-----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, UepwMJDK/4ATeY5DZxOjDLXhg4muxwxX0jLKHoXNYqiE2uaZPKhtu3ymI0rt+IPa MP8pS7eSpu+nssOPeggPmQ== 0000778793-97-000004.txt : 19971114 0000778793-97-000004.hdr.sgml : 19971114 ACCESSION NUMBER: 0000778793-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND CENTRAL INDEX KEY: 0000778793 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 942992020 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15439 FILM NUMBER: 97714258 BUSINESS ADDRESS: STREET 1: ONE MARKET PLAZA 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 September 30, 1997. [ ] 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 0-15439 ----------------------- PLM Transportation Equipment Partners IXC 1986 Income Fund (Exact name of registrant as specified in its charter) California 94-2992020 (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 ______ PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND (A Limited Partnership) BALANCE SHEETS
September 30, December 31, 1997 1996 --------------------------------------- Assets: Equipment held for operating lease, at cost $ 2,285,662 $ 3,486,094 Less accumulated depreciation (2,162,733 ) (3,140,358 ) --------------------------------------- Net equipment 122,929 345,736 Cash and cash equivalents 218,142 211,878 Accounts receivable, net of allowance for doubtful accounts of $87,041 in 1997 and $57,870 in 1996 69,161 97,754 Prepaid insurance 189 2,438 --------------------------------------- Total assets $ 410,421 $ 657,806 ======================================= Liabilities and Partners' Capital Liabilities: Accounts payable and other liabilities $ 22,659 $ 9,350 Due to affiliate 5,059 5,059 --------------------------------------- Total liabilities 27,718 14,409 --------------------------------------- Partners' capital (deficit): Limited partners (24,285 units) 485,831 743,918 General Partner (103,128 ) (100,521 ) --------------------------------------- Total partners' capital 382,703 643,397 --------------------------------------- Total liabilities and partners' capital $ 410,421 $ 657,806 =======================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF INCOME
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1997 1996 1997 1996 ----------------------------------------------------------------- Revenues: Lease revenue $ 67,946 $ 97,143 $ 198,893 $ 317,352 Interest and other income 2,789 2,878 8,126 15,723 Net gain on disposition of equipment 34,479 292,451 123,611 337,432 ----------------------------------------------------------------- Total revenues 105,214 392,472 330,630 670,507 ----------------------------------------------------------------- Expenses: Depreciation 31,513 46,864 110,654 152,246 Repairs and maintenance 9,125 19,772 25,267 45,671 Management fees to affiliate 15,178 15,178 45,534 46,382 General and administrative expenses to affiliates 12,789 17,219 44,447 62,714 Other general and administrative expenses 7,191 9,199 31,608 49,214 Provision for (recovery of) bad debt 17,066 (2,806 ) 22,797 142 ----------------------------------------------------------------- Total expenses 92,862 105,426 280,307 356,369 ----------------------------------------------------------------- Net income $ 12,352 $ 287,046 $ 50,323 $ 314,138 ================================================================= Partners' share of net income: Limited partners - 99% $ 12,228 $ 284,176 $ 49,820 $ 310,997 General Partner - 1% 124 2,870 503 3,141 ----------------------------------------------------------------- Total $ 12,352 $ 287,046 $ 50,323 $ 314,138 ================================================================= Net income per weighted-average limited partnership unit - 24,285 units $ 0.50 $ 11.70 $ 2.05 $ 12.81 ================================================================= Cash distributions $ -- $ 67,589 $ 65,714 $ 210,270 ================================================================= Cash distributions per weighted-average limited partnership unit $ -- $ 2.76 $ 2.68 $ 8.57 ================================================================= Special cash distributions $ 122,652 $ -- $ 245,303 $ 1,100,000 ================================================================= Special cash distributions per weighted- average limited partnership unit $ 5.00 $ -- $ 10.00 $ 44.84 ================================================================= Total cash distribution per weighted- average limited partnership unit $ 5.00 $ 2.76 $ 12.68 $ 53.41 =================================================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For the period from December 31, 1995 to September 30, 1997
Limited General Partners Partner Total --------------------------------------------------------- Partners' capital (deficit) at December 31, 1995 $ 2,087,769 $ (86,946 ) $ 2,000,823 Net income 317,231 3,204 320,435 Cash distributions (275,082 ) (2,779 ) (277,861 ) Special distributions (1,386,000 ) (14,000 ) (1,400,000 ) --------------------------------------------------------- Partners' capital (deficit) at December 31, 1996 743,918 (100,521 ) 643,397 Net income 49,820 503 50,323 Cash distributions (65,057 ) (657 ) (65,714 ) Special distributions (242,850 ) (2,453 ) (245,303 ) --------------------------------------------------------- Partners' capital (deficit) at September 30, 1997 $ 485,831 $ (103,128 ) $ 382,703 =========================================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1997 1996 --------------------------------- Operating activities: Net income $ 50,323 $ 314,138 Adjustments to reconcile net income to net cash provided by operating activities: Net gain on disposition of equipment (123,611 ) (337,432 ) Depreciation 110,654 152,246 Changes in operating assets and liabilities: Accounts receivable, net 45,968 19,489 Prepaid insurance 2,249 3,408 Accounts payable and other liabilities 13,309 (14,526 ) Due to affiliate -- 8,000 Lessee deposits and reserves -- (17,072 ) ---------------------------------- Net cash provided by operating activities 98,892 128,251 ---------------------------------- Investing activities: Payments received on sales-type lease -- 1,003,564 Proceeds from disposition of equipment 218,389 467,528 ---------------------------------- Net cash provided by investing activities 218,389 1,471,092 ---------------------------------- Financing activities: Cash distributions paid to limited partners (307,907 ) (1,297,167 ) Cash distributions paid to General Partner (3,110 ) (13,103 ) ---------------------------------- Net cash used in financing activities (311,017 ) (1,310,270 ) ---------------------------------- Cash and cash equivalents: Net increase in cash and cash equivalents 6,264 289,073 Cash and cash equivalents at beginning of period 211,878 251,709 ---------------------------------- Cash and cash equivalents at end of period $ 218,142 $ 540,782 ================================== Supplemental disclosure of noncash investing and financing activities: Sales proceeds included in accounts receivable $ 17,375 $ -- ==================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS September 30, 1997 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 financial position of PLM Transportation Equipment Partners IXA 1986 Income Fund (the Partnership) as of September 30, 1997 and December 31, 1996, the statements of income for the three and nine months ended September 30, 1997 and 1996, the statements of changes in partners' capital for the period from December 31, 1995 to September 30, 1997, and the statements of cash flows for the nine months ended September 30, 1997 and 1996. 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, 1996, on file at the Securities and Exchange Commission. 2. Equipment The components of equipment are as follows:
September 30, December 31, 1997 1996 ------------------------------------ Trailers $ 1,262,727 $ 2,357,296 Marine containers 1,022,935 1,128,798 ------------------------------------ 2,285,662 3,486,094 Less accumulated depreciation (2,162,733 ) (3,140,358 ) ------------------------------------ Net equipment $ 122,929 $ 345,736 ====================================
