
Total Liabilities 1,881 1,949
------- -------
Partners' Capital (Deficit):
General Partner (408) (410)
Limited Partners, 44,000 units authorized,
41,798 units issued and 40,343 units
outstanding at June 30, 1996 and
December 31, 1995 (704) (63)
Unrealized gains (losses) on
available-for-sale securities 9 (23)
------- -------
Total Partners' Capital (Deficit) (1,103) (496)
------- -------
Total Liabilities and Partners' Capital (Deficit) $ 778 $ 1,453
======= =======
The accompanying notes are an integral
part of these statements.
Page 3 of 11
PHOENIX LEASING GROWTH FUND 1982
STATEMENTS OF OPERATIONS
(Amounts in Thousands Except for Per Unit Amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Rental income $ 1 $ 68 $ 4 $ 145
Gain on sale of equipment -- 4 -- 11
Equity in earnings from
joint ventures, net 49 69 165 112
Gain on sale of securities 11 -- 11 --
Other income 10 17 17 30
----- ----- ----- -----
Total Income 71 158 197 298
----- ----- ----- -----
EXPENSES
Lease related operating expenses -- -- -- 8
Management fees to General Partner 3 9 4 15
Provision for losses on receivables -- (51) -- (52)
General and administrative expenses 11 18 25 35
----- ----- ----- -----
Total Expenses 14 (24) 29 6
----- ----- ----- -----
NET INCOME $ 57 $ 182 $ 168 $ 292
===== ===== ===== =====
NET INCOME PER LIMITED
PARTNERSHIP UNIT $1.40 $4.47 $4.13 $7.17
===== ===== ===== =====
DISTRIBUTIONS PER LIMITED
PARTNERSHIP UNIT $-- $-- $20.01 $30.31
===== ===== ===== =====
ALLOCATION OF NET INCOME:
General Partner $-- $ 2 $ 1 $ 3
Limited Partners 57 180 167 289
----- ----- ----- -----
$ 57 $ 182 $ 168 $ 292
===== ===== ===== =====
The accompanying notes are an integral
part of these statements.
Page 4 of 11
PHOENIX LEASING GROWTH FUND 1982
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Six Months Ended
June 30,
1996 1995
---- ----
Operating Activities:
Net income $ 168 $ 292
Adjustments to reconcile net income to net cash
used by operating activities:
Gain on sale of equipment -- (11)
Equity in earnings from joint ventures, net (165) (112)
Provision for early termination, financing leases -- (1)
Provision for losses on notes receivable -- (53)
Provision for doubtful accounts receivable -- 2
Decrease in accounts receivable 15 1
Decrease in accounts payable and accrued expenses (68) (317)
Decrease (increase) in other assets (1) 11
Gain on securities (11) --
------- -------
Net cash used by operating activities (62) (188)
------- -------
Investing Activities:
Principal payments, financing leases -- 1
Principal payments, notes receivable -- 62
Proceeds from sale of equipment -- 11
Distributions from joint ventures 299 164
Proceeds from sale of securities 48 --
------- -------
Net cash provided by investing activities 347 238
------- -------
Financing Activities:
Payments of principal, notes payable -- --
Distributions to partners (807) (1,223)
------- -------
Net cash used by financing activities (807) (1,223)
------- -------
Decrease in cash and cash equivalents (522) (1,173)
Cash and cash equivalents, beginning of period 1,078 1,975
------- -------
Cash and cash equivalents, end of period $ 556 $ 802
======= =======
The accompanying notes are an integral
part of these statements.
Page 5 of 11
PHOENIX LEASING GROWTH FUND 1982
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. General.
The accompanying unaudited condensed financial statements have
been prepared by the Partnership in accordance with generally accepted
accounting principles, pursuant to the rules and regulations of the Securities
and Exchange Commission. In the opinion of Management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Although management believes that the
disclosures are adequate to make the information presented not misleading, it is
suggested that these condensed financial statements be read in conjunction with
the financial statements and the notes included in the Partnership's Financial
Statement, as filed with the SEC in the latest annual report on Form 10-K.
Note 2. Reclassification.
Reclassification - Certain 1995 amounts have been reclassified to
conform to the 1996 presentation.
Note 3. Income Taxes.
Federal and state income tax regulations provide that taxes on the
income or loss of the Partnership are reportable by the partners in their
individual income tax returns. Accordingly, no provision for such taxes has been
made in the accompanying financial statements.
Note 4. Net Income (Loss) and Distributions per Limited Partnership Unit.
