Item 1. BUSINESS
General Development of Business -
The Registrant is a Florida limited partnership (the "Partnership") composed of Cypress Equipment Management Corporation II, a California corporation and a wholly-owned subsidiary of Cypress Leasing Corporation, as the Managing General Partner; RJ Leasing - 2, Inc., a Florida corporation and a second-tier subsidiary of Raymond James Financial, Inc., as the Administrative General Partner; Raymond James Partners, Inc., a Florida corporation and a wholly-owned subsidiary of Raymond James Financial, Inc., as the other General Partner; and purchasers of partnership units as Limited Partners.
Financial Information about Industry Segments -
The Registrant is engaged in only one industry segment, to acquire transportation, manufacturing, industrial and other capital equipment (the "Equipment") and lease the Equipment to third parties.
Narrative Description of Business -
The Partnership's business is to acquire and lease equipment, primarily through full payout and operating leases expected to generate income over the useful life of the Equipment, and to generate cash distributions to the Limited Partners from leasing revenues and proceeds from the sale or other disposition of the Equipment owned by the Partnership.
The Registrant has no direct employees. The General Partners have full and exclusive discretion in management and control of the Partnership.
The equipment leasing industry is highly competitive and offers to users an alternative to the purchase of nearly every type of equipment. In seeking lessees, the Partnership will compete with manufacturers of equipment who provide leasing programs and with established leasing companies and equipment brokers. In addition, there are numerous other potential investors, including limited partnerships, organized and managed similarly to the Partnership, seeking to purchase equipment subject to leases, some of which have greater financial resources and more experience than the Partnership or the General Partners.
Item 2.
Item 2. PROPERTIES
The Registrant commenced operations in June 1992, and as of December 31, 1996, the original cost of Equipment owned by the Partnership was $49,984,701, all of which are located within the United States. Equipment and related information consist of the following:
FUTURE REVENUE LEASE OF REMAINING MATURITIES ACQUISITION LEASE TERM AT EQUIPMENT AT 12/31/96 COST 12/31/96 - -------------------------- ------------- -------------- ----------------
Aircraft March 1997 $ 1,537,519 $ 85,720
Tank Barges December 1997 3,623,484 988,251
Locomotives November 1998 1,745,717 666,976
Self Unloading Bulk November 1998 8,773,564 2,015,891 Carrier
Recovery Boiler Facility July 1999 10,331,910 5,502,779
Electronic Banking October 1997 10,336,844 5,903,473 Equipment -August 2000
Offlease:
3 Aircraft (5) 5,438,086
Aircraft (1) 1,519,874
Peak Power Generating Units (2) 4,100,606
Tank Cars (3) 36,137
Hopper Cars (4) 2,540,960 ------------ -------------- TOTAL $ 49,984,701 $ 15,163,090 ============ ==============
(1) Equipment was placed on a 7 year lease subsequent to year end. (2) The lessee has exercised its option to purchase the equipment. See "Legal Proceedings". (3) Equipment was sold subsequent to year end. (4) Equipment is subject to a dispute with the lessee. See "Legal Proceedings". (5) Letter of intent to lease was received subsequent to year end.
The lessees and the percentages of total equipment owned are as follows:
Federal Paper Board, Inc. 21% Oglebay Norton Company 18% Hughes Network Systems, Inc. 16% Dow Chemical Company 7% Affiliated Computer Services, Inc. 5% Skywest Airlines, Inc. 3% Southern Pacific Transportation Company 3% Equipment Pending Re-lease 14% Equipment Held for Sale 13% ---- 100% ====
The Partnership owns three Options, purchased for an acquisition cost of $3,033,618, to buy rail equipment at various lease expiration dates from July 1997 through January 2000. The Partnership paid $3,109,549 for the right to obtain title to certain equipment on December 30, 2002, at the expiration of the lease.
Item 3.
Item 3. LEGAL PROCEEDINGS
The Illinois Central Gulf Railroad transaction was purchased in September 1992. In 1994 a total of 234 of the original 398 hopper cars were declared casualtied by the lessee and the casualty proceeds as required under the lease were paid to the Partnership. The Partnership has brought a legal action against the lessee for damages associated with the return condition of the remaining 162 cars subject to the lease. The cars are currently stored on the Illinois Central tracks pending resolution of the dispute.
The Pennsylvania Power and Light Company lease expired in May 1996. Under the lease, the lessee is entitled to purchase the equipment at fair market value, determined by an appraisal, at the expiration of the lease if the lessee has given 180 days prior notice to the Partnership. The lessee provided this notification. Subsequently the lessee brought a legal action against the Partnership seeking to have their exercise of the purchase option revoked or to have the court define "fair market value." This action has been dismissed by the court. The equipment is currently located on the lessee's premises, pending resolution under the appraisal mechanism of the price to be paid for the equipment.
Varilease, the seller of the Hughes transaction to the Partnership, has initiated legal action against the partnership for enforcement of certain provision in the sales agreement. At this time management does not believe that there is any material liability.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders through the solicitation of proxies or otherwise during the fourth quarter of 1996. PART II
Item 5.
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 holders:
Number of Record Holders Title of Each Class as of December 31, 1996
Units of Limited Partnership Interest 1,894 General Partner Interests 3
Item 6.
Item 6. SELECTED FINANCIAL DATA
1996 1995 1994 1993 1992* Total Revenues $10,873,477 $7,119,741 $8,672,375 $ 5,170,123 $ 1,503,784
Net Income $4,472,073 $1,550,265 $3,199,088 $ 845,361 $ 190,937
Total Assets $50,451,896 $39,309,444 $36,771,147 $34,343,968 $21,246,728
Notes Payable $19,781,263 $9,900,879 $4,799,168 $ 9,492,116 $11,744,562
Distributions to Limited Partners Per Weighted Average Limited Partnership Unit Outstanding $ 100.00 $ 109.21 $ 91.45 $ 78.46 $ 19.94
Earnings Per Weighted Average Limited Partnership Unit Outstanding $ 121.40 $ 42.08 $ 90.75 $ 47.07 $ 26.70
* The Registrant's operations commenced June 22, 1992, and therefore, the earnings for 1992 do not reflect a full year of operations.
The selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this report. This statement is not covered by the auditor's opinion included elsewhere in this report.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Rental income increased from $6,573,823 for the year ended December 31, 1995, to $7,759,575 for the year ended December 31, 1996. Equipment which came off-lease or was sold during 1996 provided $1,213,921 less revenue in 1996 than in 1995 and equipment purchased in 1996 provided $2,399,673 more revenue in 1996 than in 1995. Equipment with a book value of $240,202 was sold for a gain of $198,081 during the year ended December 31, 1996. There were additional insurance proceeds of $912,756 on units previously declared as casualties. Interest income decreased during the year ended December 31, 1996, as compared to the year ended December 31, 1995, because the Partnership had a lower average balance of cash for investment and no interest income was received from the Note Receivable which originated and ended in 1995.
Interest expense increased from $639,213 for the year ended December 31, 1995, to $1,255,689 for the year ended December 31, 1996. This increase primarily resulted from a increased average level of debt during the period. Management fee expense decreased due to the calculations on two leases being based on the cash received by the Partnership instead of the revenues recognized by the Partnership. Depreciation and amortization expense increased $731,807 for the year ended December 31, 1996 versus the year ended December 31, 1995, due to an average higher depreciable basis of equipment during 1996.
The net effect of the above revenue and expense items resulted in a net income of $4,472,073 for the year ended December 31, 1996, compared to a net income of $1,550,265 for the year ended December 31, 1995.
During the year ended December 31, 1996, the Partnership acquired $14,555,650 of equipment and sold equipment with an original cost of $3,803,141 for a net increase in equipment of $10,752,509.
Notes payable increased $9,880,384 during the year ended December 31, 1996, due to $12,828,904 of additional borrowing, a non-cash reclassification increase of $3,037,097, deferred interest of $495,617, and $6,481,234 of principal payments on notes.
Liquidity and Capital Resources
The primary sources of funds for the year ended December 31, 1996 were $11,836,048 from operating activities, $12,828,904 from additional borrowing, and $1,351,038 of sales proceeds. These sources were used to make $10,335,806 of equipment purchases, $3,109,549 of advance forward purchases, $6,481,234 of notes payments, and $3,683,732 of distributions. As of December 31, 1996, the Partnership had $5,671,367 of Cash and Cash Equivalents. In the opinion of the General Partners there are no material trends, favorable or unfavorable, in the Partnership's capital resources and the resources will be sufficient to meet the Partnership's needs for the foreseeable future. The General Partners expect to make additional equipment purchases which will be funded from Cash and Cash Equivalents at December 31, 1996, and additional borrowings.
Short-term liquidity requirements consist of funds needed to purchase equipment, make distributions, and meet administrative expenses and debt retirement. These short-term needs will be funded by cash from 1997 operations and Cash and Cash Equivalents at December 31, 1996.
In the opinion of the General Partners, the Partnership has sufficient funds or sources of funds to remain liquid for the expected life of the Partnership. The General Partners are not aware of any trends that significantly affect the Partnership's liquidity.
The cash balance at December 31, 1996, was $5,671,367. The Partnership had income of $4,472,073 and after adjusting for depreciation and amortization and gain on sale and the changes in operating assets and liabilities, net cash provided by operating activities was $11,836,048. Cash used in investing activities totaled $11,980,804. Cash provided by financing activities consisted primarily of additional borrowing of $12,828,904, cash used in financing activities was primarily to make payments of notes payable of $6,481,234 and distributions of $3,683,732.
Actual cash distributions were $3,683,732 in 1996 and $4,023,005 in 1995.
The Partnership anticipates that funds from operations in 1997 will be adequate to cover all 1997 operating contingencies.
INDEPENDENT AUDITOR'S REPORT
To the Partners of Cypress Equipment Fund II, Ltd.
We have audited the accompanying balance sheets of Cypress Equipment Fund II, Ltd. as of December 31, 1996 and 1995, and the related statements of operations, partners' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements 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 Cypress Equipment Fund II, Ltd. 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.
/s/Spence, Marston, Bunch, Morris & Co. SPENCE, MARSTON, BUNCH, MORRIS & CO. Certified Public Accountants
Clearwater, Florida May 2, 1997
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CYPRESS EQUIPMENT FUND II, LTD.
BALANCE SHEETS
DECEMBER 31, 1996 1995 ------------ ------------ ASSETS
Leased Equipment, at Cost $ 43,306,997 $ 33,358,046 Less: Accumulated Depreciation (9,611,491) (5,972,307) ------------ ------------ 33,695,506 27,385,739
Equipment Held for Sale 4,125,116 3,607,031 Residual Participations 0 134,396 Deposit on Equipment 3,109,549 0 Options 3,033,618 3,038,114 Deferred Debt Costs (Net of Accumulated Amortization of $179,112 and $144,300 respectively) 82,876 83,135 Rents and Sales Proceeds Receivable 659,999 871,216 Accounts Receivable - Interest 0 63,752 Accounts Receivable - Residual Participation 0 914,066 Prepaid Expenses 73,866 25,257 Cash and Cash Equivalents 5,671,367 3,186,738 ------------ ------------ Total Assets $ 50,451,897 $ 39,309,444 ============ ============ LIABILITIES AND PARTNERS' EQUITY
Liabilities: Notes Payable $ 19,781,263 $ 9,900,879 Payable to: General Partners 386,367 99,187 Affiliates 11,393 0 Other 102,058 61,573 Interest Payable 210,289 56,182 Unearned Revenue 90,403 109,840 ------------ ------------ Total Liabilities 20,581,773 10,227,661 ------------ ------------
Partners' Equity: Limited Partners (36,469 units outstanding at December 31, 1996 and 1995) 29,890,358 29,109,906 General Partners (20,234) (28,123) ------------ ------------ Total Partners' Equity 29,870,124 29,081,783 ------------ ------------ Total Liabilities and Partners' Equity $ 50,451,897 $ 39,309,444 ============ ============
The accompanying notes are an integral part of these financial statements.
