UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the fiscal quarter ended
March 31, 1998.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number 0-14599
PLMTRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME
FUND (Exact name of registrant as specified in its
charter)
California 94-2946248
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Market, Steuart Street Tower,
Suite 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 VIIB INCOME FUND
BALANCE SHEETS
March 31, December 31,
1998 1997
---------------------------------------
Assets
Equipment held for operating leases, at cost $ 288,612 $ 304,133
Less accumulated depreciation (288,538) (304,133)
--------------------------------------------
Net equipment 74 --
Cash and cash equivalents 50,510 358,630
Accounts receivable, net of allowance for doubtful accounts of
$1,527 in 1998 and $3,965 in 1997 8,209 20,038
Prepaid insurance 305 494
--------------------------------------------
Total assets $ 59,098 $ 379,162
============================================
Liabilities and capital
Liabilities:
Accounts payable and accrued expenses $ 5,334 $ 18,311
Due to affiliates -- 4,641
Total liabilities 5,334 22,952
Capital:
Beneficiaries or limited partners (22,276 units) 53,764 356,210
Beneficiary or General Partner -- --
--------------------------------------------
Total capital 53,764 356,210
--------------------------------------------
Total liabilities and capital $ 59,098 $ 379,162
============================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND
STATEMENTS OF INCOME
For the Three Months Ended March 31,
1998 1997
------------------------------
Revenues
Lease revenue $ 13,458 $ 98,483
Interest and other income 3,310 3,528
Net gain on disposition of equipment 1,366 114,482
--------------------------------------
Total revenues 18,134 216,493
Expenses
Depreciation -- 23,510
Management fees to affiliate -- 13,922
Repairs and maintenance 2,173 16,249
Insurance expense 189 1,057
General and administrative expenses to affiliates 4,235 4,364
Other general and administrative expenses 7,792 27,185
Recovery of bad debts (2,439) (106)
Total expenses 11,950 86,181
Net income $ 6,184 $ 130,312
======================================
Allocation of net income
Beneficiaries or limited partners $ 3,098 $ 129,009
Beneficiary or General Partner 3,086 1,303
--------------------------------------
Total $ 6,184 $ 130,312
======================================
Net income per weighted-average unit
outstanding (22,276 units) $ 0.14 $ 5.79
======================================
Cash distributions $ -- $ 97,172
======================================
Cash distribution per weighted-average
unit outstanding $ -- $ 4.32
======================================
Special cash distributions $ 308,630 $ --
======================================
Special cash distribution per weighted-average
unit outstanding $ 13.72 $ --
======================================
Total cash distribution per weighted-average
unit outstanding $ 13.72 $ 4.32
======================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB INCOME FUND
STATEMENTS OF CHANGES IN CAPITAL
For the period from December 31, 1996 to March 31, 1998
Beneficiaries Beneficiary
(formerly (formerly
Limited General
Partners) Partner) Total
-----------------------------------------------------------------
Capital (deficit) as of December 31, 1996 $ 578,736 $ (93,194) $ 485,542
Net income 487,976 100,371 588,347
Cash distributions (96,200) (972) (97,172)
Special distributions (614,302) (6,205) (620,507)
-------------------------------------------------------------------
Capital as of December 31, 1997 356,210 -- 356,210
Net income 3,098 3,086 6,184
Special distributions (305,544) (3,086) (308,630)
-------------------------------------------------------------------
Capital as of March 31, 1998 $ 53,764 $ -- $ 53,764
===================================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31,
1998 1997
------------------------------------
Operating activities
Net income $ 6,184 $ 130,312
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation -- 23,510
Net gain on disposition of equipment (1,366) (114,482)
Changes in operating assets and liabilities:
Accounts receivable, net 7,704 8,190
Prepaid insurance 189 686
Accounts payable and accrued expenses (12,977) (3,863)
Due to affiliates (4,641) --
Lessee deposits and engine reserves -- 13,385
-----------------------------------------
Net cash (used in) provided by operating activities (4,907) 57,738
-----------------------------------------
Investing activities
Proceeds from disposition of equipment 5,417 174,706
Net cash provided by investing activities 5,417 174,706
-----------------------------------------
Financing activities
Cash distributions paid to Beneficiaries (formerly limited
partners) (305,544) (96,200)
Cash distributions paid to Beneficiary (formerly General Partner) (3,086) (972)
-----------------------------------------
Net cash used in financing activities (308,630) (97,172)
-----------------------------------------
Net (decrease) increase in cash and cash equivalents (308,120) 135,272
Cash and cash equivalents at beginning of period 358,630 269,628
-----------------------------------------
Cash and cash equivalents at end of period $ 50,510 $ 404,900
=========================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
1. Liquidation of the Partnership
With the disposal of the majority of the equipment portfolio, the
Partnership's remaining assets were transferred into a liquidating trust on
January 1, 1998. The sole Beneficiaries of the liquidating trust are the
limited partners and the General Partner. The Trustees, as designated by
the General Partner, are three officers of the General Partner. The amounts
reflected as assets and liabilities of the Trust have not been adjusted to
reflect liquidation values. The equipment portfolio that is actively being
marketed for sale by the Trustees continues to be carried at the lower of
depreciated cost or fair value less estimated cost of disposal. Although
the Trustees estimate that there will be distributions to the Beneficiaries
after final disposal of assets and settlement of liabilities, the amounts
cannot be determined prior to actual disposal of the equipment. Cash
receipts (including proceeds from the sale of assets) in excess of expected
obligations and reasonable reserves will be distributed to the
Beneficiaries in the liquidating trust from time to time, and not less
often than annually. Upon final liquidation, the liquidating trust will be
dissolved.
