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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, 2004OR[   ]
    
    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 [X]. No [   ]. Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [   ]. No [X].




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IEA INCOME FUND X, L.P. Report on Form 10-Q for the Quarterly Period
Ended September 30, 2004 TABLE OF CONTENTS PAGEPART I  FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Balance Sheets  September 30, 2004 and December 31, 2003 (unaudited)
    
    
    4Condensed Statements of Operations for the three and nine months ended September 30, 2004 and 2003 (unaudited)
    
    
    5Condensed Statements of Cash Flows for the nine months ended September 30, 2004 and 2003 (unaudited)
    
    
    6Notes to Condensed Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 4. Controls and Procedures
    
    
    15PART II  OTHER INFORMATION
    
    
    16Item 1. Legal Proceedings
    
    
    16Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    16Item 3. Defaults Upon Senior Securities
    
    
    16Item 4. Submissions of Matters to a Vote of Securities Holders
    
    
    16Item 5. Other Information
    
    
    16Item 6. Exhibits and Reports on Form 8-K
    
    
    16EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
  2




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PART I  FINANCIAL INFORMATION 
 Item 1. Financial Statements  Presented herein are the Registrants condensed balance sheets as of
September 30, 2004 and December 31, 2003, condensed statements of
operations for the three and nine months ended September 30, 2004 and
2003, and condensed statements of cash flows for the nine months ended
September 30, 2004 and 2003, (collectively the Financial Statements)
prepared by the Registrant 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 Registrant 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
Registrants December 31, 2003 Annual Report on Form 10-K. These
Financial Statements reflect, in the opinion of the Registrant and Cronos
Capital Corp., 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
Registrant with respect to future events and financial performance and
are subject to a number of risks and uncertainties, many of which are
beyond the Registrant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 Registrants strategy, future
operations, financial position, estimated revenues, projected costs,
prospects, plans and objectives of the Registrant 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
Registrant 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 Registrant believes that its
plans, intentions and expectations reflected in or suggested by the
forward-looking statements made in this report are reasonable, the
Registrant 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) September 30,
    
    December 31,2004
    
    2003AssetsCurrent assets:Cash and cash equivalents, includes $313,673 at September 30, 2004
and $297,175 at December 31, 2003 in interest-bearing accounts
    
    $
    336,737
    
    
    $
    339,147Net lease receivables due from Leasing Company
(notes 1 and 2)
    
    
    37,192
    
    
    
    30,370Total current assets
    
    
    373,929
    
    
    
    369,517Container rental equipment, at cost
    
    
    4,520,712
    
    
    
    5,288,827Less accumulated depreciation
    
    
    (3,720,456
    )
    
    
    (4,111,379
    )Net container rental equipment
    
    
    800,256
    
    
    
    1,177,448Total assets
    
    $
    1,174,185
    
    
    $
    1,546,965Partners CapitalPartners capital (deficit):General partner
    
    $
    (146,548
    )
    
    $
    (153,080
    )Limited partners
    
    
    1,320,733
    
    
    
    1,700,045Total partners capital
    
    $
    1,174,185
    
    
    $
    1,546,965
 The accompanying notes 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 Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,
    
    September 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003Net lease revenue (notes 1 and 3)
    
    $
    72,056
    
    
    $
    73,791
    
    
    $
    215,644
    
    
    $
    224,795Other operating income (expenses):Depreciation
    
    
    (72,157
    )
    
    
    (93,107
    )
    
    
    (233,827
    )
    
    
    (294,956
    )Other general and administrative expenses
    
    
    (13,197
    )
    
    
    (14,465
    )
    
    
    (44,054
    )
    
    
    (43,033
    )Net gain (loss) on disposal of equipment
    
    
    4,481
    
    
    
    (19,187
    )
    
    
    16,616
    
    
    
    (50,854
    )Loss from operations
    
    
    (8,817
    )
    
    
    (52,968
    )
    
    
    (45,621
    )
    
    
    (164,048
    )Other income:Interest income
    
    
    484
    
    
    
    268
    
    
    
    863
    
    
    