With the exception of one trailer, all equipment was either on lease or operating in PLM-affiliated short-term rental facilities as of September 30, 1997 and December 31, 1996. The net carrying value of this trailer was $8,617 and $28,433, respectively, as of September 30, 1997 and December 31, 1996. During the nine months ended September 30, 1997, the Partnership sold or disposed of marine containers and trailers with an aggregate book value of $112,153 for proceeds of $235,764. During the nine months ended September 30, 1996, the Partnership sold or disposed of marine containers, trailers, and railcars with an aggregate book value of $130,096 for proceeds of $464,899. In addition, additional proceeds of $2,629 were received for the commuter aircraft which was under a sales-type lease. 3. Liquidation and Special Distributions During the first quarter of 1996, the Partnership completed its 10th year of operations. As originally anticipated by the General Partner, the Partnership will be liquidated in an orderly manner in its 11th and 12th years of operation. The General Partner is actively marketing the remaining equipment portfolio with the intent of maximizing sale proceeds. As sale proceeds are received the General Partner intends to periodically declare special distributions to distribute the sale proceeds to the partners. During the liquidation phase of the Partnership the equipment will continue to be leased under operating leases until sold. Operating cash flows, to the extent they exceed Partnership expenses, will continue to be PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS September 30, 1997 3. Liquidation and Special Distributions (continued) distributed on a quarterly basis to the partners. The amounts reflected for assets and liabilities of the Partnership have not been adjusted to reflect liquidation values. The equipment portfolio continues to be carried at the lower of depreciated cost or fair value less cost to dispose. Although the General Partner estimates that there will be distributions after liquidation of assets and liabilities, the amounts cannot be accurately determined prior to actual liquidation of the equipment. Any excess proceeds over expected Partnership obligations will be distributed to the Partners throughout the liquidation period. Upon final liquidation, the Partnership will be dissolved. During the nine months ended September 30, 1997 and 1996, the General Partner paid special distributions of $10.00 and $44.84, respectively, per weighted-average limited partnership unit which were the result of proceeds from the sale of equipment. During the liquidation phase, the Partnership is not permitted to reinvest proceeds from sales or liquidations of equipment. These proceeds, in excess of operational cash requirements, are periodically paid out to the partners in the form of special distributions. The sales and liquidations occur because of equipment destructions, the determination by the General Partner that it is the appropriate time to maximize the return on an asset through the sale of that asset, and, in some leases, the ability of the lessee to exercise purchase options. 4. Reclassifications Certain amounts in the 1996 financial statements have been reclassified to conform to the 1997 presentation. PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND (A Limited Partnership) BALANCE SHEETS
September 30, December 31, 1997 1996 --------------------------------------- Assets: Equipment held for operating lease, at cost $ 582,917 $ 1,961,397 Less accumulated depreciation (552,153 ) (1,769,486 ) --------------------------------------- Net equipment 30,764 191,911 Cash and cash equivalents 100,529 478,922 Accounts receivable, net of allowance for doubtful accounts of $39,463 in 1997 and $22,285 in 1996 2,600 28,720 Prepaid insurance 124 1,879 --------------------------------------- Total assets $ 134,017 $ 701,432 ======================================= Liabilities and Partners' Capital Liabilities: Accounts payable and other liabilities $ 8,296 $ 9,637 Due to affiliate 3,637 3,637 --------------------------------------- Total liabilities 11,933 13,274 --------------------------------------- Partners' capital (deficit): Limited partners (17,460 units) 197,730 758,143 General Partner (75,646 ) (69,985 ) ------------------------------------- -- Total partners' capital 122,084 688,158 --------------------------------------- Total liabilities and partners' capital $ 134,017 $ 701,432 =======================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF OPERATIONS
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1997 1996 1997 1996 --------------------------------------------------------------- Revenues: Lease revenue $ 8,777 $ 58,429 $ 37,703 $ 206,030 Interest and other income 1,850 3,536 8,067 11,275 Net gain on disposition of equipment 10,922 8,473 96,274 38,239 --------------------------------------------------------------- Total revenues 21,549 70,438 142,044 255,544 --------------------------------------------------------------- Expenses: Depreciation 13,557 34,705 59,601 108,831 Repairs and maintenance 6,851 13,192 12,507 36,608 Management fees to affiliate 10,913 10,913 32,738 32,738 General and administrative expenses to affiliates 2,836 10,703 19,330 46,021 Other general and administrative expenses 5,717 6,161 24,463 26,923 Provision for (recovery of) bad debt 13,008 (2,538 ) 13,008 (899 ) --------------------------------------------------------------- Total expenses 52,882 73,136 161,647 250,222 --------------------------------------------------------------- Equity in net income of unconsolidated special- purpose entity -- 231,147 -- 192,041 --------------------------------------------------------------- Net income (loss) $ (31,333 ) $ 228,449 $ (19,603 ) $ 197,363 =============================================================== Partners' share of net income (loss) Limited partners - 99% $ (31,020 ) $ 226,165 $ (19,407 ) $ 195,389 General Partner - 1% (313 ) 2,284 (196 ) 1,974 --------------------------------------------------------------- Total $ (31,333 ) $ 228,449 $ (19,603 ) $ 197,363 =============================================================== Net income (loss) per weighted-average limited partnership unit - 17,460 units $ (1.78 ) $ 12.95 $ (1.11 ) $ 11.19 =============================================================== Cash distributions $ -- $ 101,751 $ 48,063 $ 305,254 =============================================================== Cash distributions per weighted-average limited partnership unit $ -- $ 5.77 $ 2.73 $ 17.31 =============================================================== Special cash distributions $ 132,273 $ 450,000 $ 498,408 $ 450,000 =============================================================== Special cash distributions per weighted- average limited partnership unit $ 7.50 $ 25.52 $ 28.26 $ 25.52 =============================================================== Total cash distributions per weighted- average limited partnership unit $ 7.50 $ 31.29 $ 30.99 $ 42.83 ===============================================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For the period from December 31, 1995 to September 30, 1997
Limited General Partners Partner Total ------------------------------------------------------ Partners' capital (deficit) at December 31, 1995 $ 1,132,364 $ (66,205 ) $ 1,066,159 Net income 468,643 4,734 473,377 Cash distributions (397,364 ) (4,014 ) (401,378 ) Special distributions (445,500 ) (4,500 ) (450,000 ) ----------------------------------------------------- Partners' capital (deficit) at December 31, 1996 758,143 (69,985 ) 688,158 Net loss (19,407 ) (196 ) (19,603 ) Cash distributions (47,582 ) (481 ) (48,063 ) Special distributions (493,424 ) (4,984 ) (498,408 ) ----------------------------------------------------- Partners' capital (deficit) at September 30, 1997 $ 197,730 $ (75,646 ) $ 122,084 =====================================================
See accompanying notes to financial statements PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1997 1996 --------------------------------- Operating activities: Net income (loss) $ (19,603 ) $ 197,363 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Net gain on disposition of equipment (96,274 ) (38,239 ) Depreciation 59,601 108,831 Income from unconsolidated special-purpose entity in excess of cash distributions -- (192,041 ) Changes in operating assets and liabilities: Accounts receivable, net 26,120 47,515 Prepaid insurance 1,755 2,350 Accounts payable and other liabilities (1,341 ) (65,504 ) Lessee deposits -- (16,248 ) --------------------------------- Net cash (used in) provided by operating activities (29,742 ) 44,027 --------------------------------- Investing activities: Distributions from unconsolidated special-purpose entity -- 414,169 Proceeds from disposition of equipment 197,820 91,509 --------------------------------- Net cash provided by investing activities 197,820 505,678 --------------------------------- Financing activities: Cash distributions paid to limited partners (541,006 ) (747,701 ) Cash distributions paid to General Partner (5,465 ) (7,553 ) --------------------------------- Net cash used in financing activities (546,471 ) (755,254 ) --------------------------------- Cash and cash equivalents: Net decrease in cash and cash equivalents (378,393 ) (205,549 ) Cash and cash equivalents at beginning of period 478,922 351,363 --------------------------------- Cash and cash equivalents at end of period $ 100,529 $ 145,814 =================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS September 30, 1997 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 financial position of PLM Transportation Equipment Partners IXB 1986 Income Fund (the Partnership) as of September 30, 1997 and December 31, 1996, the statements of operations for the three and nine months ended September 30, 1997 and 1996, the statements of changes in partners' capital for the period from December 31, 1995 to September 30, 1997, and the statements of cash flows for the nine months ended September 30, 1997 and 1996. 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, 1996, on file at the Securities and Exchange Commission. 2. Equipment The components of owned equipment are as follows:
September 30, December 31, 1997 1996 ------------------------------------ Marine containers $ 305,372 $ 325,115 Trailers 277,545 1,636,282 ------------------------------------ 582,917 1,961,397 Less accumulated depreciation (552,153 ) (1,769,486 ) ------------------------------------ Net equipment $ 30,764 $ 191,911 ====================================
All equipment was either on lease or operating in PLM affiliated short-term rental facilities as of September 30, 1997. With the exception of one trailer, all equipment was either on lease or operating in PLM affiliated short-term rental facilities as of December 31, 1996. The carrying value of this trailer was $46,438 as of December 31, 1996. During the nine months ended September 30, 1997, the Partnership sold or disposed of marine containers and trailers with a net book value of $101,546 for proceeds of $197,820. During the nine months ended September 30, 1996, the Partnership sold or disposed of trailers and marine containers with an aggregate net book value of $53,270 for proceeds of $91,509. 3. Liquidation and Special Distributions During the first quarter of 1996, the Partnership completed its 10th year of operations. As originally anticipated by the General Partner, the Partnership will be liquidated in an orderly manner in its 11th and 12th years of operation. The General Partner is actively marketing the remaining equipment portfolio with the intent of maximizing sale proceeds. As sale proceeds are received the General Partner intends to periodically declare special distributions to distribute the sale proceeds to the partners. During the liquidation phase of the Partnership the equipment will continue to be leased under operating leases until PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS September 30, 1997 3. Liquidation and Special Distributions (continued) sold. Operating cash flows, to the extent they exceed Partnership expenses, will continue to be distributed on a quarterly basis to partners. The amounts reflected for assets and liabilities of the Partnership have not been adjusted to reflect liquidation values. The equipment portfolio continues to be carried at the lower of depreciated cost or fair value less cost to dispose. Although the General Partner estimates that there will be distributions after liquidation of assets and liabilities, the amounts cannot be accurately determined prior to actual liquidation of the equipment. Any excess proceeds over expected Partnership obligations will be distributed to the Partners throughout the liquidation period. Upon final liquidation, the Partnership will be dissolved. During the nine months ended September 30, 1997 and 1996, the General Partner paid special distributions of $28.26 and $25.52, respectively, per weighted-average limited partnership unit which were the result of proceeds from the liquidation of equipment. During the liquidation phase, the Partnership is not permitted to reinvest proceeds from sales or liquidations of equipment. These proceeds, in excess of operational cash requirements, are periodically paid out to the partners in the form of special distributions. The sales and liquidations occur because of equipment destructions, the determination by the General Partner that it is the appropriate time to maximize the return on an asset through the sale of that asset, and, in some leases, the ability of the lessee to exercise purchase options. 4. Reclassifications Certain amounts in the 1996 financial statements have been reclassified to conform to the 1997 presentation. PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND (A Limited Partnership) BALANCE SHEETS
September 30, December 31, 1997 1996 --------------------------------------- Assets: Equipment held for operating lease, at cost $ 1,942,372 $ 3,088,393 Less accumulated depreciation (1,817,471 ) (2,767,149 ) --------------------------------------- Net equipment 124,901 321,244 Cash and cash equivalents 131,635 264,450 Accounts receivable, net of allowance for doubtful accounts of $2,941 in 1997 and $2,249 in 1996 48,558 66,079 Prepaid insurance 220 2,663 --------------------------------------- Total assets $ 305,314 $ 654,436 ======================================= Liabilities and Partners' Capital: Liabilities: Accounts payable and other liabilities $ 11,358 $ 14,382 Due to affiliate 3,523 3,523 --------------------------------------- Total liabilities 14,881 17,905 --------------------------------------- Partners' capital (deficit): Limited partners (16,914 units) 361,991 704,628 General Partner (71,558 ) (68,097 ) ------------------------------------- -- Total partners' capital 290,433 636,531 --------------------------------------- Total liabilities and partners' capital $ 305,314 $ 654,436 =======================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF OPERATIONS
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1997 1996 1997 1996 --------------------------------------------------------------- Revenues: Lease revenue $ 67,292 $ 83,286 $ 192,306 $ 271,607 Interest and other income 1,957 2,979 6,721 10,652 Net gain on disposition of equipment 76,281 3,692 160,266 21,893 --------------------------------------------------------------- Total revenues 145,530 89,957 359,293 304,152 --------------------------------------------------------------- Expenses: Depreciation 27,461 50,365 102,659 156,154 Repairs and maintenance 19,972 24,439 52,239 81,795 Management fees to affiliate 10,568 10,568 31,704 32,592 General and administrative expenses to affiliates 20,059 16,581 63,022 74,569 Other general and administrative expenses 8,372 7,030 27,580 44,862 Provision for (recovery of) bad debt (348 ) (5,644 ) 10,706 (3,145 ) --------------------------------------------------------------- Total expenses 86,084 103,339 287,910 386,827 --------------------------------------------------------------- Equity in net income (loss) of unconsolidated special-purpose entity -- (296 ) -- 111,247 --------------------------------------------------------------- Net income (loss) $ 59,446 $ (13,678 ) $ 71,383 $ 28,572 =============================================================== Partners' share of net income (loss): Limited partners - 99% $ 58,852 $ (13,541 ) $ 70,669 $ 28,286 General Partner - 1% 594 (137 ) 714 286 --------------------------------------------------------------- Total $ 59,446 $ (13,678 ) $ 71,383 $ 28,572 =============================================================== Net income (loss) per weighted-average limited partnership unit (16,914 units) $ 3.48 $ (0.80 ) $ 4.18 $ 1.67 =============================================================== Cash distributions $ -- $ 59,265 $ 57,017 $ 256,814 =============================================================== Cash distributions per weighted-average limited partnership unit $ -- $ 3.47 $ 3.34 $ 15.03 =============================================================== Special distributions $ 153,718 $ 300,000 $ 360,464 $ 300,000 =============================================================== Special distributions per weighted-average limited partnership unit $ 9.00 $ 17.56 $ 21.10 $ 17.56 =============================================================== Total distributions per weighted-average limited partnership unit $ 9.00 $ 21.03 $ 24.44 $ 32.59 ===============================================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For the period from December 31, 1995 to September 30, 1997
