UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the United States Securities Exchange Act of 1934
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For Quarter Ended March 31, 1996 Commission File No. 2-84106
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(Exact name of registrant as specified in its charter)
Massachusetts 04-2794296
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Financial Center, 21st Floor, Boston, MA 02111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 482-8000
----------------
Not Applicable
(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 ___
There are no Exhibits.
Page 1 of 11
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
INDEX Page No.
Part I. FINANCIAL INFORMATION
Financial Statements
Balance Sheets as of March 31, 1996 and December 31, 1995 3
Statements of Operations For the Quarters Ended
March 31, 1996 and 1995 4
Statements of Cash Flows For the Quarters Ended
March 31, 1996 and 1995 5
Notes to Financial Statements 6 - 7
Management's Discussion and Analysis of Financial Condition and
Results of Operations 8 - 9
Part II. OTHER INFORMATION
Items 1 - 6 10
Signature 11
PART I. FINANCIAL INFORMATION
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Balance Sheets
Assets
(Unaudited) (Audited)
3/31/96 12/31/95
---------------- ----------------
Investment property, at cost:
Computer equipment $ - $ -
Less accumulated depreciation - -
---------------- ----------------
Investment property, net - -
Cash and cash equivalents 88,369 75,688
Accounts receivable - affiliates, net (notes 2 & 4) - -
---------------- ----------------
Total assets $ 88,369 $ 75,688
================ ================
Partners' Equity
Partners' equity:
General Partner:
Capital contribution $ 1,000 $ 1,000
Cumulative net income 1,258,653 1,258,019
Cumulative cash distributions (1,259,019) (1,259,019)
---------------- ----------------
634 -
---------------- ----------------
Limited Partners (36,463 units):
Capital contribution, net of offering costs 16,259,064 16,259,064
Cumulative net income 7,749,859 7,737,812
Cumulative cash distributions (23,921,188) (23,921,188)
---------------- ----------------
87,735 75,688
---------------- ----------------
Total partners' equity $ 88,369 $ 75,688
================ ================
See accompanying notes to financial statements.
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Statements of Operations
For the Quarters Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
-------------- --------------
Revenues:
Rental income $ - $ 95,265
Other income 8,530 -
Interest income 966 5,437
Recovery of net unsecured
pre-petition claim (note 4) 3,535 -
Net gain on sale of equipment - 27,997
-------------- ---------------
Total revenues 13,031 128,699
-------------- ---------------
Costs and expenses:
Depreciation - 25,296
Reversal of provision for doubtful accounts - (1,114)
Interest - 43
Related party expenses (note 3):
Management fees - 5,440
General and administrative 350 17,091
-------------- ---------------
Total costs and expenses 350 46,756
-------------- ---------------
Net income $ 12,681 $ 81,943
============== ===============
Net income per Limited Partnership Unit $ 0.33 $ 0.91
============== ===============
See accompanying notes to financial statements.
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Statements of Cash Flows
For the Quarters Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
---- ----
Cash flows from operating activities:
Net income $ 12,681 $ 81,943
---------------- ----------------
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation - 25,296
Reversal of provision for doubtful accounts - (1,114)
Net gain on sale of equipment - (27,997)
Net increase in current assets - (7,298)
Net decrease in current liabilities - (31,274)
---------------- ----------------
Total adjustments - (42,387)
---------------- ----------------
Net cash provided by operating activities 12,681 39,556
---------------- ----------------
Cash flows from investing activities:
Proceeds from sale of investment property - 29,988
---------------- ----------------
Net cash provided by investing activities - 29,988
---------------- ----------------
Cash flows from financing activities:
Cash distributions to partners - (227,894)
---------------- ----------------
Net cash used in financing activities - (227,894)
---------------- ----------------
Net decrease in cash and cash equivalents 12,681 (158,350)
Cash and cash equivalents at beginning of period 75,688 434,029
---------------- ----------------
Cash and cash equivalents at end of period $ 88,369 $ 275,679
================ ================
Supplemental cash flow information:
Interest paid during the period $ - $ 1,120
================ ================
See accompanying notes to financial statements.
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Notes to Financial Statements
For the Quarters Ended March 31, 1996 and March 31, 1995
(Unaudited)
(1) Organization and Partnership Matters
The foregoing financial statements of Wellesley Lease Income Limited Partnership
D (the "Partnership") have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission for Form 10-Q and reflect
all adjustments which are, in the opinion of management, necessary for a fair
presentation of the results for the interim periods presented. Pursuant to such
rules and regulations, certain note disclosures which are normally required
under generally accepted accounting principles have been omitted. It is
recommended that these financial statements be read in conjunction with the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1995.
(2) Significant Accounting Policies
Allowance for Doubtful Accounts
The financial statements includes an allowance for estimated losses on
receivable balances. The allowance for doubtful accounts is based on past write
off experience and an evaluation of potential uncollectible accounts within the
current receivable balances. Receivable balances which are determined to be
uncollectible are charged against the allowance and subsequent recoveries, if
any, are credited to the allowance. At March 31, 1996 and December 31, 1995, the
allowance for doubtful accounts included in accounts receivable - affiliates was
$19,279 and $22,814, respectively.
Reclassifications
Certain prior year financial statement items have been reclassified to conform
with the current year's financial statement presentation.
