Page 1 of 29
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ----- ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996 Commission File Number 0-11170
PHOENIX LEASING GROWTH FUND 1982
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
California 94-2735710
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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
-------------
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership Interest
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ________
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 ___
As of December 31, 1996, 40,343 Units of Limited Partnership interest were
outstanding. No market exists for the Units of Partnership interest and
therefore there exists no aggregate market value at December 31, 1996.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
Page 2 of 29
PHOENIX LEASING GROWTH FUND 1982
1996 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Page
PART I
Item 1. Business............................................... 3
Item 2. Properties............................................. 4
Item 3. Legal Proceedings...................................... 4
Item 4. Submission of Matters to a Vote of Security Holders.... 4
PART II
Item 5. Market for the Registrant's Securities and Related
Security Holder Matters................................ 5
Item 6. Selected Financial Data................................ 5
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 6
Item 8. Financial Statements and Supplementary Data............ 8
Item 9. Disagreements on Accounting and Financial Disclosure
Matters................................................ 25
PART III
Item 10. Directors and Executive Officers of the Registrant..... 25
Item 11. Executive Compensation................................. 26
Item 12. Security Ownership of Certain Beneficial Owners
and Management......................................... 26
Item 13. Certain Relationships and Related Transactions......... 26
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K............................................ 27
Signatures........................................................... 28
Page 3 of 29
PART I
Item 1. Business.
Summary of Business Activities.
Phoenix Leasing Growth Fund 1982, a California limited partnership (the
"Partnership"), was organized on September 11, 1980. The Partnership was
registered with the Securities and Exchange Commission with an effective date of
February 1, 1982 and shall continue to operate until its termination date unless
dissolved sooner due to the sale of substantially all of the assets of the
Partnership or a vote of the Limited Partners. The Partnership will terminate on
December 31, 1997. The General Partner is Phoenix Leasing Incorporated, a
California corporation. The General Partner or its affiliates also is or has
been a general partner in several other limited partnerships formed to invest in
capital equipment and other assets.
The initial public offering was for 44,000 units of limited partnership
interest at a price of $1,000 per unit. The Partnership sold 41,798 units for a
total capitalization of $41,798,000. Of the proceeds received through the
offering, the Partnership has incurred $4,856,000 in organizational and offering
expenses.
From the initial formation of the Partnership through December 31,
1996, the total investments in equipment leases and financing transactions
(loans), including the Partnership's pro rata interest in investments made by
joint ventures, approximate $103,077,000. The average initial firm term of
contractual payments from equipment subject to lease was 30.90 months, and the
average initial net monthly payment rate as a percentage of the original
purchase price was 3.11%. The average initial firm term of contractual payments
from loans was 66.3 months.
The Partnership's principal objective is to produce current income and
to build and maintain a balanced portfolio of assets through the investment and
financing in various types of capital equipment including computer peripherals,
terminal systems, small computer systems, communications equipment, IBM-software
compatible mainframes, office systems and telecommunications equipment and to
lease such equipment and products to third parties pursuant to either Operating
Leases or Full Payout Leases. The Partnership has incurred debt to finance the
purchase of equipment, but the aggregate amount of outstanding debt for all
equipment will not exceed, at any time, the aggregate amount of net proceeds of
this offering.
The principal markets for the types of equipment in which the
Partnership has invested in have been and will be (1) major corporations and
other large organizations seeking to reduce the cost of their peripheral
equipment and large computer systems, (2) major corporations with numerous
operating locations seeking to improve the timeliness and responsiveness of
their data processing systems, and (3) small organizations interested in
improving the efficiency of their overall operations by moving from manually
operated to small computer-based management systems.
In addition to acquiring equipment for lease to third parties, the
Partnership either directly or through the investment in joint ventures, has
provided limited financing to certain emerging growth companies, cable
television system operators, manufacturers and their lessees with respect to
equipment leased directly by such manufacturers to third parties. The
Partnership maintains a security interest in the assets financed and in the
receivables due under any lease or rental agreement relating to such assets.
Such security interests will give the Partnership the right, upon default, to
obtain possession of the assets.
Competition. The equipment leasing industry is highly competitive.
Leases are offered on a wide variety of equipment ranging from construction
equipment to entire manufacturing facilities. The equipment leasing industry
offers to users an alternative to the purchase of nearly every type of
equipment. The General Partner intends to concentrate the Partnership's
activities, however, in markets in which the General Partner has expertise. The
computer equipment industry is extremely competitive. Competitive factors
include pricing, technological innovation and methods of financing (including
use of various short-term and long-term financing plans, as well as the outright
purchase of equipment).
There is strong competition in non-computer related equipment markets
in which the Partnership will engage as well. There is, however, no single
dominant company or factor in those other markets.
Page 4 of 29
Other.
A brief description of the type of assets in which the Partnership has
invested as of December 31, 1996, together with information concerning the uses
of assets is set forth in Item 2.
Item 2. Properties.
The Partnership is engaged in the equipment leasing and financing
industry and as such, does not own or operate any principal plants, mines or
real property. The primary assets held by the Partnership are its investments in
leases and loans either directly or through its investment in joint ventures.
As of December 31, 1996, the Partnership owns equipment and has
outstanding loans to borrowers with an aggregate original cost of $3,084,000.
The equipment and loans have been made to customers located throughout the
United States. The following table summarizes the type of equipment owned or
financed by the Partnership, including its pro rata interest in joint ventures,
at December 31, 1996.
Percentage of
Asset Types Purchase Price(1) Total Assets
----------- ----------------- ------------
(Amounts in Thousands)
Financing of Solar Systems $2,351 76%
Reproduction 476 16
Telecommunications 250 8
Small Computer Systems 7 --
------ ----
TOTAL $3,084 100%
====== ====
(1) These amounts include the Partnership's pro rata interest in equipment
joint ventures of $476,000 and financing joint ventures of $2,351,000
at December 31, 1996.
Item 3. Legal Proceedings.
The Partnership is not a party to any pending legal proceedings which
would have a material adverse impact on its financial position.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of Limited Partners, through the
solicitation of proxies or otherwise, during the year covered by this report.
Page 5 of 29
PART II
Item 5. Market for the Registrant's Securities and Related Security Holder
Matters.
(a) The Registrant's limited partnership interests are not publicly
traded. There is no market for the Registrant's limited
partnership interests and it is unlikely that any will develop.
(b) Approximate number of equity security investments:
Number of Unit Holders
Title of Class as of December 31, 1996
---------------------------------- -----------------------
Limited Partners 3,516
Item 6. Selected Financial Data.
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(Amounts in Thousands Except for Per Unit Amounts)
Total Income $ 266 $ 475 $ 877 $ 606 $ 522
Net Income (Loss) 201 437 763 301 (757)
Total Assets 829 1,453 2,637 3,171 4,351
Distributions to Partners 807 1,222 1,211 1,211 1,213
Net Income (Loss) per Limited
Partnership Unit 4.95 10.73 18.73 7.39 (18.75)
Distributions per Limited Partnership Unit 20.01 30.31 30.02 30.02 30.05
The above selected financial data should be read in conjunction with
the financial statements and related notes appearing elsewhere in this report.
