Page 1 of 11
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ----- ACT OF 1934
For the quarterly period ended March 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission File Number 0-12594
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PHOENIX LEASING INCOME FUND VI
- --------------------------------------------------------------------------------
Registrant
California 94-2869603
- --------------------------------- ----------------------------------
State of Jurisdiction I.R.S. Employer Identification No.
2401 Kerner Boulevard, San Rafael, California 94901-5527
- --------------------------------------------------------------------------------
Address of Principal Executive Offices Zip Code
Registrant's telephone number, including area code: (415) 485-4500
-------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes _X_ No ___
297,165 Units of Limited Partnership Interest were outstanding as of March 31,
1997.
Transitional small business disclosure format:
Yes __ No _X_
Page 2 of 11
Part I. Financial Information
Item 1. Financial Statements
PHOENIX LEASING INCOME FUND VI
BALANCE SHEETS
(Amounts in Thousands Except for Unit Amounts)
(Unaudited)
March 31, December 31,
1997 1996
---- ----
ASSETS
Cash and cash equivalents $ 752 $ 670
Accounts receivable (net of allowance for losses on
accounts receivable of $8 at March 31, 1997 and
December 31, 1996) 8 7
Equipment on operating leases and held for lease
(net of accumulated depreciation of $397 and
$423 at March 31, 1997 and December 31, 1996,
respectively) -- --
Investment in joint ventures 225 276
Securities, available for sale 114 149
Other assets 15 7
------- -------
Total Assets $ 1,114 $ 1,109
======= =======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 133 $ 134
Liquidation fees payable to General Partner 1,108 1,108
------- -------
Total Liabilities 1,241 1,242
------- -------
Partners' Capital (Deficit)
General Partner 427 421
Limited Partners, 320,000 units authorized
and issued, 297,165 units outstanding at
March 31, 1997 and December 31, 1996 (580) (615)
Unrealized gains on available-for-sale securities 26 61
------- -------
Total Partners' Capital (Deficit) (127) (133)
------- -------
Total Liabilities and Partners' Capital (Deficit) $ 1,114 $ 1,109
======= =======
The accompanying notes are an integral part of these statements.
Page 3 of 11
PHOENIX LEASING INCOME FUND VI
STATEMENTS OF OPERATIONS
(Amounts in Thousands Except for Per Unit Amounts)
(Unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
INCOME
Rental income $ 6 $ 6
Equity in earnings from joint ventures, net 30 52
Interest income, notes receivable 13 --
Other income 9 10
----- -----
Total Income 58 68
----- -----
EXPENSES
Depreciation -- 1
Lease related operating expenses -- 4
Management fees to General Partner 2 --
General and administrative expenses 15 28
----- -----
Total Expenses 17 33
----- -----
NET INCOME $ 41 $ 35
===== =====
NET INCOME PER LIMITED PARTNERSHIP UNIT $ .12 $ .10
===== =====
DISTRIBUTIONS PER LIMITED PARTNERSHIP UNIT $ -- $7.50
===== =====
ALLOCATION OF NET INCOME:
General Partner $ 6 $ 5
Limited Partners 35 30
----- -----
$ 41 $ 35
===== =====
The accompanying notes are an integral part of these statements.
Page 4 of 11
PHOENIX LEASING INCOME FUND VI
STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Operating Activities:
Net income $ 41 $ 35
Adjustments to reconcile net income to net cash
used by operating activities:
Depreciation -- 1
Gain on sale of equipment (2) (2)
Equity in earnings from joint ventures, net (30) (52)
Decrease (increase) in accounts receivable (1) 2
Decrease in accounts payable and accrued expenses (1) (113)
Increase in other assets (8) (1)
----- -------
Net cash used by operating activities (1) (130)
----- -------
Investing Activities:
Proceeds from sale of equipment 2 2
Distributions from joint ventures 81 95
----- -------
Net cash provided by investing activities 83 97
----- -------
Financing Activities:
Distributions to partners -- (2,228)
----- -------
Net cash used by financing activities -- (2,228)
----- -------
Increase (decrease) in cash and cash equivalents 82 (2,261)
Cash and cash equivalents, beginning of period 670 2,708
----- -------
Cash and cash equivalents, end of period $ 752 $ 447
===== =======
The accompanying notes are an integral part of these statements.
Page 5 of 11
PHOENIX LEASING INCOME FUND VI
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. General.
