-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IUZe6+DY0hx25HvgiocnMqhqBtA/M+gOVXdLeNd6goj6G612luw7CQkVpYzg1DwR jBmE+mRM95N44GOH4d8RAw== 0000948524-04-000017.txt : 20040813 0000948524-04-000017.hdr.sgml : 20040813 20040813123304 ACCESSION NUMBER: 0000948524-04-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEGASUS AIRCRAFT PARTNERS II L P CENTRAL INDEX KEY: 0000849870 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 841111757 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18387 FILM NUMBER: 04972829 BUSINESS ADDRESS: STREET 1: FOUR EMBARCADERO CENTER STREET 2: SUITE 3540 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4154343900 MAIL ADDRESS: STREET 1: FOUR EMBARCADERO CEENTER STREET 2: SUITE 3540 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 10-Q 1 p2_2q04.txt JUNE 30, 2004 FORM 10-Q 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, 2004 -------------------------------------------------- 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 0-18387 --------------------------------------------------------- PEGASUS AIRCRAFT PARTNERS II, L.P. ---------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 84-1111757 ----------------------- ------------------- (State of organization) (IRS Employer Identification No.) Four Embarcadero Center 35th Floor San Francisco, California 94111 ------------------------- ----- (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 . --- --- Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes No X --- --- This document consists of 17 pages. PEGASUS AIRCRAFT PARTNERS II, L.P. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2004 TABLE OF CONTENTS Page ---- PART I FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Balance Sheets - June 30, 2004 and December 31, 2003 3 Statements of Income/(Loss) for the three months ended June 30, 2004 and 2003 4 Statements of Income/(Loss) for the six months ended June 30, 2004 and 2003 5 Statements of Partners' Capital for the six months ended June 30, 2004 and 2003 6 Statements of Cash Flows for the six months ended June 30, 2004 and 2003 7 Notes to Financial Statements 8 Item 2. Management's Discussion and Analysis of 11 Financial Condition and Results of Operations Item 4. Controls and Procedures 13 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. 14 Signature 15 Certifications 16 2 PART I. FINANCIAL INFORMATION ----------------------------- Item 1. Financial Statements -------------------- PEGASUS AIRCRAFT PARTNERS II, L.P. ---------------------------------- BALANCE SHEETS - JUNE 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003 ---------------------------------------------------------------- 2004 2003 ---- ----- (in thousands, except unit data) ASSETS ------ Cash and cash equivalents $3,274 $3,446 Aircraft, net 375 375 Other assets 10 25 ------ ------ Total Assets $3,659 $3,846 ====== ====== LIABILITIES AND PARTNERS' CAPITAL --------------------------------- LIABILITIES: Accounts payable and accrued expenses $ 100 $ 132 Payable to affiliates 974 974 ------ ------ Total Liabilities 1,074 1,106 ------ ------ PARTNERS' CAPITAL: General Partners $ 26 $ 27 Limited Partners (7,255,000 units issued and outstanding in 2004 and 2003) 2,559 2,713 ------ ------ Total Partners' Capital 2,585 2,740 ------ ------ Total Liabilities and Partners' Capital $3,659 $3,846 ====== ====== The accompanying notes are an integral part of these interim financial statements. 3 PEGASUS AIRCRAFT PARTNERS II, L.P. ---------------------------------- STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE INCOME/(LOSS) ----------------------------------------------------------- FOR THE THREE MONTHS ENDED JUNE 30, 2004 AND 2003 ------------------------------------------------- (unaudited) 2004 2003 ---- ---- (in thousands, except unit data and per unit amounts) REVENUES: Interest $ 5 $ 12 ----------- ----------- 5 12 ----------- ----------- EXPENSES: General and administrative 55 79 Direct lease 32 25 ----------- ----------- 87 104 ----------- ----------- NET AND COMPREHENSIVE INCOME/(LOSS) $ (82) $ (92) =========== =========== NET INCOME/(LOSS) ALLOCATED: To the General Partners $ (1) $ (1) To the Limited Partners (81) (91) ----------- ----------- $ (82) $ (92) =========== =========== NET INCOME/(LOSS) PER LIMITED PARTNERSHIP UNIT $ (0.01) $ (0.01) =========== =========== WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP UNITS ISSUED AND OUTSTANDING 7,255,000 7,255,000 =========== =========== The accompanying notes are an integral part of these interim financial statements. 