Page 6 of 29
Item 7. 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 $201,000 for the year ended December 31, 1996, as compared to net income of
$437,000 and $763,000 during 1995 and 1994, respectively. The decline in net
income experienced in 1996, as compared to 1995, is attributable to a decrease
in rental income of $160,000 and an increase in provision for losses on
receivables of $61,000. The decline in net income for the year ended December
31, 1995 was due to the absence of a settlement compared to a settlement of
$337,000 during 1994.
Total revenues decreased by $209,000 and $402,000 for the year ended
December 31, 1996 and 1995, respectively, as compared to the prior year. The
decrease in earnings for 1996 and 1995, compared to the prior year, is primarily
attributable to a decrease in rental income of $160,000 and $51,000,
respectively. The decline in rental income is reflective of a reduction in the
size of the equipment portfolio as a result of the ongoing liquidation of
equipment. 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 December 31, 1996, the
partnership owned equipment, excluding its investment in equipment joint
ventures, with an aggregate original cost of $257,000 compared to $737,000 at
December 31, 1995 and $1,706,000 at December 31, 1994.
The absence of interest income from notes receivable during 1996 is a
result of the Partnership receiving payoffs from its two remaining notes
receivable, both considered to be impaired, during the year ended December 31,
1995. Prior to the payoff, the Partnership had not been recognizing interest
income on these notes due to their impaired status. As a result of the payoff of
these two notes, the Partnership recognized $21,000 in interest income from
notes receivable and reversed $69,000 of the provision for losses on notes
receivable in 1995.
Total revenues for the year ended December 31, 1994 were higher than
usual mainly due to the receipt of settlements from two manufacturers of
equipment with whom the Partnership had entered into contractual agreements for
the purchase of leased equipment. The combined settlements totaled $337,000
which was composed of cash, common stock, receivables, assigned rents from a
pool of leased equipment, and credits for goods and services. Another factor
which contributed to increasing total revenues during 1994 was the gain on sale
of equipment. The gain on sale of equipment during 1994 was attributable to the
sale of equipment back to the original manufacturer, in which the Partnership
was released from all obligations to such manufacturer including an outstanding
note payable and accrued interest of $84,000.
Total expenses increased by $27,000 during 1996, as compared to 1995,
but decreased by $76,000 during 1995, compared to 1994. The increase in total
expenses for 1996, as compared to 1995, is primarily due to the increase in
provision for losses on receivables of $61,000 for the year ended December 31,
1996, compared to 1995. During 1995, the Partnership reversed $69,000 in
provision for losses on notes receivable, as previously discussed. Such a
transaction did not occur during 1996. In part, the increase in provision for
losses on receivables experienced during 1996, is offset by decreases in most
other expense items.
The decline in total expenses experienced during 1995, compared to
1994, was due to the absence of depreciation expense. The absence of
depreciation expense for the year ended December 31, 1995, as compared to
$33,000 in 1994, was due to the remaining equipment portfolio having been fully
depreciated. Most other expense items also experienced a decrease during the
year ended December 31, 1995, compared to 1994.
Inflation affects the Partnership in relation to the current cost of
equipment placed on a lease and the residual values realized when the equipment
comes off-lease and is sold. During the last several years inflation has been
low, thereby having very little impact upon the Partnership.
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 decline as the portfolios are re-leased at lower
rental rates and eventually liquidated.
Page 7 of 29
Earnings from joint ventures decreased by $5,000 for the year ended
December 31, 1996, compared to 1995, and increased by $74,000 for the year ended
December 31, 1995, as compared to the same period in the previous year. The
decrease in earnings for 1996 is due to a decline in revenues from several
equipment joint ventures as a result of a majority of the equipment joint
ventures being in the liquidation stage. The increase in earnings from joint
ventures during 1995 was primarily attributable to two equipment joint ventures.
The increase in earnings from one equipment joint venture during 1995 was due to
a decline in depreciation expense and lease related operating expenses. The
increase in earnings from the second equipment joint venture during 1995 was due
to this joint venture having been formed in October of 1994. As a result, there
were no comparable earnings from this joint venture during the year ended
December 31, 1994.
Liquidity and Capital Resources
The Partnership reported net cash used by leasing and financing
activities of $58,000, $47,000 for the year ended December 31, 1996 and 1995,
respectively, compared to net cash provided of $454,000 for the year ended
December 31, 1994. The increase in net cash used for the year ended December 31,
1996 is attributable to the absence of principal payments from notes receivable
and the payment of liquidation fees to the General Partner. During 1995, the
Partnership received payoffs from the Partnership's remaining notes receivable.
The payment of liquidation fees to the General Partner during 1995 exceeded the
payoffs received from the notes receivable. The Partnership did not make a
payment of liquidation fees in 1994.
Cash distributions from joint ventures increased by $36,000 and
$129,000 for the years ended December 31, 1996 and 1995, respectively, compared
to the previous year. The increase in cash distributions in 1996 is due to the
increase in cash available for distribution from the Partnership's only
foreclosed cable system joint venture as a result of the sale of its cable
television system during the first quarter of 1996. The increase during 1995 was
primarily attributable to a new investment made in a newly formed equipment
joint venture during the fourth quarter of 1994. In addition, one equipment
joint venture experienced an increase in cash available as a result of a decline
in lease related operating expenses.
During the year ended December 31, 1996, the Partnership sold a portion
of its investment in common stock receiving proceeds of $49,000.
As of December 31, 1996, the Partnership owned equipment held for lease
with a purchase price of $257,000 and a net book value of $0, as compared to
$662,000 and $0, respectively, at December 31, 1995 and $699,000 and $0,
respectively, at December 31, 1994. 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 ,
$1,222,000 and $1,211,000 during the year ended December 31, 1996, 1995 and
1994, respectively. As a result, the cumulative cash distributions to the
limited partners are $38,467,000, $37,660,000 and $36,438,000 as of December 31,
1996, 1995 and 1994, respectively. The General Partner did not receive cash
distributions for the years ended December 31, 1996, 1995 and 1994.
Distributions to partners are being made annually on January 15. The
distribution amount distributed on January 15, 1997 was lower than the January
15, 1996 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. The Partnership is currently in its liquidation stage and
currently has no obligation, commitments or plans to purchase more equipment.
It's the General Partner's intention to continue the Partnership's payments of
liquidation fees only to the extent of cash available for such payments after
taking into consideration the Partnership's cash requirements to cover its
operating costs over the next years.