For tax purposes, the liquidating trust will continue to be treated as a
partnership under Internal Revenue Regulation Section 301.7701-3(b)(1)(i).
Partnership tax returns will be filed until all the liquidating trust
assets are distributed.
The Trustees applied to the Securities and Exchange Commission (SEC) to
terminate the Trust's obligation to file future reports on Form 10-Q and
Form 10-K. If approved by the SEC, the Trustees will discontinue all future
filings of these reports.
2. Opinion of Management
In the opinion of the Trustees, the accompanying unaudited financial
statements contain all adjustments necessary, consisting primarily of
normal recurring accruals, to present fairly the Trust's or Partnership's
financial position as of March 31, 1998 and December 31, 1997, the
statements of operations and cash flows for the three months ended March
31, 1998 and 1997, and the statements of changes in capital for the period
from December 31, 1996 to March 31, 1998. Certain information and note
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 Annual Report on Form 10-K for the year
ended December 31, 1997, on file at the Securities and Exchange Commission.
3. Equipment
The components of owned equipment are as follows:
March 31, December 31,
1998 1997
----------------------------------------
Trailers $ 288,612 $ 304,133
Less accumulated depreciation (288,538 ) (304,133 )
--------------------------------------------
Net equipment $ 74 $ --
============================================
All of the equipment owned by the Trust or Partnership was operating in
PLM-affiliated short-term rental facilities as of March 31, 1998 and December
31, 1997.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIB 1985 INCOME FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
3. Equipment (continued)
During the first quarter of 1998, the Trust repossessed a trailer, that had
been sold for a gain of $4,051 in 1997, due to a collection problem.
During the three months ended March 31, 1998, the Trust sold or disposed of
trailers with an aggregate net book value of $0 for proceeds of $5,417.
During the three months ended March 31, 1997, the Partnership sold or
disposed of railcars, trailers, and marine containers with an aggregate net
book value of $60,224 for proceeds of $174,706.
4. Cash Distributions
The Trust paid special distributions of $13.72 per weighted-average unit
during the first quarter of 1998. The Partnership paid cash distributions
of $4.32 per weighted-average unit during the first quarter of 1997.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
March 31, December 31,
1998 1997
--------------------------------------
Assets
Equipment held for operating leases, at cost $ 951,998 $ 1,295,164
Less accumulated depreciation (946,948) (1,291,640)
-------------------------------------------
Net equipment 5,050 3,524
Cash and cash equivalents 131,076 191,228
Accounts receivable, net of allowance for doubtful accounts of
$3,695 in 1998 and $3,227 in 1997 14,841 25,630
Prepaid insurance 559 913
-------------------------------------------
Total assets $ 151,526 $ 221,295
===========================================
Liabilities and partners' capital
Liabilities:
Accounts payable and accrued expenses $ 4,595 $ 9,928
Due to affiliates 7,026 7,026
Total liabilities 11,621 16,954
Partners' capital:
Limited partners (33,727 units) 139,905 204,341
General Partner -- --
-------------------------------------------
Total partners' capital 139,905 204,341
-------------------------------------------
Total liabilities and partners' capital $ 151,526 $ 221,295
===========================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND
(A Limited Partnership)
STATEMENTS OF INCOME
For the Three Months
Ended March 31,
1998 1997
----------------------------------
Revenues
Lease revenue $ 30,716 $ 72,195
Interest and other income 2,636 4,318
Net gain on disposition of equipment 58,617 40,958
------------------------------------
Total revenues 91,969 117,471
Expenses
Depreciation 109 55,082
Management fees to affiliate 21,079 21,079
Repairs and maintenance 4,609 14,825
Insurance expense 354 1,431
General and administrative expenses to affiliates 9,029 23,305
Other general and administrative expenses 6,723 12,760
Provision for (recovery of) bad debts 468 (21)
------------------------------------
Total expenses 42,371 128,461
Equity in net income of unconsolidated special-purpose entities 27,196 12,956
------------------------------------
Net income $ 76,794 $ 1,966
====================================
Partners' share of net income
Limited partners $ 75,382 $ 1,946
