1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
Commission file number 0-16834
IEA INCOME FUND VII,
A CALIFORNIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
California 94-2966976
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
444 Market Street, 15th Floor, San Francisco, California 94111
(Address of principal executive offices) (Zip Code)
(415) 677-8990
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
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IEA INCOME FUND VII,
A CALIFORNIA LIMITED PARTNERSHIP
REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 1999
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 1999 (unaudited) and December 31, 1998 4
Statements of Operations for the three months ended March 31, 1999 and 1998 (unaudited) 5
Statements of Cash Flows for the three months ended March 31, 1999 and 1998 (unaudited) 6
Notes to Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 3. Defaults Upon Senior Securities 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 15
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Presented herein are the Registrant's balance sheets as of March 31,
1999 and December 31, 1998, statements of operations for the three
months ended March 31, 1999 and 1998, and statements of cash flows for
the three months ended March 31, 1999 and 1998.
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IEA INCOME FUND VII,
A CALIFORNIA LIMITED PARTNERSHIP
BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
1999 1998
---------- -------------
Assets
Current assets:
Cash and cash equivalents, includes $363,640 at March 31, 1999 and
$278,040 at December 31, 1998 in interest-bearing accounts $ 363,740 $ 278,140
Net lease receivables due from Leasing Company
(notes 1 and 2) 109,567 134,960
---------- ----------
Total current assets 473,307 413,100
---------- ----------
Container rental equipment, at cost 3,313,021 3,707,535
Less accumulated depreciation 2,106,213 2,319,154
---------- ----------
Net container rental equipment 1,206,808 1,388,381
---------- ----------
$1,680,115 $1,801,481
========== ==========
Partners' Capital
Partners' capital:
General partners $ 33,241 $ 29,386
Limited partners 1,646,874 1,772,095
---------- ----------
Total partners' capital 1,680,115 1,801,481
---------- ----------
$1,680,115 $1,801,481
========== ==========
The accompanying notes are an integral part of these financial statements.
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IEA INCOME FUND VII,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
----------------------------
March 31, March 31,
1999 1998
-------- --------
Net lease revenue (notes 1 and 3) $ 77,050 $132,892
Other operating expenses:
Depreciation 50,386 59,598
Other general and administrative expenses 9,515 8,727
-------- --------
59,901 68,325
-------- --------
Earnings from operations 17,149 64,567
Other income:
Interest income 3,161 3,901
Net gain on disposal of equipment 36,199 20,137
-------- --------
39,360 24,038
-------- --------
Net earnings $ 56,509 $ 88,605
======== ========
Allocation of net earnings:
General partners $ 21,642 $ 21,461
Limited partners 34,867 67,144
-------- --------
$ 56,509 $ 88,605
-------- --------
Limited partners' per unit share of net earnings $ 3.74 $ 7.21
======== ========
The accompanying notes are an integral part of these financial statements.
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IEA INCOME FUND VII,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
-------------------------------
March 31, March 31,
1999 1998
--------- ---------
Net cash provided by operating activities $ 85,826 $ 71,774
Cash flows provided by investing activities:
Proceeds from disposal of equipment 177,650 69,180
Cash flows used in financing activities:
Distribution to partners (177,876) (197,281)
--------- ---------
Net increase (decrease) in cash and cash equivalents 85,600 (56,327)
Cash and cash equivalents at January 1 278,140 347,836
--------- ---------
Cash and cash equivalents at March 31 $ 363,740 $ 291,509
========= =========
The accompanying notes are an integral part of these financial statements.
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IEA INCOME FUND VII,
A California Limited Partnership
Notes to Unaudited Financial Statements
(1) Summary of Significant Accounting Policies
(a) Nature of Operations
IEA Income Fund VII, A California Limited Partnership (the
"Partnership") was organized under the laws of the State of
California on June 27, 1985 for the purpose of owning and
leasing marine cargo containers worldwide to ocean carriers.
To this extent, the Partnership's operations are subject to
the fluctuations of world economic and political conditions.
Such factors may affect the pattern and levels of world trade.
The Partnership believes that the profitability of, and risks
associated with, leases to foreign customers is generally the
same as those of leases to domestic customers. The
Partnership's leases generally require all payments to be made
in United States currency.
The managing general partner is Cronos Capital Corp. ("CCC");
the associate general partners include seven individuals, one
is an officer of CCC. CCC, with its affiliate Cronos
Containers Limited (the "Leasing Company"), manages the
business of the Partnership. The Partnership shall continue
until December 31, 2007, unless sooner terminated upon the
occurrence of certain events.
