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
_______________________
For Quarter Ended March 31, 1995 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 12
(Page 2)
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, 1995 and December 31, 1994 3
Statements of Operations For the Quarters Ended
March 31, 1995 and 1994 4
Statements of Cash Flows For the Quarters Ended
March 31, 1995 and 1994 5
Notes to Financial Statements 6 - 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 - 9
Computer Equipment Portfolio 10
Part II. OTHER INFORMATION
Items 1 - 6 11
Signature 12
(Page 3)
PART I. FINANCIAL INFORMATION
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Balance Sheets
Assets
(Unaudited) (Audited)
3/31/95 12/31/94
Investment property, at cost (note 3):
Computer equipment $ 2,118,653 $ 2,541,961
Less accumulated depreciation 1,999,520 2,395,541
------------------------
Investment property, net 119,133 146,420
Cash and cash equivalents 275,679 434,029
Rents receivable, net of allowance for
doubtful accounts (note 2) 23,955 16,161
Sales receivable, net of allowance
for doubtful accounts (note 2) 618 -
------------------------
Total assets $ 419,385 $ 596,610
------------------------
------------------------
Liabilities and Partners' Equity
Liabilities:
Accounts payable and accrued
expenses - affiliates (note 4) $ 24,770 $ 28,766
Accrued expenses 3,657 9,854
Accounts payable 60,076 78,859
Unearned rental revenue 2,944 5,242
Distribution payable 11,994 -
------------------------
Total liabilities 103,441 122,721
------------------------
Partners' equity:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 1,234,030 1,185,408
Cumulative cash distributions (1,235,030) (1,223,036)
------------------------
- (36,628)
------------------------
Limited Partners (36,463 units):
Capital contribution, net of offering
costs 16,259,064 16,259,064
Cumulative net income 7,522,281 7,488,960
Cumulative cash distributions (23,465,401) (23,237,507)
------------------------
315,944 510,517
------------------------
Total partners' equity 315,944 473,889
------------------------
Total liabilities and partners' equity $ 419,385 $ 596,610
------------------------
------------------------
See accompanying notes to financial statements.
(Page 4)
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Statements of Operations
For the Quarters Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
Revenue:
Rental income $ 95,265 $ 155,394
Interest income 5,437 1,952
Other income - 26,114
Net gain on sale of equipment 27,997 33,806
----------------------
Total revenue 128,699 217,266
----------------------
Costs and expenses:
Depreciation 25,296 65,449
Reversal of provision for doubtful accounts (1,114) -
Interest 43 -
Related party expenses (note 4):
Management fees 5,440 11,418
General and administrative 17,091 21,368
----------------------
Total costs and expenses 46,756 98,235
----------------------
Net income $ 81,943 $ 119,031
----------------------
----------------------
Net income (loss) per Limited
Partnership Unit $ 0.91 $ (0.80)
----------------------
----------------------
See accompanying notes to financial statements.
(Page 5)
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Statements of Cash Flows
For the Quarters Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
Cash flows from operating activities:
Net income $ 81,943 $ 119,031
---------------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 25,296 65,449
Reversal of provision for doubtful accounts (1,114) -
Net gain on sale of equipment (27,997) (33,806)
Net increase in current assets (7,298) (17,380)
Net decrease in current liabilities (31,274) (46,198)
---------------------
Total adjustments (42,387) (31,935)
---------------------
Net cash provided by operating activities 39,556 87,096
---------------------
Cash flows from investing activities:
Proceeds from sale of investment property 29,988 37,892
---------------------
Net cash provided by investing activities 29,988 37,892
---------------------
Cash flows from financing activities:
Cash distributions to partners (227,894) (191,911)
---------------------
Net cash used in financing activities (227,894) (191,911)
---------------------
Net decrease in cash and cash equivalents (158,350) (66,923)
Cash and cash equivalents at beginning of period 434,029 348,438
---------------------
Cash and cash equivalents at end of period $ 275,679 $ 281,515
---------------------
---------------------
Supplemental cash flow information:
Interest paid during the period $ 1,120 $ -
---------------------
---------------------
See accompanying notes to financial statements.
(Page 6)
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Notes to Financial Statements
(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,
1994.
(2) Significant Accounting Policies
Allowance for Doubtful Accounts
The financial statements include allowances for estimated
losses on receivable balances. The allowances for doubtful
accounts are 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, 1995 and December 31, 1994, the
allowance for doubtful accounts included in rents receivable
was $27,743 and $28,289, respectively, and $82 and $650
included in sales receivable, respectively.
Reclassifications
Certain prior year financial statement items have been
reclassified to conform with the current year's financial
statement presentation.