Forward-looking statements in this report are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Actual results could differ from those anticipated by some of the statements
made above. Limited Partners are cautioned that such forward-looking statements
involve risks and uncertainties including without limitation the following: (i)
the Partnership's plans are subject to change at any time at the discretion of
the General Partner of the Partnership, (ii) future technological developments
in the industry in which the Partnership operates, (iii) competitive pressure on
pricing or services, (iv) substantial customer defaults or cancellations, (v)
changes in business conditions and the general economy, (vi) changes in
government regulations affecting the Partnership's core businesses and (vii) the
ability of the Partnership to sell its remaining assets.
Page 8 of 29
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PHOENIX LEASING GROWTH FUND 1982
YEAR ENDED DECEMBER 31, 1996
Page 9 of 29
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Phoenix Leasing Growth Fund 1982:
We have audited the accompanying balance sheets of Phoenix Leasing Growth Fund
1982 (a California limited partnership) as of December 31, 1996 and 1995, and
the related statements of operations, partners' capital, and cash flows for each
of the three years in the period ended December 31, 1996. These financial
statements and the schedule referred to below are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Phoenix Leasing Growth Fund
1982 as of December 31, 1996 and 1995, and the results of its operations, and
its cash flows for each of the three years in the period ended December 31,
1996, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Item 14,
subsection (a) 2 is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not a required part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in our audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
San Francisco, California, ARTHUR ANDERSEN LLP
January 17, 1997
Page 10 of 29
PHOENIX LEASING GROWTH FUND 1982
BALANCE SHEETS
(Amounts in Thousands Except for Unit Amounts)
December 31,
1996 1995
---- ----
ASSETS
Cash and cash equivalents $ 658 $ 1,078
Accounts receivable (net of allowance for losses on accounts
receivable of $0 at December 31, 1996 and 1995) 1 27
Equipment on operating leases and held for lease (net of
accumulated depreciation and obsolescence reserves of
$114 and $578 at December 31, 1996 and 1995, respectively) -- --
Investment in joint ventures 99 283
Securities, available-for-sale 67 60
Other assets 4 5
------- -------
Total Assets $ 829 $ 1,453
======= =======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Accounts payable and accrued expenses $ 71 $ 68
Liquidation fees payable to General Partner 1,816 1,881
------- -------
Total Liabilities 1,887 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
December 31, 1996 and 1995 (671) (63)
Unrealized gains (losses) on available-for-sale securities 21 (23)
------- -------
Total Partners' Capital (Deficit) (1,058) (496)
------- -------
Total Liabilities and Partners' Capital (Deficit) $ 829 $ 1,453
======= =======
The accompanying notes are an integral
part of these statements.
Page 11 of 29
PHOENIX LEASING GROWTH FUND 1982
STATEMENTS OF OPERATIONS
(Amounts in Thousands Except for Per Unit Amounts)
For the Years Ended December 31,
1996 1995 1994
---- ---- ----
INCOME
Rental income $ 5 $ 165 $ 216
Gain on sale of equipment -- 12 92
Equity in earnings from joint ventures, net 212 217 143
Interest income, notes receivable -- 21 6
Settlements -- -- 337
Other income 49 60 83
----- ------ ------
Total Income 266 475 877
----- ------ ------
EXPENSES
Depreciation -- -- 33
Lease related operating expenses -- 9 8
Management fees to General Partner 5 25 30
Provision for (recovery of) losses on
receivables 2 (59) (31)
General and administrative expenses 58 63 74
----- ------ ------
Total Expenses 65 38 114
----- ------ ------
NET INCOME $ 201 $ 437 $ 763
===== ====== ======
NET INCOME PER LIMITED PARTNERSHIP UNIT $4.95 $10.73 $18.73
===== ====== ======
ALLOCATION OF NET INCOME:
General Partner $ 2 $ 4 $ 8
Limited Partners 199 433 755
----- ------ ------
$ 201 $ 437 $ 763
===== ====== ======
The accompanying notes are an integral
part of these statements.
Page 12 of 29
PHOENIX LEASING GROWTH FUND 1982
STATEMENTS OF PARTNERS' CAPITAL
(Amounts in Thousands Except for Unit Amounts)
General Unrealized
Partner's Limited Partners' Gains Total
Amount Units Amount (Losses) Amount
------ ----- ------ -------- ------
Balance, December 31, 1993 $ (422) 40,343 $ 1,182 $ -- $ 760
Distributions to partners ($30.02 per
limited partnership unit) -- -- (1,211) -- (1,211)
Adjustment to unrealized losses on
available-for-sale securities -- -- -- (14) (14)
Net income 8 -- 755 -- 763
------- ------- ------- ------- -------
Balance, December 31, 1994 (414) 40,343 726 (14) 298
Distributions to partners ($30.31 per
limited partnership unit) -- -- (1,222) -- (1,222)
Net income 4 -- 433 -- 437
Change in unrealized losses on marketable
securities available-for-sale -- -- -- (9) (9)
------- ------- ------- ------- -------
Balance, December 31, 1995 (410) 40,343 (63) (23) (496)
Distributions to partners ($20.01 per
limited partnership unit) -- -- (807) -- (807)
Net income 2 -- 199 -- 201
Change in unrealized gains on
available-for-sale securities -- -- -- 44 44
------- ------- ------- ------- -------
Balance, December 31, 1996 $ (408) 40,343 $ (671) $ 21 $(1,058)
======= ======= ======= ======= =======
The accompanying notes are an integral
part of these statements.
Page 13 of 29
PHOENIX LEASING GROWTH FUND 1982
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
For the Years Ended December 31,
1996 1995 1994
---- ---- ----
Operating Activities:
Net income $ 201 $ 437 $ 763
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation -- -- 33
Gain on sale of equipment -- (12) (92)
Gain on sale of securities (12) -- --
Equity in earnings from joint ventures, net (212) (217) (143)
Provision for (recovery of) early termination,
financing leases -- (1) (1)
Provision for (recovery of) losses on notes
receivable -- (69) --
Provision for (recovery of) losses on accounts
receivable 2 11 (30)
Settlements -- -- (195)
Decrease (increase) in accounts receivable 24 (4) 19
Increase (decrease) in accounts payable and
accrued expenses (62) (390) 44
Decrease in other assets 1 13 --
------- ------- -------
Net cash provided (used) by operating activities (58) (232) 398
------- ------- -------
Investing Activities:
Principal payments, financing leases -- 1 52
Principal payments, notes receivable -- 184 4
Proceeds from sale of equipment -- 12 15
Proceeds from available-for-sale securities 49 -- --
Distributions from joint ventures 396 360 231
Purchase of equipment -- -- (124)
Investment in joint ventures -- -- (29)
------- ------- -------
Net cash provided by investing activities 445 557 149
------- ------- -------
Financing Activities:
Payments of principal, notes payable -- -- (32)
Distributions to partners (807) (1,222) (1,211)
------- ------- -------
Net cash used by financing activities (807) (1,222) (1,243)
------- ------- -------
Decrease in cash and cash equivalents (420) (897) (696)
Cash and cash equivalents, beginning of period 1,078 1,975 2,671
------- ------- -------
Cash and cash equivalents, end of period $ 658 $ 1,078 $ 1,975
======= ======= =======
The accompanying notes are an integral
part of these statements.
