##### Table of Contents



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, 2003
|                                                  |  |                                                                                         
|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 0-21518

IEA INCOME FUND XII, L.P.

(Exact name of registrant as specified in its charter)


|                                |  |                    
|------------------------------- |  | -------------------
|California                      |  | 94-3143940         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)

|                                                       |  |           
|------------------------------------------------------ |  | ----------
|One Front Street, Suite 925, 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 [   ].





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TABLE OF CONTENTS



|                               |                                                                                               |                                         |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | --------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | Balance Sheets                         
|                               |                                                                                               | Statements of Operations               
|                               |                                                                                               | Statements of Cash Flows               
|                               |                                                                                               | Notes to Unaudited Financial Statements
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                               | Item 4. Controls and Procedures                                                              
|PART II  OTHER INFORMATION   
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                    
|EXHIBIT INDEX                 
|Exhibit 31.1                  
|Exhibit 31.2                  
|Exhibit 32                    



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##### Table of Contents



IEA INCOME FUND XII, L.P.

Report on Form 10-Q for the Quarterly Period
Ended September 30, 2003

TABLE OF CONTENTS

|                                                                                              |                                                                                                      |  |    |      |  | 
|--------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- |  | -- | ---- |  | 
|                                                                                              |                                                                                                      |  |    | PAGE
|PART I - FINANCIAL INFORMATION                                                                |                                                                                                      |  |    |     
|Item 1. Financial Statements                                                                  |                                                                                                      |  |    |     
|                                                                                              | Balance Sheets - September 30, 2003 (unaudited) and December 31, 2002                                |  |    | 4    | 
|                                                                                              | Statements of Operations for the three and nine months ended September 30, 2003 and 2002 (unaudited) |  |    | 5    | 
|                                                                                              | Statements of Cash Flows for the nine months ended September 30, 2003 and 2002 (unaudited)           |  |    | 6    | 
|                                                                                              | Notes to Financial Statements (unaudited)                                                            |  |    | 7    | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |                                                                                                      |  | 11 |     
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                                      |  | 14 |     
|Item 4. Controls and Procedures                                                               |                                                                                                      |  | 15 |     
|PART II - OTHER INFORMATION                                                                   |                                                                                                      |  |    |     
|Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                      |  | 16 |     

2



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##### Table of Contents






PART I - FINANCIAL INFORMATION




Item 1. Financial Statements



| |  | Presented herein are the Registrants balance sheets as of September 30, 2003 and December 31, 2002, statements of operations for the three and nine months ended September 30, 2003 and 2002, and statements of cash flows for the nine months ended September 30, 2003 and 2002.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3



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IEA INCOME FUND XII, L.P.




Balance Sheets

(Unaudited)

|                                    |                                                                                                                                       |                                |                         |             |            |               |            |              |            |            |  | 
|----------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | ----------------------- | ----------- | ---------- | ------------- | ---------- | ------------ | ---------- | ---------- |  | 
|                                    |                                                                                                                                       |                                |                         |             |            | September 30, |            | December 31,
|                                    |                                                                                                                                       |                                |                         |             |            | 2003          |            | 2002        
|                                    |                                                                                                                                       |                                |                         |             |            |               |            |             
|Assets                              |                                                                                                                                       |                                |                         |             |            |               |            |             
|Current assets:                     |                                                                                                                                       |                                |                         |             |            |               |            |             
|                                    | Cash and cash equivalents, includes $1,427,348 at September 30, 2003 and
$1,567,623 at December 31, 2002 in interest-bearing accounts |                                | $                       | 1,583,154   |            |               | $          | 1,843,633    |           
|                                    | Net lease receivables due from Leasing Company (notes 1 and 2)                                                                        |                                |                         | 269,976     |            |               |            | 176,676      |           
|                                    |                                                                                                                                       |                                |                         |             |            |               |            |             
|                                    |                                                                                                                                       |                                | Total current assets    |             |            | 1,853,130     |            |              |            | 2,020,309  | 
|                                    |                                                                                                                                       |                                |                         |             |            |               |            |             
|Container rental equipment, at cost |                                                                                                                                       |                                | 40,931,992              |             |            |               | 45,121,392 |             
|                                    | Less accumulated depreciation                                                                                                         |                                |                         | (26,529,684 | )          |               |            | (27,313,596  | )         
|                                    |                                                                                                                                       |                                |                         |             |            |               |            |             
|                                    |                                                                                                                                       | Net container rental equipment |                         |             | 14,402,308 |               |            |              | 17,807,796 |           
|                                    |                                                                                                                                       |                                |                         |             |            |               |            |             
|                                    |                                                                                                                                       |                                | Total assets            |             | $          | 16,255,438    |            |              | $          | 19,828,105 | 
|                                    |                                                                                                                                       |                                |                         |             |            |               |            |             
|Partners Capital                   |                                                                                                                                       |                                |                         |             |            |               |            |             
|Partners capital (deficit):        |                                                                                                                                       |                                |                         |             |            |               |            |             
|                                    | General partner                                                                                                                       |                                | $                       | (470,802    | )          |               | $          | (377,749     | )         
|                                    | Limited partners                                                                                                                      |                                |                         | 16,726,240  |            |               |            | 20,205,854   |           
|                                    |                                                                                                                                       |                                |                         |             |            |               |            |              |           
|                                    |                                                                                                                                       |                                | Total partners capital |             | $          | 16,255,438    |            |              | $          | 19,828,105 | 
|                                    |                                                                                                                                       |                                |                         |             |            |               |            |             

The accompanying notes are an integral part of these financial statements.

