<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, 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 0-14440
IEA INCOME FUND VI,
A CALIFORNIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
California 94-2942941
<S> <C>
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
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
IEA INCOME FUND VI,
A CALIFORNIA LIMITED PARTNERSHIP
REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 1999
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
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
</TABLE>
2
<PAGE> 3
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.
3
<PAGE> 4
IEA INCOME FUND VI,
A CALIFORNIA LIMITED PARTNERSHIP
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---------- ------------
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents, includes $721,040 at March 31, 1999 and
$786,333 at December 31, 1998 in interest-bearing accounts $ 721,140 $ 786,433
Net lease receivables due from Leasing Company
(notes 1 and 2) 128,086 137,087
---------- ----------
Total current assets 849,226 923,520
---------- ----------
Container rental equipment, at cost 6,431,028 6,971,959
Less accumulated depreciation 4,411,896 4,742,260
---------- ----------
Net container rental equipment 2,019,132 2,229,699
---------- ----------
$2,868,358 $3,153,219
========== ==========
Partners' Capital
Partners' capital:
General partners $ 8,460 $ 11,309
Limited partners 2,859,898 3,141,910
---------- ----------
Total partners' capital 2,868,358 3,153,219
---------- ----------
$2,868,358 $3,153,219
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
IEA INCOME FUND VI,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31, March 31,
1999 1998
-------- --------
<S> <C> <C>
Net lease revenue (notes 1 and 3) $171,000 $269,586
Other operating expenses:
Depreciation 33,142 66,379
Other general and administrative expenses 17,527 17,289
-------- --------
50,669 83,668
-------- --------
Earnings from operations 120,331 185,918
Other income:
Interest income 8,173 16,055
Net gain on disposal of equipment 53,623 95,328
-------- --------
61,796 111,383
-------- --------
Net earnings $182,127 $297,301
======== ========
Allocation of net earnings:
General partners $ 38,661 $ 69,523
Limited partners 143,466 227,778
-------- --------
$182,127 $297,301
======== ========
Limited partners' per unit share of net earnings $ 3.27 $ 5.19
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
IEA INCOME FUND VI,
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------
March 31, March 31,
1999 1998
----------- -----------
<S> <C> <C>
Net cash provided by operating activities $ 155,057 $ 158,827
Cash flows provided by investing activities:
Proceeds from disposal of equipment 246,637 479,038
Cash flows used in financing activities:
Distribution to partners (466,987) (843,590)
----------- -----------
Net decrease in cash and cash equivalents (65,293) (205,725)
Cash and cash equivalents at January 1 786,433 1,274,362
----------- -----------
Cash and cash equivalents at March 31 $ 721,140 $ 1,068,637
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
IEA INCOME FUND VI,
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) Summary of Significant Accounting Policies
(a) Nature of Operations
IEA Income Fund VI, A California Limited Partnership (the
"Partnership") is a limited partnership organized under the
laws of the State of California on August 1, 1984 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 are four individuals. CCC, with
its affiliate Cronos Containers Limited (the "Leasing
Company"), manages the business of the Partnership. The
Partnership shall continue until December 31, 2006, unless
sooner terminated upon the occurrence of certain events.
The Partnership commenced operations on December 4, 1984, when
the minimum subscription proceeds of $1,000,000 were obtained.
The Partnership offered 60,000 units of limited partnership
interest at $500 per unit, or $30,000,000. The offering
terminated on October 11, 1985, at which time 43,920 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)
7
<PAGE> 8
IEA INCOME FUND VI,
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:
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
-------- ------------
<S> <C> <C>
Lease receivables, net of doubtful accounts of $42,855 at March 31, 1999
and $59,225 at December 31, 1998 $421,553 $459,232
Less:
Direct operating payables and accrued expenses 150,934 168,144
Damage protection reserve 29,396 31,651
Base management fees 60,551 64,597
Reimbursed administrative expenses 5,721 5,866
Incentive fees 46,865 51,887
-------- --------
$128,086 $137,087
======== ========
</TABLE>
(Continued)
8
<PAGE> 9
IEA INCOME FUND VI,
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-month periods ended
March 31, 1999 and 1998 was as follows:
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31, March 31,
1999 1998
-------- --------
<S> <C> <C>
Rental revenue (note 4) $304,955 $489,026
Less:
Rental equipment operating expenses 50,117 74,561
Base management fees 21,799 34,134
Incentive fees 46,866 78,668
Reimbursed administrative expenses 15,173 32,077
-------- --------
$171,000 $269,586
======== ========
</TABLE>
(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 March 31, 1999, the Partnership operated 1,667
twenty-foot, 816 forty-foot and 49 forty-foot high-cube 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.
