<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

  [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
           ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].

                   For the fiscal year ended December 31, 1999

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

            For the transition period from____________ to___________.

                         Commission file number 0-16834

                              IEA INCOME FUND VII,
                        A California Limited Partnership
             (Exact name of registrant as specified in its charter)



            California                                     94-2966976
   (State or other jurisdiction             (I.R.S. Employer Identification No.)
of incorporation or organization)


         444 Market Street, 15th Floor, San Francisco, California 94111
               (Address of principal executive offices)         (Zip Code)

        Registrant's telephone number, including area code (415) 677-8990

           Securities registered pursuant to Section 12(b) of the Act:

                                                Name of each exchange on
       Title of each class                           which registered
         Not Applicable

          Securities registered pursuant to Section 12(g) of the Act:

                     UNITS OF LIMITED PARTNERSHIP INTERESTS
                     --------------------------------------
                                (Title of Class)

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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant is not applicable.

                                      Documents incorporated by Reference
PART I
Item 1 -  Business                   Prospectus of IEA Income Fund VII, A
                                     California Limited Partnership dated
                                     December 3, 1986 included as part of
                                     Registration Statement on Form S-1 (No.
                                     33-9351)

                                     Certificate of Limited Partnership of IEA
                                     Income Fund VII, A California Limited
                                     Partnership filed as Exhibit 3.4 to the
                                     Registration Statement on Form S-1 (No.
                                     33-9351)

<PAGE>   2
                                     PART I


Item 1. Business

   (a)  General Development of Business

   The Registrant is a California limited partnership formed on June 27, 1985 to
engage in the business of leasing marine dry cargo containers to unaffiliated
third-party lessees. The Registrant was initially capitalized with $100, and
commenced offering its limited partnership interests to the public during the
week of December 3, 1986, pursuant to its Registration Statement on Form S-1
(File No. 33-9351). The offering terminated on August 31, 1987.

   The Registrant raised $4,657,100 in subscription proceeds. The following
table sets forth the use of said subscription proceeds:


<TABLE>
<CAPTION>
                                                              Percentage of
                                                Amount        Gross Proceeds
                                                ------        --------------
<S>                                           <C>             <C>
Gross Subscription Proceeds                   $4,657,100        100.0%

Public Offering Expenses:
    Underwriting Commissions                  $  465,700         10.0%
    Offering and Organization Expenses        $  232,850          5.0%
                                              ----------        -----

    Total Public Offering Expenses            $  698,550         15.0%
                                              ----------        -----

Net Proceeds                                  $3,958,550         85.0%

Acquisition Fees                              $   38,705          0.8%

Working Capital Reserve                       $   49,345          1.1%
                                              ----------        -----

Gross Proceeds Invested in Equipment          $3,870,500         83.1%
                                              ==========        =====
</TABLE>


   The managing general partner of the Registrant is Cronos Capital Corp.
("CCC"), a wholly-owned subsidiary of Cronos Holdings/Investments (U.S.), Inc.,
a Delaware corporation. These and other affiliated companies are ultimately
wholly-owned by The Cronos Group, a holding company registered in Luxembourg
("the Parent Company") and are collectively referred to as the "Group". The
activities of the container division of the Group are managed through the
Group's subsidiary in the United Kingdom, Cronos Containers Limited ("the
Leasing Company"). The Leasing Company manages the leasing operations of all
equipment owned by the Group on its behalf or managed on behalf of other
third-party container owners, including all other programs organized by CCC. The
associate general partners of the Registrant are: John M. Foy; Paul E.
Jeremiassen; Paul W. Botterill; James E. Hoelter; John A. Maccarone; and Robert
J. Corbolotti.

   Pursuant to the Limited Partnership Agreement of the Registrant, all
authority to administer the business of the Registrant is vested in CCC. CCC has
entered into a Leasing Agent Agreement, whereby the Leasing Company has assumed
the responsibility for the container leasing activities of CCC's managed
programs.

   For a discussion of recent developments in the Registrant's business, see
Item 7, "Management's Discussion and Analysis of Financial Condition and Result
of Operations."

   For information concerning the containers acquired by the Registrant, see
Item 2, "Properties."



                                       2
<PAGE>   3
   (b)  Financial Information About Industry Segments

   The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which requires that public business
enterprises report financial and descriptive information about reportable
operating segments. 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's management operates the
Registrant's container fleet as a homogenous unit and has determined, after
considering the requirements of SFAS No. 131, that as such it has a single
reportable operating segment.

   Due to the Registrant's lack of information regarding the physical location
of its fleet of containers when on lease in the global shipping trade, it is
impracticable to provide the geographic area information required by SFAS No.
131. Any attempt to separate "foreign" operations from "domestic" operations
would be dependent on definitions and assumptions that are so subjective as to
render the information meaningless and potentially misleading.

   No single sub-lessee of the Leasing Company contributed more than 10% of the
Registrant's rental revenue earned during 1999, 1998 and 1997.

   (c)  Narrative Description of Business

   (c)(1)(i) A marine cargo container is a reusable metal container designed for
the efficient carriage of cargo with a minimum of exposure to loss from damage
or theft. Containers are manufactured to conform to worldwide standards of
container dimensions and container ship fittings adopted by the International
Standards Organization ("ISO") in 1968. The standard container is either 20'
long x 8' wide x 8'6" high (one twenty-foot equivalent unit ("TEU"), the
standard unit of physical measurement in the container industry) or 40' long x
8' wide x 8'6" high (two TEU). Standardization of the construction, maintenance
and handling of containers allows containers to be picked up, dropped off,
stored and repaired efficiently throughout the world. This standardization is
the foundation on which the container industry has developed.

   Standard dry cargo containers are rectangular boxes with no moving parts,
other than doors, and are typically made of steel or aluminum. They are
constructed to carry a wide variety of cargos ranging from heavy industrial raw
materials to light-weight finished goods. Specialized containers include, among
others, refrigerated containers for the transport of temperature-sensitive goods
and tank containers for the carriage of liquid cargo. Dry cargo containers
currently constitute approximately 87% (in TEU) of the worldwide container
fleet. Refrigerated and tank containers currently constitute approximately 8%
(in TEU) of the worldwide container fleet, with other specialized containers
constituting the remainder.

   One of the primary benefits of containerization has been the ability of the
shipping industry to effectively lower freight rates due to the efficiencies
created by standardized intermodal containers. Containers can be handled much
more efficiently than loose cargo and are typically shipped via several modes of
transportation, including truck, railway and ship. Containers require loading
and unloading only once and remain sealed until arrival at the final
destination, significantly reducing transport time, labor and handling costs and
losses due to damage and theft. Efficient movement of containerized cargo
between ship and shore reduces the amount of time that a ship must spend in port
and reduces the transit time of freight moves.

   The logistical advantages and reduced freight rates brought about by
containerization have been major catalysts for world trade growth during the
last twenty-five years, resulting in increased demand for containerization. The
world's container fleet has grown from an estimated 270,000 TEU in 1969 to
approximately 13 million TEU by mid-1999.



                                       3
<PAGE>   4
   BENEFITS OF LEASING

   Leasing companies own approximately 46% of the world's container fleet with
the balance owned predominantly by shipping lines. Shipping lines, which
traditionally operate on tight profit margins, often supplement their owned
fleet of containers by leasing a portion of their equipment from container
leasing companies and, in doing so, achieve the following financial and
operational benefits:

   -  Leasing allows the shipping lines to utilize the equipment they need
      without having to make large capital expenditures;

   -  Leasing offers a shipping line an alternative source of financing in a
      traditionally capital-intensive industry;

   -  Leasing enables shipping lines to expand their routes and market shares at
      a relatively inexpensive cost without making a permanent commitment to
      support their new structure;

   -  Leasing allows shipping lines to respond to changing seasonal and trade
      route demands, thereby optimizing their capital investment and storage
      costs.

   TYPES OF LEASES

   The Registrant's containers are leased primarily to shipping lines operating
in major trade routes (see Item 1(d)). Most if not all of the Registrant's
marine dry cargo containers are leased pursuant to operating leases, primarily
master leases, where the containers are leased to the ocean carrier on a daily
basis for any desired length of time, with the flexibility of picking up and
dropping off containers at various agreed upon locations around the world. Some
of the Registrant's containers may be leased pursuant to term leases, which may
have durations of less than one year to five years.

   -  Master lease. Most short-term leases are "master leases," under which a
      customer reserves the right to lease a certain number of containers, as
      needed, under a general agreement between the lessor and the lessee. Such
      leases provide customers with greater flexibility by allowing them to pick
      up and drop off containers where and when needed, subject to restrictions
      and availability, as specified in each lease. The commercial terms of
      master leases are negotiated annually. Master leases also define the
      number of containers that may be returned within each calendar month, the
      return locations and applicable drop-off charges. Due to the increased
      flexibility they offer, master leases usually command higher per-diem
      rates and generate more ancillary fees (including pick-up, drop-off,
      handling and off-hire fees) than term leases.

