<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 $ 250.00

                   For the fiscal year ended December 31, 1995
                                       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 of             (I.R.S. Employer Identification No.)
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>

                                        2
<PAGE>   3
    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. Cronos Holdings/Investments (U.S.), Inc. is a
wholly-owned subsidiary of Cronos Investments B.V., a Dutch company. These and
other affiliated companies are ultimately wholly-owned by The Cronos Group, a
holding company registered in Luxembourg ("Holding 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 or managed by the Group on
its own behalf or on behalf of other third-party container owners, including all
other programs organized by CCC. The associate general partners are: Dennis J.
Tietz, President and Director of CCC; 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 information concerning the containers acquired by the Registrant, see
Item 2, "Properties."

    (b)  Financial Information About Industry Segments

    Inapplicable.

    (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 effectively 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. 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
constitute approximately 85% of the worldwide container fleet. Refrigerated and
tank containers constitute approximately 7% of the worldwide container fleet,
with open-tops and 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 a major catalyst for world trade growth during the
last twenty-five years, which in turn has generated increased demand for
containerization. The world container fleet has grown from an estimated 270,000
TEU in 1969 to 9,198,000 TEU at the end of 1995, and according to recent
industry data, growth of containerized shipping since 1987 has generally
averaged two to three times that of average GDP growth in industrialized
countries.

                                        3
<PAGE>   4
    The Registrant believes that growth of containerization will continue to
outpace GDP growth and the growth in world trade over the next five years for
the following reasons:

    -   Lower freight rates resulting from containerization are generating new
        cargos that previously were not economical to export. Containerization
        provides inexpensive, timely and secure transport to manufacturers
        allowing them to take advantage of regional opportunities in technology
        or labor, and to move products to different locations at various stages
        of production;

    -   Intermodal traffic is expected to continue to grow, and industrialized
        countries are continuing to improve intermodal infrastructure (i.e.,
        railways, roads and ports);

    -   Shippers continue to demand transportation of cargo by containers rather
        than break-bulk;

    -   Countries with rapidly-growing economies in emerging markets are
        continuing to build new container port facilities that accommodate an
        increased flow of containerized trade; and

    -   Recent trade agreements, such as the North American Free Trade Agreement
        ("NAFTA") and the General Agreement on Tariffs and Trade ("GATT"),
        should further stimulate world trade, and, therefore containerized
        trade.

    The container leasing industry has been a significant contributor to the
growth of containerization, and, in 1995, had an approximately 47% share of the
total world container fleet with ocean carriers holding most of the remainder.
To an ocean carrier, the primary benefits of leasing rather than owning
containers are the following:

    -   Reduced Capital Expenditures. Leasing is an attractive option to ocean
        carriers because ownership of containers requires significant capital
        expenditures. Carriers constantly evaluate their investment strategy,
        with container purchasing competing directly with other expenditure
        requirements, such as ship purchases, ship conversions and terminal
        improvements. Container leasing allows ocean carriers to invest capital
        in assets that are more central to their business.

    -   Improved Asset Management. Trade flow imbalances and seasonal demands
        frequently leave ocean carriers with regional surpluses or shortages of
        containers, requiring costly repositioning of empty containers. Leasing
        companies help ocean carriers manage these trade imbalances by providing
        the inventory to service demand, reducing the costs of maintaining local
        inventories and minimizing repositioning expenses. By matching different
        carriers' container needs, leasing companies can reduce their own risks
        of container inventory imbalances and seasonality through a portfolio of
        lessees as well as variations in lease terms.

    -   Increased Container Fleet Flexibility. Ocean carriers benefit from the
        variety of lease types offered by leasing companies such as the master
        lease, long-term and short-term lease and direct financing lease. These
        various leases give ocean carriers flexibility in sizing their fleets
        while minimizing capital costs. For example, master lease agreements
        give ocean carriers the option of adjusting the size of their fleets,
        with the flexibility to pick-up and drop-off containers at various
        locations around the world.

    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 (Corten(R) roofs, walls, doors and undercarriage), a
high-tensile steel yielding greater damage and corrosion resistance than mild
steel.

    The Registrant's containers are leased primarily to ocean-going steamship
companies 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 and, secondarily, term leases (1-5 years) and one-way or round-trip
leases.

                                        4
<PAGE>   5
    Master lease agreements. A master lease is designed to provide greater
flexibility by allowing customers to pick-up and drop-off containers where and
when needed, subject to restrictions and availability, on pre-agreed terms. The
commercial terms of master leases are generally negotiated annually. Master
leases also define the number of containers that may be returned within each
calendar month and the return locations and applicable drop-off charges. Because
of 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 agreements. Term lease agreements include short-term and
long-term leases. Long-term lease agreements define the number of containers to
be leased, the pick-up and drop-off locations, the applicable per-diem rental
rate for the duration of the lease and the early termination penalties that may
apply in the event of early redelivery. Ocean carriers use long-term leases when
they have a need for identified containers for a specified term. Long-term
leases usually are not terminated early by the customer and provide the
Registrant with stable and relatively predictable sources of revenue, although
per-diem rates and ancillary charges are lower under long-term leases than under
master lease agreements. 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
containers to be leased. Ocean carriers 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 after one
or more legs of a voyage. Except for direct financing leases, lease rates
typically are highest for short-term leases.

    Under these leases, 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 upon
redelivery, other than ordinary wear and tear. 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.

    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 which 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.

    The non-cancelable terms of the operating leases of the Registrant's
containers will not be sufficient to return to the Registrant as lessor the
purchase price of the equipment. In order to recover the original investment in
the equipment and achieve an adequate return thereon, it is necessary to renew
the lease, lease the equipment to another lessee at the end of the initial lease
term, or sell the equipment.