(3) Related Party Transactions
Fees, commissions and other expenses paid or accrued by the Partnership to the
General Partner or affiliates of the General Partner for the quarters ended
March 31, 1996 and 1995 are as follows:
1996 1995
---- ----
Management fees $ - $ 5,440
Reimbursable expenses paid - 19,432
------------ -------------
$ - $ 24,872
============ =============
Under the terms of the Partnership Agreement, the General Partner is entitled to
an equipment acquisition fee of 3% of the purchase price paid by the Partnership
for the equipment. The General Partner is also entitled to a management fee
equal to 7% of the monthly rental billings collected. Also, the Partnership
reimburses the General Partner and its affiliates for certain expenses incurred
by them in connection with the operation of the Partnership.
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Notes to Financial Statements
For the Quarters Ended March 31, 1996 and March 31, 1995
(Unaudited)
(4) Bankruptcy of Continental Information Systems Corporation
On January 19, 1996, the Partnership received the fourth distribution from the
Trustee of the Liquidating Estate, et al, ("the Trustee") with respect to the
net unsecured pre-petition claim. The distribution consisted of cash proceeds of
$3,535. Following the Trustee's fourth distribution, the Partnership has a
remaining unsecured pre-petition claim balance of $19,279 as of March 31, 1996
(see note 5).
(5) Subsequent Events
On April 19, 1996, the Partnership received the fifth distribution from the
Trustee with respect to the net unsecured pre-petition claim. The distribution
consisted of cash proceeds of $6,673. Following the Trustee's fifth
distribution, the Partnership has a remaining unsecured pre-petition claim
balance of $12,606 as of April 19, 1996. The General Partner anticipates that
the Liquidating Estate will make future distributions on the remaining
outstanding claim balance, although it is not possible at this time to determine
when these distributions will be made.
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Unaudited)
Results of Operations
The following discussion relates to Partnership operations for the quarter ended
March 31, 1996 in comparison to the quarter ended March 31, 1995.
The Partnership realized net income of $12,681 and $81,943 for the quarters
ended March 31, 1996, and 1995, respectively. Due to the Partnership's sale of
the equipment portfolio and the related leases during August, 1995, the
Partnership did not recognize any rental income during the first quarter of
1996. The $8,530 other income recognized during the current quarter resulted
from the combination of a $2,320 overaccrual of broker fees that had been
originally offset against rental income and a $6,210 reversal of management fees
which resulted from an overstated reserve set up in a prior period. Interest
income decreased as a result of lower average short-term investment balances.
The recovery of the net unsecured pre-petition claim of $3,535 for the quarter
ended March 31, 1996 was the result of the receipt of the Trustee's fourth
distribution on the fully reserved net unsecured pre-petition receivable (for
further discussion refer to note 4 to the financial statements).
Total costs and expenses decreased in 1996, as a result of the sale of the
equipment portfolio in August, 1995. The reversal of the provision for doubtful
accounts in the prior quarter was due to successful collection efforts on
delinquent rents receivable. The current quarter general and administrative
expenses pertained to filing fees for the Commonwealth of Massachusetts and U.S.
Securities and Exchange Commission.
The Partnership had net income per Limited Partnership Unit of $0.33 and $0.91
in 1996 and 1995, respectively.
Liquidity and Capital Resources
During the fourth quarter of 1994, the General Partner announced its intentions
of winding down the operations of the Partnership beginning in 1995. As of
August 31, 1995, all of the assets had been sold with the exception of the
unsecured pre-petition claim receivable and the common stock in Continental
Information Systems Corporation received from the Trustee. The sales proceeds
generated from the sale of the assets were accumulated to settle all outstanding
liabilities and make a distribution on November 28, 1995, prior to the receipt
of the final Trustee settlement distribution. All future cash distributions have
been halted until the remaining claim balance has been settled and any stock
received, sold. At that time, a final distribution shall be made to the
partners. As discussed in notes 4 and 5 to the financial statements, the
Partnership received the fourth and fifth total distributions from the Trustee,
with respect to the unsecured pre-petition claim. The distributions consisted of
total cash proceeds of $10,208. Following the Trustee's fourth and fifth
distributions, the Partnership has a remaining net unsecured pre-petition claim
of $12,606 as of April 19, 1996.
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Unaudited)
As discussed above, the Partnership is awaiting the settlement of its
outstanding net unsecured pre-petition claim balance in order to make the final
distribution. The Partnership will not be terminated until the net unsecured
pre-petition claim against CIS has been settled and the remaining proceeds have
been distributed to the partners (see note 4 to the financial statements). The
effects of inflation have not been significant to the Partnership and are not
expected to have a material impact in future periods.
On January 9, 1996, TLP Holding LLC purchased all the common stock of TLP
Leasing Programs, Inc. from CMI Holding Co. Under the new ownership, it is
expected that TLP Leasing Programs, Inc. will continue to operate in the same
manner of business as it has in the past.
PART II. OTHER INFORMATION
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Item 1. Legal Proceedings
Response: None
Item 2. Changes in the Rights of the Partnership's Security Holders
Response: None
Item 3. Defaults by the Partnership on its Senior Securities
Response: None
Item 4. Results of Votes of Security Holders
Response: None
Item 5. Other Information
Response: None
Item 6. Exhibits and Reports on Form 8-K
Response:
A. None
B. None
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.
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(Registrant)
By: Wellesley Leasing Partnership,
its General Partner
By: TLP Leasing Programs, Inc.,
one of its Corporate General Partners
By: Arthur P. Beecher,
President
Date: May 14, 1996