   -  Term lease. Term leases are for a fixed period of time and include both
      long and short-term commitments, with most extending from three to five
      years. Term lease agreements may contain early termination penalties that
      apply in the event of early redelivery. In most cases, however, equipment
      is not returned prior to the expiration of the lease. Term leases provide
      greater revenue stability to the lessor, but at lower rates than master
      leases. Ocean carriers use long-term leases when they have a need for an
      identified number of containers for a specified term. Short-term lease
      agreements have a duration of less than one year and include one-way,
      repositioning and round-trip leases. They differ from master leases in
      that they define the number and the term of the containers to be leased.
      Ocean carriers generally use one-way leases to manage trade imbalances
      (where more containerized cargo moves in one direction than another) by
      picking up a container in one port and dropping it off at another location
      after one or more legs of a voyage.

   The terms and conditions of the Registrant's leases provide that customers
are responsible for paying all taxes and service charges arising from container
use, maintaining the containers in good and safe operating condition while on
lease and paying for repairs, excluding ordinary wear and tear, upon redelivery.
Some leases provide for a "damage protection plan" whereby lessees, for an
additional payment (which may be in the form of a higher per-diem rate), are
relieved of the responsibility of paying some of the repair costs upon
redelivery of the containers. The Leasing Company has historically provided this
service on a limited basis to selected customers. Repairs provided under such
plans are carried out by the same depots, under the same procedures, as are
repairs to containers not covered by such plans. Customers also are required to
insure leased containers against physical damage and loss, and against third
party liability for loss, damage, bodily injury or death.

   Lease rates depend on several factors including the type of lease, length of
term, maintenance provided, type and age of the equipment, location and
availability, and market conditions.



                                       4
<PAGE>   5
   CUSTOMERS

   The Registrant is not dependent upon any particular customer or group of
customers of the Leasing Company and none of those customers account for more
than 10% of the Registrant's revenue. The Registrant's customers are billed and
pay in United States dollars. The Leasing Company sets maximum credit limits for
the Registrant's customers, limiting the number of containers leased to each
according to established credit criteria. The Leasing Company continually tracks
its credit exposure to each customer. The Leasing Company's credit committee
meets quarterly to analyze the performance of the Registrant's customers and to
recommend actions to be taken in order to minimize credit risks. The Leasing
Company uses specialist third party credit information services and reports
prepared by local staff to assess credit applications.

   FLEET PROFILE

   The Registrant acquired high-quality dry cargo containers manufactured to
specifications that exceed ISO standards and designed to minimize repair and
operating costs.

   Dry cargo containers are the most commonly used type of container in the
shipping industry. The Registrant's dry cargo container fleet is constructed of
all Corten(R) steel (i.e., Corten(R) roofs, walls, doors and undercarriage),
which is a high-tensile steel yielding greater damage and corrosion resistance
than mild steel.

   The Registrant purchased its dry cargo containers from manufacturers in Korea
and India as part of a policy of sourcing container production in locations
where it can meet customer demands most effectively.

   As of December 31, 1999, the Registrant owned 545 twenty-foot and 467
forty-foot marine dry cargo containers. The following table sets forth the
number of containers on lease, by container type and lease type as of December
31, 1999:

<TABLE>
<CAPTION>
                                                          Number of
                                                       Containers on
                                                            Lease
                                                       -------------
<S>                                                    <C>
      20-Foot Dry Cargo Containers:
         Term Leases                                         48
         Master Leases                                      395
                                                            ---
              Total on lease                                443
                                                            ===

      40-Foot Dry Cargo Containers:
         Term Leases                                         75
         Master Leases                                      309
                                                            ---
              Total on lease                                384
                                                            ===
</TABLE>


   The Leasing Company makes payments to the Registrant based upon rentals
collected from ocean carriers after deducting certain operating expenses
associated with the containers, such as the base management fee payable to CCC,
certain expense reimbursements and incentive fees payable to CCC, the costs of
maintenance and repairs not performed by lessees, independent agent fees and
expenses, depot expenses for handling, inspection and storage, and additional
insurance.



                                       5
<PAGE>   6
   REPAIR AND MAINTENANCE

   All containers are inspected and repaired when redelivered by a customer, and
customers are obligated to pay for all damage repair, excluding wear and tear,
according to standardized industry guidelines. Depots in major port areas
perform repair and maintenance that is verified by independent surveyors or the
Leasing Company's technical and operations staff. Before any repair or
refurbishment is authorized on older containers in the Registrant's fleet, the
Leasing Company's technical and operations staff reviews the age, condition and
type of container, and its suitability for continued leasing. The Leasing
Company compares the cost of such repair or refurbishment with the prevailing
market resale price that might be obtained for that container and makes the
appropriate decision whether to repair or sell the container.

   MARKET FOR USED CONTAINERS

   The Registrant estimates that the period for which a dry cargo container may
be used as a leased marine cargo container ranges from 10 to 15 years. The
Leasing Company, on behalf of the Registrant, disposes of used containers in a
worldwide market in which buyers include wholesalers, mini-storage operations,
construction companies and others. As the Registrant's fleet ages, a larger
proportion of its revenue will be derived from selling its containers.

   OPERATIONS

   The Registrant's container leasing and marketing operations are conducted
through the Leasing Company in the United Kingdom, with support provided by area
offices and dedicated agents located in San Francisco, California; Iselin, New
Jersey; Hamburg; Antwerp; Genoa; Gothenburg, Sweden; Singapore; Hong Kong;
Sydney; Tokyo; Taipei; Seoul; Rio de Janeiro; Shanghai; and Madras, India.

   The Leasing Company also maintains agency relationships with over 25
independent agents around the world, to whom it pays commissions based upon the
amount of revenues they generate in the region or the number of containers that
are leased from their area on behalf of the Registrant. The agents are located
in jurisdictions where the volume of the Leasing Company's business necessitates
a presence in the area but is not sufficient to justify a fully-functioning
Leasing Company office or dedicated agent. These agents provide marketing
support to the area offices covering the region, together with limited
operational support.

   In addition, the Leasing Company relies on the services of over 300
independently-owned and operated depots around the world to inspect, repair,
maintain and store containers while off-hire. The Leasing Company's area offices
authorize all container movements into and out of the depot and supervise all
repair and maintenance performed by the depot. The Leasing Company's technical
staff sets the standards for repair of its owned and managed fleet throughout
the world and monitors the quality of depot repair work. The depots provide a
vital link to the Leasing Company's operations, as the redelivery of a container
into a depot is the point at which the container is off-hired from one customer
and repaired in preparation for re-leasing to the next.

   The Leasing Company's global network is integrated with its computer system
and provides 24-hour communication between offices, agents and depots. The
system allows the Leasing Company to manage and control the Registrant's fleet
on a global basis, providing it with the responsiveness and flexibility
necessary to service the master lease market effectively. This system is an
integral part of the Leasing Company's service, as it processes information
received from the various offices, generates billings to the Registrant's
lessees and produces s a wide range of reports on all aspects of the
Registrant's leasing activities. The system records the life history of each
container, including the length of time on and off lease and repair costs. It
also traces port activity trends, leasing activity and equipment data per
customer. The operations and marketing data is fully interfaced with the finance
and accounting system to provide revenue, cost and asset information to
management and staff around the world.



                                       6
<PAGE>   7
   INSURANCE

   The Registrant's lease agreements typically require lessees to obtain
insurance to cover all risks of physical damage and loss of the equipment under
lease, as well as public liability and property damage insurance. However, the
precise nature and amount of the insurance carried by each ocean carrier varies
from lessee to lessee. In addition, the Registrant has purchased secondary
insurance effective in the event that a lessee fails to have adequate primary
coverage. This insurance covers liability arising out of bodily injury and/or
property damage as a result of the ownership and operation of the containers, as
well as insurance against loss or damage to the containers, loss of lease
revenues in certain cases and costs of container recovery and repair in the
event that a customer goes into bankruptcy. The Registrant believes that the
nature and the amounts of its insurance are customary in the container leasing
industry and subject to standard industry deductions and exclusions.

   (c)(1)(ii) Inapplicable.

   (c)(1)(iii) Inapplicable.

   (c)(1)(iv)  Inapplicable.

   (c)(1)(v) The Registrant's containers are leased globally; therefore,
seasonal fluctuations are minimal. Other economic and business factors to which
the transportation industry in general and the container leasing industry in
particular are subject, include fluctuations in general business conditions and
fluctuations in supply and demand for equipment resulting from, among other
things, obsolescence, changes in the methods or economics of a particular mode
of transportation or changes in governmental regulations or safety standards.

   (c)(1)(vi) The Registrant established an initial working capital reserve of
approximately $49,000 (approximately 1.1% of subscription proceeds raised). In
addition, the Registrant may reserve additional amounts from anticipated cash
distributions to the partners to meet working capital requirements.

   Amounts due under master leases are calculated at the end of each month and
billed approximately six to eight days thereafter. Amounts due under short-term
and long-term leases are set forth in the respective lease agreements and are
generally payable monthly. However, payment is normally received within 45-100
days of billing. Past due penalties are not customarily collected from lessees
and, accordingly, are not generally levied by the Leasing Company against
lessees of the Registrant's containers.