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

                                        5
<PAGE>   6
    Of the 947 twenty-foot and 1,029 forty-foot dry cargo containers owned by
the Registrant as of December 31, 1995, 747 twenty-foot (or 79% thereof) and 870
forty-foot dry cargo containers (or 85% thereof) were on lease. The following
table sets forth the information on the lease terms with respect to the
containers on lease:

<TABLE>
<CAPTION>
                                                        Number of
                                                       Containers
                                                       ----------
<S>                                                    <C>
         20-Foot Dry Cargo Containers:
             Term Leases                                   65
             Master Leases                                682

         40-Foot Dry Cargo Containers:
             Term Leases                                  118
             Master Leases                                752
</TABLE>

    The Leasing Company will make 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 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.

    The Registrant's sales 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;
Windsor, England; Hamburg; Antwerp; Auckland; Genoa; Singapore; Hong Kong;
Sydney; Tokyo; Taipei; Seoul; Rio de Janeiro; and Shanghai. Each of the Leasing
Company's area offices and dedicated agents is staffed with local people
familiar with the customers and language of the region. The Leasing Company's
marketing directors have been employed in the container industry in their
respective regions for an average of 15 years, building direct personal
relationships with the local ocean carriers and locally based representatives of
other ocean carriers.

    The Leasing Company also maintains agency relationships with over 20
independent agents around the world, who are generally paid a commission 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. They 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, and the point
when the Leasing Company's area offices report the container's movements onto
the Leasing Company's equipment tracking system. The Leasing Company's computer
system has the capability to accommodate future developments, such as allowing
depots access to record directly on the system the on-hire and off-hire activity
of containers delivered into the depot. It also has the capability of verifying
the terms of redelivery authorized by the area offices. These functions are
currently being performed by the Leasing Company's area offices.

    (c)(1)(ii)  Inapplicable.

    (c)(1)(iii)  Inapplicable.

    (c)(1)(iv)  Inapplicable.

                                        6
<PAGE>   7
    (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 inflation and 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 receipt. 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, 1995, no single lessee
accounted for 10% or more 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. The
Leasing Company believes that it, on behalf of the Registrant, competes
favorably on all of these factors.

    The Leasing Company, on behalf of the Registrant, competes with various
container leasing companies in the markets in which it conducts business,
including Genstar Container Corp., Transamerica Leasing, Triton Container
International Ltd., Trans Ocean Ltd., Textainer Corp. and others. In a series of
recent consolidations, one of the major leasing companies, as well as some
smaller ones, have been acquired by competitors. It is estimated that at the end
of 1995, the ten largest leasing companies (including the Leasing Company)
represented 94% of the global leased fleet. Genstar Container Corp. and
Transamerica Leasing, the two largest container leasing companies, had
approximately 50% of the worldwide leased container fleet at the end of 1995.
Some of the Leasing Company's competitors have greater financial resources than
the Leasing Company and may be more capable of offering lower per-diem rates on
a larger fleet. 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. In addition, 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 leasing.

    (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 27 employees, consisting of 5 officers, 4 other managers and
18 clerical and staff personnel.


                                        7
<PAGE>   8
    (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-going steamship companies. To this extent, the Registrant's operations are
subject to the fluctuations of worldwide economic and political conditions that
may affect the pattern and levels of world trade.

    Rental income from leases to foreign customers constituted approximately 90%
of the Registrant's total rental income for the years 1995, 1994 and 1993. 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, 1995, the Registrant owned 947 twenty-foot and 1,029
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, 1995 was as follows:

<TABLE>
<CAPTION>
                                                        Estimated
                                                       Useful Life        Average Age        Average Cost
                                                       -----------        -----------        ------------
<S>                                                    <C>                <C>                <C>
                20-Foot Dry Cargo Containers           10-15 years           8 years           $  2,091
                40-Foot Dry Cargo Containers           10-15 years           9 years           $  2,627
</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 1995, utilization averaged 87%.

    During 1995, the Registrant disposed of 19 twenty-foot and 30 forty-foot
marine dry cargo containers at an average book gain of $722 per container.

Item 3. Legal Proceedings

    Inapplicable.

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

    Inapplicable.

                                        8
<PAGE>   9
                                     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

                                                        Number of Unit Holders
    (b)(1) Title of Class                              as of December  31, 1995
             Units of limited partnership

                interests                                          544

    (c)  Dividends

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

                                        9
<PAGE>   10
Item 6. Selected Financial Data

<TABLE>
<CAPTION>
                                                             Year Ended December 31,
                                       ------------------------------------------------------------------
                                          1995          1994          1993          1992          1991
                                       ----------    ----------    ----------    ----------    ----------
<S>                                    <C>           <C>           <C>           <C>           <C>
    Net lease revenue                  $  864,468    $  870,781    $1,059,690    $1,273,280    $1,408,463

    Net earnings                       $  611,498    $  618,243    $  772,199    $  971,131    $1,088,037

    Net earnings per unit of
       limited partnership interest    $    55.42    $    55.49    $    71.48    $    94.98    $   110.52

    Cash distributions per unit of
       limited partnership interest    $    88.75    $    97.50    $   121.25    $   148.75    $   133.75

    At year-end:

    Total assets                       $3,171,248    $3,478,236    $3,869,643    $4,347,305    $4,851,137

    Long-term obligations              $     --      $     --      $     --      $    8,401    $   19,526

    Partners' capital                  $3,171,248    $3,478,236    $3,861,242    $4,327,779    $4,820,485
</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 flow 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 current operating needs. No credit
lines are maintained to finance working capital.

