<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
COMMISSION FILE NUMBER: 0-13432
(Check One):
[ ] Form 10-K [ ] Form 20-F [ ] Form 11-K [X] Form 10-Q [ ] Form N-SAR
For Period Ended: March 31, 1997
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR For the Transition Period Ended: ___________
________________________________________________________________________________
PART I -- REGISTRANT INFORMATION
IEA Marine Container Income Fund V(B)
- --------------------------------------------------------------------------------
Full Name of Registrant
Former Name if Applicable
444 Market Street, 15th Floor
- --------------------------------------------------------------------------------
Address of Principal Executive Office (Street and Number)
San Francisco, CA 94111
- --------------------------------------------------------------------------------
City, State and Zip Code
PART II -- RULES 12b-25 (b) AND (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed. (Check box if appropriate)
[ ] (a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without reasonable effort or expense;
[X] (b) The subject annual report, semi-annual report, transition report
on Form 10-K, Form 20-F, 11-K, Form N-SAR, or portion thereof,
will be filed on or before the fifteenth calendar day following
the prescribed due date; or the subject quarterly report of
transition report on Form 10-Q, or portion thereof will be filed
on or before the fifth calendar day following the prescribed due
date; and
[ ] (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
<PAGE> 2
PART III -- NARRATIVE
As reported in the Registrant's Current Report on Form 8-K, filed February
7, 1997, and Amendment No. 1 to Current Report on Form 8-K, filed February 26,
1997, 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 Cronos Capital Corp.,
the Managing General Partner of the Registrant. In its letter of resignation to
the Parent Company, Arthur Andersen states that it is resigning as auditors of
the Parent Company and all other entities affiliated with the Parent Company.
While its letter of resignation is not addressed to the General Partner of the
Registrant, Arthur Andersen has confirmed to the Managing General Partner that
its resignation as auditors of the entities referred to in its letter of
resignation includes its resignation as auditors of Cronos Capital Corp. and the
Registrant.
Due to the nature and timing of Arthur Andersen's resignation, the Parent
Company and Managing General Partner were unable to name a successor auditor on
behalf of the Registrant until it retained Moore Stephens, P.C. ("Moore
Stephens") on April 10, 1997, as reported in the Registrant's Current Report on
Form 8-K, filed April 14, 1997. Moore Stephens has recently commenced its audit
of the Registrant's financial statements for the year ending December 31, 1996.
The period subsequent to Moore Stephens' appointment has been occupied with
reviewing the predecessor's audit workpapers and gaining an understanding of the
Registrant's, Managing General Partner's and Parent Company's business. As a
result of the aforementioned resignation and subsequent appointment of Moore
Stephens as successor auditor, the Registrant has been unable to complete its
audit and file its Annual Report on Form 10-K for the period ending December 31,
1996 within the 15 day extension provided by Rule 12B-25 and its Quarterly
Report on Form 10-Q for the period ending March 31, 1997. The Registrant will
undertake to file its Annual Report on Form 10-K for the period ending December
31, 1996 and its Quarterly Report on Form 10-Q for the period ending March 31,
1997 with the Commission no later than June 15, 1997.
<PAGE> 3
PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard
to this notification
John Kallas 415 677-8990
------------- ------------ --------------------
(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under section 13 or 15(d)
of the Securities Exchange Act of 1934 or section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is no,
identify report(s).
[ ] Yes [X] No
Annual Report on Form 10-K for the period ending December 31, 1996.
(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject report or
portion thereof?
[X] Yes [ ] No
If so, attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the reasons why a
reasonable estimate of the results cannot be made.
Reference is made to Exhibit I attached hereto.
IEA Marine Container Income Fund V(B)
- --------------------------------------------------------------------------------
(Name of Registrant as specified in charter)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: May 14, 1997 By Cronos Capital Corp.