   (c)(1)(vii) For the fiscal year ended December 31, 1999, no single sub-lessee
of the Leasing Company accounted for more than 10% of the Registrant's rental
income. The Registrant does not believe that its ongoing business is dependent
upon a single customer, although the loss of one or more of its largest
customers could have an adverse effect upon its business.

   (c)(1)(viii) Inapplicable.

   (c)(1)(ix) Inapplicable.

   (c)(1)(x) Competition among container leasing companies is based upon several
factors, including the location and availability of inventory, lease rates, the
type, quality and condition of the containers, the quality and flexibility of
the service offered and the confidence in and professional relationship with the
lessor. Other factors include the speed with which a leasing company can prepare
its containers for lease and the ease with which a lessee believes it can do
business with a lessor or its local area office. Not all container leasing
companies compete in the same market, as some supply only dry cargo containers
and not specialized containers, while others offer only long-term leases.



                                       7
<PAGE>   8
   The Leasing Company, on behalf of the Registrant, competes with various
container leasing companies in the markets in which it conducts business,
including Transamerica Leasing, GE-Seaco, Textainer Corp., Triton Container
International Ltd. and others. In a series of recent consolidations, several
major leasing companies, as well as numerous smaller ones, have been acquired by
competitors. The Leasing Company believes that the current trend toward
consolidation in the container leasing industry will continue, making economies
of scale, worldwide operations, diversity, size of fleet and financial strength
increasingly important to the successful operation of a container leasing
business. Additionally, as containerization grows, customers may demand more
flexibility from leasing companies regarding per diem rates, pick-up and
drop-off locations, availability of containers and other terms. Some of the
Leasing Company's competitors may have greater financial resources than the
Leasing Company and may be more capable of offering lower per-diem rates. In the
Leasing Company's experience, however, ocean carriers will generally lease
containers from more than one leasing company in order to minimize dependence on
a single supplier.

   (c)(1)(xi) Inapplicable.

   (c)(1)(xii) Inapplicable.

   (c)(1)(xiii) The Registrant, as a limited partnership, is managed by CCC, the
managing general partner, and accordingly does not itself have any employees.
CCC has 16 employees, consisting of 4 officers, 4 other managers and 8 clerical
and staff personnel.

   (d) Financial Information About Foreign and Domestic Operations and Export
Sales

   The Registrant's business is not divided between foreign or domestic
operations. The Registrant's business is the leasing of containers worldwide to
ocean carriers. To this extent, the Registrant'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 Registrant 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 Registrant's leases generally require all payments to be made in
United States currency.


Item 2. Properties

   As of December 31, 1999, the Registrant owned 545 twenty-foot and 467
forty-foot marine dry cargo containers suitable for transporting cargo by rail,
sea or highway. The Registrant's containers were originally acquired from four
container manufacturers located in Korea and India. The average age and
manufacturers' invoice cost of the containers in the Registrant's fleet as of
December 31, 1999 were as follows:


<TABLE>
<CAPTION>
                                                   Estimated
                                                  Useful Life      Average Age      Average Cost
                                                  -----------      -----------      ------------
<S>                                               <C>              <C>              <C>
      20-Foot Dry Cargo Containers                10-15 years       11 years          $2,418

      40-Foot Dry Cargo Containers                10-15 years       12 years          $2,765
</TABLE>

   Utilization by lessees of the Registrant's containers fluctuates over time
depending on the supply of and demand for containers in the Registrant's
inventory locations. During 1999, utilization of the Registrant's containers
averaged 82%.

   During 1999, the Registrant disposed of 197 twenty-foot and 265 forty-foot
marine dry cargo containers at an average book gain of $195 per container.



                                       8
<PAGE>   9
Item 3. Legal Proceedings

   On November 15, 1999, the Parent Company consented to the entry by the
Securities and Exchange Commission ( the "SEC") of an administrative cease and
desist order (the "Order"). The Parent Company is the indirect corporate parent
of CCC, the managing general partner of the Partnership. Without admitting or
denying the findings made by the SEC in the Order, the Parent Company agreed to
cease and desist from committing or causing any future violation of certain
anti-fraud, reporting, and recordkeeping provisions of the federal securities
laws. The SEC's investigation of the Parent Company began in February, 1997 and
was triggered by the actions of a former chairman, Stefan M. Palatin. The Parent
Company's Board removed Mr. Palatin as CEO in May, 1998 and, in July 1998, Mr.
Palatin resigned from the Board. While Mr. Palatin is no longer an officer or
director of the Parent Company, he continues to control approximately 20% of the
outstanding common shares of the Parent Company. The Partnership does not
believe that the focus of the SEC's investigation was upon the Partnership or
CCC.

   The SEC made certain findings by its Order. Among them, the SEC found that
the Parent Company, under the domination and control of Mr. Palatin,
misrepresented, through affirmative misstatements and omissions in its public
statements and filings with the SEC, transactions it had with Mr. Palatin for
the period from December, 1995 through 1997. The Parent Company neither admitted
nor denied the findings made by the SEC.

   While the Order did not impose any fine or penalty against the Parent
Company, the Parent Company is unable to predict what impact, if any, it will
have on future business or whether it will lead to future litigation involving
the Parent Company. Under the Order, the Parent Company has designated an agent
for service of process with respect to any proceedings instituted by the SEC to
enforce the Order or with respect to any future investigation of the Parent
Company by the SEC. In addition, the entry of the Order precludes the Parent
Company and persons acting on its behalf from relying upon certain protections
according to forward-looking statements by the Securities Act of 1933 and the
Securities Exchange Act of 1934 through November 14, 2002.


Item 4. Submission of Matters to a Vote of Security Holders

   Inapplicable.



                                       9
<PAGE>   10
                                     PART II


Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters

   (a)  Market Information

   (a)(1)(i) The Registrant's outstanding units of limited partnership interests
are not traded on any market nor does an established public trading market exist
for such purposes.

   (a)(1)(ii) Inapplicable.

   (a)(1)(iii) Inapplicable.

   (a)(1)(iv) Inapplicable.

   (a)(1)(v) Inapplicable.

   (a)(2) Inapplicable.

      (b) Holders


<TABLE>
<CAPTION>
                                                     Number of Unit
                                                         Holders
                                                   as of December 31,
  (b)(1)   Title of Class                                 1999
           --------------                          ------------------
<S>                                                <C>
           Units of limited partnership interests          548
</TABLE>


   (c)  Dividends

   Inapplicable. For the distributions made by the Registrant to its limited
partners, see Item 6, "Selected Financial Data."



                                       10
<PAGE>   11
Item 6. Selected Financial Data


<TABLE>
<CAPTION>
                                                              Year Ended December 31,
                                ----------------------------------------------------------------------------------
                                   1999              1998              1997              1996              1995
                                ----------        ----------        ----------        ----------        ----------
<S>                             <C>               <C>               <C>               <C>               <C>
Net lease revenue               $  235,751        $  473,605        $  476,181        $  619,504        $  864,468

Net income                      $  184,204        $  361,162        $  273,177        $  408,537        $  611,498

Net income per unit of
    limited partnership
    interest                    $     9.95        $    28.70        $    20.69        $    34.05        $    55.42

Cash distributions per
    unit of limited
    partnership interest        $    82.81        $    75.94        $    73.13        $    84.06        $    88.75

At year-end:

Total assets                    $1,128,647        $1,801,481        $2,226,210        $2,709,813        $3,171,248

Partners' capital               $1,128,647        $1,801,481        $2,226,210        $2,709,813        $3,171,248
</TABLE>


Item 7. Management's Discussion and Analysis of Financial Condition and Result
of Operations

LIQUIDITY AND CAPITAL RESOURCES

   The Registrant's primary objective is to generate cash from operations for
distribution to its limited partners. Aside from the initial working capital
reserve retained from gross subscription proceeds (equal to approximately 1.1%
of such proceeds), the Registrant relies primarily on container rental receipts
to meet this objective as well as to finance operating needs. No credit lines
are maintained to finance working capital.

   At December 31, 1999, the Registrant had $183,046 in cash and cash
equivalents, a decrease of $95,094 and $164,790, respectively, from the cash
balances at December 31, 1998 and December 31, 1997.

   Having just completed the 13th year of operations, the Registrant will
continue to focus 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 10 to 15 years. During this period, cash proceeds from equipment
disposals, in addition to cash from operations, will provide the cash flow for
distributions to limited partners. The decision to dispose of containers is
influenced by various factors including age, conditions, suitability for
continued leasing, as well as the geographical location when disposed.

   Cash distributions from operations were originally allocated 5% to the
general partners and 95% to the limited partners. Distributions of sales
proceeds were allocated 100% to the limited partners. In 1992, pursuant to
Section 6.1(c) of the Partnership Agreement, the allocation of distributions
from operations among the general partners and limited partners was adjusted to
9% and 91%, respectively. The allocation of distributions of cash from sales
proceeds among the general partners and limited partners remained unchanged.
This sharing arrangement remained in place until the second quarter of 1994, at
which time the limited partners had received from the Registrant aggregate
distributions in an amount equal to their adjusted capital contributions plus an
8% cumulative, annual return on their adjusted capital contributions.
Thereafter, all distributions have been allocated 19% to the general partners
and 81% to the limited partners, pursuant to Sections 6.1(b) and (c) of the
Partnership Agreement. Cash distributions from operations to the general
partners in excess of 9% of distributable cash are considered to be an incentive
fee and is compensation to the general partners.



