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 June 30, 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
June 30, December 31,
1996 1995
-------------------------------------
Equipment held for operating leases, at cost $ 4,060,455 $ 4,242,401
Less accumulated depreciation (3,511,421 ) (3,567,969 )
-------------------------------------
Net equipment 549,034 674,432
Cash and cash equivalents 159,636 251,709
Accounts receivable, net of allowance for doubtful
accounts of $59,970 in 1996 and $57,022 in 1995 89,043 107,933
Net investment in sales-type lease -- 1,003,564
Due from affiliates -- 2,941
Prepaid insurance 909 3,544
-------------------------------------
Total assets $ 798,622 $ 2,044,123
=====================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 5,059 $ --
Accounts payable 5,477 23,272
Prepaid deposits 2,854 20,028
-------------------------------------
Total liabilities 13,390 43,300
Partners' capital (deficit):
Limited Partners (24,285 units) 884,334 2,087,769
General Partner (99,102 ) (86,946 )
-------------------------------------
Total partners' capital 785,232 2,000,823
-------------------------------------
Total liabilities and partners' capital $ 798,622 $ 2,044,123
=====================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF INCOME
For the three months For the six months
ended June 30, ended June 30,
1996 1995 1996 1995
---------------------------- -------------------------------
Revenues:
Lease revenue $ 109,072 $ 120,131 $ 220,209 $ 240,224
Interest and other income 1,880 3,021 12,845 7,095
Gain on disposition of equipment 42,312 535,795 44,981 545,340
---------------------------- -------------------------------
Total revenues 153,264 658,947 278,035 792,659
Expenses:
Depreciation 52,148 99,640 105,382 201,500
Management fees to affiliate 15,178 15,178 31,204 30,356
Repairs and maintenance 13,905 24,308 25,899 105,819
General and administrative
expenses to affiliates 21,838 30,045 45,495 60,724
Other general and administrative expenses 22,034 26,829 42,965 38,812
-------------------------------
----------------------------
Total expenses 125,103 196,000 250,945 437,211
---------------------------- -------------------------------
Net income $ 28,161 $ 462,947 $ 27,090 $ 355,448
============================ ===============================
Partners' share of net income
Limited Partners - 99% $ 27,879 $ 458,318 $ 26,819 $ 351,894
General Partner - 1% 282 4,629 271 3,554
---------------------------- -------------------------------
Total $ 28,161 $ 462,947 $ 27,090 $ 355,448
============================ ===============================
Net income per Limited
Partnership Unit - 24,285 units $ 1.15 $ 18.87 $ 1.10 $ 14.49
============================ ===============================
Cash distributions $ 68,216 $ 74,464 $ 142,681 $ 148,940
============================ ===============================
Cash distributions per Limited
Partnership Unit $ 2.78 $ 3.04 $ 5.82 $ 6.07
============================ ===============================
Special cash distributions $ 100,000 $ -- $ 1,100,000 $ --
============================ ===============================
Special cash distributions per
Limited Partnership Unit $ 4.08 $ -- $ 44.84 $ --
============================ ===============================
Total cash distribution per
Limited Partnership Unit $ 6.86 $ 3.04 $ 50.66 $ 6.07
============================ ===============================
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 June 30, 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 income 26,819 271 27,090
Quarterly cash distributions (141,254 ) (1,427 ) (142,681 )
Special distributions (1,089,000 ) (11,000 ) (1,100,000 )
------------------------------------------------------
Partners' capital (deficit)
at June 30, 1996 $ 884,334 $ (99,102 ) $ 785,232
======================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the six months
ended June 30,
1996 1995
----------------------------------
Operating activities:
Net income $ 27,090 $ 355,448
Adjustments to reconcile net income to net cash provided
by operating activities:
Gain on disposition of equipment (44,981 ) (545,340 )
Depreciation 105,382 201,500
Changes in operating assets and liabilities
Accounts receivable, net 18,890 11,981
Due to/from affiliates 8,000 (5,673 )
Prepaid insurance 2,635 2,196
Accounts payable (17,795 ) 48,463
Prepaid deposits (17,174 ) (47,101 )
----------------------------------
Cash provided by (used in ) operating activities 82,047 21,474
----------------------------------
Investing activities:
Proceeds from disposition of equipment 64,997 32,157
Payments received on sales-type lease 1,003,564 --
Payments for purchase of capital improvements -- (876 )
----------------------------------
Cash provided by investing activities 1,068,561 31,281
----------------------------------
Cash flows used in financing activities:
Cash distributions paid to General Partner (1,230,254 ) (147,451 )
Cash distributions paid to Limited Partners (12,427 ) (1,489 )
----------------------------------
Cash used in financing activities (1,242,681 ) (148,940 )
----------------------------------
Cash and cash equivalents:
Net decrease in cash and cash equivalents (92,073 ) (96,185 )
Cash and cash equivalents at beginning of period 251,709 298,718
----------------------------------
Cash and cash equivalents at end of period $ 159,636 $ 202,533
==================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 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 June 30, 1996, the statements of income
for the three and six months ended June 30, 1996 and 1995, the statements of
changes in partners' capital for the period from December 31, 1994 to June 30,
1996, and the statements of cash flows for the six months ended June 30, 1996
and 1995. 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:
June 30, December 31,
1996 1995
------------------------------------
Rail equipment $ 783,870 $ 783,870
Marine containers 1,254,733 1,420,872
Trailers 2,021,852 2,037,659
------------------------------------
4,060,455 4,242,401
Less accumulated depreciation (3,511,421 ) (3,567,969 )
------------------------------------
Net equipment $ 549,034 $ 674,432
====================================
All equipment was either on lease or operating in PLM affiliated short-term
rental facilities except one forklift with a net carrying value of $41,712 as of
June 30, 1996. All equipment was either on lease or operating in PLM-affiliated
short-term rental facilities as of December 31, 1995.
During the six months ended June 30, 1996, the Partnership sold or disposed of
10 marine containers and one trailer with an aggregate book value of $20,016 for
proceeds of $64,997. In addition, additional proceeds of $2,629 was received for
the commuter aircraft which was under sales-type lease. During the six months
ended June 30, 1995, the Partnership sold or disposed of one trailer and five
marine containers with an aggregate book value of $21,367 for proceeds of
$32,157. Additionally, the Partnership entered into a sales-type lease related
to a commuter aircraft with a carrying value of $505,450 for a sales price equal
to the present value of the future lease payments ($1,090,000) less a $50,000
reserve for future costs of sale.
