`
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended June 30, 2000
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[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the transition period from to
------------------------- -------------------
Commission File Number 333-54011
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ICON Income Fund Eight A L.P.
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(Exact name of registrant as specified in its charter)
Delaware 13-4006824
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
111 Church Street, White Plains, New York 10601-1505
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(Address of principal executive offices) (Zip code)
(914) 993-1700
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Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[ x ] Yes [ ] No
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
<TABLE>
June 30, December 31,
2000 1999
Assets
<S> <C> <C>
Cash $ 7,526,606 $ 5,222,028
----------------- ----------------
Investment in finance leases
Minimum rents receivable 65,167,810 72,064,245
Estimated unguaranteed residual values 43,679,745 42,536,175
Initial direct costs 2,411,572 2,327,918
Unearned income (24,630,551) (27,622,947)
Allowance for doubtful accounts (585,000) (385,000)
----------------- ----------------
86,043,576 88,920,391
Investment in operating leases
Equipment, at cost 40,688,100 38,671,600
Accumulated depreciation (1,899,869) (594,308)
----------------- ----------------
38,788,231 38,077,292
Investment in unguaranteed residual value 3,147,000 1,150,000
----------------- ----------------
Investment in joint venture 3,121,470 2,989,128
----------------- ----------------
Other assets 1,924,243 1,563,052
----------------- ----------------
Total assets $ 140,551,126 $ 137,921,891
================= ================
Liabilities and Partners' Equity
Notes payable - non-recourse $ 74,125,685 $ 82,790,864
Note payable - line of credit 4,619,319 5,000,000
Security deposits, and other payables 1,984,023 521,695
Minority interest in joint venture 141,422 132,909
----------------- ----------------
80,870,449 88,445,468
Partners' equity (deficiency)
General Partner (58,135) (24,043)
Limited partners (749,965 and 595,184.58
units outstanding, $100 per unit original
issue price in 2000 and 1999, respectively) 59,738,812 49,500,466
----------------- ----------------
Total partners' equity 59,680,677 49,476,423
----------------- ----------------
Total liabilities and partners' equity $ 140,551,126 $ 137,921,891
================= ================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Operations
<TABLE>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Finance income $ 2,122,349 $ 2,346,330 $ 4,178,684 $ 3,246,522
Rental income 1,395,000 - 2,790,000 -
Income from investment in joint venture 62,238 - 132,342 -
Interest income and other 144,720 26,541 321,758 55,042
------------- ------------- ------------- -------------
Total revenues 3,724,307 2,372,871 7,422,784 3,301,564
--------- ------------- ------------- -------------
Expenses
Interest 1,845,713 1,105,184 3,739,431 1,598,971
Provision for bad debts 200,000 385,000 200,000 385,000
Management fees - General Partner 321,007 111,796 742,232 376,174
Administrative expense reimbursements
General Partner 130,576 56,641 299,988 149,672
Depreciation 664,475 - 1,305,561 -
Amortization of initial direct costs 405,792 287,778 706,069 342,502
General and administrative 129,215 49,594 221,165 60,676
Minority interest expense in consolidated
joint venture 4,060 4,673 8,513 10,497
------------- ------------- ------------- -------------
Total expenses 3,700,838 2,000,666 7,222,959 2,923,492
------------- ------------- ------------- -------------
Net income $ 23,469 $ 372,205 $ 199,825 $ 378,072
============= ============= ============= =============
Net income allocable to:
Limited partners $ 23,234 $ 368,483 $ 197,827 $ 374,291
General Partner 235 3,722 1,998 3,781
------------- ------------- ------------- -------------
$ 23,469 $ 372,205 $ 199,825 $ 378,072
============= ============= ============= =============
Weighted average number of limited
partnership units outstanding 725,548 325,087 672,574 263,898
============= ============= ============= =============
Net income per weighted average
limited partnership unit $ .03 $ 1.13 $ .29 $ 1.42
============= ============= ============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Six Months Ended June 30, 2000 and
the Year Ended December 31, 1999
(unaudited)
<TABLE>
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1998 $ 11,794,222 $ 618 $ 11,794,840
Proceeds from issuance
of limited partnership
units (458,408 units) 45,840,825 - 45,840,825
