-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, S1tkcKkVwigVHogYlAG4kh92uuOs3pvLxx8qyssHaqkebDowENaBRvNoay88G4fo SOHB87I6P1T+AGhjVPc/fw== 0000754714-95-000001.txt : 19950518 0000754714-95-000001.hdr.sgml : 19950518 ACCESSION NUMBER: 0000754714-95-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND CENTRAL INDEX KEY: 0000754714 STANDARD INDUSTRIAL CLASSIFICATION: 7359 IRS NUMBER: 942946248 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14599 FILM NUMBER: 95537874 BUSINESS ADDRESS: STREET 1: ONE MARKET PLZ STEUART ST TOWER STREET 2: 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, 1995. [ ] 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 0-14599 ----------------------- PLM Transportation Equipment Partners VIIC 1985 Income Fund (Exact name of registrant as specified in its charter) California 94-2946248 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Market, Steuart Street Tower Suite 900, 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 ______ PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND (A Limited Partnership) BALANCE SHEETS ASSETS March 31, December 31, 1995 1994 Transportation equipment held for operating leases $ 4,987,719 $ 5,228,048 Less accumulated depreciation (4,316,704) (4,449,835) ----------- ----------- Net equipment 671,015 778,213 Cash and cash equivalents 348,434 358,864 Restricted cash 7,903 7,600 Accounts receivable, net of allowance for doubtful accounts of $44,966 in 1995 and $1,942 in 1994 105,276 136,481 Prepaid insurance 2,519 3,286 ----------- ----------- Total assets $ 1,135,147 $ 1,284,444 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Liabilities: Due to affiliates $ 5,908 $ 18,764 Accounts payable 16,213 32,478 Prepaid deposits and engine reserves 23,493 24,552 ------------ ------------ Total liabilities 45,614 75,794 Partners' capital (deficit): Limited Partners (22,276 units) 1,176,687 1,294,613 General Partner (87,154) (85,963) ------------ ------------ Total partners' capital 1,089,533 1,208,650 ------------ ------------ Total liabilities and partners'capital $ 1,135,147 $ 1,284,444 ============ ============ See accompanying notes to financial statements. 1 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND (A Limited Partnership) STATEMENTS OF OPERATIONS For the three months ended March 31, 1995 1994 Revenues: Lease revenue $ 183,663 $ 174,525 Interest and other income 5,326 2,088 Gain (loss) on disposition of equipment 12,830 (2,397) ---------- ---------- Total revenues 201,819 174,216 Expenses: Depreciation 71,856 76,015 Management fees to affiliate 13,923 15,341 Bad debt expense 44,639 13,118 Repairs and maintenance 44,422 21,292 General and administrative expenses to affiliates 35,839 27,754 Other general and administrative expenses 11,211 12,914 ---------- ---------- Total expenses 221,890 166,434 ---------- ---------- Net income (loss) $ (20,071) $ 7,782 ========== ========== Partners'share of net income (loss): Limited Partners-99% $ (19,870) $ 7,704 General Partner-1% (201) 78 ---------- ---------- Total $ (20,071) $ 7,782 ========== ========== Net income (loss) per Limited Partnership Unit (22,276 units) $ (0.89) $ 0.35 ========== ========== Cash distributions $ 99,046 $ 145,267 ========== ========== Cash distribution per Limited Partnership Unit $ 4.40 $ 6.46 ========== ========== See accompanying notes to financial statements. 2 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND (A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For the period from December 31, 1993 to March 31, 1995 (Unaudited) Limited General Partners Partner Total Partners' capital (deficit) at December 31, 1993 $ 1,677,478 $ (82,096) $ 1,595,382 Net income 87,802 887 88,689 Cash distributions (470,667) (4,754) (475,421) ------------ ------------ ------------ Partners' capital (deficit) at December 31, 1994 1,294,613 (85,963) 1,208,650 Net loss (19,870) (201) (20,071) Cash distributions (98,056) (990) (99,046) ------------ ------------ ------------ Partners' capital (deficit) at March 31, 1995 $ 1,176,687 $ (87,154) $ 1,089,533 ============ ============ ============ See accompanying notes to financial statements. 