Limited General Partners Partner Total ----------------------------------------------------- Partners' capital (deficit) at December 31, 1995 $ 1,208,326 $ (63,009 ) $ 1,145,317 Net income 103,990 1,050 105,040 Cash distributions (310,688 ) (3,138 ) (313,826 ) Special distributions (297,000 ) (3,000 ) (300,000 ) ----------------------------------------------------- Partners' capital (deficit) at December 31, 1996 704,628 (68,097 ) 636,531 Net income 70,669 714 71,383 Cash distributions (56,447 ) (570 ) (57,017 ) Special distributions (356,859 ) (3,605 ) (360,464 ) ----------------------------------------------------- Partners' capital (deficit) at September 30, 1997 $ 361,991 $ (71,558 ) $ 290,433 =====================================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1997 1996 --------------------------------- Operating activities: Net income $ 71,383 $ 28,572 Adjustments to reconcile net income to net cash provided by operating activities: Net gain on disposition of equipment (160,266 ) (21,893 ) Depreciation 102,659 156,154 Equity in net income from unconsolidated special-purpose entity -- (111,247 ) Change in operating assets and liabilities: Accounts receivable, net 17,521 51,927 Prepaid insurance 2,443 22,322 Accounts payable and other liabilities (3,024 ) -- Lessee deposits and reserves for repairs -- 12,795 --------------------------------- Net cash provided by operating activities 30,716 138,630 --------------------------------- Investing activities: Distributions from unconsolidated special-purpose entity -- 244,610 Proceeds from disposition of equipment 253,950 45,280 --------------------------------- Net cash provided by investing activities 253,950 289,890 --------------------------------- Financing activities: Cash distributions paid to limited partners (413,306 ) (551,246 ) Cash distributions paid to General Partner (4,175 ) (5,568 ) --------------------------------- Net cash used in financing activities (417,481 ) (556,814 ) --------------------------------- Cash and cash equivalents: Net decrease in cash and cash equivalents (132,815 ) (128,294 ) Cash and cash equivalents at beginning of period 264,450 248,504 --------------------------------- Cash and cash equivalents at end of period $ 131,635 $ 120,210 ================================= Supplemental disclosure of noncash investing and financing activities: Sales proceeds included in accounts receivable $ -- $ 16,528 =================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS September 30, 1997 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 financial position of PLM Transportation Equipment Partners IXC 1986 Income Fund (the Partnership) as of September 30, 1997 and December 31, 1996, the statements of operations for the three and nine months ended September 30, 1997 and 1996, the statements of changes in partners' capital for the period from December 31, 1995 to September 30, 1997, and the statements of cash flows for the nine months ended September 30, 1997 and 1996. 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, 1996, on file at the Securities and Exchange Commission. 2. Equipment The components of owned equipment are as follows:
September 30, December 31, 1997 1996 ------------------------------------ Trailers $ 1,827,749 $ 2,973,770 Marine containers 114,623 114,623 ------------------------------------ 1,942,372 3,088,393 Less accumulated depreciation (1,817,471 ) (2,767,149 ) ------------------------------------ Net equipment $ 124,901 $ 321,244 ====================================
All of the equipment was either on lease or operating in PLM-affiliated short-term rental facilities as of September 30, 1997 and December 31, 1996. During the nine months ended September 30, 1997, the Partnership sold or disposed of trailers with a net book value of $93,684 for proceeds of $253,950. During the nine months ended September 30, 1996, the Partnership sold or disposed of trailers and a marine container with a net book value of $39,915 for proceeds of $61,808. 3. Liquidation and Special Distributions During the first quarter of 1996, the Partnership completed its 10th year of operations. As originally anticipated by the General Partner, the Partnership will be liquidated in an orderly manner in its 11th and 12th years of operation. The General Partner is actively marketing the remaining equipment portfolio with the intent of maximizing sale proceeds. As sale proceeds are received the General Partner intends to periodically declare special distributions to distribute the sale proceeds to the partners. During the PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS September 30, 1997 3. Liquidation and Special Distributions (continued) liquidation phase of the Partnership the equipment will continue to be leased under operating leases until sold. Operating cash flows, to the extent they exceed Partnership expenses, will continue to be distributed on a quarterly basis to partners. The amounts reflected for assets and liabilities of the Partnership have not been adjusted to reflect liquidation values. The equipment portfolio continues to be carried at the lower of depreciated cost or fair value less cost to dispose. Although the General Partner estimates that there will be distributions after liquidation of assets and liabilities, the amounts cannot be accurately determined prior to actual liquidation of the equipment. Any excess proceeds over expected Partnership obligations will be distributed to the Partners throughout the liquidation period. Upon final liquidation, the Partnership will be dissolved. During the nine months ended September 30, 1997 and 1996, the General Partner paid special distributions of $21.10 and $17.56, respectively, per weighted-average limited partnership unit which were the result of proceeds from equipment liquidations. During the liquidation phase, the Partnership is not permitted to reinvest proceeds from sales or liquidations of equipment. These proceeds, in excess of operational cash requirements, are periodically paid out to the partners in the form of special distributions. The sales and liquidations occur because of equipment destructions, the determination by the General Partner that it is the appropriate time to maximize the return on an asset through the sale of that asset, and, in some leases, the ability of the lessee to exercise purchase options. 4. Reclassifications Certain amounts in the 1996 financial statements have been reclassified to conform to the 1997 presentation. PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND (A Limited Partnership) BALANCE SHEETS
September 30, December 31, 1997 1996 --------------------------------------- Assets: Equipment held for operating lease, at cost $ 856,786 $ 1,463,355 Less accumulated depreciation (786,138 ) (1,280,566 ) --------------------------------------- Net equipment 70,648 182,789 Cash and cash equivalents 127,526 77,140 Accounts receivable, net of allowance for doubtful accounts of $44,992 in 1997 and $29,601 in 1996 2,750 15,839 Prepaid insurance 1,232 2,293 --------------------------------------- Total assets $ 202,156 $ 278,061 ======================================= Liabilities and Partners' Capital: Liabilities: Accounts payable and other liabilities $ 10,016 $ 9,477 Due to affiliate 1,985 1,985 -------------------------------------- Total liabilities 12,001 11,462 -------------------------------------- Partners' capital (deficit): Limited partners (9,529 units) 230,080 305,760 General Partner (39,925 ) (39,161 ) -------------------------------------- Total partners' capital 190,155 266,599 -------------------------------------- Total liabilities and partners' capital $ 202,156 $ 278,061 ======================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF OPERATIONS
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1997 1996 1997 1996 --------------------------------------------------------------- Revenues: Lease revenue $ 26,931 $ 42,621 $ 65,938 $ 132,068 Interest and other income 1,245 595 3,055 4,737 Net gain on disposition of equipment 56,018 8,491 96,596 18,580 --------------------------------------------------------------- Total revenues 84,194 51,707 165,589 155,385 --------------------------------------------------------------- Expenses: Depreciation 13,500 22,563 50,929 69,102 Repairs and maintenance 5,456 5,008 9,856 22,185 Management fees to affiliate 5,956 5,956 17,867 17,867 General and administrative expenses to affiliates 4,309 7,487 14,735 33,054 Other general and administrative expenses 4,809 7,246 18,453 33,681 Provision for (recovery of) bad debt 17,072 (2,673 ) 15,392 (4,398 ) --------------------------------------------------------------- Total expenses 51,102 45,587 127,232 171,491 --------------------------------------------------------------- Net income (loss) $ 33,092 $ 6,120 $ 38,357 $ (16,106 ) =============================================================== Partners' share of net income (loss): Limited partners - 99% $ 32,761 $ 6,059 $ 37,973 $ (15,945 ) General Partner - 1% 331 61 384 (161 ) ------------------------------------------------------------- Total $ 33,092 $ 6,120 $ 38,357 $ (16,106 ) =============================================================== Net income (loss) per weighted-average limited partnership unit (9,529 units) $ 3.44 $ 0.64 $ 3.98 $ (1.67 ) =============================================================== Cash distributions $ -- $ 18,798 $ 18,549 $ 115,288 =============================================================== Cash distributions per weighted-average limited partnership unit $ -- $ 1.95 $ 1.93 $ 11.98 =============================================================== Special distributions $ 48,126 $ -- $ 96,252 $ 100,000 =============================================================== Special distributions per weighted-average limited partnership unit $ 5.00 $ -- $ 10.00 $ 10.39 =============================================================== Total distributions per weighted-average limited partnership unit $ 5.00 $ 1.95 $ 11.93 $ 22.37 ===============================================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For the period from December 31, 1995 to September 30, 1997