4 PEGASUS AIRCRAFT PARTNERS II, L.P. ---------------------------------- STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE INCOME/(LOSS) ----------------------------------------------------------- FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003 ----------------------------------------------- (unaudited) 2004 2003 ---- ---- (in thousands, except unit data and per unit amounts) REVENUES: Interest $ 10 $ 34 Other income 2 -- ----------- ----------- 12 34 ----------- ----------- EXPENSES: General and administrative 115 150 Direct lease 52 94 ----------- ----------- 167 244 ----------- ----------- NET AND COMPREHENSIVE INCOME/(LOSS) $ (155) $ (210) =========== =========== NET INCOME/(LOSS) ALLOCATED: To the General Partners $ (1) $ (2) To the Limited Partners (154) (208) ----------- ----------- $ (155) $ (210) =========== =========== NET INCOME/(LOSS) PER LIMITED PARTNERSHIP UNIT $ (0.02) $ (0.03) =========== =========== WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP UNITS ISSUED AND OUTSTANDING 7,255,000 7,255,000 =========== =========== The accompanying notes are an integral part of these interim financial statements. 5 PEGASUS AIRCRAFT PARTNERS II, L.P. ---------------------------------- STATEMENTS OF PARTNERS' CAPITAL ------------------------------- FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003 ----------------------------------------------- (unaudited) General Limited Partners Partners Total -------- -------- ----- In thousands) Balance, January 1, 2004 $ 27 $ 2,713 $ 2,740 Net loss (1) (154) (155) ------- ------- ------- Balance, June 30, 2004 $ 26 $ 2,559 $ 2,585 ======= ======= ======= Balance, January 1, 2003 $ 59 $ 5,680 $ 5,739 Net loss (2) (208) (210) Distribution to partners (29) (2,902) (2,931) ------- ------- ------- Balance, June 30, 2003 $ 28 $ 2,570 $ 2,598 ======= ======= ======= The accompanying notes are an integral part of these interim financial statements. 6 PEGASUS AIRCRAFT PARTNERS II, L.P. ---------------------------------- STATEMENTS OF CASH FLOWS ------------------------ FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003 ----------------------------------------------- (unaudited) 2004 2003 ---- ---- (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income/(loss) $ (155) $ (210) Adjustments to reconcile net income/(loss) to net cash used in provided by operating activities: Change in assets and liabilities: Other assets 15 (6) Accounts payable and accrued expenses (32) 18 ------- ------- Net cash used in operating activities (172) (198) ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of aircraft -- 1,370 ------- ------- Net cash provided by investing activities -- 1,370 ------- ------- NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (172) 1,172 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,446 4,569 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,274 $ 5,741 ======= ======= The accompanying notes are an integral part of these interim financial statements. 7 PEGASUS AIRCRAFT PARTNERS II, L.P. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2004 (unaudited) Note 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, 2003. Operating results for the six-month period ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ended December 31, 2004. Pegasus Aircraft Partners II, L.P. is attempting to sell the remaining aircraft in an "as-is, where-is" condition. With the sale of the final aircraft, the Partnership will continue to hold its funds in an interest bearing money-market account. A final distribution of the funds, net of intervening expenses and any other liabilities, is anticipated to be made within twelve months of the final aircraft sale. The final distribution will be allocated to the Limited Partners with positive balances in their Capital Accounts (as defined in the Partnership's Limited Partnership Agreement) in proportion to how their positive balance bears to the sum of all Capital Accounts with positive balances. Note 2. Aircraft -------- The Partnership's net investment in aircraft as of June 30, 2004 and December 31, 2003 consisted of the following (in thousands): 2004 2003 ---- ---- Aircraft held for sale, at cost $ 49,860 $ 49,860 Less: Accumulated depreciation (26,237) (26,237) Write-downs (23,248) (23,248) -------- -------- Aircraft, net $ 375 $ 375 ======== ======== 8 Boeing 727-200 Advanced Aircraft. The aircraft was returned at the end of the lease in June 2002, the return condition payment was taken into revenue and the aircraft and engines has been offered for sale on an "as-is, where-is" basis. During the year ended December 31, 2003, the Partnership wrote down the aircraft's carrying value by an additional $90,000 to its estimated realizable value. DC-10-10 Freighter. The McDonnell Douglas DC-10 aircraft was returned to the Partnership in December 2002, the return condition payment was taken into revenue and the aircraft and engines has been offered for sale on an "as-is, where-is" basis. The Partnership wrote down the aircraft's carrying value by an additional $200,000 during the year ended December 31, 2003 to its estimated realizable value. DC-9 Aircraft. The McDonnell Douglas DC-9 was returned to the Partnership in July 2001, the