                                       11
<PAGE>   12
   From inception through February 29, 2000, the Registrant has distributed
$9,539,758 in cash from operations and $1,222,489 in cash from container sales
proceeds to its limited partners. This represents total distributions of
$10,762,247, or 231% of the limited partners' original invested capital.
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 managing
general partner. The Registrant's disposal activity should produce lower
operating results and consequently, lower distributions from operations to its
partners in subsequent periods. Cash generated from sales proceeds totaled
$496,291, $274,905 and $240,885 for the years ended December 31, 1999, 1998 and
1997, respectively. Sales proceeds distributed to its partners may fluctuate in
subsequent periods, reflecting the level of container disposals.

RESULTS OF OPERATIONS

1999 - 1998

   During the year, economic reforms in Asia, as well as in Latin America, have
begun to produce gradual improvement in terms of world trade, and there are
preliminary indications that containerized trade volumes from North America and
Europe to Asia, in particular, may be increasing. Intra-Asia trade, which also
had stagnated since the Asia financial crisis began nearly two years ago, has
shown increased activity in recent months. These favorable signs, however, have
yet to produce any significant positive impact on the Registrant's operating
performance.

   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. Net lease revenue for 1999 declined by
approximately 50% when compared to 1998.

   The Registrant's utilization rates increased from an average of 80% during
1998, to an average of 82% during 1999, a direct result of the Registrant's
policy to dispose of its off-hire containers. The Registrant's average fleet
size (as measured in twenty-foot equivalent units ("TEU")) was 1,775 TEU,
compared to 2,413 TEU in 1998. The decline in the Registrant's fleet size,
combined with a 13% reduction in average per-diem rental rates, contributed to a
39% decline in gross rental revenue (a component of net lease revenue) for 1999
when compared to the previous year.

   At December 31, 1999, 48% of the original equipment remained in the
Registrant's fleet, and was comprised of the following:



<TABLE>
<CAPTION>
                                             20-Foot             40-Foot
                                             -------             -------
<S>                                          <C>                 <C>
      Containers on lease:
           Term leases                          48                  75
           Master leases                       395                 309
                                               ---                 ---
              Subtotal                         443                 384

      Containers off lease                     102                  83
                                               ---                  --

           Total container fleet               545                 467
                                               ===                 ===
</TABLE>


<TABLE>
<CAPTION>
                                                20-Foot                   40-Foot
                                           -----------------         ----------------
                                            Units        %           Units         %
                                           -------      ----         -----        ----
<S>                                        <C>          <C>          <C>          <C>
Total purchases                             1,001        100%        1,104        100%
    Less disposals                            456         46%          637         58%
                                            -----        ---         -----        ---
Remaining fleet at December 31, 1999          545         54%          467         42%
                                            =====        ===         =====        ===
</TABLE>


   Rental equipment operating expenses were approximately 25% of rental revenue
during 1999 as compared to 21% during 1998.



                                       12
<PAGE>   13
   The age and declining size of the Registrant's fleet both contributed to a
43% decline in depreciation expense during 1999 when compared with 1998. Base
management fees, dependent on the operating performance of the fleet, declined
$20,501, or approximately 35% during 1999 when compared with 1998. Incentive
fees, which are also based on the operating performance of the fleet as well as
sales proceeds, increased $3,234, or approximately 4%, during 1999 when compared
with 1998.

   The Registrant disposed of 197 twenty-foot and 265 forty-foot marine dry
cargo containers during 1999, as compared to 99 twenty-foot and 128 forty-foot
marine dry cargo containers during 1998. As a result, approximately 49% of the
Registrant's net earnings for 1999 were from gain on disposal of equipment, as
compared to 39% for 1998. The decision to repair or dispose of a container is
made when it is returned by a lessee. This decision is influenced by various
factors including the age, condition, suitability for continued leasing as well
as the geographical location of the container when disposed. These factors also
influence the amount of sales proceeds received and the related gain on
container disposals.

1998 - 1997

   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.

   Despite the aforementioned market conditions, the Registrant's utilization
rates increased from an average of 78% during 1997, to an average of 80% during
1998, a direct result of the Registrant's policy to dispose of its off-hire
containers. The Registrant's average fleet size (as measured in twenty-foot
equivalent units ("TEU")) was 2,413 TEU, compared to 2,710 TEU in 1997. The
decline in the Registrant's fleet size, combined with a 4% reduction in average
per-diem rental rates, contributed to a 9% decline in gross rental revenue (a
component of net lease revenue) for 1998 when compared to the previous year.

   At December 31, 1998, 70% of the original equipment remained in the
Registrant's fleet, and was comprised of the following:



<TABLE>
<CAPTION>
                                             20-Foot         40-Foot
                                             -------         -------
<S>                                           <C>              <C>
      Containers on lease:
           Term leases                          57              68
           Master leases                       479             517
                                               ---             ---
              Subtotal                         536             585

      Containers off lease                     206             147
                                               ---             ---

           Total container fleet               742             732
                                               ===             ===
</TABLE>



<TABLE>
<CAPTION>
                                                 20-Foot                   40-Foot
                                            -----------------        ----------------
                                            Units         %          Units          %
                                            -----        ----        -----        ----
<S>                                         <C>          <C>         <C>          <C>
Total purchases                             1,001        100%        1,104        100%
    Less disposals                            259         26%          372         34%
                                            -----        ---         -----        ---
Remaining fleet at December 31, 1998          742         74%          732         66%
                                            =====        ===         =====        ===
</TABLE>



   Rental equipment operating expenses were approximately 21% of rental revenue
during 1998 as compared to 27% during 1997.



                                       13
<PAGE>   14
   The age and declining size of the Registrant's fleet both contributed to an
8% decline in depreciation expense during 1998 when compared with 1997. Base
management fees, dependent on the operating performance of the fleet, declined
$5,086, or approximately 8% during 1998 when compared with 1997. Incentive fees,
which are also based on the operating performance of the fleet as well as sales
proceeds, increased $1,438, or approximately 2%, during 1998 when compared with
1997.

   The Registrant disposed of 99 twenty-foot and 128 forty-foot marine dry cargo
containers during 1998, as compared to 66 twenty-foot and 101 forty-foot marine
dry cargo containers during 1997. As a result, approximately 39% of the
Registrant's net earnings for 1998 were from gain on disposal of equipment, as
compared to 25% for 1997. The decision to repair or dispose of a container is
made when it is returned by a lessee. This decision is influenced by various
factors including the age, condition, suitability for continued leasing as well
as the geographical location of the container when disposed. These factors also
influence the amount of sales proceeds received and the related gain on
container disposals.

THE CRONOS GROUP'S CREDIT FACILITY

   In March 1999, the Parent Company agreed to a fourth amendment to a credit
facility ("the Credit Facility"), under which the final maturity date was
extended to September 30, 1999. The balance outstanding on the Credit Facility
was $33,110,000 at December 31, 1998. Under the third amendment to this Credit
Facility, the Parent Company had failed to make principal payments totaling
$33,110,000, when due, on repayment dates in September 1998 and January 1999.
This Credit Facility was refinanced in August 1999, as discussed below.

   On August 2, 1999, the Parent Company refinanced approximately $47,800,000 of
its short-term and other indebtedness by establishing a loan facility (the "Loan
Facility") with MeesPierson N.V., a Dutch financial institution, as agent for
itself and First Union National Bank (collectively, the "Lenders"). The borrower
under the Loan Facility was Cronos Finance (Bermuda) Limited ("Cronos Finance"),
a newly-organized, wholly-owned, special purpose subsidiary of the Parent
Company. Cronos Finance borrowed $50,000,000 under the Loan Facility for the
purpose of acquiring containers from three other direct or indirect wholly-owned
subsidiaries (the "Sellers") of the Parent Company and paying certain fees
associated with the establishment of the Loan Facility and the fees of certain
former lenders. The Sellers utilized the cash proceeds from the sale of the
containers to Cronos Finance to repay $47,800,000 in principal due by the
Sellers to eight different creditors or groups of creditors of the Parent
Company, including all indebtedness owed to the Credit Facility.

   The Registrant was not a borrower under the Credit Facility or the Loan
Facility, and neither the containers nor the other assets of the Registrant have
been pledged as collateral under the Credit Facility or the Loan Facility.