    1,314Net loss
    
    $
    (8,333
    )
    
    $
    (52,700
    )
    
    $
    (44,758
    )
    
    $
    (162,734
    )Allocation of net loss:General partner
    
    $
    4,353
    
    
    $
    (527
    )
    
    $
    16,002
    
    
    $
    (1,627
    )Limited partners
    
    
    (12,686
    )
    
    
    (52,173
    )
    
    
    (60,760
    )
    
    
    (161,107
    )$
    (8,333
    )
    
    $
    (52,700
    )
    
    $
    (44,758
    )
    
    $
    (162,734
    )Limited partners per unit share of net loss
    
    $
    (0.32
    )
    
    $
    (1.33
    )
    
    $
    (1.55
    )
    
    $
    (4.11
    )
 The accompanying notes 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) Nine Months EndedSeptember 30,
    
    September 30,2004
    
    2003Net cash provided by operating activities
    
    $
    158,593
    
    
    $
    179,954Cash flows provided by investing activities:Proceeds from sale of container rental equipment
    
    
    167,020
    
    
    
    202,823Cash flows used in financing activities:Distribution to general partners
    
    
    (9,470
    )
    
    
    (12,546
    )Distribution to limited partners
    
    
    (318,552
    )
    
    
    (416,569
    )(328,022
    )
    
    
    (429,115
    )Net decrease in cash and cash equivalents
    
    
    (2,409
    )
    
    
    (46,338
    )Cash and cash equivalents at the beginning of the period
    
    
    339,147
    
    
    
    404,368Cash and cash equivalents at the end of the period
    
    $
    336,738
    
    
    $
    358,030
 The accompanying notes 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. 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, 2010, unless sooner terminated upon the occurrence of certain
events.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.During 2004, the Partnership has continued to actively dispose of its
fleet, while cash proceeds from equipment disposals, in addition to cash
from operations, have provided 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 Registrants fleet size is reduced to approximately 20% of
its original fleet size, the Registrant expects to enter the final phase
of its liquidation and wind-up stage of operations. At December 31,
2004, the Registrants fleet size measured approximately 26% of its
original fleet size.(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 Agreement (continued)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. 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.(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)
    
    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 and nine-month periods ended September 30, 2004 and 2003.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 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. (Continued) 8




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IEA INCOME FUND X, L.P. Notes to Unaudited Condensed Financial Statements  (e)
    
    Use of Estimates (continued)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 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.(f)
    
    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
Registrant 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, 2003 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 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, 2004 and December 31, 2003 were as follows: September 30,
    
    December 31,2004
    
    2003Gross lease receivables
    
    $
    110,069
    
    
    $
    103,511Less:Direct operating payables and accrued expenses
    
    
    50,026
    
    
    
    47,198Damage protection reserve
    
    
    1,500
    
    
    
    3,547Base management fees payable
    
    
    5,826
    
    
    
    5,989Reimbursed administrative expenses
    
    
    2,096
    
    
    
    2,296Allowance for doubtful accounts
    
    
    13,429
    
    
    
    14,111Net lease receivables
    
    $
    37,192
    
    
    $
    30,370
 (Continued) 9




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IEA INCOME FUND X, L.P. Notes to Unaudited Condensed Financial Statements (3) Net Lease Revenue  Net lease revenue is determined by deducting direct operating expenses,
base management fees and reimbursed administrative expenses to CCC 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, 2004 and 2003 was as
follows: Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,
    
    September 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003Rental revenue (note 4)
    
    $
    93,749
    
    
    $
    106,812
    
    
    $
    294,369
    
    
    $
    337,007Less:Rental equipment operating expenses
    
    
    8,923
    
    
    
    18,714
    
    
    
    38,623
    
    
    
    65,805Base management fees
    
    
    6,488
    
    
    
    7,347
    
    
    
    20,477
    
    
    
    23,317Reimbursed administrative expenses
    
    
    6,282
    
    
    
    6,960
    
    
    
    19,625
    
    
    