4



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IEA INCOME FUND XII, L.P.




Statements of Operations

(Unaudited)

|                                             |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |            |            |  
|-------------------------------------------- | ----------------------------------------- | -------------------- | -------- | ------------------ | -------- | ----------------- | -------- | ------------- | -------- | ------------- | --------- | --------- | -------- | - | ---------- | ---------- | ---------- | -
|                                             |                                           |                      |          | Three Months Ended |          | Nine Months Ended
|                                             |                                           |                      |          |                    |          |                  
|                                             |                                           |                      |          | September 30,      |          | September 30,     |          | September 30, |          | September 30,
|                                             |                                           |                      |          | 2003               |          | 2002              |          | 2003          |          | 2002         
|                                             |                                           |                      |          |                    |          |                   |          |               |          |              
|Net lease revenue (notes 1 and 3)            |                                           | $                    | 520,622  |                    |          | $                 | 512,889  |               |          | $             | 1,593,162 |           |          | $ | 1,735,210  |           
|Other operating expenses:                    |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |           
|                                             | Depreciation                              |                      |          | 629,513            |          |                   |          | 723,002       |          |               |           | 1,948,055 |          |   |            | 2,302,249  |           
|                                             | Other general and administrative expenses |                      |          | 30,970             |          |                   |          | 29,762        |          |               |           | 96,010    |          |   |            | 97,239     |           
|                                             | Net loss on disposal of equipment         |                      |          | 213,564            |          |                   |          | 660,147       |          |               |           | 496,836   |          |   |            | 1,833,467  |           
|                                             |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |           
|                                             |                                           | Loss from operations |          |                    | (353,425 | )                 |          |               | (900,022 | )             |           |           | (947,739 | ) |            |            | (2,497,745 | )
|Other income:                                |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |           
|                                             | Interest income                           |                      |          | 1,733              |          |                   |          | 5,705         |          |               |           | 6,064     |          |   |            | 15,578     |           
|                                             |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |           
|                                             |                                           | Net loss             |          | $                  | (351,692 | )                 |          | $             | (894,317 | )             |           | $         | (941,675 | ) |            | $          | (2,482,167 | )
|                                             |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |           
|Allocation of net loss:                      |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |           
|                                             | General partner                           |                      | $        | (3,517             | )        |                   | $        | (8,943        | )        |               | $         | (9,417    | )        |   | $          | (24,822    | )         
|                                             | Limited partners                          |                      |          | (348,175           | )        |                   |          | (885,374      | )        |               |           | (932,258  | )        |   |            | (2,457,345 | )         
|                                             |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |           
|                                             |                                           | $                    | (351,692 | )                  |          | $                 | (894,317 | )             |          | $             | (941,675  | )         |          | $ | (2,482,167 | )         
|                                             |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |           
|Limited partners per unit share of net loss |                                           | $                    | (0.10    | )                  |          | $                 | (0.25    | )             |          | $             | (0.27     | )         |          | $ | (0.70      | )         
|                                             |                                           |                      |          |                    |          |                   |          |               |          |               |           |           |          |   |            |           

The accompanying notes are an integral part of these financial statements.

5



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IEA INCOME FUND XII, L.P.




Statements of Cash Flows

(Unaudited)

|                                                     |                                     |   |                   |            |               |   |           |            |  
|---------------------------------------------------- | ----------------------------------- | - | ----------------- | ---------- | ------------- | - | --------- | ---------- | -
|                                                     |                                     |   | Nine Months Ended
|                                                     |                                     |   |                  
|                                                     |                                     |   | September 30,     |            | September 30,
|                                                     |                                     |   | 2003              |            | 2002         
|                                                     |                                     |   |                   |            |              
|Net cash provided by operating activities            |                                     | $ | 1,467,431         |            |               | $ | 1,730,021 |           
|Cash provided by investing activities:               |                                     |   |                   |            |               |   |           |           
|                                                     | Proceeds from disposal of equipment |   |                   | 903,082    |               |   |           | 1,621,450  |  
|Cash used in financing activities:                   |                                     |   |                   |            |               |   |           |           
|                                                     | Distribution to partners            |   |                   | (2,630,992 | )             |   |           | (2,743,847 | )
|                                                     |                                     |   |                   |            |               |   |           |           
|Net (decrease) increase in cash and cash equivalents |                                     |   | (260,479          | )          |               |   | 607,624   |           
|Cash and cash equivalents at January 1               |                                     |   | 1,843,633         |            |               |   | 1,451,917 |           
|                                                     |                                     |   |                   |            |               |   |           |           
|Cash and cash equivalents at September 30            |                                     | $ | 1,583,154         |            |               | $ | 2,059,541 |           
|                                                     |                                     |   |                   |            |               |   |           |           

The accompanying notes are an integral part of these financial statements.

6



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##### Table of Contents



IEA INCOME FUND XII, L.P.