    At December 31, 1995, the Registrant had $383,705 in cash and cash
equivalents, an increase of $88,560 from December 31, 1994 and a decrease of
$6,211 from December 31, 1993. A slightly smaller operating fleet size,
declining per-diem rental rates and fluctuating utilization levels, contributed
to these changes.

    The Registrant's allowance for doubtful accounts increased from $74,821 in
1994 to $89,590 in 1995. The Leasing Company has either negotiated specific
payment terms or is pursuing other alternatives in an attempt to collect the
outstanding receivable balances. During 1995, the Leasing Company concentrated
on improving the credit quality of its customer portfolio. The Registrant
expects to gain long-term benefits from the improvement in the credit quality of
this customer portfolio, as the allowance for doubtful accounts and related
expenses should decline in subsequent periods.

    Cash distributions from operations were originally allocated 5% to the
general partners and 95% to the limited partners. Distributions of sales
proceeds are allocated 100% to the limited partners. In 1991, pursuant to
Section 6.1(c) of the Partnership Agreement, the allocations of distributions
from operations among the general partners and limited partners were 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 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. As a result of this threshold being reached,
distributions received by the limited partners should decline from levels
experienced in prior periods.

    Cash distributions from operations to the general partners in excess of 8%
of distributable cash are considered to be an incentive fee and is compensation
to the general partners. The incentive fee, which is based on the operating
performance of the fleet and sales proceeds, is paid only after the limited
partners reach the aforementioned distribution threshold levels. As a result,
the incentive fee increased from $68,131 in 1994 to $108,161 in 1995.

                                       10
<PAGE>   11
    From inception through February 29, 1996, the Registrant has distributed
$7,668,184 in cash from operations and $273,604 in cash from sales proceeds to
its limited partners. This represents total distributions of $7,941,788, or 171%
of the Registrant's original limited partners' investment. 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. The
Registrant will continue to distribute to its partners all cash generated from
operations and sales proceeds, to the extent possible, periodically increasing
or decreasing working capital reserves, as deemed appropriate by CCC.

    Another of the Registrant's original objectives was to realize the residual
value of its containers after the expiration of their economic useful lives. The
decision to dispose of containers is influenced by various factors including
age, condition, suitability for continued leasing as well as the geographical
location when disposed. Cash generated from sales proceeds should continue to
fluctuate in subsequent periods as a result of these factors. Cash generated
from sales proceeds totaled $83,238, $66,911 and $21,195 for the years ended
December 31, 1995, 1994 and 1993, respectively.

    The container leasing market generally softened during the fourth quarter of
1995 and has remained so during the early months of 1996. Demand for leased
containers remains stable in some areas of the world; however, sluggish activity
in other markets, particularly in Southeast Asia, has resulted in an increase in
container inventories. The current market conditions cannot be attributed to any
one factor; rather, a series of factors, in combination, have resulted in a
slowdown in leasing activity. Some of the contributing factors are: a slowdown
in some European economies, as well as in some Far East exporting countries;
increased efficiencies in the shipping industry through the formation of
alliances between shipping lines; and a prolonged seasonal slowdown in container
demand during the holiday season. Although some further softening in market
conditions may be anticipated, the volume of world trade continues to grow and
the long-term outlook is a positive one.

Results of Operations

1995 - 1994

    In 1995, the Registrant's operations were impacted by its declining fleet
size, increasingly competitive market conditions, including, but not limited to,
the container leasing market's resistance to higher per-diem rental rates, an
expanding supply of containers within the container industry, as well as
increased efficiencies in the shipping industry. The Registrant's net lease
revenue, which decreased by less than 1% when compared to 1994, 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. The Registrant's net lease revenue
is directly related to the size of its fleet and the utilization and per-diem
rental rates of the equipment owned by the Registrant.

    During 1995, the Registrant's average fleet size (as measured in twenty-foot
equivalent units ("TEU")) was 3,042 TEU, as compared to 3,101 TEU in 1994. At
December 31, 1995, 94% 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                                     65      118
    Master lease                                   682      752
                                                   ---    -----
         Subtotal                                  747      870
Containers off lease                               200      159
                                                   ---    -----
    Total container fleet                          947    1,029
                                                   ===    =====
</TABLE>


<TABLE>
<CAPTION>
                                             20-Foot          40-Foot
                                        --------------     --------------
                                        Units      %       Units      %
                                        -----    -----     -----    -----
<S>                                     <C>      <C>       <C>      <C>
Total purchases                         1,001      100%    1,104      100%
    Less disposals                         54        5%       75        7%
                                        -----      ---     -----      ---
Remaining fleet at December 31, 1995      947       95%    1,029       93%
                                        =====      ===     =====      ===
</TABLE>


                                       11
<PAGE>   12
    Utilization rates decreased slightly from an average of 88% during 1994 to
an average of 87% during 1995. Per-diem rental rates decreased by less than 1%
from 1994 levels. Despite these declines, gross rental revenue, a component of
net lease revenue, increased from $1,458,573 in 1994 to $1,446,407 in 1995. The
impact on gross rental revenue arising from the decline in the average fleet
size, utilization and per-diem rental rates, was offset by a 35% increase in
ancillary revenue. Ancillary revenue contributed to approximately 16% and 12% of
the Registrant's total gross rental revenue in 1995 and 1994, respectively.
Ancillary revenue is comprised of pick-up, drop-off , handling and off-hire
charges, as well as lease incentives such as drop-off and pick-up credits.