General Partner 1,412 20
------------------------------------
Total $ 76,794 $ 1,966
====================================
Net income per weighted-average limited partnership
unit (33,727 units) $ 2.24 $ 0.06
====================================
Cash distributions $ -- $ 75,660
====================================
Cash distribution per weighted-average
limited partnership unit $ -- $ 2.22
====================================
Special cash distributions $ 141,230 $ 100,000
====================================
Special cash distributions per weighted-average
limited partnership unit $ 4.15 $ 2.94
====================================
Total cash distributions per weighted-average
limited partnership unit $ 4.15 $ 5.16
====================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC INCOME FUND
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the period from December 31, 1996 to March 31,
1998
Limited General
Partners Partner Total
---------------------------------------------------------------
Partners' capital (deficit) as of
December 31, 1996 $ 913,500 $ (140,776) $ 772,724
Net income 193,401 149,893 343,294
Cash distributions (74,903) (757) (75,660)
Special distributions (827,657) (8,360) (836,017)
--------------------------------------------------------------------
Partners' capital as of December 31, 1997 204,341 -- 204,341
Net income 75,382 1,412 76,794
Special distributions (139,818) (1,412) (141,230)
--------------------------------------------------------------------
Partners' capital at March 31, 1998 $ 139,905 $ -- $ 139,905
====================================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31,
1998 1997
------------------------------------
Operating activities
Net income $ 76,794 $ 1,966
Adjustment to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 109 55,082
Net gain on disposition of equipment (58,617 ) (40,958)
Equity in net income from unconsolidated special-purpose
entity (27,196 ) (12,956)
Changes in operating assets and liabilities
Accounts receivable, net 13,789 11,215
Prepaid insurance 354 1,006
Accounts payable and accrued expenses (5,333 ) (3,010)
-----------------------------------------
Net cash (used in) provided by operating activities (100 ) 12,345
-----------------------------------------
Investing activities
Proceeds from disposition of equipment 53,982 51,023
Distributions from unconsolidated special-purpose entity 27,196 39,706
-----------------------------------------
Net cash provided by investing activities 81,178 90,729
-----------------------------------------
Financing activities
Cash distributions paid to limited partners (139,818 ) (173,903)
Cash distributions paid to General Partner (1,412 ) (1,757)
-----------------------------------------
Net cash used in financing activities (141,230 ) (175,660)
-----------------------------------------
Net decrease in cash and cash equivalents (60,152 ) (72,586)
Cash and cash equivalents at beginning of period 191,228 416,360
-----------------------------------------
Cash and cash equivalents at end of period $ 131,076 $ 343,774
=========================================
Supplemental information
Sale proceeds included in accounts receivable $ 3,000 $ --
=========================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
1. Liquidation and Special Distributions
During the first quarter of 1995, the Partnership completed its 10th year
of operations. Since that date, the General Partner has been 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 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 estimated
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 three months ended March 31, 1998, and 1997, the Partnership
paid special distributions of $4.15 and $2.94 per weighted-average limited
partnership unit, respectively. During the three months ended March 31,
1997, the Partnership paid regular cash distributions of $2.22 per
weighted-average limited partnership unit.
2. Opinion of Management
In the opinion of the management of PLM Financial Services Inc., the
General Partner, the accompanying unaudited financial statements contain
all adjustments necessary, consisting primarily of normal recurring
accruals, to present fairly the Partnership's financial position as of
March 31, 1998 and December 31, 1997, the statements of income and cash
flows for the three months ended March 31, 1998 and 1997, and the
statements of changes in partners' capital for the period from December 31,
1996 to March 31, 1998. Certain information and note 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, 1997, on file at the Securities and Exchange Commission.
