<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, 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 JUNE 30, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements
Balance Sheets - June 30, 1997 (unaudited) and December 31, 1996 4
Statements of Operations for the three and six months ended June 30,
1997 and 1996 (unaudited) 5
Statements of Cash Flows for the six months ended June 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 June 30,
1997 and December 31, 1996, statements of operations for the three and
six-month periods ended June 30, 1997 and 1996, and statements of cash
flows for the six months ended June 30, 1997 and 1996.
3
<PAGE> 4
IEA INCOME FUND XI, L.P.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ ------------
Assets
------
<S> <C> <C>
Current assets:
Cash and cash equivalents, includes $1,282,246 at June 30, 1997
and $1,605,226 at December 31, 1996 in interest-bearing accounts $ 1,297,832 $ 1,605,557
Net lease receivables due from Leasing Company
(notes 1 and 2) 650,460 738,235
------------ -----------
Total current assets 1,948,292 2,343,792
------------ -----------
Container rental equipment, at cost 35,984,198 35,888,165
Less accumulated depreciation 12,156,433 11,163,236
------------ -----------
Net container rental equipment 23,827,765 24,724,929
------------ -----------
Organizational costs, net - 25,624
------------ -----------
$ 25,776,057 $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 (9,918) 24
Limited partners 25,710,975 27,019,321
------------ -----------
Total partners' capital 25,701,057 27,019,345
------------ -----------
$ 25,776,057 $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 Six Months Ended
------------------------ --------------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net lease revenue (notes 1 and 3) $780,603 $961,977 $1,522,874 $2,023,197
Other operating expenses:
Depreciation 529,648 559,047 1,078,088 1,119,022
Other general and administrative expenses 24,298 17,128 36,951 33,855
-------- -------- ---------- ----------
553,946 576,175 1,115,039 1,152,877
-------- -------- ---------- ----------
Earnings from operations 226,657 385,802 407,835 870,320
Other income:
Interest income 15,265 24,385 33,596 48,940
Net gain (loss) on disposal of equipment (5,530) (6,470) 3,274 3,123
-------- -------- ---------- ----------
9,735 17,915 36,870 52,063
-------- -------- ---------- ----------
Net earnings $236,392 $403,717 $ 444,705 $ 922,383
======== ======== ========== ==========
Allocation of net earnings:
General partner $ 32,167 $ 45,047 $ 78,208 $ 110,553
Limited partners 204,225 358,670 366,497 811,830
-------- -------- ---------- ----------
$236,392 $403,717 $ 444,705 $ 922,383
======== ======== ========== ==========
Limited partners' per unit share of net earnings $ .10 $ .18 $ .18 $ .41
======== ======== ========== ==========
The accomanying notes are an integral part of these financial statements.
</TABLE>
5
<PAGE> 6
IEA INCOME FUND XI, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
----------------------------
June 30, June 30,
1997 1996
----------- -----------
<S> <C> <C>
Net cash provided by operating activities $ 1,647,678 $ 2,032,678
Cash flows provided by (used in) investing activities:
Proceeds from sale of container rental equipment 80,852 149,189
Purchases of container rental equipment (260,247) (102,000)
Acquisition fees paid to general partner (13,012) (5,100)
----------- -----------
Net cash provided by (used in) investing activities (192,407) 42,089
----------- -----------
Cash flows used in financing activities:
Distribution to partners (1,762,996) (2,455,908)
----------- -----------
Net decrease in cash and cash equivalents (307,725) (381,141)
Cash and cash equivalents at January 1 1,605,557 2,024,584
----------- -----------
Cash and cash equivalents at June 30 $ 1,297,832 $ 1,643,443
=========== ===========
</TABLE>
The accomanying 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 June
30, 1997, the Partnership operated 6,147 twenty-foot, 3,263 forty-foot
and 198 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.
