<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 SEPTEMBER 30, 1997
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 0-19770
IEA INCOME FUND XI, L.P.
(Exact name of registrant as specified in its charter)
California 94-3122430
(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 XI, L.P.
REPORT ON FORM 10-Q FOR THE QUARTERLY
PERIOD ENDED SEPTEMBER 30, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - September 30, 1997 (unaudited) and December 31, 1996 4
Statements of Operations for the three and nine months ended September 30, 1997 and 1996 (unaudited) 5
Statements of Cash Flows for the nine months ended September 30, 1997 and 1996 (unaudited) 6
Notes to Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results Operations 10
PART II - OTHER INFORMATION
Item 6. Exhibit and Reports on Form 8-K 13
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Presented herein are the Registrant's balance sheets as of September
30, 1997 and December 31, 1996, statements of operations for the three
and nine-month periods ended September 30, 1997 and 1996, and
statements of cash flows for the nine months ended September 30, 1997
and 1996.
3
<PAGE> 4
IEA INCOME FUND XI, L.P.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------ -----------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents, includes $1,059,797
at September 30, 1997 and $1,605,226 at
December 31, 1996 in interest-bearing
accounts $ 1,275,369 $ 1,605,557
Net lease receivables due from Leasing Company
(notes 1 and 2) 654,062 738,235
------------ -----------
Total current assets 1,929,431 2,343,792
------------ -----------
Container rental equipment, at cost 35,936,805 35,888,165
Less accumulated depreciation 12,639,851 11,163,236
------------ -----------
Net container rental equipment 23,296,954 24,724,929
------------ -----------
Organizational costs, net - 25,624
------------ -----------
$ 25,226,385 $27,094,345
============ ===========
Liabilities and Partners' Capital
Current liabilities:
Accrued expenses $ 75,000 $ 75,000
------------ -----------
Total current liabilities 75,000 75,000
------------ -----------
Partners' capital (deficit):
General partner (18,656) 24
Limited partners 25,170,041 27,019,321
------------ -----------
Total partners' capital 25,151,385 27,019,345
------------ -----------
$ 25,226,385 $27,094,345
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
IEA INCOME FUND XI, L.P.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net lease revenue (notes 1 and 3) $ 807,236 $ 933,405 $ 2,330,110 $2,956,602
Other operating expenses:
Depreciation 524,008 559,167 1,602,096 1,678,189
Other general and administrative expenses 17,257 18,826 54,208 52,681
--------- ---------- ----------- ----------
541,265 577,993 1,656,304 1,730,870
--------- ---------- ----------- ----------
Earnings from operations 265,971 355,412 673,806 1,225,732
Other income (expense):
Interest income 14,572 22,806 48,168 71,746
Net gain (loss) on disposal of equipment (14,503) 20,718 (11,229) 23,841
--------- ---------- ----------- ----------
69 43,524 36,939 95,587
--------- ---------- ----------- ----------
Net earnings $ 266,040 $ 398,936 $ 710,745 $1,321,319
========= ========== =========== ==========
Allocation of net earnings:
General partner $ 32,047 $ 65,900 $ 110,255 $ 176,453
Limited partners 233,993 333,036 600,490 1,144,866
--------- ---------- ----------- ----------
$ 266,040 $ 398,936 $ 710,745 $1,321,319
========= ========== =========== ==========
Limited partners' per unit
share of net earnings $ .12 $ .16 $ .30 $ .57
========= ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
IEA INCOME FUND XI, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------------------
September 30, September 30,
1997 1996
----------- -----------
<S> <C> <C>
Net cash provided by operating activities $ 2,422,162 $ 3,059,883
Cash flows provided by (used in) investing activities:
Proceeds from sale of container rental equipment 155,625 224,085
Purchase of container rental equipment (313,588) (207,960)
Acquisition fees paid to general partner (15,679) (10,398)
----------- -----------
Net cash provided by (used in) investing activities (173,642) 5,727
----------- -----------
Cash flows used in financing activities:
Distribution to partners (2,578,708) (3,490,898)
----------- -----------
Net decrease in cash and cash equivalents (330,188) (425,288)
Cash and cash equivalents at January 1 1,605,557 2,024,584
----------- -----------
Cash and cash equivalents at September 30 $ 1,275,369 $ 1,599,296
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
IEA INCOME FUND XI, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) Summary of Significant Accounting Policies
(a) Nature of Operations
IEA Income Fund XI, L.P. (the "Partnership") is a limited partnership
organized under the laws of the State of California on July 30, 1990
for the purpose of owning and leasing marine cargo containers. 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,
2010, unless sooner terminated upon the occurrence of certain events.