    The Registrant's slightly smaller fleet contributed to a 2% decline in
depreciation expense during 1995. The Leasing Company makes payments to the
Registrant based upon the rentals collected from ocean carriers after deducting
certain operating expenses associated with the containers, such as base
management fees and reimbursed administrative expense payable to CCC and its
affiliates, 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. Rental equipment direct operating expenses
decreased 3% when compared to 1994. Contributing to this decline was a 68%
decline in the provision for doubtful accounts, which reduced the impact of
higher costs usually associated with lower utilization rates, such as storage,
handling, and repair and maintenance expenses.

    The Registrant disposed of 20 twenty-foot and 30 forty-foot marine dry cargo
containers during 1995, as compared to 19 twenty-foot and 13 forty-foot marine
dry cargo containers during 1994. Approximately 6% of the Registrant's net
earnings for 1995 were from gain on disposal of equipment, as compared to 7% for
1994. 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.

1994 - 1993

    The container leasing industry began to benefit from a global economic
recovery during the latter half of 1994, experiencing an improvement in
conditions that existed during 1993, including an upward trend in utilization
rates, a reduction in container inventories, and a stabilization of declining
per-diem rental rates during the fourth quarter of 1994. Despite these
conditions, net lease revenue decreased by approximately 18%, when compared to
1993. During 1994, the Registrant operated a fleet averaging 3,101 TEU
(twenty-foot equivalent units), compared with an average of 3,135 TEU during
1993. The Registrant's average per-diem rental rates during 1994 were 5% lower
than 1993 levels. Utilization averaged 88% during 1994, the same as the prior
year.

    Rental equipment direct operating expenses increased as the Registrant's
fleet experienced an increase in turnover activity, storage, and handling.
Additionally, the provision for doubtful accounts also increased from $22,465 in
1993 to $77,339 in 1994. These increases offset a decline in repair and
maintenance expense.

    The Registrant disposed of 20 twenty-foot and 13 forty-foot marine dry cargo
containers during 1994, as compared to three twenty-foot and five forty-foot
marine dry cargo containers during 1993. As a result, approximately 7% of the
Registrant's earnings during 1994 were from gain in disposal of equipment, as
compared to 1% for 1993.


Item 8. Financial Statements and Supplementary Data

                                       12
<PAGE>   13



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



The Partners
IEA Income Fund VII,
A California Limited Partnership:


We have audited the accompanying balance sheets of IEA Income Fund VII, A
California Limited Partnership, as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital and cash flows for each of
the three years in the period ended December 31, 1995. These financial
statements and the schedule referred to below are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements and schedule 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, 1995 and 1994, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1995, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedule 1 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. This information has been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

                                               Arthur Andersen, LLP

San Francisco, California,
  March 15, 1996

                                       13
<PAGE>   14
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                                 BALANCE SHEETS

                           DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
                   Assets                                 1995          1994
                   ------                                 ----          ----
<S>                                                    <C>           <C>
Current assets:
    Cash, includes $132,105 in 1995 and $82,301
       in 1994 in interest-bearing accounts            $  132,486    $   95,145
    Short-term investments (note 2)                       251,219       200,000
    Net lease receivables due from Leasing Company
       (notes 1 and 3)                                    153,232       198,083
                                                       ----------    ----------

           Total current assets                           536,937       493,228
                                                       ----------    ----------

Container rental equipment, at cost                     4,916,860     5,040,541
    Less accumulated depreciation                       2,282,549     2,055,533
                                                       ----------    ----------
       Net container rental equipment                   2,634,311     2,985,008
                                                       ----------    ----------

                                                       $3,171,248    $3,478,236
                                                       ==========    ==========

              Partners' Capital
              -----------------

Partners' capital (note 7):
    General partners                                   $    5,025    $    1,528
    Limited partners                                    3,166,223     3,476,708
                                                       ----------    ----------

           Total partners' capital                      3,171,248     3,478,236
                                                       ----------    ----------

                                                       $3,171,248    $3,478,236
                                                       ==========    ==========
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       14
<PAGE>   15
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
                                                       1995          1994          1993
                                                       ----          ----          ----
<S>                                                 <C>           <C>           <C>
Net lease revenue (notes 1 and 5)                   $  864,468    $  870,781    $1,059,690

Other operating expenses:
    Depreciation and amortization (note 1)             281,452       286,867       290,266
    Other general and administrative expenses           25,402        23,605        17,830
                                                    ----------    ----------    ----------
                                                       306,854       310,472       308,096
                                                    ----------    ----------    ----------

           Earnings from operations                    557,614       560,309       751,594

Other income:
    Interest income                                     18,482        12,386        11,126
    Net gain on disposal of equipment                   35,402        45,548         9,479
                                                    ----------    ----------    ----------
                                                        53,884        57,934        20,605
                                                    ----------    ----------    ----------

           Net earnings                             $  611,498    $  618,243    $  772,199
                                                    ==========    ==========    ==========

Allocation of net earnings:

    General partners                                $   95,347    $  101,435    $  106,480
    Limited partners                                   516,151       516,808       665,719
                                                    ----------    ----------    ----------

                                                    $  611,498    $  618,243    $  772,199
                                                    ==========    ==========    ==========

Limited partners' per unit share of net earnings    $    55.42    $    55.49    $    71.48
                                                    ==========    ==========    ==========
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       15
<PAGE>   16
                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                         STATEMENTS OF PARTNERS' CAPITAL

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
                                   Limited
                                   Partners         General
                                   (Note 7)         Partners        Total
                                   --------         --------        -----
<S>                              <C>             <C>             <C>
Balances at January 1, 1993      $ 4,331,664     $    (3,885)    $ 4,327,779

Net earnings                         665,719         106,480         772,199

Cash distributions                (1,129,347)       (109,389)     (1,238,736)
                                 -----------     -----------     -----------
Balances at December 31, 1993      3,868,036          (6,794)      3,861,242

Net earnings                         516,808         101,435         618,243

Cash distributions                  (908,136)        (93,113)     (1,001,249)
                                 -----------     -----------     -----------
Balances at December 31, 1994      3,476,708           1,528       3,478,236

Net earnings                         516,151          95,347         611,498

Cash distributions                  (826,636)        (91,850)       (918,486)
                                 -----------     -----------     -----------

Balances at December 31, 1995    $ 3,166,223     $     5,025     $ 3,171,248
                                 ===========     ===========     ===========
</TABLE>



        The accompanying notes are an integral part of these statements.

