Item 1. Business
Pershing Lease Income Limited Partnership (the "Partnership") is a limited partnership organized under the provisions of the Missouri Revised Uniform Limited Partnership Act on November 30, 1987. As of December 31, 1996, the Partnership consisted of a General Partner and 3,708 Limited Partners owning 62,840 Units of limited partnership interest of $500 each (the "Units"), except that employees of the General Partner and employees and securities representatives of the affiliates purchased Units for a net price of $460 per Unit, and the Partnership incurred no obligation to pay any sales commissions with respect to such sales. The Units were sold commencing February 22, 1988, pursuant to a Registration Statement on Form S-1 under the Securities Act of 1933. As set forth more fully at Item 10 of this Report, the General Partner is Waddell & Reed Leasing, Inc., a Missouri corporation.
The Partnership was organized to engage in the business of acquiring diversified types of equipment and leasing such equipment to others on a short-term basis under operating leases. The Partnership's principal objectives are:
1. To provide quarterly distributions of cash to the Limited Partners from leasing revenues and from the proceeds of sale or other disposition of Partnership Equipment; and
2. To maintain equipment residual values for ultimate sale or other disposition.
The Partnership was formed primarily for investment purposes and not as a "tax shelter".
The life of the Partnership shall terminate on December 31, 2005, unless sooner dissolved or terminated as provided in Section 11 of the Amended Agreement of Limited Partnership.
The Partnership had a total of fourteen closings. The closings occurred on May 3, 1988, June 3, 1988, July 8, 1988, August 5, 1988, September 8, 1988, October 7, 1988, November 7, 1988, December 7, 1988, January 9, 1989, February 7, 1989, March 7, 1989, April 7, 1989, May 5, 1989 and June 14, 1989 with subscribers purchasing 10,732, 6,712, 3,984, 4,268, 5,011, 3,822, 2,562, 2,701, 4,001, 3,256, 3,604, 4,014, 3,592 and 4,581 units, respectively, being admitted on such dates.
Total equipment purchased through December 31, 1996 was $50,459,580 including acquisition fees. The Partnership had sold $46,156,390 of equipment as of December 31, 1996 and had a balance of $4,303,190 invested in equipment. At the end of 1996, there were 6 leases in place with 6 lessees. The acquisition of these leases and equipment is described more fully in Item 2

Item 2. Properties.
At December 31, 1996, the Partnership owned capital equipment, with a cost of $4,303,190, subject to 6 leases with 6 different lessees. All purchases of capital equipment were subject to a 4.75% acquisition fee paid to the General Partner.
Item 3.

Item 3. Legal Proceedings.
There are no material pending legal proceedings to which the Partnership is a party or of which any of its equipment or leases is the subject.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders.
None.
Part II
Item 5.

Item 5. Market for the Partnership's Securities and Related Security Holder Matters.
(a) Market Information
The Partnership's outstanding securities consist of Units of Limited Partnership Interest ("Units) which were sold for $500 each. As of December 31, 1996, 62,840 Units had been sold to the public at a price of $500 per Unit (except for 693 Units which were sold for a net price of $460 per Unit to employees of affiliates of the General Partner and securities representatives of its affiliates).
There is no public market for the Units, and it is not anticipated that such a public market will develop.
(b) Approximate Number of Security Holders
Number of Number of Units Unit holders as of Title of Class as of 12/31/96 12/31/96 Units of Limited Partnership Interest 3,717 62,840
(c) Dividend History and Restrictions
During the years ended December 31, 1989 and 1988 and the two months ended December 31, 1987, the Partnership had an initial closing and thirteen subsequent closings admitting partners holding a total of 62,840 units. The final admission date to admit partners into the Partnership was June 14, 1989. Pursuant to Section 8 of the Amended Limited Partnership Agreement, the Partnership's Distributable Cash from Operations for each year will be determined and will be distributed to the Partners. The Partnership distributions were:
Distributions Distributions To The To The Limited Partners General Partner 1988 $ 477,031 $ 25,107 1989 2,827,947 148,840 1990 3,468,767 182,568 1991 3,468,769 182,567 1992 4,166,292 178,649 1993 6,441,100 243,562 1994 5,718,440 169,453 1995 2,387,920 99,178 1996 2,749,250 48,798
The Partnership did not make a distribution in 1987.
"Cash from Operations" means the net cash provided by the Partnership's normal operations after the general expenses and current liabilities of the Partnership (other than the equipment management fee) are paid, as reduced by any reserves for working capital and contingent liabilities to the extent deemed reasonable by the General Partner, and increased by any portion of such reserves then deemed by the General Partner not to be required for Partnership operations.