Page 14 of 29
PHOENIX LEASING GROWTH FUND 1982
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
Note 1. Organization and Partnership Matters.
Phoenix Leasing Growth Fund 1982, a California limited partnership (the
"Partnership"), was formed on September 11, 1980, to invest in capital equipment
of various types and to lease such equipment to third parties on either a
long-term or short-term basis. Minimum investment requirements were met April
28, 1982, at which time the Partnership commenced operations.
The Partnership has also made investments in joint ventures with
affiliated partnerships managed by the General Partner for the purpose of
spreading the risks of financing or acquiring certain capital equipment leased
to third parties (see Note 6).
For financial reporting purposes, as more specifically described in the
Partnership Agreement, income in any quarter will be allocated, before
liquidation and redemption fees, 15% to Phoenix Leasing Incorporated (the
"General Partner") and 85% to the Limited Partners subject to the following
limitations. To the extent that income for any quarter, when added to income for
all prior accounting periods, does not exceed losses for all prior accounting
periods, such income shall be allocated, before liquidation and redemption fees,
1% to the General Partner and 99% to the Limited Partners. Income shall be
allocated, before liquidation and redemption fees, 1% to the General Partner and
99% to the Limited Partners in any quarter subsequent to a quarter in which the
General Partner was allocated, before liquidation and redemption fees, 1% of
losses, to the extent of previously allocated Partnership losses. A loss in any
quarter shall be allocated, before liquidation and redemption fees, 1% to the
General Partner and 99% to the Limited Partners.
As an alternative to receiving cash distributions, Limited Partners may
have participated in the Capital Accumulation Plan, whereby the Limited
Partners' cash distributions were reinvested and accumulated in the respective
Limited Partner's capital account. Effective January 1, 1988, the Capital
Accumulation Plan was discontinued. Limited Partners who elected to participate
in the Capital Accumulation Plan are now receiving cash distributions.
In the event the General Partner has a deficit balance in its capital
account at the time of partnership liquidation, it will be required to
contribute the amount of such deficit to the Partnership. The General Partner
has acquired 63 units of Limited Partnership interest.
As compensation for management services, the General Partner receives a
fee, payable quarterly, in an amount equal to 6% of the Partnership's gross
revenues for the quarter from which such payment is being made, which revenues
shall include rental and note receipts, maintenance fees, proceeds from the sale
of equipment and other income.
In consideration for the services and activities performed by the
General Partner in connection with the disposition of the Partnership's
equipment, the General Partner receives liquidation fees equal to 15% of the
"Net Capital Contribution" of the Limited Partners with respect to all
Partnership interests other than those interests which have been previously
redeemed and accordingly were subject to the 15% redemption fee.
For financial reporting purposes, the Partnership began to recognize
the liquidation fee in the second year of operations when the General Partner
began its activities of liquidating portions of the equipment portfolio. The
original firm terms of the initial leases (generally 24 months) began to expire
at this point in time. The present value of the liquidation fee was recognized
using the interest method and accreted to the face amount over a period of
approximately eight years in order to properly match the liquidation fee expense
with the activities of the General Partner in connection with ongoing portfolio
liquidations. The liquidation fees have been fully accrued as of December 31,
1992. The Partnership began to pay the liquidation fees to the General Partner
in 1990. It's the General Partner's intention to continue the Partnership's
payments of liquidation fees only to the extent of cash available for such
payments after taking into consideration the Partnership's cash requirements to
cover its operating costs over the remaining life of the partnership.
Page 15 of 29
Note 2. Summary of Significant Accounting Policies.
Leasing Operations. The Partnership's leasing operations consisted of
both financing and operating leases. The financing method of accounting for
leases records as unearned income at the inception of the lease, the excess of
net rentals receivable and estimated residual value at the end of the lease term
over the cost of equipment leased. Unearned income is credited to income monthly
over the term of the lease on a declining basis to provide an approximate level
rate of return on the unrecovered cost of the investment. Initial direct costs
of consummating new leases are capitalized and included in the cost of the
equipment.
Under the operating method of accounting for leases, the leased
equipment is recorded as an asset at cost and depreciated on a straight-line
basis over the estimated useful life, ranging up to seven years.
Rental income for the year is determined on the basis of rental
payments due for the period under the terms of the lease. Maintenance, repairs
and minor renewals of the leased equipment are charged to expense.
Portfolio Valuation Methodology. The Partnership uses the portfolio
method of accounting for the net realizable value of the Partnership's equipment
portfolio.
Credit and Collateral. The Partnership's activities have been
concentrated in the equipment leasing and financing industry. A credit
evaluation is performed by the General Partner for all leases and loans made,
with the collateral requirements determined on a case-by-case basis. The
Partnership's loans are generally secured by the equipment or assets financed
and, in some cases, other collateral of the borrower. In the event of default,
the Partnership has the right to foreclose upon the collateral used to secure
such loans.
Investment in Joint Ventures. Investments in net assets of the
equipment, financing and foreclosed cable systems joint ventures reflect the
Partnership's equity basis in the ventures. Under the equity method of
accounting, the original investment is recorded at cost and is adjusted
periodically to recognize the Partnership's share of earnings, losses, cash
contributions and cash distributions after the date of acquisition.
Investment in Available-for-Sale Securities. The Partnership has
investments in stock in public companies that have been determined to be
available for sale that are on the accompanying Balance Sheets.
Available-for-sale securities are stated at their fair market value, with the
unrealized gains and losses reported in a separate component of partners'
capital.
Cash and Cash Equivalents. Cash and cash equivalents includes deposits
at banks, investments in money market funds and other highly liquid short-term
investments with original maturities of less than 90 days.
Non Cash Investing Activities. During the year ended December 31, 1995,
the Partnership received a final distribution of marketable securities from one
of its investments in joint ventures. The market value of the marketable
securites at the distribution date was $11,000. During the year ended December
31, 1994, the Partnership contributed equipment and other investments received
through a settlement to a joint venture. The amount of such contribution was
$247,000. Non cash transactions included in Other Assets during the year ended
December 31, 1994 consist of common stock valued at $72,000 received pursuant to
a settlement (see Note 8) and an unrealized loss on marketable securities of
$14,000.
Financial Accounting Pronouncements. In March 1995, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standard No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of," which requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. In performing the review for
recoverability, the entity would estimate the future cash flows expected to
result from the use of the asset and its eventual disposition. If the sum of the
expected future cash flows (undiscounted and without interest charges) is less
than the carrying amount of the asset, an impairment loss is recognized.
Measurement of an impairment loss for long-lived assets and identifiable
intangibles that an entity expects to hold and use should be based on the fair
value of the asset. Statement No. 121 is effective for financial statements for
fiscal years beginning after December 15, 1995. At January 1, 1996, the adoption
of Statement No. 121 did not materially impact the Partnership's financial
position or results of operations.
