##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR
THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005
 OR
 o
    
    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.
  California
(State or other jurisdiction of
incorporation or organization)
    
    94-3143940
(I.R.S. Employer
Identification No.)
 One Front Street, Suite 925, San Francisco, California 94111(Address of principal executive offices)
    
    (Zip Code)
 
 þ o
 o þ
 o þ




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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, 2005
 TABLE OF CONTENTS
 PAGEPART I  FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Balance Sheets  September 30, 2005 and December 31, 2004 (unaudited)
    
    
    4Condensed Statements of Operations for the three and nine months ended September 30, 2005 and 2004 (unaudited)
    
    
    5Condensed Statements of Cash Flows for the nine months ended September 30, 2005 and 2004 (unaudited)
    
    
    6Notes to Condensed Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    17Item 4. Controls and Procedures
    
    
    17PART II  OTHER INFORMATION
    
    
    18Item 1. Legal Proceedings
    
    
    18Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    18Item 3. Defaults Upon Senior Securities
    
    
    18Item 4. Submissions of Matters to a Vote of Securities Holders
    
    
    18Item 5. Other Information
    
    
    18Item 6. Exhibits
    
    
    18EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
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PART I  FINANCIAL INFORMATION
 
 Financial Statements
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IEA INCOME FUND XII, L.P.
 
 Condensed Balance Sheets
 (Unaudited)
 September 30,
    
    
    December 31,2005
    
    
    2004AssetsCurrent assets:Cash and cash equivalents, includes $1,506,472 at September 30, 2005 and
$2,107,593 at December 31, 2004 in interest-bearing accounts
    
    $
    1,521,472
    
    
    $
    2,122,594Net lease receivables due from Leasing Company (notes 1 and 2)
    
    
    519,806
    
    
    
    498,682Total current assets
    
    
    2,041,278
    
    
    
    2,621,276Container rental equipment, at cost
    
    
    23,205,996
    
    
    
    29,464,593Less accumulated depreciation
    
    
    (17,554,129
    )
    
    
    (21,035,331
    )Net container rental equipment (note 1)
    
    
    5,651,867
    
    
    
    8,429,262Total assets
    
    $
    7,693,145
    
    
    $
    11,050,538Partners CapitalPartners capital (deficit):General partner
    
    $
    (538,918
    )
    
    $
    (608,534
    )Limited partners
    
    
    8,232,063
    
    
    
    11,659,072Total partners capital
    
    $
    7,693,145
    
    
    $
    11,050,538
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IEA INCOME FUND XII, L.P.
 
 Condensed Statements of Operations
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net lease revenue (notes 1 and 4)
    
    $
    473,912
    
    
    $
    569,689
    
    
    $
    1,437,189
    
    
    $
    1,606,530Other operating income (expenses):Depreciation
    
    
    (372,317
    )
    
    
    (537,255
    )
    
    
    (1,197,924
    )
    
    
    (1,677,761
    )Other general and administrative expenses
    
    
    (35,088
    )
    
    
    (30,373
    )
    
    
    (107,088
    )
    
    
    (99,576
    )Net gain (loss) on disposal of equipment
    
    
    39,569
    
    
    
    (200,223
    )
    
    
    104,993
    
    
    
    (456,399
    )Income (loss) from operations
    
    
    106,076
    
    
    
    (198,162
    )
    
    
    237,170
    
    
    
    (627,206
    )Other income:Interest income
    
    
    11,534
    
    
    
    2,643
    
    
    
    30,480
    
    
    
    4,490Net income (loss)
    
    $
    117,610
    
    
    $
    (195,519
    )
    
    $
    267,650
    
    
    $
    (622,716
    )Allocation of net income (loss):General partner
    
    $
    62,929
    
    
    $
    (1,955
    )
    
    $
    181,069
    
    
    $
    (6,227
    )Limited partners
    
    
    54,681
    
    
    
    (193,564
    )
    
    
    86,581
    
    
    
    (616,489
    )$
    117,610
    
    
    $
    (195,519
    )
    
    $
    267,650
    
    
    $
    (622,716
    )Limited partners per unit share of net
income (loss)
    
    $
    0.02
    
    
    $
    (0.06
    )
    
    $
    0.02
    
    
    $
    (0.18
    )
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IEA INCOME FUND XII, L.P.
 
