##### 



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 MARCH 31, 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 0-18982 IEA INCOME FUND X, L.P.  California
    
    94-3098648(State or other jurisdiction of
    
    (I.R.S. Employerincorporation 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
þ.   No o. Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). Yes o
..   No þ.




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IEA INCOME FUND X, L.P. Report on Form 10-Q for the Quarterly Period
Ended March 31, 2005 TABLE OF CONTENTS PAGEPART I  FINANCIAL INFORMATION
    
    

    
    
    
    
    3Item 1. Financial Statements
    
    

    
    
    
    
    3Condensed Balance Sheets  March 31, 2005 and December 31, 2004 (unaudited)
    
    
    
    
    
    
    4Condensed Statements of Operations for the three months ended March 31, 2005 and 2004
(unaudited)
    
    

    
    
    
    
    5Condensed Statements of Cash Flows for the three months ended March 31, 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
    
    

    
    
    
    
    16Item 4. Controls and Procedures
    
    

    
    
    
    
    16PART II  OTHER INFORMATION
    
    

    
    
    
    
    17Item 1. Legal Proceedings
    
    

    
    
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    

    
    
    
    

    17Item 3. Defaults Upon Senior Securities
    
    

    
    
    
    
    17Item 4. Submissions of Matters to a Vote of Securities Holders
    
    

    
    
    
    
    17Item 5. Other Information
    
    

    
    
    
    
    17Item 6. Exhibits
    
    

    
    
    
    
    17
  2




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PART I  FINANCIAL INFORMATION 
 Item 1. Financial Statements Presented herein are IEA Income Fund X, L.P.s (the Partnership) condensed balance sheets
as of March 31, 2005 and December 31, 2004, condensed statements of operations for the
three months ended March 31, 2005 and 2004, and condensed statements of cash flows for the
three months ended March 31, 2005 and 2004, (collectively the Financial Statements)
prepared by the Partnership without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting principles
generally accepted in the United States have been condensed or omitted pursuant to such
rules and regulations, although the Partnership believes that the disclosures are adequate
to make the information present not misleading. It is suggested that these Financial
Statements be read in conjunction with the financial statements and the notes thereto
included in the Partnerships December 31, 2004 Annual Report on Form 10-K. These
Financial Statements reflect, in the opinion of the Partnership and Cronos Capital Corp.
(CCC), the general partner, all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the results for the interim periods. The
statements of operations for such interim periods are not necessarily indicative of the
results for the full year. The information in this Quarterly Report on Form 10-Q contains certain forward-looking
statements within the meaning of the securities laws. These forward-looking statements
reflect the current view of the Partnership with respect to future events and financial
performance and are subject to a number of risks and uncertainties, many of which are
beyond the Partnerships control. All statements, other than statements of historical
facts included in this report, including the statements under Managements Discussion and
Analysis of Financial Condition and Results of Operations, regarding the Partnerships
strategy, future operations, financial position, estimated revenues, projected costs,
prospects, plans and objectives of the Partnership are forward-looking statements. When
used in this report, the words will, believe, anticipate, intend, estimate,
expect, project, and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain these identifying words.
All forward-looking statements speak only as of the date of this report. The Partnership
does not undertake any obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise. Although
the Partnership believes that its plans, intentions and expectations reflected in or
suggested by the forward-looking statements made in this report are reasonable, the
Partnership can give no assurance that these plans, intentions or expectations will be
achieved. Future economic and industry trends that could potentially impact revenues and
profitability are difficult to predict. 3




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##### 



IEA INCOME FUND X, L.P. 
 Condensed Balance Sheets (Unaudited) March 31,
    
    
    December 31,2005
    
    
    2004AssetsCurrent assets:Cash and cash equivalents, includes $328,482 at March 31, 2005
and $326,723 at December 31, 2004 in interest-bearing accounts
    
    $
    343,963
    
    
    $
    341,723Net lease receivables due from Leasing Company
(notes 1 and 2)
    
    
    133,892
    
    
    
    138,704Total current assets
    
    
    477,855
    
    
    
    480,427Container rental equipment, at cost
    
    
    2,136,290
    
    
    
    2,390,053Less accumulated depreciation
    
    
    (1,747,663
    )
    
    
    (1,932,205
    )Net container rental equipment (note 1)
    
    
    388,627
    
    
    