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, 1999 and
December 31, 1998.
During the first quarter of 1999, the Registrant continued disposing of
containers as part of its ongoing container operations. Accordingly,
219 containers were disposed during the first quarter of 1999,
contributing to a decline in the Registrant's operating results. At
March 31, 1999, 25% of the original equipment remained in the
Registrant's fleet, as compared to 28% at December 31, 1998, and was
comprised of the following:
<TABLE>
<CAPTION>
40-Foot
20-Foot 40-Foot High-Cube
------- ------- ---------
<S> <C> <C> <C>
Containers on lease:
Term leases 468 268 7
Master leases 867 424 34
----- ----- -----
Subtotal 1,335 692 41
Containers off lease 332 124 8
----- ----- -----
Total container fleet 1,667 816 49
===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
40-Foot
20-Foot 40-Foot High-Cube
----------------- ----------------- ---------------
Units % Units % Units %
----- --- ----- --- ----- ---
<S> <C> <C> <C> <C> <C> <C>
Total purchases 6,102 100% 3,753 100% 75 100%
Less disposals 4,435 73% 2,937 78% 26 35%
----- --- ----- --- --- ---
Remaining fleet at March 31, 1999 1,667 27% 816 22% 49 65%
===== === ===== === === ===
</TABLE>
During the first quarter of 1999, distributions from operations and
sales proceeds amounted to $466,987, reflecting distributions to the
general and limited partners for the fourth quarter of 1998. This
represents a decrease from the $527,434 distributed during the fourth
quarter of 1998, reflecting distributions for the third quarter of
1998. The decrease in distributions is attributable to a decrease in
sales proceeds distributed to its partners. The Registrant's continuing
disposal of containers should produce lower operating results and,
consequently, lower distributions 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.
10
<PAGE> 11
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
$171,000, a decline of 37% from the same three-month period in the
prior year. Approximately 29% 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 32% for the same three-month period in the
prior year. As the Registrant's 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 $304,955, reflecting a
decline of 38% from the comparable three-month period in 1998. Gross
rental revenue was primarily impacted by the Registrant's diminishing
fleet size and a decline in per-diem rental rates. Average per-diem
rental rates decreased approximately 9% 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 March 31, 1998 were as follows:
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31, March 31,
1999 1998
--------- ---------
<S> <C> <C>
Average fleet size (measured in twenty-foot equivalent units (TEU)) 3,569 4,992
Average Utilization 83% 89%
</TABLE>
The age and declining size of the Registrant's fleet contributed to an
82% decline in depreciation expense when compared to the same
three-month period in the prior year. Rental equipment operating
expenses were 16% of the Registrant's gross lease revenue during the
three-month period ended March 31, 1999, as compared to 15% during the
three-month period ended March 31, 1998. The Registrant's declining
fleet size and related operating results also contributed to a decline
in base management fees, reimbursed administrative expenses and
incentive fees.
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.
11
<PAGE> 12
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.
12
<PAGE> 13
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.
13
<PAGE> 14
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.
14
<PAGE> 15
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 October 11, 1984
3(b) Certificate of Limited Partnership of the Registrant **
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, 1999.
- --------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant dated October 12, 1984, included as part of Registration
Statement on Form S-1 (No. 2-92883)
** Incorporated by reference to Exhibit 3.4 to the Registration Statement
on Form S-1 (No. 2-92883)
15
<PAGE> 16
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 VI,
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
16
<PAGE> 17
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 October 11, 1984
3(b) Certificate of Limited Partnership of the Registrant **
27 Financial Data Schedule Filed with this document
</TABLE>
- ------------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant dated October 12, 1984, included as part of Registration
Statement on Form S-1 (No. 2-92883)
** Incorporated by reference to Exhibit 3.4 to the Registration Statement
on Form S-1 (No. 2-92883)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT MARCH 31, 1999 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE
QUARTERLY PERIOD ENDED MARCH 31, 1999 (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, 1999
</LEGEND>
<S> <C>
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0
0
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