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, 1996.
[ ] 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 0-15437
-----------------------
PLM Transportation Equipment Partners IXA 1986
Income Fund
(Exact name of registrant as specified in its charter)
California 94-2992018
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Market, Steuart Street Tower
Suite 900, San Francisco, CA 94105-1301
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code (415) 974-1399
-----------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ______
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
March 31, December 31,
1996 1995
----------------------------------------
Equipment held for operating leases, at cost $ 4,237,326 $ 4,242,401
Less accumulated depreciation (3,616,760) (3,567,969)
----------------------------------------
Net equipment 620,566 674,432
Cash and cash equivalents 230,787 251,709
Accounts receivable, net of allowance for doubtful
accounts of $57,376 in 1996 and $57,022 in 1995 80,558 107,933
Net investment in sales-type lease -- 1,003,564
Due from affiliates 2,941 2,941
Prepaid insurance 2,160 3,544
----------------------------------------
Total assets $ 937,012 $ 2,044,123
========================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable $ 9,969 $ 23,272
Prepaid deposits 1,756 20,028
----------------------------------------
Total liabilities 11,725 43,300
Partners' capital (deficit):
Limited Partners (24,285 units) 1,022,989 2,087,769
General Partner (97,702) (86,946)
----------------------------------------
Total partners' capital 925,287 2,000,823
----------------------------------------
Total liabilities and partners' capital $ 937,012 $ 2,044,123
========================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
1996 1995
------------------------------
Revenues:
Lease revenue $ 111,137 $ 120,093
Interest and other income 10,965 4,074
Gain on disposition of equipment 2,669 9,545
--------------------------------
Total revenues 124,771 133,712
Expenses:
Depreciation 53,234 101,860
Management fees to affiliate 16,026 15,178
Repairs and maintenance 11,994 81,511
General and administrative
expenses to affiliates 23,657 30,679
Other general and administrative expenses 20,931 11,983
--------------------------------
Total expenses 125,842 241,211
--------------------------------
Net loss $ (1,071) $ (107,499)
================================
Partners' share of net loss
Limited Partners - 99% $ (1,060) $ (106,424)
General Partner - 1% (11) (1,075)
--------------------------------
Total $ (1,071) $ (107,499)
================================
Net loss per Limited
Partnership Unit - 24,285 units $ (0.04) $ (4.38)
================================
Cash distributions $ 74,465 $ 74,476
================================
Cash distributions per Limited
Partnership Unit $ 3.04 $ 3.04
================================
Special cash distributions $ 1,000,000 $ --
================================
Special cash distributions per
Limited Partnership Unit $ 40.77 $ --
================================
Total cash distribution per
Limited Partnership Unit $ 43.81 $ 3.04
================================
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, 1994 to March 31, 1996
Limited General
Partners Partners Total
-----------------------------------------------------
Partners' capital (deficit)
at December 31, 1994 $ 1,913,772 $ (88,703) $ 1,825,069
Net income 468,887 4,736 473,623
Cash distributions (294,890) (2,979) (297,869)
--------------------------------------------------------
Partners' capital (deficit)
at December 31, 1995 2,087,769 (86,946) 2,000,823
Net loss (1,060) (11) (1,071)
Quarterly cash distributions (73,720) (745) (74,465)
Special distributions (990,000) (10,000) (1,000,00)
--------------------------------------------------------
Partners' capital (deficit)
at March 31, 1996 $ 1,022,989 (97,702) 925,287
========================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the three months
ended March 31,
1996 1995
----------------------------------
Operating activities:
Net loss $ (1,071) $ (107,499)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Gain on disposition of equipment (2,669) (9,545)
Depreciation 53,234 101,860
Changes in operating assets and liabilities
Accounts receivable, net 27,375 12,052
Due to/from affiliates -- (9,860)
Prepaid insurance 1,384 746
Accounts payable (13,303) 515
Prepaid deposits (18,272) 3,501
-----------------------------------
Cash provided by (used in ) operating activities 46,678 (8,230)
-----------------------------------
Investing activities:
Proceeds from disposition of equipment 3,301 26,353
Payments received on sales-type lease 1,003,564 --
Payments for purchase of capital improvements -- (876)
-----------------------------------
Cash provided by investing activities 1,006,865 25,477
-----------------------------------
Cash flows used in financing activities:
Cash distributions paid to partners (1,074,465) (74,476)
-----------------------------------
Cash and cash equivalents:
Net decrease in cash and cash equivalents (20,922) (57,229)
Cash and cash equivalents at beginning of period 251,709 298,718
-----------------------------------
Cash and cash equivalents at end of period $ 230,787 $ 241,489
===================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
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 only of normal recurring accruals, to present fairly the
Partnership's financial position as of March 31, 1996, the statements of
operations and cash flows for the three months ended March 31, 1996 and 1995,
the statements of changes in partners' capital for the period from December 31,
1994 to March 31, 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, 1995, on file at the
Securities and Exchange Commission.
2. Equipment
Equipment held for operating leases is stated at cost. The components of
equipment are as follows:
March 31, December 31,
1996 1995
-------------------------------------
Rail equipment $ 783,870 $ 783,870
Marine containers 1,415,797 1,420,872
Trailers 2,037,659 2,037,659
-------------------------------------
4,237,326 4,242,401
Less accumulated depreciation (3,616,760) (3,567,969)
-------------------------------------
Net equipment $ 620,566 $ 674,432
=====================================
All equipment was either on lease or operating in PLM affiliated short-term
rental facilities except one hand forklift with a net carrying value of $48,352
as of March 31, 1996. All equipment was either on lease or operating in
PLM-affiliated short-term rental facilities as of December 31, 1995.