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

                            STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
                                                                       1995            1994            1993
                                                                       ----            ----            ----
<S>                                                                <C>             <C>             <C>
Cash flows from operating activities:
    Net earnings                                                   $   611,498     $   618,243     $   772,199
    Adjustments to reconcile net earnings to net cash
       provided by (used in) operating activities:
          Depreciation and amortization                                281,452         286,867         290,266
          Net gain on disposal of equipment                            (35,402)        (45,548)         (9,479)
          Decrease (increase) in net lease receivables due from
              Leasing Company                                           66,260         (11,594)         (1,462)
                                                                   -----------     -----------     -----------

              Total adjustments                                        312,310         229,725         279,325
                                                                   -----------     -----------     -----------

              Net cash provided by operating activities                923,808         847,968       1,051,524
                                                                   -----------     -----------     -----------

Cash flows from (used in) investing activities:
    Proceeds from disposal of equipment                                 83,238          66,911          21,195
    Acquisition fees paid to managing general partner                     --            (8,401)        (11,126)
                                                                   -----------     -----------     -----------

              Net cash provided by investing activities                 83,238          58,510          10,069
                                                                   -----------     -----------     -----------

Cash flows used in financing activities:
    Distributions to partners                                         (918,486)     (1,001,249)     (1,238,736)
                                                                   -----------     -----------     -----------
Net increase (decrease) in cash and cash equivalents                    88,560         (94,771)       (177,143)

Cash and cash equivalents at beginning at year                         295,145         389,916         567,059
                                                                   -----------     -----------     -----------

Cash and cash equivalents at end of year                           $   383,705     $   295,145     $   389,916
                                                                   ===========     ===========     ===========
</TABLE>

        The accompanying notes are an integral part of these statements.

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

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993

(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. 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 and controls the
           business of the Partnership.

           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
           purchased.

           As of December 31, 1995, the Partnership owned and operated 947
           twenty-foot and 1,029 forty-foot marine dry cargo containers.

      (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; 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.

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

                          NOTES TO FINANCIAL STATEMENTS

      (c)  Basis of Accounting

           The Partnership utilizes the accrual method of accounting. Revenue is
           recorded when earned.

           The preparation of financial statements in conformity with generally
           accepted accounting principles (GAAP) requires the Partnership to
           make estimates and assumptions that affect the reported amounts of
           assets and liabilities and disclosure of contingent assets and
           liabilities at the date of the financial statements and the reported
           amounts of revenues and expenses during the reported period.

      (d)  Allocation of Net Earnings and Partnership Distributions

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

           Actual cash distributions differ from the allocations of net earnings
           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 are
           allocated 95% to the limited partners and 5% to the general partners.
           Sales proceeds are 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 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 (allocated 91% to the limited
           partners and 9% to the general partners) were adjusted. These
           allocations will be maintained until such time as the limited
           partners have received from the Partnership aggregate distributions
           in an amount equal to their capital contributions plus an 8%
           cumulative, compounded (daily), annual return on their adjusted
           capital contributions. Thereafter, all Partnership distributions will
           be allocated 81% to the limited partners and 19% to the general
           partners.

      (e)  Acquisition Fees

           Pursuant to Article IV Section 4.2 of the Partnership Agreement,
           acquisition fees paid to CCC were based on 5% of the equipment
           purchase price. These fees were capitalized and included in the cost
           of the rental equipment. The fees were payable in five equal annual
           installments commencing in the year of purchase.


      (f)  Rental Equipment - Depreciation

           Rental equipment is depreciated over a twelve-year life on a
           straight-line basis to its estimated salvage value.

      (g)  Amortization

           The Partnership's organization costs were amortized over 60 months on
           a straight-line basis.

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

                          NOTES TO FINANCIAL STATEMENTS

      (h)  Income Taxes

           The Partnership is not subject to income taxes, consequently no
           provision for income taxes has been made. The Partnership files an
           annual information tax return, prepared on the accrual basis of
           accounting. At December 31, 1995, the tax basis of total partners'
           capital was $1,397,345.


      (i)  Foreign Operations

           The Partnership's business is not divided between foreign or domestic
           operations. The Partnership's business is the leasing of containers
           worldwide to ocean-going steamship companies and does not fit the
           definition of reportable foreign operations within Financial
           Accounting Standards Board Statement No. 14 "Financial Reporting for
           Segments of a Business Enterprise." 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.

      (j)  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 statement of operations display the
           payments to be received by the Partnership from the Leasing Company
           as the Partnership's receivables and revenues.

(2)   Short-term Investments

      Short-term investments are carried at cost which approximates market
      value. Short-term investments with an original maturity of less than three
      months are considered cash equivalents.