The Partnership commenced operations on January 31, 1991, when the
minimum subscription proceeds of $1,000,000 were obtained. As of
September 30, 1997, the Partnership operated 6,152 twenty-foot, 3,252
forty-foot and 197 forty-foot high-cube marine dry cargo containers, as
well as 100 twenty-foot and 50 forty-foot marine refrigerated cargo
containers.
The Partnership offered 2,000,000 units of limited partnership interest
at $20 per unit, or $40,000,000. The offering terminated on November
30, 1991, at which time 1,999,812 limited partnership units had been
purchased.
(b) Leasing Company and Leasing Agent Agreement
The Partnership 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 and the Leasing Company. 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 XI, L.P.
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, and reimbursed administrative expenses 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 September 30, 1997 and
December 31, 1996 were as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---------- ----------
<S> <C> <C>
Lease receivables, net of doubtful accounts
of $164,318 at September 30, 1997 and $166,016
at December 31, 1996 $1,284,592 $1,375,901
Less:
Direct operating payables and accrued expenses 350,614 296,859
Damage protection reserve 141,289 193,112
Base management fees 115,869 122,447
Reimbursed administrative expenses 22,758 25,248
---------- ----------
$ 654,062 $ 738,235
========== ==========
</TABLE>
(Continued)
8
<PAGE> 9
IEA INCOME FUND XI, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(3) Net Lease Revenue
Net lease revenue is determined by deducting direct operating expenses,
base management fees and reimbursed administrative expenses to CCC and its
affiliates 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 nine-month periods ended
September 30, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------- --------------------------
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Rental revenue $1,261,349 $1,486,188 $3,854,903 $4,595,991
Less:
Rental equipment operating expenses 298,964 364,799 1,050,149 1,064,257
Base management fees 86,766 101,258 267,223 314,071
Reimbursed administrative expenses 68,383 86,726 207,421 261,061
---------- ---------- ---------- ----------
$ 807,236 $ 933,405 $2,330,110 $2,956,602
========== ========== ========== ==========
</TABLE>
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 September 30, 1997 and
December 31, 1996.
At September 30, 1997, the Registrant had $1,275,369 in cash and cash
equivalents, a decrease of $330,188 from the December 31, 1996 cash
balances. At September 30, 1997, the Registrant had approximately $75,000
in cash generated from equipment sales reserved as part of its cash
balances. Throughout the remainder of 1997, the Registrant expects to
continue using cash generated from equipment sales to purchase and replace
containers which have been lost or damaged beyond repair.
Net lease receivables at September 30, 1997 declined 11% when compared to
December 31, 1996. Contributing to this change was an increase in direct
operating payables and accrued expenses, a component of net lease
receivables. Direct operating payables and accrued expenses increased 18%
from December 31, 1996 due to the increase in costs associated with lower
utilization levels, including handling, storage and repositioning.
The Registrant's cash distribution from operations for the third quarter of
1997 was 7.75% (annualized) of the limited partners' original capital
contribution, unchanged from the second quarter of 1997. These
distributions are directly related to the Registrant's results from
operations and may fluctuate accordingly.
During 1996, ocean carriers and other transport companies moved away from
leasing containers outright, as declining container prices, favorable
interest rates and the abundance of available capital resulted in ocean
carriers and transport companies purchasing a larger share of equipment for
their own account, reducing their need for leased containers. Once the
demand for leased containers began to fall, per-diem rental rates were also
adversely affected. Since the beginning of 1997, the container leasing
industry has experienced a modest recovery indicated by an upward trend in
container utilization. The impact of this trend on the utilization rates of
the Registrant has been mixed. The Registrant's dry container utilization
rate increased from 74% at December 31, 1996 to 79% at September 30, 1997,
while the refrigerated container utilization rate declined from 90% at
December 31, 1996 to 80% at September 30, 1997, respectively. Increasing
cargo volumes and continuing equipment imbalances within the container
fleets of shipping lines and transport companies have re-established a need
for these companies to replenish their leased fleets during 1997.