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 IXA 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 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 six months ended June 30, 1996, the General Partner paid special
distributions of $44.84 per Limited Partnership Unit which were the result of
proceeds from the sale of the commuter aircraft. No special distributions was
paid during the six months ended June 30, 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
June 30, December 31,
1996 1995
-------------------------------------
Equipment held for operating leases, at cost $ 2,583,795 $ 2,908,067
Less accumulated depreciation (2,201,742 ) (2,408,060 )
-------------------------------------
Net equipment 382,053 500,007
Cash and cash equivalents 296,744 351,363
Investment in unconsolidated special purpose entity 115,415 222,128
Accounts receivable, net of allowance for doubtful
accounts of $27,731 in 1996 and $29,460 in 1995 48,368 82,668
Prepaid insurance 649 2,447
-------------------------------------
Total assets $ 843,229 $ 1,158,613
=====================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 3,637 $ 3,637
Accounts payable and other liabilities 7,954 72,569
Prepaid deposits 68 16,248
-------------------------------------
Total liabilities 11,659 92,454
Partners' capital (deficit):
Limited Partners (17,460 units) 900,121 1,132,364
General Partner (68,551 ) (66,205 )
-------------- --------------
-------- -
Total partners' capital 831,570 1,066,159
-------------------------------------
Total liabilities and partners' capital $ 843,229 $ 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 Six Months Ended
June 30, June 30,
1996 1995 1996 1995
----------------------------- -----------------------------
Revenues:
Lease revenue $ 70,109 $ 115,086 $ 147,601 $ 260,644
Interest and other income 3,643 5,081 7,738 11,372
Gain on disposition of equipment 17,915 55,010 29,766 72,554
----------------------------- -----------------------------
Total revenues 91,667 175,177 185,105 344,570
Expenses:
Depreciation 35,757 66,433 74,126 137,531
Management fees to affiliate 10,912 10,912 21,825 21,825
Repairs and maintenance 14,198 9,851 23,416 26,857
General and administrative
expenses to affiliates 15,930 23,563 35,318 52,856
Other general and administrative expenses 11,892 1,956 22,401 44,398
----------------------------- -----------------------------
Total expenses 88,689 112,715 177,086 283,467
Equity in net loss of unconsolidated special
purpose entity (18,239 ) (39,106 ) --
----------------------------- -----------------------------
Net income (loss) $ (15,261 ) $ 62,462 $ (31,087 ) $ 61,103
============================= =============================
Partners' share of net income (loss)
Limited Partners - 99% $ (15,108 ) $ 61,837 $ (30,776 ) $ 60,492
General Partner - 1% (153 ) 625 (311 ) 611
----------------------------- -----------------------------
Total $ (15,261 ) $ 62,462 $ (31,087 ) $ 61,103
============================= =============================
Net income (loss) per Limited
Partnership Unit - 17,460 units $ (0.87 ) $ 3.54 $ (1.76 ) $ 3.46
============================= =============================
Cash distributions $ 101,751 $ 133,900 $ 203,502 $ 369,425
============================= =============================
Cash distributions per Limited
Partnership Unit $ 5.77 $ 7.59 $ 11.54 $ 20.95
============================= =============================
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 June 30, 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 (30,776 ) (311 ) (31,087 )
Cash distributions (201,467 ) (2,035 ) (203,502 )
----------------------------------------------------
Partners' capital (deficit)
at June 30, 1996 $ 900,121 $ (68,551 ) $ 831,570
====================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the six months ended
June 30,
1996 1995
--------------------------------
Operating activities:
Net (loss) income $ (31,087 ) $ 61,103
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Gain on disposition of equipment (29,766 ) (72,554 )
Depreciation 74,126 137,531
Cash distributions from unconsolidated special
purpose entity in excess of income accrued 106,713 --
Changes in operating assets and liabilities:
Accounts receivable, net 34,300 30,145
Prepaid insurance 1,798 1,782
Due to affiliates -- (2,725 )
Accounts payable (64,615 ) (8,736 )
Prepaid deposits (16,180 ) 1,101
--------------------------------
Cash provided by operating activities 75,289 147,647
--------------------------------
Investing activities:
Proceeds from disposition of equipment 73,594 175,606
Payments for purchase of capital improvements -- (2,120 )
--------------------------------
Cash provided by investing activities 73,594 173,486
Cash flows used in financing activities:
Cash distributions paid to General Partner (201,467 ) (365,731 )
Cash distributions paid to Limited Partners (2,035 ) (3,694 )
--------------------------------
Cash used in financing activities (203,502 ) (369,425 )
--------------------------------
Cash and cash equivalents:
Net decrease in cash and cash equivalents (54,619 ) (48,292 )
Cash and cash equivalents at beginning of period 351,363 492,060
--------------------------------
Cash and cash equivalents at end of period $ 296,744 $ 443,768
================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 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 June 30, 1996, the statements of
operations for the three and six months ended June 30, 1996 and 1995, the
statements of changes in partners' capital for the period from December 31, 1994
to June 30, 1996, and the statements of cash flows for the six months ended June
30, 1996 and 1995. 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:
June 30, December 31,
1996 1995
----------------------------------
Rail equipment $ 867,300 $ 867,300
Marine containers 367,784 413,633
Trailers and tractors 1,348,711 1,627,134
----------------------------------
2,583,795 2,908,067
Less accumulated depreciation (2,201,742 ) (2,408,060 )
----------------------------------
Net equipment $ 382,053 $ 500,007
==================================
With the exception of one sidelift with an aggregate net carrying value of
$59,706, all equipment was either on lease or operating in PLM affiliated
short-term rental facilities as of June 30, 1996. At June 30, 1996, a
jointly-owned aircraft was subject to a pending sale contract. The investment in
this aircraft was $115,415. 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 six months ended June 30, 1996, the Partnership sold or disposed of
seven trailers and two marine containers with an aggregate net book value of
$43,828 for proceeds of $73,594. During the six months ended June 30, 1995, the
Partnership sold or disposed of 14 trailers and three marine containers with an
aggregate net book value of $103,052 for proceeds of $175,606.