    457,848Total assets
    
    $
    866,482
    
    
    $
    938,275Partners CapitalPartners capital (deficit):General partner
    
    $
    (127,595
    )
    
    $
    (167,421
    )Limited partners
    
    
    994,077
    
    
    
    1,105,696Total partners capital
    
    $
    866,482
    
    
    $
    938,275
 The accompanying note are an integral part of these financial statements. 4




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##### 



IEA INCOME FUND X, L.P. 
 Condensed Statements of Operations (Unaudited) Three Months EndedMarch 31,
    
    
    March 31,2005
    
    
    2004Net lease revenue (notes 1 and 3)
    
    $
    32,177
    
    
    $
    71,545Other operating income (expenses):Depreciation
    
    
    (32,750
    )
    
    
    (83,232
    )Other general and administrative expenses
    
    
    (14,803
    )
    
    
    (16,035
    )Net gain on disposal of equipment
    
    
    43,037
    
    
    
    4,470(4,516
    )
    
    
    98,797Income (loss) from operations
    
    
    27,661
    
    
    
    (23,252
    )Other income:Interest income
    
    
    1,635
    
    
    
    194Net income (loss)
    
    $
    29,296
    
    
    $
    (23,058
    )Allocation of net income (loss):General partner
    
    $
    42,899
    
    
    $
    4,195Limited partners
    
    
    (13,603
    )
    
    
    (27,253
    )$
    29,296
    
    
    $
    (23,058
    )Limited partners per unit share of net income (loss)
    
    $
    (0.35
    )
    
    $
    (0.70
    )
 The accompanying note are an integral part of these financial statements. 5




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IEA INCOME FUND X, L.P. 
 Condensed Statements of Cash Flows (Unaudited) Three Months EndedMarch 31,
    
    
    March 31,2005
    
    
    2004Net cash provided by operating activities
    
    $
    21,868
    
    
    $
    53,401Cash flows provided by investing activities:Proceeds from sale of container rental equipment
    
    
    58,154
    
    
    
    40,663Payment received from sales-type lease for sale of rental equipment
    
    
    23,308
    
    
    
    81,462
    
    
    
    40,663Cash flows used in financing activities:Distribution to general partner
    
    
    (3,073
    )
    
    
    (3,322
    )Distribution to limited partners
    
    
    (98,016
    )
    
    
    (122,520
    )Total distribution to partners
    
    
    (101,090
    )
    
    
    (125,842
    )Net increase (decrease) in cash and cash equivalents
    
    
    2,240
    
    
    
    (31,778
    )Cash and cash equivalents at January 1
    
    
    341,723
    
    
    
    339,147Cash and cash equivalents at March 31
    
    $
    343,963
    
    
    $
    307,369
 The accompanying note are an integral part of these financial statements. 6




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IEA INCOME FUND X, L.P. 
 Notes to Unaudited Condensed Financial Statements  (1)
    Summary of Significant Accounting Policies  (a)
    Nature of OperationsIEA Income Fund X, L.P. (the Partnership) is a limited partnership organized under the
laws of the State of California on July 18, 1989 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 17, 1990, when the minimum subscription
proceeds of $1,000,000 were obtained. The Partnership offered 40,000 units of limited
partnership interest at $500 per unit, or $20,000,000. The offering terminated on October
30, 1990, at which time 39,206 limited partnership units had been sold.The decision to dispose of containers is influenced by various factors including age,
condition, suitability for continued leasing as well as the geographical location when
disposed. At that time whereby the Partnerships fleet size is reduced to approximately 20%
of its original fleet size, the Partnership expects to enter the final phase of its
liquidation and wind-up stage of operations. At March 31, 2005 the Partnerships fleet
size measured approximately 23% its original fleet size. Within the next twelve months,
the Partnership is expected to enter the final phase of its liquidation and wind-up stage
of operations by disposing of its remaining fleet and focusing on the collection of its
lease receivables, a component of net lease receivables. The Partnership will thereafter
undertake a final distribution to its partners, then cancel the Certificate of Limited
Partnership, thus terminating and dissolving the Partnership.(b)
    Leasing Company and Leasing Agent AgreementPursuant to the Limited Partnership Agreement of the Partnership, all authority to
administer the business of the Partnership is vested in CCC. A Leasing Agent Agreement
exists between CCC 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. (Continued) 7