 Condensed Statements of Cash Flows
 (Unaudited)
 Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004Net cash provided by operating activities
    
    $
    1,271,993
    
    
    $
    1,439,844Cash provided by investing activities:Proceeds from disposal of equipment
    
    
    1,693,634
    
    
    
    1,103,209Payment received from sales-type lease for sale of rental equipment
    
    
    58,294
    
    
    
    1,751,928
    
    
    
    1,103,209Cash used in financing activities:Distribution to general partner
    
    
    (111,453
    )
    
    
    (70,156
    )Distribution to limited partners
    
    
    (3,513,590
    )
    
    
    (2,137,438
    )(3,625,043
    )
    
    
    (2,207,594
    )Net (decrease) increase in cash and cash equivalents
    
    
    (601,122
    )
    
    
    335,459Cash and cash equivalents at the beginning of the period
    
    
    2,122,594
    
    
    
    1,476,987Cash and cash equivalents at the end of the period
    
    $
    1,521,472
    
    
    $
    1,812,446
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IEA INCOME FUND XII, L.P.
 
 Notes to Unaudited Condensed Financial Statements
 Summary of Significant Accounting Policies
 (a)
    
    Nature of OperationsIEA 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. The Partnerships operations are
subject to the fluctuations of world economic and political conditions. 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 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.The Partnership has completed its 13th year of operations and has entered its
liquidation phase wherein the General Partner focuses its attention on the retirement
of the remaining equipment in the Partnerships container fleet. At September 30,
2005, approximately 42% of the original equipment remained in the Partnerships fleet.
The General Partner will take several factors into consideration when examining
options for the timing of the disposal of the containers. These factors include the
impact of a diminishing fleet size and current market conditions on the level of gross
lease revenue, and fixed operating costs relative to this revenue. Parallel to these
considerations will be a projected increase in expenses for devoting significant
resources to the additional reporting and compliance requirements of Section 404 of
the Sarbanes Oxley Act of 2002, which addresses a range of corporate governance,
disclosure, and accounting issues. These costs may include increased accounting and
administrative expenses for additional staffing and outside professional services by
accountants and consultants. These additional costs, depending on their materiality,
may reduce the Partnerships results from operations and therefore negatively affect
future distributions to the Limited Partners.(b)
    
    Leasing Company and Leasing Agent AgreementA 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, under operating leases which are
either master leases or term leases (mostly one to five years) and sales-type leases.
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
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IEA INCOME FUND XII, L.P.
 Notes to Unaudited Condensed Financial Statements
 (b)
    
    Leasing Company and Leasing Agent Agreement (continued)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. Sales-type leases have fixed payment terms and provide the lessee with a
purchase option. The net investment in sales-type leases represents a receivable due from
the Leasing Company, net of unearned income. Unearned income, when recognized, is
reflected in the Partnerships statements of operations, providing a constant return on
capital over the lease term. Unearned income is recorded as part of the net lease
receivable due from the Leasing Company.(c)
    
    Basis of AccountingThe 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)
    
    Use of EstimatesThe 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 carrying value
of container rental equipment in accordance with SFAS No. 144. 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,
recognition of an impairment of the container rental equipment carrying values may be
necessary based upon changes in market and economic conditions.(e)
    
    Container Rental EquipmentContainer rental equipment is depreciated using the straight-line basis. Depreciation
policies are also evaluated to determine whether subsequent events and circumstances
warrant revised estimates of useful lives.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 three and nine-month periods ended
September 30, 2005 and 2004.
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IEA INCOME FUND XII, L.P.
 Notes to Unaudited Condensed Financial Statements
 (f)
    
