FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
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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 0-17712
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PEGASUS AIRCRAFT PARTNERS, L.P.
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(Exact name of registrant as specified in its charter)
DELAWARE 84-1099968
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(State of organization) (IRS Employer
Identification No.)
Four Embarcadero Center 35th Floor
San Francisco, California 94111
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(Address of principal (Zip Code)
executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (415) 434-3900
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 .
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This document consists of 20 pages.
PEGASUS AIRCRAFT PARTNERS, L.P.
QUARTERLY REPORT ON FORM 10-Q FOR THE
QUARTER AND SIX MONTHS ENDED JUNE 30, 2003
TABLE OF CONTENTS
Page
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PART 1 FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Balance Sheets - June 30, 2003 and December 31, 2002 3
Statements of Income/(Loss) for the three months
ended June 30, 2003 and 2002 4
Statements of Income/(Loss) for the six months
ended June 30, 2003 and 2002 5
Statements of Partners' Capital for the six months
ended June 30, 2003 and 2002 6
Statements of Cash Flows for the six months ended
` June 30, 2003 and 2002 7
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations 12
Item 4. Controls and Procedures 15
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 16
Signature 17
Certifications 18
2
PART I. FINANCIAL INFORMATION
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ITEM 1. Financial Statements
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PEGASUS AIRCRAFT PARTNERS, L.P.
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BALANCE SHEETS -- JUNE 30, 2003 (UNAUDITED) AND DECEMBER 31, 2002
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2003 2002
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(in thousands, except unit data)
ASSETS
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Cash and cash equivalents $2,710 $2,599
Rent and other receivable -- 261
Aircraft, net 100 100
Other assets 4 --
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Total Assets $2,814 $2,960
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LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Accounts payable and accrued expenses 119 127
Distribution payable to partners 1,616 --
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Total Liabilities $1,735 $ 127
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PARTNERS' CAPITAL:
General Partners 14 32
Limited Partners (4,000,005 units issued and
outstanding in 2003 and 2002) 1,065 2,801
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Total Partners' Capital 1,079 2,833
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Total Liabilities and Partners' Capital $2,814 $2,960
====== ======
The accompanying notes are an integral part of these financial statements.
3
PEGASUS AIRCRAFT PARTNERS, L.P.
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STATEMENTS OF INCOME/(LOSS)
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FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
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(unaudited)
2003 2002
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(in thousands, except unit
data and per unit amounts)
REVENUE:
Rentals from operating leases $ -- $ 130
Interest 6 16
Equity in (deficit)/earnings of MD-81 Trust -- (11)
Management and re-lease fees reversal -- 1,620
Other 4 --
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10 1,755
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EXPENSES:
Depreciation and amortization -- 128
General and administrative 69 71
Direct lease 14 21
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83 220
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NET INCOME/(LOSS) $ (73) $ 1,535
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NET INCOME/(LOSS) ALLOCATED:
To the General Partners $ (1) $ 16
To the Limited Partners (72) 1,519
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$ (73) $ 1,535
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NET INCOME/(LOSS) PER LIMITED PARTNERSHIP UNIT $ (0.01) $ 0.38
=========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS ISSUED AND OUTSTANDING 4,000,005 4,000,005
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
PEGASUS AIRCRAFT PARTNERS, L.P.
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STATEMENTS OF INCOME/(LOSS)
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FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
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(unaudited)
2003 2002
---- ----
(in thousands, except unit
data and per unit amounts)
REVENUE:
Rentals from operating leases $ -- $ 668
Gain on sale of aircraft -- 91
Interest 12 28
Equity in (deficit)/earnings of MD-81 Trust -- (22)
Management and re-lease fees reversal -- 1,495
Other 4 --
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16 2,260
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EXPENSES:
Depreciation and amortization -- 390
General and administrative 138 140
Direct lease 16 39
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154 569
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NET INCOME/(LOSS) $ (138) $ 1,691
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NET INCOME/(LOSS) ALLOCATED:
To the General Partners $ (2) $ 17
To the Limited Partners (136) 1,674
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$ (138) $ 1,691
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NET INCOME/(LOSS) PER LIMITED PARTNERSHIP UNIT $ (0.03) $ 0.42
=========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS ISSUED AND OUTSTANDING 4,000,005 4,000,005
=========== ===========
The accompanying notes are an integral part of these financial statements.
