-----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, Soqmbp7EeF1XiszRuilkQJ5m3IO7zswYHjqoErGnR0Jd+ay0nZ4NHPMzuBWkIzAB +u4TTTY0LaGdyFr02AQEmA== 0000950149-95-000773.txt : 19951119 0000950149-95-000773.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950149-95-000773 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IEA INCOME FUND XII LP CENTRAL INDEX KEY: 0000879045 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 943143940 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21518 FILM NUMBER: 95590086 BUSINESS ADDRESS: STREET 1: 444 MARKET ST 15TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4156778990 10-Q 1 FORM 10-Q FOR IEA INCOME FUND XII,LP 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO _______ Commission file number 0-21518 IEA INCOME FUND XII, L.P. (Exact name of registrant as specified in its charter) CALIFORNIA 94-3143940 (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 XII, L.P. REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 TABLE OF CONTENTS
PAGE PART I - FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets - September 30, 1995 (unaudited) and December 31, 1994 2 Statements of Operations for the three and nine months ended September 30, 1995 and 1994 3 (unaudited) Statements of Cash Flows for the nine months ended September 30, 1995 and 1994 4 (unaudited) Notes to Financial Statements (unaudited) 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of 7 Operations PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9
3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Presented herein are the Registrant's balance sheets as of September 30, 1995 and December 31, 1994, statements of operations for the three and nine months ended September 30, 1995 and 1994, and statements of cash flows for the nine months ended September 30, 1995 and 1994. 4 IEA INCOME FUND XII, L.P. BALANCE SHEETS (UNAUDITED)
September 30, December 31, 1995 1994 ------------- ------------ Assets ------ Current assets: Cash, includes $665,667 at September 30, 1995 and $475,530 at December 31, 1994 in interest-bearing accounts $ 666,049 $ 485,789 Short-term investments 2,130,000 1,675,000 Net lease receivables due from Leasing Company (notes 1 and 2) 1,392,094 1,417,270 ------------- ------------- Total current assets 4,188,143 3,578,059 ------------- ------------- Container rental equipment, at cost 63,358,177 63,648,667 Less accumulated depreciation 11,867,687 8,761,517 ------------- ------------- Net container rental equipment 51,490,490 54,887,150 ------------- ------------- Organizational costs, net 447,034 627,887 ------------- ------------- $ 56,125,667 $ 59,093,096 ============= ============= Liabilities and Partners' Capital --------------------------------- Current liabilities Accrued expenses $ 430,500 $ 446,500 Due to general partner (notes 1 and 3) 1,253,382 1,975,382 ------------- ------------- Total current liabilities 1,683,882 2,421,882 ------------- ------------- Partners' capital (deficit): General partner (33,002) (55,052) Limited partners 54,474,787 56,726,266 ------------- ------------- Total partners' capital 54,441,785 56,671,214 ------------- ------------- $ 56,125,667 $ 59,093,096 ============= =============
The accompanying notes are an integral part of these statements. 2 5 IEA INCOME FUND XII, L.P. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended ---------------------------- ----------------------------- September 30, September 30, September 30, September 30, 1995 1994 1995 1994 ------------- ------------- ------------- ------------- Net lease revenue (notes 1 and 4) $ 2,249,891 $ 2,125,176 $ 6,599,072 $ 6,458,798 Other operating expenses: Depreciation 1,382,410 987,294 3,350,393 2,963,647 Other general and administrative expenses 11,864 35,275 82,698 110,690 ------------ ------------ ------------ ------------ 1,394,274 1,022,569 3,433,091 3,074,337 ------------ ------------ ------------ ------------ Earnings from operations 855,617 1,102,607 3,165,981 3,384,461 Other income: Interest income 34,582 26,129 107,577 58,455 Net gain on disposal of equipment 32,049 8,581 44,792 54,552 ------------ ------------ ------------ ------------ 66,631 34,710 152,369 113,007 ------------ ------------ ------------ ------------ Net earnings $ 922,248 $ 1,137,317 $ 3,318,350 $ 3,497,468 ============ ============ ============ ============ Allocation of net earnings: General partner $ 114,922 $ 82,551 $ 299,439 $ 276,463 Limited partners 807,326 1,054,766 3,018,911 3,221,005 ------------ ------------ ------------ ------------ $ 922,248 $ 1,137,317 $ 3,318,350 $ 3,497,468 ============ ============ ============ ============ Limited partners' per unit share of net earnings $ .23 $ .30 $ .86 $ .92 ============ ============ ============ ============
The accompanying notes are an integral part of these statements. 3 6 IEA INCOME FUND XII, L.P. STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended --------------------------------- September 30, September 30, 1995 1994 ------------- ------------- Net cash provided by operating activities $ 6,718,473 $ 5,988,303 Cash flows provided by (used in) investing activities: Proceeds from sale of container rental equipment 246,338 142,497 Purchase of container rental equipment (59,771) (19,600) Acquisition fees paid to general partner (722,000) (454,552) ------------ ----------- Net cash used in investing activities (535,433) (331,655) ------------ ----------- Cash flows used in financing activities: Distribution to partners (5,547,780) (5,547,780) ------------ ----------- Net increase in cash and cash equivalents 635,260 108,868 Cash and cash equivalents at January 1 2,160,789 2,200,279 ------------ ----------- Cash and cash equivalents at September 30 $ 2,796,049 $ 2,309,147 ============ ===========