During the three months ended March 31, 1996, the Partnership sold or disposed
of one marine container with an aggregate book value of $633 for proceeds of
$673. In addition, additional proceeds of $2,629 was received for the commuter
aircraft which was under sales-type lease. During the three months ended March
31, 1995, the Partnership sold or disposed of one trailer, and two marine
containers with an aggregate book value of $16,808 for proceeds of $26,353.
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 periodicially 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 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
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
3. Liquidation and special distributions (continued)
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, 1996, the General Partner paid special
distributions of $40.77 per Limited Partnership Unit which were the result of
proceeds from the sale of the commuter aircraft. No special distributions was
paid during the three months ended March 31, 1995. 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 limited 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 sale of that asset, and, in some leases, the ability of the lessee
to exercise purchase options.
4. Investment in Sales-type Lease
On May 30, 1995, the Partnership entered into a sales-type lease for the purpose
of selling a commuter aircraft. The lease was structured with a one year term
commencing June 1995. The lessee was to make monthly payments of $19,500. Gross
lease payments of $234,000 were to be received over a one year period,
commencing in June 1995, with an additional balloon payment of $919,012 due at
the end of the lease term. During the first quarter of 1996, the lessee
exercised its option to buy the aircraft for approximately $1 million.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
March 31, December 31,
1996 1995
--------------------------------------
Equipment held for operating leases, at cost $ 2,742,323 $ 2,908,067
Less accumulated depreciation (2,304,426) (2,408,060)
--------------------------------------
Net equipment 437,897 500,007
Cash and cash equivalents 331,957 351,363
Investment in unconsolidated special purpose entity 201,303 222,128
Accounts receivable, net of allowance for doubtful
accounts of $24,838 in 1996 and $29,460 in 1995 72,373 82,668
Prepaid insurance 1,491 2,447
--------------------------------------
Total assets $ 1,045,021 $ 1,158,613
======================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 3,637 $ 3,637
Accounts payable and other liabilities 69,660 72,569
Prepaid deposits 23,142 16,248
--------------------------------------
Total liabilities 96,439 92,454
Partners' capital (deficit):
Limited Partners (17,460 units) 1,015,963 1,132,364
General Partner (67,381) (66,205)
--------------- ---------------
Total partners' capital 948,582 1,066,159
--------------------------------------
Total liabilities and partners' capital $ 1,045,021 $ 1,158,613
======================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
1996 1995
------------------------------
Revenues:
Lease revenue $ 77,492 $ 145,558
Interest and other income 4,095 6,291
Gain on disposition of equipment 11,851 17,544
------------------------------
Total revenues 93,438 169,393
Expenses:
Depreciation 38,369 71,098
Management fees to affiliate 10,913 10,913
Repairs and maintenance 9,218 17,006
General and administrative
expenses to affiliates 19,388 29,293
Other general and administrative expenses 10,509 42,442
------------------------------
Total expenses 88,397 170,752
Equity in net loss of unconsolidated special
purpose entity (20,867) --
------------------------------
Net loss $ (15,826) $ (1,359)
==============================
Partners' share of net loss
Limited Partners - 99% $ (15,668) $ (1,345)
General Partner - 1% (158) (14)
------------------------------
Total $ (15,826) $ (1,359)
==============================
Net loss per Limited
Partnership Unit - 17,460 units $ (0.90) $ (0.08)
==============================
Cash distributions $ 101,751 $ 135,525
==============================
Cash distributions per Limited
Partnership Unit $ 5.77 $ 7.68
==============================
Special distributions $ -- $ 100,000
==============================
Special distributions per Limited
Partnership Unit $ -- $ 5.67
==============================
Total distributions per Limited
Partnership Unit $ 5.77 $ 13.35
==============================
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, 1994 to March 31, 1996
Limited General
Partners Partners Total
-----------------------------------------------------
Partners' capital (deficit)
at December 31, 1994 $ 1,717,622 $ (60,293) $ 1,657,329
Net income 82,176 830 83,006
Cash distributions (667,434) (6,742) (674,176)
-----------------------------------------------------
Partners' capital (deficit)
at December 31, 1995 1,132,364 (66,205) 1,066,159
Net loss (15,668) (158) (15,826)
Cash distributions (100,733) (1,018) (101,751)
-----------------------------------------------------
Partners' capital (deficit)
at March 31, 1996 $ 1,015,963 (67,381) 948,582
=====================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the three months ended
March 31,
1996 1995
---------------------------------
Operating activities:
Net loss $ (15,826) $ (1,359)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Gain on disposition of equipment (11,851) (17,544)
Depreciation 38,369 71,098
Cash distributions from unconsolidated special
purpose entity in excess of income accrued 20,825 --
Changes in operating assets and liabilities:
Accounts receivable, net 10,295 23,643
Prepaid insurance 956 663
Due to affiliates -- (3,825)
Accounts payable (2,909) (7,096)
Prepaid deposits 6,894 609
---------------------------------
Cash provided by operating activities 46,753 66,189
---------------------------------
Investing activities:
Proceeds from disposition of equipment 35,592 28,941
---------------------------------
Cash provided by investing activities 35,592 28,941
Cash flows used in financing activities:
Cash distributions paid to partners (101,751) (235,525)
---------------------------------
Cash and cash equivalents:
Net decrease in cash and cash equivalents (19,406) (140,395)
Cash and cash equivalents at beginning of period 351,363 492,060
---------------------------------
Cash and cash equivalents at end of period $ 331,957 $ 351,665
=================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
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 only of normal recurring accruals, to present fairly the
Partnership's financial position as of March 31, 1996, the statements of
operations and cash flows for the three months ended March 31, 1996 and 1995,
the statements of changes in partners' capital for the period from December 31,
1994 to March 31, 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, 1995, on file at the
Securities and Exchange Commission.
