UNITED STATES
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 fiscal quarter ended September 30, 1996.
[ ] 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 0-15437
-----------------------
PLM Transportation Equipment Partners IXD 1986
Income Fund
(Exact name of registrant as specified in its charter)
California 94-2992018
(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>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------------------------------------
<S> <C> <C>
Equipment held for operating leases, at cost $ 3,513,098 $ 4,242,401
Less accumulated depreciation (3,121,008 ) (3,567,969 )
------------------------------------------
Net equipment 392,090 674,432
Cash and cash equivalents 540,782 251,709
Accounts receivable, net of allowance for doubtful
accounts of $57,164 in 1996 and $57,022 in 1995 88,444 107,933
Net investment in sales-type lease -- 1,003,564
Due from affiliates -- 2,941
Prepaid insurance 136 3,544
------------------------------------------
Total assets $ 1,021,452 $ 2,044,123
==========================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 5,059 $ --
Accounts payable 8,746 23,272
Prepaid deposits 2,956 20,028
------------------------------------------
Total liabilities 16,761 43,300
Partners' capital (deficit):
Limited Partners (24,285 units) 1,101,599 2,087,769
General Partner (96,908 ) (86,946 )
------------------------------------------
Total partners' capital 1,004,691 2,000,823
------------------------------------------
Total liabilities and partners' capital $ 1,021,452 $ 2,044,123
==========================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
1996 1995 1996 1995
----------------------------- -------------------------------
<S> <C> <C> <C> <C>
Revenues:
Lease revenue $ 97,143 $ 151,828 $ 317,352 $ 392,052
Interest and other income 2,878 16,264 15,723 23,359
Gain on disposition of equipment 292,451 9,857 337,432 555,197
----------------------------- -------------------------------
Total revenues 392,472 177,949 670,507 970,608
Expenses:
Depreciation 46,864 55,518 152,246 257,018
Management fees to affiliate 15,178 15,178 46,382 45,534
Repairs and maintenance 19,772 22,951 45,671 128,770
General and administrative
expenses to affiliates 17,219 28,800 62,714 89,524
Other general and administrative
expenses 6,393 22,753 49,356 61,565
----------------------------- -------------------------------
-----------------------------
Total expenses 105,426 145,200 356,369 582,411
----------------------------- -------------------------------
Net income $ 287,046 $ 32,749 $ 314,138 $ 388,197
============================= ===============================
Partners' share of net income
Limited Partners - 99% $ 284,176 $ 32,422 $ 310,997 $ 384,315
General Partner - 1% 2,870 327 3,141 3,882
----------------------------- -------------------------------
Total $ 287,046 $ 32,749 $ 314,138 $ 388,197
============================= ===============================
Net income per Limited
Partnership Unit - 24,285 units $ 11.70 $ 1.34 $ 12.81 $ 15.83
============================= ===============================
Cash distributions $ 67,589 $ 74,464 $ 210,270 $ 223,404
============================= ===============================
Cash distributions per Limited
Partnership Unit $ 2.76 $ 3.04 $ 8.57 $ 9.11
============================= ===============================
Special cash distributions $ -- $ -- $ 1,100,000 $ --
============================= ===============================
Special cash distributions per
Limited Partnership Unit $ -- $ -- $ 44.84 $ --
============================= ===============================
Total cash distributions per
Limited Partnership Unit $ 2.76 $ 3.04 $ 53.41 $ 9.11
============================= ===============================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For
the period from December 31, 1994 to September 30, 1996
<TABLE>
<CAPTION>
Limited General
Partners Partners Total
----------------------------------------------------
<S> <C> <C> <C>
Partners' capital (deficit)
at December 31, 1994 $ 1,913,772 $ (88,703 ) $ 1,825,069
Net income 468,887 4,736 473,623
Cash distributions (294,890 ) (2,979 ) (297,869 )
------------------------------------------------------
Partners' capital (deficit)
at December 31, 1995 2,087,769 (86,946 ) 2,000,823
Net income 310,997 3,141 314,138
Quarterly cash distributions (208,167 ) (2,103 ) (210,270 )
Special distributions (1,089,000 ) (11,000 ) (1,100,000 )
------------------------------------------------------
Partners' capital (deficit)
at September 30, 1996 $ 1,101,599 $ (96,908 ) $ 1,004,691
======================================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the nine months
ended September 30,
1996 1995
----------------------------------
<S> <C> <C>
Operating activities:
Net income $ 314,138 $ 388,197
Adjustments to reconcile net income to net cash provided
by operating activities:
Gain on disposition of equipment (337,432 ) (555,197 )
Depreciation 152,246 257,018
Changes in operating assets and liabilities
Accounts receivable, net 19,489 (4,306 )
Due to/from affiliates 8,000 (5,673 )
Prepaid insurance 3,408 3,178
Accounts payable (14,526 ) (28,068 )
Prepaid deposits (17,072 ) (897 )
----------------------------------
Cash provided by operating activities 128,251 54,252
----------------------------------
Investing activities:
Proceeds from disposition of equipment 467,528 90,053
Payments received on sales-type lease 1,003,564 --
Payments for purchase of capital improvements -- (876 )
----------------------------------
Cash provided by investing activities 1,471,092 89,177
----------------------------------
Cash flows used in financing activities:
Cash distributions paid to Limited Partners (1,297,167 ) (221,170 )
Cash distributions paid to General Partner (13,103 ) (2,234 )
----------------------------------
Cash used in financing activities (1,310,270 ) (223,404 )
----------------------------------
Cash and cash equivalents:
Net increase (decrease) in cash and cash equivalents 289,073 (79,975 )
Cash and cash equivalents at beginning of period 251,709 298,718
----------------------------------
Cash and cash equivalents at end of period $ 540,782 $ 218,743
==================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
1. Opinion of Management
In the opinion of the management of PLM Financial Services, Inc., the General
Partner, the accompanying unaudited financial statements contain all adjustments
necessary, consisting primarily of normal recurring accruals, to present fairly
the Partnership's financial position as of September 30, 1996, the statements of
income for the three and nine months ended September 30, 1996 and 1995, the
statements of changes in partners' capital for the period from December 31, 1994
to September 30, 1996, and the statements of cash flows for the nine months
ended September 30, 1996 and 1995. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted from the
accompanying financial statements. For further information, reference should be
made to the financial statements and notes thereto included in the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1995, on file at the
Securities and Exchange Commission.
2. Equipment
Equipment held for operating leases is stated at cost. The components of
equipment are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------------------------------
<S> <C> <C>
Rail equipment $ -- $ 409,301
Marine containers 1,155,802 1,420,872
Trailers 2,357,296 2,412,228
------------------------------------
3,513,098 4,242,401
Less accumulated depreciation (3,121,008 ) (3,567,969 )
------------------------------------
Net equipment $ 392,090 $ 674,432
====================================
</TABLE>
All equipment was either on lease or operating in PLM affiliated short-term
rental facilities except one forklift with a net carrying value of $35,073 as of
September 30, 1996. All equipment was either on lease or operating in
PLM-affiliated short-term rental facilities as of December 31, 1995.
During the nine months ended September 30, 1996, the Partnership sold or
disposed of 10 railcars, 16 marine containers and two trailers with an aggregate
book value of $130,096 for proceeds of $464,899. In addition, additional
proceeds of $2,629 were received for the commuter aircraft which was under a
sales-type lease. During the nine months ended September 30, 1995, the
Partnership sold or disposed of one trailer and seven marine containers with
aggregate net book value of $26,501 for proceeds of $47,148. Additionally, the
Partnership entered into a sales-type lease related to a commuter aircraft with
a carrying value of $505,450 for a sales price equal to the present value of the
future lease payments ($1,090,000) less a $50,000 reserve for future costs of
sale.
3. Liquidation and special distributions
During the first quarter of 1996, the Partnership completed its 10th year of
operations. As originally anticipated by the General Partner, the Partnership
will be liquidated in an orderly manner in its 11th and 12th years of operation.
The General Partner is actively marketing the remaining equipment portfolio with
the intent of maximizing sale proceeds. As sale proceeds are received, the
General Partner intends to periodically declare special distributions to
distribute the sale proceeds to the partners. During the liquidation phase of
the Partnership the equipment will continue to be leased under operating leases
until sold. Operating cash flows, to the extent they exceed Partnership
expenses, will continue to be distributed on a quarterly basis to partners. The
amounts reflected for assets and liabilities of the Partnership have not been
adjusted to reflect liquidation values. The equipment portfolio continues to be
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXA 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
3. Liquidation and special distributions (continued)
carried at the lower of depreciated cost or fair value less cost to dispose.