Although there has been an improvement in container utilization rates,
per-diem rental rates continue to remain under pressure as a result of the
following factors: start-up leasing companies offering new containers and
low rental rates in an effort to break into the leasing market; established
leasing companies reducing rates to very low levels; and a continuing
oversupply of containers. The recent volatility of the Hong Kong and other
Asian financial markets and its impact on trade, shipping, and container
leasing, especially intra-Asia and Asia-Europe routes, has yet to be
determined. While these conditions could impact the Registrant's financial
condition and operating performance through the remainder of 1997 and first
half of 1998, the Registrant is well positioned to take advantage of
further improvements in the container leasing market.
10
<PAGE> 11
2) Material changes in the results of operations between the three and
nine-month periods ended September 30, 1997 and the three and nine-month
periods ended September 30, 1996.
Net lease revenue for the three and nine-month periods ended September 30,
1997 was $807,236 and $2,330,110, respectively, a decline of approximately
14% and 21% from the same periods in the prior year, respectively. Gross
rental revenue (a component of net lease revenue) for the three and
nine-month periods ended September 30, 1997 was $1,261,349 and $3,854,903,
respectively, reflecting a decline of 15% and 16% from the same periods in
the prior year respectively. During 1997, gross lease revenue was primarily
impacted by lower per-diem rental rates and utilization levels. Average dry
cargo container per-diem rental rates for the three and nine-month periods
ended September 30, 1997 declined 14% and 11%, respectively, when compared
to the same periods in the prior year. Average refrigerated container
per-diem rental rates for the three and nine-month periods ended September
30, 1997 declined 14% and 9%, respectively, when compared to the same
periods in the prior year.
Dry cargo container utilization, which steadily increased since December
31, 1996, did not recover to the same levels experienced during the three
and nine-month periods ended September 30, 1996. Refrigerated container
utilization rates declined in each of the three and nine-month periods
ended September 30, 1997, as many of the term leases entered into during
the Registrant's initial years of operations have since expired. The
Registrant's average fleet size and utilization rates for the three and
nine-month periods ended September 30, 1997 and September 30, 1996 were as
follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Average Fleet Size (measured in
twenty-foot equivalent units (TEU))
Dry cargo containers 13,059 13,028 13,052 13,029
Refrigerated containers 200 200 200 200
Average Utilization
Dry cargo containers 77% 79% 75% 81%
Refrigerated containers 81% 94% 83% 95%
</TABLE>
Rental equipment operating expenses were 24% and 27%, respectively, of the
Registrant's gross lease revenue during the three and nine-month periods
ended September 30, 1997, as compared to 25% and 23%, respectively, during
the three and nine-month period ended September 30, 1996. These changes
were largely attributable to an increase in costs associated with lower
utilization levels, including handling and storage. The Registrant's
operating results contributed to a decline in base management fees and
reimbursed administrative expenses when compared to the same periods in the
prior year.
As reported in the Registrant's Current Report on Form 8-K and Amendment
No. 1 to Current Report on Form 8-K, filed with the Commission on February
7, 1997 and February 26, 1997, respectively, Arthur Andersen, London,
England, resigned as auditors of The Cronos Group, a Luxembourg Corporation
headquartered in Orchard Lea, England (the "Parent Company"), on February
3, 1997.
11
<PAGE> 12
The Parent Company is the indirect corporate parent of Cronos Capital
Corp., the general partner of the Registrant. In its letter of resignation
to the Parent Company, Arthur Andersen states that it resigned as auditors
of the Parent Company and all other entities affiliated with the Parent
Company. While its letter of resignation was not addressed to the general
partner or the Registrant, Arthur Andersen confirmed to the general partner
that its resignation as auditors of the entities referred to in its letter
of resignation included its resignation as auditors of Cronos Capital Corp.
and the Registrant. Following Arthur Andersen's resignation, the Parent
Company subsequently received notification from the Securities and Exchange
Commission that it was conducting a private investigation of the Parent
Company regarding the events and circumstances leading to Arthur Andersen's
resignation. The results of this investigation are still pending.
Accordingly, the Registrant does not, at this time, have sufficient
information to determine the impact, if any, that the Securities and
Exchange Commission investigation of the Parent Company and the concerns
expressed by Arthur Andersen in its letter of resignation may have on the
future operating results and financial condition of the Registrant or the
Leasing Company's ability to manage the Registrant's fleet in subsequent
periods. However, the general partner of the Registrant does not believe,
based upon the information currently available to it, that Arthur
Andersen's resignation was triggered by any concern over the accounting
policies and procedures followed by the Registrant.