2. Equipment
Owned equipment held for operating leases is stated at cost. The components of
owned equipment are as follows:
March 31, December 31,
1996 1995
-----------------------------------
Rail equipment $ 867,300 $ 867,300
Marine containers 367,784 413,633
Trailers and tractors 1,507,239 1,627,134
-----------------------------------
2,742,323 2,908,067
Less accumulated depreciation (2,304,426) (2,408,060)
-----------------------------------
Net equipment $ 437,897 $ 500,007
===================================
With the exception of one sidelift with an aggregate net carrying value of
$66,340, all equipment was either on lease or operating in PLM affiliated
short-term rental facilities as of March 31, 1996. With the exception of one
trailer and one sidelift with a carrying value of $79,024, all equipment was on
lease or operating in PLM affiliated short-term rental facilities as of December
31, 1995.
During the three months ended March 31, 1996, the Partnership sold or disposed
of three trailers and two marine containers with an aggregate net book value of
$23,741 for proceeds of $35,592. During the three months ended March 31, 1995,
the Partnership sold or disposed of one trailer and one marine container with an
aggregate net book value of $11,397 for proceeds of $28,941.
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 periodicially 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
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
3. Liquidation and special distributions (continued)
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 three months ended March 31, 1995, the General Partner paid special
distributions of $5.67 per Limited Partnership Unit which were the result of
proceeds from equipment liquidations. 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 limited
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 sale of
that asset, and, in some leases, the ability of the lessee to exercise purchase
options.
4. Investment in Unconsolidated Special Purpose Entity
Prior to 1996, the Partnership accounted for operating activities associated
with joint ownership of rental equipment as undivided interests, including its
proportionate share of each asset with similar wholly-owned assets in its
financial statements. Under generally accepted accounting principles, the
effects of such activities, if material, should be reported using the equity
method of accounting. Therefore, effective January 1, 1996, the Partnership
adopted the equity method to account for its investment in such jointly-held
assets.
The principle differences between the previous accounting method and the equity
method relates to the presentation of activities relating to these assets in the
statement of operations. Whereas, under equity accounting the Partnership's
proportionate share is presented as a single net amount, "equity in net income
(loss) of unconsolidated special purpose entities", under the previous method,
the Partnership's statement of operations reflected its proportionate share of
each individual item of revenue and expense. Accordingly, the effect of adopting
the equity method of accounting has no cumulative effect on previously reported
partner's capital or on the Partnership's net income (loss) for the period of
adoption. Because the effects on previously issued financial statements of
applying the equity method of accounting to investments in jointly-owned assets
are not considered to be material to such financial statements taken as a whole,
previously issued financial statements have not been restated. However, certain
items have been reclassified in the previously issued balance sheet to conform
to the current period presentation.
The net investment in unconsolidated special purpose entity includes a 50%
interest in a commuter aircraft.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
March 31, December 31,
1996 1995
----------------------------------------
Equipment held for operating leases, at cost $ 3,984,540 $ 4,007,465
Less accumulated depreciation (3,389,289) (3,354,708)
----------------------------------------
Net equipment 595,251 652,757
Cash and cash equivalents 184,970 248,504
Investment in unconsolidated special purpose entity 145,284 133,363
Accounts receivable, net of allowance for doubtful
accounts of $5,451 in 1996 and $9,684 in 1995 64,300 104,717
Prepaid insurance and other assets 32,773 22,438
----------------------------------------
Total assets $ 1,022,578 $ 1,161,779
========================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 3,523 $ 3,523
Accounts payable 10,680 12,939
---------------------------------------
Total liabilities 14,203 16,462
Partners' capital (deficit):
Limited Partners (16,914 units) 1,072,754 1,208,326
General Partner (64,379) (63,009)
-------------- ---------------
Total partners' capital 1,008,375 1,145,317
---------------------------------------
Total liabilities and partners' capital $ 1,022,578 $ 1,161,779
=======================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
1996 1995
------------------------------
Revenues:
Lease revenue $ 106,638 $ 190,510
Interest and other income 2,915 6,541
Gain on disposition of equipment 1,688 236,072
------------------------------
Total revenues 111,241 433,123
Expenses:
Depreciation 53,986 75,473
Management fees to affiliate 11,434 13,649
Repairs and maintenance 33,878 48,958
General and administrative
expenses to affiliates 31,942 48,283
Other general and administrative expenses 5,620 8,542
------------------------------
Total expenses 136,860 194,905
Equity in net loss of unconsolidated special
purpose entity (12,550) --
------------------------------
Net income (loss) $ (38,169) $ 238,218
==============================
Partners' share of net income (loss):
Limited Partners - 99% $ (37,787) $ 235,836
General Partner - 1% (382) 2,382
------------------------------
Total $ (38,169) $ 238,218
==============================
Net income (loss) per Limited
Partnership Unit (16,914 units) $ (2.23) $ 13.94
==============================
Cash distributions $ 98,773 $ 105,023
==============================
Cash distributions per Limited
Partnership Unit $ 5.78 $ 6.15
==============================
Special distributions $ - $ 50,000
==============================