Although the General Partner estimates that there will be distributions after
liquidation of assets and liabilities, the amounts cannot be accurately
determined prior to actual liquidation of the equipment. Any excess proceeds
over expected Partnership obligations will be distributed to the Partners
throughout the liquidation period. Upon final liquidation, the Partnership will
be dissolved.
During the nine months ended September 30, 1996, the General Partner paid
special distributions of $44.84 per Limited Partnership Unit which were the
result of proceeds from the sale of the commuter aircraft and other equipment.
No special distributions was paid during the nine months ended September 30,
1995. The Partnership is not permitted to reinvest proceeds from sales or
liquidations of equipment. These proceeds, in excess of operational cash
requirements, are periodically paid out to limited partners in the form of
special distributions. The sales and liquidations occur because of equipment
destructions, the determination by the General Partner that it is the
appropriate time to maximize the return on an asset through sale of that asset,
and, in some leases, the ability of the lessee to exercise purchase options.
4. Investment in Sales-type Lease
On May 30, 1995, the Partnership entered into a sales-type lease for the purpose
of selling a commuter aircraft. The lease was structured with a one-year term
commencing June 1995. The lessee was to make monthly payments of $19,500. Gross
lease payments of $234,000 were to be received over a one-year period,
commencing in June 1995, with an additional balloon payment of $919,012 due at
the end of the lease term. During the first quarter of 1996, the lessee
exercised its option to buy the aircraft for approximately $1.1 million.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
-------------------------------------
<S> <C> <C>
Equipment held for operating leases, at cost $ 2,001,362 $ 2,908,067
Less accumulated depreciation (1,777,008 ) (2,408,060 )
-------------------------------------
224,354 500,007
Equipment held for sale 113,552 --
-------------------------------------
Net equipment 337,906 500,007
Cash and cash equivalents 145,814 351,363
Investment in unconsolidated special purpose entity -- 222,128
Accounts receivable, net of allowance for doubtful
accounts of $24,148 in 1996 and $29,460 in 1995 35,153 82,668
Prepaid insurance 97 2,447
-------------------------------------
Total assets $ 518,970 $ 1,158,613
=====================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 3,637 $ 3,637
Accounts payable and other liabilities 7,065 72,569
Prepaid deposits -- 16,248
-------------------------------------
Total liabilities 10,702 92,454
Partners' capital (deficit):
Limited Partners (17,460 units) 580,052 1,132,364
General Partner (71,784 ) (66,205 )
-------------- --------------
Total partners' capital 508,268 1,066,159
-------------------------------------
Total liabilities and partners' capital $ 518,970 $ 1,158,613
=====================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Revenues:
Lease revenue $ 58,429 $ 132,659 $ 206,030 $ 393,303
Interest and other income 3,536 5,516 11,275 16,888
Gain on disposition of equipment 8,473 27,862 38,239 100,416
----------------------------- -----------------------------
Total revenues 70,438 166,037 255,544 510,607
Expenses:
Depreciation 34,705 61,641 108,831 199,172
Management fees to affiliate 10,913 10,913 32,738 32,738
Repairs and maintenance 13,192 24,313 36,608 51,170
General and administrative
expenses to affiliates 10,703 19,573 46,021 72,429
Other general and administrative
expenses 3,623 15,965 26,024 60,363
---------------------------------------------------------------
Total expenses 73,136 132,405 250,222 415,872
Equity in net income of unconsolidated
special purpose entity 231,147 -- 192,041 --
----------------------------- -----------------------------
Net income $ 228,449 $ 33,632 $ 197,363 $ 94,735
============================= =============================
Partners' share of net income
Limited Partners - 99% $ 226,165 $ 33,296 $ 195,389 $ 93,788
General Partner - 1% 2,284 336 1,974 947
----------------------------- -----------------------------
Total $ 228,449 $ 33,632 $ 197,363 $ 94,735
============================= =============================
Net income per Limited
Partnership Unit - 17,460 units $ 12.95 $ 1.91 $ 11.19 $ 5.37
============================= =============================
Cash distributions $ 101,751 $ 102,999 $ 305,254 $ 372,424
============================= =============================
Cash distributions per Limited
Partnership Unit $ 5.77 $ 5.84 $ 17.31 $ 21.12
============================= =============================
Special cash distributions $ 450,000 $ 100,000 $ 450,000 $ 200,000
============================= =============================
Special cash distributions per
Limited Partnership Unit $ 25.52 $ 5.67 $ 25.52 $ 11.34
============================= =============================
Total cash distributions per
Limited Partnership Unit $ 31.29 $ 11.51 $ 42.83 $ 32.46
============================= =============================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For
the period from December 31, 1994 to September 30, 1996
<TABLE>
<CAPTION>
Limited General
Partners Partners Total
----------------------------------------------------
<S> <C> <C> <C>
Partners' capital (deficit)
at December 31, 1994 $ 1,717,622 $ (60,293 ) $ 1,657,329
Net income 82,176 830 83,006
Cash distributions (667,434 ) (6,742 ) (674,176 )
----------------------------------------------------
Partners' capital (deficit)
at December 31, 1995 1,132,364 (66,205 ) 1,066,159
Net income 195,389 1,974 197,363
Quarterly cash distributions (302,201 ) (3,053 ) (305,254 )
Special distributions (445,500 ) (4,500 ) (450,000 )
----------------------------------------------------
Partners' capital (deficit)
at September 30, 1996 $ 580,052 $ (71,784 ) $ 508,268
====================================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the nine months ended
September 30,
1996 1995
--------------------------------
<S> <C> <C>
Operating activities:
Net income $ 197,363 $ 94,735
Adjustments to reconcile net income
to net cash provided by operating activities:
Gain on disposition of equipment (38,239 ) (100,416 )
Depreciation 108,831 199,172
Income from unconsolidated special
purpose entity in excess of cash distributions (220,372 ) --
Changes in operating assets and liabilities:
Accounts receivable, net 47,515 35,713
Prepaid insurance 2,350 2,650
Due to affiliates -- (2,425 )
Accounts payable and other liabilities (65,504 ) (1,598 )
Prepaid deposits (16,248 ) (15,379 )
--------------------------------
Cash provided by operating activities 15,696 212,452
--------------------------------
Investing activities:
Proceeds from disposition of equipment 91,509 241,627
Liquidation proceeds from unconsolidated special
purpose entity 442,500 --
Payments for purchase of capital improvements -- (4,895 )
--------------------------------
Cash provided by investing activities 534,009 236,732
--------------------------------
Cash flows used in financing activities:
Cash distributions paid to Limited Partners (747,701 ) (566,700 )
Cash distributions paid to General Partner (7,553 ) (5,724 )
--------------------------------
Cash used in financing activities (755,254 ) (572,424 )
--------------------------------
Net decrease in cash and cash equivalents (205,549 ) (123,240 )
Cash and cash equivalents at beginning of period 351,363 492,060
--------------------------------
Cash and cash equivalents at end of period $ 145,814 $ 368,820
================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
1. Opinion of Management
In the opinion of the management of PLM Financial Services, Inc., the General
Partner, the accompanying unaudited financial statements contain all adjustments
necessary, consisting primarily of normal recurring accruals, to present fairly
the Partnership's financial position as of September 30, 1996, the statements of
income for the three and nine months ended September 30, 1996 and 1995, the
statements of changes in partners' capital for the period from December 31, 1994
to September 30, 1996, and the statements of cash flows for the nine months
ended September 30, 1996 and 1995. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted from the
accompanying financial statements. For further information, reference should be
made to the financial statements and notes thereto included in the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1995, on file at the
Securities and Exchange Commission.
2. Equipment
Owned equipment held for operating leases is stated at cost. Equipment held for
sale is stated at the lower of the equipment's depreciated cost or estimated net
realizable value and is subject to a pending contract for sale. The components
of owned equipment are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
----------------------------------
<S> <C> <C>
Rail equipment $ -- $ 499,800
Marine containers 325,115 413,633
Trailers and tractors 1,676,247 1,994,634
----------------------------------
2,001,362 2,908,067
Less accumulated depreciation (1,777,008 ) (2,408,060 )
----------------------------------
224,354 500,007
Equipment held for sale 113,552 --
----------------------------------
Net equipment $ 337,906 $ 500,007
==================================
</TABLE>
With the exception of one sidelift with an aggregate net carrying value of
$53,072, all equipment was either on lease or operating in PLM affiliated
short-term rental facilities as of September 30, 1996. Fourteen railcars with a
pending contract for sale and an aggregate net book value of $113,552 were
reclassed to equipment held for sale in the third quarter of 1996. With the
exception of one trailer and one sidelift with a carrying value of $79,024, all
equipment was on lease or operating in PLM affiliated short-term rental
facilities as of December 31, 1995.