The Partnership commenced operations on February 2, 1987, when
the minimum subscription proceeds of $1,000,000 were obtained.
The Partnership offered 40,000 units of limited partnership
interest at $500 per unit, or $20,000,000. The offering
terminated on August 31, 1987, at which time 9,314 limited
partnership units had been purchased.
(b) Leasing Company and Leasing Agent Agreement
Pursuant to the Limited Partnership Agreement of the
Partnership, all authority to administer the business of the
Partnership is vested in CCC. CCC has entered into a Leasing
Agent Agreement whereby the Leasing Company has the
responsibility to manage the leasing operations of all
equipment owned by the Partnership. Pursuant to the Agreement,
the Leasing Company is responsible for leasing, managing and
re-leasing the Partnership's containers to ocean carriers and
has full discretion over which ocean carriers and suppliers of
goods and services it may deal with. The Leasing Agent
Agreement permits the Leasing Company to use the containers
owned by the Partnership, together with other containers owned
or managed by the Leasing Company and its affiliates, as part
of a single fleet operated without regard to ownership. Since
the Leasing Agent Agreement meets the definition of an
operating lease in Statement of Financial Accounting Standards
(SFAS) No. 13, it is accounted for as a lease under which the
Partnership is lessor and the Leasing Company is lessee.
The Leasing Agent Agreement generally provides that the
Leasing Company will make payments to the Partnership based
upon rentals collected from ocean carriers after deducting
direct operating expenses and management fees to CCC. The
Leasing Company leases containers to ocean carriers, generally
under operating leases which are either master leases or term
leases (mostly one to five years). Master leases do not
specify the exact number of containers to be leased or the
term that each container will remain on hire but allow the
ocean carrier to pick up and drop off containers at various
locations; rentals are based upon the number of containers
used and the applicable per-diem rate. Accordingly, rentals
under master leases are all variable and contingent upon the
number of containers used. Most containers are leased to ocean
carriers under master leases; leasing agreements with fixed
payment terms are not material to the financial statements.
Since there are no material minimum lease rentals, no
disclosure of minimum lease rentals is provided in these
financial statements.
(Continued)
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IEA INCOME FUND VII,
A California Limited Partnership
Notes to Unaudited Financial Statements
(c) Basis of Accounting
The Partnership utilizes the accrual method of accounting. Net
lease revenue is recorded by the Partnership in each period
based upon its leasing agent agreement with the Leasing
Company. Net lease revenue is generally dependent upon
operating lease rentals from operating lease agreements
between the Leasing Company and its various lessees, less
direct operating expenses and management fees due in respect
of the containers specified in each operating lease agreement.
(d) Financial Statement Presentation
These financial statements have been prepared without audit.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting procedures have been omitted. It is
suggested that these financial statements be read in
conjunction with the financial statements and accompanying
notes in the Partnership's latest annual report on Form 10-K.
The preparation of financial statements in conformity with
generally accepted accounting principles (GAAP) requires the
Partnership to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from
those estimates.
The interim financial statements presented herewith reflect
all adjustments of a normal recurring nature which are, in the
opinion of management, necessary to a fair statement of the
financial condition and results of operations for the interim
periods presented.
(2) Net Lease Receivables Due from Leasing Company
Net lease receivables due from the Leasing Company are determined by
deducting direct operating payables and accrued expenses, base
management fees payable, reimbursed administrative expenses, and
incentive fees payable to CCC and its affiliates from the rental
billings payable by the Leasing Company to the Partnership under
operating leases to ocean carriers for the containers owned by the
Partnership. Net lease receivables at March 31, 1999 and December 31,
1998 were as follows:
March 31, December 31,
1999 1998
-------- ------------
Lease receivables, net of doubtful accounts of $15,775
at March 31, 1999 and $22,438 at December 31, 1998 $241,846 $286,993
Less:
Direct operating payables and accrued expenses 49,682 74,866
Damage protection reserve 18,065 20,870
Base management fees 31,586 32,974
Reimbursed administrative expenses 3,122 3,559
Incentive fees 29,824 19,764
-------- --------
$109,567 $134,960
======== ========
(Continued)
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IEA INCOME FUND VII,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(3) Net Lease Revenue
Net lease revenue is determined by deducting direct operating expenses,
base management and incentive fees and reimbursed administrative
expenses to CCC from the rental revenue billed by the Leasing Company
under operating leases to ocean carriers for the containers owned by
the Partnership. Net lease revenues for the three-month periods ended
March 31, 1999 and 1998 were as follows:
Three Months Ended
----------------------------
March 31, March 31,
1999 1998
-------- --------
Rental revenue (note 4) $165,670 $229,549
Less:
Rental equipment operating expenses 38,511 43,452
Base management fees 12,256 15,753
Reimbursed administrative expenses 8,028 15,532
Incentive fees 29,825 21,920
-------- --------
$ 77,050 $132,892
======== ========
(4) Operating Segment
The Financial Accounting Standards Board has issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information,"
which changes the way public business enterprises report financial and
descriptive information about reportable operating segments. An
operating segment is a component of an enterprise that engages in
business activities from which it may earn revenues and incur expenses,
of which operating results are regularly reviewed by the enterprise's
chief operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance, and about which
separate financial information is available. Management operates the
Partnership's container fleet as a homogenous unit and has determined,
after considering the requirements of SFAS No. 131, that as such it has
a single reportable operating segment.