(3) Investment Property
At March 31, 1995, the Partnership owned computer equipment
with a depreciated cost basis of $113,059, subject to
existing leases and equipment with a depreciated cost basis
of $6,074 in inventory, awaiting re-lease or sale. All
purchases of computer equipment are subject to a 3%
acquisition fee paid to the General Partner.
(Page 7)
(4) 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, 1995 and
1994 are as follows:
1995 1994
Management fees $ 5,440 $11,418
Reimbursable expenses
paid 19,432 18,261
-------------------
$24,872 $29,679
-------------------
-------------------
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.
(Page 8)
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, 1995 in comparison to the
quarter ended March 31, 1994.
The Partnership realized net income of $81,943 and $119,031
for the quarters ended March 31, 1995, and 1994,
respectively. Rental income decreased $60,129 or 39%
between the three month periods. The decrease is primarily
due to lower rental rates on equipment lease extensions and
remarketings resulting after the initial lease term expires
and due to a decrease in the overall size of the equipment
portfolio. Other income in 1994 is a result of the write-
off of overstated liabilities recorded in prior years.
Interest income has increased as a result of higher average
short-term investment balances.
Total costs and expenses decreased 52% in 1995, primarily as
a result of the decrease in depreciation expense.
Depreciation expense decreased due to a large portion of the
equipment portfolio becoming fully depreciated and an
overall reduction in the equipment portfolio. Management
fees and general and administrative expenses have decreased
in relation to the decline in rental income. The reversal
of the provision for doubtful accounts is due to successful
collection efforts on delinquent rents receivable.
The Partnership had net income (loss) per Limited
Partnership Unit of $0.91 and $(0.80) in 1995 and 1994,
respectively.
Liquidity and Capital Resources
For the quarter ended March 31, 1995, rental revenue
generated from operating leases was the primary source of
funds for the Partnership. As equipment leases terminate,
the General Partner determines if the equipment will be
extended to the same lessee, remarketed to another lessee,
or if it is less marketable, sold. This decision is made
upon analyzing which options would generate the most
favorable results.
Rental income will continue to decrease due to two factors.
The first factor is the rate obtained when the original
leases expire and are remarketed at a lower rate. Typically
the remarketed rates are lower due to the decrease in useful
life of the equipment. Secondly, the increasing change of
technology in the computer industry usually decreases the
demand for older equipment, thus increasing the possibility
of obsolescence. Both of these factors together will cause
remarketed rates to be lower than original rates and will
cause certain leases to terminate upon expiration.
(Page 9)
During the fourth quarter of 1994, the General Partner
announced its intentions of winding down the operations of
the Partnership in 1995. It is anticipated that
substantially all of the assets will be liquidated and the
proceeds will be used to settle all outstanding liabilities
and to make a final distribution. The Partnership will not
be terminated until the net unsecured pre-petition claim
against CIS and CMI has been settled and the remaining
proceeds have been distributed to the Partners.
The Partnership's investing activities for the quarter
resulted in equipment sales with a depreciated cost basis of
$5,690, generating $29,988 in proceeds. Associated with the
equipment sales were $3,699 of charge offs of losses against
the reserve, initially set up in prior periods for estimated
losses on the ultimate disposition of equipment. The
Partnership has no material capital expenditure commitments
and will not purchase equipment in the future as the
Partnership has reached the end of its reinvestment period
and has announced its intentions of winding down the
Partnership in 1995.
Cash distributions are currently at an annual level of 4%
per Limited Partnership Unit, or $5.00 per Limited
Partnership Unit on a quarterly basis. For the quarter
ended March 31, 1995, the Partnership declared a cash
distribution of $191,911, of which $9,596 is allocated to
the General Partner and $182,315 is allocated to the Limited
Partners. The distribution will be paid on May 31, 1995.
The Partnership expects distributions to be more volatile as
its operations are winding down.
The effects of inflation have not been significant to the
Partnership and are not expected to have any material impact
in the future periods.
(Page 10)
WELLESLEY LEASE INCOME LIMITED PARTNERSHIP D
(A Massachusetts Limited Partnership)
Computer Equipment Portfolio (Unaudited)
March 31, 1995
Lessee
ADP, Incorporated
Allied Signal Corporation
Caterpillar, Incorporated
Citicorp Services, Incorporated
FAX International, Incorporated
Genix Corporation
GPU Service Corporation
Halliburton Company
Hughes Aircraft Company, Incorporated
Kroger, Incorporated
Maryland Casualty Insurance, Incorporated
Owens Corning Fiberglass, Incorporated
Smith Kline, Incorporated
Equipment Description Acquisition Price
Computer peripherals $1,059,327
Processors & upgrades 42,373
Telecommunications 127,119
Other 889,834
----------
$2,118,653
----------
----------
(Page 11)
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
(Page 12)
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
Date: May 12, 1995
By: Arthur P. Beecher,
President