During the nine months ended September 30, 1996, the Partnership sold or
disposed of eight trailers and four marine containers with an aggregate net book
value of $53,270 for proceeds of $91,509. During the nine months ended September
30, 1995, the Partnership sold or disposed of 20 trailers and four marine
containers with an aggregate net book value of $141,211 for proceeds of
$241,627.
3. Liquidation and Special Distributions
During the first quarter of 1996, the Partnership completed its 10th year of
operations. As originally anticipated by the General Partner, the Partnership
will be liquidated in an orderly manner in its 11th and 12th years of operation.
The General Partner is actively marketing the remaining equipment portfolio with
the intent of maximizing sale proceeds. As sale proceeds are received, the
General Partner intends to periodically declare special distributions to
distribute the sale proceeds to the partners. During the
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXB 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
3. Liquidation and Special Distributions (continued)
liquidation phase of the Partnership, the equipment will continue to be leased
under operating leases until sold. Operating cash flows, to the extent they
exceed Partnership expenses, will continue to be distributed on a quarterly
basis to partners. The amounts reflected for assets and liabilities of the
Partnership have not been adjusted to reflect liquidation values. The equipment
portfolio continues to be carried at the lower of depreciated cost or fair value
less cost to dispose. Although the General Partner estimates that there will be
distributions after liquidation of assets and liabilities, the amounts cannot be
accurately determined prior to actual liquidation of the equipment. Any excess
proceeds over expected Partnership obligations will be distributed to the
Partners throughout the liquidation period. Upon final liquidation, the
Partnership will be dissolved.
During the nine months ended September 30, 1996 and 1995, the General Partner
paid special distributions of $25.52 and $11.34, respectively, per Limited
Partnership Unit which were the result of proceeds from the liquidation of
equipment. The Partnership is not permitted to reinvest proceeds from sales or
liquidations of equipment. These proceeds, in excess of operational cash
requirements, are periodically paid out to limited partners in the form of
special distributions. The sales and liquidations occur because of equipment
destructions, the determination by the General Partner that it is the
appropriate time to maximize the return on an asset through sale of that asset,
and, in some leases, the ability of the lessee to exercise purchase options.
4. Investment in Unconsolidated Special Purpose Entity
Prior to 1996, the Partnership accounted for operating activities associated
with joint ownership of rental equipment as undivided interests, including its
proportionate share of each asset with similar wholly-owned assets in its
financial statements. Under generally accepted accounting principles, the
effects of such activities, if material, should be reported using the equity
method of accounting. Therefore, effective January 1, 1996, the Partnership
adopted the equity method to account for its investment in such jointly-held
assets.
The principal differences between the previous accounting method and the equity
method relate to the presentation of activities relating to these assets in the
statement of operations. Whereas, under equity accounting the Partnership's
proportionate share is presented as a single net amount, "equity in net income
(loss) of unconsolidated special purpose entities", under the previous method,
the Partnership's statement of operations reflected its proportionate share of
each individual item of revenue and expense. Accordingly, the effect of adopting
the equity method of accounting has no cumulative effect on previously reported
partner's capital or on the Partnership's net income (loss) for the period of
adoption. Because the effects on previously issued financial statements of
applying the equity method of accounting to investments in jointly-owned assets
are not considered to be material to such financial statements taken as a whole,
previously issued financial statements have not been restated. However, certain
items have been reclassified in the previously issued balance sheet to conform
to the current period presentation.
During the nine months ended September 30, 1996, the General Partner sold the
Partnership's 50% interest in a commuter aircraft, included in "Investment in
Unconsolidated Special Purpose Entity" for proceeds of $442,500. The Partnership
received liquidating distributions from the Unconsolidated Special Purpose
Entity during the third quarter of 1996.
5. Subsequent Event
On October 24, 1996, the General Partner sold 14 railcars for proceeds of
$343,000, which were classified as assets held for sale at September 30, 1996.
The net book value of these railcars was $113,552.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---------------------------------------
<S> <C> <C>
Equipment held for operating leases, at cost $ 3,563,112 $ 4,007,465
Less accumulated depreciation (3,139,998 ) (3,354,708 )
---------------------------------------
423,114 652,727
Equipment held for sale 33,574 --
---------------------------------------
Net equipment 456,688 652,757
Cash and cash equivalents 120,210 248,504
Investment in unconsolidated special purpose entity -- 133,363
Accounts receivable, net of allowance for doubtful
accounts of $7,973 in 1996 and $9,684 in 1995 69,318 104,717
Prepaid insurance and other assets 116 22,438
---------------------------------------
Total assets $ 646,332 $ 1,161,779
=======================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 3,523 $ 3,523
Prepaid deposits 25,734 12,939
---------------------------------------
Total liabilities 29,257 16,462
Partners' capital (deficit):
Limited Partners (16,914 units) 685,366 1,208,326
General Partner (68,291 ) (63,009 )
-------------- --------------
Total partners' capital 617,075 1,145,317
---------------------------------------
Total liabilities and partners' capital $ 646,332 $ 1,161,779
=======================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Revenues:
Lease revenue $ 83,286 $ 141,042 $ 271,607 $ 503,101
Interest and other income 2,979 4,070 10,652 18,046
Gain on disposition of equipment 3,692 424 21,893 234,869
----------------------------- -----------------------------
Total revenues 89,957 145,536 304,152 756,016
Expenses:
Depreciation 50,365 67,502 156,154 211,449
Management fees to affiliate 10,568 10,568 32,592 34,785
Repairs and maintenance 24,439 32,263 81,795 119,546
General and administrative
expenses to affiliates 16,581 34,618 74,569 126,011
Other general and administrative
expenses 1,386 19,071 41,717 33,814
---------------------------------------------------------------
Total expenses 103,339 164,022 386,827 525,605
Equity in net (loss) income of special
unconsolidated purpose entity (296 ) -- 111,247 --
----------------------------- -----------------------------
Net income (loss) $ (13,678 ) $ (18,486 ) $ 28,572 $ 230,411
============================= =============================
Partners' share of net income (loss):
Limited Partners - 99% $ (13,541 ) $ (18,301 ) $ 28,286 $ 228,107
General Partner - 1% (137 ) (185 ) 286 2,304
----------------------------- -----------------------------
Total $ (13,678 ) $ (18,486 ) $ 28,572 $ 230,411
============================= =============================
Net income (loss) per Limited
Partnership Unit (16,914 units) $ (0.80 ) $ (1.08 ) $ 1.67 $ 13.49
============================= =============================
Cash distributions $ 59,265 $ 98,772 $ 256,814 $ 308,194
============================= =============================
Cash distributions per Limited
Partnership Unit $ 3.47 $ 5.78 $ 15.03 $ 18.04
============================= =============================
Special distributions $ 300,000 $ -- $ 300,000 $ 500,000
============================= =============================
Special distributions per Limited
Partnership Unit $ 17.56 $ -- $ 17.56 $ 29.27
============================= =============================
Total distributions per Limited
Partnership Unit $ 21.03 $ 5.78 $ 32.59 $ 47.31
============================= =============================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For
the period from December 31, 1994 to September 30, 1996
<TABLE>
<CAPTION>
Limited General
Partners Partners Total
------------------------------------------------------
<S> <C> <C> <C>
Partners' capital (deficit)
at December 31, 1994 $ 1,849,276 $ (56,534 ) $ 1,792,742
Net income 256,946 2,595 259,541
Cash distributions (897,896 ) (9,070 ) (906,966 )
------------------------------------------------------
Partners' capital (deficit)
at December 31, 1995 1,208,326 (63,009 ) 1,145,317
Net income 28,286 286 28,572
Quarterly cash distributions (254,246 ) (2,568 ) (256,814 )
Special cash distributions (297,000 ) (3,000 ) (300,000 )
------------------------------------------------------
Partners' capital (deficit)
at September 30, 1996 $ 685,366 $ (68,291 ) $ 617,075
======================================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the nine months ended
September 30,
1996 1995
--------------------------------
<S> <C> <C>
Operating activities:
Net income $ 28,572 $ 230,411
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on disposition of equipment (21,893 ) (234,869 )
Depreciation 156,154 211,449
Income from unconsolidated special purpose
entity in excess of cash distributions (137,175 ) --
Change in operating assets and liabilities
Accounts receivable, net 35,399 49,154
Due to affiliates -- 15,308
Prepaid deposits 12,795 (30,008 )
Prepaid insurance and other assets 22,322 3,439
Accounts payable and other liabilities -- 2,098
--------------------------------
Cash provided by operating activities 96,174 246,982
--------------------------------
Investing activities:
Proceeds from disposition of equipment 61,808 532,486
Liquidation proceeds from unconsolidated special
purpose entity 270,538 --
Payments for purchase of capital improvements -- (2,237 )
--------------------------------
Cash provided by investing activities 332,346 530,249
--------------------------------
Cash flows used in financing activities:
Cash distributions paid to Limited Partners (551,246 ) (800,112 )
Cash distributions paid to General Partner (5,568 ) (8,082 )
--------------------------------
Cash used in financing activities (556,814 ) (808,194 )
--------------------------------
Net decrease in cash and cash equivalents (128,294 ) (30,963 )
Cash and cash equivalents at beginning of period 248,504 312,230
--------------------------------
Cash and cash equivalents at end of period $ 120,210 $ 281,267
================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
1. Opinion of Management
In the opinion of the management of PLM Financial Services, Inc., the General
Partner, the accompanying unaudited financial statements contain all adjustments
necessary, consisting primarily of normal recurring accruals, to present fairly
the Partnership's financial position as of September 30, 1996, the statements of
operations for the three and nine months ended September 30, 1996 and 1995, the
statements of changes in partners' capital for the period from December 31, 1994
to September 30, 1996, and the statements of cash flows for the nine months
ended September 30, 1996 and 1995. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted from the
accompanying financial statements. For further information, reference should be
made to the financial statements and notes thereto included in the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1995, on file at the
Securities and Exchange Commission.