YEAR 2000

   The Registrant relies upon the financial and operational systems provided by
the Leasing Company and its affiliates, as well as the systems provided by other
independent third parties to service the three primary areas of its business:
investor processing/maintenance; container leasing/asset tracking; and
accounting/finance. Neither the Registrant nor the Leasing Company experienced
nor do they currently anticipate any material adverse effects on the
Registrant's business, results of operations or financial condition as a result
of Year 2000 issues involving internal use systems, third party products or any
of their software products. Costs incurred in preparing for Year 2000 issues
were expensed as incurred. Neither the Registrant nor the Leasing Company
anticipate any additional material costs in connection with Year 2000
uncertainties. Pursuant to the Limited Partnership Agreement, CCC or the Leasing
Company, may not seek reimbursement of data processing costs associated with the
Year 2000 program.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk

   Inapplicable


Item 8. Financial Statements and Supplementary Data



                                       14
<PAGE>   15
                          INDEPENDENT AUDITORS' REPORT


The Partners
IEA Income Fund VII,
A California Limited Partnership


We have audited the accompanying balance sheet of IEA Income Fund VII, A
California Limited Partnership (the "Partnership") as of December 31, 1999, and
the related statements of operations, partners' capital, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership at December 31, 1999, and
the results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Deloitte & Touche LLP

San Francisco, CA
February 25, 2000



                                       15
<PAGE>   16
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


The Partners
IEA Income Fund VII,
A California Limited Partnership


We have audited the accompanying balance sheet of IEA Income Fund VII, A
California Limited Partnership, as of December 31, 1998, and the related
statements of operations, partners' capital, and cash flows for each of the two
years in the period ended December 31, 1998. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IEA Income Fund VII, A
California Limited Partnership, as of December 31, 1998, and the results of its
operations and its cash flows for each of the two years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.




                                       /s/ Moore Stephens, P.C.
                                       Certified Public Accountants

New York, New York
March 5, 1999



                                       16
<PAGE>   17
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                                 BALANCE SHEETS

                           DECEMBER 31, 1999 AND 1998



<TABLE>
<CAPTION>
                                                                           1999              1998
                                                                        ----------        ----------
<S>                                                                     <C>               <C>
                 Assets
Current assets:
   Cash and cash equivalents, includes $182,946 in 1999
      and $278,040 in 1998 in interest-bearing accounts (note 3)        $  183,046        $  278,140
   Net lease receivables due from Leasing Company
      (notes 1 and 4)                                                       47,207           134,960
                                                                        ----------        ----------

         Total current assets                                              230,253           413,100
                                                                        ----------        ----------

Container rental equipment, at cost                                      2,606,588         3,707,535
   Less accumulated depreciation (note 1)                                1,708,194         2,319,154
                                                                        ----------        ----------
      Net container rental equipment                                       898,394         1,388,381
                                                                        ----------        ----------

         Total assets                                                   $1,128,647        $1,801,481
                                                                        ==========        ==========

            Partners' Capital

Partners' capital:
   General partners                                                     $   35,249        $   29,386
   Limited partners (note 8)                                             1,093,398         1,772,095
                                                                        ----------        ----------

         Total partners' capital                                        $1,128,647        $1,801,481
                                                                        ==========        ==========
</TABLE>



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


                                       17
<PAGE>   18
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997


<TABLE>
<CAPTION>
                                                        1999            1998            1997
                                                      --------        --------        --------
<S>                                                   <C>             <C>             <C>
Net lease revenue (notes 1 and 6)                     $235,751        $473,605        $476,181

Other operating expenses:
  Depreciation (note 1)                                133,059         233,190         253,090
  Other general and administrative expenses             20,005          31,834          31,840
                                                      --------        --------        --------

                                                       153,064         265,024         284,930
                                                      --------        --------        --------
    Income from operations                              82,687         208,581         191,251

Other income:
  Interest income                                       11,580          13,358          13,435
  Net gain on disposal of equipment                     89,937         139,223          68,491
                                                      --------        --------        --------
                                                       101,517         152,581          81,926
                                                      --------        --------        --------
    Net income                                        $184,204        $361,162        $273,177
                                                      ========        ========        ========
Allocation of net income:
  General partners                                    $ 91,568        $ 93,836        $ 80,432
  Limited partners                                      92,636         267,326         192,745
                                                      --------        --------        --------

                                                      $184,204        $361,162        $273,177
                                                      ========        ========        ========

Limited partners' per unit share of net income        $   9.95        $  28.70        $  20.69
                                                      ========        ========        ========
</TABLE>



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



                                       18
<PAGE>   19
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                         STATEMENTS OF PARTNERS' CAPITAL

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997


<TABLE>
<CAPTION>
                                       Limited           General
                                       Partners          Partners             Total
                                     -----------         --------         -----------
<S>                                  <C>                 <C>              <C>
Balances at December 31, 1996        $ 2,700,423         $  9,390         $ 2,709,813

Net income                               192,745           80,432             273,177

Cash distributions                      (681,101)         (75,679)           (756,780)
                                     -----------         --------         -----------

Balances at December 31, 1997          2,212,067           14,143           2,226,210

Net income                               267,326           93,836             361,162

Cash distributions                      (707,298)         (78,593)           (785,891)
                                     -----------         --------         -----------

Balances at December 31, 1998          1,772,095           29,386           1,801,481

Net income                                92,636           91,568             184,204

Cash distributions                      (771,333)         (85,705)           (857,038)
                                     -----------         --------         -----------

Balances at December 31, 1999        $ 1,093,398         $ 35,249         $ 1,128,647
                                     ===========         ========         ===========
</TABLE>



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



                                       19
<PAGE>   20
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997


<TABLE>
<CAPTION>
                                                               1999              1998              1997
                                                            ---------         ---------         ---------
<S>                                                         <C>               <C>               <C>
Cash flows from operating activities:
   Net income                                               $ 184,204         $ 361,162         $ 273,177
   Adjustments to reconcile net income to net cash
     provided by operating activities:
         Depreciation                                         133,059           233,190           253,090
         Net gain on disposal of equipment                    (89,937)         (139,223)          (68,491)
         Decrease (increase) in net lease
          receivables due from Leasing Company                 38,327           (13,839)           74,788
                                                            ---------         ---------         ---------

           Total adjustments                                   81,449            80,128           259,387
                                                            ---------         ---------         ---------

           Net cash provided by operating activities          265,653           441,290           532,564
                                                            ---------         ---------         ---------

Cash flows provided by investing activities
   Proceeds from disposal of equipment                        496,291           274,905           240,885
                                                            ---------         ---------         ---------

Cash flows used in financing activities
   Distributions to partners                                 (857,038)         (785,891)         (756,780)
                                                            ---------         ---------         ---------

Net increase (decrease) in cash and cash equivalents          (95,094)          (69,696)           16,669

Cash and cash equivalents at beginning of year                278,140           347,836           331,167
                                                            ---------         ---------         ---------

Cash and cash equivalents at end of year                    $ 183,046         $ 278,140         $ 347,836
                                                            =========         =========         =========
</TABLE>



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



                                       20
<PAGE>   21
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1999, 1998 AND 1997


(1)  Summary of Significant Accounting Policies

     (a) Nature of Operations

         IEA Income Fund VII, A California Limited Partnership (the
         "Partnership") was organized under the laws of the State of California
         on June 27, 1985 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.

         The managing general partner is Cronos Capital Corp. ("CCC"); the
         associate general partners include seven individuals, one is an officer
         of CCC. CCC, 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 the general partner. The Partnership shall
         continue until December 31, 2007, unless sooner terminated upon the
         occurrence of certain events.

         The Partnership commenced operations on February 2, 1987, 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 August 31,
         1987, at which time 9,314 limited partnership units had been sold.

     (b) Leasing Company and Leasing Agent Agreement

          Pursuant to the Limited Partnership Agreement of the Partnership, all
          authority to administer the business of the Partnership is vested in
          CCC. CCC has entered into a Leasing Agent Agreement whereby the
          Leasing Company has the responsibility to manage the leasing
          operations of all equipment owned by the Partnership. Pursuant to the
          Agreement, the Leasing Company is responsible for leasing, managing
          and re-leasing the Partnership's containers to ocean carriers and has
          full discretion over which ocean carriers and suppliers of goods and
          services it may deal with. The Leasing Agent Agreement permits the
          Leasing Company to use the containers owned by the Partnership,
          together with other containers owned or managed by the Leasing Company
          and its affiliates, as part of a single fleet operated without regard
          to ownership. Since the Leasing Agent Agreement meets the definition
          of an operating lease in Statement of Financial Accounting Standards
          (SFAS) No. 13, it is accounted for as a lease under which the
          Partnership is lessor and the Leasing Company is lessee.

          The Leasing Agent Agreement generally provides that the Leasing
          Company will make payments to the Partnership based upon rentals
          collected from ocean carriers after deducting direct operating
          expenses and management fees to CCC. 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.



                                       21
<PAGE>   22
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS



     (c) Concentrations of Credit Risk

         The Partnership's financial instruments that are exposed to
         concentrations of credit risk consist primarily of cash, cash
         equivalents and net lease receivables due from the Leasing Company. See
         note 3 for further discussion regarding the credit risk associated with
         cash and cash equivalents.

         Net lease receivables due from the Leasing Company (see notes 1(b) and
         4 for discussion regarding net lease receivables) subject the
         Partnership to a significant concentration of credit risk. These net
         lease receivables, representing rentals collected from ocean carriers
         after deducting direct operating expenses and management fees to CCC
         and the Leasing Company, are remitted by the Leasing Company to the
         Partnership three to four times per month. The Partnership has
         historically never incurred a loss associated with the collectability
         of unremitted net lease receivables due from the Leasing Company.