Reclassification. Certain 1995 and 1994 amounts have been reclassified
to conform to the 1996 presentation.
Page 16 of 29
Use of Estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Note 3. Accounts Receivable.
Accounts Receivable consist of the following at December 31:
1996 1995
---- ----
(Amounts in Thousands)
Lease payments $ 1 $21
Property tax -- 6
--- ---
Total $ 1 $27
=== ===
Note 4. Notes Receivable.
The Partnership's notes receivable from cable television system
operators provided for a monthly payment rate in an amount that is less than the
contractual interest rate. The difference between the payment rate and the
contractual interest rate was added to the principal and therefore deferred
until the maturity date of the note. Upon maturity of the note, the original
principal and deferred interest was due and payable in full. Although the
contractual interest rates may be higher, due to a high degree of uncertainty
relating to the collection of the entire amount of contractually owed interest,
the Partnership limited the amount of interest recognized on the Partnership's
performing notes receivable to cable television system operators to the amount
of the payments received, thereby deferring the recognition of a portion of the
deferred interest until such time as management believed it would be realized.
Generally, notes receivable were classified as impaired and the accrual
of interest on such notes were discontinued when the contractual payment of
principal or interest had become 90 days past due or management had serious
doubts about further collectibility of the contractual payments. Any payments
received subsequent to the placement of the note receivable on to impaired
status would generally be applied towards the reduction of the outstanding note
receivable balance, which may have included previously accrued interest as well
as principal. Once the principal and accrued interest balance was reduced to
zero, the remaining payments were applied to interest income. The average
recorded investment in impaired loans during the year ended December 31, 1996
and 1995 was approximately $0 and $84,000, respectively.
During the quarter ended June 30, 1995, the Partnership received a
settlement on one of its remaining notes receivable from a cable television
system operator which was considered to be impaired. The Partnership received a
partial recovery of $56,000 as a settlement which was applied towards the
$87,000 outstanding note receivable balance. The remaining balance of $31,000
was written-off through its related allowance for loan losses. The related
allowance for loan losses for this note receivable was provided for in a
previous year in an amount equal to the carrying value of the note. Upon receipt
of the settlement of this note receivable, the Partnership reduced the allowance
for loan losses by $53,000 during the quarter ended June 30, 1995. This
reduction in the allowance for loan losses was recognized as income during the
period.
The Partnership received a settlement on its one remaining note
receivable during the quarter ended September 30, 1995. This note receivable was
from a cable television operator which was impaired. The Partnership received
$141,000 as a settlement for this note receivable of which $120,000 was applied
towards the outstanding note receivable balance and the remaining $21,000
applied towards interest income. There was an allowance for losses on notes
receivable of $16,000 for this note receivable. Due to the receipt of a
settlement which exceeded the net carrying value of the note receivable, this
allowance was recognized as income.
Page 17 of 29
The activity in the allowance for losses on notes receivable during the
years ended December 31, is as follows:
1996 1995
---- ----
(Amounts in Thousands)
Beginning balance $-- $ 100
Provision for (recovery of) losses -- (69)
Write downs -- (31)
--- -----
Ending balance $-- $--
=== =====
Note 5. Equipment on Operating Leases and Held for Lease.
Equipment on lease consists primarily of computer peripheral equipment
and small computer systems subject to operating leases. At December 31, 1996,
the Partnership's remaining equipment was being held for lease. The net book
value of equipment held for lease at December 31, 1996 and 1995 amounted to $0.
The Partnership has entered into direct lease arrangements with certain
lessees. Generally, it is the responsibility of the lessee to provide
maintenance on leased equipment. The General Partner administers the equipment
portfolio of leases acquired through the direct leasing program. Administration
includes the collection of rents from the lessees and remarketing of the
equipment.
The Partnership has agreements with some of the manufacturers of its
equipment whereby such manufacturers undertake to remarket off-lease equipment
on a best efforts basis. These agreements permit the Partnership to assume the
remarketing function directly if certain conditions contained in the agreements
are not met. For their remarketing services, the manufacturers are paid a
percentage of net monthly rentals. Certain manufacturers are entitled to
additional fees after the Partnership has recovered certain amounts.
Note 6. Investment in Joint Ventures.
Equipment Joint Ventures
The Partnership owns a limited or general partnership interest in
equipment joint ventures. These investments are accounted for using the equity
method of accounting. The other partners of the ventures are entities organized
and managed by the General Partner.
The purpose of the equipment joint ventures is the acquisition and
leasing of various types of equipment. Phoenix Leasing Growth Fund 1982 has
participated in the following equipment joint ventures:
Weighted
Joint Venture Percentage Interest
------------- -------------------
Arroyo Joint Venture VIII(1) 40.00%
Arroyo Joint Venture XVI(3) 35.72
Arroyo Joint Venture XVII(1) 28.35
PLI Limited Partnership Fund A(2) 25.24
ACRO Joint Venture, Residential(3) 30.90
Leveraged Joint Venture 1986(2) 23.44
Leveraged Joint Venture 1987-1(1) 19.75
Leveraged Joint Venture 1987-2 17.91
Leveraged Joint Venture 1987-3 9.73
Leveraged Joint Venture 1990-1 15.88
Xerox Graphics Joint Venture(1) 16.67
Phoenix Joint Venture 1994-1 5.37
(1) Closed during 1994
(2) Closed during 1995
(3) Closed during 1996
Page 18 of 29
An analysis of the Partnership's investment in equipment joint ventures
is as follows:
Net Investment Net Investment
at Beginning Equity in at End
Date of Period Contributions Earnings Distributions of Period
- ---- --------- ------------- -------- ------------- ---------
(Amounts in Thousands)
Year Ended
December 31, 1994 $ 89 $ 276 $124 $169 $320
==== ======= ==== ==== ====
Year Ended
December 31, 1995 $320 $ -- $191 $342 $169
==== ======= ==== ==== ====
Year Ended
December 31, 1996 $169 $ -- $131 $207 $ 93
==== ======= ==== ==== ====
The aggregate combined financial information of the equipment joint
ventures as of December 31 and for the years then ended is presented as follows:
COMBINED BALANCE SHEETS
ASSETS
December 31,
1996 1995
---- ----
(Amounts in Thousands)
Cash and cash equivalents $ 432 $ 644
Accounts receivable 1,443 1,776
Operating lease equipment 525 1,021
Other assets 512 691
------ ------
Total Assets $2,912 $4,132
====== ======
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 786 $ 973
Partners' capital 2,126 3,159
------ ------
Total Liabilities and Partners' Capital $2,912 $4,132
====== ======
COMBINED STATEMENTS OF OPERATIONS
INCOME
For the Years Ended December 31,
1996 1995 1994
---- ---- ----
(Amounts in Thousands)
Rental income $2,609 $3,923 $3,293
Gain on sale of equipment 850 1,769 1,312
Other income 141 742 259
------ ------ ------
Total Income 3,600 6,434 4,864
------ ------ ------
Page 19 of 29
EXPENSES
Depreciation $ 332 1,188 1,257
Lease related operating expenses 1,460 2,961 2,778
Management fee to the General Partner 119 289 235
Interest expense -- -- 1
Other expenses 126 272 88
------ ------ ------
Total Expenses 2,037 4,710 4,359
------ ------ ------
Net Income $1,563 $1,724 $ 505
====== ====== ======
As of December 31, 1996 and 1995, the Partnership's pro rata interest
in the equipment joint ventures' net book value of off-lease equipment was
$2,000 and $6,000, respectively.