Each distribution of Distributable Cash from Operations of the Partnership shall be made 95% to the Limited Partners and 5% to the General Partner. For rendering services in connection with the normal operations of the Partnership, the Partnership will pay to the General Partner a partnership management fee equal to 5% of the cash received from rents.
Any distributable cash from sales or refinancing will be distributed 99% to the Limited Partners and 1% to the General Partner until Payout. Payout is the time when the aggregate amount of all distributions to the Limited Partners of Distributable Cash from Operations and of Distributable Cash from Sales or Refinancing equal the aggregate cumulative 8% annual return on their aggregate unreturned Invested Capital. After payout has occurred, any distributable cash from sales or refinancing will be distributed 15% to the General Partner, and the remainder to the Limited Partners.
Any Distributable Cash from Operations will be distributed within 60 days after the completion of each of the first three fiscal quarters of each Partnership fiscal year, and within 120 days after the completion of each fiscal year, beginning after the first full fiscal quarter following the Partnership's first closing date. Each such distribution will be described in a statement sent to the Limited Partners.
Items 6. Selected Financial Data.
The following table sets forth selected financial information regarding the Partnership's financial position and operating results. This information should be read in conjunction with the Management's Discussion and Analysis of Financial Condition and Results of Operations and Financial Statements and Notes thereto, which are included in Items 7 and 8 of this report.
As of and for As of and for As of and for the Year Ended the Year Ended the Year Ended 12/31/96 12/31/95 12/31/94 Operating Data Rental Income $ 808,218 $ 1,863,506 $ 3,037,422 Interest Income 65,911 47,992 71,592 Net Income 1,047,419 1,337,147 2,892,968
Balance Sheet Data Cash and Cash Equivalents 639,226 802,866 926,557 Investment Property 123,888 1,809,976 2,744,992 Total Assets 769,746 2,631,265 3,741,270 Partners' Equity 760,881 2,511,510 3,661,461
Per Unit Data 1996 1995 1994 Net Income $ 16.18 $ 20.67 $44.97
Distributions 43.75 38.00 91.00
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
General
On May 3, 1988, the Partnership had its first closing and received from the escrow account $5,356,940 representing 10,731 Units of Limited Partnership Interest. During 1989 and 1988, the Partnership had an additional thirteen closings and received from the escrow account $26,034,840 representing 52,108 Units of Limited Partnership Interest. Of these amounts, the Partnership received proceeds from the sale of 693 Units at a price net of sales commission for sales to employees and securities representatives of affiliates of the General Partners, who are allowed to purchase units for a net price of $460 per Unit.
Results of Operation
For the years ended December 31, 1996, 1995 and 1994, the net income was $1,047,419, $1,337,147, and $2,892,968, respectively, and net income per unit was $16.18, $20.67, and $44,97. Total distributions for the years ended December 31, 1996, 1995, and 1994, were $2,798,048, $2,487,098, and $5,887,893, respectively, and distributions per unit were $43.75, $38.00, and $91.00.
Total revenue decreased $1.2 million in 1996 from the prior year due to lower rental income and lower gain from sales of investment property. Rental income will continue to decline due to lease expirations and equipment sales. Depreciation expense declined as a result of equipment sales and the use of accelerated depreciation methods.
In 1995, total revenue had decreased $2.4 million from 1994. As in 1996, this was due to lower rental income as the result of lease expirations and equipment sales.
As of December 31, 1996, the Partnership held $4.3 million of equipment of which $3.4 million was on lease. During 1997, leases on $2.7 million of equipment will expire. As a result, rental income is expected to decline due to lease expirations. Future cash distributions will depend on the remarketing of this property.
Liquidity and Capital Resources
The Partnership believes it has sufficient liquidity to pay operating expenses and fund cash distributions. The Partnership also believes that rental income and cash from equipment sales will provide sufficient resources to meet obligations. The Partnership does not anticipate borrowing funds in 1997.
Item 8.

Item 8. Financial Statements and Supplementary Data.
