<PAGE> 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, 1998
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 0-27496
CRONOS GLOBAL INCOME FUND XVI, L.P.
(Exact name of registrant as specified in its charter)
California 94-3230380
(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 [ ].
<PAGE> 2
CRONOS GLOBAL INCOME FUND XVI, L.P.
REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 1998 (unaudited) and December 31, 1997 4
Statements of Operations for the three months ended March 31,
1998 and 1997 (unaudited) 5
Statements of Cash Flows for the three months ended
March 31, 1998 and 1997 (unaudited) 6
Notes to Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Presented herein are the Registrant's balance sheets as of March 31,
1998 and December 31, 1997, statements of operations for the three
months ended March 31, 1998 and 1997, and statements of cash flows for
the three months ended March 31, 1998 and 1997.
3
<PAGE> 4
CRONOS GLOBAL INCOME FUND XVI, L.P.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents, includes $1,394,528 at March
31, 1998 and $1,231,959 at December 31, 1997 in
interest-bearing accounts $ 1,411,759 $ 1,232,159
Net lease receivables due from Leasing Company
(notes 1 and 2) 529,959 572,740
------------ ------------
Total current assets 1,941,718 1,804,899
------------ ------------
Container rental equipment, at cost 26,707,030 26,755,856
Less accumulated depreciation 2,828,283 2,442,049
------------ ------------
Net container rental equipment 23,878,747 24,313,807
------------ ------------
Organizational costs, net 168,104 180,594
------------ ------------
$ 25,988,569 $ 26,299,300
============ ============
Partners' Capital
Partners' capital (deficit):
General partner $ 4 $ (4,653)
Limited partners 25,988,565 26,303,953
------------ ------------
Total partners' capital 25,988,569 26,299,300
------------ ------------
$ 25,988,569 $ 26,299,300
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
CRONOS GLOBAL INCOME FUND XVI, L.P.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------
March 31, March 31,
1998 1997
-------- --------
<S> <C> <C>
Net lease revenue (notes 1 and 3) $713,301 $662,478
Other operating expenses:
Depreciation 403,103 391,014
Other general and administrative expenses 14,066 13,369
-------- --------
417,169 404,383
-------- --------
Earnings from operations 296,132 258,095
Other income:
Interest income 16,411 24,918
Net gain on disposal of equipment 8,237 2,031
-------- --------
24,648 26,949
-------- --------
Net earnings $320,780 $285,044
======== ========
Allocation of net earnings:
General partner $ 36,229 $ 26,687
Limited partners 284,551 258,357
-------- --------
$320,780 $285,044
======== ========
Limited partners' per unit share of net earnings $ 0.19 $ 0.26
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
CRONOS GLOBAL INCOME FUND XVI, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------
March 31, March 31,
1998 1997
----------- -----------
<S> <C> <C>
Net cash provided by operating activities $ 765,971 $ 679,017
Cash flows provided by (used in) investing activities:
Proceeds from disposal of equipment 45,075 --
Purchase of container rental equipment -- (1,786,590)
Acquisition fees paid to general partner -- (89,330)
----------- -----------
Net cash provided by (used in) investing activities 45,075 (1,875,920)
----------- -----------
Cash flows provided by (used in) financing activities:
Capital contributions -- 1,931,060
Underwriting commissions -- (193,196)
Offering and organizational expenses -- (91,494)
Distribution to partners (631,446) (545,611)
----------- -----------
Net cash provided by (used in) financing activities (631,446) 1,100,759
----------- -----------
Net increase (decrease) in cash and cash equivalents 179,600 (96,144)
Cash and cash equivalents at January 1 1,232,159 1,755,884
----------- -----------
Cash and cash equivalents at March 31 $ 1,411,759 $ 1,659,740
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
CRONOS GLOBAL INCOME FUND XVI, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) Summary of Significant Accounting Policies
(a) Nature of Operations
Cronos Global Income Fund XVI, L.P. (the "Partnership") is a limited
partnership organized under the laws of the State of California on
September 1, 1995, for the purpose of owning and leasing marine cargo
containers, special purpose containers and container related equipment.
Cronos Capital Corp. ("CCC") is the general partner and, with its
affiliate Cronos Containers Limited (the "Leasing Company"), manages
and controls the business of the Partnership. The Partnership shall
continue until December 31, 2015, unless sooner terminated upon the
occurrence of certain events.
The Partnership commenced operations on March 29, 1996, when the
minimum subscription proceeds of $2,000,000 were received from over 100
subscribers (excluding from such count Pennsylvania residents, the
general partner, and all affiliates of the general partner). On
February 3, 1997, CCC suspended the offer and sale of units in the
Partnership. The offering terminated on December 27, 1997.