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IEA INCOME FUND X, L.P. Notes to Unaudited Condensed Financial Statements  (b)
    Leasing Company and Leasing Agent AgreementThe 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 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. (Continued) 8




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IEA INCOME FUND X, L.P. Notes to Unaudited Condensed Financial Statements  (e)
    Container Rental EquipmentIn 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-month periods ended March
31, 2005 and 2004.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.(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 persons
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 an amount equal to the deficit
balance in its capital account at the time of such liquidation, 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 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. (Continued) 9




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IEA INCOME FUND X, L.P. Notes to Unaudited Condensed Financial Statements  (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 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 March 31, 2005 and December 31, 2004 were as follows: March 31,
    
    
    December 31,2005
    
    
    2004Gross lease receivables
    
    $
    118,074
    
    
    $
    104,822Sales-type lease receivable (net of unearned income)
    
    
    89,232
    
    
    
    112,539207,306
    
    
    
    217,361Less:Direct: operating payables and accrued expenses
    
    
    52,227
    
    
    
    55,245Base management fees payable
    
    
    5,097
    
    
    
    5,336Reimbursed administrative expenses
    
    
    1,743
    
    
    
    2,073Allowance for doubtful accounts
    
    
    14,347
    
    
    
    78,657Net lease receivables
    
    $
    133,892
    
    
    $
    138,704
 On 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 632 on-hire containers that
were subject to the amended term lease agreement. At March 31, 2005, the minimum future lease
rentals under this direct financing lease, net of unearned income are: Unearned
    
    
    Net Minimum FutureGross Sales-Type
    
    
    Sales-Type Lease
    
    
    Sales-Type LeaseLease Receivable

    
    
    Income
    
    
    Rentals2005
    
    $
    69,025
    
    
    $
    2,783
    
    
    $
    66,2422006
    
    
    23,222
    
    
    
    232
    
    
    
    22,990Total
    
    $
    92,247
    
    
    $
    3,015
    
    
    $
    89,232
 10




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IEA INCOME FUND X, L.P. Notes to Unaudited Condensed Financial Statements  (3)
    Net Lease RevenueNet lease revenue is determined by deducting direct operating expenses, base management
fees and reimbursed administrative expenses to CCC 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-month periods ended March 31, 2005 and 2004 was
as follows: Three Months EndedMarch 31,
    
    
    March 31,2005
    
    
    2004Rental revenue (note 4)
    
    $
    52,514
    
    
    $
    101,745Interest income from sales-type lease
    
    
    1,610
    
    
    
    54,124
    
    
    
    101,745Less:Rental equipment operating expenses
    
    
    10,696
    
    
    
    16,257Base management fees
    
    
    5,362
    
    
    
    7,197Reimbursed administrative expensesSalaries
    
    
    4,045
    
    
    
    4,836Other payroll related expenses
    
    
    790
    
    
    
    430General and administrative expenses
    
    
    1,054
    
    
    
    1,48021,947
    
    
    
    30,200Net lease revenue
    
    $
    32,177
    
    
    $
    71,545
  (4)
    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 containers used by its customers in global
trade routes. As of March 31, 2005, the Partnership operated 1,082 twenty-foot, 195 forty-foot
and 10 forty-foot high-cube marine dry cargo containers.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. 11




