-----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, Pjweod5TfUIHIWYsyTWJjiIMnhvrHtoN/94/7ioMrI0D1pV8j/btNUjYDfAteAlf lH5ZoMz9QzW6gF+RtdiM5w== 0000950149-99-000906.txt : 19990513 0000950149-99-000906.hdr.sgml : 19990513 ACCESSION NUMBER: 0000950149-99-000906 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IEA INCOME FUND XI LP CENTRAL INDEX KEY: 0000867640 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 943122430 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19770 FILM NUMBER: 99618135 BUSINESS ADDRESS: STREET 1: 444 MARKET ST 15TH FLR CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4156778990 10-Q 1 IEA INCOME FUND XI, L.P. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________ Commission file number 0-19770 IEA INCOME FUND XI, L.P. (Exact name of registrant as specified in its charter) California 94-3122430 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 444 Market Street, 15th Floor, San Francisco, California 94111 (Address of principal executive offices) (Zip Code) (415) 677-8990 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]. No [ ]. 2 IEA INCOME FUND XI, L.P. REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999 TABLE OF CONTENTS
PAGE ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets - March 31, 1999 (unaudited) and December 31, 1998 4 Statements of Operations for the three months ended March 31, 1999 and 1998 (unaudited) 5 Statements of Cash Flows for the three months ended March 31, 1999 and 1998 (unaudited) 6 Notes to Financial Statements (unaudited) 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings 13 Item 3. Defaults Upon Senior Securities 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 15
2 3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Presented herein are the Registrant's balance sheets as of March 31, 1999 and December 31, 1998, statements of operations for the three months ended March 31, 1999 and 1998, and statements of cash flows for the three months ended March 31, 1999 and 1998. 3 4 IEA INCOME FUND XI, L.P. BALANCE SHEETS (UNAUDITED)
March 31, December 31, 1999 1998 ------------ ------------ Assets Current assets: Cash and cash equivalents, includes $1,610,339 at March 31, 1999 and $1,506,063 at December 31, 1998 in interest-bearing accounts $ 1,610,439 $ 1,506,163 Net lease receivables due from Leasing Company (notes 1 and 2) 468,497 499,399 ------------ ------------ Total current assets 2,078,936 2,005,562 ------------ ------------ Container rental equipment, at cost 34,223,544 34,982,063 Less accumulated depreciation 15,007,739 14,838,118 ------------ ------------ Net container rental equipment 19,215,805 20,143,945 ------------ ------------ $ 21,294,741 $ 22,149,507 ============ ============ Liabilities and Partners' Capital Current liabilities: Accrued expenses $ 75,000 $ 75,000 ------------ ------------ Total current liabilities 75,000 75,000 ------------ ------------ Partners' capital (deficit): General partner (57,973) (49,424) Limited partners 21,277,714 22,123,931 ------------ ------------ Total partners' capital 21,219,741 22,074,507 ------------ ------------ $ 21,294,741 $ 22,149,507 ============ ============
The accompanying notes are an integral part of these financial statements. 4 5 IEA INCOME FUND XI, L.P. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended ------------------------- March 31, March 31, 1999 1998 --------- --------- Net lease revenue (notes 1 and 3) $ 597,360 $ 815,523 Other operating expenses: Depreciation 504,209 521,622 Other general and administrative expenses 23,035 19,273 --------- --------- 527,244 540,895 --------- --------- Earnings from operations 70,116 274,628 Other income (loss): Interest income 16,081 18,410 Net gain (loss) on disposal of equipment (206,486) 8,020 --------- --------- (190,405) 26,430 --------- --------- Net earnings (loss) $(120,289) $ 301,058 ========= ========= Allocation of net earnings (loss): General partner $ 25,995 $ 43,578 Limited partners (146,284) 257,480 --------- --------- $(120,289) $ 301,058 ========= ========= Limited partners' per unit share of net earnings (loss) $ (0.07) $ 0.13 ========= =========
The accompanying notes are an integral part of these financial statements. 5 6 IEA INCOME FUND XI, L.P. STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended ----------------------------- March 31, March 31, 1999 1998 ----------- ----------- Net cash provided by operating activities $ 634,872 $ 663,540 Cash flows provided by investing activities: Proceeds from disposal of equipment 203,880 114,882 Cash flows used in financing activities: Distribution to partners (734,476) (815,712) ----------- ----------- Net increase (decrease) in cash and cash equivalents 104,276 (37,290) Cash and cash equivalents at January 1 1,506,163 1,394,672 ----------- ----------- Cash and cash equivalents at March 31 $ 1,610,439 $ 1,357,382 =========== ===========