     (d) Basis of Accounting

         The Partnership utilizes the accrual method of accounting. Net lease
         revenue is recorded by the Partnership in each period based upon its
         leasing agent agreement with the Leasing Company. Net lease revenue is
         generally dependent upon operating lease rentals from operating lease
         agreements between the Leasing Company and its various lessees, less
         direct operating expenses and management fees due in respect of the
         containers specified in each operating lease agreement.

         The financial statements are prepared in conformity with accounting
         principles generally accepted in the United States (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
         reporting period. Actual results could differ from those estimates.

     (e) Allocation of Net Income and Partnership Distributions

         Net income have been allocated between general and limited partners in
         accordance with the Partnership Agreement.

         Actual cash distributions differ from the allocations of net income
         between the general and limited partners as presented in these
         financial statements. Partnership distributions are based on
         "distributable cash" and are paid to the general and limited partners
         on a quarterly basis, in accordance with the provisions of the
         Partnership Agreement. Partnership distributions from operations were
         allocated 95% to the limited partners and 5% to the general partners.
         Distributions of sales proceeds were allocated 100% to the limited
         partners. However, if the amount of the limited partners' capital
         contributions invested in equipment exceeds the minimum percentage
         required by the Partnership Agreement, and the limited partners have
         received cumulative distributions equal to their capital contributions,
         the general partners' interest in distributions from operations will be
         increased by one percentage point for each 1% of the limited partners'
         capital contribution invested in equipment in excess of 80%.



                                       22
<PAGE>   23
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS



     (e) Allocation of Net Income and Partnership Distributions - (continued)

         During 1992, this threshold was reached and, accordingly, distributions
         from distributable cash from operations were allocated 91% to the
         limited partners and 9% to the general partners. The allocations of
         sales proceeds remained unchanged. These allocations remained in effect
         until 1994, at which time the limited partners have received from the
         Partnership aggregate distributions in an amount equal to their
         adjusted capital contributions plus an 8% cumulative, compounded
         (daily), annual return on their adjusted capital contributions.
         Thereafter, all Partnership distributions have been allocated 81% to
         the limited partners and 19% to the general partners. Cash
         distributions for the first 8% were charged to partners' capital. Cash
         distributions from operations to the general partners in excess of 9%
         of distributable cash are considered to be incentive fees and are
         recorded as compensation to the general partners.

     (f) Container Rental Equipment

         In accordance with SFAS No. 121, "Accounting for the Impairment of
         Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
         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.
         Depreciation policies are also evaluated to determine whether
         subsequent events and circumstances warrant revised estimates of useful
         lives. There were no reductions to the carrying value of container
         rental equipment during 1999, 1998 and 1997.

         Container rental equipment is depreciated over a twelve-year life on a
         straight line basis to its salvage value, estimated to be 30%.

     (g) Income Taxes

         The Partnership is not subject to income taxes, consequently no
         provision for income taxes has been made. The Partnership files federal
         and state annual information tax returns, prepared on the accrual basis
         of accounting. Taxable income or loss is reportable by the partners
         individually.


     (h) Financial Statement Presentation

         The Partnership has determined that, for accounting purposes, the
         Leasing Agent Agreement is a lease, and the receivables, payables,
         gross revenues and operating expenses attributable to the containers
         managed by the Leasing Company are, for accounting purposes, those of
         the Leasing Company and not of the Partnership. Consequently, the
         Partnership's balance sheets and statements of operations display the
         payments to be received by the Partnership from the Leasing Company as
         the Partnership's receivables and revenues.

(2) Operating Segment

    The Financial Accounting Standards Board has issued SFAS No. 131,
    "Disclosures about Segments of an Enterprise and Related Information", which
    changes the way public business enterprises report financial and descriptive
    information about reportable operating segments. An operating segment is a
    component of an enterprise that engages in business activities from which it
    may earn revenues and incur expenses, whose operating results are regularly
    reviewed by the enterprise's chief operating decision maker to make
    decisions about resources to be allocated to the segment and assess its
    performance, and about which separate financial information is available.
    Management operates the Partnership's container fleet as a homogenous unit
    and has determined, after considering the requirements of SFAS No. 131, that
    as such it has a single reportable operating segment.




                                       23
<PAGE>   24
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


(2) Operating Segment - (continued)

    The Partnership derives revenues from dry cargo containers. As of December
    31, 1999, the Partnership owned 545 twenty-foot and 467 forty-foot 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, it is
    impracticable to provide the geographic area information required by SFAS
    No. 131.

    No single sub-lessee of the Leasing Company contributed more than 10% of the
    Partnership's rental revenue earned during 1999, 1998 and 1997.

(3) Cash and Cash Equivalents

     Cash equivalents include highly-liquid investments with a maturity of three
     months or less on their acquisition date. Cash equivalents are carried at
     cost which approximates fair value. The Partnership maintains its cash and
     cash equivalents in accounts which, at times, may exceed federally insured
     limits. The Partnership has not experienced any losses in such accounts and
     believes it is not exposed to any significant credit risk. The Partnership
     places its cash equivalents in investment grade, short-term debt
     instruments and limits the amount of credit exposure with any one
     commercial issuer.


(4)  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, reimbursed administrative expenses, and incentive fees
     payable to CCC and its affiliates from the rental billings payable by the
     Leasing Company to the Partnership under operating leases to ocean carriers
     for the containers owned by the Partnership. Net lease receivables at
     December 31, 1999 and December 31, 1998 were as follows:


<TABLE>
<CAPTION>
                                                             December 31,     December 31,
                                                                 1999            1998
                                                             ------------     -----------
<S>                                                          <C>              <C>
         Gross lease receivables                               $154,580        $309,431
         Less:
         Direct operating payables and accrued expenses          25,448          74,866
         Damage protection reserve (note 5)                      14,388          20,870
         Base management fees payable                            31,194          32,974
         Reimbursed administrative expenses                       1,809           3,559
         Allowance for doubtful accounts                         21,598          22,438
         Incentive fees                                          12,936          19,764
                                                               --------        --------

         Net lease receivables                                 $ 47,207        $134,960
                                                               ========        ========
</TABLE>


(5)  Damage Protection Plan

     The Leasing Company offers a repair service to several lessees of the
     Partnership's containers, whereby the lessee pays an additional rental fee
     for the convenience of having the Partnership incur the repair expense for
     containers damaged while on lease. This fee is recorded as revenue when
     earned according to the terms of the rental contract. An accrual has been
     recorded to provide for the estimated costs incurred by this service. This
     accrual is a component of net lease receivables due from the Leasing
     Company (see note 4). The Partnership is not responsible in the event
     repair costs exceed predetermined limits, or for repairs that are required
     for damages not defined by the damage protection plan agreement.



                                       24
<PAGE>   25
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

(6) Net Lease Revenue

     Net lease revenue is determined by deducting direct operating expenses,
     base management and incentive fees and reimbursed administrative expenses
     to CCC from the rental revenue billed by the Leasing Company under
     operating leases to ocean carriers for the containers owned by the
     Partnership. Net lease revenue for the years ended December 31, 1999, 1998
     and 1997, was as follows:


<TABLE>
<CAPTION>
                                                           1999            1998            1997
                                                         --------        --------        --------
<S>                                                      <C>             <C>             <C>
         Rental revenue                                  $517,041        $847,713        $931,869
         Less:
         Rental equipment operating expenses              127,769         179,260         256,206
         Base management fees (note 7)                     38,926          59,427          64,513
         Reimbursed administrative expenses (note
         7):
             Salaries                                      13,782          23,909          23,664
             Other payroll related expenses                 2,352           4,137           4,354
             General and administrative expenses           10,063          22,211          23,225
         Incentive fees (note 7)                           88,398          85,164          83,726
                                                         --------        --------        --------
                                                         $235,751        $473,605        $476,181
                                                         ========        ========        ========
</TABLE>


(7)  Compensation to Managing General Partner

     Base management fees are equal to 7% of gross lease revenues attributable
     to operating leases pursuant to the Partnership Agreement. Reimbursed
     administrative expenses are equal to the costs expended by CCC and its
     affiliates for services necessary for the prudent operation of the
     Partnership pursuant to the Partnership Agreement. Incentive management
     fees are equal to 10% of cash distributions from operations and sales
     proceeds after the limited partners receive aggregate distributions in an
     amount equal to their adjusted capital contribution plus an 8% cumulative,
     compounded (daily), annual return on their adjusted capital contributions
     pursuant to the Partnership Agreement. The following compensation was paid
     or will be paid by the Partnership to CCC:


<TABLE>
<CAPTION>
                                                     1999            1998            1997
                                                   --------        --------        --------
<S>                                                <C>             <C>             <C>
         Base management fees                      $ 38,926        $ 59,427        $ 64,513
         Reimbursed administrative expenses          26,197          50,257          51,243
         Incentive fees                              88,398          85,164          83,726
                                                   --------        --------        --------
                                                   $153,521        $194,848        $199,482
                                                   ========        ========        ========
</TABLE>


(8)  Limited Partners' Capital

     Cash distributions made to the limited partners during 1999, 1998 and 1997
     included distributions of proceeds from equipment sales in the amount of
     $401,675, $232,856 and $171,730, respectively. These distributions, as well
     as cash distributions from operations, are used in determining "Adjusted
     Capital Contributions" as defined by the Partnership Agreement.

