<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
* QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 ......................... For the period ended September 30,
1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 33-44946
RAILCAR TRUST NO. 1992-1
(Exact name of Registrant as specified in its charter)
Delaware 36-3822700
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
c/o Wilmington Trust Company
Rodney Square North
1100 N. Market St.
Wilmington, Delaware 19890
(Address of principal executive offices and ZIP code)
Registrant's telephone number, including area code: (302) 651-1000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
-------------------
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
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<PAGE>
PART I. FINANCIAL INFORMATION
RAILCAR TRUST NO. 1992-1
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
-------------- --------------
<S> <C> <C>
Assets
Cash and cash equivalents...................................... $ 742 $ 691
Restricted cash................................................ 838 869
Rent receivable from GE Capital Railcar Associates, Inc........ 16,339 23,753
Prepaid expenses and other..................................... 606 725
-------- --------
Total current assets........................................ 18,525 26,038
Rental equipment............................................... 725,928 763,263
Deferred financing fees........................................ 1,021 1,455
-------- --------
Total assets................................................... $745,474 $790,756
======== ========
Liabilities and Trust Surplus
Accrued interest and other liabilities......................... $ 5,030 $ 5,347
Current maturities of long-term debt........................... 107,440 101,401
-------- --------
Total current liabilities................................... 112,470 106,748
Long-term debt:
Trust notes................................................... 463,783 543,565
Secured indebtedness.......................................... 23,717 25,434
-------- --------
Total long-term debt........................................ 487,500 568,999
Minority interest in Partnership............................... 8,256 8,881
Trust surplus:
Capital distributions in excess of contributions.............. (81,955) (74,623)
Cumulative net earnings....................................... 219,203 180,751
-------- --------
Net trust surplus........................................... 137,248 106,128
-------- --------
Total liabilities and trust surplus............................ $745,474 $790,756
======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
1
<PAGE>
RAILCAR TRUST NO. 1992-1
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Rental revenue from GE Capital Railcar
Associates, Inc........................ $ 38,259 $ 38,188 $114,776 $120,027
-------- -------- -------- --------
Operating expenses:
Depreciation........................... (12,445) (12,446) (37,336) (37,336)
General, administrative and other...... (22) (106) (113) (247)
-------- -------- -------- --------
Total operating expenses............. (12,467) (12,552) (37,449) (37,583)
-------- -------- -------- --------
Operating income........................ 25,792 25,636 77,327 82,444
Interest expense........................ (12,270) (14,207) (38,213) (44,162)
Minority interest....................... (55) (167) (662) (660)
-------- -------- -------- --------
Net income.............................. $ 13,467 $ 11,262 $ 38,452 $ 37,622
======== ======== ======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
2
<PAGE>
RAILCAR TRUST NO. 1992-1
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30,
1999 1998
-------------- ------------
<S> <C> <C>
Operating activities:
Net income................................................. $ 38,452 $ 37,622
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation............................................. 37,336 37,336
Amortized discount on debt and deferred financing fees... 645 781
Income of minority interest.............................. 662 660
Changes in assets and liabilities, net:
Restricted cash........................................ 31 18,010
Rent receivable from GE Capital Railcar Associates,
Inc................................................... 7,414 -
Other.................................................. (318) (819)
-------- --------
Net cash provided by operating activities................ 84,222 93,590
Financing activities:
Borrowings................................................. - -
Principal payments on borrowings........................... (75,554) (87,122)
Distribution to beneficiaries.............................. (7,332) (5,268)
Cash contributed........................................... - -
Distributions to minority interest......................... (1,285) (1,159)
-------- --------
Net cash used in financing activities.................... (84,171) (93,549)
-------- --------
Net increase (decrease) in cash............................. 51 41
Cash and equivalents at beginning of the period............. 691 587
-------- --------
Cash and equivalents at end of the period................... $ 742 $ 628
======== ========
Supplemental cash flow information:
Interest paid during the period........................... $ 38,375 $ 44,436
======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE>
RAILCAR TRUST NO. 1992-1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note A Basis of Presentation
Railcar Trust No. 1992-1 (the Trust) holds a majority interest in Railcar
Associates, LP, a limited partnership (the Partnership). The Partnership leases
approximately 59,000 railcars within the United States. GE Railcar Associates,
Inc. (the Lessee) is the sole lessee of the railcars. The leases mature in 2004
with quarterly fixed rental payments totaling approximately $153 million
annually. These rental payments are guaranteed by General Electric Capital
Corporation. The Lessee has an option to purchase all, but not less than all, of
the railcars under lease for approximately $500 million at the end of the lease.