return condition payment was taken into revenue and the aircraft and engines has been offered for sale on an "as-is, where-is" basis. The aircraft, while parked in Texas, was damaged during a hailstorm in early 2002. The Partnership filed an insurance claim and on September 30, 2003, the Partnership received insurance proceeds of $819,421 as compensation for the hail damage to this aircraft. Because the decision was made not to repair the aircraft to its pre-damage condition, the Partnership recognized the proceeds as revenue and wrote down the aircraft's carrying value by an additional $225,000 during the year ended December 31, 2003 to its estimated realizable value. General. In the sale of its aircraft, the Partnership is essentially competing in the market for used aircraft and aircraft parts. After September 11, 2001, a large number of aircraft of a similar type to that of the Partnership's aircraft were removed from service. The Partnership will seek to dispose of the remaining aircraft and engines as soon as possible in an "as-is, where-is" condition, although there can be no assurance as to when the sales or dispositions will be completed. Note 3. Transactions With Affiliates ---------------------------- The Management Fee, Incentive Management 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 Unreturned Capital Contribution is 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 $2,330,000 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, Incentive Management and Re-Lease Fees in future quarters. As part of a class action settlement agreement, an affiliate of the Administrative General Partner has agreed to pay to members of the class, fees and distributions remitted to it by the Administrative General Partner. 9 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 during the six months ended June 30, 2004 payable to the Administrative General Partner. Note 4. Subsequent Event. On July 22, 2004, Pegasus Aircraft Partners II, L.P. paid $236,218 and $203,896 to Pegasus Aircraft Management Corporation and Air Transport Leasing, Inc, respectively, for accrued management, incentive management and release fees. 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results ----------------------------------------------------------------------- of Operations ------------- 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 involve 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 these 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 two freighter aircraft, which are off-lease. The Partnership is attempting to sell the remaining three aircraft, in an "as-is, where-is" condition. With the sale of the final aircraft, the Partnership will continue to hold its funds in an interest bearing money-market account. A final distribution of the funds, net of intervening expenses and any other liabilities, is anticipated to be made within twelve months of the final aircraft sale. The Partnership invests working capital and cash flow from operations prior to its distribution to the partners in a fund that invests in short-term, highly liquid investments. At June 30, 2004, the Partnership's unrestricted cash and cash equivalents of $3,274,000 were primarily invested in such a fund. This amount was $172,000 less than the Partnership's unrestricted cash and cash equivalents at December 31, 2003 of $3,446,000. This decrease in unrestricted cash was primarily attributable to cash used in operating activities. Net cash used in operating activities was $172,000, for the six months ended June 30, 2004 ("2004 Period"), which was a net loss of $155,000 for the 2004 Period adjusted by changes in assets and liabilities, as discussed below. Other Assets decreased by $15,000, or 60%, from $25,000 at December 31, 2003 to $10,000 at June 30, 2004, primarily due to the receipt of returned insurance premium credits of $21,000, which was partially offset by an increase in the insurance premium receivable of $6,000 during the 2004 Period. Accounts payable and accrued expenses decreased by $32,000, or 24%, from $132,000 at December 31, 2003 to $100,000 at June 30, 2004, primarily due to payments of obligations accrued at December 31, 2003. Partnership capital was $2,585,000 at June 30, 2004, a decrease of $155,000, or 6% from $2,740,000 at December 31, 2003, due to a net loss of $155,000 during the 2004 Period. 