<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 JUNE 30, 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 0-17942
IEA INCOME FUND VIII,
(A CALIFORNIA LIMITED PARTNERSHIP)
(Exact name of registrant as specified in its charter)
California 94-3046886
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
444 Market Street, 15th Floor, San Francisco, California 94111
(Address of principal executive offices) (Zip Code)
(415) 677-8990
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
---- ----
<PAGE> 2
IEA INCOME FUND VIII,
(A CALIFORNIA LIMITED PARTNERSHIP)
REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 1999
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - June 30, 1999 (unaudited) and December 31, 1998 4
Statements of Operations for the three and six months ended June 30, 1999 and 1998 (unaudited) 5
Statements of Cash Flows for the six months ended June 30, 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 14
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Presented herein are the Registrant's balance sheets as of June 30,
1999 and December 31, 1998, statements of operations for the three and
six months ended June 30, 1999 and 1998, and statements of cash flows
for the six months ended June 30, 1999 and 1998.
3
<PAGE> 4
IEA INCOME FUND VIII,
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- -----------
<S> <C> <C>
Assets
------
Current assets:
Cash and cash equivalents, includes $683,969 at June 30, 1999 and
$543,682 at December 31, 1998 in interest-bearing accounts $ 684,143 $ 543,782
Net lease receivables due from Leasing Company
(notes 1 and 2) 97,427 148,068
Due from general partner (note 3) -- 142,660
----------- -----------
Total current assets 781,570 834,510
----------- -----------
Container rental equipment, at cost 9,005,546 9,794,204
Less accumulated depreciation 5,296,314 5,507,701
----------- -----------
Net container rental equipment 3,709,232 4,286,503
----------- -----------
$ 4,490,802 $ 5,121,013
=========== ===========
Partners' Capital
-----------------
Partners' capital (deficit):
General partner $ (138,843) $ 4,649
Limited partners 4,629,645 5,116,364
----------- -----------
Total partners' capital 4,490,802 5,121,013
----------- -----------
$ 4,490,802 $ 5,121,013
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
IEA INCOME FUND VIII,
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------- --------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net lease revenue (notes 1 and 4) $ 113,387 $ 271,628 $ 319,850 $ 563,250
Other operating expenses:
Depreciation 136,396 155,981 275,320 311,155
Other general and administrative expenses 6,550 8,210 18,587 19,621
--------- --------- --------- ---------
142,946 164,191 293,907 330,776
--------- --------- --------- ---------
Earnings (loss) from operations (29,559) 107,437 25,943 232,474
Other income:
Interest income 7,837 8,185 14,009 16,576
Net gain on disposal of equipment 32,677 30,591 77,342 59,746
--------- --------- --------- ---------
40,514 38,776 91,351 76,322
--------- --------- --------- ---------
Net earnings $ 10,955 $ 146,213 $ 117,294 $ 308,796
========= ========= ========= =========
Allocation of net earnings (loss):
General partner $ 37,676 $ 75,064 $ (67,090) $ 149,640
Limited partners (26,721) 71,149 184,384 159,156
--------- --------- --------- ---------
$ 10,955 $ 146,213 $ 117,294 $ 308,796
========= ========= ========= =========
Limited partners' per unit share of net earnings $ (1.24) $ 3.31 $ 8.58 $ 7.40
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
IEA INCOME FUND VIII,
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
--------------------------
June 30, June 30,
1999 1998
--------- ---------
<S> <C> <C>
Net cash provided by operating activities $ 406,528 $ 501,318
Cash flows provided by investing activities:
Proceeds from sale of rental equipment 338,677 303,324
Cash flows from (used in) financing activities:
Repayment of excess-distribution to general partner
142,660 --
Distribution to partners (747,504) (889,954)
--------- ---------
Net cash used in financing activities (604,844) (889,954)
--------- ---------
Net increase (decrease) in cash and cash equivalents 140,361 (85,312)
Cash and cash equivalents at January 1 543,782 723,464
--------- ---------
Cash and cash equivalents at June 30 $ 684,143 $ 638,152
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
IEA INCOME FUND VIII,
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) Summary of Significant Accounting Policies
(a) Nature of Operations
IEA Income Fund VIII, A California Limited Partnership (the
"Partnership") was organized under the laws of the State of California
on August 31,1987 for the purpose of owning and leasing marine cargo.