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations The following discussion of the Partnerships historical financial condition and results of
operations should be read in conjunction with the Partnerships December 31, 2004 Annual Report on
Form 10-K and the financial statements and the notes thereto appearing elsewhere in this report. Market Overview The Partnerships operating results for the first quarter of 2005 improved over the
corresponding period in 2004, as market conditions were favorable in comparison to those that
existed during the three months ended March 31, 2004, and consistent with those that existed at the
end of 2004. The first quarter 2005 results were contrary to historical trends, whereby
container-leasing companies have traditionally experienced reductions in demand during the first
quarter of the year, as shipping lines reduce their activity during the Lunar New Year holiday. As
a result, the Partnerships dry cargo container utilization remained at a historically high level,
measuring 96% at March 31, 2005, compared to 97% at December 31, 2004. Also contributing to the
Partnerships high levels of utilization and favorable performance was the continued disposal of
the Partnerships off-hire containers, in accordance with its objective to wind-up its operations
and thus terminate and dissolve the Partnership within the next twelve months. Although conditions for the container leasing market were favorable during the first quarter
of 2005, global economic reports for this period indicate that, with the exception of China,
consumer spending and economic growth rates have declined from the robust levels experienced in
Europe, the US and many of the other developed countries during 2004. The decline in these
economic growth rates are a direct result of rising fuel costs, combined with a generally weak US
dollar, a soaring US trade deficit, higher interest rates and Europes languishing economies.
Economists opinions vary as to whether the recent declines in these growth rates during the first
quarter of 2005 are temporary or an indicator of slower global economic growth for the remainder of
2005. CCC and the Leasing Company do not expect a significant decline in the Partnerships
utilization rates in the near future. However, further declines in these economic growth rates
during 2005 may contribute to a weakening in container leasing market conditions and lower levels
of demand for new and existing containers. In the long term, industry experts believe the future
of the container shipping industry is favorable, as the level of outsourcing to China and other
parts of Asia increase, previously restrictive trade agreements expire, new trade agreements are
negotiated, and China enters global markets in which it previously played a small role. The price of a new dry cargo container increased from $2,200 at the end of 2004 to
approximately $2,250 at the end of March 2005, as the demand for new containers remained strong and
the cost of container raw materials such as steel and wood flooring remained at high levels.
Manufacturers indicate that there is unlikely to be a major reduction in the price of new
containers in the near term due to the increase in raw material prices. Although container prices
may fluctuate over the remainder of 2005, the long-term outlook for container prices continues to
show an inflationary bias tied to energy costs, steel prices and interest rates. These higher
prices have forced some shipping lines, as well as leasing companies, to reconsider capital
expenditure levels for new container investment during the 2005 year. A reduction in new container
capital expenditures by the shipping lines could result in the shipping lines leasing more
containers from the leasing companies, including the Partnerships containers. Ports, railroads and inland transportation systems, particularly in the US and Europe,
continue to experience congestion arising from the higher trade volumes experienced in recent
years, thereby, increasing the turnaround time for containerships and reducing the available supply
of containers. Port congestion in many locations has been attributable to underestimating the
growth in containerized cargo activity over the last few years, delays in expanding existing
facilities and in planning new facilities due to environmental concerns, and the implementation of
larger containerships. Expansion of the worlds ports and terminals is considered to be the key to
relieving the congestion currently experienced, as further efficiency gains are not expected to
create significant increases in port and terminal capacity. During the three-month period ending March 31, 2005, inventory levels of off-hire containers
remained at low levels, as shipping lines employed a larger quantity of leased containers to meet
their containerized cargo requirements. The declines in inventory levels have resulted in
substantial decreases in storage and other inventory related operating expenses. A significant
increase in container inventories in future periods may contribute to increases in storage expenses
and expenditures to reposition containers from low demand locations to locations of higher demand.
The Leasing Company has not undertaken any major repositioning of the Partnerships containers
since the first quarter of 2004, due primarily to the shortage of containership capacity. If
suitable carriers can be sourced, the Leasing Company will reposition off-hire containers from the
US East Coast during 2005, thereby taking advantage of the strong demand for containers in the
Asian trade routes. This repositioning may 12




