-----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, RNo6CVIe/VBAwKM2uEkyXn6hdxmmXB7eeG2HyGx++TvZfq67zb42HofAXgrd50mf 8vd+KA1/bdy021ZLmqwP3w== 0000311250-99-000002.txt : 19990503 0000311250-99-000002.hdr.sgml : 19990503 ACCESSION NUMBER: 0000311250-99-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RMI COVERED HOPPER RAILCAR MANAGEMENT PROGRAM 79-1 CENTRAL INDEX KEY: 0000311250 STANDARD INDUSTRIAL CLASSIFICATION: ARRANGEMENT OF TRANSPORTATION OF FREIGHT & CARGO [4731] IRS NUMBER: 942645847 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 002-64413 FILM NUMBER: 99606630 BUSINESS ADDRESS: STREET 1: ONE MARKET PLZ STREET 2: STEUART STREET TOWER STE 900 CITY: SAN FRANCISCO STATE: CA ZIP: 94105-1301 BUSINESS PHONE: 4159741399 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL QUARTER ENDED MARCH 31, 1999. [ ] 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 2-64413 ----------------------- RMI COVERED HOPPER RAILCAR MANAGEMENT PROGRAM 79-1 (Exact name of registrant as specified in its charter) CALIFORNIA 94-2645847 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE MARKET, STEUART STREET TOWER SUITE 800, SAN FRANCISCO, CA 94105-1301 (Address of principal (Zip code) executive offices) Registrant's telephone number, including area code (415) 974-1399 ----------------------- 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 ______ RMI COVERED HOPPER RAILCAR MANAGEMENT PROGRAM 79-1 STATEMENTS OF REVENUES COLLECTED AND EXPENSES PAID AND OTHER CHANGES IN CASH
For the Three Months Ended March 31, 1999 1998 ------------------------------------ Revenues collected: Lease revenue received $ 537,324 $ 612,392 Interest and other income 22,730 19,690 ------------------------------------ Total revenues collected 560,054 632,082 Expenses paid: Management fees paid 74,078 71,494 Repairs and maintenance 73,835 67,270 Property taxes 1,364 1,654 Accounting and legal fees 1,988 3,791 Storage, repositioning, and other 2,157 2,671 ------------------------------------ Total expenses paid 153,422 146,880 ------------------------------------ Excess of revenues collected over expenses paid 406,632 485,202 ------------------------------------ Other increases (decreases) in cash: Reimbursement of prepaid mileage,repairs, and other expenses, net 32,089 40,953 Receipt of proceeds from sold or destroyed cars 29,763 62,820 Receipt of proceeds for transfer of car ownership 26,000 79,000 Payments to investors for sold or destroyed cars -- (32,772 ) Payments to investors for transfer of car ownership (24,960 ) (75,840 ) Commission paid for sale or transfer of car ownership -- (3,160 ) Distributions to investors (485,325 ) (476,086 ) ------------------------------------ Net other decreases in cash (422,433 ) (405,085 ) ------------------------------------ Net (decrease) increase in cash (15,801 ) 80,117 Cash at beginning of period 1,318,995 1,314,628 ------------------------------------ Cash at end of period $ 1,303,194 $ 1,394,745 ====================================
See accompanying notes to financial statements. RMI COVERED HOPPER RAILCAR MANAGEMENT PROGRAM 79-1 NOTES TO THE STATEMENTS OF REVENUES COLLECTED AND EXPENSES PAID AND OTHER CHANGES IN CASH MARCH 31, 1999 1. Basis of Presentation RMI Covered Hopper Railcar Management Program 79-1 (the Program) is not a legal entity. The statements of revenues collected and expenses paid and other changes in cash (the Statements) of the Program are presented on the cash basis of accounting, used for reporting to investors in the Program in accordance with the Management Agreement with PLM Investment Management, Inc. (IMI). Under the cash basis of accounting, revenues are recognized when received, rather than when earned, and expenses are recognized when paid, rather than when the obligation is incurred. Accordingly, the Statements are not intended to present financial position, or results of operations or cash flows in accordance with generally accepted accounting principles. 2. Operations At March 31, 1999, 485 cars, which are owned by the investors, were being managed by IMI under the Program. All of the cars were covered by lease agreements. During the three months ending March 31, 1999, one car was destroyed and one car was added to the Program. 3. Equalization reserve Under the terms of the management agreement, IMI may, at its discretion, cause the Program to retain a certain amount of cash (the working capital reserve) to cover future disbursements and provide for a balanced distribution of funds to the investors each quarter. IMI has determined the working capital reserve at March 31, 1999, to be $751,716 ($836,155 at December 31, 1998). Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CASH BALANCES AND RESULTS OF OPERATIONS Comparison of the Program's Revenues Collected, Expenses Paid, and Other Changes in Cash for the Three Months Ended March 31, 1999 and 1998 REVENUES COLLECTED: (1) Lease receipts decreased to $537,324 in the first quarter of 1999 from $612,392 in the first quarter of 1998. The decrease is primarily due to the timing of receipt of revenues and to lower average leases rates for certain lessees during the comparable periods. (2) Interest and other income increased to $22,730 in the first quarter of 1999, from $19,690 in the first quarter of 1998, due to $5,848 exchange rate gain in the first quarter of 1999 as compared to $53 exchange rate loss in the first quarter of 1998. The increase caused by the exchange rate fluctuation was partially offset by decreased interest income resulting from lower interest rates earned on cash investments during the first quarter of 1999 when compared to the same period of 1998. EXPENSES PAID: (1) Management fees paid increased to $74,078 in the first quarter 1999, from $71,494 in the first quarter of 1998. The increase is due to more cars in the Program during the first quarter of 1999 as compared to the same period of 1998. In addition, an incentive management fees of $18,788 was paid to IMI in the first quarter of 1999 compared to an incentive management fees of $17,850 was paid to IMI in the same period of 1998. Incentive management fees are paid to the Manager quarterly in arrears. (2) Repairs and maintenance expense increased to $73,835 in the first quarter of 1999, from $67,270 in the first quarter of 1998. The increase is due to the timing of payments of expenses during comparable periods. (3) Property taxes decreased to $1,364 in the first quarter of 1999, from $1,654 in the first quarter of 1998. The decrease is due to the timing of payments for these expenses during the comparable periods. (4) Accounting and legal fees decreased to $1,988 in the first quarter of 1999, from $3,791 in the first quarter of 1998 due to the timing of payments for these expenses during the comparable periods. (5) Storage, repositioning, and other expenses decreased to $2,157 in the first quarter of 1999, from $2,671 in the first quarter of 1998. The decrease is primarily due to the timing of payments of expenses during comparable periods. OTHER CHANGES IN CASH: (1) Prepaid mileage, reimbursable repairs and other expenses are composed primarily of receipts of mileage credits from railroads which are due to lessees, net of reimbursable repairs due from lessees. The funds increased by $32,089 in the first quarter of 1999, as compared to an increase of $40,953 in the first quarter of 1998 as a result of these items. The difference between comparable periods is due primarily to the timing of net receipts and repayments of these funds by the Program. (2) During the three months ended March 31, 1999, one car was destroyed for which the Program received insurance proceeds of $29,763. These insurance proceeds were paid to the investor of the destroyed car in April of 1999. During the three months ended March 31, 1998, the Program received insurance proceeds of $62,820 from two cars that were destroyed. The Program paid one investor $32,772 for one of the destroyed cars during the first quarter of 1998 and paid the remaining $30,048 to the other investor of the destroyed car during the second quarter of 1998. (3) During the three months ended March 31, 1999, the Program received proceeds of $26,000 for one car that was transferred between investors in the Program. The Program paid $24,960 net of commission to the investor that sold the railcar. During the three months ended March 31, 1998, the Program received proceeds of $79,000 for three cars that were transferred between investors in the Program. The Program paid $75,840 net of commission to investors that sold the railcars. (4) Commission of $1,040 will be paid to the Manager during the second quarter of 1999 for the one car that was transferred between investors during the first quarter of 1999. Commission of $3,160 was paid during the three months ended March 31, 1998 for the three cars that were transferred between investors in the Program. As a result of the foregoing and other factors, the Program distributed $485,325 to investors in the first quarter 1999 compared to $476,086 in the first quarter of 1998. The Program's performance in the first quarter 1999 is not necessarily indicative of future periods. Liquidity and Capital Resources The Program's operating funds are committed to payment of operating expenses, management fees, and making cash distributions to the investors when available. The Program intends to finance these activities with funds generated from operations. The Manager knows of no demands or commitments that might adversely affect the