The General Partner earns a management fee of 6% of the Partnership's
respective interest in gross revenues of each equipment joint venture. Revenues
subject to management fees at the joint venture level are not subject to
management fees at the Partnership level.
Financing Joint Ventures
The Partnership owns a limited partnership interest in financing joint
ventures which are combined for reporting purposes into Phoenix Funding
Partnership (PFP). The Partnership's current investment in PFP's consists of two
financing joint ventures. The purpose of the financing joint ventures is to
provide, on a limited basis, financing to manufacturers and their lessees for
equipment leased directly by manufacturers to third parties. All loans to
manufacturers are interest bearing and are secured by equipment. The Partnership
accounts for its investment in the PFP using the equity method of accounting.
PFP periodically reviews the probability of recovering the outstanding
note balances. Such reviews address, among other things, current cash receipts,
costs of collection efforts, the current economic situation and potential
uncollectible receivables. If the review indicates that future cash receipts,
net of anticipated future expenses, does not exceed the outstanding note
balances, PFP provides a reserve for any anticipated loan loss as appropriate.
Due to a high degree of uncertainty relating to the collection of the
entire amount of contractually owed principal and interest over the lives of the
notes receivable, the PFP loan portfolios apply all cash receipts (principal and
interest) to the outstanding note balances. Under this method, interest income
will not be recognized until the outstanding note balances are recovered.
The following information summarizes the Partnership's respective
interest in the original loan proceeds of the funding partnership.
Weighted
Joint Venture Percentage Interest
------------- -------------------
Phoenix Funding Partnership 14.33%
An analysis of the Partnership's investment account in financing joint
ventures is as follows:
Page 20 of 29
Net Investment Net Investment
at Beginning Equity in at End
Date of Period Contributions Earnings Distributions of Period
- ---- --------- ------------- -------- ------------- ---------
(Amounts in Thousands)
Year Ended
December 31, 1994 $46 $- $ 8 $45 $9
=== == === === ==
Year Ended
December 31, 1995 $ 9 $- $17 $21 $5
=== == === === ==
Year Ended
December 31, 1996 $ 5 $- $ 9 $ 8 $6
=== == === === ==
The aggregate combined financial information of the financing joint
ventures as of December 31 and for the years then ended is presented as follows:
COMBINED BALANCE SHEETS
ASSETS
December 31,
1996 1995
---- ----
(Amounts in Thousands)
Cash and cash equivalents $38 $28
--- ---
Total Assets $38 $28
=== ===
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 4 $ 5
Partners' capital 34 23
--- ---
Total Liabilities and Partners' Capital $38 $28
=== ===
COMBINED STATEMENTS OF OPERATIONS
INCOME
For the Years Ended December 31,
1996 1995 1994
---- ---- ----
(Amounts in Thousands)
Interest income $ 46 $ 73 $ 86
Other income 30 77 17
---- ---- ----
Total Income 76 150 103
---- ---- ----
EXPENSES
Management fee to the General Partner 2 8 19
Other expenses 11 19 43
---- ---- ----
Total Expenses 13 27 62
---- ---- ----
Net Income $ 63 $123 $ 41
==== ==== ====
The General Partner earns a management fee of 6% of the Partnership's
respective interest in gross payments received for each financing joint venture.
Revenues subject to a management fee at the joint venture level are not subject
to management fees at the Partnership level.
Page 21 of 29
Foreclosed Cable Systems Joint Ventures
The Partnership owns an interest in foreclosed cable systems joint
ventures, along with other partnerships managed by the General Partner and its
affiliates. The Partnership foreclosed upon nonperforming outstanding notes
receivable to cable television operators to whom the Partnership, along with
other affiliated partnerships managed by the General Partner, had extended
credit. The partnerships' notes receivables were exchanged for interests (their
capital contribution), on a pro rata basis, in newly formed joint ventures owned
by the partnerships and managed by the General Partner. Title to the cable
television systems is held by the joint ventures. These investments are
accounted for using the equity method of accounting.
The foreclosed cable systems joint ventures owned by the Partnership,
along with their percentage ownership is as follows:
Percentage
Joint Venture Ownership
------------- ---------
Phoenix Black Rock Cable J.V.(1) 6.65%
(1) Cable system sold and joint venture closed during 1996.
An analysis of the Partnership's net investment in foreclosed cable
systems joint ventures at December 31, is as follows:
Net Investment Net Investment
at Beginning Equity in at End
Date of Period Contributions Earnings Distributions of Period
- ---- --------- ------------- -------- ------------- ---------
(Amounts in Thousands)
Year Ended
December 31, 1994 $114 $-- $11 $ 17 $108
==== ==== === ==== ====
Year Ended
December 31, 1995 $108 $-- $ 9 $ 8 $109
==== ==== === ==== ====
Year Ended
December 31, 1996 $109 $-- $72 $181 $--
==== ==== === ==== ====
The aggregate combined financial information of the foreclosed cable
systems joint ventures as of December 31 and for the years then ended is
presented as follows:
BALANCE SHEETS
ASSETS
December 31,
1996 1995
---- ----
(Amounts in Thousands)
Cash and cash equivalents $-- $ 258
Accounts receivable -- 31
Property, plant and equipment -- 1,449
Other assets -- 1
---- ------
Total Assets $-- $1,739
==== ======
Page 22 of 29
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $-- $ 90
Partners' capital -- 1,649
---- ------
Total Liabilities and Partners' Capital $-- $1,739
==== ======
STATEMENTS OF OPERATIONS
INCOME
For the Years Ended December 31,
1996 1995 1994
---- ---- ----
(Amounts in Thousands)
Subscriber revenue $ 50 $ 680 $ 658
Gain on sale of cable system 1,185 -- --
Other income 9 8 3
------ ------ ------
Total Income 1,244 688 661
------ ------ ------
EXPENSES
Depreciation and amortization 13 154 150
Program services 12 181 154
General and administrative expenses 19 185 155
Management fees to an affiliate of the
General Partner 121 31 29
Provision for losses on accounts receivable -- 7 7
------ ------ ------
Total Expenses 165 558 495
------ ------ ------
Net Income $1,079 $ 130 $ 166
====== ====== ======
Phoenix Cable Management Inc. (PCMI), an affiliate of the General
Partner, provided day to day management services in connection with the
operation of the foreclosed cable systems joint ventures. The foreclosed cable
systems joint ventures paid a management fee equal to four and one-half percent
of the System's monthly gross revenue for these services. Revenues subject to a
management fee at the joint venture level were not subject to management fees at
the Partnership level.