     The limited partners' per unit share of capital at December 31, 1999, 1998
     and 1997 was $117, $190 and $237, respectively. This is calculated by
     dividing the limited partners' capital at the end of the year by 9,314, the
     total number of limited partnership units.



                                       25
<PAGE>   26
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS



(9)  The Cronos Group

     In March 1999, the Parent Company agreed to a fourth amendment to a credit
     facility ("the Credit Facility"), under which the final maturity date was
     extended to September 30, 1999. The balance outstanding on the Credit
     Facility was $33,110,000 at December 31, 1998. Under the third amendment to
     this Credit Facility, the Parent Company had failed to make principal
     payments totaling $33,110,000, when due, on repayment dates in September
     1998 and January 1999. This Credit Facility was refinanced in August 1999,
     as discussed below.

     On August 2, 1999, the Parent Company refinanced approximately $47,800,000
     of its short-term and other indebtedness by establishing a loan facility
     (the "Loan Facility") with MeesPierson N.V., a Dutch financial institution,
     as agent for itself and First Union National Bank (collectively, the
     "Lenders"). The borrower under the Loan Facility was Cronos Finance
     (Bermuda) Limited ("Cronos Finance"), a newly-organized, wholly-owned,
     special purpose subsidiary of the Parent Company. Cronos Finance borrowed
     $50,000,000 under the Loan Facility for the purpose of acquiring containers
     from three other direct or indirect wholly-owned subsidiaries (the
     "Sellers") of the Parent Company and paying certain fees associated with
     the establishment of the Loan Facility and the fees of certain former
     lenders. The Sellers utilized the cash proceeds from the sale of the
     containers to Cronos Finance to repay $47,800,000 in principal due by the
     Sellers to eight different creditors or groups of creditors of the Parent
     Company, including all indebtedness owed to the Credit Facility.

     The Registrant was not a borrower under the Credit Facility or the Loan
     Facility, and neither the containers nor the other assets of the Registrant
     have been pledged as collateral under Credit Facility or the Loan Facility.


                            ************************



                                       26
<PAGE>   27
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

   Inapplicable.



                                       27
<PAGE>   28
                                    PART III


Item 10. Directors and Executive Officers of the Registrant

   The Registrant, as such, has no officers or directors, but is managed by CCC,
the managing general partner. The officers and directors of CCC at March 30,
2000, are as follows:

<TABLE>
<CAPTION>
                Name                          Office
                ----                          ------
<S>                            <C>
          Dennis J. Tietz      President, Chief Executive Officer, and Director

          Peter J. Younger     Treasurer, Principal Accounting Officer, and
                               Director

          Elinor A. Wexler     Vice President/Administration and Secretary,
                               and Director

          John P. McDonald     Vice President/Sales, and Director
          John M. Foy          Director
</TABLE>


   DENNIS J. TIETZ Mr. Tietz, 47, as President and Chief Executive Officer, is
responsible for the general management of CCC. Mr. Tietz was appointed Chief
Executive Officer of The Cronos Group, indirect corporate parent of CCC, in
December 1998 and elected Chairman of the Board in March 1999. Mr. Tietz is also
President and a director of Cronos Securities Corp. From 1986 until August 1992,
Mr. Tietz was responsible for the organization, marketing and after-market
support of CCC's investment programs. Mr. Tietz was a regional manager for CCC,
responsible for various container leasing activities in the U.S. and Europe from
1981 to 1986. Prior to joining CCC in December 1981, Mr. Tietz was employed by
Trans Ocean Leasing Corporation as Regional Manager based in Houston, with
responsibility for all leasing and operational activities in the U.S. Gulf.

   Mr. Tietz holds a B.S. degree in Business Administration from San Jose State
University and is a Registered Securities Principal with the NASD.

   PETER J. YOUNGER Mr. Younger, 43, was elected Treasurer and Principal
Accounting Officer in 1998. Mr. Younger joined the Board of Directors of CCC in
June 1997. See key management personnel of the Leasing Company for further
information.

   ELINOR A. WEXLER Ms. Wexler, 51, was elected Vice President - Administration
and Secretary of CCC in August 1992. Ms. Wexler joined the Board of Directors of
CCC in June 1997. Ms. Wexler has been employed by the General Partner since
1987, and is responsible for investor services, compliance and securities
registration. From 1983 to 1987, Ms. Wexler was Manager of Investor Services for
The Robert A. McNeil Corporation, a real estate syndication company, in San
Mateo, California. From 1971 to 1983, Ms. Wexler held various positions,
including securities trader and international research editor, with Nikko
Securities Co., International, based in San Francisco.

   Ms. Wexler attended the University of Oregon, Portland State University and
the Hebrew University of Jerusalem, Israel. Ms. Wexler is also Vice President
and Secretary of Cronos Securities Corp. and a Registered Principal with the
NASD.

   JOHN P. MCDONALD Mr. McDonald, 39, was elected Vice President - National
Sales Manager of CCC in August 1992, with responsibility for marketing CCC's
investment programs. Mr. McDonald joined the Board of Directors of CCC in
October 1997. Since 1988, Mr. McDonald had been Regional Marketing Manager for
the Southwestern U.S. From 1983 to 1988, Mr. McDonald held a number of container
leasing positions with CCC, the most recent of which was as Area Manager for
Belgium and the Netherlands, based in Antwerp.

   Mr. McDonald holds a B.S. degree in Business Administration from Bryant
College, Rhode Island. Mr. McDonald is also a Vice President of Cronos
Securities Corp.

   JOHN M. FOY Mr. Foy, 54, was elected to the Board of Directors of CCC in
April 1999. See key management personnel of the Leasing Company for further
information.



                                       28
<PAGE>   29
   The key management personnel of the Leasing Company at March 30, 2000, were
as follows:

<TABLE>
<CAPTION>
                   Name                              Title
             ----------------       ---------------------------------------
<S>                                 <C>
             Peter J. Younger       Vice President/Chief Financial Officer

             John M. Foy            Vice President/Americas

             Nico Sciacovelli       Vice President/Europe, Middle East and
                                    Africa

             John C. Kirby          Vice President/Operations
</TABLE>

   PETER J. YOUNGER Mr. Younger, 43, was elected to the Board of Directors of
The Cronos Group on January 13, 2000. Mr. Younger will serve as a director until
the annual meeting in 2001 and his successor is elected. Mr. Younger was
appointed as Executive Vice President of The Cronos Group in April 1999 and its
Chief Financial Officer in March 1997. From 1991 to 1997, Mr. Younger served as
Vice President of Finance for the Leasing Company, located in the UK. From 1987
to 1991 Mr. Younger served as Vice President and Controller for CCC in San
Francisco. Prior to 1987, Mr. Younger was a certified public accountant and a
principal with the accounting firm of Johnson, Glaze and Co. in Salem, Oregon.
Mr. Younger holds a B.S. degree in Business Administration from Western Baptist
College.

   JOHN M. FOY Mr. Foy, 54, is directly responsible for the Leasing Company's
lease marketing and operations in North America, Central America, and South
America, and is based in San Francisco. From 1985 to 1993, Mr. Foy was Vice
President/Pacific with responsibility for dry cargo container lease marketing
and operations in the Pacific Basin. From 1977 to 1985 Mr. Foy was Vice
President of Marketing for Nautilus Leasing Services in San Francisco with
responsibility for worldwide leasing activities. From 1974 to 1977, Mr. Foy was
Regional Manager for Flexi-Van Leasing, a container lessor, with responsibility
for container leasing activities in the Western United States. Mr. Foy holds a
B.A. degree in Political Science from University of the Pacific, and a Bachelor
of Foreign Trade from Thunderbird Graduate School of International Management.

   NICO SCIACOVELLI Mr. Sciacovelli, 50, was elected Vice President - Europe,
Middle East and Africa in June 1997. Mr. Sciacovelli is directly responsible for
the Leasing Company's lease marketing and operations in Europe, the Middle East
and Africa and is based in Italy. Since joining Cronos in 1983, Mr. Sciacovelli
served as Area Director and Area Manager for Southern Europe. Prior to joining
Cronos, Mr. Sciacovelli was a Sales Manager at Interpool Ltd.

   JOHN C. KIRBY Mr. Kirby, 46, is responsible for container purchasing,
contract and billing administration, container repairs and leasing-related
systems, and is based in the United Kingdom. Mr. Kirby joined CCC in 1985 as
European Technical Manager and advanced to Director of European Operations in
1986, a position he held with CCC, and later the Leasing Company, until his
promotion to Vice President/Operations of the Leasing Company in 1992. From 1982
to 1985, Mr. Kirby was employed by CLOU Containers, a container leasing company,
as Technical Manager based in Hamburg, Germany. Mr. Kirby acquired a
professional engineering qualification from the Mid-Essex Technical College in
England.



                                       29
<PAGE>   30
Item 11. Executive Compensation

   The Registrant pays a management fee and will reimburse the managing general
partner as set forth in the following table.

