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 JUNE 30, 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 JUNE 30, 1999
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - June 30, 1999 (unaudited) and December 31, 1998 4
Statements of Operations for the three and six months ended June 30, 1999 and 1998 (unaudited) 5
Statements of Cash Flows for the six months ended June 30, 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 14
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Presented herein are the Registrant's balance sheets as of June 30, 1999
and December 31, 1998, statements of operations for the three and six
months ended June 30, 1999 and 1998, and statements of cash flows for the
six months ended June 30, 1999 and 1998.
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IEA INCOME FUND VII,
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1999 1998
---------- ------------
Assets
Current assets:
Cash and cash equivalents, includes $324,514 at June 30, 1999 and
$278,040 at December 31, 1998 in interest-bearing accounts $ 325,920 $ 278,140
Net lease receivables due from Leasing Company
(notes 1 and 2) 60,706 134,960
---------- ----------
Total current assets 386,626 413,100
---------- ----------
Container rental equipment, at cost 3,039,326 3,707,535
Less accumulated depreciation 1,955,351 2,319,154
---------- ----------
Net container rental equipment 1,083,975 1,388,381
---------- ----------
$1,470,601 $1,801,481
========== ==========
Partners' Capital
Partners' capital:
General partners $ 37,409 $ 29,386
Limited partners 1,433,192 1,772,095
---------- ----------
Total partners' capital 1,470,601 1,801,481
---------- ----------
$1,470,601 $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 Six Months Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
Net lease revenue (notes 1 and 3) $ 48,443 $119,734 $125,493 $252,626
Other operating expenses:
Depreciation 33,977 57,928 84,363 117,526
Other general and administrative expenses 3,866 5,538 13,381 14,265
-------- -------- -------- --------
37,843 63,466 97,744 131,791
-------- -------- -------- --------
Earnings from operations 10,600 56,268 27,749 120,835
Other income:
Interest income 3,575 3,509 6,736 7,410
Net gain on disposal of equipment 44,741 33,795 80,940 53,932
-------- -------- -------- --------
48,316 37,304 87,676 61,342
-------- -------- -------- --------
Net earnings $ 58,916 $ 93,572 $115,425 $182,177
======== ======== ======== ========
Allocation of net earnings:
General partners $ 31,012 $ 23,424 $ 52,654 $ 44,885
Limited partners 27,904 70,148 62,771 137,292
-------- -------- -------- --------
$ 58,916 $ 93,572 $115,425 $182,177
======== ======== ======== ========
Limited partners' per unit share of net earnings $ 3.00 $ 7.53 $ 6.74 $ 14.74
======== ======== ======== ========
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)
Six Months Ended
----------------------------
June 30, June 30,
1999 1998
--------- ---------
Net cash provided by operating activities $ 162,493 $ 213,769
Cash flows provided by investing activities:
Proceeds from disposal of equipment 331,593 143,237
Cash flows used in financing activities:
Distribution to partners (446,306) (394,562)
--------- ---------
Net increase (decrease) in cash and cash equivalents 47,780 (37,556)
Cash and cash equivalents at January 1 278,140 347,836
--------- ---------
Cash and cash equivalents at June 30 $ 325,920 $ 310,280
========= =========
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. 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.
As of June 30, 1999, the Partnership owned and operated 631
twenty-foot and 563 forty-foot marine dry cargo containers.
(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 two 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 June
30, 1999 and December 31, 1998 were as follows:
June 30, December 31,
1999 1998
-------- ------------
Lease receivables, net of doubtful accounts of $18,773
at June 30, 1999 and $22,438 at December 31, 1998 $182,034 $286,993
Less:
Direct operating payables and accrued expenses 46,415 74,866
Damage protection reserve 15,423 20,870
Base management fees 30,997 32,974
Reimbursed administrative expenses 2,620 3,559
Incentive fees 25,873 19,764
-------- --------
$ 60,706 $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 revenue for the three and six-month periods ended
June 30, 1999 and 1998, was as follows:
Three Months Ended Six Months Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
Rental revenue (note 4) $126,335 $213,016 $292,005 $442,565
Less:
Rental equipment operating expenses 33,936 44,639 72,447 88,091
Base management fees 10,613 14,669 22,869 30,422
Reimbursed administrative expenses 7,469 10,617 15,497 26,149
Incentive fees 25,874 23,357 55,699 45,277
-------- -------- -------- --------
$ 48,443 $119,734 $125,493 $252,626
======== ======== ======== ========
(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, whose 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 owning and leasing marine cargo
containers. As of June 30, 1999, the Partnership operated 631 twenty-foot
and 563 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.