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##### 



include the Partnerships containers. The objective of
each repositioning is to improve future cash flows so that savings in storage expense, combined with an increase in future lease revenue, exceed the cost of repositioning the containers. Sales proceeds realized on the sale of used containers remained favorable during the first
quarter of 2005, as fewer containers were available to meet the demand of buyers. A significant
increase in inventory levels in future periods could adversely impact sales proceeds realized on
the sale of containers. The Leasing Company, on behalf of the Partnership, may consider the
disposal of the Partnerships off-hire containers in locations whereby container sale prices equal
or exceed targets established by both CCC and the Leasing Company. The Partnerships average dry cargo container per-diem rate for the three-month period ending
March 31, 2005 increased approximately 1% in comparison to the same period in the prior year.
Per-diem rates for older containers are expected to maintain their current level for the remainder
of 2005. Although favorable market conditions currently exist for container lessors, recent declines in
spending and economic growth rates may negatively impact the shipping lines in future periods.
Sharply rising and volatile oil prices, combined with the increase in charter rates for ships,
chronic port congestion, higher steel prices and the related increase in new container prices, have
created a concern for both the shipping lines and, therefore, the leasing companies. Although the
majority of the top 20 shipping lines have experienced strong profit growth during 2004, other
shipping lines are facing increased financial pressures, especially those shipping lines that rely
on operating their containerships via short-term charters. Current conditions appear to favor the
larger more established shipping lines, which have witnessed increases in freight rates due to the
strong demand experienced in their respective trade routes. However, some regional intra-Asian
shipping lines have struggled to remain profitable, due primarily to the rising charter rates for
ships, over capacity and lower freight rates, and have cut back services in certain routes in an
attempt to reduce rising costs. The increased trade volumes of recent years have contributed to shortages of both
containerships and tonnage capacity. As a result, shipping lines have embarked on a major new
shipbuilding program. Industry analysts are expressing concern that the current program of new
shipbuilding may create over capacity within the shipping industry once the new container ships
scheduled for delivery during 2006 and 2007 are placed in service. Based on current orders,
industry analysts predict that the worlds containership fleet will exceed 10 million TEU by the
end of 2007, compared to less than 7 million TEU at the beginning of 2004. Over capacity may
contribute to lower charter and freight rates as shippers take advantage of the capacity surplus
created by the additional container ships. These changes may result in a reduction in
profitability for shipping lines, which in turn could have adverse implications for container
lessors, including a decline in the demand for leased containers and a reduction in container
per-diem rental rates. The financial impact of losses from shipping lines may eventually influence
the demand for leased containers, as some shipping lines may experience additional financial
difficulties, consolidate, or become insolvent. The Partnership, CCC and the Leasing Company
continue to monitor the aging of lease receivables, collections and the credit exposure to various
existing and new customers. Results of Operations Pursuant to the Limited Partnership Agreement of the Partnership, all authority to administer
the business of the Partnership is vested in CCC. A Leasing Agent Agreement exists between CCC 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. The primary component
of the Partnership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
gross lease revenues billed by the Leasing Company from the leasing of the Partnerships
containers. Net lease revenue is directly related to the size, utilization and per-diem rental
rates of the Partnerships fleet. Direct operating expenses are direct costs associated with the
Partnerships containers. Direct operating expenses may be categorized as follows:  
    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. 13




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At March 31, 2005, approximately 23% of the original equipment remained in the Partnerships
fleet, as compared to approximately 25% at December 31, 2004. The following table summarizes the
composition of the Partnerships fleet (based on container type) at March 31, 2005. 40-Foot20-Foot
    
    
    40-Foot
    
    
    High-CubeContainers on lease:Master lease
    
    
    278
    
    
    
    38
    
    
    
    8Term leaseShort term1
    
    
    159
    
    
    
    73
    
    
    
    1Long term2
    
    
    55
    
    
    
    12
    
    
    
    Sales-type lease
    
    
    543
    
    
    
    66
    
    
    
    Subtotal
    
    
    1,035
    
    
    
    189
    
    
    
    9Containers off lease
    
    
    47
    
    
    
    6
    
    
    
    1Total container fleet
    
    
    1,082
    
    
    
    195
    
    
    
    10
 40-Foot20-Foot
    
    
    40-Foot
    
    
    High-CubeUnits
    
    
    %
    
    
    Units
    
    
    %
    
    
    Units
    
    
    %Total purchases
    
    
    4,000
    
    
    
    100
    %
    
    
    1,150
    
    
    
    100
    %
    
    
    100
    
    
    
    100
    %Less disposals
    
    
    2,918
    
    
    
    73
    %
    
    
    955
    
    
    
    83
    %
    
    
    90
    
    
    
    90
    %Remaining fleet at March 31, 2005
    
    
    1,082
    
    
    
    27
    %
    
    
    195
    
    
    
    17
    %
    
    
    10
    
    
    
    10
    %
   1.
    
    Short-term leases represent term leases that are either scheduled for renegotiation or
that may expire on or before March 31, 2006.2.
    