The accompanying notes are an integral part of these financial statements. 6 7 IEA INCOME FUND XI, L.P. NOTES TO UNAUDITED FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies (a) Nature of Operations IEA Income Fund XI, L.P. (the "Partnership") is a limited partnership organized under the laws of the State of California on July 30, 1990 for the purpose of owning and leasing marine cargo containers worldwide to ocean carriers. To this extent, the Partnership's operations are subject to the fluctuations of world economic and political conditions. Such factors may affect the pattern and levels of world trade. The Partnership believes that the profitability of, and risks associated with, leases to foreign customers is generally the same as those of leases to domestic customers. The Partnership's leases generally require all payments to be made in United States currency. Cronos Capital Corp. ("CCC") is the general partner and, with its affiliate Cronos Containers Limited (the "Leasing Company"), manages the business of the Partnership. The Partnership shall continue until December 31, 2010, unless sooner terminated upon the occurrence of certain events. The Partnership commenced operations on January 31, 1991, when the minimum subscription proceeds of $1,000,000 were obtained. The Partnership offered 2,000,000 units of limited partnership interest at $20 per unit, or $40,000,000. The offering terminated on November 30, 1991, at which time 1,999,812 limited partnership units had been purchased. (b) Leasing Company and Leasing Agent Agreement The Partnership has entered into a Leasing Agent Agreement whereby the Leasing Company has the responsibility to manage the leasing operations of all equipment owned by the Partnership. Pursuant to the Agreement, the Leasing Company is responsible for leasing, managing and re-leasing the Partnership's containers to ocean carriers and has full discretion over which ocean carriers and suppliers of goods and services it may deal with. The Leasing Agent Agreement permits the Leasing Company to use the containers owned by the Partnership, together with other containers owned or managed by the Leasing Company and its affiliates, as part of a single fleet operated without regard to ownership. Since the Leasing Agent Agreement meets the definition of an operating lease in Statement of Financial Accounting Standards (SFAS) No. 13, it is accounted for as a lease under which the Partnership is lessor and the Leasing Company is lessee. The Leasing Agent Agreement generally provides that the Leasing Company will make payments to the Partnership based upon rentals collected from ocean carriers after deducting direct operating expenses and management fees to CCC and the Leasing Company. The Leasing Company leases containers to ocean carriers, generally under operating leases which are either master leases or term leases (mostly one to five years). Master leases do not specify the exact number of containers to be leased or the term that each container will remain on hire but allow the ocean carrier to pick up and drop off containers at various locations; rentals are based upon the number of containers used and the applicable per-diem rate. Accordingly, rentals under master leases are all variable and contingent upon the number of containers used. Most containers are leased to ocean carriers under master leases; leasing agreements with fixed payment terms are not material to the financial statements. Since there are no material minimum lease rentals, no disclosure of minimum lease rentals is provided in these financial statements. (Continued) 7 8 IEA INCOME FUND XI, L.P. NOTES TO UNAUDITED FINANCIAL STATEMENTS (c) Basis of Accounting The Partnership utilizes the accrual method of accounting. Net lease revenue is recorded by the Partnership in each period based upon its leasing agent agreement with the Leasing Company. Net lease revenue is generally dependent upon operating lease rentals from operating lease agreements between the Leasing Company and its various lessees, less direct operating expenses and management fees due in respect of the containers specified in each operating lease agreement. (d) Financial Statement Presentation These financial statements have been prepared without audit. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting procedures have been omitted. It is suggested that these financial statements be read in conjunction with the financial statements and accompanying notes in the Partnership's latest annual report on Form 10-K. The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires the Partnership to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. The interim financial statements presented herewith reflect all adjustments of a normal recurring nature which are, in the opinion of management, necessary to a fair statement of the financial condition and results of operations for the interim periods presented. (2) Net Lease Receivables Due from Leasing Company Net lease receivables due from the Leasing Company are determined by deducting direct operating payables and accrued expenses, base management fees payable, and reimbursed administrative expenses payable to CCC and its affiliates from the rental billings payable by the Leasing Company to the Partnership under operating leases to ocean carriers for the containers owned by the Partnership. Net lease receivables at March 31, 1999 and December 31, 1998 were as follows:
March 31, December 31, 1999 1998 ---------- ------------ Lease receivables, net of doubtful accounts of $110,906 at March 31, 1999 and $134,182 at December 31, 1998 $1,110,240 $1,124,544 Less: Direct operating payables and accrued expenses 379,020 354,547 Damage protection reserve 146,495 142,346 Base management fees 98,126 108,788 Reimbursed administrative expenses 18,102 19,464 ---------- ---------- $ 468,497 $ 499,399 ========== ==========
(Continued) 8 9 IEA INCOME FUND XI, L.P. NOTES TO UNAUDITED FINANCIAL STATEMENTS (3) Net Lease Revenue Net lease revenue is determined by deducting direct operating expenses, base management fees and reimbursed administrative expenses to CCC and its affiliates from the rental revenue billed by the Leasing Company under operating leases to ocean carriers for the containers owned by the Partnership. Net lease revenue for the three-month periods ended March 31, 1999 and 1998 was as follows:
Three Months Ended -------------------------- March 31, March 31, 1999 1998 ---------- ---------- Rental revenue (note 4) $1,031,888 $1,253,370 Less: Rental equipment operating expenses 307,215 262,384 Base management fees 69,755 86,013 Reimbursed administrative expenses 57,558 89,450 ---------- ---------- $ 597,360 $ 815,523 ========== ==========
(4) Operating Segment The Financial Accounting Standards Board has issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", which changes the way public business enterprises report financial and descriptive information about reportable operating segments. An operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and about which separate financial information is available. Management operates the Partnership's container fleet as a homogenous unit and has determined, after considering the requirements of SFAS No. 131, that as such it has a single reportable operating segment. The Partnership derives its revenues from owning and leasing marine cargo containers. As of March 31, 1999, the Partnership operated 5,902 twenty-foot, 3,049 forty-foot and 184 forty-foot high-cube marine dry cargo containers, as well as 100 twenty-foot and 50 forty-foot marine refrigerated cargo containers. A summary of gross lease revenue, by product, for the three-month periods ended March 31, 1999 and 1998 follows:
1999 1998 ---------- ---------- Dry cargo containers $ 933,120 $1,140,536 Refrigerated containers 98,768 112,834 ---------- ---------- Total $1,031,888 $1,253,370 ========== ==========
Due to the Partnership's lack of information regarding the physical location of its fleet of containers when on lease in the global shipping trade, it is impracticable to provide the geographic area information required by SFAS No. 131. Any attempt to separate "foreign" operations from "domestic" operations would be dependent on definitions and assumptions that are so subjective as to render the information meaningless and potentially misleading. 9 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations It is suggested that the following discussion be read in conjunction with the Registrant's most recent annual report on Form 10-K. 1) Material changes in financial condition between March 31, 1999 and December 31, 1998. At March 31, 1999, the Registrant had $1,610,439 in cash and cash equivalents, an increase of $104,276 from the cash balances at December 31, 1998. Net lease receivables at March 31, 1999 decreased 6% when compared to December 31, 1998. Contributing to this change was an increase in direct operating payables and accrued expenses, a component of net lease receivables. Direct operating payables and accrued expenses increased 7% from December 31, 1998 due to the increase in costs associated with lower utilization levels, including handling, storage and repositioning. The Registrant's cash distribution from operations for the first quarter of 1999 was 6.50% (annualized) of the limited partners' original capital contributions, unchanged from the fourth quarter of 1998. These distributions are directly related to the Registrant's results from operations and may fluctuate accordingly. The cash distribution from sales proceeds for the first quarter of 1999 was .50% (annualized) of the limited partners' original capital contribution, unchanged from the fourth quarter of 1998. Sales proceeds distributed to its partners may fluctuate in subsequent periods, reflecting the level of container disposals. Growth in intra-Asian trade and improving lease-out activity in some key locations have expanded the requirement for leased containers in selected locations. As a result of these slowly improving trends, trade volumes in several markets are rebounding and utilization of the Registrant's equipment has been recently improving. However, per-diem rental rates remain unchanged and container imbalances are expected to continue for the remainder of 1999. In light of the encouraging signs mentioned above, the Registrant will selectively increase its repositioning of available equipment to higher demand locations when it believes that the impact will have a positive effect on operations. 