The Partnership derives its revenues from owing and leasing marine
cargo containers. As of March 31, 1999, the Partnership operated 683
twenty-foot and 628 forty-foot marine dry cargo containers.
Due to the Partnership's lack of information regarding the physical
location of its fleet of containers when on lease in the global
shipping trade, it is impracticable to provide the geographic area
information required by SFAS No. 131. Any attempt to separate "foreign"
operations from "domestic" operations would be dependent on definitions
and assumptions that are so subjective as to render the information
meaningless and potentially misleading.
(Continued)
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
It is suggested that the following discussion be read in conjunction with the
Registrant's most recent annual report on Form 10-K.
1) Material changes in financial condition between March 31, 1999 and
December 31, 1998.
During the first three months of 1999, the Registrant disposed of 163
containers as part of its ongoing operations. At March 31, 1999, 62%
of the original equipment remained in the Registrant's fleet, as
compared to 70% at December 31, 1998, and was comprised of the
following:
20-Foot 40-Foot
------- -------
Containers on lease:
Term leases 104 157
Master leases 402 351
--- ---
Subtotal 506 508
Containers off lease 177 120
--- ---
Total container fleet 683 628
=== ===
20-Foot 40-Foot
---------------------- ----------------------
Units % Units %
----- --- ----- ---
Total purchases 1,001 100% 1,104 100%
Less disposals 318 32% 476 43%
----- --- ----- ---
Remaining fleet at March 31, 1999 683 68% 628 57%
===== === ===== ===
During the first quarter of 1999, distributions from operations and
sales proceeds amounted to $177,876, reflecting distributions to the
general and limited partners for the fourth quarter of 1998. This
represents a decline from the $181,111 distributed during the fourth
quarter of 1998, reflecting distributions for the third quarter of
1998. The Registrant's continuing disposal of containers should
produce lower operating results and, consequently, lower
distributions from operations to its partners in subsequent periods.
Sales proceeds distributed to its partners may fluctuate in
subsequent periods, reflecting the level of container disposals.
Growth in intra-Asian trade and improving lease-out activity in some
key locations have expanded the requirement for leased containers in
selected locations. As a result of these slowly improving trends,
trade volumes in several markets are rebounding and utilization of
the Registrant's equipment has been recently improving. However,
per-diem rental rates remain unchanged and container imbalances are
expected to continue for the remainder of 1999. In light of the
encouraging signs mentioned above, the Registrant will selectively
increase its repositioning of available equipment to higher demand
locations when it believes that the impact will have a positive
effect on operations.
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2) Material changes in the results of operations between the three-month
period ended March 31, 1999 and the three- month period ended March
31, 1998.
Net lease revenue for the three-month period ended March 31, 1999 was
$77,050, a decrease of approximately 42% from the same three-month
period in the prior year. Approximately 64% of the Registrant's net
earnings for the three-month period ended March 31, 1999 were from
gain on disposal of equipment, as compared to 23% for the same
three-month period in the prior year. As the Registrant's container
disposals increase in subsequent periods, net gain on disposal should
contribute significantly to the Registrant's net earnings and may
fluctuate depending on the level of container disposals.
Gross rental revenue (a component of net lease revenue) for the
three-month period ended March 31, 1999 was $165,670, reflecting a
decline of 28% from the same three-month period in 1998. Gross rental
revenue was primarily impacted by the reduction in the Registrant's
fleet size and a decline in per-diem rental rates. Average per-diem
rental rates decreased approximately 6% when compared to the same
three-month period in the prior year. The Registrant's average fleet
size and utilization rates for the three-month periods ended March
31, 1999 and 1998 were as follows:
Three Months Ended
----------------------------
March 31, March 31,
1999 1998
--------- ---------
Average fleet size (measured in twenty-foot equivalent
units (TEU)) 2,066 2,530
Average Utilization 79% 81%
The Registrant's declining fleet size contributed to a 15% decline in
depreciation expense when compared to the same three-month period in
the prior year. Rental equipment operating expenses were 23% of the
Registrant's gross lease revenue during the three-month period ended
March 31, 1999, as compared to 19% during the three-month period
ended March 31, 1998.