CYPRESS EQUIPMENT FUND II, LTD.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
1996 1995 1994 ------------ ------------------------ Revenues:
Rental Income $ 7,759,575 $ 6,573,823$ 6,846,703 Interest Income 362,482 439,766 251,092 Gain on Sale of Equipment 198,081 106,152 1,574,580 Gain on Sale of Equipment Held for Sale 1,640,583 0 0 Insurance Proceeds 912,756 0 0 ------------ ------------------------- Total Revenues 10,873,477 7,119,741 8,672,375 ------------ -------------------------
Operating Expenses:
Interest Expense 1,255,689 639,213 418,607 Management Fees - General Partners 223,432 284,795 368,087 General and Administrative: Affiliate 73,286 49,063 51,807 Other 565,488 294,703 190,174 Depreciation and Amortization 4,283,509 3,551,702 4,444,612 Write Down of Rental Equipment Held for Sale 0 750,000 0 ------------ ------------------------ Total Operating Expenses 6,401,404 5,569,476 5,473,287 ------------ ------------------------ Net Income $ 4,472,073 $ 1,550,265$ 3,199,088 ============ ========================
Allocation of Net Income - Limited Partners $ 4,427,352 $ 1,534,762$ 3,167,097 General Partners 44,721 15,503 31,991 ------------ ------------------------ $ 4,472,073 $ 1,550,265$ 3,199,088 ============ ========================
Per Weighted Average $1,000 Limited Partnership Unit Outstanding - $ 121.40 $ 42.08$ 90.75 ============ ========================
Weighted Average Number of Limited Partnership Units Outstanding 36,469 36,469 34,900 ============ ========================
The accompanying notes are an integral part of these financial statements.
CYPRESS EQUIPMENT FUND II, LTD.
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Limited General Total Partners' Partners' Partners' Equity (Deficit) Equity ------------ ---------- ------------
Balance at December 31, 1993 $22,506,073 $ (3,154) $22,502,919
Capital Contributions in 1994 10,314,000 0 10,314,000
Offering and Commission Costs (1,237,680) 0 (1,237,680)
Net Income - 1994 3,167,097 31,991 3,199,088
Distributions - 1994 (3,191,567) (32,237) (3,223,804) ----------- ----------- ----------- Balance at December 31, 1994 31,557,923 (3,400) 31,554,523
Net Income - 1995 1,534,762 15,503 1,550,265
Distributions - 1995 (3,982,779) (40,226) (4,023,005) ----------- ----------- ----------- Balance at December 31, 1995 29,109,906 (28,123) 29,081,783
Net Income - 1996 4,427,352 44,721 4,472,073
Distributions - 1996 (3,646,900) (36,832) (3,683,732) ------------ ----------- ------------ Balance at December 31, 1996 $29,890,358 $ (20,234) $29,870,124 =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
CYPRESS EQUIPMENT FUND II, LTD.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
1996 1995 1994 ------------ ------------------------
Cash Flows from Operating Activities: Net Income $ 4,472,073 $ 1,550,265$ 3,199,088 Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities: (Gain) on Sale of Equipment (198,081) (106,152) (1,574,580) Depreciation and Amortization 4,283,509 3,551,702 4,444,612 Deferred Interest on Notes Payable 495,617 231,078 0 Write Down of Rental Equipment Held for Sale 0 750,000 0 Purchase of Equipment Held for Sale 0 (2,290,270) 0 Changes in Operating Assets and Liabilities: (Increase) Decrease in Equipment Held for Sale 3,174,558 0 0 (Increase) Decrease in Rents Receivable 102,200 1,391,905 (1,107,949) (Increase) Decrease in Accounts Receivable: Interest 472 (63,752) 0 Other 289 (3,598) 0 (Increase) Decrease in Prepaid Expenses (48,898) 54,329 (8,971) Increase (Decrease) in Payable to: General Partners 287,179 (41,686) 7,219 Affiliates 11,393 (5,381) 5,381 Other 40,485 61,573 0 Increase (Decrease) in Interest Payable 147,445 (26,306) 7,310 Increase (Decrease) in Unearned Revenue (19,437) (78,874) (171,632) ------------ ------------------------ Net Cash Provided by Operating Activities 12,748,804 4,974,833 4,800,478 ------------ ------------------------
Cash Flows from Investing Activities: Purchases of Leased Equipment (10,335,806) (10,284,106) (5,154,947) Deposit on Equipment (3,109,549) 0 0 Purchase of Options 0 (3,038,114) 0 Purchase of Residual Participations 0 (134,396) 0 Purchase of Accounts Receivable - Residual Participations 0 (914,066) 0 Proceeds from Sale of Equipment 438,282 3,288,957 8,713,268 Proceeds from Casualty of Option 4,496 16,083 0 Payments Received on Note Receivable 0 306,927 319,081 (Increase) Decrease in Sales Proceeds Receivable 109,017 (110,500) 0 (Increase) Decrease in Note Receivable 0 0 (626,008) Increase (Decrease) in Payable to: General Partners 0 0 (48,374) Other 0 0 (1,731,381) ------------ ------------------------ Net Cash Provided by (Used in) Investing Activities (12,893,560) (10,869,215) 1,471,639 ------------ ------------------------
Cash Flows from Financing Activities: Capital Contributions 0 0 10,314,000 Offering and Commission Costs 0 0 (1,237,680) Proceeds from Notes Payable 12,828,904 8,313,460 664,630 Payment of Notes Payable (6,481,234) (3,442,827) (5,357,578) (Increase) Decrease in Deferred Debt Costs (34,553) (97,249) (7,250) Distributions to Partners (3,683,732) (4,023,005) (3,223,804) ------------ ------------------------ Net Cash Provided by Financing Activities 2,629,385 750,379 1,152,318 ------------ ------------------------ Increase (Decrease) in Cash 2,484,629 (5,144,003) 7,424,435
Cash and Cash Equivalents at Beginning of Period 3,186,738 8,330,741 906,306 ------------ ------------------------ Cash and Cash Equivalents at End of Period $ 5,671,367 $ 3,186,738$ 8,330,741 ============ ======================== Supplemental Cash Flow Information: Interest Paid $ 612,627 $ 434,441$ 411,297 ============ ========================
Non-Cash Activities:
In 1995, Rental Equipment with a cost of $3,015,223 and a net book value of $1,498,108 was transferred to Rental Equipment Held for Sale.