INDEPENDENT AUDITORS' REPORT
To the Partners of Pershing Lease Income Limited Partnership:
We have audited the financial statements of Pershing Lease Income Limited Partnership as listed in Item 14(a)1 on page 23. 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 Pershing Lease Income Limited Partnership as of December 31, 1996 and 1995 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 1996 in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Kansas City, Missouri February 7, 1997
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
Balance Sheets December 31, 1996 and 1995
Assets 1996 1995 Investment property: Cost $ 4,303,190 $ 10,782,881 Less accumulated depreciation 4,179,302 8,972,905 Investment property, net 123,888 1,809,976 Cash and cash equivalents 639,226 802,866 Rents and other receivables 3,374 16,553 Prepaid insurance 3,258 1,870
Total assets $ 769,746 $ 2,631,265 =========== ===========
Liabilities and Partners' Equity Liabilities: Due to affiliates (Note 3) $ 8,865 $ 17,736 Accounts payable - 96,198 Unearned rental revenue - 5,821
Total liabilities 8,865 119,755
Partners' Equity (Deficit): General Partner: Capital contribution 1,000 1,000 Cumulative net income 219,002 188,305 Cumulative cash distributions (1,278,722) (1,229,924) (1,058,720) (1,040,619) Limited Partners (62,840 units): Capital contributions, net of offering costs 27,738,501 27,738,501 Cumulative net income 5,786,616 4,769,894 Cumulative cash distributions (31,705,516) (28,956,266) 1,819,601 3,552,129 Total partners' equity 760,881 2,511,510
Total liabilities and partners' equity $ 769,746 $ 2,631,265 =========== ===========
See accompanying notes to financial statements.
PERSHING LEASE INCOME LIMITED PARTNERSHIP
Statements of Operations For the Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994 Revenue: Rental income (Note 2) $ 808,218 $ 1,863,506 $ 3,037,422 Interest income 65,911 47,992 71,592 Net gain on sale of investment property 541,841 723,692 1,942,012 Total revenue 1,415,970 2,635,190 5,051,026
Expenses: Depreciation 244,007 876,121 1,759,309 General and administrative 124,544 421,922 398,749 Total expenses 368,551 1,298,043 2,158,058
Net income $ 1,047,419 $ 1,337,147 $ 2,892,968 ========== ========== ========== Net income attributable to Limited Partners $ 1,016,722 $ 1,299,237 $ 2,826,000 ========== ========== ========== Net income per Limited Partnership Unit $ 16.18 $ 20.67 $ 44.97 ========== ========== ==========
See accompanying notes to financial statements.
PERSHING LEASE INCOME LIMITED PARTNERSHIP
Statements of Partners' Equity For the Years Ended December 31, 1996, 1995 and 1994
General Limited Partner Partners Total
Partners' Equity (Deficit) at December 31, 1993 $ (876,865) $ 7,533,251 $ 6,656,386
Net income 66,967 2,826,001 2,892,968 Cash distributions (169,453) (5,718,440) (5,887,893)
Partners' Equity (Deficit) at December 31, 1994 $ (979,351) $ 4,640,812 $ 3,661,461
Net income 37,910 1,299,237 1,337,147 Cash distributions (99,178) (2,387,920) (2,487,098)
Partners' Equity (Deficit) at December 31, 1995 $(1,040,619) $ 3,552,129 $ 2,511,510
Net income 30,697 1,016,722 1,047,419 Cash distributions (48,798) (2,749,250) (2,798,048)
Partners' Equity (Deficit) at December 31, 1996 $(1,058,720) $ 1,819,601 $ 760,881 ========== ========== ==========
See accompanying notes to financial statements.
PERSHING LEASE INCOME LIMITED PARTNERSHIP
Statements of Cash Flows For the Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994 Cash flows from operating activities: Net income $ 1,047,419 $ 1,337,147 $ 2,892,968 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 244,007 876,121 1,759,309 Net gain on sale of investment property ( 541,841) ( 723,692) (1,942,012)
Changes in assets and liabilities: Receivables 13,179 50,913 5,299 Prepaid insurance (1,388) 385 485 Due from/to affiliates (8,871) (3,774) (3,516) Accounts payable (96,198) 79,443 (120,426) Unearned rental revenue (5,821) (15,909) (69,901) Net cash provided by operating activities 650,486 1,600,634 2,522,206
Cash flows from investing activities: Disposition of investment property 1,983,922 762,773 3,155,402
Cash flows from financing activities: Cash distributions to Partners (2,798,048) (2,487,098) (5,887,893) Repayment of debt - - (19,627) Net cash used in financing activities (2,798,048) (2,487,098) (5,907,520) Net decrease in cash and cash equivalents (163,640) (123,691) (229,912) Cash and cash equivalents at beginning of year 802,866 926,557 1,156,469
Cash and cash equivalents at end of year $ 639,226 $ 802,866 $ 926,557 ========== ========== =========== Cash Paid for interest $ - $ - $ 248 ========== ========== ===========
See accompanying notes to financial statements.
