-----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, GNknhA6ASDc1hi+Xtf5RKR89VplavQScmmCQkX6LmvYudrVHZuy4gbhr7hy+ZZGG C9BMOB5+VIhjQWyvw/jLbw== 0000950149-95-000761.txt : 19951119 0000950149-95-000761.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950149-95-000761 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IEA MARINE CONTAINER FUND CENTRAL INDEX KEY: 0000311780 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 942607182 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09228 FILM NUMBER: 95590050 BUSINESS ADDRESS: STREET 1: 444 MARKET ST 15TH FLR CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4156778990 MAIL ADDRESS: STREET 1: 444 MARKET ST 15TH FLOOR CITY: SAN FRANCISCO STATE: CA ZIP: 94111 10-Q 1 FORM 10-Q FOR IEA MARINE CONTAINER FUND 1 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 QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 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 0-9228 IEA MARINE CONTAINER FUND (A CALIFORNIA LIMITED PARTNERSHIP) (Exact name of registrant as specified in its charter) California 94-2607182 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 444 Market Street, 15th Floor, San Francisco, California 94111 (Address of principal executive offices) (Zip Code) (415) 677-8990 (Registrant's telephone number, including area code) 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 . --- --- 2 IEA MARINE CONTAINER FUND (A CALIFORNIA LIMITED PARTNERSHIP) REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 TABLE OF CONTENTS
PAGE PART I - FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets - September 30, 1995 (unaudited) and December 31, 1994 2 Statements of Operations for the three and nine months ended September 30, 1995 and 1994 3 (unaudited) Statements of Cash Flows for the nine months ended September 30, 1995 and 1994 4 (unaudited) Notes to Financial Statements (unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of 7 Operations PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K during the period 8
3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Presented herein are the Registrant's balance sheets as of September 30, 1995 and December 31, 1994, statements of operations for the three and nine months ended September 30, 1995 and 1994, and statements of cash flows for the nine months ended September 30, 1995 and 1994. 4 IEA MARINE CONTAINER FUND (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS (UNAUDITED)
September 30, December 31, 1995 1994 ------------- ------------ Assets ------ Current assets: Cash, includes $56,446 at September 30, 1995 and $28,632 at December 31, 1994 in interest-bearing accounts $ 56,711 $ 41,241 Short-term investments 200,000 100,000 Net lease receivables due from Leasing Company (notes 1 and 2) 35,939 12,341 --------- --------- Total current assets 292,650 153,582 --------- --------- Container rental equipment, at cost 24,689 784,422 Less accumulated depreciation 17,282 548,343 --------- --------- Net container rental equipment 7,407 236,079 --------- --------- $ 300,057 $ 389,661 ========= ========= Partners' Capital ----------------- Partners' capital (deficit): General partners $ 218 $ (2,710) Limited partners 299,839 392,371 --------- --------- Total partners' capital 300,057 389,661 --------- --------- $ 300,057 $ 389,661 ========= =========
The accompanying notes are an integral part of these statements. 2 5 IEA MARINE CONTAINER FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended ----------------------------- ------------------------------- September 30, September 30, September 30, September 30, 1995 1994 1995 1994 ------------- ------------- ------------- ------------- Net lease revenue (notes 1 and 3) $ 16,908 $ 31,357 $ 107,540 $ 130,326 Other operating expenses: Other general and administrative expenses 4,396 5,559 20,330 18,947 --------- ---------- ----------- ----------- Earnings from operations 12,512 25,798 87,210 111,379 Other income: Interest income 2,346 1,555 4,675 4,369 Net gain on disposal of equipment 544 22,676 25,620 55,569 --------- ---------- ----------- ----------- 2,890 24,231 30,295 59,938 --------- ---------- ----------- ----------- Net earnings $ 15,402 $ 50,029 $ 117,505 $ 171,317 ========= ========== =========== =========== Allocation of net earnings: General partners $ 1,293 $ 1,461 $ 4,997 $ 4,074 Limited partners 14,109 48,568 112,508 167,243 --------- ---------- ----------- ----------- $ 15,402 $ 50,029 $ 117,505 $ 171,317 ========= ========== =========== =========== Limited partners' per unit share of net earnings $ .86 $ 2.97 $ 6.86 $ 10.20 ========= ========== =========== ===========
The accompanying notes are an integral part of these statements. 3 6 IEA MARINE CONTAINER FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended -------------------------------- September 30, September 30, 1995 1994 ------------- ------------- Net cash provided by operating activities $ 59,155 $ 151,257 Cash flows provided by investing activities: Proceeds from disposal of equipment 263,425 195,140 Cash flows used in financing activities: Distribution to partners (207,110) (414,223) ---------- ---------- Net increase (decrease) in cash and cash equivalents 115,470 (67,826) Cash and cash equivalents at January 1 141,241 262,307 ---------- ---------- Cash and cash equivalents at September 30 $ 256,711 $ 194,481 ========== ==========