As of March 31, 1998, the Partnership operated 3,836 twenty-foot, 1,047
forty-foot and 459 forty-foot high-cube marine dry cargo containers, 90
twenty-foot and 299 forty-foot refrigerated containers, and 52 twenty
four thousand-liter tanks.
(b) Leasing Company and Leasing Agent Agreement
The Partnership 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 and the Leasing Company. 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)
7
<PAGE> 8
CRONOS GLOBAL INCOME FUND XVI, L.P.
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, and reimbursed administrative expenses 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, 1998 and
December 31, 1997 were as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------- ----------
<S> <C> <C>
Lease receivables, net of doubtful accounts of
$82,464 at March 31, 1998 and $61,992 at December 31, 1997 $1,038,206 $1,051,836
Less:
Direct operating payables and accrued expenses 337,154 326,518
Damage protection reserve 84,211 60,999
Base management fees 67,342 70,754
Reimbursed administrative expenses 19,540 20,825
---------- ----------
$ 529,959 $ 572,740
========== ==========
</TABLE>
(Continued)
8
<PAGE> 9
CRONOS GLOBAL INCOME FUND XVI, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(3) Net Lease Revenue
Net lease revenue is determined by deducting direct operating expenses,
base management fees and reimbursed administrative expenses to CCC and its
affiliates 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-month periods ended March 31,
1998 and 1997 was as follows:
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
March 31, March 31,
1998 1997
---------- ----------
<S> <C> <C>
Rental revenue $1,080,875 $ 946,791
Less:
Rental equipment operating expenses 225,579 166,248
Base management fees 74,174 66,051
Reimbursed administrative expenses 67,821 52,014
---------- ----------
$ 713,301 $ 662,478
========== ==========
</TABLE>
9
<PAGE> 10
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, 1998 and December
31, 1997.
At March 31, 1998, the Registrant had $1,411,759 in cash and cash
equivalents, an increase of $179,600 from the December 31, 1997 cash
balances. At March 31, 1998, the Registrant had approximately $65,000 in
cash generated from equipment sales reserved as part of its cash balances.
Throughout the remainder of 1998, the Registrant expects to use cash
generated from equipment sales to purchase and replace containers which
have been lost or damaged beyond repair.
The Registrant's cash distribution from operations for the first quarter of
1998 was 7.5% (annualized) of the limited partners' original capital
contribution, unchanged from the fourth quarter of 1997. These
distributions are directly related to the Registrant's results from
operations and may fluctuate accordingly.
Market conditions that existed during 1997 persisted through the first
quarter of 1998. Low container prices, favorable interest rates and the
abundance of available capital continued to discourage ocean carriers and
other transport companies from leasing containers at levels comparable to
previous years. By the end of 1997, the volatility of the Hong Kong and
other Asian financial markets began to negatively impact trade, shipping
and container leasing. As a result, the Registrant's dry cargo,
refrigerated and tank container utilization rates declined from 84%, 99%
and 90%, respectively, at December 31, 1997 to 81%, 97% and 88%,
respectively, at March 31, 1998. Per-diem rental rates continued to remain
under pressure as a result of the following factors: start-up leasing
companies offering new containers and low rental rates in an effort to
break into the leasing market; established leasing companies reducing rates
to very low levels; and a continuing oversupply of containers. These
leasing market conditions impacted the Registrant's financial condition and
operating performance during the first quarter of 1998.
2) Material changes in the results of operations between the three-month
period ended March 31, 1998 and 1997.
Net lease revenue for the three-month period ended March 31, 1998 was
$713,301, an increase of approximately 8% from the same three-month period
in the prior year. Gross rental revenue (a component of net lease revenue)
for the three-month period ended March 31, 1998 was $1,080,875, reflecting
an increase of 14% from the same three-month period in the prior year. Dry
container average per-diem rental rates for the three-month period ended
March 31, 1998 remained unchanged when compared to the same three-month
period in the prior year. Refrigerated container average per-diem rental
rates for the three-month period ended March 31, 1998 declined 3% when
compared to the same period in the prior year. Tank container average
per-diem rental rates for the three-month period ended March 31, 1998
declined 8% when compared to the same period in the prior year.
10
<PAGE> 11
The Registrant's average fleet size and utilization rates for the
three-month periods ended March 31, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
Three Months Ended
---------------------------
March 31, March 31,
1998 1997
--------- ---------
<S> <C> <C>
Average fleet size (measured in twenty-foot
equivalent units (TEU))
Dry cargo containers 6,853 6,798
Refrigerated containers 690 690
Tank containers 52 52
Average Utilization
Dry cargo containers 81.8% 77.2%
Refrigerated containers 98.2% 90.4%
Tank containers 87.2% 84.7%
</TABLE>
Rental equipment operating expenses were 21% of the Registrant's gross
lease revenue during the three-month period ended March 31, 1998, as
compared to 18% during the three-month period ended March 31, 1997. This
increase was largely attributable to an increase in costs associated with
the Registrant's growing fleet, and costs associated with fluctuating
utilization levels, including handling and storage.