Special distributions per Limited
Partnership Unit $ -- $ 2.93
==============================
Total distributions per Limited
Partnership Unit $ 5.78 $ 9.08
==============================
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, 1994 to March 31, 1996
Limited General
Partners Partners Total
-------------------------------------------------------
Partners' capital (deficit)
at December 31, 1994 $ 1,849,276 $ (56,534) $ 1,792,742
Net income 256,946 2,595 259,541
Cash distributions (897,896) (9,070) (906,966)
-------------------------------------------------------
Partners' capital (deficit)
at December 31, 1995 1,208,326 (63,009) 1,145,317
Net loss (37,787) (382) (38,169)
Cash distributions (97,785) (988) (98,773)
-------------------------------------------------------
Partners' capital (deficit)
at March 31, 1996 $ 1,072,754 (64,379) 1,008,375
=======================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the three months ended
March 31,
1996 1995
---------------------------------
Operating activities:
Net (loss) income $ (38,169) $ 238,218
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Gain on disposition of equipment (1,688) (236,072)
Depreciation 53,986 75,473
Loss from unconsolidated special purpose entity
in excess of cash distributions (11,921) --
Change in operating assets and liabilities
Accounts receivable, net 40,417 53,523
Due from affiliates -- 260
Prepaid deposits and reserves -- (25,207)
Prepaid expenses and other assets (10,335) 2,087
Accounts payable and other liabilities (2,259) 8,457
---------------------------------
Cash provided by operating activities 30,031 116,739
---------------------------------
Investing activities:
Proceeds from disposition of equipment 5,208 503,260
---------------------------------
Cash provided by investing activities 5,208 503,260
---------------------------------
Cash flows used in financing activities:
Cash distributions paid to partners (98,773) (155,023)
---------------------------------
Cash and cash equivalents:
Net (decrease) increase in cash and cash equivalents (63,534) 464,976
Cash and cash equivalents at beginning of period 248,504 312,230
---------------------------------
Cash and cash equivalents at end of period $ 184,970 $ 777,206
=================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
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 only of normal recurring accruals, to present fairly the
Partnership's financial position as of March 31, 1996, the statements of
operations and cash flows for the three months ended March 31, 1996 and 1995,
the statements of changes in partners' capital for the period from December 31,
1994 to March 31, 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, 1995, on file at the
Securities and Exchange Commission.
2. Equipment
Equipment held for operating leases is stated at cost.
The components of owned equipment are as follows:
March 31, December 31,
1996 1995
-------------------------------------
Rail equipment $ 178,501 $ 178,501
Marine containers 114,623 137,548
Trailers and tractors 3,691,416 3,691,416
-------------------------------------
3,984,540 4,007,465
Less accumulated depreciation (3,389,289) (3,354,708)
-------------------------------------
Net equipment $ 595,251 $ 652,757
=====================================
All of the equipment was either on lease or operating in PLM-affiliated
short-term rental facilities as of March 31, 1996. With the exception of two
trailers with a carrying value of $16,119, all of the equipment was either on
lease or operating in PLM affiliated short-term rental facilities as of December
31, 1995.
During the three months ended March 31, 1996, the Partnership sold or disposed
of one marine container with net book value of $3,520 for proceeds of $5,208.
During the three months ended March 31, 1995, the Partnership sold or disposed
of five twin stack railcars with a net book value of $267,188 for proceeds of
$503,260.
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 periodicially 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
March 31, 1996
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 three months ended March 31, 1995, the General Partner paid special
distributions of $2.93 per Limited Partnership Unit which were the result of
proceeds from equipment liquidations. 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 limited
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 sale of
that asset, and, in some leases, the ability of the lessee to exercise purchase
options.
4. Investment in Unconsolidated Special Purpose Entity
Prior to 1996, the Partnership accounted for operating activities associated
with joint ownership of rental equipment as undivided interests, including its
proportionate share of each asset with similar wholly-owned assets in its
financial statements. Under generally accepted accounting principles, the
effects of such activities, if material, should be reported using the equity
method of accounting. Therefore, effective January 1, 1996, the Partnership
adopted the equity method to account for its investment in such jointly-held
assets.
The principle differences between the previous accounting method and the equity
method relates to the presentation of activities relating to these assets in the
statement of operations. Whereas, under equity accounting the Partnership's
proportionate share is presented as a single net amount, "equity in net income
(loss) of unconsolidated special purpose entities", under the previous method,
the Partnership's statement of operations reflected its proportionate share of
each individual item of revenue and expense. Accordingly, the effect of adopting
the equity method of accounting has no cumulative effect on previously reported
partner's capital or on the Partnership's net income (loss) for the period of
adoption. Because the effects on previously issued financial statements of
applying the equity method of accounting to investments in jointly-owned assets
are not considered to be material to such financial statements taken as a whole,
previously issued financial statements have not been restated. However, certain
items have been reclassified in the previously issued balance sheet to conform
to the current period presentation.