The accompanying unaudited condensed financial statements have been
prepared by the Partnership in accordance with generally accepted accounting
principles, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Although management believes that the disclosures are adequate to make
the information presented not misleading, it is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes included in the Partnership's Financial Statement, as filed with the
SEC in the latest annual report on Form 10-K.
Note 2. Reclassification.
Reclassification - Certain 1997 amounts have been reclassified to
conform to the 1996 presentation.
Note 3. Income Taxes.
Federal and state income tax regulations provide that taxes on the
income or loss of the Partnership are reportable by the partners in their
individual income tax returns. Accordingly, no provision for such taxes has been
made in the accompanying financial statements.
Note 4. Net Income (Loss) and Distributions per Limited Partnership Unit.
Net income and distributions per limited partnership unit were based on
the limited partner's share of net income and distributions, and the weighted
average number of units outstanding of 297,165 for the three month periods ended
March 31, 1997 and 1996. For purposes of allocating income (loss) and
distributions to each individual limited partner, the Partnership allocates net
income (loss) and distributions based upon each respective limited partner's
ending capital account balance. The use of this method accurately reflects each
limited partner's participation in the partnership including reinvestment
through the Capital Accumulation Plan. As a result the calculation of net income
(loss) and distributions per limited Partnership unit is not indicative of per
unit income (loss) and distributions due to reinvestments through the Capital
Accumulation Plan.
Page 6 of 11
Note 5. Investment in Joint Ventures.
Equipment Joint Ventures
The aggregate combined financial information of the equipment joint
ventures is as follows:
March 31, December 31,
1997 1996
---- ----
(Amounts in Thousands)
Assets $2,667 $2,912
Liabilities 763 786
Partners' Capital 1,904 2,126
Three Months Ended
March 31,
1997 1996
---- ----
(Amounts in Thousands)
Revenue $687 $961
Expenses 351 587
Net Income 336 374
Financing Joint Ventures
The aggregate combined financial information of the financing joint
ventures is as follows:
March 31, December 31,
1997 1996
---- ----
(Amounts in Thousands)
Assets $34 $38
Liabilities 11 4
Partners' Capital 23 34
Three Months Ended
March 31,
1997 1996
---- ----
(Amounts in Thousands)
Revenue $14 $19
Expenses 3 4
Net Income 11 15
Page 7 of 11
Foreclosed Cable Systems Joint Venture
The financial information of the foreclosed cable systems joint
venture is as follows:
March 31, December 31,
1997 1996
---- ----
(Amounts in Thousands)
Assets $ -- $ --
Liabilities -- --
Partners' Capital -- --
Three Months Ended
March 31,
1997 1996
---- ----
(Amounts in Thousands)
Revenue $ -- $1,276
Expenses -- 164
Net Income -- 1,112
Page 8 of 11
PHOENIX LEASING INCOME FUND VI
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
The Partnership reported net income of $41,000 during the three months
ended March 31, 1997, compared to net income of $35,000 for the same period in
the prior year. The increase in net income during the three months ended March
31, 1997, compared to the same period in 1996, is attributable to a decline in
total expenses which exceeded the decline in total revenues.
Total revenues decreased by $10,000 during the three months ended March
31, 1997, when compared to the same period in 1996. The decrease in total
revenues during the three months ended March 31, 1997 was primarily attributable
to a decrease in earnings from joint ventures of $22,000, as will be further
discussed under "Joint Ventures".
The decrease in earnings from joint ventures is partially offset by an
increase in interest income from notes receivable of $13,000 for the three
months ended March 31, 1997, compared to the same period in the prior year. The
Partnership received a disbursement of proceeds during the three months ended
March 31, 1997, which were held in escrow for a note receivable which was paid
off in 1995. In 1995, a portion of the proceeds from the payoff of this notes
receivable was placed into escrow to cover unanticipated liabilities which may
have arisen after the payoff.
Total expenses decreased by $16,000 during the three months ended March
31, 1997, as compared to the same period in 1996. The decrease during the three
months ended March 31, 1997, as compared to the same period in 1996, is due to a
$13,000 decrease in general and administrative expenses and a $4,000 decrease in
lease related operating expenses. General and administrative expenses consist
primarily of audit fees, postage, insurance and printing costs, all of which
decreased during the three months ended March 31, 1997, compared to the same
period in 1996.
Because the Partnership is in its liquidation stage, it is not expected
that the Partnership will acquire any additional equipment. As a result, lease
related revenues and expenses are expected to continue to decline as the
portfolio is liquidated and the remaining equipment is re-leased at lower rental
rates. The Partnership will reach the end of its term on December 31, 1997.