3. Liquidation
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
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
3. Liquidation (continued)
Partnership have not been adjusted to reflect liquidation values. The equipment
portfolio continues to be carried at the lower of depreciated cost or fair value
less cost to dispose. Although the General Partner estimates that there will be
distributions after liquidation of assets and liabilities, the amounts cannot be
accurately determined prior to actual liquidation of the equipment. Any excess
proceeds over expected Partnership obligations will be distributed to the
Partners throughout the liquidation period. Upon final liquidation, the
Partnership will be dissolved.
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 principal 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 "Investment in unconsolidated special purpose entity" includes a 50%
interest in a commuter aircraft.
5. Subsequent Event
On July 31, 1996, the General Partner sold an aircraft that the Partnership
holds an investment of 50%. The Partnership received $442,500 for its $115,415
investment in the aircraft. The investment is included in "Investment in
unconsolidated special purpose entity" at June 30, 1996.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
June 30, December 31,
1996 1995
---------------------------------------
Equipment held for operating leases, at cost $ 3,745,431 $ 4,007,465
Less accumulated depreciation (3,233,570 ) (3,354,708 )
---------------------------------------
Net equipment 511,861 652,757
Cash and cash equivalents 431,315 248,504
Investment in unconsolidated special purpose entity -- 133,363
Accounts receivable, net of allowance for doubtful
accounts of $13,617 in 1996 and $9,684 in 1995 58,400 104,717
Prepaid insurance and other assets 728 22,438
---------------------------------------
Total assets $ 1,002,304 $ 1,161,779
=======================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 3,523 $ 3,523
Accounts payable 8,762 12,939
---------------------------------------
Total liabilities 12,285 16,462
Partners' capital (deficit):
Limited Partners (16,914 units) 1,054,581 1,208,326
General Partner (64,562 ) (63,009 )
-------------- --------------
--------- --
Total partners' capital 990,019 1,145,317
---------------------------------------
Total liabilities and partners' capital $ 1,002,304 $ 1,161,779
=======================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
----------------------------- -----------------------------
Revenues:
Lease revenue $ 81,683 $ 171,549 $ 188,321 $ 362,059
Interest and other income 4,758 7,435 7,673 13,976
Gain (loss) on disposition of equipment 16,513 (1,628 ) 18,201 234,444
----------------------------- -----------------------------
Total revenues 102,954 177,356 214,195 610,479
Expenses:
Depreciation 51,803 68,474 105,789 143,947
Management fees to affiliate 10,590 10,568 22,024 24,217
Repairs and maintenance 23,478 38,325 57,356 87,283
General and administrative
expenses to affiliates 26,046 43,110 57,988 91,393
Other general and administrative expenses 34,712 6,200 40,332 14,742
----------------------------- -----------------------------
Total expenses 146,629 166,677 283,489 361,582
Equity in net income of unconsolidated special
purpose entity 124,093 -- 111,543 --
----------------------------- -----------------------------
Net income $ 80,418 $ 10,679 $ 42,249 $ 248,897
============================= =============================
Partners' share of net income:
Limited Partners - 99% $ 79,614 $ 10,572 $ 41,827 $ 246,408
General Partner - 1% 804 107 422 2,489
----------------------------- -----------------------------
Total $ 80,418 $ 10,679 $ 42,249 $ 248,897
============================= =============================
Net income per Limited
Partnership Unit (16,914 units) $ 4.71 $ 0.62 $ 2.47 $ 14.57
============================= =============================
Cash distributions $ 98,774 $ 104,399 $ 197,547 $ 259,422
============================= =============================
Cash distributions per Limited
Partnership Unit $ 5.78 $ 6.11 $ 11.56 $ 15.18
============================= =============================
Special distributions $ -- $ 450,000 $ -- $ 450,000
============================= =============================
Special distributions per Limited
Partnership Unit $ -- $ 26.34 $ -- $ 26.34
============================= =============================
Total distributions per Limited
Partnership Unit $ 5.78 $ 32.45 $ 11.56 $ 41.52
============================= =============================
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 June 30, 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 income 41,827 422 42,249
Cash distributions (195,572 ) (1,975 ) (197,547 )
------------------------------------------------------
Partners' capital (deficit)
at June 30, 1996 $ 1,054,581 $ (64,562 ) $ 990,019
======================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the six months ended June
30,
1996 1995
--------------------------------
Operating activities:
Net income $ 42,249 $ 248,897
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on disposition of equipment (18,201 ) (234,444 )
Depreciation 105,789 143,947
Cash distributions from unconsolidated special purpose entity
in excess of income accrued 133,363 --
Change in operating assets and liabilities
Accounts receivable, net 46,317 24,080
Due from affiliates -- 15,308
Prepaid deposits and reserves -- (26,086 )
Prepaid expenses and other assets 21,710 4,682
Accounts payable and other liabilities (4,177 ) (3,545 )
--------------------------------
Cash provided by operating activities 327,050 172,839
--------------------------------
Investing activities:
Proceeds from disposition of equipment 53,308 520,760
Payments for puchase of capital improvements -- (1,362 )
--------------------------------
Cash provided by investing activities 53,308 519,398
--------------------------------
Cash flows used in financing activities:
Cash distributions paid to General Partner (195,572 ) (702,328 )
Cash distributions paid to Limited Partners (1,975 ) (7,094 )
--------------------------------
Cash used in financing activities (197,547 ) (709,422 )
--------------------------------
Cash and cash equivalents:
Net increase (decrease) in cash and cash equivalents 182,811 (17,185 )
Cash and cash equivalents at beginning of period 248,504 312,230
--------------------------------
Cash and cash equivalents at end of period $ 431,315 $ 295,045
================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 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 June 30, 1996, the statements of income
for the three and six months ended June 30, 1996 and 1995, the statements of
changes in partners' capital for the period from December 31, 1994 to June 30,
1996, and the statements of cash flow for the six months ended June 30, 1996 and
1995. 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:
June 30, December 31,
1996 1995
------------------------------------
Rail equipment $ 178,501 $ 178,501
Marine containers 114,623 137,548
Trailers and tractors 3,452,307 3,691,416
------------------------------------
3,745,431 4,007,465
Less accumulated depreciation (3,233,570 ) (3,354,708 )
------------------------------------
Net equipment $ 511,861 $ 652,757
====================================
All of the equipment was either on lease or operating in PLM-affiliated
short-term rental facilities as of June 30, 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 six months ended June 30, 1996, the Partnership sold or disposed of
seven trailers and one marine container with net book value of $35,107 for
proceeds of $53,308. During the six months ended June 30, 1995, the Partnership
sold or disposed of three trailers and five twin stack railcars with a net book
value of $286,316 for proceeds of $520,760.