The net investment in unconsolidated special purpose entity includes a 30%
interest in a commuter aircraft.
At March 31, 1996, the jointly owned commuter aircraft was subject to a pending
sale contract and considered held for sale. The Partnership's $135,922
investment in this asset is reported in "investment in unconsolidated special
purpose entity".
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
5. Subsequent Event
The jointly owned commuter aircraft was sold on April 30, 1996 for proceeds of
$270,538. The Partnership's investment in this asset was $135,922.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
March 31, December 31,
1996 1995
----------------------------------------
Equipment held for operating leases, at cost $ 1,693,439 $ 1,716,659
Less accumulated depreciation (1,410,335) (1,405,716)
----------------------------------------
Net equipment 283,104 310,943
Cash and cash equivalents 175,231 191,840
Accounts receivable, net of allowance for doubtful
accounts of $31,299 in 1996 and $33,793 in 1995 54,943 48,723
Due from affiliates 7,639 7,639
Prepaid insurance and other assets 1,738 16,549
----------------------------------------
Total assets $ 522,655 $ 575,694
========================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and other liabilities $ 8,818 $ 8,338
Partners' capital (deficit):
Limited Partners (9,529 units) 550,525 603,509
General Partner (36,688) (36,153)
----------------------------------------
Total partners' capital 513,837 567,356
----------------------------------------
Total liabilities and partners' capital $ 522,655 $ 575,694
========================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
1996 1995
------------------------------
Revenues:
Lease revenue $ 55,242 $ 79,538
Interest and other income 2,566 8,651
(Loss) gain on disposition of equipment (997) 15,453
------------------------------
Total revenues 56,811 103,642
Expenses:
Depreciation 23,563 35,953
Management fees to affiliate 5,956 6,383
Repairs and maintenance 11,225 21,879
Provision for (recovery of) bad debts (3,328) 37,070
General and administrative
expenses to affiliates 15,417 22,611
Other general and administrative expenses 9,252 22,664
------------------------------
Total expenses 62,085 146,560
------------------------------
Net loss $ (5,274) $ (42,918)
==============================
Partners' share of net loss:
Limited Partners - 99% $ (5,221) $ (42,489)
General Partner - 1% (53) (429)
-----------------------------
Total $ (5,274) $ (42,918)
==============================
Net loss per Limited
Partnership Unit (9,529 units) $ (0.55) $ (4.46)
==============================
Cash distributions $ 48,245 $ 83,618
==============================
Cash distributions per Limited
Partnership Unit $ 5.01 $ 8.69
==============================
Special distributions $ -- $ 200,000
==============================
Special distributions per Limited
Partnership Unit $ -- $ 20.78
==============================
Total distributions per Limited
Partnership Unit $ 5.01 $ 29.47
==============================
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, 1994 to March 31, 1996
Limited General
Partners Partners Total
-------------------------------------------------------
Partners' capital (deficit)
at December 31, 1994 $ 1,413,009 $ (27,977) $ 1,385,032
Net income 45,590 461 46,051
Cash distributions (855,090) (8,637) (863,727)
-------------------------------------------------------
Partners' capital (deficit)
at December 31, 1995 603,509 (36,153) 567,356
Net loss (5,221) (53) (5,274)
Cash distributions (47,763) (482) (48,245)
-------------------------------------------------------
Partners' capital (deficit)
at March 31, 1996 $ 550,525 (36,688) 513,837
=======================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the three months ended
March 31,
1996 1995
---------------------------------
Operating activities:
Net loss $ (5,274) $ (42,918)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Loss (gain) on disposition of equipment 997 (15,453)
Depreciation 23,563 35,953
Changes in operating assets and liabilities
Accounts receivable, net (6,220) 67,382
Due from affiliate -- (5,895)
Prepaid insurance and other assets 14,811 5,330
Accounts payable and other liabilities 480 17,636
---------------------------------
Cash provided by operating activities 28,357 62,035
---------------------------------
Investing activities:
Proceeds form disposition of equipment 3,279 243,414
---------------------------------
Cash provided by investing activities 3,279 243,414
---------------------------------
Cash flows used in financing activities:
Cash distributions paid to partners (48,245) (283,618)
---------------------------------
Cash and cash equivalents:
Net (decrease) increase in cash and cash equivalents (16,609) 21,831
Cash and cash equivalents at beginning of period 191,840 524,782
---------------------------------
Cash and cash equivalents at end of period $ 175,231 $ 546,613
=================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
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 only of normal recurring accruals, to present fairly the
Partnership's financial position as of March 31, 1996, and the statements of
operations and cash flows for the three months ended March 31, 1996 and 1995,
the statements of changes in partners' capital for the period from December 31,
1994 to March 31, 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, 1995, on file at the
Securities and Exchange Commission.