Note 7. Accounts Payable and Accrued Expenses.
Accounts payable and accrued expenses consist of the following at
December 31:
1996 1995
---- ----
(Amounts in Thousands)
Equipment lease operations $-- $ 2
General Partner and affiliates 1 --
Other 70 66
--- ---
Total $71 $68
=== ===
Note 8. Settlements.
On July 1, 1991, Phoenix Leasing Incorporated, as General Partner to
the Partnership and sixteen other affiliated partnerships, filed suit in the
Superior Court for the County of Marin, Case No. 150016, against Xerox
Corporation, a corporation with which the General Partner had entered into
contractual agreements for the acquisition and administration of leased
equipment. The lawsuit was settled out of court, effective as of October 28,
1994 pursuant to the terms of a Confidential Settlement Agreement and Mutual
Page 23 of 29
Release. The settlement agreement generally provides for compensation payable to
the Partnership and its affiliates in cash and kind, including the assignment by
Xerox of certain goods and services. The agreement further provides for the sale
by Xerox to the Partnership and its affiliates of equipment subject to lease.
The suit has been dismissed with prejudice on the merits.
The Partnership's pro rata share of the Xerox settlement was $203,000,
which consists of cash of $80,000, and assigned monthly rentals and credits for
goods and services valued at $123,000. In addition, the Partnership purchased
additional leased equipment at an aggregate cost of $124,000. The Partnership,
along with sixteen other affiliated partnerships managed by the General Partner,
contributed its share of the assigned monthly rentals, credits for goods and
services and purchased equipment leases to a joint venture, in exchange for an
interest in the joint venture.
Storage Technology Corporation (STC), a major manufacturer of equipment
purchased by the Partnership, filed for protection from creditors under Chapter
11 of the Federal Bankruptcy Code on October 14, 1984. On June 18, 1987, STC's
plan of reorganization was approved and the Partnership received a settlement.
On August 31, 1994, the United States Bankruptcy Court for the District
of Colorado ordered a final distribution from the Disputed Claims Reserve which
was provided for in the Debtors' Joint Plan of Reorganization. On December 23,
1994, the Partnership received its pro rata share of the final distribution from
the Disputed Claims Reserve valued at $134,000. The final distribution consisted
of cash of $62,000 and common stock valued at $72,000.
Note 9. 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.
The net difference between the tax basis and the reported amounts of
the Partnership's assets and liabilities are as follows at December 31:
Reported Amounts Tax Basis Net Difference
---------------- --------- --------------
(Amounts in Thousands)
1996
- ----
Assets $ 829 $ 837 $ (8)
Liabilities 1,887 1,214 673
1995
- ----
Assets $1,453 $1,488 $ (35)
Liabilities 1,949 1,211 738
Note 10. Related Entities.
The General Partner serves in the capacity of general partner in other
partnerships, all of which are engaged in the equipment leasing and financing
business.
The General Partner incurs certain expenses, such as data processing
and equipment remarketing costs, for which it is reimbursed by the Partnership.
Equipment remarketing costs are incurred as the General Partner remarkets
certain equipment on behalf of the Partnership. The expenses incurred by the
General Partner are reimbursed at the lower of the actual costs or an amount
equal to 90% of the fair market value for such services. The equipment
remarketing costs reimbursed to the General Partner were $0, $1,000 and $1,000
for the years ended December 31, 1996, 1995 and 1994, respectively.
Note 11. 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 years ended December 31,
1996, 1995 and 1994. For purposes of allocating income (loss) and distributions
Page 24 of 29
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.
Note 12. Subsequent Events.
In January 1997, cash distributions of $404,000 were made to the
Limited Partners.
Note 13. Fair Value of Financial Instruments.
The following methods and assumptions were used to estimate the fair
value of each class of financial instrument for which it is practicable to
estimate that value.
Cash and Cash Equivalents
The carrying amount of cash and cash equivalents approximates fair value because
of the short maturity of these instruments.
Securities, Available-for-Sale
The fair values of investments in available-for-sale securities are estimated
based on quoted market prices.
The estimated fair values of the Partnership's financial instruments
are as follows at December 31,:
Carrying
Amount Fair Value
------ ----------
(Amounts in Thousands)
1996
- ----
Assets
Cash and cash equivalents $ 658 $ 658
Securities, available-for-sale 67 67
1995
- ----
Assets
Cash and cash equivalents $1,078 $1,078
Securities, available-for-sale 60 60
Page 25 of 29
Item 9. Disagreements on Accounting and Financial Disclosure Matters.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The registrant is a limited partnership and, therefore, has no
executive officers or directors. The general partner of the registrant is
Phoenix Leasing Incorporated, a California corporation. The directors and
executive officers of Phoenix Leasing Incorporated (PLI) are as follows:
GUS CONSTANTIN, age 59, is President, Chief Executive Officer and a
Director of PLI. Mr. Constantin received a B.S. degree in Engineering from the
University of Michigan and a Master's Degree in Management Science from Columbia
University. From 1969 to 1972, he served as Director, Computer and Technical
Equipment of DCL Incorporated (formerly Diebold Computer Leasing Incorporated),
a corporation formerly listed on the American Stock Exchange, and as Vice
President and General Manager of DCL Capital Corporation, a wholly-owned
subsidiary of DCL Incorporated. Mr. Constantin was actively engaged in marketing
manufacturer leasing programs to computer and medical equipment manufacturers
and in directing DCL Incorporated's IBM System/370 marketing activities. Prior
to 1969, Mr. Constantin was employed by IBM as a data processing systems
engineer for four years. Mr. Constantin is an individual general partner in four
active partnerships and is an NASD registered principal. Mr. Constantin is the
founder of PLI and the beneficial owner of all of the common stock of Phoenix
American Incorporated.
PARITOSH K. CHOKSI, age 43, is Senior Vice President, Chief Financial
Officer, Treasurer and a Director of PLI. He has been associated with PLI since
1977. Mr. Choksi oversees the finance, accounting, information services and
systems development departments of the General Partner and its Affiliates and
oversees the structuring, planning and monitoring of the partnerships sponsored
by the General Partner and its Affiliates. Mr. Choksi graduated from the Indian
Institute of Technology, Bombay, India with a degree in Engineering. He holds an
M.B.A. degree from the University of California, Berkeley.
GARY W. MARTINEZ, age 46, is Senior Vice President and a Director of
PLI. He has been associated with PLI since 1976. He manages the Asset Management
Department, which is responsible for lease and loan portfolio management. This
includes credit analysis, contract terms, documentation and funding; remittance
application, change processing and maintenance of customer accounts; customer
service, invoicing, collection, settlements and litigation; negotiating lease
renewals, extensions, sales and buyouts; and management information reporting.