(3)   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, 1995 and December 31, 1994 were as follows:

<TABLE>
<CAPTION>
                                                            December 31, December 31,
                                                               1995          1994
                                                            -----------  -----------
<S>                                                         <C>          <C>
           Lease receivables, net of  doubtful accounts
              of $89,590 in 1995 and $74,821 in 1994         $348,445     $402,001
           Less:
           Direct operating payables and accrued expenses      81,993       59,495
           Damage protection reserve (note 4)                  42,177       75,199
           Base management fees                                35,812       39,446
           Reimbursed administrative expenses                   6,124        6,780
           Incentive fees                                      29,107       22,998
                                                             --------     --------
                                                             $153,232     $198,083
                                                             ========     ========
</TABLE>

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

                          NOTES TO FINANCIAL STATEMENTS

(4)   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 revenue is recorded when earned
      according to the terms of the rental contract. A reserve has been
      established to provide for the estimated costs incurred by this service.
      This reserve is a component of net lease receivables due from the Leasing
      Company (see note 3). 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.

(5)   Net Lease Revenue

      Net lease revenue is determined by deducting direct operating expenses,
      management 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, 1995, 1994 and 1993, was as
      follows:

<TABLE>
<CAPTION>
                                                                       1995           1994           1993
                                                                       ----           ----           ----
<S>                                                              <C>             <C>            <C>
           Rental revenue (note 8)                               $  1,458,573    $  1,446,407   $  1,531,372
           Rental equipment operating expenses                        307,732         318,417        266,915
           Base management fees (note 6)                               98,461         105,793        105,216
           Reimbursed administrative expenses (note 6)                 79,751          83,285         99,551
           Incentive fees (note 6)                                    108,161          68,131            -
                                                                 ------------    ------------   ------------
                                                                 $    864,468    $    870,781   $  1,059,690
                                                                 ============    ============   ============
</TABLE>


(6)   Compensation to Managing General Partner

      Base management fees are equal to 7% of gross lease revenues attributable
      to operating leases pursuant to Section 4.3 of the Partnership Agreement.
      Reimbursed administrative expenses are equal to the costs expended by CCC
      and its affiliates for services necessary to the prudent operation of the
      Partnership pursuant to Section 4.4 of the Partnership Agreement. The
      following compensation was paid or will be paid by the Partnership to CCC:

<TABLE>
<CAPTION>
                                                                           1995              1994           1993
                                                                           ----              ----           ----
<S>                                                                    <C>              <C>             <C>
           Base management fees                                        $    98,461      $   105,793     $   105,216
           Reimbursed administrative expenses                               79,751           83,285          99,551
           Incentive fees                                                  108,161           68,131             -
                                                                       -----------      -----------     -----------
                                                                       $   286,373      $   257,209     $   204,767
                                                                       ===========      ===========     ===========
</TABLE>

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

                          NOTES TO FINANCIAL STATEMENTS



(7)   Limited Partners' Capital

      Cash distributions made to the limited partners during 1995, 1994 and 1993
      included distributions of proceeds from equipment sales in the amount of
      $46,571, $58,215 and $23,286, 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, 1995, 1994
      and 1993 was $340, $373 and $415, 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.

(8)   Major Lessees

      No single lessee contributed more than 10% of the rental revenue earned
      during 1995, 1994 and 1993.


                                       22
<PAGE>   23
                                                                      Schedule 1

                              IEA INCOME FUND VII,
                        A CALIFORNIA LIMITED PARTNERSHIP

                 SCHEDULE OF REIMBURSED ADMINISTRATIVE EXPENSES
                       PURSUANT TO ARTICLE IV SECTION 4.4
                          OF THE PARTNERSHIP AGREEMENT

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
                                                               1995          1994           1993
                                                               ----          ----           ----
<S>                                                           <C>           <C>           <C>
           Salaries                                           $40,563       $39,004       $51,850
           Other payroll related expenses                       6,253        10,951        14,799
           General and administrative expenses                 32,935        33,330        32,902
                                                              -------       -------       -------

               Total reimbursed administrative expenses       $79,751       $83,285       $99,551
                                                              =======       =======       =======
</TABLE>


                                       23
<PAGE>   24
Item 9. Changes in and Disagreements with Accountants on Accounting and 
        Financial Disclosure

    Inapplicable.

                                       24
<PAGE>   25
                                    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 January
31, 1996, are as follows:

<TABLE>
<CAPTION>
            Name                                                 Office
-------------------------------         ----------------------------------------------------
<S>                                     <C>
Dennis J. Tietz                         President, Chief Executive Officer, and Director
John P. McDonald                        Vice President/Sales
Elinor Wexler                           Vice President/Administration and Secretary
John Kallas                             Vice President/Treasurer and Chief Financial Officer
Laurence P. Sargent                     Director
Stefan M. Palatin                       Director
A. Darrell Ponniah                      Director
</TABLE>


      DENNIS J. TIETZ Mr. Tietz, 43, as President and Chief Executive Officer,
is responsible for the general management of CCC. From 1986 until August 1992,
Mr. Tietz was responsible for the organization, marketing and after-market
support of CCC's investment programs. Mr. Tietz is also President and a director
of Cronos Securities Corp. and a director of The Cronos Group. 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.

      JOHN P. MCDONALD Mr. McDonald, 34, was elected Vice President - National
Sales Manager of CCC in August 1992, with responsibility for marketing CCC's
investment programs. 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.

      ELINOR A. WEXLER Ms. Wexler, 47, was elected Vice President -
Administration and Secretary of CCC in August 1992. 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 KALLAS Mr. Kallas, 33, was elected Vice President/Treasurer and Chief
Financial Officer of CCC in December 1993 and is directly responsible for CCC's
accounting operations and reporting activities. Mr. Kallas has held various
accounting positions since joining CCC in 1989, including Controller, Director
of Accounting and Corporate Accounting Manager. From 1985 to 1989, Mr. Kallas
was an accountant with KPMG Peat Marwick, San Francisco, California.

      Mr. Kallas holds a B.S. degree in Business Administration from the
University of San Francisco and is a certified public accountant. Mr. Kallas is
also Treasurer of Cronos Securities Corp.