    Long-term leases represent term leases, the majority of which will expire between April
2006 and December 2008. Within the next twelve months, the Partnership is expected to enter the final phase of
its liquidation and wind-up stage of operations by disposing of its remaining fleet and focusing on
the collection of its lease receivables, a component of net lease receivables. The Partnership
will thereafter undertake a final distribution to its partners, then cancel the Certificate of
Limited Partnership, thus terminating and dissolving the Partnership. Three Months Ended March 31, 2005 Compared to the Three Months Ended March 31, 2004 Net lease revenuewas $32,177 for the three months ended March 31, 2005, compared to $71,545
for the same period in the prior year. The decrease was primarily due to a $49,231 decline in
gross rental revenue (a component of net lease revenue). Gross rental revenue was impacted by the
Partnerships smaller fleet size, partially offset by a 1% increase in the average per-diem rental
rates, as well as an increase in fleet utilization rates when compared to the same three-month
period in the prior year. The Partnerships average fleet size and utilization rates for the
three-month periods ended March 31, 2005 and 2004 were as follows: Three Months EndedMarch 31,
    
    March 31,2005
    
    2004Average fleet size (measured in twenty-foot equivalent units (TEU))
    
    
    1,546
    
    
    
    1,934Average utilization
    
    
    97
    %
    
    
    92
    %
 A $5,561 decrease in direct operating expenses was attributable to the Partnerships
higher fleet utilization rates and its impact of inventory-related expenses such as storage and
handling, as well as a decrease in the provision for doubtful accounts. Other components of net
lease revenue, including management fees, and reimbursed administrative expenses, were lower by a
combined $2,692 when compared to the same period in 2004. This decline was attributable to the
Partnerships smaller fleet size. Depreciation expenseof $32,750 for the three months ended March 31, 2005 declined by $50,482
when compared to the corresponding period in 2004, a direct result of the Partnerships aging and
declining fleet size. 14




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##### 



Other general and administrative expensesamounted to $14,803 for the three month period ended
March 31, 2005, a decrease of $1,232 or 8% when compared to the same period in 2004. Net gain on disposal of equipmentfor the three months ended March 31, 2005 was $43,037, as
compared to a net gain of $4,470 for the corresponding period in 2004. The Partnership disposed of
84 containers, as compared to 51 containers during the same three-month period in 2004. The
Partnership believes that the net gain or container disposals in the three-month period ended March
31, 2005, was a result of various factors, including the volume of disposed containers, the age,
condition, suitability for continued leasing, as well as the geographical location of the
containers when disposed. These factors will continue to influence the amount of sales proceeds
received and the related gain or loss on container disposals. The level of the Partnerships container disposals in subsequent periods, as well as the price
of steel, new container prices and the current leasing markets impact on sales prices for existing
older containers such as those owned by the Partnership, 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 March 31, 2005 and 2004. Liquidity and Capital Resources During the Partnerships first 10 years of operations, the Partnerships primary objective was
to generate cash flow from operations for distribution to its limited partners. Aside from the
initial working capital reserve retained from the gross subscription proceeds (equal to
approximately 1% of such proceeds), the Partnership relied primarily on container rental receipts
to meet this objective as well as to finance current operating needs. No credit lines are
maintained to finance working capital. Commencing in 2001, the Partnerships 11th year of
operations, the Partnership began focusing its attention on the disposition of its fleet in
accordance with another of its original investment objectives, realizing the residual value of its
containers after the expiration of their economic useful lives, estimated to be between 12 to 15
years after placement in leased service. Since that time, the Partnership has been actively
disposing of its fleet, while cash proceeds from equipment disposals, in addition to cash from
operations, will provide the cash flow for distributions to the limited partners. The decision to
dispose of containers is influenced by various factors including age, condition, suitability for
continued leasing as well as the geographical location when disposed. At that time whereby the
Partnerships fleet size is reduced to approximately 20% of its original fleet size, the
Partnership expects to enter the final phase of its liquidation and wind-up stage of operations.
At March 31, 2005, the Partnerships fleet size measured approximately 23% of its original fleet
size. Within the next twelve months, the Partnership is expected to enter the final phase of its
liquidation and wind-up stage of operations by disposing of its remaining fleet and focusing on the
collection of its lease receivables, a component of net lease receivables. The Partnership will
thereafter undertake a final distribution to its partners, then cancel the Certificate of Limited
Partnership, thus terminating and dissolving the Partnership. Upon the liquidation of CCCs
interest in the Partnership, CCC shall contribute to the Partnership an aggregate amount equal to
the deficit balance in its capital account at the time of such liquidation, after giving effect to
the allocation of income or loss arising from the liquidation of the Partnerships assets. Distributions to the partners are determined and paid quarterly, based primarily on each
quarters cash flow from operations and cash generated from container sales. Quarterly
distributions are also affected by periodic increases or decreases to working capital reserves, as
deemed appropriate by the general partner. Sales proceeds distributed to its partners may
fluctuate in subsequent periods, reflecting the level of container disposals. At March 31, 2005, the Partnership had $343,963 in cash and cash equivalents, an increase of
$2,240 from the cash balances at December 31, 2004. The Partnership invests its working capital,
as well as cash flows from operations and the sale of containers that have not yet been distributed
to CCC or its limited partners, in money market funds. At March, 31, 2005, the Partnership had an
additional $45,000 as part of its working capital for expenses related to its final liquidation and
subsequent dissolution. Cash from Operating Activities: Net cash provided by operating activities, primarily generated
from the billing and collection of net lease revenue, was $21,868 during the three months ended
March 31, 2005, compared to $53,401 for the same three month period in 2004. Cash from Investing Activities: Net cash provided by investing activities was $81,462 during
the three months ended March 31, 2005, compared to $53,401 in the corresponding period of 2004.
These amounts represent sales proceeds generated from the sale of container equipment and payment received from the sales-type lease
for the sale of rental equipment. 15