3 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND (A Limited Partnership) STATEMENTS OF CASH FLOWS For the three months ended March 31, 1995 1994 Operating Activities: Net income (loss) $ (20,071) $ 7,782 Adjustments to reconcile net income (loss) to net cash provided by operating activities: (Gain) loss on disposition of equipment (12,830) 2,397 Depreciation 71,856 76,015 Changes in operating assets and liabilities: Restricted cash (303) (70) Accounts receivable, net 31,205 36,823 Prepaid insurance 767 1,711 Due to affiliates (12,856) 3,622 Accounts payable (16,265) (17,315) Prepaid deposits and engine reserves (1,059) (1,163) ---------- ---------- Net Cash provided by operating activities 40,444 109,802 Investing Activities: Proceeds from disposition of equipment 48,172 13,048 ---------- ---------- Net Cash provided by investing activities 48,172 13,048 ---------- ---------- Financing Activities: Cash distributions paid to partners (99,046) (145,267) ---------- ---------- Net Cash used in financing activities (99,046) (145,267) ---------- ---------- Net decrease in cash and cash equivalents (10,430) (22,417) Cash and cash equivalents at beginning of period 358,864 386,179 ---------- ---------- Cash and cash equivalents at end of period $ 348,434 $ 363,762 ========== ========== See accompanying notes to financial statements. 4 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS March 31, 1995 1. Opinion of Management In the opinion of the management of PLM Financial Services Inc., the General Partner, the accompanying unaudited financial statements contain all adjustments necessary, consisting primarily of normal recurring accruals, to present fairly the Partnership's financial position as of March 31, 1995, the statements of operations and cash flows for the three months ended March 31, 1995 and 1994. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from the accompanying financial statements. For further information, reference should be made to the financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1994, on file at the Securities and Exchange Commission. 2. Reclassifications Certain amounts in the 1994 financial statements have been reclassified to conform to the 1995 presentation. 3. Equipment Equipment held for operating leases is stated at cost. The components of equipment are as follows: Equipment held for operation leases: March 31, December 31, 1995 1994 Rail equipment $ 318,649 $ 318,649 Marine containers 140,496 151,167 Aircraft 908,733 908,733 Trailers 3,619,841 3,849,499 ----------- ----------- 4,987,719 5,228,048 Less accumulated depreciation (4,316,704) (4,449,835) ----------- ----------- Net equipment $ 671,015 $ 778,213 =========== =========== With the exception of one railcar and seven trailers, all of the equipment owned by the Partnership was either on lease or operating in PLM-affiliated short-term rental facilities as of March 31, 1995. The net book value of equipment off-lease was $32,880. At December 31, 1994, all equipment was on lease except one railcar. The net book value of the railcar off lease at December 31, 1994 was $16,750. 5 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS March 31, 1995 3. Equipment (continued) During the three months ended March 31, 1995, the Partnership sold or disposed of six trailers with a net book value of $33,702 for proceeds of $44,000, and four marine containers with a net book value of $1,640 for proceeds of $4,172. During the three months ended March 31, 1994, the Partnership sold two trailers with a net book value of $15,445 for proceeds of $13,048. The Partnership has entered into its 10th year of operation and the liquidation phase has begun. Therefore, equipment will be marketed for sale as current lease terms expire. 6 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND (A Limited Partnership) BALANCE SHEETS ASSETS March 31, December 31, 1995 1994 Transportation equipment held for operating leases $ 9,487,419 $ 9,697,693 Less accumulated depreciation (8,109,158) (8,156,512) ------------ ------------ Net equipment 1,378,261 1,541,181 Cash and cash equivalents 695,590 799,068 Restricted cash 17,590 17,359 Accounts receivable, net of allowance for doubtful accounts of $18,437 in 1995 and $26,568 in 1994 161,987 188,843 Prepaid insurance 3,884 4,919 ------------ ------------ Total assets $ 2,257,312 $ 2,551,370 ============ ============ LIABILITIES AND PARTNERS' CAPITAL Liabilities: Due to affiliates $ 7,708 $ 24,418 Accounts payable 10,566 11,161 Prepaid deposits and engine reserves 17,522 17,290 ------------ ------------ Total liabilities 35,796 52,869 Partners' capital (deficit): Limited Partners (33,727 units) 2,347,804 2,622,019 General Partner (126,288) (123,518) ------------ ------------ Total partners' capital 2,221,516 2,498,501 ------------ ------------ Total liabilities and partners' capital $ 2,257,312 $ 2,551,370 ============ ============ See accompanying notes to financial statements. 