5
PEGASUS AIRCRAFT PARTNERS, L.P.
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STATEMENTS OF PARTNERS' CAPITAL
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FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
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(unaudited)
General Limited
Partners Partners Total
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(dollar amounts in thousands)
Balance, January 1, 2003 $ 32 $ 2,801 $ 2,833
Net income/(loss) (2) (136) (138)
Distribution declared to partners (16) (1,600) (1,616)
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Balance, June 30, 2003 $ 14 $ 1,065 $ 1,079
======= ======= =======
Balance, January 1, 2002 $ 34 $ 3,024 $ 3,058
Net income 17 1,674 1,691
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Balance, June 30, 2002 $ 51 $ 4,698 $ 4,749
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The accompanying notes are an integral part of these financial statements.
6
PEGASUS AIRCRAFT PARTNERS, L.P.
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STATEMENTS OF CASH FLOWS
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FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
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(unaudited)
2003 2002
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(dollar amounts in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ (138) $ 1,691
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of aircraft -- (91)
Depreciation and amortization -- 390
Equity in (deficit)/earnings of MD-81 Trust -- 22
Change in assets and liabilities:
Other assets (4) 16
Accounts payable and accrued expenses (8) 2
Payable to affiliates -- (1,495)
Maintenance reserves payable -- 115
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Net cash provided by (used in) operating
activities (150) 650
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of aircraft 261 1,241
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Net cash provided by investing activities 261 1,241
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NET INCREASE IN CASH AND CASH EQUIVALENTS 111 1,891
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,599 2,516
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,710 $ 4,407
======= =======
The accompanying notes are an integral part of these financial statements.
7
PEGASUS AIRCRAFT PARTNERS, L.P.
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STATEMENTS OF CASH FLOWS
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FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
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(unaudited)
2003 2002
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(dollar amounts in thousands)
SUPPLEMENTAL CASH FLOW INFORMATION:
Non cash activities:
Distributions declared to partners but
unpaid $1,616 $ --
Application of maintenance reserves to
sale of aircraft -- 367
Application of security deposit to sale of
aircraft -- 150
The accompanying notes are an integral part of these financial statements.
8
PEGASUS AIRCRAFT PARTNERS, L.P.
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NOTES TO FINANCIAL STATEMENTS
-----------------------------
JUNE 30, 2003
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(unaudited)
1. General
The accompanying unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and in accordance with instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of the General
Partners, all adjustments necessary for a fair presentation have been included.
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 dates of the financial statements and
the reported amounts of revenues and expenses during the reporting periods. The
most significant assumptions and estimates relate to useful life and
recoverability of the aircraft values. Actual results could differ from such
estimates. The unaudited financial statements should be read in conjunction with
the financial statements and footnotes thereto included in the Partnership's
annual report on Form 10-K for the year ended December 31, 2002. Operating
results for the six-month period ended June 30, 2003 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2003.
2. Aircraft
The Partnership's net investment in aircraft as of June 30, 2003 and
December 31, 2002 consisted of the following (in thousands):
2003 2002
---- ----
Aircraft held for sale, at cost $11,915 $11,915
Less: Accumulated depreciation (6,365) (6,365)
Write-downs (5,450) (5,450)
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Aircraft, net $ 100 $ 100
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Kitty Hawk Aircargo, Inc. ("Kitty Hawk"). One of the Partnership's
Boeing 727-200 advanced aircraft was hushkitted, converted to a freighter and
delivered to Kitty Hawk in August 1999. The lease agreement was for 84 months,
the lease rate was $117,800 per month, and maintenance reserves were to be paid
at the rate of $375 per flight hour. Kitty Hawk provided a security deposit of
$236,000.