2. Equipment
Equipment held for operating leases is stated at cost. The components of
equipment are as follows:
March 31, December 31,
1996 1995
-------------------------------------
Marine containers $ 307,666 $ 330,886
Trailers 1,385,773 1,385,773
-------------------------------------
1,693,439 1,716,659
Less accumulated depreciation (1,410,335) (1,405,716)
-------------------------------------
Net equipment $ 283,104 $ 310,943
=====================================
All equipment owned by the Partnership was either on lease or operating in
PLM-affiliated short-term rental facilities as of March 31, 1996. All of the
equipment was either on lease or operating in PLM affiliated short-term rental
facilities as of December 31, 1995.
During the three months ended March 31, 1996, the Partnership sold or disposed
of 12 marine containers with an aggregate net book value of $4,276 for proceeds
of $3,279. During the three months ended March 31, 1995, the Partnership sold or
disposed of 24 trailers and eight marine containers and one trailer with an
aggregate net book value of $227,961 for proceeds of $243,414.
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 periodicially 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 cost to dispose.
Although the General Partner
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
3. Liquidation and special distributions (continued)
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, 1995, the General Partner paid special
distributions of $20.78 per Limited Partnership Unit which were the result of
proceeds from equipment liquidations. 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 limited
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 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
March 31, 1996 and 1995
TEP IXA
(A) Revenues
Total revenues of $124,771 for the quarter ended March 31, 1996, decreased from
$133,712 for the same period in 1995, due primarily to lower lease revenues and
lower gain on disposition on equipment in the first quarter of 1996, compared to
the same period in 1995, partially offset by higher interest and other income.
(1) Lease revenue decreased to $111,137 in the first quarter 1996, from $120,093
in the same period of 1995. The following table lists lease revenues earned by
equipment type:
For the three months ended
March 31,
1996 1995
-------------------------------
Trailers $ 55,317 $ 70,855
Rail equipment 25,950 25,950
Marine containers 29,870 23,288
-------------------------------
$ 111,137 $ 120,093
===============================
The decline was due primarily to the following:
(a) Trailer revenue decreased $15,538 due primarily to a decline in
utilization in the short-term rental facilities in 1996, compared to 1995
levels.
(2) For the quarter ended March 31, 1996, the Partnership realized a total gain
of $2,669 which included a gain of $40 on the disposition of one marine
container and additional gain of $2,629 from the commuter aircraft which was
under a sales-type lease, compared to the same period in 1995, where the
Partnership realized a gain of $9,545 on the sale or disposition of one trailer
and two marine containers.
(B) Expenses
Total expenses of $125,842 for the quarter ended March 31, 1996, decreased from
$241,211 for the same period in 1995. The decrease in 1996 expenses was
attributable to decreases in repairs and maintenance, and depreciation expense,
offset partially by an increase in general and administrative expenses.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$11,994 in 1996, from $81,511 in 1995, due primarily to a decrease of aircraft
repairs and maintenance due to the sale of the Partnership's commuter aircraft
during the second quarter of 1995.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, and general and administrative expenses) decreased to $113,848 in the
first quarter 1996, from $159,700 in the same period in 1995. This change
resulted primarily from:
(a) a decrease in depreciation expense of $48,626 from 1995 levels
reflecting asset sales or dispositions during 1996 and 1995;
(C) Net Loss
The Partnership incurred a net loss of $1,071 in the first quarter 1996, versus
a net loss of $107,499 in the same period in 1995. 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 1996, is not necessarily
indicative of future periods. In the first quarter 1996, the Partnership
distributed $1,063,720 to the Limited Partners, or approximately $43.81 per unit
which included a special distribution of $40.77 per unit resulting from the
exercise of a purchase option for a lessee of a commuter aircraft.
TEP IXB
(A) Revenues
Total revenues of $93,438 for the quarter ended March 31, 1996, decreased from
$169,393 for the same period in 1995 due primarily to lower lease revenues and a
lower gain from the sale of equipment in the first quarter of 1996, compared to
the same period in 1995.
(1) Lease revenue decreased to $77,492 in the first quarter 1996, from $145,558
in the same period in 1995. The following table lists lease revenues earned for
own equipment types:
For the three months ended
March 31,
1996 1995
-------------------------------
Aircraft $ -- $ 48,593
Trailers and tractors 48,721 72,503
Rail equipment 21,870 16,027
Marine containers 6,901 8,435
-------------------------------
$ 77,492 $ 145,558
===============================
Although, net income was not affected by the change in accounting for investment
in unconsolidated special purpose entity, lease revenues attributable to the
unconsolidated special purpose entity decrease $48,593 in the first quarter of
1996. (refer to the "Equity in net income of the unconsolidated special purpose
entity" section below).
The decline of revenue of owned equipment was due primarily to the following:
(a) Aircraft revenue decreased $48,593 due to the off-lease status of the
aircraft throughout the first quarter of 1996.
(b) Trailer and tractor revenue decreased $23,782 due to disposition or
sale of 21 trailers during the last three quarters of 1995, and three trailers
in the first quarter of 1996, and a decline in utilization in the short-term
rental facilities in 1996 compared to 1995 levels;
(2) For the quarter ended March 31, 1996, the Partnership realized a gain of
$11,851 on the sale or disposition of three trailers and two marine containers,
compared to the same period in 1995, where the Partnership realized a gain of
$17,544 on the sale or disposal of one trailer and one marine container.