liquidity of the Program. Effects of Year 2000 It is possible that the PLM Investment Management, Inc.'s (IMI's or Manager's) currently installed computer systems, software products and other business systems, or the Program's vendors, service providers and customers, working either alone or in conjunction with other software or systems, may not accept input of, store, manipulate and output dates on or after January 1, 2000 without error or interruption (a problem commonly known as the "Year 2000" problem). Since the Program relies substantially on the Manager's software systems, applications and control devices in operating and monitoring significant aspects of its business, any Year 2000 problem suffered by the Manager could have a material adverse effect on the Program's business, financial condition and results of operations. The Manager has established a special Year 2000 oversight committee to review the impact of Year 2000 issues on its software products and other business systems in order to determine whether such systems will retain functionality after December 31, 1999. The Manager (a) is currently integrating Year 2000-compliant programming code into its existing internally customized and internally developed transaction processing software systems and (b) the Manager's accounting and asset management software systems have either already been made Year 2000-compliant or Year 2000-compliant upgrades of such systems are planned to be implemented by the Manager before the end of fiscal 1999. Although the Manager believes that its Year 2000 compliance program can be completed by the beginning of 1999, there can be no assurance that the compliance program will be completed by that date. To date, the costs incurred and allocated to the Program to become Year 2000 compliant have not been material. In addition, the Manager believes the future costs allocable to the Program to become Year 2000 compliant will not be material. It is possible that certain of the Program's equipment lease portfolio may not be Year 2000 compliant. The Manager is currently contacting equipment manufacturers of the Program's leased equipment portfolio to assure Year 2000 compliance or to develop remediation strategies. The Manager does not expect that non-Year 2000 compliance of its leased equipment portfolio will have an adverse material impact on its financial statements. Some risks associated with the Year 2000 problem are beyond the ability of the Manager or the Program to control, including the extent to which third parties can address the Year 2000 problem. The Manager is communicating with vendors, services providers and customers in order to assess the Year 2000 compliance readiness of such parties and the extent to which the Program is vulnerable to any third-party Year 2000 issues. There can be no assurance that the software systems of such parties will be converted or made Year 2000 compliant in a timely manner. Any failure by the Manager or such other parties to make their respective systems Year 2000 compliant could have a material adverse effect on the business, financial position and results of operations from the Program. The Manager will make an ongoing effort to recognize and evaluate potential exposure relating to third-party Year 2000 non-compliance, and will develop a contingency plan if the Manager determines, that third-party non-compliance will have a material adverse effect on the Program's business, financial position, or results of operation. The Manager is currently developing a contingency plan to address the possible failure of any systems due to the Year 2000 problems. The Manager anticipates these plans will be completed by September 30, 1999. Forward-Looking Information Except for historical information contained herein, the discussion in this Form 10-Q contains forward-looking statements that involve risks and uncertainties, such as statements of the Program's plans, objectives, expectations, and intentions. The cautionary statements made in this Form 10-Q should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-Q. The Program's actual results could differ materially from those discussed here. (this space intentionally left blank) 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. RMI COVERED HOPPER RAILCAR MANAGEMENT PROGRAM 79-1 By: PLM Investment Management, Inc. Manager By: /s/ Stephen M. Bess --------------------------------- Stephen M. Bess President Date: April 30, 1999 By: /s/ Richard K Brock --------------------------------- Richard K Brock Vice President and Corporate Controller EX-27 2
5 3-MOS DEC-31-1999 MAR-31-1999 1,303,194 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 560,054 0 0 153,422 0 0 0 0 0 0 0 0 0 0 0
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