Notes to Unaudited Financial Statements



|(1) |  | Summary of Significant Accounting Policies
|--- |  | ------------------------------------------



| | (a) |  | Nature of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | IEA Income Fund XII, L.P. (the Partnership) is a limited partnership
organized under the laws of the State of California on November 28, 1991
for the purpose of owning and leasing marine cargo containers worldwide
to ocean carriers. To this extent, the Partnerships operations are
subject to the fluctuations of world economic and political conditions.
Such factors may affect the pattern and levels of world trade. The
Partnership believes that the profitability of, and risks associated
with, leases to foreign customers is generally the same as those of
leases to domestic customers. The Partnerships leases generally require
all payments to be made in United States currency.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |     |  | Cronos Capital Corp. (CCC) is the general partner and, with its
affiliate Cronos Containers Limited (the Leasing Company), manages the
business of the Partnership. CCC and the Leasing Company also manage the
container leasing business for other partnerships affiliated with CCC.
The Partnership shall continue until December 31, 2011, unless sooner
terminated upon the occurrence of certain events.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |     |  | The Partnership commenced operations on January 31, 1992, when the
minimum subscription proceeds of $2,000,000 were obtained. The
Partnership offered 3,750,000 units of limited partnership interest at
$20 per unit, or $75,000,000. The offering terminated on November 30,
1992, at which time 3,513,594 limited partnership units had been sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (b) |  | Leasing Company and Leasing Agent Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |     |  | A Leasing Agent Agreement exists between the Partnership and the
Leasing Company, 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 one 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, and
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)

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IEA INCOME FUND XII, 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) |  | Container Rental Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |     |  | In accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, container rental equipment is considered
to be impaired if the carrying value of the asset exceeds the expected
future cash flows from related operations (undiscounted and without
interest charges). If impairment is deemed to exist, the assets are
written down to fair value. An analysis is prepared each quarter
projecting future cash flows from container rental equipment operations.
Current and projected utilization rates, per-diem rental rates, direct
operating expenses, fleet size and container disposals are the primary
variables utilized by the analysis. Additionally, the Partnership
evaluates future cash flows and potential impairment by container type
rather than for each individual container, and as a result, future losses
could result for individual container dispositions due to various
factors, including age, condition, suitability for continued leasing, as
well as the geographical location of containers when disposed. There were
no impairment charges to the carrying value of container rental equipment
for the nine-month periods ended September 30, 2003 and 2002.
|
| |     |  | Depreciation policies are also evaluated to determine whether subsequent
events and circumstances warrant revised estimates of useful lives.
Container rental equipment is depreciated using the straight-line basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (e) |  | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |     |  | The financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America (GAAP),
which 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 most significant estimates included within the financial statements
are the container rental equipment estimated useful lives and residual
values, and the estimate of future cash flows from container rental
equipment operations, used to determine the adequacy of the carrying
value of container rental equipment in accordance with SFAS No. 144.
Considerable judgement is required in estimating future cash flows from
container rental equipment operations. Accordingly, the estimates may
not be indicative of the amounts that may be realized in future periods.
As additional information becomes available in subsequent periods,
reserves for the impairment of the container rental equipment carrying
values may be necessary based upon changes in market and economic
conditions.                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (f) |  | 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 accounting principles
generally accepted in the United States of America (GAAP) 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

(Continued)

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IEA INCOME FUND XII, L.P.

Notes to Unaudited Financial Statements



| | (f) |  | Financial Statement Presentation (continued)                                                                                                                                                                                                                                                                                                                                                              
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | 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. The results of
operations for such interim periods are not necessarily indicative of the
results to be expected for the full year.



|(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 earned by the Leasing Company under
operating leases to ocean carriers for the containers owned by the
Partnership, as well as proceeds earned from container disposals. Net lease
receivables at September 30, 2003 and December 31, 2002 were as follows:

|                                               |  |               |         |              |  |   |         | 
|---------------------------------------------- |  | ------------- | ------- | ------------ |  | - | ------- | 
|                                               |  | September 30, |         | December 31,
|                                               |  | 2003          |         | 2002        
|                                               |  |               |         |             
|Gross lease receivables                        |  | $             | 889,294 |              |  | $ | 959,271 | 
|Less:                                          |  |               |         |              |  |   |         | 
|Direct operating payables and accrued expenses |  |               | 361,049 |              |  |   | 405,443 | 
|Damage protection reserve                      |  |               | 46,281  |              |  |   | 47,726  | 
|Base management fees payable                   |  |               | 117,609 |              |  |   | 189,911 | 
|Reimbursed administrative expenses             |  |               | 17,367  |              |  |   | 20,691  | 
|Allowance for doubtful accounts                |  |               | 77,012  |              |  |   | 118,824 | 
|                                               |  |               |         |              |  |   |         | 
|Net lease receivables                          |  | $             | 269,976 |              |  | $ | 176,676 | 
|                                               |  |               |         |              |  |   |         | 



|(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 earned 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, 2003 and 2002 were as follows:

|                                    |  |                    |         |                   |  |               |         |               |  |   |           |  |  |   |           | 
|----------------------------------- |  | ------------------ | ------- | ----------------- |  | ------------- | ------- | ------------- |  | - | --------- |  |  | - | --------- | 
|                                    |  | Three Months Ended |         | Nine Months Ended
|                                    |  |                    |         |                  
|                                    |  | September 30,      |         | September 30,     |  | September 30, |         | September 30,
|                                    |  | 2003               |         | 2002              |  | 2003          |         | 2002         
|                                    |  |                    |         |                   |  |               |         |              
|Rental revenue (note 4)             |  | $                  | 869,077 |                   |  | $             | 969,810 |               |  | $ | 2,691,133 |  |  | $ | 3,151,124 | 
|Less:                               |  |                    |         |                   |  |               |         |               |  |   |           |  |  |   |           | 
|Rental equipment operating
expenses |  |                    | 241,334 |                   |  |               | 328,707 |               |  |   | 782,831   |  |  |   | 1,004,230 | 
|Base management fees                |  |                    | 53,439  |                   |  |               | 66,455  |               |  |   | 144,683   |  |  |   | 217,180   | 
|Reimbursed administrative expenses  |  |                    | 53,682  |                   |  |               | 61,759  |               |  |   | 170,457   |  |  |   | 194,504   | 
|                                    |  |                    |         |                   |  |               |         |               |  |   |           |  |  |   |           | 
|Net lease revenue                   |  | $                  | 520,622 |                   |  | $             | 512,889 |               |  | $ | 1,593,162 |  |  | $ | 1,735,210 | 
|                                    |  |                    |         |                   |  |               |         |               |  |   |           |  |  |   |           | 

(Continued)

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IEA INCOME FUND XII, L.P.