Cronos Capital Corp. ("CCC") is the general partner and, with its
affiliate Cronos Containers Limited (the "Leasing Company"), manages
the business of the Partnership. The Partnership shall continue until
December 31, 2008, unless sooner terminated upon the occurrence of
certain events.
The Partnership commenced operations on January 6, 1988, when the
minimum subscription proceeds of $1,000,000 were obtained. The
Partnership offered 40,000 units of limited partnership interest at
$500 per unit, or $20,000,000. The offering terminated on August 31,
1988, at which time 21,493 limited partnership units had been
purchased.
As of June 30, 1999, the Partnership owned and operated 1,671
twenty-foot, 1,533 forty-foot and 85 forty-foot high-cube marine dry
cargo containers.
(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 two to five years).
Master leases do not specify the exact number of containers to be
leased or the term that each container will remain on hire but allow
the ocean carrier to pick up and drop off containers at various
locations; rentals are based upon the number of containers used and
the applicable per-diem rate. Accordingly, rentals under master leases
are all variable and contingent upon the number of containers used.
Most containers are leased to ocean carriers under master leases;
leasing agreements with fixed payment terms are not material to the
financial statements. Since there are no material minimum lease
rentals, no disclosure of minimum lease rentals is provided in these
financial statements.
(Continued)
7
<PAGE> 8
IEA INCOME FUND VIII,
(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 June
30, 1999 and December 31, 1998 were as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- ------------
<S> <C> <C>
Lease receivables, net of doubtful accounts of $52,597
at June 30, 1999 and $63,213 at December 31, 1998 $397,336 $449,861
Less:
Direct operating payables and accrued expenses 142,149 138,341
Damage protection reserve 54,191 60,071
Base management fees 57,226 58,164
Reimbursed administrative expenses 6,883 8,276
Incentive fees 39,460 36,941
-------- --------
$ 97,427 $148,068
======== ========
(Continued)
</TABLE>
8
<PAGE> 9
IEA INCOME FUND VIII,
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
3) Due From General Partner
During 1998, CCC received excess-distributions of $142,660. CCC repaid the
excess-distribution amount in March 1999.
(4) 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 and six-month periods ended
June 30, 1999 and 1998 was as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Rental revenue (note 5) $ 305,690 $ 495,406 $ 706,653 $1,013,845
Less:
Rental equipment operating expenses 104,915 117,458 207,649 226,772
Base management fees 26,909 33,990 56,861 70,082
Reimbursed administrative expenses 21,019 25,314 43,373 61,388
Incentive fees 39,460 47,016 78,920 92,353
---------- ---------- ---------- ----------
$ 113,387 $ 271,628 $ 319,850 $ 563,250
========== ========== ========== ==========
</TABLE>
(5) 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 June 30, 1999, the Partnership operated 1,671
twenty-foot, 1,553 forty-foot and 85 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 June 30, 1999 and December
31, 1998.
During the first six months of 1999, the Registrant disposed of 291
containers as part of its ongoing operations. At June 30, 1999, 69% of the
original equipment remained in the Registrant's fleet, as compared to 75%
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 174 246 14
Master leases 1,048 922 57
----- ----- -----
Subtotal 1,222 1,168 71
Containers off lease 449 385 14
----- ----- -----
Total container fleet 1,671 1,553 85
===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
40-Foot
20-Foot 40-Foot High-Cube
----------------- ----------------- ----------------
Units % Units % Units %
----- --- ----- --- ----- ---
<S> <C> <C> <C> <C> <C> <C>
Total purchases 2,244 100% 2,396 100% 150 100%
Less disposals 573 26% 843 35% 65 43%
----- --- ----- --- --- ---
Remaining fleet at June 30, 1999 1,671 74% 1,553 65% 85 57%
===== === ===== === === ===
</TABLE>
The Registrant's operating performance contributed to a 34% decrease in net
lease receivables at June 30, 1999 when compared to December 31, 1998.
During the second quarter of 1999, distributions from operations and sales
proceeds amounted to $415,032, reflecting distributions to the general and
limited partners for the first quarter of 1999. This represents an increase
from the $332,472 distributed during the first quarter of 1999, reflecting
distributions for the fourth quarter of 1998. In 1994, pursuant to Section
6.1(b) and (c) of the Partnership Agreement, the allocation of
distributions from operations among the general partner and limited
partners was adjusted to 10% and 90%, respectively. With the payment of the
distribution for the third quarter of 1997, the limited partners received
aggregate distributions in an amount equal to their adjusted capital
contributions plus a 10% cumulative, annual return on their adjusted
capital contributions. Thereafter, all distributions were allocated 20% to
the general partner and 80% to the limited partners, pursuant to Sections
6.1(b) and (c) of the Partnership Agreement. Cash distributions from
operations to the general partner in excess of 10% of distributable cash
will be considered an incentive fee and compensation to the general
partner.