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
June 30, 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.
No special distributions were paid during the six months ended June 30, 1996.
During the six months ended June 30, 1995, the General Partner paid special
distributions of $26.34 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 principal 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 "Investment in unconsolidated special purpose entity" includes a 30%
interest in a commuter aircraft. This jointly owned commuter aircraft was sold
for $270,538 on April 30, 1996.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
June 30, December 31,
1996 1995
---------------------------------------
Equipment held for operating leases, at cost $ 1,643,756 $ 1,716,659
Less accumulated depreciation (1,391,621 ) (1,405,716 )
---------------------------------------
Net equipment 252,135 310,943
Cash and cash equivalents 56,503 191,840
Accounts receivable, net of allowance for doubtful
accounts of $32,902 in 1996 and $33,793 in 1995 43,915 48,723
Due from affiliates -- 7,639
Prepaid insurance and other assets 1,423 16,549
---------------------------------------
Total assets $ 353,976 $ 575,694
=======================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 1,985 $ --
Accounts payable and other liabilities 3,352 8,338
---------------------------------------
5,337 8,338
Partners' capital (deficit):
Limited Partners (9,529 units) 386,979 603,509
General Partner (38,340 ) (36,153 )
---------------------------------------
Total partners' capital 348,639 567,356
---------------------------------------
Total liabilities and partners' capital $ 353,976 $ 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 Six Months Ended
June 30, June 30,
1996 1995 1996 1995
----------------------------- -----------------------------
Revenues:
Lease revenue $ 34,205 $ 75,733 $ 89,447 $ 155,271
Interest and other income 1,576 6,790 4,142 15,441
Gain on disposition of equipment 11,087 36,886 10,090 52,339
----------------------------- -----------------------------
Total revenues 46,868 119,409 103,679 223,051
Expenses:
Depreciation 22,976 25,507 46,539 61,460
Management fees to affiliate 5,955 5,956 11,911 12,339
Repairs and maintenance 5,952 10,540 17,177 32,419
Provision for (recovery of) bad debts 1,603 (764 ) (1,725 ) 41,352
General and administrative
expenses to affiliates 10,150 18,741 25,567 28,914
Other general and administrative expenses 17,184 6,250 26,436 36,306
-----------------------------
-----------------------------
Total expenses 63,820 66,230 125,905 212,790
----------------------------- -----------------------------
Net income (loss) $ (16,952 ) $ 53,179 $ (22,226 ) $ 10,261
============================= =============================
Partners' share of net income (loss):
Limited Partners - 99% $ (16,782 ) $ 52,467 $ (22,004 ) $ 10,158
General Partner - 1% (170 ) 532 (222 ) 103
----------------------------- ----------------------------
Total $ (16,952 ) $ 53,179 $ (22,226 ) $ 10,261
============================= =============================
Net income (loss) per Limited
Partnership Unit (9,529 units) $ (1.76 ) $ 5.52 $ (2.31 ) $ 1.07
============================= =============================
Cash distributions $ 48,245 $ 79,868 $ 96,491 $ 164,371
============================= =============================
Cash distributions per Limited
Partnership Unit $ 5.01 $ 8.30 $ 10.02 $ 17.08
============================= =============================
Special distributions $ 100,000 $ 200,000 $ 100,000 $ 400,000
============================= =============================
Special distributions per Limited
Partnership Unit $ 10.39 $ 20.78 $ 10.39 $ 41.56
============================= =============================
Total distributions per Limited
Partnership Unit $ 15.40 $ 29.08 $ 20.41 $ 58.64
============================= =============================
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 June 30, 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 (22,004 ) (222 ) (22,226 )
Cash distributions (194,526 ) (1,965 ) (196,491 )
------------------------------------------------------
Partners' capital (deficit)
at June 30, 1996 $ 386,979 $ (38,340 ) $ 348,639
======================================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the six months ended
June 30,
1996 1995
--------------------------------
Operating activities:
Net (loss) income $ (22,226 ) $ 10,261
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Gain on disposition of equipment (10,090 ) (52,339 )
Depreciation 46,539 61,460
Changes in operating assets and liabilities
Accounts receivable, net 4,808 70,084
Due to/from affiliate 9,624 (5,895 )
Prepaid insurance and other assets 15,126 11,000
Accounts payable and other liabilities (4,986 ) (4,927 )
--------------------------------
Cash provided by operating activities 38,795 89,644
--------------------------------
Investing activities:
Proceeds form disposition of equipment 22,359 338,662
--------------------------------
Cash provided by investing activities 22,359 338,662
--------------------------------
Cash flows used in financing activities:
Cash distributions paid to General Partner (194,526 ) (558,727 )
Cash distributions paid to Limited Partners (1,965 ) (5,644 )
--------------------------------
Cash used in financing activities (196,491 ) (564,371 )
Cash and cash equivalents:
Net decrease in cash and cash equivalents (135,337 ) (136,065 )
Cash and cash equivalents at beginning of period 191,840 524,782
--------------------------------
Cash and cash equivalents at end of period $ 56,503 $ 388,717
================================
See accompanying notes to financial
statements.