An option purchased in 1993 at a cost of $584,736 was exercised during 1995. This cost less casualty proceeds received of $16,083 was transferred to Rental Equipment Held for Sale.
Notes Payable in 1995 were increased by $231,078 the amount of Deferred Interest on Notes Payable.
The 1996 transfer of ownership from equipment previously under option resulted in increases of: Leased Equipment by $4,155,501; Notes Payable by $3,037,097; and Interest Payable by $6,662; and decreases of: Residual Participations by $134,396; Residual Participations Receivable by $914,066; and Accounts Receivable - Interest by $63,280.
Notes Payable in 1996 increased in total to $495,617, the amount of Deferred Interest on Notes Payable. In 1996, Leased Equipment with a cost of $4,136,743 and a net book value of $3,692,643 was transferred to Equipment Held for Sale.
The accompanying notes are an integral part of these financial statements.
CYPRESS EQUIPMENT FUND II, LTD.
NOTES TO FINANCIAL STATEMENTS December 31, 1996
NOTE 1 - ORGANIZATION
Cypress Equipment Fund II, Ltd., (the "Partnership"), a Florida limited partnership, was formed November 13, 1991, for the purpose of acquiring and leasing transportation, manufacturing, industrial and other capital equipment. The Partnership was funded with limited partner capital contributions and commenced operations on June 22, 1992. The Partnership will terminate on December 31, 2015, or sooner, in accordance with the terms of the Limited Partnership Agreement.
Cypress Equipment Management Corporation II, a California corporation and a wholly-owned subsidiary of Cypress Leasing Corporation, is the Managing General Partner; RJ Leasing - 2, Inc., a Florida corporation and a second-tier subsidiary of Raymond James Financial, Inc., is the Administrative General Partner; and Raymond James Partners, Inc., a Florida corporation and a wholly-owned subsidiary of Raymond James Financial, Inc., is the other General Partner.
Cash distributions, subject to payment of the equipment management fees, and profits and losses of the Partnership shall be allocated 99% to the Limited Partners and 1% to the General Partners. Once each Limited Partner has received cumulative cash distributions equal to his capital contributions, an incentive management fee equaling 4% of cash available for distributions will be paid to the General Partners. When each Limited Partner has received cumulative cash distributions equal to his capital contributions plus an amount equal to 8% of adjusted capital contributions per annum, an incentive management fee equaling 23% of cash available for distributions will be paid to the General Partners.
As of December 31, 1996, the Partnership has received Limited and General Partner capital contributions of $36,469,000 and $2,000, respectively.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Partnership utilizes the accrual basis of accounting whereby revenues are recognized when earned and expenses are recognized as obligations are incurred.
Cash and Cash Equivalents
It is the Partnership's policy to include all money market funds with an original maturity of three months or less in Cash and Cash Equivalents. Concentration of Credit Risk
Financial instruments which potentially subject the Partnership to concentrations of credit risk consist principally of cash investments and rents receivable. The cash investments are placed in high credit quality financial institutions and in a money market mutual fund that is managed by a wholly-owned subsidiary of Raymond James Financial, Inc. The Partnership receives rental income exclusively from lessees. Management does not believe that significant credit risk exists in relation to these accounts at December 31, 1996.
The Partnership maintains deposits in excess of federally insured limits. Statement of Financial Accounting Standards No. 105 requires disclosure regardless of the degree of risk.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates that affect certain reported amounts and disclosures. These estimates are based on management's knowledge and experience. Accordingly, actual results could differ from these estimates.
Offering and Commission Costs
Offering and commission costs are charged against Limited Partners' Equity upon admission of Limited Partners.
Leases
The Partnership accounts for all of its leases in accordance with the operating method. Under the operating method of accounting, the leased equipment is recorded as an asset at cost and depreciated on the declining balance method using a ten to forty year life. Rental income is recognized ratably over the term of the leases.
The Partnership's policy is to periodically review the estimated future rental income including remarketing of its leased equipment ("Future Revenues"). Should such review indicate that estimated Future Revenues will not exceed expenses including depreciation in any future period, the Partnership will revise its depreciation policy as appropriate. Future equipment expenses including depreciation exceeded the estimated Future Revenues resulting in an additional depreciation provision of $250,000 in 1994.
Equipment Held for Sale
The Partnership's policy is to transfer off-lease equipment that is held for sale to Equipment Held for Sale at the lower of its net book value or its market value. The net book value of equipment transferred exceeded market value resulting in a write down of $750,000 for the year ended December 31, 1995.
Options
In 1993, the Partnership purchased an option to acquire equipment at the termination of the current lease. The cost of the Option was $584,736. During 1995, the Partnership exercised the option and paid the strike price of $2,290,270. Upon exercise, the equipment was transferred to Equipment Held for Sale. This equipment was sold in 1996.
During 1995, the partnership purchased three options to acquire equipment at the termination of the current leases. The Partnership accounts for these options at costs of $749,893, $674,124, and $1,609,601. The exercise dates are July 1997, August 1999, and January 2000 with exercise prices of $572,516, $1,535,122, and $5,115,000, respectively. If the options are not exercised, the option costs will be charged against income.
During 1995, the Partnership purchased a residual interest to share in the cash proceeds generated by a series of equipment leases. The portion of the residual interest generated during the leases had a cost of $914,066, based on the present value of the future cash stream. The portion of the residual interest generated by subsequent leases or equipment sales had a cost of $134,396. During 1996, the Partnership purchased the equipment which had previously supported the residual interest.
Deposit On Equipment
During 1996 the Partnership paid $3,109,549 for the right to obtain title to certain equipment on December 31, 2002, at the expiration of the lease.
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.
Per Unit Computations
Per unit computations are based on 36,469, 36,469 and 34,900 weighted average number of $1,000 limited partnership units outstanding for 1996, 1995, and 1994, respectively.
Reclassification
For comparability, the 1995 and 1994 figures have been reclassified where appropriate to conform to the financial statement presentation used in 1996.