    23,090Net lease revenue
    
    $
    72,056
    
    
    $
    73,791
    
    
    $
    215,644
    
    
    $
    224,795
 (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. The Leasing Company 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 dry cargo containers used by its
customers in global trade routes. As of September 30, 2004, the Partnership
operated 1,175 twenty-foot, 234 forty-foot and 13 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. 10




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations The following discussion of the Registrants historical financial condition and
results of operations should be read in conjunction with the Registrants
December 31, 2003 Annual Report on Form 10-K and the financial statements and
the notes thereto appearing elsewhere in this report. General Pursuant to the Limited Partnership Agreement of the Registrant, all authority
to administer the business of the Registrant 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 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. During 2004, the Registrant has continued to actively dispose of
its fleet, while cash proceeds from equipment disposals, in addition to cash
from operations, have provided 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 Registrants
fleet size is reduced to approximately 20% of its original fleet size, the
Registrant expects to enter the final phase of its liquidation and wind-up
stage of operations. At September 30, 2004, 26% of the original equipment
remained in the Registrants fleet, as compared to 30% at December 31, 2003.
The following chart summarizes the composition of the Registrants fleet (based
on container type) at September 30, 2004. 40-Foot20-Foot
    
    40-Foot
    
    High-CubeContainers on lease:Term leases
    
    
    820
    
    
    
    178
    
    
    
    1Master leases
    
    
    319
    
    
    
    47
    
    
    
    11Subtotal
    
    
    1,139
    
    
    
    225
    
    
    
    12Containers off lease
    
    
    36
    
    
    
    9
    
    
    
    1Total container fleet
    
    
    1,175
    
    
    
    234
    
    
    
    13
 40-Foot20-Foot
    
    40-Foot
    
    High-CubeUnits
    
    %
    
    Units
    
    %
    
    Units
    
    %Total purchases
    
    
    4,000
    
    
    
    100
    %
    
    
    1,150
    
    
    
    100
    %
    
    
    100
    
    
    
    100
    %Less disposals
    
    
    2,825
    
    
    
    71
    %
    
    
    916
    
    
    
    80
    %
    
    
    87
    
    
    
    87
    %Remaining fleet at September 30, 2004
    
    
    1,175
    
    
    
    29
    %
    
    
    234
    
    
    
    20
    %
    
    
    13
    
    
    
    13
    %
 The general increase in trade volumes that emerged during the nine-month period
ending September 30, 2004, contributed to stronger container leasing market
conditions and higher levels of demand for new and existing containers. The
Registrants dry cargo container utilization measured 97% at September 30,
2004, compared to 92% at December 31, 2003. The nine-month period ending September 30, 2004 experienced substantial growth
in container trade volumes, especially within Asia-Europe and intra-Asian trade
routes. Chinas import and export markets were a catalyst to this growth, in
addition to low global interest rates and improved investor and consumer
confidence. These increases in trade volumes placed additional burdens on the
worlds ports and railroads, contributing to congestion and additional demand
in some locations. 11