3. Equipment
The components of owned equipment are as follows:
March 31, December 31,
1998 1997
-----------------------------------------
Trailers $ 951,998 $ 1,295,164
Less accumulated depreciation (946,948) (1,291,640 )
-------------------------------------------
Net equipment $ 5,050 $ 3,524
===========================================
All of the equipment owned by the Partnership was operating in
PLM-affiliated short-term rental facilities as of March 31, 1998 and December
31, 1997.
PLM TRANSPORTATION EQUIPMENT PARTNERS VIIC 1985 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
3. Equipment (continued)
During the three months ended March 31, 1998, the Partnership sold or
disposed of trailers with a net book value of $0 for proceeds of $56,982.
During the three months ended March 31, 1997, the Partnership sold or
disposed of trailers with a net book value of $10,065 for proceeds of
$51,023.
4. Investment in Unconsolidated Special Purpose Entity
The net investment in unconsolidated special-purpose entity consisted of an
80% interest in a commuter aircraft as of March 31, 1998 and December 31,
1997. As of March 31, 1998 and December 31, 1997, the net book value of
this investment was $0.
Subsequent Event
During May of 1998, the General Partner sold the commuter aircraft in which
the Partnership owned an 80% interest for proceeds of $391,820. The net
book value of this investment was $0.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(I) RESULTS OF OPERATIONS
Comparison of the Trust's Operating Results for the Three Months Ended March 31,
1998 and 1997
TEP VIIB:
(A) Owned Equipment Operations
Lease revenues less direct expenses (defined as repairs and maintenance and
asset specific insurance expenses) on owned equipment decreased for the quarter
ended March 31, 1998 when compared to the same period of 1997. The following
table presents lease revenues less direct expenses by owned equipment type:
For the Three Months
Ended March 31,
1998 1997
-----------------------------------
Trailers $ 11,285 $ 76,569
Railcar equipment -- 3,565
Marine containers -- 1,343
Trailers: Trailer lease revenues and direct expenses were $13,458 and $2,173,
respectively, for the quarter ended March 31, 1998, compared to $93,461 and
$16,892, respectively, during the same period of 1997. The number of trailers
has been declining over the past twelve months due to sales and dispositions.
The result of this declining fleet has been a decrease in trailer net
contribution.
Railcar equipment: Railcar lease revenues and direct expenses were zero for
quarter ended March 31, 1998, compared to $3,661 and $96, respectively, during
the same period of 1997. The decrease in railcar contribution resulted from the
sale of all of the remaining railcars during 1997.
Marine containers: Marine container lease revenues and direct expenses were zero
for the quarter ended March 31, 1998, compared to $1,361 and $18, respectively,
during the same period of 1997. The decrease in marine containers contribution
resulted from the sale of all of the remaining containers during 1997.
(B) Indirect Expenses Related to Owned Equipment Operations
Total indirect expenses of $9,777 for the quarter ended March 31, 1998,
decreased from $69,175 for the same period in 1997. Significant variances are
explained as follows:
(a) A $23,510 decrease in depreciation expenses reflecting the disposition of
equipment during 1998 and 1997 and the remaining equipment being fully
depreciated.
(b) A $19,522 decrease in general and administrative expenses was due to
decreased accounting costs and administrative costs associated with the
short-term rental facilities due to decreased volume of trailers operating in
these facilities.
(c) A $13,922 decrease in management fees to affiliates due to the transfer of
the remaining assets into a liquidating trust. The Trustees are not entitled to
a management fee.
(d) A $2,333 decrease in bad debt expense primarily reflecting the Partnership's
recovery of certain receivable balances previously reserved for as bad debts.
(C) Net Gain on Disposition of Equipment
For the quarter ended March 31, 1998, the Trust realized a gain of $1,366 on the
sale or disposition of trailers. For the quarter ended March 31, 1997, the
Partnership realized a gain of $114,482 on the sale or disposition of trailers,
railcars and marine containers.
(D) Net Income
As a result of the foregoing, the net income of $6,184 in the first quarter of
1998 decreased from net income of $130,312 in the first quarter of 1997. The
Trust's ability to operate or liquidate assets, secure leases, and re-lease
those assets whose leases expire during the duration of the Trust is subject to
many factors, and the Trust's performance in the first quarter of 1998 is not
necessarily indicative of future periods. In the first quarter of 1998, the
Trust distributed $305,544 to the beneficiaries, or $13.72 per weighted-average
unit.