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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 June 30, 1999 and December
31, 1998.
During the first six months of 1999, the Registrant disposed of 280
containers as part of its ongoing operations. At June 30, 1999, 57% 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 91 146
Master leases 392 328
--- ---
Subtotal 483 474
Containers off lease 148 89
--- ---
Total container fleet 631 563
=== ===
20-Foot 40-Foot
------------------------ ------------------------
Units % Units %
----- ----- ----- -----
Total purchases 1,001 100% 1,104 100%
Less disposals 370 37% 541 49%
----- ----- ----- -----
Remaining fleet at June 30, 1999 631 63% 563 51%
===== ===== ===== =====
During the second quarter of 1999, distributions from operations and sales
proceeds amounted to $268,430, reflecting distributions to the general and
limited partners for the first quarter of 1999. This represents an increase
from the $177,876 distributed during the first quarter of 1999, reflecting
distributions for the fourth quarter of 1998. The Registrant's continuing
disposal of containers should produce lower operating results and,
consequently, lower distributions from operations to the limited partners
in subsequent periods. Sales proceeds distributed to the limited partners
may fluctuate in subsequent periods, reflecting the level of container
disposals.
The sentiment with respect to the container industry's slump over the past
two years has turned more favorable in recent months as evidence suggests a
turnaround is underway with respect to Asia's economic crisis. In recent
months, economic reforms in Asia, as well as in Latin America, have begun
to produce gradual improvement in terms of world trade, and there are
preliminary indications that containerized trade volumes from North America
and Europe to Asia, in particular, may be stabilizing. In addition,
intra-Asian trade, which also has stagnated since the Asia financial crisis
began nearly two years ago, has shown increased activity in recent months.
These favorable signs, however, have yet to produce any significant
positive impact on the Registrant's operating performance. In spite of the
reduced redelivery of on-hire equipment by the ocean carriers, per-diem
rental rates, which declined
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sharply over the past two years, have continued to soften as a result of
competitive market conditions, decreased demand and high inventories.
The Registrant continues to take advantage of its strong marketing
resources in order to seek out leasing opportunities during this period in
which seasonal factors are also influencing the increased demand. At the
same time, it has identified specific strategies intended to strengthen
on-hire volumes and enhance utilization of the container fleet. The
short-term objective is to improve utilization by offering greater leasing
incentives and actively moving surplus, off-hire equipment to higher-demand
locations. While this short-term strategy will increase repositioning
expenses, it may also minimize those expenses related to handling and
storing off-hire containers. These measures will also provide the
longer-term advantage of placing the containers where the demand is
greatest.
2) Material changes in the results of operations between the three and
six-month periods ended June 30, 1999 and the three and six-month periods
ended June 30, 1998.
Net lease revenue for the three and six-month periods ended June 30, 1999
was $48,443 and $125,493, respectively, a decrease of approximately 60% and
50% from the respective three and six-month periods in the prior year.
Approximately 76% and 70%, respectively, of the Registrant's net earnings
for the three and six-month periods ended June 30, 1999 were from gain on
disposal of equipment, as compared to 36% and 30%, respectively, for the
same three and six-month periods 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 dependent on the level of container disposals.