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 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 June 30, 1996, and the statements of
operations for the three and six months ended June 30, 1996 and 1995, the
statements of changes in partners' capital for the period from December 31, 1994
to June 30, 1996, and the statements of cash flows for the six months ended June
30, 1996 and 1995. 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:
June 30, December 31,
1996 1995
------------------------------------
Marine containers $ 288,316 $ 330,886
Trailers 1,355,440 1,385,773
------------------------------------
1,643,756 1,716,659
Less accumulated depreciation (1,391,621 ) (1,405,716 )
------------------------------------
Net equipment $ 252,135 $ 310,943
====================================
All equipment owned by the Partnership was either on lease or operating in
PLM-affiliated short-term rental facilities as of June 30, 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 six months ended June 30, 1996, the Partnership sold or disposed of
22 marine containers and one trailer with an aggregate net book value of $12,269
for proceeds of $22,359. During the six months ended June 30, 1995, the
Partnership sold or disposed of 30 trailers and 27 marine containers with an
aggregate net book value of $286,323 for proceeds of $338,662.
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
June 30, 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 six months ended June 30, 1996 and June 30, 1995, the General Partner
paid special distributions of $10.39 and $41.56, respectively, 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
June 30, 1996 and 1995
TEP IXA
(A) Revenues
Total revenues of $153,264 for the quarter ended June 30, 1996, decreased from
$658,947 for the same period in 1995, due primarily to lower gain on disposition
on equipment, lower lease revenues, and lower interest and other income in the
second quarter of 1996, compared to the same period in 1995.
(1) Lease revenue decreased to $109,072 in the second quarter 1996, from
$120,131 in the same period of 1995. The following table lists lease revenues
earned by equipment type:
For the three months ended
June 30,
1996 1995
-------------------------------
Trailers $ 59,778 $ 71,754
Rail equipment 25,950 25,950
Marine containers 23,344 22,427
------------------------------
$ 109,072 $ 120,131
==============================
The decline was due primarily to the following:
(a) Trailer revenue decreased $11,976 due primarily to a decline in
utilization in the short-term rental facilities in 1996, compared to 1995
levels.
(2) For the quarter ended June 30, 1996, the Partnership realized a total gain
of $42,312 on the disposition of nine marine containers and one trailer,
compared to the same period in 1995, where the Partnership realized a gain of
$535,795 on the sale or disposition of three marine containers and one aircraft
which was structed as a sales-type lease.
(B) Expenses
Total expenses of $125,103 for the quarter ended June 30, 1996, decreased from
$196,000 for the same period in 1995. The decrease in 1996 expenses was
attributable to decreases in depreciation expense, general and administrative
expenses, and repairs and maintenance.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$13,905 in 1996, from $24,308 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 $111,198 in the
second quarter 1996, from $171,692 in the same period in 1995. This change
resulted primarily from:
(a) a decrease in depreciation expense of $47,492 from 1995 levels
reflecting asset sales or dispositions during 1996 and 1995;
(C) Net Income
The Partnership's net income of $28,161 in the second quarter 1996, decreased
from $462,847 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 second quarter 1996, is not necessarily
indicative of future periods. In the second quarter 1996, the Partnership
distributed $166,534 to the Limited Partners, or approximately $6.86 per unit
which included a special distribution of $4.08 per unit.
TEP IXB
(A) Owned equipment operations
Lease revenues less direct expenses (defined as repairs and maintenance and
asset specific insurance expenses) on owned equipment decreased during the
second quarter of 1996 when compared to the same quarter of 1995. The following
table presents lease revenues less direct expenses by owned equipment type:
For the three months
ended June 30,
1996 1995
------------------------------
Trailers $ 29,549 $ 27,604
Railcar equipment 20,577 21,568
Marine containers 5,857 6,101
Trailers: Trailer lease revenues and direct expenses were $42,334 and $12,785,
respectively, for the three months ended June 30, 1996, compared to $38,324 and
$10,720, respectively during the same quarter of 1995. The number of trailers
was decreased from the second quarter of 1995 to the second quarter of 1996,
however, over the past twelve months the number of trailers in the PLM
affiliated short-term rental yards has increased due to term leases which
expired. These trailers are now earning a higher utilization rate while in the
rental yard compared to the fixed term lease;
Railcar equipment: Railcar lease revenues and direct expenses were $21,870 and
$1,293, respectively, for the three months ended June 30, 1996, compared to
$21,870 and $302, respectively during the same quarter of 1995. The decrease of
net contribution was due to needed running repairs in the second quarter of 1996
which was not required in the second quarter in 1995;
Marine containers: Marine container lease revenues and direct expenses were
$5,905 and $48, respectively, for the three months ended June 30, 1996, compared
to $6,299 and $198, respectively during the same quarter of 1995. The number of
marine containers owned by the Partnership has been declining due to sales and
dispositions. The result of this declining fleet has resulted in a decrease in
marine container net contribution.
(B) Indirect expenses related to owned equipment
Total indirect expenses of $74,123 for the three months ended June 30, 1996,
decreased from $80,376 for the same period of 1995. The variance is explained as
follows:
(a) a decrease in depreciation expense of $9,851 from 1995 levels
reflecting assets sales or dispositions during 1996 and 1995;
(b) a $7,189 decrease in general and administrative expenses from 1995
levels was due to decreased administrative costs associated with the short-term
rental facilities due to decreased volume of trailers operating in these
facilities;
(c) an increase of $10,785 in bad debt expense was due to the General
Partner's evaluation of the collectibility of trade receivables from trailer
rental yard lessees.
(C) For the quarter ended June 30, 1996, the Partnership realized a gain of
$17,915 on the sale or disposition of four trailers, compared to the same period
in 1995, where the Partnership realized a gain of $55,010 on the sale or
disposal of 13 trailers and two marine containers.
(D) Interest and other income
Interest and other income decreased $1,438 during the second quarter of 1996 due
primarily to lower cash balances available for investments when compared to the
same period of 1995.
(E) Equity in net income (loss) of the unconsolidated special purpose entity
Equity in net income (loss) of unconsolidated special purpose entity represents
the net income (loss) generated from jointly-owned assets accounted for under
the equity method (see Note 4 to financial statements).
For the three months
ended June 30,
1996 1995
--------------------------------
Aircraft $ (18,679 ) $ 27,474
Aircraft: the net loss of $18,679 compared to net income of $27,474 due to the
offlease status of the aircraft in the second quarter of 1996.