                                       25
<PAGE>   26
      LAURENCE P. SARGENT Mr. Sargent, 66, joined the Board of Directors of CCC
in 1991. Mr. Sargent was a founder of Leasing Partners International ("LPI") and
served as its Managing Director from 1983 until 1991. From 1977 to 1983, Mr.
Sargent held a number of positions with Trans Ocean Leasing Corporation, the
last of which was as a director of its refrigerated container leasing
activities. From 1971 to 1977, Mr. Sargent was employed by SSI Container
Corporation (later Itel Container International), ultimately serving as Vice
President / Far East. Prior to that, Mr. Sargent was a Vice President of Pacific
Intermountain Express, a major U.S. motor carrier, responsible for its bulk
container division. Mr. Sargent holds a B.A. degree from Stanford University.
Mr. Sargent also serves as a director of the Institute of International
Container Lessors ("IICL"), an industry trade association. Mr. Sargent is also a
director of Cronos Securities Corp.

      Mr. Sargent retired as Deputy Chairman of the Group as of January 1, 1996.
He will remain a director of CCC, The Cronos Group, as well as other various
subsidiaries of The Cronos Group.

      STEFAN M. PALATIN Mr. Palatin, 42, joined the Board of Directors of CCC in
January 1993. Mr. Palatin is Chairman and CEO of The Cronos Group, and was a
founder of LPI in 1983. From 1980 to 1991, Mr. Palatin was an executive director
of the Contrin Group, which has provided financing to the container leasing
industry, as well as other business ventures, and has sponsored limited
partnerships organized in Austria. From 1977 to 1980, Mr. Palatin was a
consultant to a number of companies in Austria, including Contrin. From 1973 to
1977, Mr. Palatin was a sales manager for Generali AG, the largest insurance
group in Austria.

      Mr. Palatin, who is based in Austria, holds a Doctorate in Business
Administration from the University of Economics and World Trade in Vienna. Mr.
Palatin is also a director of The Cronos Group.

      A. DARRELL PONNIAH Mr. Ponniah, 46, was elected to the Board of Directors
of CCC in January 1993. Mr. Ponniah is Chief Financial Officer of The Cronos
Group and is based in the United Kingdom. Prior to joining Cronos in 1991, Mr.
Ponniah was employed by the Barclays Bank Group and served as Chief Operating
Officer of Barclays European Equipment Finance. From 1973 to 1988, Mr. Ponniah
was employed by Rank Xerox, the European-based subsidiary of Xerox Corporation
of the U.S.A., in a number of positions, the most recent of which was as Group
Controller and Chief Financial Officer of the International Equipment Financing
Division of Rank Xerox Limited.

      Mr. Ponniah is an honors graduate of Manchester University in England and
holds post graduate degrees in operational research from Brunel University and
in Business Administration from the Manchester Business School. Mr. Ponniah is
also a director of The Cronos Group and Cronos Securities Corp.

      The key management personnel of the Leasing Company at January 31, 1996,
were as follows:

<TABLE>
<CAPTION>
            Name                                        Title
-------------------------------         ---------------------------------------------
<S>                                     <C>
Nigel J. Stribley                       President
John M. Foy                             Vice President/Americas
Geoffrey J. Mornard                     Vice President/Europe, Middle East and Africa
Danny Wong                              Vice President/Asia Pacific
David Heather                           Vice President/Technical Services
John C. Kirby                           Vice President/Operations
J. Gordon Steel                         Vice President/Tank Container Division
</TABLE>

      NIGEL J. STRIBLEY Mr. Stribley, 42, has been responsible for the general
management of the Leasing Company since September 1991. From 1985 to 1991, Mr.
Stribley was a director of LPI, based in the United Kingdom and responsible for
worldwide lease marketing and operations of refrigerated containers. From 1978
to 1985, Mr. Stribley was employed by Sea Containers Limited, London, where he
was involved in refrigerated container leasing, ultimately as Manager of
Refrigerated Containers with responsibility for world-wide activities. From 1975
to 1978, Mr. Stribley was employed by Sealand Containerships, Ltd., the United
Kingdom subsidiary of a major U.S. container shipping company, as a management
trainee and later as Operations Manager and a Container Terminal Manager.


                                       26
<PAGE>   27
      Mr. Stribley holds a BA degree with honors from Bristol University in
England. Mr. Stribley is a director of The Cronos Group.

      JOHN M. FOY Mr. Foy, 50, 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.

      GEOFFREY J. MORNARD Mr. Mornard, 36, is directly responsible for the
Leasing Company's lease marketing and operations in Europe, the Middle East and
Africa. From 1991 to 1993, Mr. Mornard was Director of Marketing for
refrigerated containers in Australia and New Zealand. From 1989 to 1991, Mr.
Mornard held the same position with LPI. From 1979 to 1989, Mr. Mornard was
employed by Cooltainer Services, Ltd., a refrigerated container carrier company,
initially as Melbourne Branch Manager, later as Sydney Branch Manager, and
ultimately as Australian Trade Manager, responsible for marketing and operations
of all container traffic to and from Australia.

      DANNY WONG Mr. Wong, 42, is responsible for the Leasing Company's lease
marketing and operations in Asia, Australia and the Indian sub-continent, and is
based in Singapore. From 1991 to 1993, Mr. Wong was Vice President/Refrigerated
Containers, responsible for the marketing of refrigerated containers worldwide
for the Leasing Company. From 1988 to 1991, Mr. Wong was employed by LPI, as
Director of Marketing for the Far East and Southeast Asia based in Singapore.
From 1987 to 1988, Mr. Wong was a district manager in Singapore covering leasing
activities in Southeast Asia for Gelco CTI, a major container leasing company.
From 1979 to 1987, Mr. Wong was employed by Flexi-Van Leasing in Singapore as a
sales manager and later as Regional Manager for Southeast Asia and the Indian
sub-continent. Mr. Wong holds a Diploma in Marketing Management from the
Singapore Institute of Management.