Kitty Hawk filed for protection under Chapter 11 of the U.S. Bankruptcy
Code on May 1, 2000, but stayed current with regard to its rent payment through
September 2001. For the months of October, November, and December 2001, Kitty
Hawk could not make a full payment of the monthly rent, and the Partnership
agreed to a payment of only half of the amount due. The Partnership also agreed
to a 50% reduction of the maintenance reserves due for the months of September,
9
October, and November 2001. The Partnership also agreed to a payment of 71% of
the rents of December 2001, and January, February 2002 and no maintenance
reserves payment for these months. However, Kitty Hawk could not make any
payment in March and April 2002. In May 2002, the Partnership agreed to a sale
of the aircraft to Kitty Hawk for a $750,000 note, subject to documentation and
approval of the Bankruptcy court. The lease was reinstated with a per month
lease rate of $65,000, beginning in May 2002. The aircraft was sold to Kitty
Hawk in December 2002 with lease payments made from May 2002 through the
completion of the sale being applied to the note. The remainder of the note was
paid with payments of $65,000 per month from January through March 2003 and the
last payment was in April 2003.
Vanguard Airlines ("Vanguard") Lease. US Airways returned the MD-81 in
July 2001, and in August 2001, the Trust that owned the MD-81 entered into a
three-year lease of the aircraft with Vanguard Airlines, a Kansas City, Missouri
airline providing passenger services to a number of U.S. cities.
Vanguard, as have many other airlines, had been adversely affected by
events of September 11, 2001. After being denied a loan guarantee for a second
time by the Airline Transportation Stabilization Board, Vanguard Airlines
suspended flights operations on July 30, 2002, dismissed all but 80 employees
and filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Vanguard
rejected the lease and returned the MD-81 aircraft to the Partnership on
September 30, 2002. At the time of its filing, Vanguard was in arrears to the
Trust in the amount of $1,389,000 ($694,500 to the Partnership, for its 50%
interest) in rent and reserves. At June 30, 2003, recovery of any amount is
unlikely. The Partnership wrote down the value of the aircraft by $1,030,000 for
the Trust ($515,000 for the Partnership for its 50% interest) in the third
quarter of 2002.
The Partnership sold the MD-81 aircraft on October 25, 2002 for
$500,000 cash ($250,000 for the Partnership for its 50% interest). The
Partnership retained $442,000 of maintenance reserves ($221,000 for the
Partnership for its 50% interest).
TNT Transport International B.V. ("TNT") Lease. The TNT lease ended on
March 24, 2002 and the Partnership sold the Boeing 727-200 freighter to TNT. The
Partnership received cash proceeds of $1,241,000 and also applied, as part of
the sale, TNT's maintenance reserves of $367,000 and the security deposit of
$150,000.
Boeing 727-200. The Boeing 727-200, formerly leased to Discovery
Airlines (Sky Trek), was returned in March 2000. During the second quarter 2001,
the Partnership took $848,000 of paid-in maintenance reserves relating to the
aircraft into income and wrote down the aircraft's value by $1,766,000 to
$200,000. During the third quarter of 2002, the Partnership wrote down the
aircraft's value to $100,000. The aircraft and engines are being offered for
sale on an "as-is, where-is" basis.
General. Of the 5.5 aircraft the Partnership originally owned, only one
Boeing 727-200 remains. The Partnership is seeking to dispose of it as soon as
possible.