Net income and distributions per limited partnership unit were
based on the limited partners' share of net income and distributions, and the
weighted average number of units outstanding of 40,343 for the six month periods
ended June 30, 1996 and 1995. For purposes of allocating income (loss) and
distributions to each individual limited partner, the Partnership allocates net
income (loss) and distributions based upon each respective limited partner's
ending capital account balance. The use of this method accurately reflects each
limited partner's participation in the partnership including reinvestment
through the Capital Accumulation Plan. As a result, the calculation of net
income (loss) and distributions per limited partnership unit is not indicative
of per unit income (loss) and distributions due to reinvestments through the
Capital Accumulation Plan.
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Note 5. Investment in Joint Ventures.
Equipment Joint Ventures
- ------------------------
The aggregate combined statements of operations of the equipment
joint ventures is presented below:
COMBINED STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Rental income $ 735 $1,217 $1,407 $2,136
Gain on sale of equipment 295 298 543 876
Other income 41 49 82 109
------ ------ ------ ------
Total income 1,071 1,564 2,032 3,121
------ ------ ------ ------
EXPENSES
Depreciation 84 113 173 460
Lease related operating expenses 420 800 884 1,531
Management fees to General Partner 36 62 68 126
General and administrative expenses 2 4 5 8
------ ------ ------ ------
Total expenses 542 979 1,130 2,125
------ ------ ------ ------
Net income $ 529 $ 585 $ 902 $ 996
====== ====== ====== ======
Financing Joint Ventures
- ------------------------
The aggregate combined statements of operations of the financing joint
ventures is presented below:
COMBINED STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Interest income - notes receivable $ 6 $ 21 $ 24 $ 48
Other income 16 62 18 67
---- ---- ---- ----
Total income 22 83 42 115
---- ---- ---- ----
EXPENSES
Management fees to General Partner 1 4 1 5
General and administrative expenses 2 5 7 12
---- ---- ---- ----
Total expenses 3 9 8 17
---- ---- ---- ----
Net income $ 19 $ 74 $ 34 $ 98
==== ==== ==== ====
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Foreclosed Cable Systems Joint Venture
- --------------------------------------
The statements of operations of the foreclosed cable systems joint
venture is presented below:
STATEMENTS OF OPERATIONS
(Amounts in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
INCOME
Subscriber revenue $ -- $ 174 $ 54 $ 343
Gain (adjustment to gain) on sale
of cable system (35) -- 1,205 --
Other income 1 2 10 6
------ ------ ------ ------
Total income (34) 176 1,269 349
------ ------ ------ ------
EXPENSES
Depreciation and amortization -- 38 13 77
Program services -- 43 12 87
Management fees to an affiliate of
the General Partner 1 8 121 16
General and administrative expenses -- 47 46 102
Provision for losses on accounts
receivable -- 2 -- 3
------ ------ ------ ------
Total expenses 1 138 192 285
------ ------ ------ ------
Net income (loss) $ (35) $ 38 $1,077 $ 64
====== ====== ====== ======
Page 8 of 11
PHOENIX LEASING GROWTH FUND 1982
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
Phoenix Leasing Growth Fund 1982 (the Partnership) reported net income
of $57,000 and $168,000 for the three and six months ended June 30, 1996,
respectively, compared to net income of $182,000 and $292,000 during the same
periods in the prior year. The decrease in earnings is primarily attributable to
a decrease in rental income.
Total revenues decreased by $87,000 and $101,000 for the three and six
months ended June 30, 1996, respectively, compared to the same periods in the
prior year. The decrease in total revenues is primarily due to a decrease in
rental income. The increase in earnings from joint ventures during the six
months ended June 30, 1996 will be discussed under "Joint Ventures". Rental
income decreased by $67,000 and $141,000 for the three and six months ended June
30, 1996, respectively, compared to the same periods in 1995. The increase for
the three and six months ended June 30, 1995 is primarily the result of the
recognition of prepaid rent that had previously been recorded as a liability.
During the three months ended June 30, 1995, it was determined that these
payments were no longer a liability and the amount was subsequently recognized
as rental income. An additional factor contributing to the increase in rental
income for the six months ended June 30, 1995 is the recognition of a mandatory
purchase option which came due on one of the Partnership's leases.
Because the Partnership is in its liquidation stage, it is not expected
to acquire any additional equipment. As a result, rental revenues are expected
to continue to decline as the portfolio is liquidated and the remaining
equipment is re-leased at lower rental rates. At June 30, 1996, the Partnership
owned equipment with an aggregate original cost of $722,000 compared to
$1,348,000 at June 30, 1995.