The Managing General Partner
By /s/ John Kallas
----------------------------------------
John Kallas
Vice President/Treasurer
Principal Accounting and Finance Officer
<PAGE> 4
EXHIBIT I
STATEMENT IN RESPONSE TO PART IV-(3)
Net lease revenue for the first quarter of 1997 was $92,676, a decline of
43% from the first quarter of 1996. Approximately 49% of the Registrant's net
earnings for the three-month period ended March 31, 1997 were from gain on
disposal of equipment, as compared to 38% 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 dependent on the level of container
disposals.
Gross rental revenue (a component of net lease revenue) for the quarter was
$157,002, a decline of 49% from the same period last year. During 1997, gross
rental revenue was primarily impacted by the Registrant's declining fleet size.
However, the sluggish container leasing market conditions that existed during
1996 and throughout the first quarter of 1997 also contributed to lower average
per-diem rental rates, which declined 8% when compared to the same period in the
prior year. The Registrant's average fleet size and utilization rates for the
three-month periods ended March 31, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
Three Months Ended
---------------------
March 31, March 31,
1997 1996
--------- ---------
<S> <C> <C>
Average Fleet Size (measured in
twenty-foot equivalent units (TEU)) 1,479 2,652
Average Utilization 89% 82%
</TABLE>
The Registrant's aging and declining fleet size contributed to a 43% decline
in depreciation expense when compared to the same period in the prior year.
Rental equipment operating expenses were 11% of the Registrant's gross lease
revenue during the three-month period ended March 31, 1997, as compared to 23%
during the three-month period ended March 31, 1996. Contributing to the decline
were reductions in certain expenses such as repair and maintenance, no longer
incurred at levels comparable to prior periods. Additionally, direct operating
expenses including storage and handling declined as a result of the Registrant's
decision to dispose of its off-hire containers. The Registrant's declining fleet
size and related operating results also contributed to a decline in base
management and incentive fees, when compared to the same period in the prior
year.
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 Parent Company on February 3, 1997.
The Parent Company is the indirect corporate parent of the Managing General
Partner of the Registrant. In its letter of resignation to the Parent Company,
Arthur Andersen states 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 the Managing General Partner of the Registrant,
Arthur Andersen confirmed to the Managing General Partner that its resignation
as auditors of the entities referred to in its letter of resignation included
its resignation as auditors of Cronos Capital Corp. and the Registrant.
The Registrant does not, at this time, have sufficient information to
determine the impact, if any, that the concerns expressed by Arthur Andersen in
its letter of resignation may have on the future operating results and financial
condition of the Registrant or the Leasing Company's ability to manage the
Registrant's fleet in subsequent periods. However, the Managing General Partner
of the Registrant 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.
<PAGE> 5
Arthur Andersen's report on the financial statements of the Managing General
Partner and the Registrant, for either of the past two years, 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 two most recent fiscal years and the subsequent
interim period preceding Arthur Andersen's resignation, there have been no
disagreements between the Managing General Partner 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.
Cautionary Statement
This Report on Form 12b-25 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; and 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 Exhibit I, Statement in Response to Part IV-(3) and those
detailed from time to time in the filings of Registrant with the Securities and
Exchange Commission.
<PAGE> 6
IEA MARINE CONTAINER INCOME FUND V(B)
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 (UNAUDITED) AND 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
----------------------
March 31, March 31,
1997 1996
-------- --------
<S> <C> <C>
Net lease revenue $ 92,676 $163,397
Other operating expenses:
Depreciation 36,811 64,567
Other general and administrative expenses 8,597 6,870
-------- --------
45,408 71,437
-------- --------
Earnings from operations 47,268 91,960
Other income:
Interest income 5,329 6,319
Net gain on disposal of equipment 50,160 59,615
-------- --------
55,489 65,934
-------- --------
Net earnings $102,757 $157,894
======== ========
Allocation of net earnings:
General partners $ 29,108 $ 31,042
Limited partners 73,649 126,852
-------- --------
$102,757 $157,894
======== ========
Limited partners' per unit share of net earnings $ 4.30 $ 7.40
======== ========
</TABLE>