2) Material changes in the results of operations between the three-month period ended March 31, 1999 and the three-month period ended March 31, 1998. Net lease revenue for the three-month period ended March 31, 1999 was $597,360, a decrease of approximately 27% from the same period in the prior year. Gross rental revenue (a component of net lease revenue) for the three-month period ended March 31, 1999 was $1,031,888, reflecting a decline of 18% from the same period in the prior year. Gross lease revenue was primarily impacted by lower per-diem rental rates and utilization levels. Average dry cargo container per-diem rental rates for the three-month period ended March 31, 1999 declined 5% when compared to the same period in the prior year. Average refrigerated container per-diem rental rates for the three-month period ended March 31, 1999 declined 3% when compared to the same period in the prior year. 10 11 The Registrant's average fleet size and utilization rates for the three-month periods ended March 31, 1999 and March 31, 1998 were as follows:
Three Months Ended --------- --------- March 31, March 31, 1999 1998 --------- --------- Average fleet size (measured in twenty-foot equivalent units (TEU)) Dry cargo containers 12,520 12,982 Refrigerated containers 200 200 Average Utilization Dry cargo containers 69% 78% Refrigerated containers 65% 83%
Rental equipment operating expenses were 30% of the Registrant's gross lease revenue during the three-month period ended March 31, 1999, as compared to 21% during the three-month period ended March 31, 1998. This increase was largely attributable to an increase in costs associated with lower utilization levels, including handling and storage. The Registrant's operating results contributed to a decline in base management fees when compared to the same period in the prior year. The Registrant disposed of 89 twenty-foot, 104 forty-foot and six forty-foot high-cube marine dry cargo containers during the first quarter of 1999, as compared to 28 twenty-foot and 14 forty-foot marine dry cargo containers during the same period in the prior year. The decision to repair or dispose of a container is made when it is returned by a lessee. This decision is influenced by various factors including the age, condition, suitability for continued leasing, as well as the geographical location of the container when disposed. These factors also influence the amount of sales proceeds received and the related gain on container disposals. Year 2000 The Registrant relies upon the financial and operational systems provided by the Leasing Company and its affiliates, as well as the systems provided by other independent third parties to service the three primary areas of its business: investor processing/maintenance; container leasing/asset tracking; and accounting finance. The Registrant has received confirmation from its third-party investor processing/maintenance vendor that their system is Year 2000 compliant. The Registrant does not expect a material increase in its vendor servicing fee to reimburse Year 2000 costs. Container leasing/asset tracking and accounting/finance services are provided to the Registrant by CCC and its affiliate, the Leasing Company, pursuant to the respective Limited Partnership Agreement and Leasing Agent Agreement. CCC and the Leasing Company have initiated a program to prepare their systems and applications for the Year 2000. Preliminary studies indicate that testing, conversion and upgrading of system applications is expected to cost CCC and the Leasing Company less than $500,000. Pursuant to the Limited Partnership Agreement, CCC or the Leasing Company, may not seek reimbursement of data processing costs associated with the Year 2000 program. The financial impact of making these required system changes is not expected to be material to the Registrant's financial position, results of operations or cash flows. 11 12 Cautionary Statement This Quarterly Report on Form 10-Q contains statements relating to future results of the Registrant, including certain projections and business trends, that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to changes in economic conditions; trade policies; demand for and market acceptance of leased marine cargo containers; competitive utilization and per-diem rental rate pressures; as well as other risks and uncertainties, including but not limited to those described above in the discussion of the marine container leasing business under Item 2., Management's Discussion and Analysis of Financial Condition and Results of Operations; and those detailed from time to time in the filings of the Registrant with the Securities and Exchange Commission. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not applicable. 12 13 PART II - OTHER INFORMATION Item 1. Legal Proceedings As reported in the Registrant's Current Report on Form 8-K and Amendment No. 1 to Current Report on Form 8-K, filed with the Commission on February 7, 1997 and February 26, 1997, respectively, Arthur Andersen, London, England, resigned as auditors of The Cronos Group, (the "Parent Company"), on February 3, 1997. The Parent Company is the indirect corporate parent of CCC, the general partner of the Registrant. In its letter of resignation to the Parent Company, Arthur Andersen stated that it resigned as auditors of the Parent Company and all other entities affiliated with the Parent Company. While its letter of resignation was not addressed to CCC, Arthur Andersen confirmed to CCC that its resignation as auditors of the entities referred to in its letter of resignation included its resignation as auditors of CCC and the Registrant. CCC does not believe, based upon the information currently available to it, that Arthur Andersen's resignation was triggered by any concern over the accounting policies and procedures followed by the Registrant. Arthur Andersen's reports on the financial statements of CCC and the Registrant, for years preceding 1996, had not contained an adverse opinion or a disclaimer of opinion, nor were any such reports qualified or modified as to uncertainty, audit scope, or accounting principles. During the Registrant's fiscal year ended December 31, 1995 and the subsequent interim period preceding Arthur Andersen's resignation, there were no disagreements between CCC or the Registrant and Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. In connection with its resignation, Arthur Andersen also prepared a report pursuant to the provisions of Section 10A(b)(2) of the Securities Exchange Act of 1934, as amended, for filing by the Parent Company with the Securities and Exchange Commission (the "SEC"). Following the report of Arthur Andersen, the SEC, on February 10, 1997, commenced a private investigation of the Parent Company for the purpose of investigating the matters discussed in such report and related matters. The Registrant does not believe that the focus of the SEC's investigation is upon the Registrant or CCC. CCC is unable to predict the outcome of the SEC's ongoing private investigation of the Parent Company. Item 3. Defaults Upon Senior Securities See Item 5. Other Information. Item 5. Other Information In 1993, the Parent Company negotiated a credit facility (hereinafter, the "Credit Facility") with several banks for the use by the Parent Company and its subsidiaries, including CCC. At December 31, 1996, approximately $73,500,000 in principal indebtedness was outstanding under the Credit Facility. As a party to the Credit Facility, CCC is jointly and severally liable for the repayment of all principal and interest owed under the Credit Facility. The obligations of CCC, and the five other subsidiaries of the Parent Company that are borrowers under the Credit Facility, are guaranteed by the Parent Company. 13 14 Following negotiations in 1997 with the banks providing the Credit Facility, an Amended and Restated Credit Agreement was executed in June 1997, subject to various actions being taken by the Parent Company and its subsidiaries, primarily relating to the provision of additional collateral. This Agreement was further amended in July 1997 and the provisions of the Agreement and its Amendment converted the facility to a term loan, payable in installments, with a final maturity date of May 31, 1998. The terms of the Agreement and its Amendment also provided for additional security over shares in the subsidiary of the Parent Company that owns the head office of the Parent Company's container leasing operations. They also provided for the loans to the former Chairman of $5,900,000 and $3,700,000 to be restructured as obligations of the former Chairman to another subsidiary of the Parent Company (not CCC), together with the pledge to this subsidiary company of 2,030,303 Common Shares beneficially owned by him in the Parent Company as security for these loans. They further provided for the assignment of these loans to the lending banks, together with the pledge of 1,000,000 shares and the assignment of the rights of the Parent Company in respect of the other 1,030,303 shares. Additionally, CCC granted the lending banks a security interest in the fees to which it is entitled for the services it renders to the container leasing partnerships of which it acts as general partner, including its fee income payable by the Registrant. The Parent Company did not repay the Credit Facility at the amended maturity date of May 31, 1998. On June 30, 1998, the Parent Company entered into a third amendment (the "Third Amendment") to the Credit Facility. Under the Third Amendment, the remaining principal amount of $36,800,000 was to be amortized in varying monthly amounts commencing on July 31, 1998 