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Although container manufacturers stepped up production in the first half of
2004 in order to meet the increased container demand by shipping lines,
production of new containers was hampered somewhat by steel shortages earlier
in the year, contributing to stronger market conditions for leased containers.
As steel prices increased during 2004, along with the price of other materials
including wood flooring, the cost of a new twenty-foot dry cargo container also
increased, from $1,350 during the latter part of 2003, to as high as $2,000
during the middle of 2004, an amount higher than at any time since 1995, the
last time container prices peaked. As a result of the current level of demand
for new container equipment, a significant reduction in the price of new
containers is unlikely in the near future, and potentially may contribute to
further price increases. The major container manufacturers report full order
books through the first calendar quarter of 2005. Off-hire inventories of older containers throughout the world declined, as
shipping lines employed more leased containers to meet their increasing
container requirements arising from the robust growth in containerized trade
and the acceptance of new, larger containerships. This decline in inventories
has resulted in substantial decreases in storage expenses and expenditures to
reposition containers from low demand locations to locations of higher demand.
Declining inventories have also contributed to an increase in proceeds per
container realized on the sale of used containers, as fewer containers were
available to meet the demand of buyers of existing containers. The
Registrants dry cargo inventory of off-hire containers at September 30, 2004
decreased approximately 75% in comparison to September 30, 2003. Per-diem rates for new containers increased in line with the increase in new
container costs, while per-diem rates for older containers experienced none to
modest increases, as the lease market for older containers remains competitive,
and therefore, subject to significant pricing pressures. Slight increases in
the per-diem rates for older containers may be expected over the next 12
months. The Registrants average dry cargo container per-diem rate for the
three-month period ended September 30, 2004 increased approximately 1% in
comparison to the same period in the prior year, while the comparison for the
nine-month period ended September 30, 2004 to the same period in the prior year
remained unchanged. Although favorable market conditions currently exist for container lessors,
current market conditions may negatively impact the shipping lines. Sharply
rising oil prices, combined with the increase in charter rates for ships, 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 the last 12 months, 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, most regional intra-Asian shipping lines have struggled to
remain profitable, due primarily to the rising charter rates for ships, over
capcity and lower freight rates, and have cut back services in some routes in
an attempt to reduce rising costs. The Registrant, CCC and the Leasing Company
remain cautious, and continue to monitor the aging of lease receivables,
collections and the credit exposure to various existing and new customers. The
financial impact of losses from these shipping lines may eventually influence
the demand for leased containers, as some shipping lines may experience
additional financial difficulties, consolidate, or become insolvent. Industry analysts are expressing concern that the current program of new ship
building may create over capacity within the shipping industry once the new
container ships are delivered. Any over capacity could result in a reduction
in profitability for shipping lines which in turn could have adverse
implications for container lessors. Lastly, wide-ranging concerns remain regarding the worlds major economies,
including the price of oil and its impact on economic growth and the related
growth of containerized trade volumes, inflation concerns and its impact on
interest rates, US trade and budget deficits, Chinas efforts to cool its
economy, performance of global stock markets, geopolitical concerns arising
from uncertainties within the Middle East and Asia, threats of another major
terrorist attack, as well as new container production levels, all of which may
have an impact on 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, 2004 and 2003 were as follows: Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,
    
    September 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003Average fleet size
(measured in
twenty-foot
equivalent units
(TEU))
    
    
    1,707
    
    
    
    2,186
    
    
    
    1,823
    
    
    
    2,308Average Utilization
    
    
    97
    %
    
    
    87
    %
    
    
    95
    %
    
    
    86
    %
 12




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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. Three Months Ended September 30, 2004 Compared to the Three Months Ended
September 30, 2003 Net lease revenueof $72,056 for the three months ended September 30, 2004 was
$1,735 lower than in the corresponding period of 2003. The decrease was due to
a $13,063 decline in gross rental revenue (a component of net lease revenue)
from the same period in 2003. Gross rental revenue was impacted by the
Registrants smaller fleet size, partially offset by higher utilization rates.
Other components of net lease revenue, including rental equipment operating
expenses, reimbursable administrative expenses and management fees, were lower
by a combined $11,328 when compared to the corresponding period in 2003,
paritally offsetting the decrease in gross lease revenue. Contributing to the
decline in rental equipment operating expenses were decreases in handling and
and storage costs, a direct result of higher utilization rates. Depreciation expenseof $72,157 for the three months ended September 30, 2004
was $20,950 lower than the same period in 2003, a direct result of the
Registrants aging and declining fleet size. Other general and administrative expenseswere $13,197 for the three months
ended September 30, 2004, a decrease of $1,268 or 9%, which did not materially
differ from the same period of the prior year. Net gain (loss) on disposal of equipmentwas a result of the Registrant
disposing of 61 containers during the three-month period ended September 30,
2004, as compared to 109 containers during the same period in 2003. These
disposals resulted in a net gain of $4,481 for the three-month period ended
September 30, 2004, as compared to a net loss of $19,187 for the three-month
period ended September 30, 2003. The Registrant believes that the net gain on
container disposals in the three-month period ended September 30, 2004 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 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, 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 Registrant, 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, 2004 and 2003. Nine Months Ended September 30, 2004 Compared to the Nine Months Ended
September 30, 2003 Net lease revenueof $215,644 for the nine months ended September 30, 2004 was
$9,151 lower than in the corresponding period of 2003. The decrease was due to
a $42,638 decline in gross rental revenue (a component of net lease revenue)
from the same period in 2003. Gross rental revenue was impacted by the
Registrants smaller fleet size for the nine-month period ended September 30,
2004, partially offset by higher utilization rates. Other components of net
lease revenue, including rental equipment operating expenses, reimbursable
administrative expenses and management fees, were lower by a combined $33,487
when compared to the corresponding period in 2003, partially offsetting the
decline in gross lease revenue. Contributing to the decline in rental
equipment operating expenses were declines in handling and storage costs,
primarily attributable to the Registrants reduction in fleet size and
favorable utilization levels. Depreciation expenseof $233,827 for the nine months ended September 30, 2004
was $61,129 lower than the same period in 2003, a direct result of the
Registrants aging and declining fleet size. Other general and administrative expenseswere $44,054 for the nine months
ended September 30, 2004, an increase of $1,021 or 2%, which did not materially
differ from the same period of the prior year. 13