The Lessee is responsible for maintenance, taxes, insurance and other expenses
involved with operating the railcars.
The Lessee has an annual obligation to make certain contingent rental payments
to the Partnership in addition to the previously described quarterly fixed
rental payments ("Additional Rent"). The Additional Rent calculation is
prepared by the Lessee and is subject to verification by an independent auditor.
Prior to 1998, Additional Rent was recorded upon receipt. Due to a change in
accounting estimates, the Partnership began accruing Additional Rent starting in
1998. Approximately $11 million in Additional Rent was accrued in 1998 related
to 1997 and 1998 Additional Rent. Cash of $7 million relating to 1997
Additional Rent was received by the Trust in the first quarter of 1999 and was
distributed in the second quarter of 1999 on a prorata basis to the holders of
the Beneficial Interests in the Trust. The 1998 estimate of Additional Rent of
$4 million has not been received pending verification by the independent
auditor.
The accompanying consolidated financial statements should be read in conjunction
with the consolidated financial statements included in the Trust's Annual Report
on Form 10-K for the year ended December 31, 1998. The consolidated financial
information furnished herein reflects all adjustments (consisting of normal
recurring accruals) which are, in the opinion of management, necessary for a
fair presentation of the consolidated statements for the periods shown.
The partnership has the following partners:
Partner Interest (%)
Railcar Trust No. 1992-1 98.99 %
GE Railcar Associates, Inc. 1.00 %
GE Railcar Leasing Associates, Inc. 0.01 %
The Partners share in profits or losses and distributions in accordance with a
specific formula, as defined in the Amended and Restated Agreement of the
Limited Partnership.
4
<PAGE>
Note B Summary of Significant Accounting Policies
Principles of Consolidation: The consolidated financial statements include the
financial results of the Trust and the Partnership. All inter-entity
transactions have been eliminated.
Use of Estimates: The preparation of financial statements requires management to
make estimates and assumptions that affect amounts reported in the financial
statements and accompanying notes. Such estimates and assumptions could change
in the future as more information becomes known which could impact the amounts
reported and disclosed herein.
Revenue Recognition: All revenue is recognized as received from the
Partnership.
Cash, Cash Equivalents, and Restricted Cash: The Trust considers all highly
liquid investments with an original maturity of three months or less to be cash
equivalents. Due to the short maturity of these instruments, the carrying
amount approximates fair value. Restricted cash balances represent short-term
investments held by GECC. The investments are restricted as to the availability
to the Partnership and are available only to service principal and interest
payments on the Partnership's debt.
Rental Equipment: Rental equipment (railcars) are carried at cost, which is
based upon the historical cost of the contributing partners. Railcars are
depreciated to estimated residual value using the straight-line method over the
term of the leases.
<TABLE>
<CAPTION>
September 30, December 31,
1999 1999
---------------------- -------------------
(In Thousands)
<S> <C> <C>
Railcars (at cost)... $1,388,582 $1,388,582
Accumulated
depreciation......... (662,654) (625,319)
---------- ----------
Net Book Value....... $ 725,928 $ 763,263
========== ==========
</TABLE>
Income Taxes: The Trust does not provide for income taxes, as the liability for
such taxes is that of the beneficial owners of the Trust.
Note C Debt
Debt consists of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---------------------- ----------------------
(In Thousands)
<S> <C> <C>
Trust Notes................... $ 568,688 $ 642,488
Secured indebtedness.......... 26,252 27,912
--------- ---------
Total debt.................. 594,940 670,400
Less: Current maturities...... (107,440) (101,401)
--------- ---------
Long-term debt.............. $ 487,500 $ 568,999
========= =========
</TABLE>
5
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Liquidity and Capital Resources
Substantially all of the physical property of the Trust, consisting primarily of
railcars, was contributed to the Partnership of which the Trust is a 98.99%
partner. At such time, the Partnership assumed the Assumed Indebtedness. The
Partnership then leased to the Lessee all of the property contributed by the
Trust, along with other railcars it received as a contribution from its other
partners. Financing of the Trust was accomplished by issuance of $998 million
of Trust Notes secured by the Trust's ownership interest in the Partnership. No
new borrowings have occurred during 1999.