Arthur Andersen's report on the financial statements of Cronos Capital
Corp. and the Registrant, for either of the previous two years, has not
contained an adverse opinion or a disclaimer of opinion, nor was any such
report qualified or modified as to uncertainty, audit scope, or accounting
principles. During the Registrant's previous two fiscal years and the
subsequent interim period preceding Arthur Andersen's resignation, there
have been no disagreements between Cronos Capital Corp. or the Registrant
and Arthur Andersen on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
The Registrant retained a new auditor, Moore Stephens, P.C. ("Moore
Stephens") on April 10, 1997, as reported in the Registrant's Current
Report on Form 8-K, filed April 14, 1997.
The President of the Leasing Company, a subsidiary of the Parent Company,
along with two marketing Vice Presidents, resigned in June 1997. These
vacancies were filled by qualified, long-time employees who average over 15
years of experience in the container leasing industry, therefore providing
continuity in the management of the Leasing Company. The Registrant and
general partner do not believe these changes will have a material impact on
the future operating results and financial condition of the Registrant.
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.
12
<PAGE> 13
PART II - OTHER INFORMATION
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 December 14, 1990
3(b) Certificate of Limited Partnership of the Registrant **
10(a) Form of Leasing Agent Agreement with LPI Leasing ***
Partners International N.V.
10(b) Assignment of Leasing Agent Agreement dated January 1, ****
1992 between the Registrant, CCC (formerly Intermodal
Equipment Associates), Cronos Containers N.V.
(formerly LPI Leasing Partners International N.V.) and
Cronos Containers Limited
27 Financial Data Schedule Filed with this document
</TABLE>
(b) Report on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
ended September 30, 1997.
- -------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant dated December 14, 1990, included as part of Registration
Statement on Form S-1 (No. 33-36701)
** Incorporated by reference to Exhibit 3.2 to the Registration Statement on
Form S-1 (No. 33-36701)
*** Incorporated by reference to Exhibit 10.2 to the Registration Statement on
Form S-1 (No. 33-36701)
**** Incorporated by reference to Exhibit 10(b) to the Report on Form 10-K for
the fiscal year ended December 31, 1996.
13
<PAGE> 14
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 XI, L.P.
By Cronos Capital Corp.
The General Partner
By /s/ JOHN KALLAS
-------------------------------
John Kallas
Vice President, Treasurer
Principal Finance & Accounting Officer
Date: November 10, 1997
14
<PAGE> 15
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 December 14, 1990
3(b) Certificate of Limited Partnership of the Registrant **
10(a) Form of Leasing Agent Agreement with LPI Leasing ***
Partners International N.V.
10(b) Assignment of Leasing Agent Agreement dated January 1, ****
1992 between the Registrant, CCC (formerly Intermodal
Equipment Associates), Cronos Containers N.V. (formerly
LPI Leasing Partners International N.V.) and Cronos
Containers Limited
27 Financial Data Schedule Filed with this document
</TABLE>
- -------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant dated December 14, 1990, included as part of Registration
Statement on Form S-1 (No. 33-36701)
** Incorporated by reference to Exhibit 3.2 to the Registration Statement on
Form S-1 (No. 33-36701)
*** Incorporated by reference to Exhibit 10.2 to the Registration Statement on
Form S-1 (No. 33-36701)
**** Incorporated by reference to Exhibit 10(b) to the Report on Form 10-K for
the fiscal year ended December 31, 1996.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT SEPTEMBER 30, 1997 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE
QUARTERLY PERIOD ENDED SEPETEMBER 30, 1997 (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 SEPTEMBER 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,275,369
<SECURITIES> 0
<RECEIVABLES> 645,062
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,929,431
<PP&E> 35,936,805
<DEPRECIATION> 12,639,851
<TOTAL-ASSETS> 25,226,385
<CURRENT-LIABILITIES> 75,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,151,385
<TOTAL-LIABILITY-AND-EQUITY> 25,226,385
<SALES> 0
<TOTAL-REVENUES> 2,330,110
<CGS> 0
<TOTAL-COSTS> 1,656,304
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 710,745
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