Limited General Partners Partner Total -------------------------------------------------------- Partners' capital (deficit) at December 31, 1995 $ 603,509 $ (36,153 ) $ 567,356 Net loss (16,504 ) (167 ) (16,671 ) Cash distributions (132,745 ) (1,341 ) (134,086 ) Special distributions (148,500 ) (1,500 ) (150,000 ) ------------------------------------------------------- Partners' capital (deficit) at December 31, 1996 305,760 (39,161 ) 266,599 Net income 37,973 384 38,357 Cash distributions (18,364 ) (185 ) (18,549 ) Special distributions (95,289 ) (963 ) (96,252 ) ------------------------------------------------------- Partners' capital (deficit) at September 30, 1997 $ 230,080 $ (39,925 ) $ 190,155 =======================================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND (A Limited Partnership) STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1997 1996 --------------------------------- Operating activities: Net income (loss) $ 38,357 $ (16,106 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Net gain on disposition of equipment (96,596 ) (18,580 ) Depreciation 50,929 69,102 Changes in operating assets and liabilities: Accounts receivable, net 23,089 7,990 Prepaid insurance 1,061 15,364 Accounts payable and other liabilities 539 (3,392 ) Due to affiliate -- 9,624 --------------------------------- Net cash provided by operating activities 17,379 64,002 --------------------------------- Investing activities: Proceeds from disposition of equipment 147,808 33,865 --------------------------------- Net cash provided by investing activities 147,808 33,865 --------------------------------- Financing activities: Cash distributions paid to limited partners (113,653 ) (213,135 ) Cash distributions paid to General Partner (1,148 ) (2,153 ) --------------------------------- Net cash used in financing activities (114,801 ) (215,288 ) --------------------------------- Cash and cash equivalents: Net increase (decrease) in cash and cash equivalents 50,386 (117,421 ) Cash and cash equivalents at beginning of period 77,140 191,840 --------------------------------- Cash and cash equivalents at end of period $ 127,526 $ 74,419 ================================= Supplemental disclosure of noncash investing and financing activities: Sales proceeds included in accounts receivable $ 10,000 $ -- =================================
See accompanying notes to financial statements. PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS September 30, 1997 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 financial position of PLM Transportation Equipment Partners IXD 1986 Income Fund (the Partnership) as of September 30, 1997 and December 31, 1996, and the statements of operations for the three and nine months ended September 30, 1997 and 1996, the statements of changes in partners' capital for the period from December 31, 1995 to September 30, 1997, and the statements of cash flows for the nine months ended September 30, 1997 and 1996. 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, 1996, on file at the Securities and Exchange Commission. 2. Equipment The components of equipment are as follows:
September 30, December 31, 1997 1996 ------------------------------------ Trailers $ 700,051 $ 1,207,934 Marine containers 156,735 255,421 ------------------------------------ 856,786 1,463,355 Less accumulated depreciation (786,138 ) (1,280,566 ) ------------------------------------ Net equipment $ 70,648 $ 182,789 ====================================
All equipment owned by the Partnership was either on lease or operating in PLM-affiliated short-term rental facilities as of September 30, 1997 and as of December 31, 1996. During the nine months ended September 30, 1997, the Partnership sold or disposed of marine containers and trailers with an aggregate net book value of $61,212 for proceeds of $157,808. During the nine months ended September 30, 1996, the Partnership sold or disposed of marine containers and a trailer with an aggregate net book value of $15,285 for proceeds of $33,865. 3. Liquidation and Special Distributions During the first quarter of 1996, the Partnership completed its 10th year of operations. As originally anticipated by the General Partner, the Partnership will be liquidated in an orderly manner in its 11th and 12th years of operation. The General Partner is actively marketing the remaining equipment portfolio with the intent of maximizing sale proceeds. As sale proceeds are received the General Partner intends to periodically declare special distributions to distribute the sale proceeds to the partners. During the liquidation phase of the Partnership the equipment will continue to be leased under operating leases until sold. Operating cash flows, to the extent they exceed Partnership expenses, will continue to be distributed on a quarterly basis to partners. The amounts reflected for assets and liabilities of the PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND (A Limited Partnership) NOTES TO FINANCIAL STATEMENTS September 30, 1997 3. Liquidation and Special Distributions (continued) Partnership have not been adjusted to reflect liquidation values. The equipment portfolio continues to be carried at the lower of depreciated cost or fair value less cost to dispose. Although the General Partner estimates that there will be distributions after liquidation of assets and liabilities, the amounts cannot be accurately determined prior to actual liquidation of the equipment. Any excess proceeds over expected Partnership obligations will be distributed to the Partners throughout the liquidation period. Upon final liquidation, the Partnership will be dissolved. During the nine months ended September 30, 1997 and 1996, the General Partner paid special distributions of $10.00 and $10.39, respectively, per weighted-average limited partnership unit which were the result of proceeds from equipment liquidations. During the liquidation phase, the Partnership is not permitted to reinvest proceeds from sales or liquidations of equipment. These proceeds, in excess of operational cash requirements, are periodically paid out to the partners in the form of special distributions. The sales and liquidations occur because of equipment destructions, the determination by the General Partner that it is the appropriate time to maximize the return on an asset through the sale of that asset, and, in some leases, the ability of the lessee to exercise purchase options. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (I) RESULTS OF OPERATIONS Comparison of the Partnership's Operating Results for the Three Months Ended September 30, 1997 and 1996 TEP IXA (A) Revenues Total revenues of $105,214 for the quarter ended September 30, 1997, decreased from $392,472 for the same period in 1996, due primarily to lower gain on the disposition on equipment and lower lease revenues. (1) Lease revenue decreased to $67,946 in the third quarter 1997, from $97,143 in the same period of 1996. The following table lists lease revenues earned by equipment type: For the Three Months Ended September 30, 1997 1996 ------------------------------- Trailers $ 43,048 $ 73,480 Marine containers 24,898 16,072 Rail equipment -- 7,591 ------------------------------ $ 67,946 $ 97,143 ============================== The decline was due primarily to the following: (a) Trailer revenue decreased $30,432 due primarily to the sale of trailers during 1997 and 1996, and lower utilization in short-term rental facilities operated by an affiliate of the General Partner. (b) Container revenue increased $8,826 due to the net increase in lease revenue for the quarter ended September 30, 1997, compared to the same quarter of 1996. (c) No railcar revenue was earned in the third quarter of 1997 due to the sale of all the Partnership's railcars during 1996. (2) For the quarter ended September 30, 1997, the Partnership realized a gain of $34,479 on the sale or disposition of trailers and a marine container, compared to the same period in 1996, when the Partnership realized a gain of $292,451 on the disposition of railcars, marine containers, and a trailer. (B) Expenses Total expenses of $92,862 for the quarter ended September 30, 1997, decreased from $105,426 for the same period in 1996. The decrease in expenses in the third quarter of 1997 was attributable to decreases in depreciation expense and repairs and maintenance, and general and administrative expenses, partially offset by an increase in provision for (recovery of) bad debt. (1) Direct operating expenses (defined as repairs and maintenance) decreased to $9,125 in the third quarter of 1997, from $19,772 in the third quarter of 1996, due primarily to the sale of equipment during 1997 and 1996. (2) Indirect operating expenses (defined as depreciation expense, management fees, general and administrative expenses, and provision for (recovery of) bad debt) decreased to $83,737 in the third quarter 1997, from $85,654 in the same period in 1996. This change resulted primarily from: (a) a $15,351 decrease in depreciation expense reflecting asset sales or dispositions during 1997 and 1996. (b) a $6,438 decrease in general and administrative expenses reflects the decreased administrative costs related to short-term rental facilities due to sale of equipment. (c) a $19,872 increase in bad debt expense due to the General Partner's evaluation of the collectibility of trade receivables. (C) Net Income As a result of the foregoing, the Partnership's net income of $12,352 in the third quarter 1997, decreased from $287,046 in the same period in 1996. 