Notes to Unaudited Financial Statements



|(4) |  | Operating Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | 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 that as such it has
a single reportable operating segment.
|   
|    |  | The Partnership derives its revenues from leasing marine cargo containers.
As of September 30, 2003, the Partnership operated 5,869 twenty-foot, 3,627
forty-foot and 155 forty-foot high-cube marine dry cargo containers, as well
as 218 twenty-foot and 180 forty-foot marine refrigerated cargo containers.
A summary of gross lease revenue, by product, for the three and nine-month
periods ended September 30, 2003 and 2002 follows:                                                                                                                    

|                        |  |                    |         |                   |  |               |         |               |  |   |           |  |  |   |           | 
|----------------------- |  | ------------------ | ------- | ----------------- |  | ------------- | ------- | ------------- |  | - | --------- |  |  | - | --------- | 
|                        |  | Three Months Ended |         | Nine Months Ended
|                        |  |                    |         |                  
|                        |  | September 30,      |         | September 30,     |  | September 30, |         | September 30,
|                        |  | 2003               |         | 2002              |  | 2003          |         | 2002         
|                        |  |                    |         |                   |  |               |         |              
|Dry cargo containers    |  | $                  | 686,562 |                   |  | $             | 748,569 |               |  | $ | 2,102,448 |  |  | $ | 2,468,960 | 
|Refrigerated containers |  |                    | 182,515 |                   |  |               | 221,241 |               |  |   | 588,685   |  |  |   | 682,164   | 
|                        |  |                    |         |                   |  |               |         |               |  |   |           |  |  |   |           | 
|Total                   |  | $                  | 869,077 |                   |  | $             | 969,810 |               |  | $ | 2,691,133 |  |  | $ | 3,151,124 | 
|                        |  |                    |         |                   |  |               |         |               |  |   |           |  |  |   |           | 



| |  | 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 geographic area information.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10



---



##### Table of Contents






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.

General

A Leasing Agent Agreement exists between the Registrant and the Leasing
Company, whereby the Leasing Company has the responsibility to manage the
leasing operations of all equipment owned by the Registrant. Pursuant to the
Agreement, the Leasing Company is responsible for leasing, managing and
re-leasing the Registrant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 Registrant, 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. At September 30, 2003, 63% of the
original equipment remained in the Registrants fleet, as compared to 70% at
December 31, 2002. The following chart summarizes the composition of the
Registrants fleet (based on container type) at September 30, 2003.

|                      |                        |          |       |            |       |            |       |           |       |         |     |         |     |              |     |    |     |  |     |     |     | 
|--------------------- | ---------------------- | -------- | ----- | ---------- | ----- | ---------- | ----- | --------- | ----- | ------- | --- | ------- | --- | ------------ | --- | -- | --- |  | --- | --- | --- | 
|                      |                        |          |       |            |       |            |       | Dry Cargo |       |         |     |         |     | Refrigerated
|                      |                        |          |       | Containers |       | Containers
|                      |                        |          |       |            |       |           
|                      |                        |          |       |            |       |            |       |           |       |         |     | 40-Foot |     |              |     |    |     |  |     |    
|                      |                        |          |       | 20-Foot    |       | 40-Foot    |       | High-Cube |       | 20-Foot |     | 40-Foot
|                      |                        |          |       |            |       |            |       |           |       |         |     |        
|Containers on lease:  |                        |          |       |            |       |            |       |           |       |         |     |         |     |              |     |    |     |  |     |    
|                      | Master lease           |          |       | 3,448      |       |            |       | 2,077     |       |         |     | 101     |     |              |     | 94 |     |  |     | 11  |    
|                      | Term lease (1-5 years) |          |       | 1,669      |       |            |       | 700       |       |         |     | 27      |     |              |     | 59 |     |  |     | 100 |    
|                      |                        |          |       |            |       |            |       |           |       |         |     |         |     |              |     |    |     |  |     |     |    
|                      |                        | Subtotal |       |            | 5,117 |            |       |           | 2,777 |         |     |         | 128 |              |     |    | 153 |  |     |     | 111 | 
|Containers off lease  |                        |          | 752   |            |       |            | 850   |           |       |         | 25  |         |     |              | 65  |    |     |  | 69  |    
|                      |                        |          |       |            |       |            |       |           |       |         |     |         |     |              |     |    |     |  |     |     |    
|Total container fleet |                        |          | 5,869 |            |       |            | 3,627 |           |       |         | 153 |         |     |              | 218 |    |     |  | 180 |    
|                      |                        |          |       |            |       |            |       |           |       |         |     |         |     |              |     |    |     |  |     |     |    