NOTE 3 - RELATED PARTY TRANSACTIONS
General Partners
The General Partners have contributed a total of $2,000 to the Partnership. In accordance with the terms of the offering prospectus, the Administrative and Managing General Partners were paid $0, $0, and $412,560 (representing 4% of the Limited Partners' initial capital contributions) for organization and offering expenses in 1996, 1995, and 1994, respectively. Acquisition fees of $368,478, $254,125, and $137,968 for services related to locating and leasing equipment (2.85% of the purchase price); equipment management fees of $223,432, $284,795, and $368,087 (5% of gross rentals from rental equipment subject to operating leases, 2% of gross rentals from rental equipment subject to full payout leases, or 1% of gross rentals from rental equipment subject to operating leases for which the Administrative and Managing General Partners arrange for and actively supervise the performance of services) were paid or accrued in 1996, 1995, and 1994, respectively. Gross rentals for purposes of calculating equipment management fees include cash revenues received by the Partnership subsequent to the date of purchase including cash revenues that relate to periods prior to the date of purchase. General Partner distributions were $36,832, $40,226, and $32,237 for 1996, 1995, and 1994, respectively.
Affiliates of the General Partner
The following amounts were paid or accrued to affiliates of the Administrative General Partner: (1) $0 in 1996, $0 in 1995, and $321,680 in 1994 for sales commissions (8% of original capital contributions) as selling agents for the Limited Partnership units sold; and (2) $73,286 in 1996, $49,063 in 1995, and $51,807 in 1994 for reimbursement of general and administrative expenses on an accountable basis.
NOTE 4 - LEASES
The initial lease terms of the equipment are generally 5 to 25 years. Future minimum rentals to be received on these leases at December 31, 1996, are as follows: Year Ending December 31, Amount ------------ ------------
1997 $ 7,132,105 1998 5,303,887 1999 2,653,082 2000 74,017 ------------ $ 15,163,091 ============ NOTE 5 - NOTES PAYABLE
Notes payable consist of the following:
December 31, December 31, 1996 1995 ------------ ------------ Non-recourse notes payable secured by equipment with fixed interest rates of 5% to 16 5/8% and maturities from 1997 to 1998. $ 4,941,784 $ 4,265,074
Non-recourse note payable secured by equipment, original terms of 72 months each, no payments for the first 48 months with the accruing interest converted to additional principal, then fully amortizing over the remaining 24 months, with a fixed interest rate of 7.85% and final maturity in 1999. $135,845 is expected to be converted to principal. 3,182,618 1,307,217
Non-recourse note payable secured by equipment, original term of 36 months, no payments due until maturity with the accruing interest converted to additional principal, with fixed interest rate of 10.23% and final maturity in 1997. $82,120 is expected to be converted to principal. 926,900 873,130
Recourse notes payable secured by assets of the Partnership, original terms of 28 to 53 months, no payments due until maturity with the accruing interest converted to additional principal, with fixed interest rate of 10% and final maturities from 1997 to 1999. $470,032 is expected to be converted to principal. 1,747,528 1,591,458
Line of Credit secured by equipment with a floating rate of LIBOR + 3.5% with maturity in 1998. The interest rate as of December 31, 1996, was 9.03125%. (See Note 10-Commitments and Contingencies). 4,234,500 1,900,000
Recourse note secured by assets of the Partnership with a floating rate of commercial paper rate + 3.5% up to and including 3/16/97, and thereafter a floating rate of commercial paper rate + 4% with a maturity in 1999. The interest rate as of December 31, 1996 was 9.45%. 3,547,933 0
Non-recourse note payable secured by residual proceeds after lease termination in 2002 with fixed interest rate of 7% 1,200,000 0 ------------ ------------ TOTAL $ 19,781,263 $ 9,900,879 ============ ============
The aggregate amounts of principal payments due in the years after December 31, 1996 are : 1997 - $6,368,113; 1998 - $8,516,816; 1999 - $3,646,587; 2000 - $49,747; 2001 - $0; and 2002 and thereafter - $1,200,000.
NOTE 6 - NOTE RECEIVABLE
During 1994, the Partnership sold equipment with an original cost of approximately $4,800,000 for $6,470,345. Payments of $6,163,418 in 1994 and $306,927 in 1995 were received during the year, leaving a note receivable balance of $0.
NOTE 7 - TAXABLE INCOME
The Partnership's taxable income differs from financial income primarily due to depreciation which is recorded under the Modified Accelerated Cost Recovery System (MACRS). The following is a reconciliation between net income as reported and Partnership income (loss) for tax purposes: 1996 1995 1994 ------------ ------------------------
Net income per financial statements$ 4,472,073 $ 1,550,265 $ 3,199,088
Tax gain/loss in excess of (less than) financial gain/loss on sale of equipment(71,918) 942,777 (465,676)
Tax depreciation in excess of financial depreciation (1,286,344) (1,209,615) (829,631)
Financial write down of equipment greater than tax write down 0 750,000 0
Adjustment from equity to schedule K-1 for interest in Partnership (434,304) 0 0 ----------- ----------- -----------
Partnership taxable income $ 2,679,507 $ 2,033,427 $ 1,903,781 =========== =========== ===========
NOTE 8 - MAJOR LESSEE INFORMATION
Four leases accounted for $2,611,723, $1,078,034, $1,076,876 and $988,251 for the year ended December 31, 1996. Four leases accounted for $1,087,087, $1,078,034, $1,077,773 and $806,051 of rental income for the year ended December 31, 1995. Four leases accounted for $1,823,066, $1,498,398, $1,078,608 and $1,078,034 of rental income for the year ended December 31, 1994.
NOTE 9 - LEASED EQUIPMENT
Leased equipment at December 31, 1996 includes equipment that was off lease as of that date but was subsequently leased or comitted to be leased to third parties. This offlease equipment had a cost of $6,957,960 and accumulated depreciation of $3,142,632 at December 31, 1996. See Note 12, Subsequent Events.
NOTE 10 - OTHER
During the year insurance proceeds of $912,746 were received as a result of prior casualties to equipment.