(F) Net Loss
The Partnership incurred a net loss of $15,261 in the second quarter 1996,
compared to a net income of $62,462 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 second
quarter 1996, is not necessarily indicative of future periods. In the second
quarter 1996, the Partnership distributed $100,733 to the Limited Partners, or
approximately $5.77 per unit.
TEP IXC
(A) Owned equipment operations
Lease revenues less direct expenses (defined as repairs and maintenance and
asset specific insurance expenses) on owned equipment decreased during the
second quarter of 1996 when compared to the same quarter of 1995. The following
table presents lease revenues less direct expenses by owned equipment type:
For the three months
ended June 30,
1996 1995
--------------------------------
Trailers $ 41,495 $ 101,730
Railcar equipment 14,705 10,778
Marine containers 1,572 1,712
Trailers: Trailer lease revenues and direct expenses were $72,293 and $30,798,
respectively, for the three months ended June 30, 1996, compared to $143,501 and
$41,771, respectively during the same quarter of 1995. The decrease of net
contribution was due to lower utilization of trailers in the short-term rental
facilities and the disposition of trailers;
Railcar equipment: Railcar lease revenues and direct expenses were $7,800 and a
credit of $6,905, respectively, for the three months ended June 30, 1996,
compared to $9,175 and a credit of $1,603, respectively, during the same quarter
of 1995. The increase of net contribution was due to lower repairs and maintance
expenses in the second quarter of 1996 as compared to the second quarter of
1995, offset by decrease in lease revenue in the second quarter of 1996 than
compared to the second quarter of 1995 due to the sale of five twin stack
railcars in the second quarter of 1995 which reduced the second quarter 1996
results;
Marine containers: Marine container lease revenues and direct expenses were
$1,590 and $18 respectively, for the three months ended June 30, 1996, compared
to $1,772 and $60, respectively during the same quarter of 1995. The number of
marine containers owned by the Partnership has been declining due to sales and
dispositions. The result of this declining fleet has resulted in a decrease in
marine container net contribution.
(B) Indirect expenses related to owned equipment
Total indirect expenses of $122,718 for the three months ended June 30, 1996,
increased from $113,525 for the same period of 1995. The variance is explained
as follows:
(a) an increase of $10,377 in bad debt expense was due to the General
Partner's evaluation of the collectibility of trade receivables from trailer
rental yard lessees;
(b) an increase in general and administrative expenses of $2,723 due to
higher indirect costs associated with the short-term rental facilities in the
second quarter of 1996 as compared to the second quarter of 1995;
(c) a decrease in depreciation expense of $3,928 from 1995 levels
reflecting asset sales during 1995 and 1996.
(C) For the quarter ended June 30, 1996, the Partnership realized a gain of
$16,513 on the disposal of seven trailers compared to the same period in 1995,
where the Partnership realized a loss of $1,628 on the sale of three trailers.
(D) Interest and other income
Interest and other income decreased $2,677 during the second quarter of 1996 due
primarily to lower cash balances available for investments when compared to the
same period of 1995.
(E) Equity in net income of the unconsolidated special purpose entity
Equity in net income of unconsolidated special purpose entity represents the net
income generated from jointly-owned assets accounted for under the equity method
(see Note 4 to financial statements).
For the three months
ended June 30,
1996 1995
------------------------------
Aircraft $ 124,093 $ 4,177
Aircraft: The aircraft was sold in April of 1996 which incurred a gain of
$134,192.
(F) Net Income
The Partnership's net income of $80,418 in the second quarter 1996, increased
from $10,679 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 second quarter 1996, is not necessarily
indicative of future periods. In the second quarter 1996, the Partnership
distributed $97,786 to the Limited Partners, or approximately $5.78 per unit.
TEP IXD
(A) Revenues
Total revenues of $46,868 for the quarter ended June 30, 1996, decreased from
$119,409 for the same period in 1995, due primarily to lower lease revenues, a
lower gain on sale of equipment, and lower interest and other income in the
second quarter of 1996 as compared to the same period in 1995.
(1) Lease revenues decreased to $34,205 in the second quarter 1996, from $75,733
in the same period in 1995. The following table lists lease revenue earned by
equipment type:
For the six months ended
June 30,
1996 1995
------------------------------
Trailers $ 24,671 $ 57,241
Marine containers 9,534 18,492
------------------------------
$ 34,205 $ 75,733
==============================
The decline was due primarily to the following:
(a) Trailer revenue decreased $32,570 due primarily to lower utilization in
short-term rental facilities operated by an affiliate of the General Partner;
(b) Marine container revenue decreased $8,958 primarily due to the disposal
of equipment.
(2) For the quarter ended June 30, 1996, the Partnership realized a gain of
$11,087 on the disposal of 10 marine containers and one trailer, where the
Partnership realized a gain of $36,886 on the sale or disposal of six trailers
and 19 marine containers in the quarter ended June 30, 1995.
(B) Expenses
Total expenses of $63,820 for the quarter ended June 30, 1996, decreased from
$66,230 for the same period in 1995. The decrease in 1996 expenses was
attributable primarily to decreases in repair and maintenance, depreciation
expense, offset by an increase in bad debt expense and general and administative
expense.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$5,952 in the second quarter 1996, from $10,540 in the same period in 1995. This
change resulted primarily from the refurbishment of six trailers in the second
quarter of 1995 prior to being sold. No similar costs were incurred in the
second quarter of 1996.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, bad debt expense, and general and administrative expenses) decreased to
$57,868 in the second quarter 1996, from $55,690 in the same period in 1995.
This change resulted primarily from:
(a) a decrease in depreciation expense of $2,531 from 1995 levels,
reflecting asset sales or dispositions during 1996;
(b) an increase of $2,367 in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees;
(c) an increase in administrative expense of $2,343 due to an increase in
indirect costs associated with the short-term rental facilities as compared to
the second quarter of 1995.
(C) Net Income (loss)
The Partnership incurred a net loss of $16,952 in the second quarter 1996,
compared to a net income of $53,179 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 second
quarter 1996, is not necessarily indicative of future periods. In the second
quarter 1996, the Partnership distributed $146,763 to the Limited Partners, or
approximately $15.40 per unit which included a special distribution of $10.39
per unit.