2. Equipment
Equipment held for operating leases is stated at cost. Equipment held for sale
is stated at the lower of the equipment's depreciated cost or estimated net
realizable value and is subject to a pending contract for sale.
The components of owned equipment are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------------------------------
<S> <C> <C>
Rail equipment $ 35,700 $ 178,501
Marine containers 114,623 137,548
Trailers and tractors 3,412,789 3,691,416
------------------------------------
3,563,112 4,007,465
Less accumulated depreciation (3,139,998 ) (3,354,708 )
------------------------------------
423,114 652,757
Equipment held for sale 33,574 --
------------------------------------
Net equipment $ 456,688 $ 652,757
====================================
</TABLE>
All of the equipment was either on lease or operating in PLM-affiliated
short-term rental facilities as of September 30, 1996. Four railcars with a
pending sale contract and an aggregate net book value of $33,574 were
reclassified as assets held for sale in the third quarter of 1996. With the
exception of two trailers with a carrying value of $16,119, all of the equipment
was either on lease or operating in PLM affiliated short-term rental facilities
as of December 31, 1995.
During the nine months ended September 30, 1996, the Partnership sold or
disposed of eight trailers and one marine container with an aggregate net book
value of $39,915 for proceeds of $61,808. During the nine months ended September
30, 1995, the Partnership sold or disposed of four trailers, one marine
container, and five twin stack railcars with an aggregate net book value of
$297,618 for proceeds of $532,487.
3. Liquidation and special distributions
During the first quarter of 1996, the Partnership completed its 10th year of
operations. As originally anticipated by the General Partner, the Partnership
will be liquidated in an orderly manner in its 11th and 12th years of operation.
The General Partner is actively marketing the remaining equipment portfolio with
the intent of maximizing sale proceeds. As sale proceeds are received, the
General Partner intends to periodically declare special distributions to
distribute the sale proceeds to the partners. During the
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXC 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
3. Liquidation and special distributions (continued)
liquidation phase of the Partnership the equipment will continue to be leased
under operating leases until sold. Operating cash flows, to the extent they
exceed Partnership expenses, will continue to be distributed on a quarterly
basis to partners. The amounts reflected for assets and liabilities of the
Partnership have not been adjusted to reflect liquidation values. The equipment
portfolio continues to be carried at the lower of depreciated cost or fair value
less cost to dispose. Although the General Partner estimates that there will be
distributions after liquidation of assets and liabilities, the amounts cannot be
accurately determined prior to actual liquidation of the equipment. Any excess
proceeds over expected Partnership obligations will be distributed to the
Partners throughout the liquidation period. Upon final liquidation, the
Partnership will be dissolved.
During the nine months ended September 30, 1996 and 1995, the General Partner
paid special distributions of $17.56 and $29.27, respectively, per Limited
Partnership Unit which were the result of proceeds from equipment liquidations.
The Partnership is not permitted to reinvest proceeds from sales or liquidations
of equipment. These proceeds, in excess of operational cash requirements, are
periodically paid out to limited partners in the form of special distributions.
The sales and liquidations occur because of equipment destructions, the
determination by the General Partner that it is the appropriate time to maximize
the return on an asset through sale of that asset, and, in some leases, the
ability of the lessee to exercise purchase options.
4. Investment in Unconsolidated Special Purpose Entity
Prior to 1996, the Partnership accounted for operating activities associated
with joint ownership of rental equipment as undivided interests, including its
proportionate share of each asset with similar wholly-owned assets in its
financial statements. Under generally accepted accounting principles, the
effects of such activities, if material, should be reported using the equity
method of accounting. Therefore, effective January 1, 1996, the Partnership
adopted the equity method to account for its investment in such jointly-held
assets.
The principal differences between the previous accounting method and the equity
method relate to the presentation of activities relating to these assets in the
statement of operations. Whereas, under equity accounting the Partnership's
proportionate share is presented as a single net amount, "equity in net income
(loss) of unconsolidated special purpose entities", under the previous method,
the Partnership's statement of operations reflected its proportionate share of
each individual item of revenue and expense. Accordingly, the effect of adopting
the equity method of accounting has no cumulative effect on previously reported
partner's capital or on the Partnership's net income (loss) for the period of
adoption. Because the effects on previously issued financial statements of
applying the equity method of accounting to investments in jointly-owned assets
are not considered to be material to such financial statements taken as a whole,
previously issued financial statements have not been restated. However, certain
items have been reclassified in the previously issued balance sheet to conform
to the current period presentation.
During the nine months ended September 30, 1996, the General Partner sold the
Partnership's 30% interest in a commuter aircraft, included in "Investment in
Unconsolidated Special Purpose Entities" for proceeds of $270,538. The
Partnership received liquidating distributions from the Unconsolidated Special
Purpose Entities during the second quarter of 1996.
5. Subsequent Event
On October 24, 1996, the General Partner sold four railcars for proceeds of
$98,000, which were classified as assets held for sale at September 30, 1996.