In 1994, the lessee of hopper cars, Illinois Central Gulf Railroad ("Illinois Central"), declared a portion of the cars casualties as allowed under the terms of the lease. Illinois Central paid the required casualty proceeds to the Partnership. A loss of $706,522 was recognized in 1994 on this transaction which was netted against the gains from disposition of other equipment on the statement of operations. In 1996, the Partnership received $912,756 in insurance proceeds relating to this casualty.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
The Partnership shall pay the General Partners an equipment resale fee for arranging for the sale of equipment which will equal the lessor of (a) 3% of the sales price for each Item of Equipment sold, or (b) one-half of the brokerage fee which would be paid for services that are reasonable, customary and competitive. Payment of this fee shall be deferred until all Limited Partners have received cumulative Cash Distributions in an amount equal to the sum of Capital Contributions and the annual Priority Returns attributable to all units of the Partnership.
On December 11, 1996, the Executive Committee voted to acquire machine tools at a cost of approximately $1,000,000. A closing date was projected for the first quarter of 1997.
The Partnership has received a commitment letter from a financial institution for up to $5,000,000. The financing will be collaterized by the self-unloading bulk carrier at an interest rate of LIBOR plus 4%, interest payable monthly, and principal due November 1998. The Partnership estimates that this transaction will be finalized in second quarter 1997.
The seller of certain equipment transferred to the Partnership in 1996 initiated legal proceedings against the Partnership for enforcement of certain provisions of the purchase agreement. These provisions allowed the seller to sell the title to the equipment to a third party. The Partnership would retain its right to receive rents and residual proceeds. The original suit was dismissed in Federal Court for lack of jurisdiction. The suit was refiled in State Court. A motion to dismiss is pending due to lack of jurisdiction. Management does not believe that the suit has merit or that it will result in a material cash loss to the Partnership.
NOTE 12 - SUBSEQUENT EVENTS
On January 17, 1997, the Partnership sold equipment with an original cost of $36,137 for $36,500.
On January 31, 1997, the Partnership paid distributions of $911,725 to the Limited Partners and $9,208 to the General Partners.
On February 7, 1997, the Partnership purchased equipment with leases in place for $1,051,162.
Subsequent to year end, the Partnership placed a Metro III aircraft on a 7 year lease with a $15,000 monthly rental rate.
On April 30, 1997, the Partnership paid distributions of $911,725 to Limited Partners and $9,208 to the General Partners.
Item 9.
Item 9. Disagreements on Accounting and Financial Disclosures
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or officers. The Partnership's affairs are managed and controlled by the General Partners. The General Partners make all decisions regarding acquisitions, financing and refinancing, leases and sales of equipment.
Information regarding the officers and directors of the General Partner is listed within the section captioned "Management" consisting of pages 29 through 32 of the Prospectus which are incorporated herein by reference.
Item 11.
Item 11. Executive Compensation
The Partnership has no directors or officers. See Item 13 for compensation to the General Partners and affiliates.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The General Partners of Cypress Equipment Fund II, Ltd., as purchasers of Partnership units, own 0 units of the outstanding securities of the Partnership as of December 31, 1996. Directors and officers of the General Partners of Cypress Equipment Fund II, Ltd. own 0 units of the outstanding securities of the Partnership as of December 31, 1996.
The Registrant is a Limited Partnership and therefore does not have voting securities. To the knowledge of the Partnership, no person owns of record, or beneficially, more than 5% of the Partnership's outstanding units.
Item 13.
Item 13. Certain Relationships and Related Transactions
The Partnership has no officers or directors. However, under the terms of the public offering, various kinds of compensation and fees are payable to the General Partners and their affiliates during the organization and operations of the Partnership. The amounts and kinds of compensation and fees are described on pages 19 through 23 of the Prospectus under the caption "Management Compensation", which is incorporated herein by reference. See Note 3 of Notes to Financial Statements in Item 8 of this Annual Report on Form 10-K for amounts accrued or paid to the General Partners and their affiliates during the years ended December 31, 1996 and 1995, and 1994.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
a. (1) Financial Statements
(2) Exhibit Index -
Table Number Page
2 Plan of liquidation, organization, arrangement, liquidation, or succession *** 3 Articles of incorporation and by-laws * 4 Instruments defining the rights of security holders, including debentures * 9 Voting Trust Agreement *** 10 Material Contracts *** 11 Computation of per share earnings *** 12 Computation of ratios *** 13 Annual report to security holders *** 18 Letter re: change in accounting principles *** 19 Previously unfiled documents *** 22 Subsidiaries of the Registrant *** 23 Published report regarding matters submitted to vote of security holders *** 24 Consents of experts and counsel *** 25 Power of Attorney * 28 Additional Exhibits 28.01 OPTION AGREEMENT dated as of February 1, 1993 between BLC Corporation ("Optionor") and Cypress Equipment Fund II, Ltd. ("Optionee") ** 28.02 TRUST AGREEMENT dated as of February 1, 1993 between First Security Bank of Utah, National Association ("Owner-Trustee") and BLC Corporation ("Trustor") ** 28.03 SECURITY AGREEMENT-TRUST DEED dated as of February 1, 1993 between First Security Bank of Utah, National Association as Owner-Trustee under BLC Trust No. 92-1 and State Street Bank and Trust Company of Connecticut, National Association ** 28.04 SECURITY AGREEMENT-TRUST DEED SUPPLEMENT NO. 1 dated February, 1993, between First Security Bank of Utah, National Association ("Owner- Trustee") under BLC Trust No. 92-1 and State Street Bank and Trust Company of Connecticut, National Association ("Security Trustee") ** 28.05 NOTE PURCHASE AGREEMENT dated as of February 1, 1993 re: BLC Trust No. 92.1 among BLC Corporation Trustor"), First Security Bank of Utah, National Association ("Owner-Trustee"), Hitachi Credit America Corporation ("Note Purchaser") and State Street Bank and Trust Company of Connecticut, National Association ("Security Trustee") ** 28.06 ACKNOWLEDGEMENT OF ASSIGNMENT AND AGREEMENT dated as of February 25, 1993 among Southern Pacific Transportation Company, BLC Corporation, First Security Bank of Utah, National Association and State Street Bank and Trust Company of Connecticut, National Association ** 28.07 BILL OF SALE executed as of February 24, 1993 between BLC Corporation and First Security Bank of Utah, National Association ** 28.08 PURCHASE AND SALE AGREEMENT dated as of June 22, 1993 by and between BLC Corporation and Cypress Equipment Fund II, Ltd. re: BLC Trust No. 92-1. ** 28.09 ASSIGNMENT AND ASSUMPTION AGREEMENT made and entered into as of June 22, 1993 by BLC Corporation, a Utah corporation ("Assignor") and Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Assignee") ** 28.10 TRANSFER AND ASSUMPTION AGREEMENT ("Agreement"), entered into as of June 19, 1993 by and between Twenty- Sixth HFC Leasing Inc., a Delaware Corporation ("Assignor") and Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Assignee") **
28.11 EQUIPMENT LEASE dated as of June 1, 1980 between The Connecticut Bank and Trust Company, As Trustee under I.C.G. Trust No. 80-4 ("Lessor") and Illinois Central Gulf Railroad Company ("Lessee") ** 28.12 SECURITY AGREEMENT-TRUST DEED dated as of June 1, 1980 from The Connecticut Bank and Trust Company, As Trustee under I.C.G. Trust No. 80- 4 ("Debtor") to Mercantile-Safe Deposit and Trust Company ("Secured Party") ** 28.13 TRUST AGREEMENT dated as of June 1, 1980 between The Connecticut Bank and Trust Company ("Trustee") and Twenty- Sixth HFC Leasing Corporation ("Trustor") ** 28.14 ESCROW AGREEMENT 902 dated December 31, 1994 by and among Continental Bank, N.A. (the "Transferor"), Cypress Equipment Fund II, Ltd. (the "Transferee") and Continental Bank, National Association, Corporate Trust Services (the "Escrow Agent"). ** 28.15 TRANSFER AGREEMENT 902 dated as of December 31, 1994 between Continental Bank, N.A. (the "Transferor"), and Cypress Equipment Fund II, Ltd. (the "Transferee"). ** 28.16 TRANSFEROR'S INTERESTS ASSIGNMENT AND ASSUMPTION AGREEMENT 902 dated December 31, 1994 between Continental Bank, N.A. (the "Transferor"), and Cypress Equipment Fund II, Ltd. (the "Transferee"). ** 28.17 ASSIGNMENT AND ASSUMPTION AGREEMENT 902 dated December 31, 1994 between The Kinsman Marine Transit Company (the "Assignor") and Pringle Transit Company (the "Assignee"). ** 28.18 KINSMAN AGREEMENT dated as of December 31, 1994 by The Kinsman Marine Transit Company. ** 28.19 REVOLVING CREDIT AGREEMENT dated December 31, 1994 by and between Cypress Equipment Fund II, Ltd. ("Borrower") and First Union National Bank of Florida ("Lender"). ** 28.20 SECURITY AGREEMENT dated December 31, 1994 by and between Cypress Equipment Fund II, Ltd. ("Debtor") and First Union National Bank of Florida ("Secured Party"). ** 28.21 COLLATERAL ASSIGNMENT OF RIGHTS UNDER TRUST AGREEMENT dated December 31, 1994 by and between Cypress Equipment Fund II, Ltd. ("Assignor") and First Union National Bank of Florida ("Assignee"). ** 28.22 LEASE AGREEMENT dated as of March 30, 1988 between Capital Associates International, Inc. ("Lessor") and Comair, Inc. ("Lessee"). ** 28.23 PURCHASE AGREEMENT ("Agreement") dated as of August 31, 1994, by and between Capital Associates International, Inc. ("Seller") and First Security Bank of Utah, National Association not in its individual capacity but as owner trustee pursuant to that certain Trust dated August 31, 1994 between itself and Cypress Equipment Fund II ("Buyer").** 28.24 BILL OF SALE dated August 31, 1994 between Capital Associates International, Inc. ("Seller") and First Security Bank of Utah, National Association not in its individual capacity but as owner trustee pursuant to that certain Trust dated August 31, 1994 between itself and Cypress Equipment Fund II, Ltd. ("Buyer"). ** 28.25 TRUST AGREEMENT dated as of August 31, 1994 between Cypress Equipment Fund II, Ltd. ("Owner Participant") and First Security Bank of Utah, National Association ("Owner Trustee"). ** 28.26 ASSIGNMENT OF LEASE dated August 31, 1994, between Capital Associates International, Inc. ("Assignor") and First Security Bank of Utah not in its individual capacity but as owner trustee pursuant to that certain Trust dated August 31, 1994 between itself and Cypress Equipment Fund II ("Assignee"). ** 28.27 SECURITY AGREEMENT dated as of August 31, 1994 between First Security Bank of Utah, National Association, solely as Owner Trustee under Trust Agreement dated as of August 31, 1994 and not in its individual capacity ("Trustee") and First Union National Bank of Florida, a national banking association ("Secured Party"). ** 28.28 TRUST AGREEMENT dated as of April 1, 1970 among Union Bank ("Trustor") and W. H. Ruskaup and Ben Maushardt ("Trustees") and United States Leasing International, Inc. ("Agent for Trustees"). ** 28.29 LEASE OF RAILROAD EQUIPMENT dated as of April 1, 1970 among W. H. Ruskaup and Ben Maushardt ("Trustees") and United States Leasing International, Inc. ("Agent for Trustees") and Union Carbide Corporation ("Lessee"). ** 28.30 ASSIGNMENT AGREEMENT (Residual Interest) dated as of September 30, 1994 by and between United States Leasing International, Inc., a Delaware corporation ("Assignor") and Cypress Equipment Fund II, Ltd. ("Assignee"). ** 28.31 TRANSFER AND ASSUMPTION AGREEMENT dated as of September 30, 1994, by and between Union Bank, a California state chartered bank ("Assignor") and Cypress Equipment Fund II, Ltd. ("Assignee). ** 28.32 AGREEMENT TO ACQUIRE AND LEASE dated as of April 1, 1970 among W. H. Ruskaup and Ben Maushardt ("Trustees") and United States Leasing International, Inc. ("Agent") and Union Carbide Corporation ("Lessee"). ** 28.33 SECURITY AGREEMENT - TRUST DEED dated as of June 1, 1970 from W. H. Ruskaup and Ben Maushardt ("Debtor") to Wells Fargo Bank, N.A. ("Secured Party"). ** 28.34 PURCHASE