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 third quarter 1997, is not necessarily indicative of future periods. In the third quarter of 1997, no regular distributions were made but the Partnership distributed a special distribution of $121,425 to the limited partners, or approximately $5.00 per weighted-average limited partnership unit. TEP IXB (A) Owned Equipment Operations Revenues less direct expenses (defined as repairs and maintenance and asset specific insurance expense) on owned equipment decreased for the quarter ended September 30, 1997, when compared to the same period of 1996. The following table presents revenues less direct expenses by owned equipment type:
For the Three Months Ended September 30, 1997 1996 -------------------------------- Marine containers $ 6,068 $ 3,781 Trailers (1,868 ) 22,733 Railcar equipment (2,637 ) 18,423
Marine containers: Marine container revenues and direct expenses were $6,125 and $57, respectively, for the quarter ended September 30, 1997, compared to $3,820 and $39, respectively, during the same period of 1996. The increase in marine container contribution was due to higher revenue in the third quarter of 1997 as compared to the same quarter of 1996. Trailers: Trailer revenues and direct expenses were $5,202 and $7,070, respectively, for the quarter ended September 30, 1997, compared to $32,739 and $10,006, respectively, during the same period of 1996. The decrease in contribution was due to lower utilization of trailers in the short-term rental facilities and the disposition of trailers. Railcar equipment: Railcar revenues and direct expenses were a credit of $2,550 and $87, respectively, for the quarter ended September 30, 1997, compared to $21,870 and $3,447, respectively, during the same period of 1996. The decrease in contribution was due to the sale of all the railcars owned by the Partnership in the fourth quarter of 1996. The credit in revenue for the quarter ended September 30, 1997 was due to a credit given to a former lessee. (B) Indirect Expenses Related to Owned Equipment Operations Total indirect expenses of $45,668 for the quarter ended September 30, 1997, decreased from $59,644 for the same period of 1996. The variance is explained as follows: (1) a $21,148 decrease in depreciation expense reflecting assets sales or dispositions during 1997 and 1996. (2) a $8,374 decrease in general and administrative expenses reflects the decreased administrative costs related to short-term rental facilities due to sale of equipment. (3) a $15,546 increase in bad debt expense due to the General Partner's evaluation of the collectibility of trade receivables. (C) Net Gain on Disposition of Equipment For the quarter ended September 30, 1997, the Partnership realized a gain of $10,922 on the disposal of a marine container and trailers compared to the same period of 1996, where the Partnership realized a gain of $8,473 on the disposition of marine containers and a trailer. (D) Equity in Net Income of Unconsolidated Special-Purpose Entity Equity in net income of unconsolidated special-purpose entity was $231,147 for the quarter ended September 30, 1996, and represented the net income generated from the Partnership's interest in an entity which owned an aircraft, accounted for under the equity method. This investment was sold in the third quarter of 1996. (E) Net Income (Loss) As a result of the foregoing, the Partnership's net loss of $31,333 for the quarter ended September 30, 1997, compared to a net income of $228,449 for the same period in 1996. 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 for the quarter ended September 30, 1997, is not necessarily indicative of future periods. For the quarter ended September 30, 1997, no regular distributions were made but the Partnership distributed a special distribution of $130,950 to the limited partners, or approximately $7.50 per weighted-average limited partnership unit. TEP IXC (A) Owned Equipment Operations Revenues less direct expenses (defined as repairs and maintenance and asset specific insurance expenses) on owned equipment decreased for the quarter ended September 30, 1997 when compared to the same period of 1996. The following table presents revenues less direct expenses by owned equipment type:
For the three months ended September 30, 1997 1996 --------------------------------- Trailers $ 43,000 $ 52,629 Railcar equipment 2,520 5,419 Marine containers 1,149 445
Trailers: Trailer revenues and direct expenses were $63,572 and $20,572, respectively, for the quarter ended September 30, 1997, compared to $75,026 and $22,397, respectively, during the same period of 1996. The decrease in contribution was due to lower utilization of trailers in the short-term rental facilities and the disposition of trailers. Railcar equipment: Railcar revenues and direct expenses were $2,550 and $30, respectively, for the quarter ended September 30, 1997, compared to $7,800 and $2,381, respectively during the same period of 1996. The decrease in contribution was due to the sale of all the railcars owned by the Partnership in the fourth quarter of 1996. Marine containers: Marine container revenues and direct expenses were $1,170 and $21, respectively, for the quarter ended September 30, 1997, compared to $460 and $15, respectively, during the same period of 1996. The increase in marine container contribution was due to higher revenue for the quarter ended September 30, 1997, compared to the same quarter of 1996. (B) Indirect Expenses Related to Owned Equipment Total indirect expenses of $65,461 for the quarter ended September 30, 1997, decreased from $78,546 for the same period of 1996. The variance is explained as follows: (1) a $22,904 decrease in depreciation expense reflecting asset sales during 1997 and 1996. (2) a $5,296 increase in bad debt expense due to the General Partner's evaluation of the collectibility of trade receivables. (3) a $4,523 increase in general and administrative reflects the increased administrative costs related to short-term rental facilities. (C) Net Gain on Disposition of Equipment For the quarter ended September 30, 1997, the Partnership realized a gain of $76,281 on the disposition of trailers, compared to the same period in 1996, when the Partnership realized a gain of $3,692 on the disposal of a trailer. (D) Equity in Net Loss of Unconsolidated Special-purpose Entity Equity in the net loss of the unconsolidated special-purpose entity was $296 for the quarter ended September 30, 1996, and represents the net loss generated from the Partnership's interest in an entity which owned an aircraft, accounted for under the equity method. The investment was sold in the second quarter of 1996. (F) Net Income (Loss) As a result of the foregoing, the Partnership had net income of $59,446 for the quarter ended September 30, 1997, as compared to a net loss of $13,678 in the same period in 1996. 