The net book value of these railcars were $33,574.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---------------------------------------
<S> <C> <C>
Equipment held for operating leases, at cost $ 1,624,406 $ 1,716,659
Less accumulated depreciation (1,397,850 ) (1,405,716 )
---------------------------------------
Net equipment 226,556 310,943
Cash and cash equivalents 74,419 191,840
Accounts receivable, net of allowance for doubtful
accounts of $30,229 in 1996 and $33,793 in 1995 40,733 48,723
Due from affiliates -- 7,639
Prepaid insurance and other assets 1,185 16,549
---------------------------------------
Total assets $ 342,893 $ 575,694
=======================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Due to affiliates $ 1,985 $ --
Accounts payable and other liabilities 4,946 8,338
---------------------------------------
6,931 8,338
Partners' capital (deficit):
Limited Partners (9,529 units) 374,429 603,509
General Partner (38,467 ) (36,153 )
---------------------------------------
Total partners' capital 335,962 567,356
---------------------------------------
Total liabilities and partners' capital $ 342,893 $ 575,694
=======================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Revenues:
Lease revenue $ 42,621 $ 59,601 $ 132,068 $ 214,872
Interest and other income 595 4,946 4,737 20,387
Gain on disposition of equipment 8,491 26,015 18,580 78,354
----------------------------- -----------------------------
Total revenues 51,707 90,562 155,385 313,613
Expenses:
Depreciation 22,563 24,872 69,102 86,332
Management fees to affiliate 5,956 5,955 17,867 18,294
Repairs and maintenance 5,008 9,495 22,185 41,914
Provision for (recovery of) bad debts (2,673 ) 4,770 (4,398 ) 41,074
General and administrative
expenses to affiliates 7,487 14,495 33,054 55,847
Other general and administrative
expenses 7,246 10,593 33,681 39,509
----------------------------- -----------------------------
-----------------------------
Total expenses 45,587 70,180 171,491 282,970
----------------------------- -----------------------------
Net income (loss) $ 6,120 $ 20,382 $ (16,106 ) $ 30,643
============================= =============================
Partners' share of net income (loss):
Limited Partners - 99% $ 6,059 $ 20,178 $ (15,945 ) $ 30,337
General Partner - 1% 61 204 (161 ) 306
----------------------------- -----------------------------
Total $ 6,120 $ 20,382 $ (16,106 ) $ 30,643
============================= =============================
Net income (loss) per Limited
Partnership Unit (9,529 units) $ 0.64 $ 2.12 $ (1.67 ) $ 3.18
============================= =============================
Cash distributions $ 18,798 $ 50,745 $ 115,288 $ 214,232
============================= =============================
Cash distributions per Limited
Partnership Unit $ 1.95 $ 5.27 $ 11.98 $ 22.26
============================= =============================
Special distributions $ -- $ 100,000 $ 100,000 $ 500,000
============================= =============================
Special distributions per Limited
Partnership Unit $ -- $ 10.39 $ 10.39 $ 51.95
============================= =============================
Total distributions per Limited
Partnership Unit $ 1.95 $ 15.66 $ 22.37 $ 74.21
============================= =============================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the period from December 31, 1994 to September 30, 1996
<TABLE>
<CAPTION>
Limited General
Partners Partners Total
------------------------------------------------------
<S> <C> <C> <C>
Partners' capital (deficit)
at December 31, 1994 $ 1,413,009 $ (27,977 ) $ 1,385,032
Net income 45,590 461 46,051
Cash distributions (855,090 ) (8,637 ) (863,727 )
------------------------------------------------------
Partners' capital (deficit)
at December 31, 1995 603,509 (36,153 ) 567,356
Net loss (15,945 ) (161 ) (16,106 )
Quarterly cash distributions (114,135 ) (1,153 ) (115,288 )
Special cash distributions (99,000 ) (1,000 ) (100,000 )
------------------------------------------------------
Partners' capital (deficit)
at September 30, 1996 $ 374,429 $ (38,467 ) $ 335,962
======================================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the nine months ended
September 30,
1996 1995
--------------------------------
<S> <C> <C>
Operating activities:
Net (loss) income $ (16,106 ) $ 30,643
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Gain on disposition of equipment (18,580 ) (78,354 )
Depreciation 69,102 86,332
Changes in operating assets and liabilities
Accounts receivable, net 7,990 88,631
Due to/from affiliate 9,624 (5,895 )
Prepaid insurance and other assets 15,364 2,002
Accounts payable and other liabilities (3,392 ) 436
--------------------------------
Cash provided by operating activities 64,002 123,795
--------------------------------
Investing activities:
Proceeds from disposition of equipment 33,865 364,401
--------------------------------
Cash provided by investing activities 33,865 364,401
--------------------------------
Cash flows used in financing activities:
Cash distributions paid to Limited Partners (213,135 ) (707,090 )
Cash distributions paid to General Partner (2,153 ) (7,142 )
--------------------------------
Cash used in financing activities (215,288 ) (714,232 )
--------------------------------
Net decrease in cash and cash equivalents (117,421 ) (226,036 )
Cash and cash equivalents at beginning of period 191,840 524,782
--------------------------------
Cash and cash equivalents at end of period $ 74,419 $ 298,746
================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
1. Opinion of Management
In the opinion of the management of PLM Financial Services, Inc., the General
Partner, the accompanying unaudited financial statements contain all adjustments
necessary, consisting primarily of normal recurring accruals, to present fairly
the Partnership's financial position as of September 30, 1996, and the
statements of operations for the three and nine months ended September 30, 1996
and 1995, the statements of changes in partners' capital for the period from
December 31, 1994 to September 30, 1996, and the statements of cash flows for
the nine months ended September 30, 1996 and 1995. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted from the accompanying financial statements. For further information,
reference should be made to the financial statements and notes thereto included
in the Partnership's Annual Report on Form 10-K for the year ended December 31,
1995, on file at the Securities and Exchange Commission.
2. Equipment
Equipment held for operating leases is stated at cost. The components of
equipment are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------------------------------
<S> <C> <C>
Marine containers $ 268,966 $ 330,886
Trailers 1,355,440 1,385,773
------------------------------------
1,624,406 1,716,659
Less accumulated depreciation (1,397,850 ) (1,405,716 )
------------------------------------
Net equipment $ 226,556 $ 310,943
====================================
</TABLE>
All equipment owned by the Partnership was either on lease or operating in
PLM-affiliated short-term rental facilities as of September 30, 1996 and
December 31, 1995.
During the nine months ended September 30, 1996, the Partnership sold or
disposed of 32 marine containers and one trailer with an aggregate net book
value of $15,285 for proceeds of $33,865. During the nine months ended September
30, 1995, the Partnership sold or disposed of 30 trailers and 38 marine
containers with an aggregate net book value of $286,047 for proceeds of
$364,401.
3. Liquidation and special distributions
During the first quarter of 1996, the Partnership completed its 10th year of
operations. As originally anticipated by the General Partner, the Partnership
will be liquidated in an orderly manner in its 11th and 12th years of operation.
The General Partner is actively marketing the remaining equipment portfolio with
the intent of maximizing sale proceeds. As sale proceeds are received, the
General Partner intends to periodically declare special distributions to
distribute the sale proceeds to the partners. During the liquidation phase of
the Partnership the equipment will continue to be leased under operating leases
until sold. Operating cash flows, to the extent they exceed Partnership
expenses, will continue to be distributed on a quarterly basis to partners. The
amounts reflected for assets and liabilities of the Partnership have not been
adjusted to reflect liquidation values. The equipment portfolio continues to be
carried at the lower of depreciated cost or fair value less cost to dispose.
Although the General Partner
<PAGE>
PLM TRANSPORTATION EQUIPMENT PARTNERS IXD 1986 INCOME FUND
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
3. Liquidation and special distributions (continued)
estimates that there will be distributions after liquidation of assets and
liabilities, the amounts cannot be accurately determined prior to actual
liquidation of the equipment. Any excess proceeds over expected Partnership
obligations will be distributed to the Partners throughout the liquidation
period. Upon final liquidation, the Partnership will be dissolved.
During the nine months ended September 30, 1996 and September 30, 1995, the
General Partner paid special distributions of $10.39 and $51.95, respectively,
per Limited Partnership Unit which were the result of proceeds from equipment
liquidations. The Partnership is not permitted to reinvest proceeds from sales
or liquidations of equipment. These proceeds, in excess of operational cash
requirements, are periodically paid out to limited partners in the form of
special distributions. The sales and liquidations occur because of equipment
destructions, the determination by the General Partner that it is the
appropriate time to maximize the return on an asset through sale of that asset,
and, in some leases, the ability of the lessee to exercise purchase options.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(I) Results of operations
Comparison of the Partnership's Operating Results for the Three Months Ended
September 30, 1996 and 1995
TEP IXA
(A) Revenues
Total revenues of $392,472 for the quarter ended September 30, 1996, increased
from $177,949 for the same period in 1995, due primarily to higher gain on
disposition of equipment, offset by lower lease revenues, and lower interest and
other income in the third quarter of 1996, compared to the same period in 1995.
(1) Lease revenue decreased to $97,143 in the third quarter 1996, from $151,828
in the same period of 1995. The following table lists lease revenues earned by
equipment type:
For the three months ended
September 30,
1996 1995
-------------------------------
Trailers $ 73,480 $ 96,630
Rail equipment 7,591 15,450
Marine containers 16,072 39,748
------------------------------
$ 97,143 $ 151,828
==============================
The decline was due primarily to the following:
(a) Trailer revenue decreased $23,150 due primarily to a decline in
utilization in the short-term rental facilities in 1996, compared to 1995
levels;
(b) Railcar revenue decreased $7,859 in the third quarter of 1996 due to
the sale of all railcars owned by the Partnership for $365,000 in proceeds;
(c) Marine container revenue decreased $23,676 due to a decline in
utilization in the third quarter of 1996, compared to 1995 levels.
(2) For the quarter ended September 30, 1996, the Partnership realized a total
gain of $292,451 on the disposition of 10 railcars, six marine containers and
one trailer, compared to the same period in 1995, where the Partnership realized
a gain of $9,857 on the sale or disposition of two marine containers.
(B) Expenses
Total expenses of $105,426 for the quarter ended September 30, 1996, decreased
from $145,200 for the same period in 1995. The decrease in 1996 expenses was
attributable to decreases in depreciation expense, general and administrative
expenses, and repairs and maintenance.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$19,772 in the third quarter of 1996, from $22,951 in the same quarter of 1995,
due primarily to a decrease of trailer and railcar repairs and maintenance due
to sales of the Partnership's equipment.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, and general and administrative expenses) decreased to $85,654 in the third
quarter of 1996, from $122,249 in the same period in 1995. This change resulted
primarily from:
(a) a $27,941 decrease in general and administrative expenses from 1995
levels due to lower bad debt expense and lower administrative costs associated
with the short-term rental facilities due to the decreased volume of trailers
operating in these facilities;
(b) a $8,654 decrease in depreciation expense from 1995 levels reflecting
asset sales or dispositions during 1996 and 1995.