    Partners Capital AccountsUpon dissolution, the assets of the Partnership will be sold and the proceeds thereof
distributed as follows: (i) all of the Partnerships debts and liabilities to persons other
than CCC or the limited partners shall be paid and discharged; (ii) all of the
Partnerships debts and liabilities to CCC and the limited partners shall be paid and
discharged; and (iii) the balance of such proceeds shall be distributed to CCC and the
limited partners in accordance with the positive balances of CCC and the limited partners
capital accounts. CCC shall contribute to the Partnership, if necessary, an amount equal
to the lesser of the deficit balance in its capital account at the time of such
liquidation, or 1.01% of the excess of the Limited Partners capital contribution to the
Partnership over the capital contributions previously made to the Partnership by CCC, after
giving effect to the allocation of income or loss arising from the liquidation of the
Partnerships assets.(g)
    
    Financial Statement PresentationThese financial statements have been prepared without audit pursuant to the rules and
regulations of the Securities and Exchange Commission. 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
condensed or omitted pursuant to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the information presented not
misleading. It is suggested that these financial statements be read in conjunction with
the financial statements and accompanying notes in the Partnerships December 31, 2004
Annual Report on Form 10-K.The interim financial statements presented herewith reflect in the opinion of
management, all adjustments of a normal recurring nature necessary to present fairly the
results 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 CompanyNet 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 and sales-type 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, 2005 and December 31, 2004 were as follows:
 September 30,
    
    
    December 31,2005
    
    
    2004Gross lease receivables
    
    $
    935,818
    
    
    $
    1,009,139Sales-type lease receivable, net of unearned income
(see Note 3)
    
    
    36,782
    
    
    
    95,075972,600
    
    
    
    1,104,214Less:Direct operating payables and accrued expenses
    
    
    189,897
    
    
    
    337,537Damage protection reserve
    
    
    80,846
    
    
    
    88,462Base management fees payable
    
    
    10,563
    
    
    
    26,003Reimbursed administrative expenses
    
    
    9,917
    
    
    
    16,041Allowance for doubtful accounts
    
    
    161,571
    
    
    
    137,489452,794
    
    
    
    605,532Net lease receivables
    
    $
    519,806
    
    
    $
    498,682
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IEA INCOME FUND XII, L.P.
 Notes to Unaudited Condensed Financial Statements
 (3)
    
    Sales-Type Lease ReceivableOn December 1, 2004, the Leasing Company, on behalf of the Partnership, amended a term lease
agreement with one lessee to include a bargain purchase option. As a result of the amendment,
the Partnership reclassified the term lease agreement as a sales-type lease, recorded a
sales-type lease receivable and recognized the sale of 532 on-hire containers that were subject
to the amended term lease agreement. The sales-type lease expires on March 31, 2006. At
September 30, 2005, the minimum future lease rentals under this sales-type lease, net of
unearned income are:
 Gross Sales-Type
    
    
    Unearned Sales-
    
    
    Net Minimum FutureLease Receivable
    
    
    Type Lease Income
    
    
    Sales-Type Lease Rentals2005
    
    $
    18,658
    
    
    $
    472
    
    
    $
    18,1862006
    
    
    18,784
    
    
    
    188
    
    
    
    18,596Total
    
    $
    37,442
    
    
    $
    660
    
    
    $
    36,782
 (4)
    
    Net Lease RevenueNet 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,
2005 and 2004 were as follows:
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Rental revenue
    
    $
    603,911
    
    
    $
    808,330
    
    
    $
    1,924,134
    
    
    $
    2,468,681Interest income from sales-type lease
    
    
    769
    
    
    
    
    
    
    
    3,190
    
    
    
    604,680
    
    
    
    808,330
    
    
    
    1,927,324
    
    
    
    2,468,681Less:Rental equipment operating expenses
    
    
    55,378
    
    
    
    128,383
    
    
    
    237,054
    
    
    
    535,392Base management fees
    
    
    43,285
    
    
    
    58,857
    
    
    
    136,107
    
    
    
    169,552Reimbursed administrative expensesSalaries
    
    
    23,971
    
    
    
    33,648
    
    
    
    84,368
    
    
    