      DAVID HEATHER Mr. Heather, 48, is responsible for all technical and
engineering activities of the fleet managed by the Leasing Company. Mr. Heather
was Technical Director for LPI, based in the United Kingdom, from 1986 to 1991.
From 1980 to 1986, Mr. Heather was employed by ABC Containerline NV as Technical
Manager with technical responsibility for the shipping line's fleet of dry
cargo, refrigerated and other specialized container equipment. From 1974 to
1980, Mr. Heather was Technical Supervisor for ACT Services Ltd., a shipping
line, with responsibility for technical activities related to refrigerated
containers. Mr. Heather holds a Marine Engineering Certificate from Riversdale
Marine Technical College in England.

      JOHN C. KIRBY Mr. Kirby, 42, 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.

      J. GORDON STEEL Mr. Steel, 63, is directly responsible for the overall
lease marketing activity for the Leasing Company's Tank Container Division. From
1990 to 1992, Mr. Steel held the position of Director/General Manager for
Tiphook Container's Tank Division. From 1977 to 1990, Mr. Steel held various
managerial positions, involving manufacturing and transportation of hazardous
materials, with Laporte Industries and ICI, major chemical distribution
companies. Mr. Steel is a qualified Chemical Engineer and attended the Associate
Royal Technical College in Scotland.

                                       27
<PAGE>   28
Item 11. Executive Compensation

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

      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 (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.

      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 Section
4.4 of 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.

                                       28
<PAGE>   29
      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 1995.

<TABLE>
<CAPTION>
                                                                                                  Cash Fees and
                 Name                                  Description                                Distributions
                 ----                                  -----------                                -------------
<S>                                     <C>                                                         <C>
        1)   CCC                        Base management fees - equal to 7% of gross                 $ 105,809
                                          lease revenues attributable to operating
                                          leases pursuant to Section 4.3 of the Limited
                                          Partnership Agreement

        2)   CCC                        Reimbursed administrative expenses - equal to               $  80,408 
                                         the costs expended by CCC for services
                                          necessary to the prudent operation of the 
                                          Registrant pursuant to Section 4.4 of the
                                          Limited Partnership Agreement

        3)   CCC                        Interest in Fund - percentage of distributable              $  69,341
                                          cash for any quarter prior to receipt of the
             Associate General            incentive management fee, pursuant to
               Partners                   Section 6.1 of the Limited Partnership                    $  17,334
                                          Agreement

        4)   CCC                        Interest in Fund - percentage of sales proceeds             $   4,140
                                          for any quarter pursuant to Section 6.1 of
             Associate General            the Limited Partnership Agreement
               Partners                                                                             $   1,035

        5)   CCC                        Incentive management fee - 10% of cash                      $  81,642
                                          distributed from operations and sales
             Associate General            proceeds after a cumulative return to the
               Partners                   Limited Partners of 8% per annum of their                 $  20,410
                                          adjusted capital contributions pursuant to
                                          Section 6.1 of the Limited Partnership
                                          Agreement
</TABLE>

                                       29
<PAGE>   30
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, the
managing general partner of the Registrant, 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, the 
managing general partner.  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 1995 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.

                                       30
<PAGE>   31
                                     PART IV

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

    (a)1.  Financial Statements

<TABLE>
<CAPTION>
                                                                                                     Page
                                                                                                     ----
<S>                                                                                                  <C>
    The following financial statements of the Registrant are included in Part
II, Item 8:

           Report of Independent Public Accountants ...........................................       13

           Balance sheets - December 31, 1995 and 1994 ........................................       14

           Statements of operations - for the years ended
               December 31, 1995, 1994 and 1993 ...............................................       15

           Statements of partners' capital - for the years ended
               December 31, 1995, 1994 and 1993 ...............................................       16

           Statements of cash flows - for the years ended
               December 31, 1995, 1994 and 1993 ...............................................       17

           Notes to financial statements ......................................................       18
</TABLE>

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


                                       31
<PAGE>   32
(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


(b)            Reports on Form 8-K

               No reports on Form 8-K were filed by the Registrant during the
               quarter ended December 31, 1995
</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)

                                       32
<PAGE>   33
                                   SIGNATURES


      Pursuant to the requirements of Section 13 or 15(d) 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/  John Kallas
                          ----------------------------
                          John Kallas
                          Vice President/Treasurer and Chief Financial Officer
                          Principal Accounting Officer

Date: March 28, 1996


      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 28, 1996
---------------------------------
Dennis J. Tietz                                        Cronos Capital Corp.
                                                   ("CCC") (Principal Executive
                                                          Officer of CCC)

   /s/  John Kallas                                Vice President/Treasurer and                         March 28, 1996
---------------------------------
John Kallas                                           Chief Financial Officer
                                                   (Principal Accounting Officer
                                                              of CCC)

   /s/  Laurence P. Sargent                               Director of CCC                               March 28, 1996
---------------------------------
Laurence P. Sargent


   /s/  A. Darrell Ponniah                                Director of CCC                               March 28, 1996
---------------------------------
A. Darrell Ponniah
</TABLE>

                            SUPPLEMENTAL INFORMATION

      The Registrant's annual report will be furnished to its limited partners
on or about April 30, 1996. 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>   34
                                  EXHIBIT INDEX

(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>



















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

*     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)