(C) Net Income
The Partnership's net income of $287,046 in the third quarter 1996, increased
from $32,749 in the same period in 1995. The Partnership's ability to operate or
liquidate assets, secure leases, and re-lease those assets whose leases expire
during the duration of the Partnership is subject to many factors, and the
Partnership's performance in the third quarter 1996, is not necessarily
indicative of future periods. In the third quarter 1996, the Partnership
distributed $66,914 to the Limited Partners, or approximately $2.76 per unit.
TEP IXB
(A) Owned equipment operations
Lease revenues less direct expenses (defined as repairs and maintenance and
asset specific insurance expenses) on owned equipment decreased during the third
quarter of 1996 when compared to the same quarter of 1995. The following table
presents lease revenues less direct expenses by owned equipment type:
<TABLE>
<CAPTION>
For the three months
ended September 30,
1996 1995
------------------------------
<S> <C> <C>
Trailers $ 22,733 $ 29,675
Railcar equipment 18,423 17,724
Marine containers 3,781 11,163
</TABLE>
Trailers: Trailer lease revenues and direct expenses were $32,739 and $10,006,
respectively, for the three months ended September 30, 1996, compared to $50,853
and $21,178, respectively, during the same quarter of 1995. The decrease in net
contribution was due to lower utilization of trailers in the short-term rental
facilities and the disposition of trailers;
Railcar equipment: Railcar lease revenues and direct expenses were $21,870 and
$3,447, respectively, for the three months ended September 30, 1996, compared to
$21,870 and $4,146, respectively, during the same quarter of 1995. The increase
of net contribution was due to running repairs needed in the third quarter of
1995 which were not required in the third quarter in 1996;
Marine containers: Marine container lease revenues and direct expenses were
$3,820 and $39, respectively, for the three months ended September 30, 1996,
compared to $11,343 and $180, respectively, during the same quarter of 1995. The
number of marine containers owned by the Partnership has been declining due to
sales and dispositions. The result of this declining fleet has been a decrease
in marine container net contribution.
(B) Indirect expenses related to owned equipment
Total indirect expenses of $59,644 for the three months ended September 30,
1996, decreased from $85,663 for the same period of 1995. The variance is
explained as follows:
(a) a $12,093 decrease in general and administrative expenses from 1995
levels due to decreased administrative costs associated with the short-term
rental facilities due to decreased volume of trailers operating in these
facilities;
(b) a $7,815 decrease in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees;
(c) a $6,111 decrease in depreciation expense from 1995 levels reflecting
assets sales or dispositions during 1996 and 1995.
(C) For the quarter ended September 30, 1996, the Partnership realized a gain of
$8,473 on the sale or disposition of one trailer and two marine containers,
compared to the same period in 1995, when the Partnership realized a gain of
$27,862 on the sale or disposal of six trailers and one marine container.
(D) Interest and other income
Interest and other income decreased $1,980 during the third quarter of 1996 due
primarily to lower cash balances available for investments when compared to the
same period of 1995.
(E) Equity in net income of the unconsolidated special purpose entity
Equity in net income of unconsolidated special purpose entity was $231,147 and
$27,355 for the three months ended September 30, 1996 and 1995, respectively,
and represents the operating income generated from a jointly-owned aircraft
accounted for under the equity method and the gain ($258,708) resulting from the
sale of this investment for proceeds of $442,500. (see Note 4 to the financial
statements).
(F) Net Income
The Partnership's net income of $228,449 in the third quarter of 1996, compared
to $33,632 in the same period in 1995. The Partnership's ability to operate or
liquidate assets, secure leases, and re-lease those assets whose leases expire
during the duration of the Partnership is subject to many factors, and the
Partnership's performance in the third quarter 1996, is not necessarily
indicative of future periods. In the third quarter 1996, the Partnership
distributed $546,233 to the Limited Partners, or approximately $31.29 per unit
which included a special distribution of $25.52 per unit.
TEP IXC
(A) Owned equipment operations
Lease revenues less direct expenses (defined as repairs and maintenance and
asset specific insurance expenses) on owned equipment decreased during the third
quarter of 1996 when compared to the same quarter of 1995. The following table
presents lease revenues less direct expenses by owned equipment type:
<TABLE>
<CAPTION>
For the three months
ended September 30,
1996 1995
--------------------------------
<S> <C> <C>
Trailers $ 52,629 $ 79,735
Railcar equipment 5,419 6,722
Marine containers 445 3,622
</TABLE>
Trailers: Trailer lease revenues and direct expenses were $75,026 and $22,397,
respectively, for the three months ended September 30, 1996, compared to
$112,465 and $32,730, respectively, during the same quarter of 1995. The
decrease in net contribution was due to lower utilization of trailers in the
short-term rental facilities and the disposition of trailers;
Railcar equipment: Railcar lease revenues and direct expenses were $7,800 and
$2,381, respectively, for the three months ended September 30, 1996, compared to
$7,800 and $1,078, respectively, during the same quarter of 1995. The decrease
in net contribution was due to lower repairs and maintance expenses in the third
quarter of 1996 as compared to the third quarter of 1995;
Marine containers: Marine container lease revenues and direct expenses were $460
and $15 respectively, for the three months ended September 30, 1996, compared to
$3,677 and $55, respectively, during the same quarter of 1995. The number of
marine containers owned by the Partnership has been declining due to sales and
dispositions. The result of this declining fleet has resulted in a decrease in
marine container net contribution.
(B) Indirect expenses related to owned equipment
Total indirect expenses of $78,546 for the three months ended September 30,
1996, decreased from $117,229 for the same period of 1995. The variance is
explained as follows:
(a) a $20,975 decrease in general and administrative expenses due to lower
indirect costs associated with the short-term rental facilities in the third
quarter of 1996 as compared to the third quarter of 1995;
(b) a $13,314 decrease in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees;
(c) a $4,394 decrease in depreciation expense from 1995 levels reflecting
asset sales during 1995 and 1996.
(C) For the quarter ended September 30, 1996, the Partnership realized a gain of
$3,692 on the disposal of one trailer compared to the same period in 1995, when
the Partnership realized a gain of $424 on the sale or disposal of one trailer
and one marine container.
(D) Interest and other income
Interest and other income decreased $1,091 during the third quarter of 1996 due
primarily to lower cash balances available for investments when compared to the
same period of 1995.
(E) Equity in net income (loss) of the unconsolidated special purpose entity
Equity in net loss of unconsolidated special purpose entity of $296 for the
third quarter of 1996, decreased from net income of $4,170 for the third quarter
of 1995, and represents the operating income (loss) generated from a
jointly-owned aircraft accounted for under the equity method (see Note 4 to the
financial statements).
The aircraft incurred a loss in the third quarter of 1996 compared to net
income for the same quarter of 1995, due to the sale of the aircraft in April of
1996. Some expenses were paid in the third quarter of 1996 for the sold
aircraft.
(F) Net Income
The Partnership incurred a net loss of $13,678 in the third quarter 1996,
compared to a net loss of $18,486 in the same period in 1995. The Partnership's
ability to operate or liquidate assets, secure leases, and re-lease those assets
whose leases expire during the duration of the Partnership is subject to many
factors, and the Partnership's performance in the third quarter 1996, is not
necessarily indicative of future periods. In the third quarter 1996, the
Partnership distributed $355,672 to the Limited Partners, or approximately
$21.03 per unit which included a special distribution of $17.56 per unit.
<PAGE>
TEP IXD
(A) Revenues
Total revenues of $51,707 for the quarter ended September 30, 1996, decreased
from $90,562 for the same period in 1995, due primarily to a lower gain on sale
of equipment, lower lease revenues, and lower interest and other income in the
third quarter of 1996 as compared to the same period in 1995.
(1) Lease revenues decreased to $42,621 in the third quarter 1996, from $59,601
in the same period in 1995. The following table lists lease revenue earned by
equipment type:
<TABLE>
<CAPTION>
For the nine months ended
September 30,
1996 1995
------------------------------
<S> <C> <C>
Trailers $ 32,456 $ 34,871
Marine containers 10,165 24,730
------------------------------
$ 42,621 $ 59,601
==============================
</TABLE>
The decline was due primarily to the following:
(a) Trailer revenue decreased $2,415 due primarily to lower utilization in
short-term rental facilities operated by an affiliate of the General Partner;
(b) Marine container revenue decreased $14,565 primarily due to the
disposal of equipment.
(2) For the quarter ended September 30, 1996, the Partnership realized a gain of
$8,491 on the disposal of 10 marine containers, when the Partnership realized a
gain of $26,015 on the disposal of 11 marine containers in the quarter ended
September 30, 1995.