|                                      |                |  |            |       |              |  |           |    |         |  |         |       |   |  |       |    |   |  |         |    |   |  |     |    |   |  |     |    |  |  |     |    |   |  |     |     |  |  |     |    |  
|------------------------------------- | -------------- |  | ---------- | ----- | ------------ |  | --------- | -- | ------- |  | ------- | ----- | - |  | ----- | -- | - |  | ------- | -- | - |  | --- | -- | - |  | --- | -- |  |  | --- | -- | - |  | --- | --- |  |  | --- | -- | -
|                                      |                |  | Dry Cargo  |       | Refrigerated
|                                      |                |  | Containers |       | Containers  
|                                      |                |  |            |       |             
|                                      |                |  |            |       |              |  |           |    |         |  |         |       |   |  |       |    |   |  | 40-Foot |    |   |  |     |    |   |  |     |    |  |  |     |    |   |  |    
|                                      |                |  | 20-Foot    |       | 40-Foot      |  | High-Cube |    | 20-Foot |  | 40-Foot
|                                      |                |  |            |       |              |  |           |    |         |  |        
|                                      |                |  | Units      |       | %            |  | Units     |    | %       |  | Units   |       | % |  | Units |    | % |  | Units   |    | %
|                                      |                |  |            |       |              |  |           |    |         |  |         |       |   |  |       |    |   |  |         |    |  
|Total purchases                       |                |  | 9,743      |       |              |  | 100       | %  |         |  | 5,426   |       |   |  | 100   | %  |   |  | 213     |    |   |  | 100 | %  |   |  | 248 |    |  |  | 100 | %  |   |  | 309 |     |  |  | 100 | % 
|                                      | Less disposals |  |            | 3,874 |              |  |           | 40 | %       |  |         | 1,799 |   |  |       | 33 | % |  |         | 60 |   |  |     | 28 | % |  |     | 30 |  |  |     | 12 | % |  |     | 129 |  |  |     | 42 | %
|                                      |                |  |            |       |              |  |           |    |         |  |         |       |   |  |       |    |   |  |         |    |   |  |     |    |   |  |     |    |  |  |     |    |   |  |     |     |  |  |     |   
|Remaining fleet at
September 30, 2003 |                |  | 5,869      |       |              |  | 60        | %  |         |  | 3,627   |       |   |  | 67    | %  |   |  | 153     |    |   |  | 72  | %  |   |  | 218 |    |  |  | 88  | %  |   |  | 180 |     |  |  | 58  | % 
|                                      |                |  |            |       |              |  |           |    |         |  |         |       |   |  |       |    |   |  |         |    |   |  |     |    |   |  |     |    |  |  |     |    |   |  |     |     |  |  |     |   

Strong growth in the volume of global container trade during the nine-month
period ending September 30, 2003 contributed to favorable container leasing
market conditions, allowing the Registrant to maintain a high level of
utilization for its containers. At September 30, 2003, the Registrants
utilization for dry cargo containers measured 82% as compared to 79% at
December 31, 2002. The demand for leased containers by the global container
shipping industry has contributed to reducing off-hire inventories primarily in
Asia, and to a lesser extent Europe and North America. In many parts of Asia
and particularly in the southeastern ports, the demand for cargo containers
continued to exceed available supplies. Also contributing to the strong demand
for leased containers during 2003 has been the preference of shipping lines to
purchase fewer containers for their own account. Due to recent operating
losses and requirements to deploy capital within other parts of their business,
including the investment in new, larger, containerships and the support of
terminal, information technology and other infrastructure requirements, funds
for new container investment have been limited. As a result, shipping lines
have strategically made the decision to employ leased containers to meet their
container requirements. However, in response to a favorable shipping market,
there are indications of an increased willingness by the shipping lines to
purchase and finance the acquisition of new containers at higher levels in the
near future, which may impact the demand for leased containers.

The favorable shipping market conditions, combined with lower cost, short term
leases for older containers, have also resulted in the shipping lines
diminishing discrimination against leasing older containers, a condition that
typically exists during periods of surplus container supply. The favorable 2003
shipping market, combined with the current shortfall of containers, is expected
to result in an increase in the production of new containers during 2003, in
comparison to 2002 and 2001 production levels. However, new container
production is expected to remain below the record container production levels
achieved during 2000. The ultimate impact of the industrys increase in new
container production on the Registrants operations is not immediately known,
however, an increase in new container availability may reduce the demand for
the Registrants older containers.

(Continued)

11



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##### Table of Contents



Although favorable market conditions for container lessors currently exists,
the uncertainty over the financial strength of the shipping industry remains a
concern. Current conditions appear to favor the larger more established
shipping lines, which have witnessed strong recoveries in their performance.
The Registrant, CCC and the Leasing Company continue to remain cautious, as
some shipping lines reported operating losses during 2002, while others have
become insolvent during 2003. The financial impact of such losses for these
shipping lines may eventually influence the demand for leased containers as
some shipping lines may experience additional financial difficulties,
consolidate or become insolvent. Although the ultimate outcome, as well as its
impact on the container leasing industry and the Registrants results of
operations, is unknown, CCC, on behalf of the Registrant, will work closely
with the Leasing Company to monitor outstanding receivables, collections, and
credit exposure to various existing and new customers.

Lastly, wide-ranging concerns remain regarding recovery of the worlds major
economies, performance of global stock markets, geopolitical concerns arising
from uncertainties within the Middle East and Asia, as well as the recent
increase in new container production, all of which may temper the current
demand for leased containers.