Comparison of the Partnership's Operating Results for the Six Months Ended
June 30, 1996 and 1995
TEP IXA
(A) Revenues
Total revenues of $278,035 for the six months ended June 30, 1996, decreased
from $792,659 for the same period in 1995, due primarily to lower gain on the
sale of assets, and lower lease revenue, offset by an increase in other income.
(1) Lease revenue decreased to $220,209 in the six months ended June 30, 1996,
from $240,224 in the same period of 1995. The following table lists lease
revenues earned by equipment type:
For the six months ended
June 30,
1996 1995
------------------------------
Trailers $ 115,096 $ 142,609
Rail equipment 51,900 51,900
Marine containers 53,213 45,715
------------------------------
$ 220,209 $ 240,224
==============================
The decline was due primarily to the following:
(a) Trailer revenue decreased $27,513 due to lower utilization of trailers
in the short-term rental facilities in 1996, compared to 1995 levels;
(b) Marine container revenue increased $7,498 due to higher utilization
rate on certain containers in the first six months of 1996 when compared to the
same period of 1995 , offset by the disposal of equipment;
(2) For the six months ended June 30, 1996, the Partnership realized a gain of
$44,981 on the sale or disposition of one trailer and 10 marine containers,
compared to the same period in 1995, where the Partnership realized a gain of
$545,340 on the sale or disposition of one trailer, five marine containers, and
one commuter aircraft which was under the sales-type lease.
(B) Expenses
Total expenses of $250,945 for the six months ended June 30, 1996, decreased
from $437,211 for the same period in 1995. The decrease in 1996 expenses was
attributable to decreases in depreciation expense, repairs and maintenance, and
all general and administrative expenses.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$25,899 in 1996, from $105,819 in 1995. This decrease was due primarily to
decrease in repairs and maintenance for trailers in the short-term rental
facilities. In the first six months of 1995, repairs were made on former term
lease trailers prior to transitioning into the short-term rental facilities.
Additionally, the Partnership had a decrease in aircraft repairs and maintenance
in 1996 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 all general and administrative expenses) decreased to $225,046 in the
six months ended June 30, 1996, from $331,392 in the same period in 1995.
This change resulted primarily from:
(a) a decrease in depreciation expense of $96,118 from 1995 levels
reflecting assets sales or dispositions during 1996 and 1995;
(b) a decrease of $11,076 in general and administrative expenses from 1995
levels due to lower administrative costs associated with the Partnership.
(C) Net Income
The Partnership's net income decreased to $27,090 in the six months ended June
30, 1996, from $355,448 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 six months ended June 30, 1996, is not
necessarily indicative of future periods. In the six months ended June 30, 1996,
the Partnership distributed $1,230,254 to the Limited Partners, or approximately
$50.06 per unit which included a special distribution of $44.84 per unit.
TEP IXB
(A) Owned equipment operations
Revenues less direct expenses (defined as repairs and maintenance and asset
specific insurance expense) on owned equipment decreased in the six months ended
June 30, 1996, when compared to the same period of 1995. The following table
presents revenues less direct expenses by owned equipment type:
For the six months
ended June 30,
1996 1995
------------------------------
Trailers $ 68,468 $ 86,341
Railcar equipment 42,156 33,885
Marine containers 12,692 14,331
Trailers: Trailer revenues and direct expenses were $91,055 and $22,587,
respectively, for the six months ended June 30, 1996, compared to $110,827 and
$24,486, respectively during the same period of 1995. The decrease of net
contribution was due to lower utilization of trailers in the short-term rental
facilities and the disposition of trailers;
Railcar equipment: Railcar revenues and direct expenses were $43,740 and $1,584,
respectively, for the six months ended June 30, 1996, compared to $37,897 and
$4,012, respectively, during the same period of 1995. The increase in net
contribution was due to a credit of $5,000 was given to the former lessee for
the off-lease sidelift which reduced the revenue for the six months ended June
30, 1995, and running repairs required on certain railcars in the fleet in the
first six months of 1995, which did not occur in 1996;
Marine containers: Marine container revenues and direct expenses were $12,806
and $114, respectively, for the six months ended June 30, 1996, compared to
$14,735 and $404, respectively during the same period of 1995. The number of
marine containers owned by the Partnership has been declining due to sales and
dispositions. The result of this declining fleet is a decrease in marine
container net contribution.
(B) Indirect expenses related to owned equipment
Total indirect expenses of $152,801 for the six months ended June 30, 1996,
decreased from $211,173 for the same period of 1995. The variance is explained
as follows:
(a) a decrease of $23,316 in general and administrative expenses from 1995
levels. This reflects the decreased administrative costs associated with the
short-term rental facilities, and lower data processing expense;
(b) a decrease in depreciation expense of $21,756 from 1995 levels
reflecting assets sales or dispositions during 1996 and 1995;
(c) a decrease of $13,300 in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees.
(C) For the quarter ended June 30, 1996, the Partnership realized a gain of
$29,766 on the disposal of two marine containers and seven trailers compared to
the same period in 1995, where the Partnership realized a gain of $72,554 on the
sale of 14 trailers.
(D) Interest and other income
Interest and other income decreased $3,634 during the first six months of 1996
due primarily to lower cash balances available for investments when compared to
the same period of 1995.
(E) Equity in net income (loss) of unconsolidated special purpose entity
Equity in net income (loss) of unconsolidated special purpose entity represents
the net income (loss) generated from jointly-owned asset accounted for under the
equity method (see Note 4 to financial statements).
For the three months
ended June 30,
1996 1995
-------------------------------
Aircraft $ (39,106 ) $ 53,793
Aircraft: The decrease of net contribution was due to the offlease status of
the aircraft.
(C) Net Income (loss)
The Partnership incurred a net loss of $31,087 in the six months ended June 30,
1996, compared to a net income of $61,103 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 six months
ended June 30, 1996, is not necessarily indicative of future periods. In the six
months ended June 30, 1996, the Partnership distributed $201,467 to the Limited
Partners, or approximately $11.54 per unit.