(B) Expenses
Total expenses of $45,587 for the quarter ended September 30, 1996, decreased
from $70,180 for the same period in 1995. The decrease in the third quarter of
1996 expenses was attributable primarily to decreases in general and
administrative expense, bad debt expense, repair and maintenance, and
depreciation expense.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$5,008 in the third quarter of 1996, from $9,495 in the same period in 1995.
This change resulted primarily from decreased trailer repairs and maintenance
expense.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, bad debt expense, and general and administrative expenses) decreased to
$40,579, in the third quarter 1996, from $60,685 in the same period in 1995.
This change resulted primarily from:
(a) a $10,355 decrease in general and administrative expense due to a
decrease in indirect costs associated with the short-term rental facilities as
compared to the third quarter of 1996;
(b) a $7,443 decrease in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees;
(c) a $2,309 decrease in depreciation expense from 1995 levels, reflecting
asset sales or dispositions during 1995 and 1996.
<PAGE>
(C) Net Income
The Partnership's had a net income of $6,120 in the third quarter 1996, compared
to $20,382 in the same period in 1995. The Partnership's ability to operate or
liquidate assets, secure leases, and re-lease those assets whose leases expire
during the duration of the Partnership is subject to many factors, and the
Partnership's performance in the third quarter 1996, is not necessarily
indicative of future periods. In the third quarter 1996, the Partnership
distributed $18,610 to the Limited Partners, or approximately $1.95 per unit.
Comparison of the Partnership's Operating Results for the Nine Months Ended
September 30, 1996 and 1995
TEP IXA
(A) Revenues
Total revenues of $670,507 for the nine months ended September 30, 1996,
decreased from $970,608 for the same period in 1995, due primarily to lower gain
on the sale of assets, lower lease revenue, and a decrease in interest and other
income.
(1) Lease revenue decreased to $317,352, in the nine months ended September 30,
1996, from $392,052 in the same period of 1995. The following table lists lease
revenues earned by equipment type:
For the nine months ended
September 30,
1996 1995
------------------------------
Trailers $ 209,576 $ 260,239
Rail equipment 38,491 46,350
Marine containers 69,285 85,463
------------------------------
$ 317,352 $ 392,052
==============================
The decline was due primarily to the following:
(a) Trailer revenue decreased $50,663 due to lower utilization of trailers
in the short-term rental facilities in 1996, compared to 1995 levels;
(b) Rail equipment revenue decreased $7,859 due to the sale of all railcars
in the third quarter of 1996 for $365,000;
(c) Marine container revenue decreased $16,178 due to lower utilization
rates on certain containers in the first nine months of 1996, when compared to
the same period of 1995, and by the disposal of equipment.
(2) For the nine months ended September 30, 1996, the Partnership realized a
gain of $337,432 on the sale or disposition of 10 railcars, two trailers, and 16
marine containers, compared to the same period in 1995, where the Partnership
realized a gain of $555,197 on the sale or disposition of one trailer, seven
marine containers, and one commuter aircraft which was under the sales-type
lease.
(B) Expenses
Total expenses of $356,369 for the nine months ended September 30, 1996,
decreased from $582,411 for the same period in 1995. The decrease in 1996
expenses was attributable to decreases in repairs and maintenance, depreciation
expense, and general and administrative expenses.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$45,671 in 1996, from $128,770 in 1995. This decrease was due primarily to
decrease in repairs and maintenance for trailers in the short-term rental
facilities. In the first nine months of 1995, repairs were made on former term
lease trailers prior to transitioning into the short-term rental facilities.
Additionally, the Partnership had a decrease in aircraft repairs and maintenance
in 1996 due to the sale of the Partnership's commuter aircraft during the first
quarter of 1996.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, and all general and administrative expenses) decreased to $310,698 in the
nine months ended September 30, 1996, from $453,641 in the same period in 1995.
This change resulted primarily from:
(a) a $104,772 decrease in depreciation expense from 1995 levels reflecting
assets sales or dispositions during 1996 and 1995;
(b) a $39,019 decrease in general and administrative expenses from 1995
levels due to lower administrative costs associated with the Partnership.
(C) Net Income
The Partnership's net income decreased to $314,138 in the nine months ended
September 30, 1996, from $388,197 in the same period in 1995. The Partnership's
ability to operate or liquidate assets, secure leases, and re-lease those assets
whose leases expire during the duration of the Partnership is subject to many
factors, and the Partnership's performance in the nine months ended September
30, 1996, is not necessarily indicative of future periods. In the nine months
ended September 30, 1996, the Partnership distributed $1,297,167 to the Limited
Partners, or approximately $53.41 per unit which included a special distribution
of $44.84 per unit.
TEP IXB
(A) Owned equipment operations
Revenues less direct expenses (defined as repairs and maintenance and asset
specific insurance expense) on owned equipment decreased in the nine months
ended September 30, 1996, when compared to the same period of 1995. The
following table presents revenues less direct expenses by owned equipment type:
<TABLE>
<CAPTION>
For the nine months
ended September 30,
1996 1995
------------------------------
<S> <C> <C>
Trailers $ 91,239 $ 111,059
Railcar equipment 60,580 56,567
Marine containers 16,474 25,493
</TABLE>
Trailers: Trailer revenues and direct expenses were $123,793 and $32,554,
respectively, for the nine months ended September 30, 1996, compared to $156,780
and $45,721, respectively, during the same period of 1995. The decrease in net
contribution was due to lower utilization of trailers in the short-term rental
facilities and the disposition of trailers;
Railcar equipment: Railcar revenues and direct expenses were $65,610 and $5,030,
respectively, for the nine months ended September 30, 1996, compared to $64,667
and $8,100, respectively, during the same period of 1995. The increase in net
contribution was due to running repairs required on certain railcars in the
fleet in the first nine months of 1995, which did not occur in 1996;
Marine containers: Marine container revenues and direct expenses were $16,627
and $153, respectively, for the nine months ended September 30, 1996, compared
to $26,078 and $585, respectively, during the same period of 1995. The number of
marine containers owned by the Partnership has been declining due to sales and
dispositions. The result of this declining fleet is a decrease in marine
container net contribution.
<PAGE>
(B) Indirect expenses related to owned equipment
Total indirect expenses of $212,485 for the nine months ended September 30,
1996, decreased from $296,836 for the same period of 1995. The variance is
explained as follows:
(a) a $35,369 decrease in general and administrative expenses from 1995
levels. This reflects the decreased administrative costs associated with the
short-term rental facilities, and lower data processing expense;
(b) a $27,867 decrease in depreciation expense from 1995 levels reflecting
assets sales or dispositions during 1996 and 1995;
(c) a $21,115 decrease in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees.
(C) For the nine months ended September 30, 1996, the Partnership realized a
gain of $38,239 on the disposal of four marine containers and eight trailers
compared to the same period in 1995, where the Partnership realized a gain of
$100,416 on the sale or disposition of 20 trailers and four marine containers.
(D) Interest and other income
Interest and other income decreased $5,613 during the first nine months of 1996
due primarily to lower cash balances available for investments when compared to
the same period of 1995.
(E) Equity in net income of unconsolidated special purpose entity
Equity in net income of unconsolidated special purpose entity was $192,041 and
$81,148 for the nine months ended September 30, 1996 and 1995, respectively, and
represents the operating income generated from a jointly-owned aircraft
accounted for under the equity method (see Note 4 to the financial statements).
The increase in aircraft net contribution was due to the sale of the
aircraft during the third quarter of 1996 for a gain of $258,708, partially
offset by the off-lease status of the aircraft during the first nine months of
1996.
(C) Net Income
The Partnership's net income of $197,363 in the nine months ended September 30,
1996, compared to $94,735 in the same period in 1995. The Partnership's ability
to operate or liquidate assets, secure leases, and re-lease those assets whose
leases expire during the duration of the Partnership is subject to many factors,
and the Partnership's performance in the nine months ended September 30, 1996,
is not necessarily indicative of future periods. In the nine months ended
September 30, 1996, the Partnership distributed $747,701 to the Limited
Partners, or approximately $42.83 per unit which included a special distribution
of $25.52 per unit.
<PAGE>
TEP IXC
(A) Owned equipment operations
Revenues less direct expenses (defined as repairs and maintenance and asset
specific insurance expenses) on owned equipment decreased during the first nine
months of 1996 when compared to the same period of 1995. The following table
presents revenues less direct expenses by owned equipment type:
<TABLE>
<CAPTION>
For the nine months
ended September 30,
1996 1995
---------------------------------
<S> <C> <C>
Trailers $ 166,114 $ 291,187
Railcar equipment 18,724 27,221
Marine containers 3,661 8,421
</TABLE>
Trailers: Trailer revenues and direct expenses were $244,489 and $78,375,
respectively, for the nine months ended September 30, 1996, compared to $409,294
and $118,107, respectively, during the same quarter of 1995. The decrease of net
contribution was due to lower utilization of trailers in the short-term rental
facilities and the disposition of trailers;
Railcar equipment: Railcar revenues and direct expenses were $23,400 and $4,676,
respectively, for the nine months ended September 30, 1996, compared to $33,909
and $6,688, respectively during the same quarter of 1995.