TEP VIIC:
(A) Owned Equipment Operations
Lease revenues less direct expenses (defined as repairs and maintenance and
asset specific insurance expenses) on owned equipment decreased for the quarter
ended March 31, 1998 when compared to the same period of 1997. The following
table presents lease revenues less direct expenses by owned equipment type:
For the Three Months
Ended March 31,
1998 1997
-----------------------------------
Trailers $ 26,107 $ 55,187
Marine containers -- 1,298
Trailers: Trailer lease revenues and direct expenses were $30,716 and $4,609,
respectively, for the quarter ended March 31, 1998, compared to $70,855 and
$15,668, respectively during the same period during 1997. The number of trailers
owned by the Partnership has been declining over the past twelve months due to
sales and dispositions. The result of this declining fleet has been a decrease
in trailer net contribution.
Marine containers: Marine container lease revenues and direct expenses were zero
for the quarter ended March 31, 1998, compared to $1,340 and $42, respectively
during the same period during 1997. The decrease in marine containers
contribution resulted from the sale of all of the remaining containers during
1997.
(B) Indirect Expenses Related to Owned Equipment Operations
Total indirect expenses of $37,762 for the quarter ended March 31, 1998,
decreased from $112,751 for the same period in 1997. Significiant variances are
explained as follows:
(a) A $54,973 decrease in depreciation expenses reflecting the disposition of
certain assets during 1998 and 1997.
(b) A $20,313 decrease in the general and administrative expenses due to
decreased accounting costs and administrative costs associated with the
short-term rental facilities due to decreased volume of trailers operating in
these facilities.
(C) Net Gain on Disposition of Equipment
For the quarter ended March 31, 1998, the Partnership realized a gain of $58,617
on the sale or disposition of trailers. During the three months ended March 31,
1997, the Partnership realized a gain of $40,958 on the sale or disposition of
trailers.
(D) Equity in Net Income of Unconsolidated Special-Purpose Entity
Equity in net income of unconsolidated special-purpose entity of $27,196 and
$12,956 for the quarter ended March 31, 1998 and March 31, 1997, respectively,
represents the Partnership's share of income generated from the investment in an
entity which owns an aircraft, accounted for under the equity method. As of
March 31, 1998 and 1997, the Partnership's investment in unconsolidated
special-purpose entity consisted of an 80% interest in an entity which owns a
commuter aircraft.
(E) Net Income
The Partnership's net income increased to $76,794 in the first quarter of 1998
from $1,966 in the first quarter of 1997. The Partnership's ability to operate
or liquidate assets, secure leases, and re-lease those assets whose leases
expire during the duration of the Partnership is subject to many factors, and
the Partnership's performance in the first quarter of 1998 is not necessarily
indicative of future periods. In the first quarter of 1998, the Partnership made
special distributions of $139,818 to the limited partners, or $4.15 per
weighted-average limited partnership unit.
(II) ASSET SALES
As discussed in Note 1 to each of the accompany financial statements and (V)
below, the remaining equipment is actively being marketed for sale.
(III) YEAR 2000 COMPLIANCE
The Trustees or General Partner are currently addressing the year 2000 computer
software issue and creating a timetable for carrying out any program
modifications that may be required. It is not anticipated that the cost of those
modifications allocable to the Trust or Partnership will be material.
(IV) ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued two new
statements: SFAS No. 130, "Reporting Comprehensive Income," which requires
enterprises to report, by major component and in total, all changes in equity
from nonowner sources; and SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes annual and interim
reporting standards for a public company's operating segments and related
disclosures about its products, services, geographic areas, and major customers.
Both statements are effective for the Trust or Partnership's fiscal year ended
December 31, 1998. The effect of adoption of these statements will be limited to
the form and content of the Trust's or Partnership's disclosures and will not
impact the Trust's or Partnership's results of operations, cash flow, or
financial position.
(V) FUTURE OUTLOOK
With the majority of the equipment portfolio now liquidated, TEP VIIB's
remaining assets were transferred into a liquidating trust as of January 1, 1998
(see Note 1) of the accompany financial statements. Any excess proceeds over
expected obligations will be distributed to the Beneficiaries in the liquidating
trust. For TEP VIIC, the General Partner is actively pursuing the sale of all of
the Partnerships' equipment with the intention of winding up the Partnership and
distributing all available cash to the Partners.
(VI) 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 Partnerships' 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 Partnerships' 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 and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PLM TRANSPORTATION EQUIPMENT
PARTNERS VIIC 1985 INCOME FUND
Date: May 14, 1998 By: /s/ Stephen M. Bess
-------------------
Stephen M. Bess
Trustee