    108,542Other payroll related expenses
    
    
    2,163
    
    
    
    6,382
    
    
    
    11,558
    
    
    
    13,944General and administrative expenses
    
    
    5,971
    
    
    
    11,371
    
    
    
    21,048
    
    
    
    34,721130,768
    
    
    
    238,641
    
    
    
    490,135
    
    
    
    862,151Net lease revenue
    
    $
    473,912
    
    
    $
    569,689
    
    
    $
    1,437,189
    
    
    $
    1,606,530
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IEA INCOME FUND XII, L.P.
 Notes to Unaudited Condensed Financial Statements
 (5)
    
    Operating SegmentAn 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. CCC and the Leasing Company operate the Partnerships container
fleet as a homogenous unit and have determined that as such it has a single reportable
operating segment.The Partnership derives its revenues from dry cargo and refrigerated containers used by its
customers in global trade routes. As of September 30, 2005, the Partnership operated 4,271
twenty-foot, 2,180 forty-foot and 107 forty-foot high-cube marine dry cargo containers, as well
as 117 twenty-foot and 13 forty-foot marine refrigerated cargo containers. A summary of gross
lease revenue, by product, for the three and nine-month periods ended September 30, 2005 and
2004 follows:
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Dry cargo containers
    
    $
    518,810
    
    
    $
    662,547
    
    
    $
    1,650,694
    
    
    $
    2,004,072Refrigerated containers
    
    
    85,870
    
    
    
    145,783
    
    
    
    276,630
    
    
    
    464,609Total
    
    $
    604,680
    
    
    $
    808,330
    
    
    $
    1,927,324
    
    
    $
    2,468,681
 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, the Partnership believes that it does
not possess discernible geographic reporting segments as defined in SFAS No. 131 (SFAS 131),
Disclosures about Segments of an Enterprise and Related Information.
 
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Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Market Overview
      12




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Results of Operations
   
    
    Activity-related expenses including agent and depot costs such as repairs, maintenance
and handling.
    
    Inventory-related expenses for off-hire containers, comprising storage and
repositioning costs. These costs are sensitive to the quantity of off-hire containers as
well as the frequency at which containers are re-delivered.
    
    Legal and other expenses including legal costs related to the recovery of containers
and doubtful accounts, insurance and provisions for doubtful accounts.
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Dry Cargo
    
    
    RefrigeratedContainers
    
    
    Containers40-Foot20-Foot
    
    
    40-Foot
    
    
    High-Cube
    
    
    20-Foot
    
    
    40-FootContainers on lease:Master lease
    
    
    2,208
    
    
    
    1,059
    
    
    
    80
    
    
    
    73
    
    
    
    6Term leaseShort term1
    
    
    643
    
    
    
    289
    
    
    
    9
    
    
    
    10
    
    
    
    5Long term2
    
    
    785
    
    
    
    596
    
    
    
    12
    
    
    
    
    
    
    
    Sales-type lease
    
    
    435
    
    
    
    64
    
    
    
    
    
    
    
    
    
    
    
    Subtotal
    
    
    4,071
    
    
    
    2,008
    
    
    
    101
    
    
    
    83
    
    
    
    11Containers off lease
    
    
    200
    
    
    
    172
    
    
    
    6
    
    
    
    34
    
    
    
    2Total container fleet
    
    
    4,271
    
    
    
    2,180
    
    
    
    107
    
    
    
    117
    
    
    
    13
 Dry Cargo
    
    
    RefrigeratedContainers
    
    
    Containers40-Foot20-Foot
    
    
    40-Foot
    
    
    High-Cube
    
    
    20-Foot
    
    
    40-FootUnits
    
    
    %
    
    
    Units
    
    
    %
    
    
    Units
    
    
    %
    
    
    Units
    
    
    %
    
    
    Units
    
    
    %Total purchases
    
    
    9,743
    
    
    
    100
    %
    
    
    5,426
    
    
    
    100
    %
    
    
    213
    
    
    
    100
    %
    
    
    248
    
    
    