The accompanying notes are an integral part of these statements. 4 7 IEA MARINE CONTAINER FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO UNAUDITED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 AND DECEMBER 31, 1994 (1) Summary of Significant Accounting Policies (a) Nature of Operations IEA Marine Container Fund (A California Limited Partnership) (the "Partnership") was organized under the laws of the State of California on April 26, 1979 for the purpose of owning and leasing marine cargo containers. The managing general partner is Cronos Capital Corp. ("CCC"); the associate general partner is Smith Barney Shearson, Inc. CCC, with its affiliate Cronos Containers Limited (the "Leasing Company"), manages and controls the business of the Partnership. (b) Leasing Company and Leasing Agent Agreement Pursuant to the Limited Partnership Agreement of the Partnership, all authority to administer the business of the Partnership is vested in CCC. CCC has entered into a Leasing Agent Agreement whereby the Leasing Company has the responsibility to manage the leasing operations of all equipment owned by the Partnership. Pursuant to the Agreement, the Leasing Company is responsible for leasing, managing and re-leasing the Partnership's containers to ocean carriers and has full discretion over which ocean carriers and suppliers of goods and services it may deal with. The Leasing Agent Agreement permits the Leasing Company to use the containers owned by the Partnership, together with other containers owned or managed by the Leasing Company and its affiliates, as part of a single fleet operated without regard to ownership. Since the Leasing Agent Agreement meets the definition of an operating lease in Statement of Financial Accounting Standards (SFAS) No. 13, it is accounted for as a lease under which the Partnership is lessor and the Leasing Company is lessee. The Leasing Agent Agreement generally provides that the Leasing Company will make payments to the Partnership based upon rentals collected from ocean carriers after deducting direct operating expenses and management fees to CCC. The Leasing Company leases containers to ocean carriers, generally under operating leases which are either master leases or term leases (mostly two to five years). Master leases do not specify the exact number of containers to be leased or the term that each container will remain on hire but allow the ocean carrier to pick up and drop off containers at various locations; rentals are based upon the number of containers used and the applicable per-diem rate. Accordingly, rentals under master leases are all variable and contingent upon the number of containers used. Most containers are leased to ocean carriers under master leases; leasing agreements with fixed payment terms are not material to the financial statements. Since there are no material minimum lease rentals, no disclosure of minimum lease rentals is provided in these financial statements. (c) Basis of Accounting The Partnership utilizes the accrual method of accounting. Revenue is recognized when earned. (d) Financial Statement Presentation These financial statements have been prepared without audit. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting procedures have been omitted. It is suggested that these financial statements be read in conjunction with the financial statements and accompanying notes in the Partnership's latest annual report on Form 10-K. The interim financial statements presented herewith reflect all adjustments of a normal recurring nature which are, in the opinion of management, necessary to a fair statement of the financial condition and results of operations for the interim periods presented. 5 8 IEA MARINE CONTAINER FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO UNAUDITED FINANCIAL STATEMENTS (2) Net Lease Receivables Due from Leasing Company Net lease receivables due from the Leasing Company are determined by deducting direct operating payables and accrued expenses, and base management fees payable to CCC, the Leasing Company, and its affiliates from the rental billings payable by the Leasing Company to the Partnership under operating leases to ocean carriers for the containers owned by the Partnership. Net lease receivables at September 30, 1995 and December 31, 1994 were as follows:
September 30, December 31, 1995 1994 ------------- ------------ Lease receivables, net of doubtful accounts of $31,391 at September 30, 1995 and $27,616 at December 31, 1994 $ 49,741 $ 103,448 Less: Direct operating payables and accrued expenses 13,802 15,615 Damage protection reserve - 75,492 --------- --------- $ 35,939 $ 12,341 ========= =========
(3) Net Lease Revenue Net lease revenue is determined by deducting direct operating expenses and management fees to CCC and the Leasing Company, from the rental revenue billed by the Leasing Company under operating leases to ocean carriers for the containers owned by the Partnership. Net lease revenue for the three and nine-month periods ended September 30, 1995 and 1994, was as follows:
Three Months Ended Nine Months Ended ------------------------------- ------------------------------- September 30, September 30, September 30, September 30, 1995 1994 1995 1994 ------------- ------------- ------------- ------------- Rental revenue $ 19,696 $ 52,039 $ 144,299 $ 199,223 Rental equipment operating expenses 2,213 9,909 24,392 31,110 Base management fees 575 10,773 12,367 37,787 --------- ---------- ---------- ---------- $ 16,908 $ 31,357 $ 107,540 $ 130,326 ========= ========== ========== ==========
6 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations It is suggested that the following discussion be read in conjunction with the Registrant's most recent annual report on Form 10-K. 1) Material changes in financial condition between September 30, 1995 and December 31, 1994. As discussed in prior quarterly reports, the Managing General Partner has focused its efforts on liquidating the remaining equipment in the fleet and winding up the Registrant's operations. Accordingly, during the first nine months of 1995, the Registrant disposed of 312 containers, equal to approximately 7% of its original fleet. Of this amount, 178 containers were sold during the second quarter of 1995, pursuant to an agreement with an unrelated party. The purchase price of these 178 containers totaled $130,789, which equaled approximately 105% of the containers' net book value. The proceeds from this and other container sales have been retained as part of working capital, ensuring the availability of sufficient cash balances during the period preceding the wind up of operations, as cash expenditures for investor processing, tax, legal and audit services, should be in excess of cash generated from operations. At September 30, 1995, the Registrant's remaining fleet consisted of 13 containers. These remaining containers have been targeted for disposal during the fourth quarter of 1995. The diminishing fleet size contributed to declines in the Registrant's lease receivables, direct operating payables and accrued expenses, and the reserve for container repairs covered under the damage protection plan. During the fourth quarter of 1995, a concentrated effort will be made to collect the Registrant's remaining lease receivables and extinguish its remaining payables, with the intent to wind up the Registrant's operations by December 31, 1995 or early 1996. 2) Material changes in the results of operations between the three and nine-month periods ended September 30, 1995 and the three and nine-month periods ended September 30, 1994. During the three and nine-month periods ended September 30, 1995, approximately 4% and 22%, respectively, of the Registrant's earnings were from gain on disposal of equipment, as compared to 45% and 32% for the same periods in the prior year. Net lease revenues were lower as a direct result of these disposals. Gross rental revenue, a component of net lease revenue, declined 62% and 28% for the three and nine-month periods ended September 30, 1995, respectively, when compared to the same periods in 1994. Rental equipment operating expenses decreased 78% and 22% over the same three and nine-month periods in the prior year. These declines were attributable to the Registrant's diminishing fleet size. Rental equipment operating expenses consisted of, but were not limited to, costs associated with the recovery actions against the doubtful accounts of certain lessees, including legal and container recovery expenses, as well as the related provision for doubtful accounts. The Registrant's average fleet size and utilization rates for the three and nine-month periods ended September 30, 1995 and 1994 were as follows:
Three Months Ended Nine Months Ended ------------------------------- ------------------------------- September 30, September 30, September 30, September 30, 1995 1994 1995 1994 ------------- ------------- ------------- ------------- Average Fleet Size (measured in twenty-foot equivalents (TEU)) 24 514 211 590 Average Utilization 53% 71% 64% 74%
During the remaining period in the wind up phase of operations, the Registrant expects to incur net losses, as certain costs including investor processing, tax, legal and audit expenses, should be in excess of net lease revenues generated from operations. The Registrant has increased its cash reserves in anticipation of these expected losses. 7 10 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits
Number Description Method of Filing ------ ----------- ---------------- 27 Financial Data Schedule Filed with this Document
(b) There were no reports on Form 8-K during the three-month period ended September 30, 1995. 8 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. IEA MARINE CONTAINER FUND (A California Limited Partnership) By Cronos Capital Corp. The Managing General Partner By /s/ JOHN KALLAS -------------------------------- John Kallas Vice President, Chief Financial Officer Principal Accounting Officer Date: November 13, 1995 9 12 EXHIBIT INDEX
Exhibit No. ------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AT SEPTEMBER 30, 1995 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED AS PART OF ITS QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD SEPTEMBER 30, 1995 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 256,711 0 35,939 0 0 292,650 24,689 17,282 300,057 0 0 0 0 0 300,057 300,057 0 137,835 0 20,330 0 0 0 0 0 0 0 0 0 117,505 0 0
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