UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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, 2001.
[ ] 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 2-64413
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RMI COVERED HOPPER RAILCAR MANAGEMENT PROGRAM 79-1
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(Exact name of registrant as specified in its charter)
California 94-2645847
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Market, Steuart Street Tower
Suite 800, San Francisco, CA 94105-1301
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code (415) 974-1399
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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
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RMI COVERED HOPPER RAILCAR MANAGEMENT PROGRAM 79-1
STATEMENTS OF REVENUES COLLECTED AND EXPENSES PAID
AND OTHER CHANGES IN CASH
For the Three Months
Ended March 31,
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2001 2000
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Revenues collected:
Lease receipts $ 305,672 $ 421,343
Interest and other income 6,999 11,738
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Total revenues collected 312,671 433,081
Expenses paid:
Management fees 55,632 59,295
Repairs and maintenance 77,848 159,743
Property taxes 2,772 1,364
Accounting and legal fees 5,405 6,171
Storage, repositioning and other 12,570 6,818
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Total expenses paid 154,227 233,391
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Excess of revenues collected
over expenses paid 158,444 199,690
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Other increases (decreases) in cash:
Prepaid mileage, reimbursable repairs
and other expenses 18,537 30,814
Distributions to investors (192,888) (388,911)
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Net other decreases in cash (174,351) (358,097)
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Net decrease in cash (15,907) (158,407)
Cash at beginning of period 541,913 956,616
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Cash at end of period $ 526,006 $ 798,209
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See accompanying notes to financial statements.
RMI COVERED HOPPER RAILCAR MANAGEMENT PROGRAM 79-1
NOTES TO THE STATEMENTS OF REVENUES COLLECTED AND EXPENSES PAID
AND OTHER CHANGES IN CASH
March 31, 2001
1. Basis of Presentation
RMI Covered Hopper Railcar Management Program 79-1 (the Program) is not a legal
entity. The statements of revenues collected and expenses paid and other changes
in cash (the Statements) of the Program are presented on the cash basis of
accounting, used for reporting to investors in the Program in accordance with
the Management Agreement with PLM Investment Management, Inc. (IMI). Under the
cash basis of accounting, revenues are recognized when received, rather than
when earned, and expenses are recognized when paid, rather than when the
obligation is incurred. Accordingly, the Statements are not intended to present
the financial position or results of operations or cash flows of the Program in
accordance with generally accepted accounting principles.
2. Operations
As of March 31, 2001, 488 cars, which are owned by the investors, were being
managed by IMI under the Program. All of the cars except 141 cars were on lease
as of March 31, 2001. As of March 31, 2000, 490 cars, which were owned by the
investors, were being managed by IMI under the Program. All of the cars except
six cars were on lease as of March 31, 2000. During the three months ending
March 31, 2001 and 2000, no cars were added to the Program and no cars were sold
or destroyed.
3. Equalization reserve
Under the terms of the management agreement, IMI may, at its discretion, cause
the Program to retain a certain amount of cash (the working capital reserve) to
cover future disbursements and provide for a balanced distribution of funds to
the investors each quarter. IMI has determined the working capital reserve at
March 31, 2001, to be $480,766 ($419,882 at December 31, 2000).
(this space intentionally left blank)
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(I) RESULTS OF OPERATIONS
Comparison of RMI Covered Hopper Railcar Management Program 79-1 (the Program)
Revenues Collected, Expenses Paid and Other Changes in Cash for the Three Months
Ended March 31, 2001 and 2000
Revenues collected:
(1) Lease receipts decreased to $305,672 in the first quarter of 2001, from
$421,343 in the first quarter of 2000. A $108,135 decrease in lease receipts was
due to 141 cars being off-lease during the first quarter of 2001 compared to six
cars being off-lease during the first quarter of 2000. A $92,157 decrease in
lease receipts was due to lower average lease rates during the comparable
periods, and a $1,020 decrease was due to two cars being destroyed during 2000.
This decrease was partially offset by an increase in lease receipts of $85,641
due to the timing of receipt of revenues during the comparable periods.
(2) Interest and other income decreased to $6,999 in the first quarter of 2001,
from $11,738 in the first quarter of 2000. The decrease was primarily due to
lower interest income earned as a result of lower average cash balances during
the first quarter of 2001 when compared to the same quarter of 2000.
Expenses paid:
(1) Management fees decreased to $55,632 in the first quarter of 2001, from
$59,295 in the first quarter of 2000. The decrease was primarily due to no
incentive fees being paid to PLM Investment Management, Inc. (IMI) in the first
quarter of 2001 compared to $3,435 in incentive fees that were paid to IMI in
the first quarter of 2000.
(2) Repairs and maintenance expense decreased to $77,848 in the first quarter of
2001, from $159,743 in the first quarter of 2000. A decrease in repairs and
maintenance expense of $57,458 was due to 141 cars being off-lease during the
first quarter of 2001 compared to six cars being off-lease in the first quarter
of 2000. A decrease in repairs and maintenance expense of $24,437 was due to the
timing of payments of expenses during comparable period.
(3) Property taxes increased to $2,772 in the first quarter of 2001, from $1,364
for the comparable period in 2000. The increase was primarily due to the timing
of payments for these expenses during the comparable periods, as the tax rates
and number of cars owned by the Program remained relatively constant.
(4) Accounting and legal fees decreased to $5,405 in the first quarter of 2001,
from $6,171 in the first quarter of 2000. A decrease in accounting and legal
fees of $1,986 was due to the timing of payments for these expenses during the
comparable periods. The decrease was partially offset by an increase in
accounting and legal fees of $1,220 due to the increase in cost of these
professional services.
(5) Storage, repositioning and other expenses increased to $12,570 in the first
quarter of 2001, from $6,818 for the comparable period in 2000. The increase was
primarily due to the timing of payments for these expenses during the comparable
periods.
Other changes in cash:
Reimbursable prepaid mileage, repairs and other expenses are composed primarily
of receipts of mileage credits from railroads which are due to lessees, net of
reimbursable repairs due from lessees. Net receipts were $18,537 in the first
quarter of 2001 compared to net receipts of $30,814 in the first quarter of
2000. The difference between comparable periods was due primarily to the timing
of receipts and repayments of these funds by the Program.
The Program distributed $192,888 to investors in the three months ended March
31, 2001 compared to $388,911 in the three months ended March 31, 2000.
The Program's performance in the three months ended March 31, 2001 is not
necessarily indicative of future periods.
(II) FORWARD-LOOKING INFORMATION
Except for the historical information contained herein, the discussion in this
Form 10-Q contains forward-looking statements that involve risks and
uncertainties, such as statements of the Program's plans, objectives,
expectations, and intentions. The cautionary statements made in this Form 10-Q
should be read as being applicable to all related forward-looking statements
wherever they appear in this Form 10-Q. The Program's actual results could
differ materially from those discussed here.
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.
RMI COVERED HOPPER RAILCAR
MANAGEMENT PROGRAM 79-1
By: PLM Investment Management, Inc.
Manager
By: /s/ Stephen M. Bess
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Stephen M. Bess
President
Date: May 7, 2001 By: /s/ Richard K Brock
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Richard K Brock
Vice President and
Chief Financial Officer