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##### Table of Contents



Net gain (loss) on disposal of equipmentwas a result of the Registrant
disposing of 215 containers during the nine-month period ended September 30,
2004, as compared to 288 containers during the same period in 2003. These
disposals resulted in a gain of $16,616 for the nine-month period ended
September 30, 2003, as compared to a loss of $50,854 for the nine-month period
ended September 30, 2003. The Registrant believes that the net gain on
container disposals in the nine-month period ended September 30, 2004 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 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, 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 Registrant, 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, 2004 and 2003. Liquidity and Capital Resources Cash from Operating Activities:Net cash provided by operating activities was
$158,593 and $179,954 during the first nine months of 2004 and 2003,
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, 2004 and 2003, included
sales proceeds generated from the sale of rental equipment of $167,020 and
$202,823, respectively. Cash from Financing Activities:Net cash used in financing activities was
$328,022 during the first nine months of 2004 compared to $429,115 in the
corresponding period of 2003. These amounts represent distributions to the
Registrants general and limited partners. The Registrants continuing
container disposals should 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 The Registrants accounting policies are fundamental to understanding
managements discussion and analysis of results of operations and financial
condition. The Registrant has identified three policies as being significant
because they require the Registrant 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 Registrant has reviewed and approved these significant accounting policies
which are further described in the Registrants 2003 Annual Report on Form
10-K. Inflation The Registrant believes inflation has not had a material adverse effect on the
results of its operations. 14




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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. 
 Item 4. Controls and Procedures The principal executive and principal financial officers of CCC have evaluated
the disclosure controls and procedures of the Registrant as of the end of the
period covered by this 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 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 were effective such 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 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 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 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 and Reports on Form 8-K  (a)
    
    Exhibits ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement of the Registrant, amended
and restated as of November 7, 1989
    
    *3(b)
    
    Certificate of Limited Partnership of the Registrant
    
    **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***
  (b)
    
    Reports on Form 8-KNo reports on Form 8-K were filed by the Registrant during the quarter ended
September 30, 2004.   *
    
    Incorporated by reference to Exhibit A to the Prospectus of the
Registrant 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. 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 X, L.P.By
    Cronos Capital Corp.The General Partner By
    /s/ Dennis J. TietzDennis J. TietzPresident and Director of Cronos Capital Corp.
(CCC)
Principal Executive Officer of CCC By
    /s/ John KallasJohn KallasChief Financial Officer and
Director of Cronos Capital Corp. (CCC)
Principal Financial and Accounting Officer of CCC Date: November 12, 2004 17




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##### Table of Contents



EXHIBIT INDEX ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement of the Registrant, amended
and restated as of November 7, 1989
    
    *3(b)
    
    Certificate of Limited Partnership of the Registrant
    
    **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
Registrant 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. 18