Year 2000
The Registrant relies upon the financial and operational systems
provided by the Leasing Company and its affiliates, as well as the
systems provided by other independent third parties to service the
three primary areas of its business: investor processing/maintenance;
container leasing/asset tracking; and accounting finance. The
Registrant has received confirmation from its third-party investor
processing/maintenance vendor that their system is Year 2000
compliant. The Registrant does not expect a material increase in its
vendor servicing fee to reimburse Year 2000 costs. Container
leasing/asset tracking and accounting/finance services are provided
to the Registrant by CCC and its affiliate, the Leasing Company,
pursuant to the respective Limited Partnership Agreement and Leasing
Agent Agreement. CCC and the Leasing Company have initiated a program
to prepare their systems and applications for the Year 2000.
Preliminary studies indicate that testing, conversion and upgrading
of system applications is expected to cost CCC and the Leasing
Company less than $500,000. Pursuant to the Limited Partnership
Agreement, CCC or the Leasing Company, may not seek reimbursement of
data processing costs associated with the Year 2000 program. The
financial impact of making these required system changes is not
expected to be material to the Registrant's financial position,
results of operations or cash flows.
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Cautionary Statement
This Quarterly Report on Form 10-Q contains statements relating to
future results of the Registrant, including certain projections and
business trends, that are "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. Actual results
may differ materially from those projected as a result of certain
risks and uncertainties, including but not limited to changes in
economic conditions; trade policies; demand for and market acceptance
of leased marine cargo containers; competitive utilization and
per-diem rental rate pressures; as well as other risks and
uncertainties, including but not limited to those described above in
the discussion of the marine container leasing business under Item
2., Management's Discussion and Analysis of Financial Condition and
Results of Operations; and those detailed from time to time in the
filings of the Registrant with the Securities and Exchange
Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As reported in the Registrant's Current Report on Form 8-K and
Amendment No. 1 to Current Report on Form 8-K, filed with the
Commission on February 7, 1997 and February 26, 1997, respectively,
Arthur Andersen, London, England, resigned as auditors of The Cronos
Group, (the "Parent Company"), on February 3, 1997.
The Parent Company is the indirect corporate parent of CCC, the
managing general partner of the Registrant. In its letter of
resignation to the Parent Company, Arthur Andersen stated that it
resigned as auditors of the Parent Company and all other entities
affiliated with the Parent Company. While its letter of resignation
was not addressed to CCC, Arthur Andersen confirmed to CCC that its
resignation as auditors of the entities referred to in its letter of
resignation included its resignation as auditors of CCC and the
Registrant.
CCC does not believe, based upon the information currently available
to it, that Arthur Andersen's resignation was triggered by any
concern over the accounting policies and procedures followed by the
Registrant.
Arthur Andersen's reports on the financial statements of CCC and the
Registrant, for years preceding 1996, had not contained an adverse
opinion or a disclaimer of opinion, nor were any such reports
qualified or modified as to uncertainty, audit scope, or accounting
principles.
During the Registrant's fiscal year ended December 31, 1995 and the
subsequent interim period preceding Arthur Andersen's resignation,
there were no disagreements between CCC or the Registrant and Arthur
Andersen on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
In connection with its resignation, Arthur Andersen also prepared a
report pursuant to the provisions of Section 10A(b)(2) of the
Securities Exchange Act of 1934, as amended, for filing by the Parent
Company with the Securities and Exchange Commission (the "SEC").
Following the report of Arthur Andersen, the SEC, on February 10,
1997, commenced a private investigation of the Parent Company for the
purpose of investigating the matters discussed in such report and
related matters. The Registrant does not believe that the focus of
the SEC's investigation is upon the Registrant or CCC. CCC is unable
to predict the outcome of the SEC's ongoing private investigation of
the Parent Company.
Item 3. Defaults Upon Senior Securities
See Item 5. Other Information.
Item 5. Other Information
In 1993, the Parent Company negotiated a credit facility
(hereinafter, the "Credit Facility") with several banks for the use
by the Parent Company and its subsidiaries, including CCC. At
December 31, 1996, approximately $73,500,000 in principal
indebtedness was outstanding under the Credit Facility. As a party to
the Credit Facility, CCC is jointly and severally liable for the
repayment of all principal and interest owed under the Credit
Facility. The obligations of CCC, and the five other subsidiaries of
the Parent Company that are borrowers under the Credit Facility, are
guaranteed by the Parent Company.