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 for the quarter ended September 30, 1997, is not necessarily indicative of future periods. For the quarter ended September 30, 1997, no regular distributions were made but the Partnership distributed a special distribution of $152,181 to the limited partners, or approximately $9.00 per weighted-average limited partnership unit. TEP IXD (A) Revenues Total revenues of $84,194 for the quarter ended September 30, 1997, increased from $51,707 for the same period in 1996, due primarily to higher gain on the disposition of equipment and higher interest and other income in the third quarter of 1997, as compared to the same period in 1996, partially offset by lower lease revenues. (1) Lease revenues decreased to $26,931 in the third quarter of 1997, from $42,621 in the same period in 1996. The following table lists lease revenue earned by equipment type: For the Three Months Ended September 30, 1997 1996 ------------------------------- Marine containers $ 15,336 $ 10,165 Trailers 11,595 32,456 ------------------------------ $ 26,931 $ 42,621 ============================== The decline was due primarily to the following: (a) Container revenue increased $5,171 due to net increase in lease revenue for the quarter ended September 30, 1997, compared to the same quarter of 1996. (b) Trailer revenue decreased $20,861 due to the sale of trailers during 1997 and 1996, and lower utilization in short-term rental facilities operated by an affiliate of the General Partner. (2) For the quarter ended September 30, 1997, the Partnership realized a gain of $56,018 on the disposal of marine containers and trailers, as compared to a gain of $8,491 on the disposal of marine containers and a trailer for the quarter ended September 30, 1996. (B) Expenses Total expenses of $51,102 for the quarter ended September 30, 1997, increased from $45,587 for the same period in 1996. The increase in 1997 expenses was attributable primarily to increases in bad debt expenses, offset by decreases in depreciation expenses and general and administrative expenses. (1) Direct operating expenses (defined as repairs and maintenance) increased to $5,456 in the third quarter of 1997, from $5,008 in the same period in 1996. (2) Indirect operating expenses (defined as depreciation expense, management fees, bad debt expense, and general and administrative expenses) decreased to $45,646 in the third quarter of 1997, from $40,579 in the same period in 1996. The decrease resulted primarily from: (a) a $19,745 increase in bad debt expense due to the General Partner's evaluation of the collectibility of trade receivables. (b) a $9,063 decrease in depreciation expense reflecting asset sales or dispositions during 1997 and 1996. (c) a $5,615 decrease in general and administrative expense due to lower administrative costs related to short-term rental facilities due to sale of equipment. (C) Net Income As a result of the foregoing, the Partnership's net income of $33,092 in the third quarter of 1997, increased from $6,120 in the same period in 1996. 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 third quarter 1997, is not necessarily indicative of future periods. In the third quarter 1997, no regular distributions were made but the Partnership distributed a special distribution of $47,645 to the limited partners, or approximately $5.00 per weighted-average limited partnership unit. Comparison of the Partnership's Operating Results for the Nine Months Ended September 30, 1997 and 1996 TEP IXA (A) Revenues Total revenues of $330,630 for the nine months ended September 30, 1997, decreased from $670,507 for the same period in 1996, due primarily to lower gain on the disposition of equipment, lower lease revenue, and lower interest income and other income. (1) Lease revenue decreased to $198,893 in the nine months ended September 30, 1997, from $317,352 in the same period of 1996. The following table lists lease revenues earned by equipment type: For the Nine Months Ended September 30, 1997 1996 ------------------------------ Trailers $ 142,545 $ 209,576 Marine containers 56,348 69,285 Rail equipment -- 38,491 ------------------------------ $ 198,893 $ 317,352 ============================== The decline was due primarily to the following: (a) Trailer revenue decreased $67,031 due to disposition of equipment and lower utilization of trailers in the short-term rental facilities in 1997, compared to 1996 levels. (b) Marine container revenue decreased $12,937 due to lower utilization and the disposal of equipment. (c) Railcar revenue decreased $38,491 due to the sale of all the Partnership's railcars during 1996. (2) For the nine months ended September 30, 1997, the Partnership realized a gain of $123,611 on the sale or disposition of trailers and marine containers, compared to the same period in 1996, where the Partnership realized a gain of $337,432 on the sale or disposition of railcars, trailers, and marine containers. (B) Expenses Total expenses of $280,307 for the nine months ended September 30, 1997, decreased from $356,369 for the same period in 1996. The decrease in 1997 expenses was attributable to decreases in depreciation expense, repairs and maintenance, and general and administrative expenses. (1) Direct operating expenses (defined as repairs and maintenance) decreased to $25,267 in 1997, from $45,671 in the same period in 1996. This decrease was due primarily to the disposition of equipment. (2) Indirect operating expenses (defined as depreciation expense, management fees, general and administrative expenses, and provision for (recovery of) bad debt) decreased to $255,040 in the nine months ended September 30, 1997, from $310,698 in the same period in 1996. This change resulted primarily from: (a) a $41,592 decrease in depreciation expense from 1996 levels reflecting assets sales or dispositions during 1997 and 1996. (b) a $35,873 decrease in general and administrative expenses from 1996 levels due to lower administrative costs related to the short-term rental facilities due to the sale of equipment. (c) a $22,655 increase in bad debt expense due to the General Partner's evaluation of the collectibility of trade receivables. (C) Net Income As a result of the foregoing, the Partnership's net income decreased to $50,323 in the nine months ended September 30, 1997, from $314,138 in the same period in 1996. 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 nine months ended September 30, 1997, is not necessarily indicative of future periods. In the nine months ended September 30, 1997, the Partnership distributed $307,907 to the limited partners, or approximately $12.68 per weighted-average limited partnership unit which included a special distribution of $10.00 per weighted-average limited partnership unit. TEP IXB (A) Owned Equipment Operations Revenues less direct expenses (defined as repairs and maintenance and asset specific insurance expense) on owned equipment decreased in the nine months ended September 30, 1997, when compared to the same period of 1996. The following table presents revenues less direct expenses by owned equipment type:
For the Nine Months Ended September 30, 1997 1996 ------------------------------ Marine containers $ 13,828 $ 16,474 Trailers 10,489 91,239 Railcar equipment (295 ) 60,580
Marine containers: Marine container revenues and direct expenses were $14,010 and $182, respectively, for the nine months ended September 30, 1997, compared to $16,627 and $153, respectively during the same period of 1996. The number of marine containers owned by the Partnership declined over the past twelve months due to sales and dispositions. In addition, the marine container fleet experienced lower utilization, resulting in a decrease in marine container contribution. Trailers: Trailer revenues and direct expenses were $23,693 and $13,204, respectively, for the nine months ended September 30, 1997, compared to $123,793 and $32,554, respectively during the same period of 1996. The decrease of net contribution was due to lower utilization of trailers in the short-term rental facilities and the disposition of trailers. Railcar equipment: Railcar revenues and direct expenses were zero and $295, respectively, for the nine months ended September 30, 1997, compared to $65,610 and $5,030, respectively, during the same period of 1996. The decrease in net contribution was due to the sale of all the Partnership's railcars owned by the Partnership in the fourth quarter of 1996. (B) Indirect Expenses Related to Owned Equipment Total indirect expenses decreased to $147,966 for the nine months ended September 30, 1997, from $212,485 for the same period of 1996. The variance is explained as follows: (1) a $49,230 decrease in depreciation expense from 1996 levels reflecting assets sales or dispositions during 1997 and 1996. (2) a $29,196 decrease in general and administrative expenses from 1996 levels. This reflects the decreased administrative costs related to the short-term rental facilities due to the sale of equipment. (3) a $13,907 increase in bad debt expense due to the General Partner's evaluation of the collectibility of trade receivables. (C) Net Gain on Disposition of Equipment For the nine months ended September 30, 1997, the Partnership realized a gain of $96,274 on the disposal of marine containers and trailers compared to the same period in 1996, where the Partnership realized a gain of $38,239 on the disposal of marine containers and trailers. (D) Equity in Net Income of Unconsolidated Special-Purpose Entity Equity in the net income of the unconsolidated special-purpose entity was $192,041 for the nine months ended September 30, 1996, and represented the net income generated from the Partnership's interest in an entity which owned an aircraft, accounted for under the equity method. This investment was sold in the third quarter of 1996. (E) Net Income (Loss) As a result of the foregoing, the Partnership had a net loss of $19,603 in the nine months ended September 30, 1997, as compared to a net income of $197,363 in the same period in 1996. 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 nine months ended September 30, 1997, is not necessarily indicative of future periods. In the nine months ended September 30, 1997, the Partnership distributed $541,006 to the limited partners, or approximately $30.99 per weighted-average limited partnership unit which included a special distribution of $28.26 per weighted-average limited partnership unit. TEP IXC (A) Owned Equipment Operations Revenues less direct expenses (defined as repairs and maintenance and asset specific insurance expenses) on owned equipment decreased during the first nine months of 1997 when compared to the same period of 1996. The following table presents revenues less direct expenses by owned equipment type:
For the nine months ended September 30, 1997 1996 --------------------------------- Trailers $ 135,436 $ 166,114 Marine containers 2,657 3,661 Railcar equipment (94 ) 18,724
Trailers: Trailer revenues and direct expenses were $189,583 and $54,147, respectively, for the nine months ended September 30, 1997, compared to $244,489 and $78,375, respectively during the same period of 1996. The decrease of net contribution was due to lower utilization of trailers in the short-term rental facilities and the disposition of trailers. Marine containers: Marine container revenues and direct expenses were $2,723 and $66, respectively, for the nine months ended September 30, 1997, compared to $3,718 and $57 respectively during the same period of 1996. The decrease in marine container contribution was due to lower utilization of marine containers for the nine months ended September 30, 1997, as compared to the same period of 1996. Railcar equipment: Railcar revenues and direct expenses were zero and $94, respectively, for the nine months ended September 30, 1997, compared to $23,400 and $4,676, respectively during the same period of 1996. The decrease of net contribution was due to the sale of all the railcars owned by the Partnership in the fourth quarter of 1996. (B) Indirect Expenses Related to Owned Equipment Total indirect expenses of $233,603 for the nine months ended September 30, 1997, decreased from $303,719 for the same period of 1996. The variance is explained as follows: (1) a $53,495 decrease in depreciation expense from 1996 levels was due to asset sales during 1997 and 1996. (2) a $29,584 decrease in general and administrative expenses due to lower administrative costs related to the short-term rental facilities due to the sale of equipment. (3) a $13,851 increase in bad debt expense due to the General Partner's evaluation of the collectibility of trade receivables. (C) Net Gain on Disposition of Equipment For the nine months ended September 30, 1997, the Partnership realized a gain of $160,266 on the sale of trailers, compared to the same period in 1996, where the Partnership realized a gain of $21,893 on the sale of trailers and a marine container. (D) Equity in Net Income of Unconsolidated Special-Purpose Entity Equity in the net income of the unconsolidated special-purpose entity was $111,247 for the nine months ended September 30, 1996, and represents the net income generated from the Partnership's interest in an entity which owned an aircraft, accounted for under the equity method. This investment was sold in the second quarter of 1996. (E) Net Income As a result of the foregoing, the Partnership's net income increased to $71,383 in the nine months ended September 30, 1997, from $28,572 in the same period in 1996. 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 nine months ended September 30, 1997, is not necessarily indicative of future periods. In the nine months ended September 30, 1997, the Partnership distributed $413,306 to the limited partners, or approximately $24.44 per weighted-average limited partnership unit which included a special distribution of $21.10 per weighted-average limited partnership unit. TEP IXD (A) Revenues Total revenues of $165,589 for the nine months ended September 30, 1997 increased from $155,385 for the same period in 1996 due primarily to higher gain on sale of equipment, offset by a lower lease revenues and lower interest and other income in 1997 compared to 1996. (1) Lease revenues decreased to $65,938 in the nine months ended September 30, 1997, from $132,068 in the same period in 1996. The following table lists lease revenue earned by equipment type: For the Nine Months Ended September 30, 1997 1996 ------------------------------ Marine containers $ 33,129 $ 39,068 Trailers 32,809 93,000 ------------------------------ $ 65,938 $ 132,068 ============================== The decrease was due to the following: (a) Marine container revenue decreased $5,939 primarily due to the disposal of equipment and lower utilization. (b) Trailer revenue decreased $60,191 due primarily to lower utilization in short-term rental facilities operated by an affiliate of the General Partner and the disposition of equipment. (2) For the nine months ended September 30, 1997, the Partnership realized a gain of $96,596 on the sale or disposal of trailers and marine containers, compared to the same period in 1996, where the Partnership realized a gain $18,580 on the sale or disposal of a trailer and marine containers. (B) Expenses Total expenses decreased to $127,232 for the nine months ended September 30, 1997, from $171,491 for the same period in 1996. The decrease in 1997 expenses was attributable primarily to decreases in general and administrative expenses, depreciation expense, and repairs and maintenance, offset by a increase in bad debt expense. (1) Direct operating expenses (defined as repairs and maintenance) decreased to $9,856 in the nine months ended September 30, 1997, from $22,185 in the same period in 1996. The decrease resulted primarily from the disposal of equipment. (2) Indirect operating expenses (defined as depreciation expense, management fees, bad debt expense, and general and administrative expenses) decreased to $117,376 in the nine months ended September 30, 1997, from $149,306 in the same period in 1996. This change resulted primarily from: (a) a $33,547 decrease in general and administrative expenses from 1996 levels due to lower administrative costs related to the short-term rental facilities due to the sale of equipment. (b) a $18,173 decrease in depreciation expense from 1996 levels, reflecting asset sales or dispositions during 1997 and 1996. (3) a $19,790 increase in bad debt expense due to the General Partner's evaluation of the collectibility of trade receivables. (C) Net Income (Loss) As a result of the foregoing, the Partnership's net income of $38,357 in the nine months ended September 30, 1997, as compared to a net loss of $16,106 in the same period in 1996. 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 nine months ended September 30, 1997, is not necessarily indicative of future periods. In the nine months ended September 30, 1997, the Partnership distributed $113,653 to the limited partners, or approximately $11.93 per weighted-average limited partnership unit which included a special distribution of $10.00 per weighted-average limited partnership unit. (this space intentionally left blank) (II) ASSET SALES The General Partner is actively marketing the remaining equipment portfolio with the intent of maximizing sale proceeds. As discussed in Note 3, the Partnerships entered the liquidation phase in 1996. During the nine months ended September 30, 1997, marine containers and trailers owned by TEP IXA were disposed for a total of $235,764. Trailers and marine containers owned by TEP IXB were disposed for a total of $197,820. Trailers owned by TEP IXC were disposed for $253,950. Marine containers and trailers owned by TEP IXD were disposed of for $157,808. (III) MARKET VALUES As of September 30, 1997, the General Partner estimated the current fair market value of each Partnership's equipment portfolio to be approximately : $0.6 million, $0.2 million, $0.6 million, and $0.4 million for TEP IXA, TEP IXB, TEP IXC, and TEP IXD, respectively. (IV) OUTLOOK FOR THE FUTURE Pursuant to the original operating plan, the Partnerships entered into their liquidation phase during 1996 and the General Partner is actively pursuing the sale of all of the Partnerships' equipment with the intention of winding up the Partnerships and distributing all available cash to the Partners. (V) 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 Partnership'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 Partnership's actual results could differ materially from those discussed here. (this space intentionally left blank) PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None. (b) Reports on Form 8-K None. 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 IXC 1986 INCOME FUND By: PLM Financial Services, Inc. General Partner Date: November 12, 1997 By: /s/ Richard Brock ------------------ Richard Brock Vice President and Corporate Controller EX-27 2
5 9-MOS DEC-31-1997 SEP-30-1997 131,635 0 51,499 2,941 0 0 1,942,372 1,817,471 305,314 0 0 0 0 0 290,443 305,314 0 359,293 0 287,910 0 0 0 71,383 0 71,383 0 0 0 71,383 0 0
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