The sentiment with respect to the container industry's slump over the past
two years has turned more favorable in recent months as evidence suggests a
turnaround is underway with respect to Asia's economic crisis. In recent
months, economic reforms in Asia, as well as in Latin America, have begun
to produce gradual improvement in terms of world trade, and there are
preliminary indications that containerized trade volumes from North America
and
10
<PAGE> 11
Europe to Asia, in particular, may be stabilizing. In addition, intra-Asian
trade, which also has stagnated since the Asia financial crisis began
nearly two years ago, has shown increased activity in recent months. These
favorable signs, however, have yet to produce any significant positive
impact on the Registrant's operating performance. In spite of the reduced
redelivery of on-hire equipment by the ocean carriers, per-diem rental
rates, which declined sharply over the past two years, have continued to
soften as a result of competitive market conditions, decreased demand and
high inventories.
The Registrant continues to take advantage of its strong marketing
resources in order to seek out leasing opportunities during this period in
which seasonal factors are also influencing the increased demand. At the
same time, it has identified specific strategies intended to strengthen
on-hire volumes and enhance utilization of the container fleet. The
short-term objective is to improve utilization by offering greater leasing
incentives and actively moving surplus, off-hire equipment to higher-demand
locations. While this short-term strategy will increase repositioning
expenses, it may also minimize those expenses related to handling and
storing off-hire containers. These measures will also provide the
longer-term advantage of placing the containers where the demand is
greatest.
2) Material changes in the results of operations between the three and
six-month periods ended June 30, 1999 and the three and six-month periods
ended June 30, 1998.
Net lease revenue for the three and six-month periods ended June 30, 1999
was $113,387 and $319,850, respectively, a decrease of 58% and 43% from the
respective three and six-month periods in the prior year. Approximately
298% and 66%, respectively, of the Registrant's net earnings for the three
and six-month periods ended June 30, 1999 were from gain on disposal of
equipment, as compared to 21% and 19%, respectively, for the same three and
six-month periods 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 and
six-month periods ended June 30, 1999 was $305,690 and $706,653,
respectively, reflecting a decline of 38% and 30% from the same respective
three and six-month periods in 1998. During 1999, gross rental revenue was
impacted by the Registrant's slightly smaller fleet size and lower per-diem
rental rates. Average per-diem rental rates decreased approximately 8% and
6%, respectively, when compared to the same three and six-month periods in
the prior year. The Registrant's average fleet size and utilization rates
for the three and six-month periods ended June 30, 1999 and June 30, 1998
were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Average fleet size (measured in twenty-foot
equivalent units (TEU)) 5,059 5,724 5,175 5,821
Average Utilization 72% 79% 72% 79%
</TABLE>
The Registrant's aging and diminishing fleet contributed to a decrease of
13% and 12%, respectively, in depreciation expense when compared to the
same three and six-month periods in the prior year. Rental equipment
operating expenses were 34% and 29%, respectively, of the Registrant's
gross lease revenue during the three and six-month periods ended June 30,
1999, as compared to 24% and 22%, respectively, of the Registrant's gross
lease revenue during the three and six-month periods ended June 30, 1998.
11
<PAGE> 12
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 Leasing Company's computer systems
have undergone modifications in order to render the systems ready for the
Year 2000. The Leasing Company has completed a detailed inventory of all
software and hardware systems and has identified all components that need
to be modified. The Leasing Company has completed all the necessary changes
and testing in a dedicated Year 2000 environment. The Leasing Company
anticipates that all compliant code will be live by the end of August 1999.
The Leasing Company has contacted all of its critical business suppliers
and has been advised that their systems are Year 2000 compliant. The
Leasing Company has also confirmed the compliance of its suppliers'
products through its own extensive testing. Expenses associated with
addressing Year 2000 issues are being recognized as incurred. Management
has not yet assessed the Year 2000 compliance expense but does not
anticipate the costs incurred to date or to be incurred in the future by
the Leasing Company and its affiliates to be in excess of $500,000. None of
the costs incurred with respect to Year 2000 compliance will be borne by
the Registrant. The Leasing Company believes it will be able to resolve any
major Year 2000 issues. The Leasing Company is aware of the implications of
a Year 2000 computer system failure and is currently in the process of
developing its contingency plans. While management believes the possibility
of a Year 2000 system failure to be remote, if the Leasing Company's
internal systems or those of its critical business suppliers fail, the
Leasing Company's consolidated financial position, liquidity or results of
operations may be adversely affected.