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Following negotiations in 1997 with the banks providing the Credit
Facility, an Amended and Restated Credit Agreement was executed in
June 1997, subject to various actions being taken by the Parent
Company and its subsidiaries, primarily relating to the provision of
additional collateral. This Agreement was further amended in July
1997 and the provisions of the Agreement and its Amendment converted
the facility to a term loan, payable in installments, with a final
maturity date of May 31, 1998. The terms of the Agreement and its
Amendment also provided for additional security over shares in the
subsidiary of the Parent Company that owns the head office of the
Parent Company's container leasing operations. They also provided for
the loans to the former Chairman of $5,900,000 and $3,700,000 to be
restructured as obligations of the former Chairman to another
subsidiary of the Parent Company (not CCC), together with the pledge
to this subsidiary company of 2,030,303 Common Shares beneficially
owned by him in the Parent Company as security for these loans. They
further provided for the assignment of these loans to the lending
banks, together with the pledge of 1,000,000 shares and the
assignment of the rights of the Parent Company in respect of the
other 1,030,303 shares. Additionally, CCC granted the lending banks a
security interest in the fees to which it is entitled for the
services it renders to the container leasing partnerships of which it
acts as general partner, including its fee income payable by the
Registrant. The Parent Company did not repay the Credit Facility at
the amended maturity date of May 31, 1998.
On June 30, 1998, the Parent Company entered into a third amendment
(the "Third Amendment") to the Credit Facility. Under the Third
Amendment, the remaining principal amount of $36,800,000 was to be
amortized in varying monthly amounts commencing on July 31, 1998 with
$26,950,000 due on September 30, 1998 and a final maturity date of
January 8, 1999. The Parent Company did not repay the amounts due on
September 30, 1998 and January 8, 1999. The balance outstanding on
the Credit Facility at December 31, 1998 was $33,110,000.
In March 1999, the Parent Company agreed to a fourth amendment (the
"Fourth Amendment") to the Bank Facility under which the final
maturity date will be September 1999. The Fourth Amendment became
effective as of March 31, 1999 subject to the satisfaction thereafter
of various conditions, including the delivery of the Parent Company's
audited financial statements for 1998, together with various legal
opinions and other loan documentation by April 15, 1999. This date
was extended to April 30, 1999. The Parent Company furnished the
required legal opinions and other loan documentation which are now
under review.
The directors of the Parent Company also are pursuing alternative
sources of financing to meet the amended repayment obligations
anticipated under the Fourth Amendment. Failure to meet revised
lending terms would constitute an event of default with the lenders.
The declaration of an event of default would result in further
defaults with other lenders under loan agreement cross-default
provisions. Should a default of the term loans be enforced, the
Parent Company and CCC may be unable to continue as going concerns.
The Registrant is not a borrower under the Credit Facility, and
neither the containers nor the other assets of the Registrant have
been pledged as collateral under the Credit Facility.
CCC is unable to determine the impact, if any, these issues may have
on the future operating results, financial condition and cash flows
of the Registrant or CCC and on the Leasing Company's ability to
manage the Registrant's fleet in subsequent periods.
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
No. Description Method of Filing
------- ---------------------------------------------------- ------------------------
3(a) Limited Partnership Agreement of the Registrant, *
amended and restated as of December 1, 1986
3(b) Certificate of Limited Partnership of the Registrant **
27 Financial Data Schedule Filed with this document
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the
quarter ended March 31, 1999.
- --------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant dated December 3, 1986, included as part of Registration
Statement on Form S-1 (No. 33-9351)
** Incorporated by reference to Exhibit 3.2 to the Registration
Statement on Form S-1 (No. 33-9351)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
IEA INCOME FUND VII,
A California Limited Partnership
By Cronos Capital Corp.
The Managing General Partner
By /s/ Dennis J. Tietz
----------------------------------
Dennis J. Tietz
President and Director of Cronos
Capital Corp. ("CCC")
Principal Executive Officer of CCC
Date: May 15, 1999
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EXHIBIT INDEX
Exhibit
No. Description Method of Filing
------- ---------------------------------------------------- ------------------------
3(a) Limited Partnership Agreement of the Registrant, *
amended and restated as of December 1, 1986
3(b) Certificate of Limited Partnership of the Registrant **
27 Financial Data Schedule Filed with this document
- ---------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant dated December 3, 1986, included as part of Registration
Statement on Form S-1 (No. 33-9351)
** Incorporated by reference to Exhibit 3.2 to the Registration
Statement on Form S-1 (No. 33-9351)