The Registrants average fleet size and utilization rates for the three and
nine-month periods ended September 30, 2003 and 2002 were as follows:

|                                                                    |                         |  |                    |        |                   |  |               |        |               |  |  |        |   |  |  |        |  
|------------------------------------------------------------------- | ----------------------- |  | ------------------ | ------ | ----------------- |  | ------------- | ------ | ------------- |  |  | ------ | - |  |  | ------ | -
|                                                                    |                         |  | Three Months Ended |        | Nine Months Ended
|                                                                    |                         |  |                    |        |                  
|                                                                    |                         |  | September 30,      |        | September 30,     |  | September 30, |        | September 30,
|                                                                    |                         |  | 2003               |        | 2002              |  | 2003          |        | 2002         
|                                                                    |                         |  |                    |        |                   |  |               |        |              
|Average fleet size (measured in
twenty-foot equivalent units
(TEU)) |                         |  |                    |        |                   |  |               |        |               |  |  |        |   |  |  |       
|                                                                    | Dry cargo containers    |  |                    | 13,766 |                   |  |               | 15,930 |               |  |  | 14,166 |   |  |  | 17,017 |  
|                                                                    | Refrigerated containers |  |                    | 602    |                   |  |               | 714    |               |  |  | 638    |   |  |  | 726    |  
|Average Utilization                                                 |                         |  |                    |        |                   |  |               |        |               |  |  |        |   |  |  |       
|                                                                    | Dry cargo containers    |  |                    | 82     | %                 |  |               | 75     | %             |  |  | 80     | % |  |  | 71     | %
|                                                                    | Refrigerated containers |  |                    | 67     | %                 |  |               | 71     | %             |  |  | 70     | % |  |  | 73     | %

Per-diem rates for dry cargo containers for the three and nine-month periods
ended September 30, 2003 declined approximately 3% and 7%, respectively, in
comparison to the same periods in the prior year, and is attributable to three
main factors that have taken place since 2002:



|1. |  | Per-diem rental rates decreased in correlation with the reduction of new
container prices and interest rate levels;                                                                                                
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | The Leasing Company converted lease agreements with certain shipping
lines from master to long-term lease, providing greater revenue stability
but at lower lease rates than those earned under master leases; and,
|  
|3. |  | The Leasing Company initiated new long-term leases for older equipment
resulting in lower per-diem rates, while significantly reducing off-hire
container inventory levels.                                        

Although per-diem rental rates for dry cargo containers have declined from 2002
levels, static new container prices and an increase in demand for leased
containers have resulted in the stabilization of per-diem rental rates during
2003. A significant improvement in lease per-diem rates is not expected until
new container prices increase to much higher levels.

The primary component of the Registrants results of operations is net lease
revenue. Net lease revenue is determined by deducting direct operating
expenses, management fees and reimbursed administrative expenses, from rental
revenues billed by the Leasing Company from the leasing of the Registrants
containers. Net lease revenue is directly related to the size, utilization and
per-diem rental rates of the Registrants fleet.

(Continued)

12



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##### Table of Contents



Three Months Ended September 30, 2003 Compared to the Three Months Ended
September 30, 2002

Net lease revenueof $520,622 for the three months ended September 30, 2003 was
$7,733 higher than in the corresponding period of 2002. The increase was
primarily a result of a $108,466 aggregate decline in rental equipment
operating expenses, management fees and reimbursed administrative expenses,
when compared to the corresponding period in 2002. This decline offset the
negative impact on gross lease revenue (a component of net lease revenue)
arising from lower, average per-diem rental rates and the Registrants smaller
fleet size. Contributing to the decline in rental equipment operating expenses
were decreases in storage and handling costs, a direct result of higher
utilization and its impact on reducing the number of off-hire containers in
inventory. The provision for doubtful accounts and repositioning expense also
decline by $16,078 and $10,570, respectively, from the corresponding period in
the prior year.

Depreciation expenseof $629,513 for the three months ended September 30, 2003
was $93,489 lower than the same period in 2002, a direct result of the
Registrants declining fleet size.

Other general and administrative expensesincreased to $30,970 in the third
quarter of 2003, from $29,762 in the corresponding period of 2002, representing
a increase of $1,208 or 4.1% from the same period in 2002.

Net loss on disposal of equipmentwas a result of the Registrant disposing of
429 containers during the three-month period ended September 30, 2003, as
compared to 842 containers during the same period in 2002. These disposals
resulted in a net loss of $213,564 for the three-month period ended September
30, 2003, as compared to $660,147 for the three-month period ended September
30, 2002. The Registrant believes that the net loss on container disposals in
the three-month period ended September 30, 2003 was a result of various factors
including the volume of disposed containers, age, condition, suitability for
continued leasing, as well as the geographical location of the containers when
disposed. These factors will continue to influence the decision to repair or
dispose of a container when it is returned by a lessee, as well as the amount
of sales proceeds received and the related gain or loss on container disposals.
The level of the Registrants container disposals in subsequent periods will
also contribute to fluctuations in the net gain or loss on disposals. There
were no reductions to the carrying value of container rental equipment due to
impairment during the three-month periods ended September 30,
2003 and 2002.

Nine Months Ended September 30, 2003 Compared to the Nine Months Ended
September 30, 2002

Net lease revenueof $1,593,162 for the nine months ended September 30, 2003
was $142,048 lower than in the corresponding period of 2002. The decrease was
due to a $459,991 decline in gross rental revenue (a component of net lease
revenue) from the same period in 2002. Gross rental revenue was impacted by
lower average per-diem rental rates and the Registrants smaller fleet size.
Other components of net lease revenue, including management fees and reimbursed
administrative expenses, were lower by $96,544 when compared to the
corresponding period in 2002, partially offsetting the decline in gross lease
revenue. Rental equipment operating expenses decreased by $221,399 when
compared to the corresponding period in 2002. Contributing to the decline in
rental equipment operating expenses were decreases in storage and handling
costs, a direct result of higher utilization and its impact on reducing the
number of off-hire containers from inventory. Such costs were partially offset
by an increase in the provision for doubtful accounts.