Total expenses increased by $38,000 and $23,000 during the three and
six months ended June 30, 1996, respectively, compared to the same periods in
1995. The increase is primarily attributable to an adjustment to the provision
for losses on receivables of $53,000 made during 1995. This downward adjustment
to the provision for losses on receivables, which resulted in the recognition of
income, was made upon the settlement of a defaulted note receivable during the
second quarter of 1995. Most other expense items decreased during the three and
six months ended June 30, 1996, as compared to the same period in 1995.
The receipt of a settlement from a defaulted note receivable from a
cable television system operator, as well as increased rental income, resulted
in higher management fees for both the three and six months ended June 30, 1995.
Joint Ventures
The Partnership has made investments in various equipment and financing
joint ventures along with other affiliated partnerships managed by the General
Partner for the purpose of spreading the risk of investing in certain equipment
leasing and financing transactions. These joint ventures are not currently
making any significant additional investments in new equipment leasing or
financing transactions. As a result, the earnings and cash flow from such
investments are anticipated to continue to decline as the portfolios are
re-leased at lower rental rates and eventually liquidated.
Page 9 of 11
The increase in earnings from joint ventures of $53,000 and the increase
in distributions from joint ventures of $135,000 for the six months ended June
30, 1996, as compared to the same period in the previous year, is primarily due
to the sale of a cable system in one of the foreclosed cable systems joint
ventures in which the Partnership has an interest.
Liquidity and Capital Resources
The Partnership reported net cash used by leasing and financing
activities of $62,000 and $125,000 for the six months ended June 30, 1996 and
1995. The decrease experienced during the six months ended June 30, 1995 was the
result of a payment of $200,000 in liquidation fees paid to the General Partner
as compared to $65,000 of payments made during the six months ended June 30,
1996.
During the six months ended June 30, 1996, the Partnership received
cash distributions of $181,000 from foreclosed cable systems joint ventures, as
compared to cash distributions of $8,000 from foreclosed cable systems joint
ventures during the same period in 1995. This increase in distributions is
attributable to the distribution of the sale proceeds from the sale of a cable
television system owned by one of these joint ventures during the first quarter
of 1996.
In contrast, cash distributions from equipment and financing joint
ventures decreased by $38,000 for the six months ended June 30, 1996, compared
to the same period in 1995. The decrease is primarily due to a decrease in cash
available.
As of June 30, 1996, the Partnership had equipment held for lease with
a purchase price of $722,000 and a net book value of $0 compared to $1,102,000
and $0 at June 30, 1995. The General Partner is actively engaged, on behalf of
the Partnership, in remarketing and selling the Partnership's off-lease
equipment portfolio.
The Limited Partners received cash distributions of $807,000 and
$1,223,000 during the six months ended June 30, 1996 and 1995, respectively. As
a result, the cumulative cash distributions to the Limited Partners are
$38,467,000 and $37,660,000 as of June 30, 1996 and 1995, respectively. The
General Partner did not receive cash distributions for the periods ended June
30, 1996 and 1995.
Distributions to partners are being made annually on January 15. The
distribution made on January 15, 1996 was made at a lower rate than the 1995
distribution.
Cash generated from leasing and financing operations has been and is
anticipated to continue to be sufficient to meet the Partnership's continuing
operational expenses.
Page 10 of 11
PHOENIX LEASING GROWTH FUND 1982
June 30, 1996
Part II. Other Information.
------------------
Item 1. Legal Proceedings. Inapplicable.
Item 2. Changes in Securities. Inapplicable
Item 3. Defaults Upon Senior Securities. Inapplicable
Item 4. Submission of Matters to a Vote of Securities Holders.Inapplicable
Item 5. Other Information. Inapplicable
Item 6. Exhibits and Reports on 8-K:
a) Exhibits:
(27) Financial Data Schedule
b) Reports on 8-K: None
Page 11 of 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PHOENIX LEASING GROWTH FUND 1982
--------------------------------
(Registrant)
Date Title Signature
---- ----- ---------
August 13, 1996 Chief Financial Officer, /S/ PARITOSH K. CHOKSI
- --------------- Senior Vice President ----------------------
and Treasurer of (Paritosh K. Choksi)
Phoenix Leasing Incorporated
General Partner
August 13, 1996 Senior Vice President, /S/ BRYANT J. TONG
- --------------- Financial Operations ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Incorporated
General Partner
August 13, 1996 Partnership Controller /S/ MICHAEL K. ULYATT
- --------------- Phoenix Leasing Incorporated ----------------------
General Partner (Michael K. Ulyatt)