3. Transactions With Affiliates
The Management Fee, Incentive Fee and Re-Lease Fee payable to the
General Partners are subordinated to the limited partners receiving an 8%
annual, non-cumulative return based upon Unreturned Capital Contribution, as
10
Unreturned Capital Contribution ais defined in the Partnership Agreement. As the
Partnership had not achieved this level of distribution since 2000, fees were
being accrued but not paid. Based upon the amount of the Preferred Return as
determined pursuant to the Partnership Agreement and the estimated value of the
Partnership's remaining assets, a determination was made to reverse the fees
accrued but unpaid to the General Partners for fiscal years 2000 through the
first quarter of 2002. In June 2002, fees previously accrued of $1,495,000 were
taken into revenue with a corresponding reduction in Payable to affiliates. In
addition, based on anticipated future revenues, the Partnership does not expect
to accrue Management and Re-lease fees in future quarters.
Management Fees: The General Partners are entitled to receive a
quarterly subordinated base management fee in an amount generally equal to 1.5%
of gross aircraft rentals, net of re-lease fees paid. Of this amount, 1.0% is
payable to the Managing General Partner and 0.5% is payable to the
Administrative General Partner. Management Fees of $8,000 were accrued for the
three months ended March 31, 2002 and this accrual was reversed at June 30,
2002.
Incentive Management Fees: The General Partners also are entitled to
receive a quarterly subordinated incentive management fee in an amount equal to
4.5% of quarterly cash flows and sales proceeds (net of resale fees). Of this
amount, 2.5% is payable to the Managing General Partner and 2.0% is payable to
the Administrative General Partner. Incentive Management Fees of $99,000 were
accrued for the three months ended March 31, 2002 and this accrual was reversed
at June 30, 2002 .
Re-lease Fees: The General Partners are entitled to receive a quarterly
subordinated fee for re-leasing aircraft or renewing a lease in an amount equal
to 3.5% of the gross rentals from such re-lease or renewal for each quarter for
which such payment is made. Of this amount, 2.5% is payable to the Managing
General Partner and 1.0% is payable to the Administrative General Partner.
Re-lease Fees of $18,000 were accrued for the three months ended March 31, 2002
and this accrual was reversed at June 30, 2002.
Accountable General and Administrative Expenses: The General Partners
are entitled to reimbursement of certain expenses paid on behalf of the
Partnership which are incurred in connection with the administration and
management of the Partnership. There were no reimbursable expenses paid to the
Administrative General Partner in the six months ending June 30, 2003.
4. Subsequent Events:
On June 24, 2003, the Partnership declared a special distribution, paid
on August 7, 2003 of $0.40 per Unit to Unit holders of record as of August 1,
2003. The Partnership also suspended the third party transfer of Units,
effective July 15, 2003.
11
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
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of Operations
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The following discussion should be read in conjunction with the
Financial Statements of the Partnership and the Notes thereto. This report may
contain, in addition to historical information, Forward-Looking statements that
include risks and other uncertainties. The Partnership's actual results may
differ materially from those anticipated in these Forward-Looking statements.
Factors that might cause such a difference include those discussed below, as
well as general economic and business conditions, competition and other factors
discussed elsewhere in this report. The Partnership undertakes no obligation to
release publicly any revisions to the Forward-Looking statements, if any, to
reflect events or circumstances after the date hereof or to reflect the
occurrence of anticipated or unanticipated events.
Liquidity and Capital Resources
The Partnership owns and manages one commercial passenger aircraft and
distributes to the partners cash flow generated by operations or asset sales in
the current and/or prior periods. In certain situations, the Partnership may
retain cash flow from operations to finance authorized capital expenditures, or
for general working capital purposes. The amount of future cash distributions
will be determined periodically after an evaluation of the Partnership's
operating results and its current and expected financial position. At the
current time, the Partnership does not anticipate making additional
distributions until the termination of the Partnership and its winddown.