PERSHING LEASE INCOME LIMITED PARTNERSHIP (A Missouri Limited Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies
Organization
Pershing Lease Income Limited Partnership (the "Partnership") was organized under the Missouri Revised Uniform Limited Partnership Act on November 30, 1987. The Partnership was formed to invest primarily in equipment to be leased to third parties. The Amended Agreement of Limited Partnership authorized the issuance of up to 60,000 Limited Partnership units at a price of $500 per unit and up to 20,000 additional units. The Partnership had an initial closing and thirteen subsequent closings. The closings occurred on May 3, 1988, June 3, 1988, July 8, 1988, August 5, 1988, September 8, 1988, October 7, 1988, November 7, 1988, December 7, 1988, January 9, 1989, February 7, 1989, March 7, 1989, April 7, 1989, May 5, 1989, and June 14, 1989 with 10,732, 6,712, 3,984, 4,268, 5,011, 3,822, 2,562, 2,701, 4,001, 3,256, 3,604, 4,014, 3,592, and 4,581 units, respectively.
Pursuant to the terms of the Amended Agreement of Limited Partnership, distributable cash from operations and profits for federal income tax purposes from normal operations, as defined, are to be allocated 95% to the Limited Partners and 5% to the General Partner until payout has occurred, and 85% to the Limited Partners and 15% to the General Partner thereafter. Any distributable cash from sales shall be distributed 99% to the Limited Partners and 1% to the General Partner until payout has occurred, and 85% to the Limited Partners and 15% to the General Partner thereafter. "Payout" means the time when the aggregate amount of all distributions to the Limited Partners of distributable cash from operations and of distributable cash from sales or refinancing equals the aggregate amount of the Limited Partners' original invested capital plus a cumulative 8% annual return on their aggregate unreturned invested capital (calculated from the beginning of the first full fiscal quarter following each Limited Partner's admission to the Partnership). Losses for federal income tax purposes from the normal operations of the Partnership will be allocated 99% to the Limited Partners and 1% to the General Partner.
The General Partner, Waddell & Reed Leasing, Inc., contributed $1,000 for its General Partnership interest. The General Partner is not required to make any other capital contributions except under certain limited circumstances upon termination of the Partnership.
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
Notes to Financial Statements, Continued
Basis of Presentation
The Partnership financial statements are presented on the accrual basis of accounting.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and short-term investments with original maturities of less than ninety days.
Investment Property
Investment property consists primarily of construction equipment, forklifts, and transportation equipment. At December 31, 1996 and 1995, the Partnership owned investment property, with a depreciable cost basis of $4,303,190 and $10,782,881, respectively. The depreciable cost basis at December 31, 1996 and 1995 includes acquisition fees of $195,202 and $488,958, respectively, which were paid to the General Partner. At December 31, 1996 and 1995, $3,483,851 and $9,006,855, respectively, was subject to existing leases and the remainder was being held in inventory. Depreciation on investment property is provided using accelerated methods over lives ranging from 3 to 12 years. At December 31, 1996, the Partnership had equipment with an original cost of $819 thousand which was not under a lease agreement.
The Partnership implemented SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" in 1996. There was no effect of implementation.
Use of Estimates
The Partnership has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
Notes to Financial Statements, Continued
Income Taxes
The Partnership is a pass-through entity and, accordingly, taxes on income, if any, are the responsibility of the individual partners. Income for financial reporting was more or (less) than that reported for income tax purposes for the three years ended December 31, 1996, 1995 and 1994 by $5,821, $(35,722), and $(848,253), respectively. The difference between income for financial reporting and income tax purposes is principally due to depreciation, gain on sale of investment property, prepaid rents and bad debt expense.
Partners' equity at December 31, 1996 and 1995 as reported herein has been reduced by sales commissions and other costs of the offering which will not be deductible by the partners until the Partnership is liquidated or the partners' units are otherwise disposed of. Limited Partner's equity for income tax purposes was $5,528,346 as of December 31, 1996.