Joint Ventures
The Partnership has made investments in various equipment and financing
joint ventures along with other affiliated partnerships managed by the General
Partner for the purpose of spreading the risk of investing in certain equipment
leasing and financing transactions. These joint ventures are not currently
making any significant additional investments in new equipment leasing or
financing transactions. As a result, the earnings and cash flow from such
investments are anticipated to continue to decline as the portfolios are
re-leased at lower rental rates and eventually liquidated.
Earnings from joint ventures decreased by $22,000 during the three
months ended March 31, 1997, compared to the same period in 1996. This decrease
is due to the closure of one equipment joint venture during the three months
ended March 31, 1997, and a decline in rental income and gain on sale of
equipment in another equipment joint venture.
Page 9 of 11
Liquidity and Capital Resources
During the three months ended March 31, 1997, the net cash used by
leasing and financing activities was $1,000, as compared to the net cash used by
leasing and financing activities of $130,000 during the three months ended March
31, 1996. The improvement in net cash generated by leasing and financing
activities for the three months ended March 31, 1997, compared to the same
period in 1996, is a result of a decrease in the amount paid to the General
Partner for liquidation fees.
The distributions from joint ventures continues to be one of the
primary sources of cash generated by the Partnership. Cash distributions from
joint ventures decreased by $14,000 for the three months ended March 31, 1997,
compared to the same period in 1996. The decrease experienced during the quarter
ended March 31, 1997, compared to 1996, is attributable to one equipment joint
venture experiencing a decline in cash available for distributions as a result
of a reduction in rental income.
As of March 31, 1997, the Partnership owned equipment held for lease
with a purchase price of $419,000 and a net book value of $0, as compared to
$807,000 and $3,000 at March 31, 1996, respectively. The General Partner is
actively engaged, on behalf of the Partnership, in remarketing and selling the
Partnership's off-lease equipment portfolio.
The Partnership will reach the end of its term on December 31, 1997, at
which time it will liquidate its remaining assets and make a final distribution
to partners of the excess cash, if any. The Partnership currently does not
anticipate making any future distribution to partners until the termination of
the Partnership, as such no distributions has been made during the three months
ended March 31, 1997. The Limited Partners received their annual distributions
of $2,228,000 during the three months ended March 31, 1996. The cumulative cash
distributions to the Limited Partners is $75,915,000 at March 31, 1997 and 1996.
The General Partner did not receive distributions during the three months ended
March 31, 1996.
As the Partnership's asset portfolio continues to decline as a result
of the on-going liquidation of assets, it is expected that the cash generated
from operations will also decline. Cash generated from leasing and financing
operations has been and is anticipated to continue to be sufficient to meet the
Partnership's on-going operational expenses.
Page 10 of 11
PHOENIX LEASING INCOME FUND VI
March 31, 1997
Part II. Other Information.
Item 1. Legal Proceedings. Inapplicable.
Item 2. Changes in Securities. Inapplicable
Item 3. Defaults Upon Senior Securities. Inapplicable
Item 4. Submission of Matters to a Vote of Securities Holders.Inapplicable
Item 5. Other Information. Inapplicable
Item 6. Exhibits and Reports on 8-K:
a) Exhibits:
(27) Financial Data Schedule
b) Reports on 8-K: None
Page 11 of 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PHOENIX LEASING INCOME FUND VI
------------------------------
(Registrant)
Date Title Signature
---- ----- ---------
May 13, 1997 Chief Financial Officer, /S/ PARITOSH K. CHOKSI
- ---------------------- Senior Vice President, -----------------------
Treasurer and a Director of (Paritosh K. Choksi)
Phoenix Leasing Incorporated
General Partner
May 13, 1997 Senior Vice President, /S/ BRYANT J. TONG
- ----------------------- Financial Operations of ----------------------
(Principal Accounting Officer) (Bryant J. Tong)
Phoenix Leasing Incorporated
General Partner
May 13, 1997 Senior Vice President /S/ GARY W. MARTINEZ
- ----------------------- and a Director of ----------------------
Phoenix Leasing Incorporated (Gary W. Martinez)
General Partner
May 13, 1997 Partnership Controller of /S/ MICHAEL K. ULYATT
- ----------------------- Phoenix Leasing Incorporated ----------------------
General Partner (Michael K. Ulyatt)