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 June 30,
1997 and December 31, 1996 were as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---------- ------------
<S> <C> <C>
Lease receivables, net of doubtful accounts
of $154,211 at June 30, 1997 and $166,016
at December 31, 1996 $1,370,000 $1,375,901
Less:
Direct operating payables and accrued expenses 375,448 296,859
Damage protection reserve 191,489 193,112
Base management fees 129,763 122,447
Reimbursed administrative expenses 22,840 25,248
---------- -----------
$ 650,460 $ 738,235
========== ===========
</TABLE>
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 six-month periods ended
June 30, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
Three months Ended Six Months Ended
------------------------- ------------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Rental revenue $1,294,688 $1,512,378 $2,593,554 $3,109,803
Less:
Rental equipment operating expenses 354,781 362,016 751,185 699,458
Base management fees 90,754 104,093 180,457 212,813
Reimbursed administrative expenses 68,550 84,292 139,038 174,335
---------- ---------- ---------- ----------
$ 780,603 $ 961,977 $1,522,874 $2,023,197
========== ========== ========== ==========
</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 June 30, 1997 and
December 31, 1996.
At June 30, 1997, the Registrant had $1,297,832 in cash and cash
equivalents, a decrease of $307,725 from the December 31, 1996 cash
balances. At June 30, 1997, the Registrant had approximately $55,000 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 June 30, 1997 declined 12% 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 21%
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 second quarter
of 1997 was 7.75% (annualized) of the limited partners' original capital
contribution, unchanged from the first 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 the demand for leased containers. Once the
demand for leased containers began to fall, per-diem rental rates were
also adversely affected, contributing to an uncertain start to 1997. Since
the beginning of the year, the container leasing industry has experienced
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 76%
at June 30, 1997, while the refrigerated container utilization rate
declined from 90% at December 31, 1996 to 80% at June 30, 1997,
respectively. During 1996, shipping lines and other transport companies
had reduced their leased fleets to minimal levels in an attempt to reduce
costs. However, increasing cargo volumes and continued equipment
imbalances within the container fleets of shipping lines and transport
companies have established a need for these companies to replenish their
leased fleets.
Although there has been a general improvement in container utilization
rates, per-diem rental rates continue to remain under pressure. The
decline in per-diem rental rates from those evidenced during 1996 can be
attributed to the following factors: three new leasing companies have
offered new containers and low rental rates in an effort to break into the
leasing market; established leasing companies have reduced rates to very
low levels; and a continued over supply of containers. Although these
conditions are expected to continue to impact the Registrant's financial
condition and operating performance throughout 1997, the long-term outlook
remains a positive one.
2) Material changes in the results of operations between the three and six
month periods ended June 30, 1997 and the three and six-month periods
ended June 30, 1996.
10
<PAGE> 11
Net lease revenue for the three and six-month periods ended June 30, 1997
was $780,603 and $1,522,874, respectively, a decline of approximately 19%
and 25% from the same periods in the prior year, respectively. Gross
rental revenue (a component of net lease revenue) for the three and
six-month periods ended June 30, 1997 was $1,294,688 and $2,593,554,
respectively, reflecting a decline of 14% and 17% 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
six-month periods ended June 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 six-month periods ended
June 30, 1997 declined 10% and 7%, 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 six-month periods ended June 30, 1996. Refrigerated container
utilization rates declined in each of the three and six-month periods
ended June 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
six-month periods ended June 30, 1997 and June 30, 1996 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------- -------------------
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Average Fleet Size (measured in
twenty-foot equivalent units (TEU))
Dry cargo containers 13,084 13,016 13,049 13,030
Refrigerated cargo containers 200 200 200 200
Average Utilization
Dry cargo containers 75% 80% 74% 81%
Refrigerated cargo containers 80% 95% 84% 95%
</TABLE>
Rental equipment operating expenses were 27% and 29% of the Registrant's
gross lease revenue during the three and six-month periods ended June 30,
1997, respectively, as compared to 24% and 22% during the three and
six-month period ended June 30, 1996, respectively. This increase was
largely attributable to an increase in costs associated with lower
utilization levels, including handling, storage and repositioning. 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
(b) Report on Form 8-K
</TABLE>
The Registrant filed a Report on Form 8-K, April 14, 1997, reporting the
appointment of the Registrant's successor certifying accountant.
- ---------------
* 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: August 14, 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 JUNE 30, 1997 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE
QUARTERLY PERIOD ENDED JUNE 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 JUNE 30, 1997
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,297,832
<SECURITIES> 0
<RECEIVABLES> 650,460
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,948,292
<PP&E> 35,984,198
<DEPRECIATION> 12,156,433
<TOTAL-ASSETS> 25,776,257
<CURRENT-LIABILITIES> 75,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,701,057
<TOTAL-LIABILITY-AND-EQUITY> 25,776,057
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,522,874
<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> 444,705
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