(B) Expenses
Total expenses of $88,397 for the quarter ended March 31, 1996, decreased from
$170,752 for the same period in 1995. Although net income was not affected as a
result of the change in accounting for investment in unconsolidated special
purpose entity, expenses attributable to the unconsolidated special purpose
entity totaled $20,867 in the first quarter of 1996, all relating to
jointly-owned assets (refer to the "Equity in net income of the unconsolidated
special purpose entity" section below). The remaining decreases in 1996 expenses
are explained below:
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$9,218 in the first quarter 1996, from $17,006 in the same period in 1995. This
decrease was attributable to the sale of 22 trailers in 1995 and three trailers
in 1996.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, general and administrative expenses) decreased to $79,179 in the first
quarter of 1996, from $153,746 in the same period in 1995. The change related to
owned equipment resulted primarily from:
(a) a decrease in depreciation expense of $32,729 from 1995 levels
reflecting assets sales or dispositions during 1996 and 1995;
(b) a decrease of $41,838 in general and administrative expenses from 1995
levels due to $9,500 of collection costs related to one trailer lessee being
paid in the first quarter of 1995, and no similar costs occured in the first
quarter of 1996. In addition, there were decreases in indirect costs associated
with the short-term rental facilites due to decreased volume of trailers
operating in the facilites in the first quarter of 1996 as compared to the first
quarter of 1995, and lower accounting costs, offset by an increase in audit
fees.
(C) Equity in net loss of the unconsolidated special purpose entity represents
the net loss generated from a jointly owned asset now accounted for under the
entity method. At March 31, 1996, the Partnership had a 50% interest in a
commuter aircraft which was accounted for under the equity method. The aircraft
was off-lease throughout the first quarter of 1996 and the depreciation expense
was $20,824 for the first quarter ended March 31, 1996.
(D) Net Loss
The Partnership incurred a net loss of $15,826 in the first quarter 1996,
compared to a net loss of $1,359 in the same period in 1995. 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 1996, is not
necessarily indicative of future periods. In the first quarter 1996, the
Partnership distributed $100,733 to the Limited Partners, or approximately $5.77
per unit.
TEP IXC
(A) Revenues
Total revenues for the quarter ended March 31, 1996, decreased to $111,241 from
$433,123 for the same period in 1995, due primarily to lower gain on disposition
of equipment, lower lease revenues and lower interest and other income.
(1) Lease revenue decreased to $106,638 in the first quarter 1996, from $190,510
in the same period in 1995. The following table lists lease revenues earned for
own equipment types:
For the three months ended
March 31,
1996 1995
-------------------------------
Trailers and tractors $ 97,171 $ 153,328
Aircraft -- 17,100
Rail equipment 7,800 16,934
Marine containers 1,667 3,148
-------------------------------
$ 106,638 $ 190,510
===============================
Although, net income was not affected by the change in accounting for
investments in unconsolidated special purpose entity, lease revenues
attributable to the unconsolidated special purpose entity totaled $17,100 in the
first quarter of 1996 which represented revenue for jointly-owned assets (refer
to the "Equity in net income of the unconsolidated special purpose entity"
section below).
The decline in revenue of owned equipment was due primarily to the following:
(a) Trailer revenue decreased $56,157 in 1996, as compared to 1995 levels
due to lower utilization in the short-term rental facilities in 1996 compared to
1995 , and the sale of four trailers during the last three quarters of 1995;
(b) Rail revenue decreased $9,134 in 1996, as compared to 1995 levels due
to the sale of five twin stack railcars in the first quarter of 1995.
(2) For the quarter ended March 31, 1996, the Partnership realized a gain of
$1,688 on the disposal of one marine container compared to the same period in
1995, where the Partnership realized a gain of $236,072 on the sale of five twin
stack railcars.
(B) Expenses
Total expenses of $136,860 for the quarter ended March 31, 1996, decreased from
$194,905 for the same period in 1995. Although net income was not affected as a
result of the change in accounting for investment in unconsolidated special
purpose entity, expenses attributable to the unconsolidated special purpose
entity totaled $62,628 in the first quarter of 1996, all relating to
jointly-owned assets (refer to the "Equity in net income of the unconsolidated
special purpose entity" section below). The remaining decreases in 1996 expenses
are explained below:
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$33,878 in the first quarter 1996, from $48,958 in the same period in 1995. This
decrease was attributable to lower maintenance expense incurred on the decreased
number of trailers in the short-term rental facilities as compared to the same
period in 1995.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, and all general and administrative expenses) decreased to $102,982 in the
first quarter 1996, from $145,947 in the same period in 1995. The change related
to own equipment resulted primarily from:
(a) a decrease in depreciation expense of $21,487 from 1995 levels
reflecting asset sales during 1995 and 1996;
(b) a decrease in general and administrative expenses of $19,263 due to
lower indirect costs associated with the short-term rental facilites due to
decreased volume of trailers operating in the facilites in the first quarter of
1996 as compared to the first quarter of 1995, and lower accounting costs,
offset by an increase in audit fees;
(c) a decrease in management fees to affiliate of $2,215 from 1995 levels
due to lower levels of operating cash flow during the comparable periods.
Management fees are calculated as the greater of 10% of the Partnership's
Operating Cash Flow, or 1/2 of 1/2% of the Partnership's Capital Contributions
as defined in the Limited Partnership Agreement;
(C) Equity in net loss of the unconsolidated special purpose entity represents
the net loss generated from a jointly owned asset now accounted for under the
equity method. At March 31, 1996, the Partnership had a 30% interest in a
commuter aircraft. The aircraft revenue was $17,100, repairs and maintenance
expense of $16,882, and the depreciation expense was $12,743, resulting in a net
loss of $12,550 for the first quarter ended March 31, 1996.