TEP IXC
(A) Owned equipment operations
Revenues less direct expenses (defined as repairs and maintenance and asset
specific insurance expenses) on owned equipment decreased during the first six
months of 1996 when compared to the same period of 1995. The following table
presents revenues less direct expenses by owned equipment type:
For the six months
ended June 30,
1996 1995
---------------------------------
Trailers $ 113,420 $ 211,452
Railcar equipment 13,305 20,500
Marine containers 3,216 4,798
Trailers: Trailer revenues and direct expenses were $169,463 and $56,043,
respectively, for the three months ended June 30, 1996, compared to $296,829 and
$85,377, respectively during the same quarter of 1995. The decrease of net
contribution was due to lower utilization of trailers in the short-term rental
facilities and the disposition of trailers;
Railcar equipment: Railcar revenues and direct expenses were $15,600 and $2,295,
respectively, for the three months ended June 30, 1996, compared to $26,110 and
$5,610, respectively during the same quarter of 1995. The decrease of net
contribution was due to the sale of equipment;
Marine containers: Marine container revenues and direct expenses were $3,258 and
$42, respectively, for the three months ended June 30, 1996, compared to $4,920
and $122 respectively during the same quarter of 1995. The number of marine
containers owned by the Partnership has been declining due to sales and
dispositions. The result of this declining fleet is a decrease in marine
container net contribution.
(B) Indirect expenses related to owned equipment
Total indirect expenses of $225,109 for the six months ended June 30, 1996,
decreased from $244,368 for the same period of 1995. The variance is explained
as follows:
(a) a decrease in depreciation expense of $12,673 from 1995 levels
reflecting asset sales during 1996;
(b) a decrease in general and administrative expenses of $7,521 due to
lower administrative costs associated with the Partnership;
(c) a decrease of $2,193 in managment fee due to lower levels of operating
cash flow during the comparable periods. Monthly management fees are calculated
as the greater of 10% of the Partnership's Operating Cash Flow, or 1/12 of 1/2%
of the Partnership's Capital Contributions as defined in the Limited Partnership
Agreement;
(d) an increase of $3,128 in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees.
(C) For the six months ended June 30, 1996, the Partnership realized a gain of
$18,201 on the sale of seven trailers and one marine container, compared to the
same period in 1995, where the Partnership realized a gain of $234,444 on the
sale of three trailers and five twin stack railcars.
(D) Interest and other income decreased $6,303 due to a decrease in cash
available for short-term investment.
(E) Equity in net income of unconsolidated special purpose entity
Equity in net income of unconsolidated special purpose entity represents the net
income generated from jointly-owned asset accounted for under the equity method
(see Note 4 to financial statements).
For the six months
ended June 30,
1996 1995
-------------------------------
Aircraft $ 111,543 $ 8,095
Aircraft: The increase of net contribution was due to the gain of $134,192
realized on the sale of the aircraft in April of 1996.
(F) Net Income
The Partnership's net income decreased to $42,249 in the six months ended June
30, 1996, from $248,897 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 six months ended June 30, 1996, is not
necessarily indicative of future periods. In the six months ended June 30, 1996,
the Partnership distributed $195,572 to the Limited Partners, or approximately
$11.56 per unit.
TEP IXD
(A) Revenues
Total revenues of $103,679 for the six months ended June 30, 1996 decreased from
$223,051 for the same period in 1995 due primarily to lower lease revenues, a
lower gain on sale of equipment, and lower interest and other income in 1996
compared to 1995.
(1) Lease revenues decreased to $89,447 in the six months ended June 30, 1996,
from $155,271 in the same period in 1995. The following table lists lease
revenue earned by equipment type:
For the six months ended
June 30,
1996 1995
------------------------------
Trailers $ 60,544 $ 114,451
Marine containers 28,903 40,820
------------------------------
$ 89,447 $ 155,271
==============================
The decrease was due to the following:
(a) Trailer revenue decreased $53,907 due primarily to lower utilization in
short-term rental facilities operated by an affiliate of the General Partner;
(b) Marine container revenue decreased $11,917 primarily due to the
disposal of equipment.
(2) For the six months ended June 30, 1996, the Partnership realized a gain of
$10,090 on the sale or disposal of one trailer and 22 marine containers,
compared to the same period in 1995, where the Partnership realized a gain
$52,339 on the sale or disposal of 30 trailers and 27 marine containers.
(3) Interest and other income decreased $11,299 due to a decrease in cash
available for short-term investment.
(B) Expenses
Total expenses of $125,905 for the six months ended June 30, 1996, increased
from $212,790 for the same period in 1995. The increase in 1996 expenses was
attributable primarily to decreases in bad debt expense, repair and maintenance,
depreciation, and general and administrative expenses.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$17,177 in the six months ended June 30, 1996, from $32,419 in the same period
in 1995. This change resulted primarily from the disposal of trailers.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, bad debt expense, and general and administrative expenses) decreased to
$108,728 in the six months ended June 30, 1996, from $180,371 in the same period
in 1995. This change resulted primarily from:
(a) a decrease of $43,077 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 depreciation expense of $14,921 from 1995 levels,
reflecting asset sales or dispositions during 1996;
(c) a decrease of $13,217 in general and administrative expenses from 1995
levels due to lower administrative costs associated with the Partnership.
(C) Net Income (loss)
The Partnership incurred a loss of $22,226 in the six months ended June 30,
1996, compared to a net income of $10,261 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 six months
ended June 30, 1996, is not necessarily indicative of future periods. In the six
months ended June 30, 1996, the Partnership distributed $194,526 to the Limited
Partners, or approximately $20.41 per unit which included a special distribution
of $10.39 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 six months ended June 30, 1996, 10 marine containers and one trailer
owned by TEP IXA was sold for a total of $64,997. 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 received proceeds totaling $1 million.
Seven trailers and two marine containers owned by TEP IXB were sold for a total
of $73,594; seven trailers and one marine container owned by TEP IXC were sold
for $53,308; and 22 marine containers and one trailer owned by TEP IXD were sold
or disposed of for $22,359. 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 six months ended June 30, 1996.
As of June 30, 1996, the General Partner estimated the current fair market
value of each Partnerships' equipment portfolio to be approximately : $1.6
million, $1.4 million, $1.5 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: August 9, 1996 By: /s/ David J. Davis
-------------------
David J. Davis
Vice President and
Corporate Controller