with $26,950,000 due on September 30, 1998 and a final maturity date of January 8, 1999. The Parent Company did not repay the amounts due on September 30, 1998 and January 8, 1999. The balance outstanding on the Credit Facility at December 31, 1998 was $33,110,000. In March 1999, the Parent Company agreed to a fourth amendment (the "Fourth Amendment") to the Bank Facility under which the final maturity date will be September 1999. The Fourth Amendment became effective as of March 31, 1999 subject to the satisfaction thereafter of various conditions, including the delivery of the Parent Company's audited financial statements for 1998, together with various legal opinions and other loan documentation by April 15, 1999. This date was extended to April 30, 1999. The Parent Company furnished the required legal opinions and other loan documentation and are now under review. The directors of the Parent Company also are pursuing alternative sources of financing to meet the amended repayment obligations anticipated under the Fourth Amendment. Failure to meet revised lending terms would constitute an event of default with the lenders. The declaration of an event of default would result in further defaults with other lenders under loan agreement cross-default provisions. Should a default of the term loans be enforced, the Parent Company and CCC may be unable to continue as going concerns. The Registrant is not a borrower under the Credit Facility, and neither the containers nor the other assets of the Registrant have been pledged as collateral under the Credit Facility. CCC is unable to determine the impact, if any, these issues may have on the future operating results, financial condition and cash flows of the Registrant or CCC and on the Leasing Company's ability to manage the Registrant's fleet in subsequent periods. 14 15 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits
Exhibit No. Description Method of Filing --------- ---------------------------------------------------- ------------------ 3(a) Limited Partnership Agreement of the Registrant, * amended and restated as of December 14, 1990 3(b) Certificate of Limited Partnership of the Registrant ** 10(a) Form of Leasing Agent Agreement with LPI Leasing *** Partners International N.V. 10(b) Assignment of Leasing Agent Agreement dated **** January 1, 1992 between the Registrant, CCC (formerly Intermodal Equipment Associates), Cronos Containers N.V. (formerly LPI Leasing Partners International N.V.) and Cronos Containers Limited 27 Financial Data Schedule Filed with this document
(b) Report on Form 8-K No reports on Form 8-K were filed by the Registrant during the quarter ended March 31, 1999. - ---------- * Incorporated by reference to Exhibit "A" to the Prospectus of the Registrant dated December 14, 1990, included as part of Registration Statement on Form S-1 (No. 33-36701) ** Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No. 33-36701) *** Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 (No. 33-36701) **** Incorporated by reference to Exhibit 10(b) to the Report on Form 10-K for the fiscal year ended December 31, 1997. 15 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. IEA INCOME FUND XI, L.P. By Cronos Capital Corp. The General Partner By /s/ Dennis J. Tietz ----------------------------------- Dennis J. Tietz President and Director of Cronos Capital Corp. ("CCC") Principal Executive Officer of CCC Date: May 15, 1999 16 17 EXHIBIT INDEX
Exhibit No. Description Method of Filing --------- ---------------------------------------------------- ------------------ 3(a) Limited Partnership Agreement of the Registrant, * amended and restated as of December 14, 1990 3(b) Certificate of Limited Partnership of the Registrant ** 10(a) Form of Leasing Agent Agreement with LPI Leasing *** Partners International N.V. 10(b) Assignment of Leasing Agent Agreement dated **** January 1, 1992 between the Registrant, CCC (formerly Intermodal Equipment Associates), Cronos Containers N.V. (formerly LPI Leasing Partners International N.V.) and Cronos Containers Limited 27 Financial Data Schedule Filed with this document
- ---------- * Incorporated by reference to Exhibit "A" to the Prospectus of the Registrant dated December 14, 1990, included as part of Registration Statement on Form S-1 (No. 33-36701) ** Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No. 33-36701) *** Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 (No. 33-36701) **** Incorporated by reference to Exhibit 10(b) to the Report on Form 10-K for the fiscal year ended December 31, 1997. EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AT MARCH 31, 1999 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED AS PART OF ITS QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD MARCH 31, 1999 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 1,610,439 0 468,497 0 0 2,078,936 34,223,544 15,007,739 21,294,741 75,000 0 0 0 0 21,219,741 21,294,741 0 597,360 0 527,244 0 0 0 0 0 0 0 0 0 (120,289) 0 0
-----END PRIVACY-ENHANCED MESSAGE-----