The accompanying notes are an integral part of these statements. 4 7 IEA INCOME FUND XII, L.P. NOTES TO UNAUDITED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 AND DECEMBER 31, 1994 (1) Summary of Significant Accounting Policies (a) Nature of Operations IEA Income Fund XII, L.P. (the "Partnership") is a limited partnership organized under the laws of the State of California on August 28, 1991 for the purpose of owning and leasing marine cargo containers. Cronos Capital Corp. ("CCC") is the general partner and, with its affiliate Cronos Containers Limited (the "Leasing Company"), manages and controls the business of the Partnership. (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 two to five years). Master leases do not specify the exact number of containers to be leased or the term that each container will remain on hire but allow the ocean carrier to pick up and drop off containers at various locations; rentals are based upon the number of containers used and the applicable per-diem rate. Accordingly, rentals under master leases are all variable and contingent upon the number of containers used. Most containers are leased to ocean carriers under master leases; leasing agreements with fixed payment terms are not material to the financial statements. Since there are no material minimum lease rentals, no disclosure of minimum lease rentals is provided in these financial statements. (c) Basis of Accounting The Partnership utilizes the accrual method of accounting. Revenue is recognized when earned. (d) Financial Statement Presentation These financial statements have been prepared without audit. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting procedures have been omitted. It is suggested that these financial statements be read in conjunction with the financial statements and accompanying notes in the Partnership's latest annual report on Form 10-K. The interim financial statements presented herewith reflect all adjustments of a normal recurring nature which are, in the opinion of management, necessary to a fair statement of the financial condition and results of operations for the interim periods presented. (Continued) 5 8 IEA INCOME FUND XII, L.P. NOTES TO UNAUDITED FINANCIAL STATEMENTS (2) Net Lease Receivables Due from Leasing Company Net lease receivables due from the Leasing Company are determined by deducting direct operating payables and accrued expenses, base management fees payable, and reimbursed administrative expenses payable to CCC, the Leasing Company, and its affiliates from the rental billings payable by the Leasing Company to the Partnership under operating leases to ocean carriers for the containers owned by the Partnership. Net lease receivables at September 30, 1995 and December 31, 1994 were as follows:
September 30, December 31, 1995 1994 ------------- ------------ Lease receivables, net of doubtful accounts of $312,953 at September 30, 1995 and $261,827 at December 31, 1994 $ 2,759,789 $ 3,020,391 Less: Direct operating payables and accrued expenses 756,192 677,781 Damage protection reserve 247,994 179,328 Base management fees 347,813 578,169 Reimbursed administrative expenses 15,696 167,843 ------------ ------------ $ 1,392,094 $ 1,417,270 ============ ============
(3) Due to General Partner The amounts due to CCC at September 30, 1995 and December 31, 1994 consist of acquisition fees. (4) Net Lease Revenue Net lease revenue is determined by deducting direct operating expenses, management fees and reimbursed administrative expenses to CCC, the Leasing Company, 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 and nine-month periods ended September 30, 1995 and 1994 was as follows:
Three Months Ended Nine Months Ended ------------------------------ ------------------------------ September 30, September 30, September 30, September 30, 1995 1994 1995 1994 ------------- ------------- ------------- ------------- Rental revenue $ 3,138,632 $ 3,115,543 $ 9,200,276 $ 9,059,327 Rental equipment operating expenses 486,440 632,356 1,454,049 1,481,217 Base management fees 212,659 179,384 629,980 590,279 Reimbursed administrative expenses 189,642 178,627 517,175 529,033 ------------ ------------ ------------ ------------ $ 2,249,891 $ 2,125,176 $ 6,599,072 $ 6,458,798 ============ ============ ============ ============
6 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations It is suggested that the following discussion be read in conjunction with the Registrant's most recent annual report on Form 10-K. 1) Material changes in financial condition between September 30, 1995 and December 31, 1994. During the first nine months of 1995, the Registrant's cash balances increased by $635,260 to $2,796,049. Additionally, the Registrant's collection of outstanding lease receivables and sales proceeds has been favorable, contributing to the aforementioned increase in cash and cash equivalents, and to a $25,176 decline in net lease receivables due from the Leasing Company. Direct operating payables and accrued expenses, a component of net lease receivables, increased $78,411. This increase results from a $60,393 increase in accrued operating expenses and an $18,018 increase