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, 2000.
[ ] 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
(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
-----------------------
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>
RMI COVERED HOPPER RAILCAR MANAGEMENT PROGRAM 79-1
STATEMENTS OF REVENUES COLLECTED AND EXPENSES PAID
AND OTHER CHANGES IN CASH
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
2000 1999
---------------------------------
<S> <C> <C>
Revenues collected:
Lease receipts $ 421,343 $ 537,324
Interest and other income 11,738 22,730
---------------------------------
Total revenues collected 433,081 560,054
Expenses paid:
Management fees 59,295 74,078
Repairs and maintenance 159,743 73,835
Property taxes 1,364 1,364
Accounting and legal fees 6,171 1,988
Storage, repositioning and other 6,818 2,157
-------------------------------
Total expenses paid 233,391 153,422
---------------------------------
Excess of revenues collected
over expenses paid 199,690 406,632
---------------------------------
Other increases (decreases) in cash:
Prepaid mileage, reimbursable repairs
and other expenses 30,814 32,089
Receipt of proceeds from sold or destroyed cars -- 29,763
Receipt of proceeds for transfer of car ownership -- 26,000
Payments to investors for transfer of car ownership -- (24,960)
Distributions to investors (388,911) (485,325)
---------------------------------
Net other decreases in cash (358,097) (422,433)
---------------------------------
Net decrease in cash (158,407) (15,801)
Cash at beginning of period 956,616 1,318,995
---------------------------------
Cash at end of period $ 798,209 $ 1,303,194
=================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
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, 2000
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, 2000, 490 cars, which are owned by the investors, were being
managed by IMI under the Program. All of the cars except six cars were covered
by lease agreements as of March 31, 2000. As of March 31, 1999, 485 cars, which
are owned by the investors, were being managed by IMI under the Program. All of
the cars were covered by lease agreements as of March 31, 1999. During the three
months ending March 31, 2000, no cars were added to the Program and no cars were
sold or destroyed. During the three months ending March 31, 1999, one car was
added to the Program and one car was 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, 2000, to be $403,490 ($603,179 at December 31, 1999).
(this space intentionally left blank)
<PAGE>
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, 2000 and 1999
REVENUES COLLECTED:
(1) Lease receipts decreased to $421,343 in the first quarter of 2000, from
$537,324 in the first quarter of 1999. A decrease in lease receipts of $161,024
was due to lower average lease rates for majority of railcars during the
comparable periods. These decrease in lease receipts were partially offset by an
increase in lease receipts of $41,473 due to the timing of receipt of revenue,
and a $3,570 increase in lease receipts due to seven cars added in the Program
during the last three quarters of 1999.
(2) Interest and other income decreased to $11,738 in the first quarter of 2000,
from $22,730 in the first quarter of 1999. The decrease in interest and other
income was due to the exchange rate fluctuation, $122 exchange rate loss in the
first quarter of 2000 as compared to $5,848 exchange rate gain in the first
quarter of 1999, a net decrease of $5,970. The decrease in interest and other
income was also due to decrease in interest income of $5,022 during the first
quarter of 2000 when compared to the same period of 1999 resulting from lower
interest income earned on lower average cash balances.
EXPENSES PAID:
(1) Management fees decreased to $59,295 in the first quarter of 2000, from
$74,078 in the first quarter of 1999. The decrease was primarily due to lower
incentive fees paid to PLM Investment Management, Inc. (IMI) in the first
quarter of 2000 compared to same quarter of 1999. In the first quarter of 2000,
$3,435 in incentive fees were paid to IMI, compared to $18,788 in the first
quarter of 1999.
(2) Repairs and maintenance expense increased to $159,743 in the first quarter
of 2000, from $73,835 in the first quarter of 1999. An increase in repairs and
maintenance expense of $43,363 was due to the timing of payments of expenses
during comparable period. An increase of $42,545 in repairs and maintenance
resulted from major repairs required on certain railcars in the fleet during the
first quarter of 2000, which were not needed during the same period of 1999.
(3) Accounting and legal fees increased to $6,171 in the first quarter of 2000,
from $1,988 in the first quarter of 1999. An increase in accounting and legal
fees of $2,379 was due to the timing of payments for these expenses during the
comparable periods. An increase in accounting and legal fees of $1,804 was due
to the increase in cost of these professional services.
(4) Storage, repositioning and other expenses increased to $6,818 in the first
quarter of 2000, from $2,157 for the comparable period in 1999. The increase was
primarily due to higher repositioning expenses during 2000 when compared to
1999.
OTHER CHANGES IN CASH:
(1) 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 $30,814
in the first quarter of 2000, as compared to net receipts of $32,089 in the
first quarter of 1999. The difference between comparable periods was due
primarily to the timing of receipts and repayments of these funds by the
Program.
(2) During the first quarter of 2000, no cars were destroyed or sold. During the
first quarter of 1999, one car was destroyed for which the Program received
insurance proceeds of $29,763. These insurance proceeds were paid to the
investor of the destroyed car in April of 1999.
(3) During the first quarter of 2000, no railcars were transferred between
investors in the Program. During the first quarter of 1999, the Program received
proceeds of $26,000 for a railcar that was transferred from one investor to
another investor in the Program. The Program paid $24,960 net of commission of
$1,040 to the investor that sold the car.
(4) No commission was paid for the three months ended March 31, 2000 or 1999.
Commission of $1,040 was paid to the Manager during the second quarter of 1999
for the one car that was transferred between investors during the first quarter
of 1999.
The Program distributed $388,911 to investors in the three months ended March
31, 2000 compared to $485,325 in the three months ended March 31, 1999.
The Program's performance in the three months ended March 31, 2000 is not
necessarily indicative of future periods.
(II) EFFECTS OF YEAR 2000
To date, the Program has not experienced any material Year 2000 (Y2K) issues
with either its internally developed software or purchased software. In
addition, to date the Program has not been impacted by any Y2K problems that may
have impacted our customers and suppliers. The amount allocated to the Program
by PLM Investment Management, Inc. (the Manager) related to Y2K issues has not
been material. The Manager continues to monitor its systems for any potential
Y2K issues.
(III) 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.
<PAGE>
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
Stephen M. Bess
President
Date: May 5, 2000 By: /s/ Richard K Brock
Richard K Brock
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 798,209
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 433,081
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 233,391
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