7 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND (A Limited Partnership) STATEMENTS OF INCOME For the three months ended March 31, 1995 1994 Revenues: Lease revenue $314,676 $377,294 Interest and other income 11,274 4,042 Gain on disposition of equipment 18,691 49,775 -------- -------- Total revenues 344,641 431,111 Expenses: Depreciation 130,908 145,974 Management fees to affiliate 24,280 32,457 Repairs and maintenance 42,929 58,068 General and administrative expenses to affiliates 55,095 54,435 Other general and administrative expenses 4,647 30,282 -------- -------- Total expenses 257,859 321,216 -------- -------- Net income $ 86,782 $109,895 ======== ======== Partners' share of net income: Limited Partners-99% $ 85,914 $108,796 General Partner-1% 868 1,099 -------- -------- Total $ 86,782 $109,895 ======== ======== Net income per Limited Partnership Unit (33,727 units) $ 2.55 $ 3.23 ======== ======== Cash distributions $263,767 $244,980 ======== ======== Cash distribution per Limited Partnership Unit $ 7.74 $ 7.19 ======== ======== Special cash distributions $100,000 $100,000 ======== ======== Special cash distribution per Limited Partnership Unit $ 2.94 $ 2.94 ======== ======== Total cash distribution per Limited Partnership Unit $ 10.68 $ 10.13 ======== ======== See accompanying notes to financial statements. 8 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND (A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For the period from December 31, 1993 to March 31, 1995 (Unaudited) Limited General Partners Partner Total Partners' capital (deficit) at December 31, 1993 $ 3,269,956 $ (116,973) $ 3,152,983 Net income 436,810 4,412 441,222 Cash distributions (1,084,747) (10,957) (1,095,704) ------------ ------------ ------------ Partners' capital (deficit) at December 31, 1994 2,622,019 (123,518) 2,498,501 Net income 85,914 868 86,782 Cash distributions (360,129) (3,638) (363,767) ------------ ------------ ------------ Partners' capital (deficit) at March 31, 1995 $ 2,347,804 $ (126,288) $ 2,221,516 ============ ============ ============ See accompanying notes to financial statements. 9 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND (A Limited Partnership) STATEMENTS OF CASH FLOWS For the three months ended March 31, 1995 1994 Operating Activities: Net income $ 86,782 $ 109,895 Adjustments to reconcile net income to net cash provided by operating activities: Gain on disposition of equipment (18,691) (49,775) Depreciation 130,908 145,974 Changes in operating assets and liabilities: Restricted cash (231) (91) Accounts receivable, net 26,856 85,000 Prepaid insurance 1,035 2,929 Due to affiliates (16,710) (19,327) Accounts payable (595) (16,008) Prepaid deposits and engine reserves 232 91 ---------- ---------- Net Cash provided by operating activities 209,586 258,688 Investing Activities: Proceeds from disposition of equipment 50,703 60,500 ---------- ---------- Net Cash provided by investing activities 50,703 60,500 ---------- ---------- Financing Activities: Cash distributions paid to partners (363,767) (344,980) ---------- ---------- Net Cash used in financing activities (363,767) (344,980) ---------- ---------- Net decrease in cash and cash equivalents (103,478) (25,792) Cash and cash equivalents at beginning of period 799,068 760,297 ---------- ---------- Cash and cash equivalents at end of period $ 695,590 $ 734,505 ========== ========== See accompanying notes to financial statements. 10 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS March 31, 1995 1. Opinion of Management In the opinion of the management of PLM Financial Services Inc., the General Partner, the accompanying unaudited financial statements contain all adjustments necessary, consisting primarily of normal recurring accruals, to present fairly the Partnership's financial position as of March 31, 1995, the statements of income and cash flows for the three months ended March 31, 1995 and 1994. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from the accompanying financial statements. For further information, reference should be made to the financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1994, on file at the Securities and Exchange Commission. 2. Reclassification Certain amounts in the 1994 financial statements have been reclassified to conform to the 1995 presentation. 3. Equipment Equipment held for operating leases is stated at cost. The components of equipment are as follows: Equipment held for operating leases: March 31, December 31, 1995 1994 Marine containers $ 315,094 $ 324,814 Aircraft 4,009,950 4,009,950 Trailers 5,162,375 5,362,929 ------------ ------------ 9,487,419 9,697,693 Less accumulated depreciation (8,109,158) (8,156,512) ------------ ------------ Net equipment $ 1,378,261 $ 1,541,181 ============ ============ With the exception of 28 trailers, all of the equipment owned by the Partnership is either on lease or operating in PLM-affiliated short-term rental facilities as of March 31, 1995. The net book value of equipment off-lease was $67,631. All of the equipment owned by the Partnership was either operating in the PLM-affiliated short-term rental facilities or on lease as of December 31, 1994. During the three months ended March 31, 1995, the Partnership sold or disposed of four marine containers with a net book value of $1,522 for proceeds of $5,253, and six trailers with a net book value of $30,490 for proceeds of $45,450. 11 PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS March 31, 1995 3. Equipment (continued) During the three months ended March 31, 1994, the Partnership disposed of two trailers with a net book value of $17,717 for proceeds of $12,500. Proceeds of $48,000 were received for equipment disposed of in the fourth quarter of 1993. The Partnership has entered into its 10th year of operation and the liquidation phase has begun. Therefore, equipment will be marketed for sale as current lease terms expire. 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources (A) Sources The Partnerships' primary source of liquidity is operating cash flow. Proceeds realized from the sale or disposal of equipment are generally distributed to the partners. The Partnerships' sources of capital have included proceeds from their offering of limited partnership units. (B) Asset Sales Equipment sales and dispositions prior to the Partnerships' planned liquidation phase generally result from either the exercise by lessees of fair market value purchase options provided for in certain leases, or the payment of stipulated loss values on equipment lost or disposed of during the time it is subject to lease agreements. Such disposal of equipment results unpredictably from the wear, tear, and general risk of normal operations. During the three months ended March 31, 1995, TEP VIIB sold or disposed of six trailers for $44,000, and four marine containers for $4,172, and TEP VIIC sold or disposed of six trailers for $45,450, and four marine containers for $5,253. The Partnership has entered into its 10th year of operation and the liquidation phase has begun. Therefore, equipment will be marketed for sale as current lease terms expire. (C) Market Values At least annually, the General Partner prepares an evaluation of the net realizable value and fair market value of the Partnerships' equipment portfolios, using, among other sources, independent third-party appraisals, values reported in trade publications, and comparative values from armslength transactions for similar equipment as the basis for its evaluation. Concurrently, the General Partner evaluates whether the current fair market value of equipment represents the effects of current market conditions or permanent impairment of value. Equipment whose carrying value is determined to be permanently impaired, without possibility of being leased at an acceptable rate, has its book value adjusted to its estimated net realizable value. The depressed nature of certain transportation sectors, combined with the impact of certain regulatory policies, has led to volatility in fair market values for certain of the Partnerships' equipment. Exacerbating this problem is the perception in some industry sectors that great uncertainty exists as to when potential recovery to acceptable performance and residual levels may occur. Further, the current recovery does not appear to fit any historical pattern. These uncertain market conditions have caused the General Partner to continuously monitor the changes in market values for the Partnerships' equipment, and on occasion, the General Partner has made adjustments to Partnerships' equipment book values to reflect this volatility. While there has continued to be a general decline in certain market values, the fair market values of the assets still exceed the Partnerships' carrying value. No adjustments to reflect impairment of equipment carrying value were recorded during the first three months of 1995. 