Depreciation expenseof $1,948,055 for the nine months ended September 30, 2003
was $354,194 lower than the same period in 2002, a direct result of the
Registrants declining fleet size.

Other general and administrative expenseswere $96,010 for the nine months
ended September 30, 2003, a decrease of $1,229 or 1.3% when compared to
corresponding period of 2002.

Net loss on disposal of equipmentwas a result of the Registrant disposing of
1,030 containers during the nine-month period ended September 30, 2003, as
compared to 2,400 containers during the same period in 2002. These disposals
resulted in a loss of $496,836 for the nine-month period ended September 30,
2003, as compared to a loss of $1,833,467 for the nine-month period ended
September 30, 2002. The Registrant believes that the net gain on container
disposals in the nine-month period ended September 30, 2003 was a result of
various factors including the volume of disposed containers, age, condition,
suitability for continued leasing, as well as the geographical location of the
containers when disposed. These factors will continue to influence the
decision to repair or dispose of a container when it is returned by a lessee,
as well as the amount of sales proceeds received and the related gain or loss
on container disposals. The level of the Registrants container disposals in
subsequent periods will also contribute to fluctuations in the net gain or loss
on disposals. There were no reductions to the carrying value of container
rental equipment due to impairment during the nine-month periods ended
September 30, 2003 and 2002.

(Continued)

13



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##### Table of Contents



Liquidity and Capital Resources

Cash from Operating Activities:Net cash provided by operating activities was
$1,467,431 and $1,730,021 during the first nine months of 2003 and 2002,
respectively, primarily generated from the billing and collection of net lease
revenue.

Cash from Investing Activities:Net cash provided by investing activities
during the nine-month periods ending September 30, 2003 and 2002, included
sales proceeds generated from the sale of rental equipment of $903,082 and
$1,621,450, respectively.

Cash from Financing Activities:Net cash used in financing activities was
$2,630,992 during the first nine months of 2003 compared to $2,743,847 in the
corresponding period of 2002. These amounts represent distributions to the
Registrants general and limited partners. The Registrants diminishing fleet
size, as well as current market conditions, may produce lower operating results
and, consequently, lower distributions to its partners in subsequent periods.
Sales proceeds distributed to its partners may fluctuate in subsequent periods,
reflecting the level of container disposals.

Capital Resources

Capital Resources:Aside from the initial working capital reserve retained
from the gross subscription proceeds (equal to approximately 1% of such
proceeds), the Registrant relied primarily on container rental receipts and
proceeds from container sales to generate distributions to its general and
limited partners, as well as to finance current operating needs. Quarterly
distributions are also affected by periodic increases or decreases to working
capital reserves, as deemed appropriate by CCC, to ensure cash reserves on hand
are sufficient to meet the Registrants operating requirements. No credit
lines are maintained to finance working capital.

Critical Accounting Policies

Container equipment  depreciable lives: Container rental equipment is
depreciated over a useful life of 15 years to a residual value of 10%. The
Registrant re-evaluates the period of amortization and residual values to
determine whether subsequent events and circumstances warrant revised estimates
of useful lives and residual values.

Container equipment  valuation:The Registrant reviews container rental
equipment when changes in circumstances require consideration as to whether the
carrying value of the equipment has become impaired, pursuant to guidance
established in SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. The Registrant considers assets to be impaired if the
carrying value of the asset exceeds the future projected cash flows from
related operations (undiscounted and without interest charges). When
impairment is deemed to exist, the assets are written down to fair value or
projected discounted cash flows from related operations. The Registrant
periodically evaluates future cash flows and potential impairment of its fleet
by container type rather than for each individual container. Therefore, future
losses could result for individual container dispositions due to various
factors including age, condition, suitability for continued leasing, as well as
geographic location of the containers where disposed. Considerable judgment is
required in estimating future cash flows from container rental equipment
operations. Accordingly, the estimates may not be indicative of the amounts
that may be realized in future periods. As additional information becomes
available in subsequent periods, reserves for the impairment of the container
rental equipment carrying values may be necessary based upon changes in market
and economic conditions.

Inflation

The Registrant believes inflation has not had a material adverse effect on the
results of its operations.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

Exchange rate risk:Substantially all of the Registrants revenues are billed
and paid in US dollars and a significant portion of costs are billed and paid
in US dollars. The Leasing Company believes that the proportion of US dollar
revenues may decrease in future years, reflecting a more diversified customer
base and lease portfolio. Of the remaining costs, the majority are
individually small, unpredictable and incurred in various denominations and
thus are not suitable for cost effective hedging.

The Leasing Company may hedge a portion of the expenses that are predictable
and are principally in UK pounds sterling. As exchange rates are outside of
the control of the Registrant and Leasing Company, there can be no assurance
that such fluctuations will not adversely affect its results of operations and
financial condition.