The Partnership invests working capital and cash flow from operations
prior to its distributions to the partners in short-term, highly liquid
investments or a fund that invests in such instruments. At June 30, 2003, the
Partnership's unrestricted cash and cash equivalents of $2,710,000 were
primarily invested in such a fund. This amount was $111,000 more than the
Partnership's unrestricted cash and cash equivalents at December 31, 2002 of
$2,599,000. This increase in unrestricted cash was primarily attributable to
$261,000 cash from proceeds of an aircraft sale offset by cash used in operating
activities of $150,000. There were no cash financing activities in the six
months ended June 30, 2003.
For the six months ended June 30, 2003 ("2003 Period"), net cash used
in operating activities was $146,000, comprised of net loss of $138,000 for the
2003 Period adjusted by changes in assets and liabilities, as discussed below.
Rent and Other receivables decreased by 100%, or $261,000, due to
$261,000 receipt from the note receivable from Kitty Hawk for the sale of the
Boeing 727-200 in December 2002.
Other assets increased during the 2003 Period by 100%, or $4,000, due
to a refund of certain 2002 insurance premiums.
Accounts payable and accrued expenses decreased by 6%, or $8,000, due
to payments of previously accrued expenses.
Cash flows from investing activities were $261,000 for the 2003 Period,
resulting from payments on a note receivable from the sale of the Boeing 727
leased to Kitty Hawk.
12
Partnership capital was $1,079,000, a decrease of
approximately $1,754,000 or 62% from $2,833,000 at December 31, 2002, as a
result of a net loss of $138,000 and the recording of distributions payable of
$1,616,000. The Partnership paid no distributions during the second quarter of
2003. A special distribution has been declared and was paid on August 7, 2003 to
Units holders of record as of August 1, 2003 (see Note 4. "Subsequent Event").
Results of Operations
The Partnership's net loss was $138,000 for the six months ended June
30, 2003 (the "2003 Period") and $73,000 for the quarter ended June 30, 2003
(the "2003 Quarter"), respectively, as compared to net income of $1,691,000 for
the six months ended June 30, 2002 (the "2002 Period") and $1,535,000 for the
quarter ended June 30, 2002 (the "2002 Quarter"), respectively.
The change from net income in the 2002 Period to net loss in the 2003 Period was
principally due to income from the reversal of management fees in 2002 compared
to no corresponding income in 2003. There was also no rental income and no gain
on sale of aircraft in the 2003 Period. The change from net income in the 2002
Period to loss in the 2003 Period was partially offset by no depreciation
expense, no management fees and less direct lease expense in the 2003 Period as
compared to the 2002 Period. .
Rentals from operating leases decreased by 100%, or $668,000, from
$668,000 for the 2002 Period to zero for the 2003 Period, and by 100%, or
$130,000, from $130,000 for the 2002 Quarter to zero for the 2003 Quarter. This
decrease is due to the off lease status of the Partnership's remaining aircraft.
Gain on sale of aircraft decreased by 100%, or $91,000, from $91,000
for the 2002 Period to zero for the 2003 Period as a result of the sale of the
Boeing 727 to TNT in the 2002 Period versus no sale of aircraft or equipment in
the 2003 Period. There was no aircraft or equipment sale in either the 2002
Quarter or the 2003 Quarter.
Interest income decreased by 57%, or $16,000, from $28,000 for the 2002
Period to $12,000 for the 2003 Period, and by 63%, or $10,000, from $16,000 for
the 2002 Quarter to $6,000 to the 2003 Quarter, due to the lower interest rate
in the 2003 Period and Quarter compared to the 2002 Period and Quarter.
Equity in deficit of the MD-81 Trust decreased by 100%, or $22,000 from
a deficit of $22,000 for the 2002 Period and a deficit of $11,000 for the 2002
Quarter to zero for both the 2003 Period and the 2003 Quarter, due to the sale
of the MD-81 Trust aircraft in October 2002.