The decrease in net contribution was due to the sale of railcar equipment;
Marine containers: Marine container revenues and direct expenses were $3,718 and
$57, respectively, for the three months ended September 30, 1996, compared to
$8,598 and $177, respectively, during the same quarter of 1995. The number of
marine containers owned by the Partnership has been declining due to sales and
dispositions. The result of this declining fleet is a decrease in marine
container net contribution.
(B) Indirect expenses related to owned equipment
Total indirect expenses of $303,719 for the nine months ended September 30,
1996, decreased from $361,598 for the same period of 1995. The variance is
explained as follows:
(a) a $28,433 decrease in general and administrative expenses due to lower
administrative costs associated with the short-term rental facilities due to a
decreased volume of trailers operating in these facilities;
(b) a $17,067 decrease in depreciation expense from 1995 levels reflecting
asset sales during 1996;
(c) an $10,186 increase in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees;
(d) a $2,193 decrease in management fees due to lower levels of operating
cash flow during the comparable periods. Monthly management fees are calculated
as the greater of 10% of the Partnership's Operating Cash Flow, or 1/12 of 1/2%
of the Partnership's Capital Contributions as defined in the Limited Partnership
Agreement.
(C) For the nine months ended September 30, 1996, the Partnership realized a
gain of $21,893 on the sale of eight trailers and one marine container, compared
to the same period in 1995, when the Partnership realized a gain of $234,869 on
the sale or disposal of four trailers, five twin stack railcars, and one marine
container.
(D) Interest and other income decreased $7,394 due to a decrease in cash
available for short-term investment.
<PAGE>
(E) Equity in net income of unconsolidated special purpose entity
Equity in net income of unconsolidated special purpose entity was $111,247 and
$12,265 for the nine months ended September 30, 1996 and 1995, respectively, and
represents the net income generated from jointly-owned aircraft accounted for
under the equity method (see Note 4 to the financial statements).
The increase in aircraft net contribution was primarily due to the gain of
$134,192 realized on the sale of the aircraft in April of 1996.
(F) Net Income
The Partnership's net income decreased to $28,572 in the nine months ended
September 30, 1996, from $230,411 in the same period in 1995. The Partnership's
ability to operate or liquidate assets, secure leases, and re-lease those assets
whose leases expire during the duration of the Partnership is subject to many
factors, and the Partnership's performance in the nine months ended September
30, 1996, is not necessarily indicative of future periods. In the nine months
ended September 30, 1996, the Partnership distributed $551,246 to the Limited
Partners, or approximately $32.59 per unit which included a special distribution
of $17.56 per unit.
TEP IXD
(A) Revenues
Total revenues of $155,385 for the nine months ended September 30, 1996
decreased from $313,613 for the same period in 1995 due primarily to lower lease
revenues, a lower gain on sale of equipment, and lower interest and other income
in 1996 compared to 1995.
(1) Lease revenues decreased to $132,068 in the nine months ended September 30,
1996, from $214,872 in the same period in 1995. The following table lists lease
revenue earned by equipment type:
For the nine months ended
September 30,
1996 1995
------------------------------
Trailers $ 93,000 $ 149,322
Marine containers 39,068 65,550
------------------------------
$ 132,068 $ 214,872
==============================
The decrease was due to the following:
(a) Trailer revenue decreased $56,322 due primarily to lower utilization in
short-term rental facilities operated by an affiliate of the General Partner and
a reduction in the size of the trailer fleet;
(b) Marine container revenue decreased $26,482 primarily due to the
disposal of equipment.
(2) For the nine months ended September 30, 1996, the Partnership realized a
gain of $18,580 on the sale or disposal of one trailer and 32 marine containers,
compared to the same period in 1995, where the Partnership realized a gain
$78,354 on the sale or disposal of 30 trailers and 38 marine containers.
(3) Interest and other income decreased $15,650 due to a decrease in cash
available for short-term investment.
<PAGE>
(B) Expenses
Total expenses of $171,491 for the nine months ended September 30, 1996,
decreased from $282,970 for the same period in 1995. The decrease in 1996
expenses was attributable primarily to decreases in bad debt expense, general
and administrative expenses, repair and maintenance, and depreciation.
(1) Direct operating expenses (defined as repairs and maintenance) decreased to
$22,185 in the nine months ended September 30, 1996, from $41,914 in the same
period in 1995. This change resulted primarily from the disposal of trailers and
containers.
(2) Indirect operating expenses (defined as depreciation expense, management
fees, bad debt expense, and general and administrative expenses) decreased to
$149,306 in the nine months ended September 30, 1996, from $241,056 in the same
period in 1995. This change resulted primarily from:
(a) a $45,472 decrease in bad debt expense due to the General Partner's
evaluation of the collectibility of trade receivables from trailer rental yard
lessees;
(b) a $28,621 decrease in general and administrative expenses from 1995
levels due to lower administrative costs associated with the Partnership;
(c) a $17,230 decrease in depreciation expense from 1995 levels, reflecting
asset sales or dispositions during 1996.
(C) Net Income (loss)
The Partnership incurred a loss of $16,106 in the nine months ended September
30, 1996, compared to a net income of $30,643 in the same period in 1995. The
Partnership's ability to operate or liquidate assets, secure leases, and
re-lease those assets whose leases expire during the duration of the Partnership
is subject to many factors, and the Partnership's performance in the nine months
ended September 30, 1996, is not necessarily indicative of future periods. In
the nine months ended September 30, 1996, the Partnership distributed $213,135
to the Limited Partners, or approximately $22.37 per unit which included a
special distribution of $10.39 per unit.
(II) Asset Sales
Equipment sales and dispositions result from General Partner decisions on
liquidations, the exercise by lessees of fair market value purchase options
provided for in certain leases, or the payment of stipulated loss values on
equipment lost or disposed of during the time it is subject to lease agreements.
During the nine months ended September 30, 1996, 10 railcars, 16 marine
containers and two trailers owned by TEP IXA were sold for a total of $464,899.
In addition, the Partnership received additional proceeds of $2,629 for the
commuter aircraft which was under a sales-type lease. Eight trailers and four
marine containers owned by TEP IXB were sold for a total of $91,509; eight
trailers and one marine container owned by TEP IXC were sold for $61,808; and 32
marine containers and one trailer owned by TEP IXD were sold or disposed of for
$33,865. In addition, during the nine months ended September 30, 1996, TEP IXB
sold its 50% investment in a commuter aircraft for $442,500 and TEP IXC sold its
30% investment in a commuter aircraft for $270,538.
As discussed in Note 3, the General Partner is actively marketing the remaining
equipment portfolio with the intent of maximizing sale proceeds.
(III) Market Values
In accordance with SFAS 121, the General Partner reviews the carrying value of
its equipment portfolio at least annually in relation to expected future market
conditions for the purpose of assessing recoverability of the recorded amounts.
If projected future lease revenue plus residual values are less than the
carrying value of the equipment, a loss on revaluation is recorded. No
adjustments to reflect impairment of individual equipment carrying values were
required for the nine months ended September 30, 1996.
As of September 30, 1996, the General Partner estimated the current fair
market value of each Partnerships' equipment portfolio to be approximately :
$1.2 million, $0.9 million, $1.5 million and $0.9 million for TEP IXA, TEP IXB,
TEP IXC and TEP IXD, respectively.
<PAGE>
(IV) Trends
Inflation and changing prices did not materially impact the Partnerships'
revenues or expenses during the reported periods.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
<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.
PLM TRANSPORTATION EQUIPMENT
PARTNERS IXD 1986 INCOME FUND
By: PLM Financial Services, Inc.
General Partner
Date: November 12, 1996 By: /s/ David J. Davis
-------------------
David J. Davis
Vice President and
Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 74,419
<SECURITIES> 0
<RECEIVABLES> 40,733
<ALLOWANCES> 30,229
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,624,406
<DEPRECIATION> 1,397,850
<TOTAL-ASSETS> 342,893
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 335,962
<TOTAL-LIABILITY-AND-EQUITY> 342,893
<SALES> 0
<TOTAL-REVENUES> 155,385
<CGS> 0
<TOTAL-COSTS> 171,491
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16,106)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,106)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,106)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