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, a Luxembourg Corporation
headquartered in Orchard Lea, England (The "Parent Company"), on February
3, 1997.
The Parent Company is the indirect corporate parent of CCC, the 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 report on the financial statements of CCC and the
Registrant, for years preceding 1996, has not contained an adverse opinion
or a disclaimer of opinion, nor was any such report qualified or modified
as to uncertainty, audit scope, or accounting principles.
During the Registrant's 1995 fiscal year 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.
The Registrant retained a new auditor, Moore Stephens, P.C. on April 10,
1997, as reported in its Current Report on Form 8-K, filed April 14, 1997.
11
<PAGE> 12
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.
In 1993, the Parent Company negotiated a credit facility (herinafter, the
"Credit Facility") with several banks for the use of the Parent Company and
its affiliates, 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.
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. At December
31, 1997, approximately $37,600,000 was outstanding under the Credit
Facility.
The terms of the Agreement and its Amendment also provide 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 Stefan M. Palatin, the Chairman of the Parent
Company (the "Chairman") and its Chief Executive Officer (and a Director of
CCC), of approximately $5,990,000 and $3,700,000 (totaling approximately
$9,690,000) to be restructured as obligations of the Chairman to another
subsidiary of the Parent Company. These obligations have been collaterally
assigned to the lending banks, together with the pledge of 1,000,000 shares
of the Parent Company's Common Stock owned by the Chairman. These 1,000,000
shares represent 11% of the issued and outstanding shares of Common Stock
of the Parent Company as of December 31, 1997. The shares of the Parent
Company are traded on NASDAQ (CRNSF). (The Chairman, including the
1,000,000 shares pledged to the banks, owns approximately 55% of the issued
and outstanding shares of Common Stock of the Parent Company as of December
31, 1997). 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 lending banks have indicated that they will not renew the Credit
Facility, and the Parent Company has yet to secure a source for repayment
of the balance due under the Credit Facility at May 31, 1998. CCC is
currently in discussions with the management of the Parent Company to
provide assurance that the management of the container leasing partnerships
managed by CCC, including the Registrant, is not disrupted pending a
refinancing or reorganization of the indebtedness of the Parent Company and
its affiliates.
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.
The Registrant is unable to determine the impact, if any, these concerns
may have on the future operating results and financial condition of the
Registrant or CCC and the Leasing Company's ability to manage the
Registrant's fleet in subsequent periods.
12
<PAGE> 13
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 it 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, Cronos Containers Limited (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.
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.
13
<PAGE> 14
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
------- ----------- ----------------
<S> <C> <C>
3(a) Limited Partnership Agreement of the Registrant, *
amended and restated as of December 28, 1995
3(b) Certificate of Limited Partnership of the **
Registrant
10 Form of Leasing Agent Agreement with Cronos ***
Containers Limited
27 Financial Data Schedule Filed with this document
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
ended March 31, 1998.
- -------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant dated December 28, 1995, included as part of Registration
Statement on Form S-1 (No. 33-98290)
** Incorporated by reference to Exhibit 3.2 to the Registration Statement on
Form S-1 (No. 33-98290)
*** Incorporated by reference to Exhibit 10.2 to the Registration Statement on
Form S-1 (No. 33-98290)
14
<PAGE> 15
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.
CRONOS GLOBAL INCOME FUND XVI, L.P.
By Cronos Capital Corp.
The 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, 1998
15
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
-------- ----------- ----------------
<S> <C> <C>
3(a) Limited Partnership Agreement of the Registrant, *
amended and restated as of December 28, 1995
3(b) Certificate of Limited Partnership of the **
Registrant
10 Form of Leasing Agent Agreement with Cronos ***
Containers Limited
27 Financial Data Schedule Filed with this document
</TABLE>
- -------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant dated December 28, 1995, included as part of Registration
Statement on Form S-1 (No. 33-98290)
** Incorporated by reference to Exhibit 3.2 to the Registration Statement on
Form S-1 (No. 33-98290)
*** Incorporated by reference to Exhibit 10.2 to the Registration Statement on
Form S-1 (No. 33-98290)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT MARCH 31, 1998 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE
QUARTERLY PERIOD ENDED MARCH 31, 1998 (UNAUDITED) AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED AS PART OF ITS
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD MARCH 31, 1998
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,411,759
<SECURITIES> 0
<RECEIVABLES> 529,959
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,941,718
<PP&E> 26,707,030
<DEPRECIATION> 2,828,283
<TOTAL-ASSETS> 25,988,569
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,988,569
<TOTAL-LIABILITY-AND-EQUITY> 25,988,569
<SALES> 0
<TOTAL-REVENUES> 713,301
<CGS> 0
<TOTAL-COSTS> 417,169
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 320,780
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