(2) Leases
The Partnership leases the investment property to unrelated third parties under operating leases. Rental income is reported when earned. Minimum lease payments scheduled to be received in the future under existing noncancelable operating leases follow:
Year Amount 1997 $ 217,227 1998 15,390 $ 232,617 =========
(3) Related Party Transactions
Equipment acquisition fees, management fees and other expenses paid or payable by the Partnership to the General Partner or affiliates of the General Partner for the years ended December 31, 1996, 1995 and 1994 are as follows:
1996 1995 1994 Management fees $ 40,410 $ 94,138 $138,472 Reimbursable operating expenses 49,695 50,472 63,853 $ 90,105 $144,610 $202,325 ======= ======= =======
At December 31, 1996 and 1995, the following costs were due to the General Partner or affiliates: 1996 1995 Management fees $ 3,750 $ 9,988 Reimbursable operating expenses 5,115 7,748 $ 8,865 $17,736 ====== ======
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting And Financial Disclosure.
None.
Part III
Item 10.

Item 10. Directors and Executive Officers of the Partnership.
(a-b) Identification of Directors and Executive Officers
The Partnership has no Directors or Officers. As indicated in Item 1 of this report, the General Partner of the Partnership is Waddell & Reed Leasing, Inc. Under the Partnership Agreement, the General Partner is solely responsible for the leasing of the Partnership's equipment, and the Limited Partners have no right to participate in the control of such operations. The names and ages of the Directors and Executive Officers of the General Partner at December 31, 1995 are as follows:
Name Title Age
Robert L. Hechler President, Treasurer and Director 60 Michael D. Strohm Executive Vice President and Assistant Treasurer 45 Sharon K. Pappas Secretary and General Counsel 38 David R. Burford Assistant Secretary and Assistant General Counsel 39
(c) Identification of certain significant persons
See Item 10. (a-b)
(d) Family relationship
No family relationship exists between any of the foregoing Directors or Officers.
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
(e) Business experience
Robert L. Hechler is also President, Chief Executive Officer and a Director of Waddell & Reed, Inc. and President and Director of Waddell & Reed Services Company. He has been employed by Waddell & Reed Services Company and affiliated companies since December 1977 and has also been a Vice President of each Fund in the United Group of Mutual Funds, TMK/United Funds, Inc., and Waddell & Reed Funds, Inc. since December 1977. Mr. Hechler holds a B.S. (1958) from the University of Illinois and an M.B.A. (1967) from the University of Chicago.
Michael D. Strohm is also Senior Vice President and Controller of Waddell & Reed, Inc. He has been employed by Waddell & Reed, Inc. and affiliated companies since June 1972. Mr. Strohm holds a B.S. (1973) and an M.B.A. (1979) from Rockhurst College.
Sharon K. Pappas is also Senior Vice President, Secretary and General Counsel of Waddell & Reed, Inc. She has been employed by Waddell & Reed, Inc. and affiliated companies since July 1989 and has also been Secretary of each Fund in the United Group of Mutual Funds, TMK, United Funds, Inc., and Waddell & Reed Funds, Inc. since January 1990, and Vice President of these Funds since December, 1992. Ms. Pappas holds a B.S. (1981) from Kansas State University and a J.D. (1984) from the University of Kansas School of Law.
David R. Burford is also Assistant Secretary and Associate General Counsel of Waddell & Reed, Inc. He has been employed by Waddell & Reed, Inc. and affiliated companies since May 1985 and has also been Assistant Secretary of each Fund in the United Group of Mutual Funds since February 1987. Mr. Burford holds a B.S. (1979) from the University of Missouri and a J.D. (1982) from Duke University School of Law.
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
(f) Involvement in certain legal proceedings
The Partnership is not aware of any legal proceedings against any Director or Executive Officer of the Corporate General Partner which may be important for the evaluation of any such person's ability and integrity.
Item 11.

Item 11. Executive Compensation
(a), (b), (c), (d), and (e): The Officers and Directors of the General Partner receive no current or proposed direct remuneration in such capacities, pursuant to any standard arrangements or otherwise, from the Partnership. In addition, the Partnership has not paid and does not propose to pay any options, warrants or rights to the Officers and Directors of the Corporate General Partners. There exists no remuneration plan or arrangement with any Officer or Director of the General Partner resulting from the resignation, retirement or any other termination. See Note 3 of the Notes to Financial Statements included in Item 8 of this report for a description of the remuneration paid by the Partnership to the General Partner and its affiliates during 1996, 1995 and 1994.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management.
By virtue of its organization as a limited partnership, the Partnership has outstanding no securities possessing traditional voting rights. However, as provided for in Section 13.2 of the Agreement of Limited Partnership (subject to Section 13.3), a majority in interest of the Limited Partners have voting rights with respect to:
1. Amendment of the Limited Partnership Agreement;
2. Termination of the Partnership;
3. Removal of the General Partner; and
4. Approval or disapproval of the sale of substantially all the assets of the Partnership.
No person or group is known by the General Partner to own beneficially more than 5% of the Partnership's 62,840 outstanding Limited Partnership Units as of December 31, 1996.