(Continued)

14



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##### Table of Contents






Item 4. Controls and Procedures

The principal executive and principal financial officers of CCC have evaluated
the disclosure controls and procedures of the Registrant within 90 days prior
to the filing of this quarterly report. As used herein, the term disclosure
controls and procedures has the meaning given to the term by Rule 13a-14 under
the Securities Exchange Act of 1934, as amended (Exchange Act), and includes
the controls and other procedures of the Registrant that are designed to ensure
that information required to be disclosed by the Registrant in the reports that
it files with the SEC under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SECs rules and forms.
Based upon their evaluation, the principal executive and principal financial
officers of CCC have concluded that the Registrants disclosure controls and
procedures provide reasonable assurance that the information required to be
disclosed by the Registrant in this report is recorded, processed, summarized
and reported within the time periods specified in the SECs rules and forms
applicable to the preparation of this report.

There have been no significant changes in the Registrants internal controls or
in other factors that could significantly affect the Registrants internal
controls subsequent to the evaluation described above conducted by CCCs
principal executive and financial officers.

15



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##### Table of Contents






PART II - OTHER INFORMATION




Item 6. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits
|--- |  | --------

|        |  |                                                                                              |  |                         
|------- |  | -------------------------------------------------------------------------------------------- |  | ------------------------
|Exhibit |  |                                                                                              |  |                         
|No.     |  | Description                                                                                  |  | Method of Filing        
|        |  |                                                                                              |  |                         
|3(a)    |  | Limited Partnership Agreement of the Registrant, amended
and restated as of December 2, 1991 |  | *                       
|        |  |                                                                                              |  |                         
|3(b)    |  | Certificate of Limited Partnership of the Registrant                                         |  | **                      
|        |  |                                                                                              |  |                         
|10      |  | Form of Leasing Agent Agreement with Cronos Containers
Limited                               |  | ***                     
|        |  |                                                                                              |  |                         
|31.1    |  | Rule 13a-14 Certification                                                                    |  | Filed with this document
|        |  |                                                                                              |  |                         
|31.2    |  | Rule 13a-14 Certification                                                                    |  | Filed with this document
|        |  |                                                                                              |  |                         
|32      |  | Section 1350 Certifications                                                                  |  | Filed with this document
|        |  |                                                                                              |  | ****                    



|(b) |  | Reports on Form 8-K                                                                             
|--- |  | ------------------------------------------------------------------------------------------------
|   
|    |  | No reports on Form 8-K were filed by the Registrant during the quarter ended
September 30, 2003.



---

|*    |  | Incorporated by reference to Exhibit A to the Prospectus of the
Registrant dated December 2, 1991, included as part of Registration
Statement on Form S-1 (No. 33-42697)                                                                                                                                                                           
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|**   |  | Incorporated by reference to Exhibit 3.2 to the Registration Statement on
Form S-1 (No. 33-42697)                                                                                                                                                                                                                                                    
|    
|***  |  | Incorporated by reference to Exhibit 10.2 to the Registration Statement
on Form S-1 (No. 33-42697)                                                                                                                                                                                                                                                   
|    
|**** |  | These certifications, required by Section 906 of the Sarbanes-Oxley Act
of 2002, other than as required by Section 906, is not to be deemed
filed with the Commission or subject to the rules and regulations
promulgated by the Commission under the Securities Exchange Act of 1934,
as amended, or to the liabilities of Section 18 of said Act.

16



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##### Table of Contents






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 XII, L.P.
| |  |                           |  |                                                                                                                                   
| |  | 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                         
| |  |                           |  |                                                                                                                                   
| |  | By                        |  | /s/ John Kallas                                                                                                                   
| |  |                           |  |                                                                                                                                   
| |  |                           |  | John Kallas
Chief Financial Officer and
Director of Cronos Capital Corp. (CCC)
Principal Financial and Accounting Officer of CCC

Date: November 12, 2003

17



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##### Table of Contents






EXHIBIT INDEX

|        |  |                                                                                              |  |                         
|------- |  | -------------------------------------------------------------------------------------------- |  | ------------------------
|Exhibit |  |                                                                                              |  |                         
|No.     |  | Description                                                                                  |  | Method of Filing        
|        |  |                                                                                              |  |                         
|3(a)    |  | Limited Partnership Agreement of the Registrant, amended
and restated as of December 2, 1991 |  | *                       
|        |  |                                                                                              |  |                         
|3(b)    |  | Certificate of Limited Partnership of the Registrant                                         |  | **                      
|        |  |                                                                                              |  |                         
|10      |  | Form of Leasing Agent Agreement with Cronos Containers
Limited                               |  | ***                     
|        |  |                                                                                              |  |                         
|31.1    |  | Rule 13a-14 Certification                                                                    |  | Filed with this document
|        |  |                                                                                              |  |                         
|31.2    |  | Rule 13a-14 Certification                                                                    |  | Filed with this document
|        |  |                                                                                              |  |                         
|32      |  | Section 1350 Certifications                                                                  |  | Filed with this document
|        |  |                                                                                              |  | ****                    



---

|*    |  | Incorporated by reference to Exhibit A to the Prospectus of the
Registrant dated December 2, 1991, included as part of Registration
Statement on Form S-1 (No. 33-42697)                                                                                                                                                                           
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|**   |  | Incorporated by reference to Exhibit 3.2 to the Registration Statement on
Form S-1 (No. 33-42697)                                                                                                                                                                                                                                                    
|    
|***  |  | Incorporated by reference to Exhibit 10.2 to the Registration Statement
on Form S-1 (No. 33-42697)                                                                                                                                                                                                                                                   
|    
|**** |  | These certifications, required by Section 906 of the Sarbanes-Oxley Act
of 2002, other than as required by Section 906, is not deemed to be
filed with the Commission or subject to the rules and regulations
promulgated by the Commission under the Securities Exchange Act of 1934,
as amended, or to the liabilities of Section 18 of said Act.