Gross rental revenue (a component of net lease revenue) for the three and
six-month periods ended June 30, 1999 was $126,335 and $292,005,
respectively, reflecting a decline of 41% and 34% from the same respective
three and six-month periods in 1998. Gross rental revenue was primarily
impacted by the Registrant's fleet size and a decline in per-diem rental
rates. Average per-diem rental rates decreased approximately 8% and 7%,
respectively, when compared to the same three and six-month periods in the
prior year. The Registrant's average fleet size and utilization rates for
the three and six-month periods ended June 30, 1999 and 1998 were as
follows:
Three Months Ended Six Months Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
Average fleet size (measured in twenty-foot
equivalent units (TEU)) 1,849 2,446 1,960 2,494
Average Utilization 80% 82% 80% 81%
The Registrant's diminishing fleet size contributed to a 41% and 28%
decline in depreciation expense respectively when compared to the same
three and six-month periods in the prior year. Rental equipment operating
expenses were 27% and 25%, respectively, of the Registrant's gross lease
revenue during the three and six-month periods ended June 30, 1999, as
compared to 21% and 20%, respectively, of the Registrant's gross lease
revenue during the same three and six-month periods ended June 30, 1998.
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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 Leasing Company's computer systems have undergone
modifications in order to render the systems ready for the Year 2000. The
Leasing Company has completed a detailed inventory of all software and hardware
systems and has identified all components that need to be modified. The Leasing
Company has completed all the necessary changes and testing in a dedicated Year
2000 environment. The Leasing Company anticipates that all compliant code will
be live by the end of August 1999. The Leasing Company has contacted all of its
critical business suppliers and has been advised that their systems are Year
2000 compliant. The Leasing Company has also confirmed the compliance of its
suppliers' products through its own extensive testing. Expenses associated with
addressing Year 2000 issues are being recognized as incurred. Management has not
yet assessed the Year 2000 compliance expense but does not anticipate the costs
incurred to date or to be incurred in the future by the Leasing Company and its
affiliates to be in excess of $500,000. None of the costs incurred with respect
to Year 2000 compliance will be borne by the Registrant. The Leasing Company
believes it will be able to resolve any major Year 2000 issues. The Leasing
Company is aware of the implications of a Year 2000 computer system failure and
is currently in the process of developing its contingency plans. While
management believes the possibility of a Year 2000 system failure to be remote,
if the Leasing Company's internal systems or those of its critical business
suppliers fail, the Leasing Company's consolidated financial position, liquidity
or results of operations may be adversely affected.
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 in the above 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 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 the Registrant has previously reported, in February 1997, its former
outside auditors, Arthur Andersen LLP ("Arthur Andersen"), resigned as
auditors to The Cronos Group (the "Parent Company"), its subsidiaries, and
all other entities affiliated with the Parent Company, including the
Registrant. The Parent Company is the indirect corporate parent of CCC, the
managing general partner of 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 prepared a report
pursuant to Section 10A of the Securities Exchange Act of 1934, as amended,
for filing by the Parent Company with the Securities and Exchange
Commission ("SEC"). As a result of the Arthur Andersen report, the SEC
commenced an investigation of the Parent Company on February 10, 1997. The
purpose of the investigation has been to determine whether the Parent
Company and persons associated with the Parent Company violated the federal
securities laws administered by the SEC. The Registrant does not believe
that the focus of the SEC's investigation is upon the Registrant or CCC.
Current management of the Parent Company has been in discussions with the
staff of the SEC with a view to settling the investigation. The Parent
Company is hopeful of reaching a settlement of the investigation by the end
of 1999.
Item 3. Defaults Upon Senior Securities
See Item 5. Other Information.
Item 5. Other Information
In 1993, the Parent Company negotiated a credit facility with several banks
for the use by the Parent Company and its subsidiaries, including CCC. At
December 31, 1998, approximately $33,110,000 in principal indebtedness was
outstanding under that credit facility (none of which had been borrowed by
the Registrant). As a party to that credit facility, CCC was jointly and
severally liable for the repayment of all principal and interest owed under
the credit facility. On August 2, 1999, all outstanding amounts under the
credit facility were repaid through the establishment of a new credit
facility with two financial institutions. CCC is not a party to the new
loan agreement. The Parent Company has guaranteed up to $10 million of
amounts borrowed under the new credit facility and, as partial security for
this guarantee, the Parent Company has pledged all of the capital stock
held by it in Cronos Holding/Investments (U.S.), Inc., a Delaware
corporation that, in turn, owns all of the outstanding capital stock of
CCC.
The Registrant is not a borrower under the new credit facility established
by the Parent Company, and neither the containers nor the other assets of
the Registrant have been pledged as collateral under the new credit
facility.
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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 June 30, 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: August 16, 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)