The Partnership recognized revenue of $1,495,000 for the 2002 Period
and $1,620,000 for the 2002 Quarter, respectively, which were the reversal of
accrued management fees for the years ending December 31, 2000 and 2001, and the
first quarter of 2002. There were no such revenues in the 2003 Period and the
2003 Quarter.
Other income increased by 100%, or $4,000, from zero in both the 2002
Period and 2002 Quarter to $4,000 in both the 2003 Period and the 2003 Quarter,
due to the receipt of the final claim of the Partnership from the Continental
Airlines bankruptcy in 1993.
13
Depreciation decreased by 100%, or $390,000, from $390,000 for the 2002
Period and $128,000 for the 2002 Quarter to zero for both the 2003 Period and
the 2003 Quarter. This decrease was primarily due to the off lease status of the
remaining aircraft of the Partnership in the 2003 Period and Quarter.
Direct Lease expense decreased by 59%, or $23,000, from $39,000 for the
2002 Period to $16,000 for the 2003 Period, and by 33%, or $7,000, from $21,000
for the 2002 Quarter to $14,000 for the 2003 Quarter. This decrease was
primarily due to the inspection cost of an engine of the Boeing 727-200,
formerly leased to Sky Trek in the 2002 Period and the recording of a refund in
the 2003 Period and Quarter due to the Partnership for aircraft insurance
expense paid in 2002.
14
ITEM 4. Controls and Procedures
-----------------------
In the 90-day period before filing of this report, the President and
Chairman of the Board of Pegasus Aircraft Management Corporation and the
President of Air Transport Leasing, Inc. (collectively, the "Certifying
Officers") have evaluated the effectiveness of the Partnership's disclosure
controls and procedures. These disclosure controls and procedures are those
controls and procedures which are designed to insure that all the information
required to be disclosed by the Partnership in all its periodic reports filed
with the Securities and Exchange Commission is recorded, processed, summarized
and reported, within the time periods specified by the Commission and that the
information is communicated to the President and Chairman of the Board of
Pegasus Aircraft Management Corporation and the President of Air Transport
Leasing, Inc. on a timely basis.
The Certifying Officers, concluded, based on the evaluation, that the
Partnership's disclosure controls and procedures are suitable and effective for
the Partnership, taking into consideration the size and nature of the
Partnership's business and operations. No significant deficiencies or material
weaknesses in the controls or procedures were detected, so no corrective actions
needed to be taken. Subsequent to the date when the disclosure controls and
procedures were evaluated, there have not been any significant changes in the
Partnership's disclosure controls or procedures or in other factors that could
significantly affect such controls or procedures.
15
PART II. OTHER INFORMATION
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ITEM 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
99.1 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
99.2 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
(b) The Partnership filed a report on Form 8-K during the second
quarter of the fiscal year ending December 31, 2003, reporting the declaration
of a special distribution of $0.40 per Unit, paid on August 7, 2003 to Unit
holders of record as of August 1, 2003. The Partnership also reported the
suspension of third party transfers effective as of July 15, 2003.
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SIGNATURE
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.
Pegasus Aircraft Partners, L.P.
(Registrant)
By: Air Transport Leasing, Inc.
Administrative General Partner
Date: August 14, 2003 By: /s/ CLIFFORD B. WATTLEY
Clifford B. Wattley
President and Director.
17
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
- -------------
I, Richard S. Wiley, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Pegasus Aircraft
Partners, L.P.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to us by
others, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
18
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: August 14, 2003
By: /s/ RICHARD S. WILEY
--------------------
Richard S. Wiley
President and Chairman of the Board of Pegasus Aircraft Management
Corporation, General Partner of Pegasus Aircraft Partners, L.P.
19
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
- -------------
I, Clifford B. Wattley, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Pegasus Aircraft
Partners, L.P.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to us by
others, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
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6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: August 14, 2003
By: /s/ CLIFFORD B. WATTLEY
-----------------------
Clifford B. Wattley
President and Director of Air Transport Leasing, Inc.
Administrative General Partner of Pegasus Aircraft Partners, L.P.
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