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
By virtue of its organization as a limited partnership, the Partnership has no Officers or Directors. Employees of the General Partners and securities representatives of its affiliates may purchase Units for a net price of $460 per unit, and the Partnership incurs no obligation to pay any sales commission with respect to those sales.
Item 13.

Item 13. Certain Relationships and Related Transactions.
(a), (b), and (c): The General Partner of the Partnership is Waddell & Reed Leasing, Inc. The identification of the General Partners' Directors and Executive Officers is indicated in Item 10 of this report. The Partnership was not involved in any transaction involving any of these Directors or Officers of the Corporation or any member of the immediate family of these individuals, nor did any of these persons provide services to the Partnership for which they received direct or indirect remuneration. Similarly, there exists no business relationship between the Partnership and any of the Directors or Officers of the Corporate General partners, nor were any of the individuals indebted to the Partnership.
Waddell & Reed, Inc. acted as dealer-manager in connection with the offering of units by the Partnership during the years ended December 31, 1989 and 1988 and the period ended December 31, 1987. The dealer-manager was entitled to receive commissions in connection therewith from the Partnership. Amounts paid or accrued for these commissions during the years ended December 31, 1989 and 1988 totaled $914,920 and $1,570,960, respectively.
Waddell & Reed Leasing, Inc. incurred certain expenses in connection with the organization of the Partnership, including preparing the Partnership for qualification under the federal and state securities laws and subsequently offering and distributing the Units to the public. Included in these organizational and offering expenses are legal, accounting, printing costs, filing and qualification fees and disbursements necessary for the organization of the Partnership and the registration and marketing of the Units of Partnership interests. The General Partner was reimbursed an amount equal to up to 4% of the gross proceeds of the Partnership's offering for organizational and offering expenses. Waddell & Reed, Inc. marketed the Units and will provide all administrative functions of the Partnership and will supply substantially all of the General Partner's capital resources. In consideration of the services and capital commitments provided by Waddell & Reed, Inc., they received 2% of the 4% of the offering and organizational expenses received by the General Partner. Waddell & Reed Leasing, Inc. was reimbursed those costs in the amount of $460,960 and $795,840 during the years ended December 31, 1989 and 1988, respectively.
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
The General Partner has the responsibility for acquiring, financing, leasing and selling of equipment for the Partnership. The General Partner received an acquisition fee of 4.75% for acquiring equipment to be purchased for the Partnerships portfolio and receives a management fee equal to 5% of gross lease rentals collected for managing the leasing and financing of the Partnership's equipment. BOT Financial Corporation proposes equipment acquisitions, leasing transactions, financing and refinancing transactions, and sale transactions for the Partnership, and oversees the operation, management and use of the equipment. BOT will receives 60% of the acquisition fee amount, 40% of all equipment management fee amounts and 100% of all subordinated remarketing fee amounts, respectively, received by the General Partner from the Partnership, and 40% of all cash distributed by the Partnership to the General Partner as its distributive share of such cash. During the years ended December 31, 1996, 1995 and 1994, the Partnership incurred no acquisition fees and paid or accrued management fees of $40,410, $94,138, and $138,472, to the General Partner.
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
Part IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements: Page
Report of the Independent Auditors' 10 Balance Sheets - December 31, 1996 and 1995 11 Statements of Operations-For the Years Ended December 31, 1996, 1995 and 1994 12 Statements of Partners' Equity - For the Years Ended December 31, 1996, 1995 and 1994 13 Statements of Cash Flows - For the Years Ended December 31, 1996, 1995 and 1994 14 Notes to Financial Statements: 15-17
2. Exhibit Index
All other schedules are omitted as the information is not applicable or is included in the financial statements or related footnotes.
Exhibit Page Number or Numbers Description Incorporation by Reference 4. Amended Agreement of Limited Partnership *
*Included with Amendment No. 1 to Form S-1, Registration No. 33-19038, filed with the Securities and Commission on February 11, 1988.
(b) Reports on Form 8-K
None.
Pershing Lease Income Limited Partnership (A Missouri Limited Partnership)
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.
PERSHING LEASE INCOME LIMITED PARTNERSHIP (Registrant)
By: /s/ Michael D. Strohm Michael D. Strohm, Executive Vice President and Assistant Treasurer of the General Partner
Date: March 4, 1997