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##### 



Cash from Financing Activities: Net cash used in financing activities was $101,090 during the three
months ended March 31, 2005 compared to $125,842 during the three months ended March 31, 2005.
These amounts represent distributions to the Partnerships general and limited partners. The
Partnerships continuing container disposals should produce lower operating results, and
consequently, lower distributions to its partners in subsequent periods. Critical Accounting Policies The Partnerships accounting policies are fundamental to understanding managements discussion and
analysis of results of operations and financial condition. The Partnership has identified three
policies as being significant because they require the Partnership to make subjective and/or
complex judgments about matters that are inherently uncertain. These policies include the
following:  
    Container equipment  depreciable lives
    Container equipment  valuation
    Allowance for doubtful accounts The Partnership, in consultation with its audit committee, has reviewed and approved these
significant accounting policies which are further described in the Partnerships 2004 Annual Report
on Form 10-K. Inflation The Partnership 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 Partnership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 non-US dollar direct operating expenses, the
majority are individually small, unpredictable and incurred in various denominations. Thus, the
Leasing Company determined such amounts are not suitable for cost effective hedging. As exchange
rates are outside of the control of the Partnership and Leasing Company, there can be no assurance
that such fluctuations will not adversely affect the Partnerships results of operations and
financial condition. 
 Item 4. Controls and Procedures The principal executive and principal financial officers of CCC have evaluated the disclosure
controls and procedures of the Partnership as of the end of the period covered by this quarterly
report. As used herein, the term disclosure controls and procedures has the meaning given to the
term by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (Exchange Act), and
includes the controls and other procedures of the Partnership that are designed to ensure that
information required to be disclosed by the Partnership 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 Partnerships disclosure controls and
procedures were effective such that the information required to be disclosed by the Partnership 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 quarterly report and is accumulated
and communicated to CCCs management, including CCCs principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding required disclosures. There have been no significant changes in the Partnerships internal controls or in other factors
that could significantly affect the Partnerships internal controls subsequent to the evaluation
described above conducted by CCCs principal executive and financial officers. 16




---



##### 



PART II  OTHER INFORMATION 
 Item 1. Legal Proceedings Not applicable. 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Not applicable. 
 Item 3. Defaults Upon Senior Securities Not applicable. 
 Item 4. Submissions of Matters to a Vote of Securities Holders Not applicable. 
 Item 5. Other Information Not applicable. 
 Item 6. Exhibits  (a)
    Exhibits ExhibitNo
    
    Description
    
    Method of Filing3(a)
    
    
    Limited Partnership Agreement, amended and
restated as of November 7, 1989
    
    *3(b)
    
    
    Certificate of Limited Partnership
    
    **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 November
7, 1989, included as part of Registration Statement on Form S-1 (No. 33-30245)**
    
    Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No.
33-30245)***
    
    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. 17




---



##### 



SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Partnership has
duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. IEA INCOME FUND X, 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 CCCDate: May 13, 2005
 18




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##### 



EXHIBIT INDEX ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement, amended and
restated as of November 7, 1989
    
    *3(b)
    
    Certificate of Limited Partnership
    
    **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 November
7, 1989, included as part of Registration Statement on Form S-1 (No. 33-30245)**
    
    Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No.
33-30245)***
    
    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. 19