13 Comparison of the Partnerships' Operating Results for the Three Months Ended March 31, 1995 and 1994. TEP VIIB: (A) Revenues Total revenues of $201,819 for the quarter ended March 31, 1995, increased from $174,216 for the same period in 1994 due primarily to a gain on the sale of equipment compared to a loss recorded during the first quarter of 1994. (1) Lease revenue increased to $183,663 in the first quarter of 1995, from $174,525 in the first quarter of 1994. The following table presents lease revenues by equipment type: For the three months ended March 31, 1995 1994 Trailers $ 143,910 $ 143,467 Aircraft 24,770 24,770 Rail equipment 7,903 (64) Marine containers 7,080 6,352 --------- --------- $ 183,663 $ 174,525 ========= ========= Significant revenue component changes resulted primarily from: (a) Railcar revenue increased due primarily to the re-lease of railcars which were off-lease during the first quarter of 1994, and a rental credit which was given to former lessee in the first quarter of 1994. (2) Interest and other income increased to $5,326 in the first quarter of 1995 from $2,088 in the first quarter of 1994 primarily due to a higher interest rate earned on investments in the first quarter of 1995. (3) Gain on disposition of equipment of $12,830 in the first quarter of 1995 was realized from the sale of six trailers and four marine containers. In the first quarter of 1994, the Partnership realized a loss of $2,397 from the sale of two trailers. (B) Expenses Total expenses of $221,890 for the quarter ended March 31, 1995 increased from $166,434 for the same period in 1994. The increase in 1995 expenses was primarily attributable to increases in bad debt expense, repairs and maintenance expense, and general and administrative expense partially offset by decreases in depreciation and management fees. 14 (1) Direct operating expenses (defined as repairs and maintenance expenses) increased to $44,422 in the first quarter of 1995, from $21,292 in the same period in 1994. This increase is primarily attributable to the trailers coming off term leases and requiring refurbishment prior to transitioning into the short-term rental facilities operated by an affiliate of the General Partner. (2) Indirect operating expenses (defined as depreciation expense, management fees to affiliate, bad debt expenses, and general and administrative expenses) increased to $177,468 in the first quarter of 1995, from $145,142 in the first quarter of 1994. This change resulted primarily from: (a) an increase of $31,521 in bad debt expense resulting from the evaluation of collectibility of trade accounts receivables; (b) an increase of $6,382 in general and administrative expenses relating to increased indirect costs associated with the additional trailers in the operations of the PLM-affiliated short-term rental facilities; (c) a decrease of $4,159 in depreciation expense due to the sale or disposal of trailers and marine containers during the last three quarters of 1994 and the first quarter of 1995; (d) a decrease of $1,418 in management fees resulting from lower operating cash flow primarily associated with lower lease revenues on fixed-term trailers. Management fees are calculated as the greater of 10% of the Partnership's operating cash flow, or 1/12 of 1/2% of the Partnership's Gross Proceeds as defined in the Limited Partnership Agreement. (C) Net Income (Loss) The Partnership's net loss of $20,071 in the first quarter of 1995, decreased from net income of $7,782 in the first quarter of 1994. The Partnership's ability to operate or liquidate assets, secure leases, and re-lease those assets whose leases expire during the duration of the Partnership is subject to many factors, and the Partnership's performance in the first quarter of 1995 is not necessarily indicative of future periods. In the first quarter of 1995, the Partnership distributed $98,056 to the Limited Partners, or $4.40 per Limited Partnership Unit. TEP VIIC: (A) Revenues Total revenues of $344,641 for the quarter ended March 31, 1995, decreased from $431,111 for the same period in 1994. The decrease was primarily due to lower lease revenues. (1) Lease revenue decreased to $314,676 in the first quarter of 1995 from $377,294 in the first quarter of 1994. 