    100
    %
    
    
    309
    
    
    
    100
    %Less disposals
    
    
    5,472
    
    
    
    56
    %
    
    
    3,246
    
    
    
    60
    %
    
    
    106
    
    
    
    50
    %
    
    
    131
    
    
    
    53
    %
    
    
    296
    
    
    
    96
    %Remaining fleet
at September 30,
2005
    
    
    4,271
    
    
    
    44
    %
    
    
    2,180
    
    
    
    40
    %
    
    
    107
    
    
    
    50
    %
    
    
    117
    
    
    
    47
    %
    
    
    13
    
    
    
    4
    %
 
 1.
    
    Short term leases represent term leases that are either scheduled for renegotiation or that
may expire on or before September 30, 2006.2.
    
    Long term leases represent term leases, the majority of which will expire between October
2006 and December 2010. Three Months Ended September 30, 2005 Compared to the Three Months Ended September 30, 2004
 Net lease revenue
 Three Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004Fleet size (measured in
Twenty-foot equivalent units (TEU))Dry cargo containers
    
    
    9,119
    
    
    
    11,743Refrigerated containers
    
    
    178
    
    
    
    419Average utilization ratesDry cargo containers
    
    
    96
    %
    
    
    92
    %Refrigerated containers
    
    
    82
    %
    
    
    77
    %
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Depreciation expense
 Other general and administrative expenses
 Net gain on disposal of equipment
 Nine Months Ended September 30, 2005 Compared to the Nine Months Ended September 30, 2004
 Net lease revenue
 Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004Fleet size (measured in
Twenty-foot equivalent units (TEU))Dry cargo containers
    
    
    9,778
    
    
    
    12,274Refrigerated containers
    
    
    210
    
    
    
    459Average utilization ratesDry cargo containers
    
    
    96
    %
    
    
    89
    %Refrigerated containers
    
    
    84
    %
    
    
    77
    %
  Depreciation expense
 Other general and administrative expenses
 15




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##### Table of Contents



Net gain on disposal of equipment
 Liquidity and Capital Resources
    Cash from Operating Activities
 Cash from Investing Activities
 Cash from Financing Activities
 16




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##### Table of Contents



Critical Accounting Policies
  
    
    Container equipment  depreciable lives
    
    Container equipment  valuation
    
    Allowance for doubtful accounts
  Inflation
  
 Quantitative and Qualitative Disclosures About Market Risk
 Exchange rate risk:
 
 Controls and Procedures
   17




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Legal Proceedings
  
 Unregistered Sales of Equity Securities and Use of Proceeds
  
 Defaults Upon Senior Securities
  
 Submissions of Matters to a Vote of Securities Holders
  
 Other Information
  
 Exhibits
  ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement, amended and
restated as of December 2, 1991
    
    *3(b)
    
    Certificate of Limited Partnership
    
    **10
    
    Form of Leasing Agent Agreement with
Cronos Containers Limited
    
    ***31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certification
    
    Filed with this document ****
 
 *
    
    Incorporated by reference to Exhibit A to the Prospectus of the Partnership 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)****
    
    This certification, 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. 18




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##### Table of Contents



SIGNATURES
  IEA INCOME FUND XII, L.P.By
    
    Cronos Capital Corp.The General PartnerBy
    
    /s/ Dennis J. TietzDennis J. TietzPresident and Director of Cronos Capital Corp. (CCC)Principal Executive Officer of CCCBy
    
    /s/ John KallasJohn KallasChief Financial Officer andDirector of Cronos Capital Corp. (CCC)Principal Financial and Accounting Officer of CCC
  19




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description.
    
    Method of Filing3(a)
    
    Limited Partnership Agreement, amended and
restated as of December 2, 1991
    
    *3(b)
    
    Certificate of Limited Partnership
    
    **10
    
    Form of Leasing Agent Agreement with
Cronos Containers Limited
    
    ***31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certification
    
    Filed with this document
****
 
 *
    
    Incorporated by reference to Exhibit A to the Prospectus of the Partnership 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)****
    
    This certification, 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.