Cautionary Statement
This Quarterly Report on Form 10-Q contains statements relating to future
results of the Registrant, including certain projections and business
trends, that are "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. Actual results may differ
materially from those projected as a result of certain risks and
uncertainties, including but not limited to changes in: economic
conditions; trade policies; demand for and market acceptance of leased
marine cargo containers; competitive utilization and per-diem rental rate
pressures; as well as other risks and uncertainties, including but not
limited to those described in the above discussion of the marine container
leasing business under Item 2., Management's Discussion and Analysis of
Financial Condition and Results of Operations; and those detailed from time
to time in the filings of Registrant with the Securities and Exchange
Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
12
<PAGE> 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As the Registrant has previously reported, in February 1997, its former
outside auditors, Arthur Andersen LLP ("Arthur Andersen"), resigned as
auditors to The Cronos Group (the "Parent Company"), its subsidiaries, and
all other entities affiliated with the Parent Company, including the
Registrant. The Parent Company is the indirect corporate parent of CCC, the
managing general partner of 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 prepared a report
pursuant to Section 10A of the Securities Exchange Act of 1934, as amended,
for filing by the Parent Company with the Securities and Exchange
Commission ("SEC"). As a result of the Arthur Andersen report, the SEC
commenced an investigation of the Parent Company on February 10, 1997. The
purpose of the investigation has been to determine whether the Parent
Company and persons associated with the Parent Company violated the federal
securities laws administered by the SEC. The Registrant does not believe
that the focus of the SEC's investigation is upon the Registrant or CCC.
Current management of the Parent Company has been in discussions with the
staff of the SEC with a view to settling the investigation. The Parent
Company is hopeful of reaching a settlement of the investigation by the end
of 1999.
Item 3. Defaults Upon Senior Securities
See Item 5. Other Information.
Item 5. Other Information
In 1993, the Parent Company negotiated a credit facility with several banks
for the use by the Parent Company and its subsidiaries, including CCC. At
December 31, 1998, approximately $33,110,000 in principal indebtedness was
outstanding under that credit facility (none of which had been borrowed by
the Registrant). As a party to that credit facility, CCC was jointly and
severally liable for the repayment of all principal and interest owed under
the credit facility. On August 2, 1999, all outstanding amounts under the
credit facility were repaid through the establishment of a new credit
facility with two financial institutions. CCC is not a party to the new
loan agreement. The Parent Company has guaranteed up to $10 million of
amounts borrowed under the new credit facility and, as partial security for
this guarantee, the Parent Company has pledged all of the capital stock
held by it in Cronos Holding/Investments (U.S.), Inc., a Delaware
corporation that, in turn, owns all of the outstanding capital stock of
CCC.
The Registrant is not a borrower under the new credit facility established
by the Parent Company, and neither the containers nor the other assets of
the Registrant have been pledged as collateral under the new credit
facility.
13
<PAGE> 14
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 13, 1987
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 June 30, 1999.
- -------------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant dated October 13, 1987, included as part of Registration
Statement on Form S-1 (No. 33-16984)
** Incorporated by reference to Exhibit 3.4 to the Registration Statement on
Form S-1 (No. 33-16984)
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
IEA INCOME FUND VIII
(A California Limited Partnership)
By Cronos Capital Corp.
The General Partner
By /s/ Dennis J. Tietz
------------------------------------
Dennis J. Tietz
President and Director of
Cronos Capital Corp. ("CCC")
Principal Executive Officer of CCC
Date: August 16, 1999
15
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
------- ----------- ----------------
<S> <C> <C>
3(a) Limited Partnership Agreement of the Registrant, amended *
and restated as of October 13, 1987
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 13, 1987, included as part of Registration
Statement on Form S-1 (No. 33-16984)
** Incorporated by reference to Exhibit 3.4 to the Registration Statement on
Form S-1 (No. 33-16984)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT JUNE 30, 1999 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE
QUARTERLY PERIOD ENDED JUNE 30, 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 JUNE 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
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0
0
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</TABLE>