AGREEMENT made as of July 25, 1994, by and among Trust Company for USL, Inc., an Illinois trust company as successor trustee to W.H. Ruskaup and Ben Maushardt, and United States Leasing International, Inc. as agent for successor trustee ("Seller") and Cypress Equipment Fund II, L.P., a Florida limited partnership, with its principal place of business at 880 Carillon Parkway, St. Petersburg, Florida 33716 as the beneficial owner of the Trust Estate ("Beneficial Owner") and Union Carbide Corporation, a New York corporation ("Purchaser"), with its principal place of business at 39 Old Ridgebury Rd., E-1, Danbury, Connecticut 06817 ** 28.35 PURCHASE AGREEMENT dated as of February 1, 1995, between Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Seller"), and Helm-Atlantic Associates Limited Partnership, a Delaware limited partnership ("Purchaser"). (This Purchase Agreement pertains to seventeen (17) of the nineteen (19) sold locomotives.) ** 28.36 ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of June 1, 1995, by and between Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Seller"), and Helm-Atlantic Associates Limited Partnership, a Delaware limited partnership ("Purchaser"). ** 28.37 ASSIGNMENT OF LEASE dated as of June 1, 1995, by and between Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Seller"), and Helm-Atlantic Associates Limited Partnership, a Delaware limited partnership ("Purchaser"). ** 28.38 PURCHASE AGREEMENT dated as of February 1, 1995, between Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Seller"), and Helm-Atlantic Associates Limited Partnership, a Delaware limited partnership ("Purchaser"). (This Purchase Agreement pertains to two (2) of the nineteen (19) sold locomotives.) ** 28.39 Purchase Agreement dated as of April 17, 1995, between Varilease Corporation, a Michigan corporation ("Seller"), and Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Buyer"). ** 28.40 Bill of Sale and Assignment dated April 28, 1995, between Varilease Corporation, a Michigan corporation "Seller"), and Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Buyer"). ** 28.41 Consent and Agreement dated April 28, 1995, between IBJ Schroder Leasing Corporation, a New York corporation ("Schroder"), and Cypress Equipment Fund II, Ltd. ("Cypress"). ** 28.42 Escrow Agreement dated April 17, 1995, between Varilease Corporation, a Michigan corporation ("Seller"), Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Buyer"), and Griffinger, Freed, Heinemann, Cook & Foreman ("Escrow Agent"). ** 28.43 Bill of Sale and Assignment (Remaining Interest) dated January 1, 1996, between Varilease Corporation, a Michigan corporation ("Seller"), and Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Buyer"). ** 28.44 Assignment and Assumption Agreement, dated as of December 30, 1996 (this "Agreement"), between NTFC Capital Corporation, a Delaware corporation (the "Seller"), and Cypress Equipment Fund, II, Ltd., a Florida limited partnership (the "Buyer"). ** 28.45 Amended and Restated Purchase Agreement No. 2 dated as of March 13, 1996, between NTFC Capital Corporation (formerly named Northern Telecom Acceptance Corporation), the Seller, and Cypress Equipment Fund II, Ltd, the Buyer. ** 28.46 Promissory Note for Value Received dated as of December 30, 1996, between Cypress Equipment Fund II, Ltd., a Florida limited partnership ("Maker") promises and agrees to pay to the order of NTFC Capital Corporation, its successors, assigns or any subsequent holder of this Note (the "Holder") at its offices located at 220 Athens Way, Nashville, Tennessee, 37228-1314, or at such other place as may be designated in writing by Holder, in lawful money of the United States of America in immediately available funds, the principal amount of Two Million Six Hundred Eight Three Thousand Four Hundred Thirty Five ($2,683,435) together with interest thereon and other amounts due as provided below. ** 28.47 Amended and Restated Security Agreement ("Security Agreement"), dated as of March 13, 1996, and made by Cypress Equipment Fund II, Ltd., a Florida limited partnership, with offices located at One Sansome Street, Suite 1900, San Francisco, California, 94104, 415-951-4605 (facsimile) (the "Debtor"), in favor of NTFC Capital Corporation, a Delaware corporation, with offices located at 220 Athens Way, Nashville, Tennessee 37228 ("Secured Party"). ** 28.48 Participation Agreement dated as of July 15, 1982 among Federal Paper Board Company, Inc., Lessee, Riegelwood, Inc., Secured Note Issuer, The Bank of New York, individually and as Owner Trustee, North Carolina National Bank, as Indenture Trustee, Teachers Insurance and Annuity Association of America, Sun Life Assurance Company of Canada, Sun Life Assurance Company of Canada (U.S.), The North Atlantic Life Insurance Company of America, and Northern Life Insurance Company, Loan Participants, and EFH Leasing Corporation, BNY Leasing, Inc., and Northern Telecom Acceptance Corporation, as Owner Participants. ** 29 Information from reports furnished to state insurance regulatory authorities ***
* Included with Form S-1, Registration No. 33- 27741 previously filed with the Securities and Exchange Commission.
** Included with Form 8-K, as amended, previously filed with the Securities and Exchange Commission.
*** Exhibits were omitted as not required, not applicable, or the information required to be shown therein is included elsewhere in this report.
b. Reports filed on Form 8-K - None.
c. Exhibits filed with this report - None.
SIGNATURES
Pursuant to the requirements 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.
Cypress Equipment Fund II, Ltd.
RJ Leasing - 2, Inc. A General Partner
Date: June 16, 1997 By: /s/J. Davenport Mosby, III -------------------------------- J. Davenport Mosby, III President
Date: June 16, 1997 By: /s/John M. McDonald --------------------------------- John M. McDonald Vice President
Date: June 16, 1997 By: /s/Christa Kleinrichert --------------------------------- Christa Kleinrichert Secretary and Treasurer
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.
Cypress Equipment Fund II, Ltd.
RJ Leasing - 2, Inc. A General Partner
ATTEST:
/s/Christa Kleinrichert By: /s/J. Davenport Mosby, III - -------------------------------- ----------------------------------- Christa Kleinrichert J. Davenport Mosby, III Secretary and Treasurer President