Debt Maturates and Repayments
Current maturities of long-term debt of $107.4 million at September 30, 1999
represent debt, which is being serviced from the cash flow from the leases.
Results of Operations
Fixed rental receipts by the Partnership under the Leases are used to service
the Assumed Indebtedness and other expenses of the Partnership. Remaining
Partnership available cash is distributed to the partners, the Trust's share of
which must be used by the Trust to service the Trust Notes.
During the first nine months of both 1999 and 1998, on a consolidated basis the
Trust received rental revenues pursuant to the Leases of $114.8 million and
$120.0 million, respectively. Operating income was $77.3 million and $82.4
million for the first nine months of 1999 and 1998, respectively. The decline of
income in 1999 was due to the timing of income recognition of the Additional
Rent. The 1997 and 1998 Additional Rent was accrued in the 4th quarter of 1998,
while the 1996 Additional Rent of $5.3 million was recorded in the 2nd quarter
of 1998. Interest expense, net, was $38.2 million and $44.2 million for the
first nine months of 1999 and 1998, respectively. The reduction of interest
expense was due to scheduled repayments of the Trust Notes and the Assumed
Indebtedness. Consolidated net income of the Trust was $38.5 million and $37.6
million for the first nine months of 1999 and 1998, respectively.
The Trust generated $84.2 million in cash from operating activities during the
first nine months of 1999. Those amounts were used to repay the Assumed
Indebtedness and the Trust Notes as payments became due. Of the net cash from
operating activities, $75.6 million was used in order to reduce borrowings, $7.3
million was distributed to the holders of the Beneficial Interests in the Trust
and $1.3 million was distributed to the minority interests in the Partnership.
The principal amount outstanding under the Assumed Indebtedness was decreased by
$1.7 million to a total of $26.3 million at quarter-end, and the principal
amount outstanding under the Trust Notes was decreased by $73.8 million to a
total amount of $568.7 million at quarter-end.
6
<PAGE>
Impact of the Year 2000
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Due to the nature of the
Trust, the Year 2000 implications on the Trust should not be material. The
railcars owned by the Trust are leased on a twelve-year contract expiring in
2004. The Trust receives quarterly fixed lease payments totaling approximately
$153 million annually that provides the majority of the revenues. The Year 2000
Issue could possibly impact the amount of Additional Rent. Additional Rent can
be received by the Trust if income generated by the railcars exceeds specific
contractual parameters. Additional Rent could be reduced or eliminated if the
Year 2000 Issue results in a decline in railcar usage. While it is beyond the
ability of the Trust to forecast the impact with any degree of certainty, any
impact on Additional Rent should not materially affect the Trust's ability to
repay its indebtedness.
PART II
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
7
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
November 5, 1999 RAILCAR TRUST NO. 1992-1
By: /s/ David A. Vanaskey, Jr.
--------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Date
--------- ----
<S> <C>
/s/ David A. Vanaskey, Jr. November 5, 1999
- --------------------------------------------- -------------------------
David A. Vanaskey, Jr.
Assistant Vice President
/s/ Bruce L. Bisson November 5, 1999
- --------------------------------------------- ------------------------
Bruce L. Bisson
Vice President
</TABLE>
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,580
<SECURITIES> 0
<RECEIVABLES> 16,339
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,525
<PP&E> 1,388,582
<DEPRECIATION> 662,654
<TOTAL-ASSETS> 745,474
<CURRENT-LIABILITIES> 112,470
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 137,248
<TOTAL-LIABILITY-AND-EQUITY> 745,474
<SALES> 0
<TOTAL-REVENUES> 114,776
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 37,449
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,213
<INCOME-PRETAX> 38,452
<INCOME-TAX> 0
<INCOME-CONTINUING> 38,452
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,452
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