11 Results of Operations - --------------------- The Partnership's net loss was $82,000 and $155,000 for the three and six months ended June 30, 2004 (the "2004 Quarter" and the "2004 Period"), respectively, as compared to a net loss of $92,000 and $210,000 for the three and six months ended June 30, 2003 (the "2003 Quarter" and the "2003 Period"), respectively. The Partnership's higher net loss for the 2003 Quarter and Period, as compared to the 2004 Quarter and Period, is primarily due to lower direct lease and general and administrative expenses, as discussed below. General and administrative expenses decreased by $24,000 and $35,000, or 30% and 23%, from $79,000 and $150,000 for the 2003 Quarter and 2003 Period, respectively, to $55,000 and $115,000 for the 2004 Quarter and 2004 Period, respectively. This decrease was primarily due to an overall decrease in accrued liabilities related to general and administrative expenses. Direct lease expenses increased by $7,000, or 28%, from $25,000 for the 2003 Quarter to $32,000 for the 2004 Quarter. This increase was due primarily to an increase in insurance premiums in the 2004 Period. The increase in insurance premiums for the 2004 Period is due to less insurance premium credits being recognized in the 2004 Period than in the 2003 Period. Direct lease expenses decreased by $42,000, or 45%, from $94,000 for the 2003 Period to $52,000 for the 2004 Period. This decrease was due primarily due to lower aircraft storage costs. 12 Item 4. Controls and Procedures ----------------------- 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 as of the end of the period covered by this report. 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 such evaluation, that the Partnership's disclosure controls and procedures were suitable and effective for the Partnership as of the end of the period covered by this report, 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. 13 PART II. OTHER INFORMATION -------------------------- Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits (numbered in accordance with Item 601 of Regulation S-K) 31.1 Rule 13a-14(a)/15d-14(a) Certification. 31.2 Rule 13a-14(a)/15d-14(a) Certification. 32.1 Section 1350 Certification. 32.2 Section 1350 Certification. (b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the quarter for which this report is filed. 14 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 II, L.P. (Registrant) By: Air Transport Leasing, Inc. Administrative General Partner Date: August 13, 2004 By: /s/ CLIFFORD B. WATTLEY --------------- ----------------------- Clifford B. Wattley President and Director 15 EX-31 2 p2_2q04ex311.txt CERTIFICATION - RICHARD S. WILEY EXHIBIT 31.1 Rule 13a-14(a)/15d-14(a) CERTIFICATION CERTIFICATION - ------------- I, Richard S. Wiley, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Pegasus Aircraft Partners II, L.P. 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this 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 report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financing reporting, 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 13, 2004 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 II, L.P. EX-31 3 p2_2q04ex312.txt CERTIFICATION - CLIFFORD B. WATTLEY EXHIBIT 31.2 Rule 13a-14(a)/15d-14(a) CERTIFICATION CERTIFICATION - ------------- I, Clifford B. Wattley, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Pegasus Aircraft Partners II, L.P. 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this 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 report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financing reporting, 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 13, 2004 By: /s/ CLIFFORD B. WATTLEY ----------------------- Clifford B. Wattley President and Director of Air Transport Leasing, Inc. Administrative General Partner of Pegasus Aircraft Partners II, L.P. EX-32 4 p2_2q04ex321.txt CERTIFICATION - RICHARD S. WILEY EXHIBIT 32.1 SECTION 1350 CERTIFICATION In connection with the Quarterly Report on Form 10-Q of Pegasus Aircraft Partners II, L.P. (the "Partnership") for the period ended June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), and pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, I, Richard S. Wiley, President and Chairman of the Board of Pegasus Aircraft Management Corporation, General Partner of the Partnership, hereby certify that: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership. Date: August 13, 2004 By: /s/ RICHARD S. WILEY --------------- -------------------- Richard S. Wiley President and Chairman of the Board of Pegasus Aircraft Management Corporation EX-32 5 p2_2q04ex322.txt CERTIFICATION - CLIFFORD B. WATTLEY EXHIBIT 32.2 SECTION 1350 CERTIFICATION In connection with the Quarterly Report on Form 10-Q of Pegasus Aircraft Partners II, L.P. (the "Partnership") for the period ended June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), and pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, I, Clifford B. Wattley, President and Director of Air Transport Leasing, Inc., Administrative General Partner of the Partnership, hereby certify that: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership. Date: August 13, 2004 By: /s/ CLIFFORD B. WATTLEY --------------- ----------------------- Clifford B. Wattley President and Director of Air Transport Leasing, Inc. -----END PRIVACY-ENHANCED MESSAGE-----