15 The following table presents lease revenues by equipment type: For the three months ended March 31, 1995 1994 Trailers $ 205,296 $ 240,648 Aircraft 99,462 128,654 Marine containers 9,918 7,992 --------- --------- $ 314,676 $ 377,294 ========= ========= Significant revenue component changes resulted primarily from: (a) Trailers revenue decreased due to 28 trailers being off-lease during the first quarter of 1995, and the sale of trailers during the last three quarters of 1994, and the first quarter of 1995. (b) Aircraft revenue decreased due to a reduced rental rate of one lessee. (2) Interest and other income increased to $11,274 in the first quarter of 1995 from $4,042 in the first quarter of 1994. The increase was due to a higher interest rate earned on investments in the first quarter of 1995. (3) Gain on disposition of equipment of $18,691 in the first quarter of 1995 was realized from the sale of six trailers and four marine containers. In the first quarter of 1994, the Partnership realized a gain of $49,775 from the sale of two trailers. (B) Expenses Total expenses of $257,859 for the quarter ended March 31, 1995, decreased from $321,216 for the same period in 1994. The decrease in 1995 expenses was primarily attributable to decreases in general and administrative expense, repairs and maintenance expense, depreciation expenses, and management fees to affiliates. (1) Direct operating expenses (defined as repairs and maintenance expenses) decreased to $42,929 in the first quarter of 1995, from $58,068 in the same period in 1994 due to disposition of trailers and containers during the last three quarters of 1994 and the first quarter of 1995. (2) Indirect operating expenses (defined as depreciation expense, management fees to affiliate, bad debt expenses, and general and administrative expenses) decreased to $214,930 in the first quarter of 1995 from $263,148 in the first quarter of 1994. This change resulted primarily from: (a) a decrease in general and administrative expenses of $24,975 resulting from decreases in indirect costs associated with the operations of the PLM- affiliated short-term rental facilities. 16 (b) a decrease of $15,066 in depreciation expense due to the sale or disposal of trailers and marine containers during 1994 and 1995; (c) a decrease in management fees of $8,177 resulting from lower operating cash flow primarily associated with lower lease revenues on fixed-term trailers. Management fees are calculated as the greater of 10% of the Partnership's Operating Cash Flow, or 1/12 of 1/2% of the Partnership's Gross Proceeds as defined in the Limited Partnership Agreement; (C) Net Income The Partnership's net income decreased to $86,782 in the first quarter of 1995, from $109,895 in the first quarter of 1994. The Partnership's ability to operate or liquidate assets, secure leases, and re-lease those assets whose leases expire during the duration of the Partnership is subject to many factors, and the Partnership's performance in the first quarter of 1995 is not necessarily indicative of future periods. In the first quarter of 1995, the Partnership distributed $360,129 to the Limited Partners, or $10.68 per Limited Partnership Unit. Trends Inflation and changing prices did not materially impact the Partnerships' revenues or expenses during the reported periods. 17 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None. (b) Reports on Form 8-K None. 18 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. PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND By: PLM Financial Services, Inc. General Partner Date: May 11, 1995 By:/s/ David J. Davis ------------------ David J. Davis Vice President and Corporate Controller 19 EX-27 2
5 3-MOS DEC-31-1995 MAR-31-1995 695,590 0 161,987 18,437 0 0 9,487,419 8,109,158 2,257,312 0 0 0 0 0 0 2,257,312 0 344,641 0 257,859 0 0 0 86,782 0 86,782 0 0 0 86,782 0 0
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