in deferred revenue from advance billings to container lessees. The reserve for container repairs covered under the damage protection plan increased $68,666 as a result of an increase in the number of containers covered by the plan. The amount due to the General Partner declined $722,000, as the Registrant continued to make payments to the General Partner for acquisition fees deferred during the build-up phase of the Registrant's fleet and operations. During the first nine months of 1995, the Registrant acquired 23 new twenty-foot dry cargo containers at an aggregate manufacturers' invoice cost of $56,925, replacing containers which had been lost or damaged beyond repair. The Registrant's cash balances at September 30, 1995 include additional sales proceeds from equipment disposals in the amount of approximately $205,000. The Registrant will use these sales proceeds in subsequent periods to purchase additional containers as replacements for lost or damaged containers. 2) Material changes in the results of operations between the three and nine-month periods ended September 30, 1995 and the three and nine-month periods ended September 30, 1994. Net lease revenue for the third quarter of 1995 was $2,249,891, an increase of 6% over the third quarter of 1994. Gross rental revenue (a component of net lease revenue) for the quarter was $3,138,632, as compared to $3,115,543 for the same period last year. For the first nine months of 1995, net lease revenue was $6,599,072, an increase of 2% when compared to the first nine months of 1994. Gross rental revenue increased 2% to $9,200,276 over the same nine-month period. Gross rental revenue increased slightly when compared to the same three and nine-month periods in the prior year, as the Registrant continued to recognize higher ancillary revenues, such as pick-up and drop-off charges. These ancillary revenues helped to offset the effects of a slightly smaller fleet size and stable utilization rates. However, competitive pressures within the container leasing market, as well as the Leasing Company's efforts to improve the credit quality of its customer portfolio, combined to create a resistance to higher average dry cargo container per-diem rental rates. Accordingly, these rates remained relatively stable when compared to the same periods in the prior year. The Registrant expects to gain long-term benefits from the improvement in the credit quality of this customer portfolio, as the allowance for doubtful accounts and related expenses should decline. However, average refrigerated container per-diem rental rates declined approximately 3% when compared to the same the three and nine-month periods ended September 30, 1994, as many of the term leases originally entered into during the Registrant's initial year of operations have since been renewed at lower, current market rates. 7 10 The Registrant's average fleet size and utilization rates for the three and nine-month periods ended September 30, 1995 and 1994 were as follows:
Three Months Ended Nine Months Ended ------------------------------- ------------------------------ September 30, September 30, September 30, September 30, 1995 1994 1995 1994 ------------- ------------- ------------- ------------- Average Fleet Size (measured in twenty-foot equivalents (TEU)) Dry cargo containers 20,340 20,368 20,379 20,381 Refrigerated containers 815 815 815 815 Average Utilization Dry cargo containers 89% 91% 90% 90% Refrigerated containers 95% 99% 98% 99%
During the third quarter of 1995, the container leasing market began to experience the effects of increasingly competitive market conditions, including, but not limited to, a resistance to higher per-diem rental rates, slightly lower utilization rates resulting from an expanding supply of marine cargo containers within the container industry, and the economic condition of the shipping industry, which has experienced a current trend toward consolidation. Accordingly, the Registrant expects a stable container leasing market during the remainder of 1995 and first half of 1996. Declines in the provision for repairs covered by the damage protection plan, and the provision for doubtful accounts, were contributing factors to declines in rental equipment operating expenses of 23% and 2%, when compared to the same three and nine-month periods ended September 30, 1994, respectively. 8 11 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits
Number Description Method of Filing ------ ----------- ---------------- 27 Financial Data Schedule Filed with this Document
(b) There were no reports on Form 8-K during the three-month period ended September 30, 1995. 9 12 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 XII, L.P. By Cronos Capital Corp. The General Partner By /s/ JOHN KALLAS --------------------------------------- John Kallas Vice President, Chief Financial Officer Principal Accounting Officer Date: November 13, 1995 10 13 EXHIBIT INDEX
Exhibit No. Description ------- ----------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AT SEPTEMBER 30, 1995 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED AS PART OF ITS QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD SEPTEMBER 30, 1995 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 2,796,049 0 1,392,094 0 0 4,188,143 63,358,177 11,867,687 56,125,667 1,683,882 0 0 0 0 54,441,785 56,125,667 0 6,751,441 0 3,433,091 0 0 0 0 0 0 0 0 0 3,318,350 0 0
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