   The Registrant also makes quarterly distributions to its partners (general
and limited) from distributable cash from operations (allocated 95% to the
limited partners and 5% to the general partners) or sales proceeds (allocated
100% to the limited partners). However, if the amount of the limited partners'
capital contributions invested in equipment exceeds the minimum percentage
required by Section 3.5 of the Limited Partnership Agreement, and the limited
partners have received cumulative distributions equal to their capital
contributions, the general partners' interest in distributions from operations
will be increased by one percentage point for each 1% of the limited partners'
capital contribution invested in equipment in excess of 80%.

   During 1992, this threshold was reached and, accordingly, distributions from
distributable cash from operations (allocated 91% to the limited partners and 9%
to the general partners) were adjusted. The allocation of sales proceeds
remained unchanged. These allocations remained in effect until 1994, at which
time the limited partners received from the Registrant aggregate distributions
in an amount equal to their adjusted capital contributions plus an 8%
cumulative, compounded (daily) annual return on their adjusted capital
contributions. Thereafter, all Partnership distributions have been allocated 81%
to the limited partners and 19% to the general partners. Cash distributions from
operations to the general partners in excess of 9% of distributable cash are
considered to be incentive fees and are compensation to the general partners.

   The Registrant does not pay or reimburse CCC or the associate general
partners for any remuneration payable by them to their executive officers,
directors or any other controlling persons. However, the Registrant does
reimburse the managing general partner for certain services pursuant to the
Partnership Agreement. These services include but are not limited to (i)
salaries and related salary expenses for services which could be performed
directly for the Registrant by independent parties, such as legal, accounting,
transfer agent, data processing, operations, communications, duplicating and
other such services; (ii) performing administrative services necessary to the
prudent operations of the Registrant.



                                       30
<PAGE>   31
   The following table sets forth the fees the Registrant paid (on a cash basis)
to CCC and the associate general partners of the Registrant, for the fiscal year
1999.



<TABLE>
<CAPTION>
                                                                                     Cash Fees and
                 Name                             Description                         Distributions
                 ----                             -----------                         -------------
<S>                             <C>                                                  <C>
   1)                           Base management fees - equal to 7% of gross
                                lease revenues attributable to operating leases
                                pursuant to Section 4.3 of the Limited
          CCC                   Partnership Agreement                                  $42,585


   2)                           Reimbursed administrative expenses - equal to
                                the costs expended by CCC and its affiliates for
                                services necessary to the prudent operation of
                                the Registrant pursuant to Section 4.4 of
          CCC                   the Limited Partnership Agreement                      $27,948


   3)                           Interest in Fund - percentage of distributable
                                cash for any quarter prior to receipt of the
                                incentive management fee, pursuant Section 6.1
          CCC                   of the Limited Partnership Agreement                   $32,858

          Associate General
          Partners                                                                      $8,215


   4)                           Interest in Fund - percentage of sales proceeds
                                for any quarter pursuant to Section 6.1 of the
                                Limited Partnership Agreement
          CCC                                                                          $35,705

          Associate General
          Partners                                                                      $8,927


   5)                           Incentive management fee - 10% of cash
                                distributed from operations and sales proceeds
                                after a cumulative return to the Limited
                                Partners of 8% cumulative, compounded (daily),
                                annual return of their adjusted capital
                                contributions pursuant to Section 6.1 of the
          CCC                   Limited Partnership Agreement                          $76,181

          Associate General
          Partners                                                                     $19,045
</TABLE>



                                       31
<PAGE>   32
Item 12. Security Ownership of Certain Beneficial Owners and Management

   (a)  Security Ownership of Certain Beneficial Owners

   There is no person or "group" of persons known to the management of CCC to be
the beneficial owner of more than five percent of the outstanding units of
limited partnership interests of the Registrant.

   (b)  Security Ownership of Management

   The Registrant has no directors or officers. It is managed by CCC. Ownership
of units of limited partnership interests of the Registrant by CCC, its officers
and/or directors of CCC is as follows:


<TABLE>
<CAPTION>
                                                   Number        Percent of
       Name of Beneficial Owner                   of Units        All Units
       ------------------------                   --------       ----------
<S>                                               <C>            <C>
       Dennis J. Tietz                              20.0            .215%
       John P. McDonald                             80.0            .859%
       Laurence P. Sargent                          10.0            .107%
       Elinor Wexler                                15.0            .161%
       Cronos Capital Corp                          39.2            .421%
                                                    ----            ----

       Officers, Directors, and CCC as a Group     164.2           1.763%
                                                   =====           =====
</TABLE>


   (c)  Changes in Control

   Inapplicable.


Item 13. Certain Relationships and Related Transactions

   (a)  Transactions with Management and Others

   The Registrant's only transactions with management and other related parties
during 1999 were limited to those fees paid or amounts committed to be paid (on
an annual basis) to CCC, the managing general partner, and the associate general
partners. See Item 11, "Executive Compensation," herein.

   (b)  Certain Business Relationships

   Inapplicable.

   (c)  Indebtedness of Management

   Inapplicable.

   (d)  Transactions with Promoters

   Inapplicable.


                                       32
<PAGE>   33
                                     PART IV


Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

<TABLE>
<CAPTION>
                                                                               Page
                                                                               ----
<S>                                                                            <C>
   (a)1.  Financial Statements

          Independent Auditors' Report...........................................15

          Report of Independent Public Accountants...............................16

The following financial statements of the Registrant are included in
Part II, Item 8:

          Balance Sheets - as of December 31, 1999 and 1998......................17

          Statements of Operations - for the years ended December 31, 1999,
          1998 and 1997..........................................................18

          Statements of Partners' Capital - for the years ended December 31,
          1999, 1998 and 1997....................................................19

          Statements of Cash Flows - for the years ended December 31, 1999,
          1998 and 1997..........................................................20

          Notes to Financial Statements..........................................21
</TABLE>


   All schedules are omitted as the information is not required or the
information is included in the financial statements or notes thereto.



                                       33
<PAGE>   34
   (a)3. Exhibits

<TABLE>
<CAPTION>
            Exhibit
              No.                       Description                        Method of Filing
            -------                     -----------                        ----------------
<S>                    <C>                                                 <C>
             3(a)      Limited Partnership Agreement of the Registrant,     *
                       amended and restated as of December 1, 1986

             3(b)      Certificate of Limited Partnership of the            **
                       Registrant

             27        Financial Data Schedule                              Filed with this document
</TABLE>


   (b)  Reports on Form 8-K

   No reports on Form 8-K were filed by the Registrant during the quarter ended
December 31, 1999.


-------------
*  Incorporated by reference to Exhibit "A" to the Prospectus of the Registrant
   dated December 3, 1986, included as part of Registration Statement on Form
   S-1 (No. 33-9351)

** Incorporated by reference to Exhibit 3.2 to the Registration Statement on
   Form S-1 (No. 33-9351)



                                       34
<PAGE>   35
                                   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 VII,
                                       A California Limited Partnership


                                       By  Cronos Capital Corp.
                                           The Managing General Partner




                                       By  /s/  Dennis J. Tietz
                                           -------------------------------------
                                           Dennis J. Tietz
                                           President and Director of Cronos
                                           Capital Corp. ("CCC")
                                           Principal Executive Officer of CCC




Date:  March 30, 2000


   Pursuant to the requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Cronos
Capital Corp., the managing general partner of the Registrant, in the capacities
and on the dates indicated:

<TABLE>
<CAPTION>
        Signature                           Title                            Date
        ---------                           -----                            ----
<S>                               <C>                                  <C>
 /s/ Dennis J. Tietz              President and Director of            March 30, 2000
-----------------------------        Cronos Capital Corp.
Dennis J. Tietz                      ("CCC") (Principal
                                          Executive
                                       Officer of CCC)

 /s/ Peter J. Younger              Treasurer and Director of           March 30, 2000
-----------------------------         Cronos Capital Corp.
Peter J. Younger                       ("CCC") (Principal
                                    Financial and Accounting
                                        Officer of CCC)


 /s/ John P. McDonald               National Sales Manager            March 30, 2000
 ----------------------------           and Director of
John P. McDonald                     Cronos Capital Corp.
</TABLE>


                            SUPPLEMENTAL INFORMATION

   The Registrant's annual report will be furnished to its limited partners on
or about April 30, 2000. Copies of the annual report will be concurrently
furnished to the Commission for information purposes only, and shall not be
deemed to be filed with the Commission.



<PAGE>   36
                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
            Exhibit
              No.                       Description                        Method of Filing
            -------                     -----------                        ----------------
<S>                    <C>                                                 <C>
             3(a)      Limited Partnership Agreement of the Registrant,     *
                       amended and restated as of December 1, 1986

             3(b)      Certificate of Limited Partnership of the            **
                       Registrant

             27        Financial Data Schedule                              Filed with this document
</TABLE>



-------------

*  Incorporated by reference to Exhibit "A" to the Prospectus of the Registrant
   dated December 3, 1986, included as part of Registration Statement on Form
   S-1 (No. 33-9351)

** Incorporated by reference to Exhibit 3.2 to the Registration Statement on
   Form S-1 (No. 33-9351)