From 1973 to 1976, Mr. Martinez was a Loan Officer with Crocker National Bank,
San Francisco. Prior to 1973, he was an Area Manager with Pennsylvania Life
Insurance Company. Mr. Martinez is a graduate of California State University,
Chico.
BRYANT J. TONG, age 42, is Senior Vice President, Financial Operations
of PLI. He has been with PLI since 1982. Mr. Tong is responsible for investor
services and overall company financial operations. He is also responsible for
the technical and administrative operations of the cash management, corporate
accounting, partnership accounting, accounting systems, internal controls and
tax departments, in addition to Securities and Exchange Commission and other
regulatory agency reporting. Prior to his association with PLI, Mr. Tong was
Controller-Partnership Accounting with the Robert A. McNeil Corporation for two
years and was an auditor with Ernst & Whinney (succeeded by Ernst & Young) from
1977 through 1980. Mr. Tong holds a B.S. in Accounting from the University of
California, Berkeley, and is a Certified Public Accountant.
CYNTHIA E. PARKS, age 41, is Vice President, General Counsel, and
Assistant Secretary of PLI. Prior to joining PLI in 1984, she was with GATX
Leasing Corporation, and had previously been Corporate Counsel for Stone
Financial Companies, and an Assistant Vice President of the Bank of America,
Bank Amerilease Group. She has a bachelor's degree from Santa Clara University,
and earned her J.D. from the University of San Francisco School of Law.
Neither the General Partner nor any Executive Officer of the General
Partner has any family relationship with the others.
Phoenix Leasing Incorporated or its affiliates and the executive
officers of the General Partner serve in a similar capacity to the following
affiliated limited partnerships:
Page 26 of 29
Phoenix Leasing American Business Fund, L.P.
Phoenix Leasing Cash Distribution Fund V, L.P.
Phoenix Income Fund, L.P.
Phoenix High Tech/High Yield Fund
Phoenix Leasing Cash Distribution Fund IV
Phoenix Leasing Cash Distribution Fund III
Phoenix Leasing Cash Distribution Fund II
Phoenix Leasing Income Fund VII
Phoenix Leasing Income Fund VI and
Phoenix Leasing Income Fund 1977
Item 11. Executive Compensation.
Set forth is the information relating to all direct remuneration paid
or accrued by the Registrant during the last year to the General Partner.
(A) (B) (C) (D)
Cash and cash- Aggregate of
Name of Individual Capacities in equivalent forms contingent forms
or persons in group which served of remuneration of remuneration
- ------------------- ------------ --------------------------------------------- ---------------
(C1) (C2)
Securities or property
Salaries, fees, directors' insurance benefits or
fees, commissions, and reimbursement, personal
bonuses benefits
------------------------- -----------------------
(Amounts in Thousands)
Phoenix Leasing
Incorporated General Partner $5(1) $0 $0
= = =
(1) consists of management fees.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) No person owns of record, or is known by the Registrant to own
beneficially, more than five percent of any class of voting
securities of the Registrant.
(b) The General Partner of the Registrant owns the equity securities
of the Registrant set forth in the following table:
(1) (2) (3)
Title of Class Amount Beneficially Owned Percent of Class
-------------- ------------------------- ----------------
General Partner Interest Represents a 15% Interest in the 100%
Registrant's Profits and Distributions
Limited Partner Interest 63 units .16%
Item 13. Certain Relationships and Related Transactions.
None.
Page 27 of 29
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Page No.
--------
(a) 1. Financial Statements:
Report of Independent Public Accountants 9
Balance Sheets as of December 31, 1996 and 1995. 10
Statements of Operations for the Years Ended
December 31, 1996, 1995 and 1994. 11
Statements of Partners' Capital for the Years Ended
December 31, 1996, 1995 and 1994. 12
Statements of Cash Flows for the Years Ended
December 31, 1996, 1995 and 1994. 13
Notes to the Financial Statements 14-24
2. Financial Statement Schedules:
Schedule II - Valuation and Qualifying Accounts and Reserves
All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the financial
statements or notes thereto.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed for the quarter ended December 31,
1996.
(c) Exhibits
21. Additional Exhibits:
a) Balance Sheets of Phoenix Leasing Incorporated E21 1-12
b) Financial Statements for Significant Subsidiaries
Phoenix Black Rock Cable J.V. E21 13-19
27. Financial Data Schedule.
Page 28 of 29
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)
BY: PHOENIX LEASING INCORPORATED,
A CALIFORNIA CORPORATION
GENERAL PARTNER
Date: March 25, 1997 By: /S/ GUS CONSTANTIN
-------------- -------------------------
Gus Constantin, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/S/ GUS CONSTANTIN President, Chief Executive Officer and a March 25, 1997
- ----------------------- Director of Phoenix Leasing Incorporated --------------
(Gus Constantin) General Partner
/S/ PARITOSH K. CHOKSI Chief Financial Officer, March 25 1997
- ----------------------- Senior Vice President, --------------
(Paritosh K. Choksi) Treasurer and a Director of
Phoenix Leasing Incorporated
General Partner
/S/ BRYANT J. TONG Senior Vice President, March 25, 1997
- ----------------------- Financial Operations of --------------
(Bryant J. Tong) (Principal Accounting Officer)
Phoenix Leasing Incorporated
General Partner
/S/ GARY W. MARTINEZ Senior Vice President and a Director of March 25, 1997
- ----------------------- Phoenix Leasing Incorporated --------------
(Gary W. Martinez) General Partner
/S/ MICHAEL K. ULYATT Partnership Controller March 25, 1997
- ----------------------- of Phoenix Leasing Incorporated --------------
(Michael K. Ulyatt) Corporate General Partner
Page 29 of 29
PHOENIX LEASING GROWTH FUND 1982
SCHEDULE II
(Amounts in Thousands)
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
Classification Balance at Charged to Charged to Deductions Balance at
Beginning of Expense Revenue End of
Period Period
- ------------------------------------- ------------- ---------- ----------- ------------ ------------
Year ended December 31, 1994
Allowance for losses on accounts
receivable $ 48 $ 0 $30 $12 $ 6
Allowance for early termination
of financing leases 2 0 1 0 1
Allowance for losses on notes
receivable 100 0 0 0 100
---- --- --- --- ----
Totals $150 $ 0 $31 $12 $107
==== === === === ====
Year ended December 31, 1995
Allowance for losses on accounts
receivable $ 6 $11 $ 0 $17 $ 0
Allowance for early termination
of financing leases 1 0 1 0 0
Allowance for losses on notes
receivable 100 0 69 31 0
---- --- --- --- ----
Totals $107 $11 $70 $48 $ 0
==== === === === ====
Year ended December 31, 1996
Allowance for losses on accounts
receivable $ 0 $ 2 $ 0 $ 2 $ 0
---- --- --- --- ----
Totals $ 0 $ 2 $ 0 $ 2 $ 0
==== === === === ====