(D) Net Income (Loss)
The Partnership incurred a net loss of $38,169 in the first quarter 1996,
compared to a net income of $238,218 in the same period in 1995. 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 1996, is not necessarily indicative of future periods. In the first
quarter 1996, the Partnership distributed $97,785 to the Limited Partners, or
approximately $5.78 per unit.
TEP IXD
(A) Revenues
Total revenues of $56,811 for the quarter ended March 31, 1996, decreased from
$103,642 for the same period in 1995, due primarily to lower lease revenues, a
loss on sale of equipment for the first quarter of 1996, compared to a gain on
disposition of equipment in the same period in 1995, and lower interest and
other income in the first quarter of 1996 as compared to the same period in
1995.
(1) Lease revenues decreased to $55,242 in the first quarter 1996, from $79,538
in the same period in 1995. The following table lists lease revenue earned by
equipment type:
For the three months ended
March 31,
1996 1995
-------------------------------
Trailers $ 35,873 $ 57,210
Marine containers 19,369 22,328
-------------------------------
$ 55,242 $ 79,538
===============================
The decline was due primarily to the following:
(a) Trailer revenue decreased $21,337 due primarily to the sale of 30
trailers during 1995, and lower utilization in short-term rental facilities
operated by an affiliate of the General Partner;
(b) Marine container revenue decreased $2,959 primarily due to the disposal
of 45 marine containers in 1995 and 12 in 1996.
(2) For the quarter ended March 31, 1996, the Partnership realized a loss of
$997 on the disposal of 12 marine containers, where the Partnership realized a
gain of $15,453 on the sale or disposal of 24 trailers and eight marine
containers in the quarter ended March 31, 1995.
(B) Expenses
Total expenses of $62,085 for the quarter ended March 31, 1996, decreased from
$146,560 for the same period in 1995. The decrease in 1996 expenses was
attributable primarily to decreases in bad debt expense, general and
administrative expense, depreciation expense, and repair and maintenance.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$11,225 in the first quarter 1996, from $21,879 in the same period in 1995. This
change resulted primarily from the refurbishment of 30 trailers in the first
quarter of 1995 prior to being sold.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, bad debt expense, and general and administrative expenses) decreased to
$50,860 in the first quarter 1996, from $124,681 in the same period in 1995.
This change resulted primarily from:
(a) a decrease of $40,398 in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees.
(b) a decrease in administrative expense of $20,606 due to $15,000 of
collection costs related to one trailer lessee that was paid in the first
quarter of 1995, with no similar costs occured in the first quarter of 1996. In
addition, a decrease in cost resulted from lower indirect costs associated with
the short-term rental facilites due to decreased volume of trailers operating in
the facilites in the first quarter of 1996 as compared to the first quarter of
1995, and lower accounting costs, offset by an increase in audit fees;
(c) a decrease in depreciation expense of $12,390 from 1995 levels,
reflecting asset sales or dispositions during 1996;
(C) Net Loss
The Partnership incurred a net loss of $5,274 in the first quarter 1996,
compared to a net loss of $42,918 in the same period in 1995. 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 1996, is not
necessarily indicative of future periods. In the first quarter 1996, the
Partnership distributed $47,763 to the Limited Partners, or approximately $5.01
per unit.
(II) Asset Sales
Equipment sales and dispositions result from General Partner decisions on
liquidations, the exercise by lessees of fair market value purchase options
provided for in certain leases, or the payment of stipulated loss values on
equipment lost or disposed of during the time it is subject to lease agreements.
During the three months ended March 31, 1996, one marine container owned by TEP
IXA was sold for a total of $673. In addition, the lessee under the sales-type
lease of the Metro III commuter aircraft exercised its option to buy the
aircraft and the Partnership receive a proceeds totaling $1 million. Three
trailers and two marine containers owned by TEP IXB were sold for a total of
$35,593; one marine container owned by TEP IXC were sold for $5,207; and 12
marine containers owned by TEP IXD were sold or disposed of for $3,279. As
discussed in note 3, the General Partner is actively marketing the remaining
equipment portfolio with the intent of maximizing sale proceeds.
(III) Market Values
In accordance with SFAS 121, the General Partner reviews the carrying value of
its equipment portfolio at least annually in relation to expected future market
conditions for the purpose of assessing recoverability of the recorded amounts.
If projected future lease revenue plus residual values are less than the
carrying value of the equipment, a loss on revaluation is recorded. No
adjustments to reflect impairment of individual equipment carrying values were
required for the three months ended March 31, 1996.
As of March 31, 1996, the General Partner estimated the current fair market
value of each Partnerships' equipment portfolio to be approximately : $1.7
million, $1.5 million, $1.9 million and $0.90 million for TEP IXA, TEP IXB, TEP
IXC and TEP IXD, respectively.
(IV) Trends
Inflation and changing prices did not materially impact the Partnerships'
revenues or expenses during the reported periods.
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 IXA 1986 INCOME FUND
By: PLM Financial Services, Inc.
General Partner
Date: May 14, 1996 By: /s/ David J. Davis
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David J. Davis
Vice President and
Corporate Controller