Sales and offering expenses (5,751,283) - (5,751,283)
Cash distributions to partners $ 7.05 $ 3.70 (3,632,817) (37,282) (3,670,099)
Net income 1,249,519 12,621 1,262,140
--------------- ------------ --------------
Balance at
December 31, 1999 $ 49,500,466 $ (24,043) $ 49,476,423
Proceeds from issuance
of limited partnership
units (154,780.42 units) 15,478,042 - 15,478,042
Sales and
offering expenses (1,827,511) - (1,827,511)
Cash distributions to partners $5.08 $.29 (3,610,012) (36,090) (3,646,102)
Net income 197,827 1,998 199,825
--------------- ------------ --------------
Balance at
June 30, 2000 $ 59,738,812 $ (58,135) $ 59,680,677
=============== ============ ==============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Cash Flows
For the Six Months Ended June 30,
(unaudited)
<TABLE>
2000 1999
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income $ 199,825 $ 378,072
--------------- --------------
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Provisions for bad debts 200,000 385,000
Finance income portion of receivables paid directly
to lenders by lessees (3,268,967) (2,406,575)
Interest expense on non-recourse financing paid
directly by lessees 3,463,423 1,511,474
Amortization of initial direct costs 706,069 342,502
Minority interest expense 8,513 10,497
Income from investment in joint venture (132,342) -
Depreciation 1,305,561 -
Change in operating assets and liabilities:
Account receivables from General Partner - (233,883)
Collection of principal - non-financed receivables 2,122,679 589,861
Other assets (361,191) (98,468)
Minority interest in joint venture - (57,697)
Accounts payable to General Partner - (1,232,922)
Security deposits, deferred credits and other payables 1,462,328 478,544
Other 161,337 27,350
---------------- ---------------
Total adjustments 5,667,410 (684,317)
---------------- ----------------
Net cash provided by operating activities 5,867,235 (306,245)
---------------- ----------------
Cash flows from investing activities:
Equipment and receivables purchased (6,803,896) (19,194,280)
Investment in unguaranteed residual value (1,997,000) -
Initial direct costs (789,723) (1,270,181)
----------------- -----------
Net cash used in investing activities (9,590,619) (20,464,461)
----------------- ---------------
Cash flows from financing activities:
Issuance of limited partnership units, net of offering expenses 13,650,531 21,502,011
Net proceeds received from non-recourse borrowings - 5,146,230
Payments of non-recourse debt (3,595,786) -
Payments of recourse debt (380,681) (5,000,000)
Cash distributions to partners (3,646,102) (1,193,338)
---------------- ---------------
Net cash provided by financing activities 6,027,962 20,454,903
---------------- ---------------
Net increase (decrease) in cash 2,304,578 (315,803)
Cash at beginning of period 5,222,028 2,283,067
---------------- ---------------
Cash at end of period $ 7,526,606 $ 1,967,264
================ ===============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Cash Flows (Continued)
Supplemental Disclosure of Cash Flow Information
For the six months ended June 30, 2000 and 1999, non-cash activities
included the following:
<TABLE>
2000 1999
---- ----
Fair value of equipment and receivables
<S> <C> <C>
purchased for debt and payables $ - $ (24,303,461)
Non-recourse notes payable assumed in
purchase price - 22,259,042
Accounts payable - equipment - 2,044,419
Principal and interest on direct
finance receivables paid directly
to lenders by lessees 8,532,816 9,071,510
Principal and interest on non-recourse
financing paid directly to lenders
by lessees (8,532,816) (9,071,510)
---------------- ---------------
$ - $ -
================ ===============
</TABLE>
Interest expense of $3,739,431 and $1,598,971 for the six months ended
June 30, 2000 and 1999 consisted of: interest expense on non-recourse financing
paid directly to lenders by lessees of $3,463,423 and $1,511,474 and interest on
the recourse note payable of $276,008 and $87,497, respectively.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
June 30, 2000
(unaudited)
1. Basis of Presentation
The consolidated financial statements of ICON Income Fund Eight A L.P.
(the "Partnership") have been prepared pursuant to the rules and regulations of
the Securities and Exchange Commission (the "SEC") and, in the opinion of
management, include all adjustments (consisting only of normal recurring
accruals) necessary for a fair statement of income for each period shown.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such SEC rules and
regulations. Management believes that the disclosures made are adequate to make
the information represented not misleading. The results for the interim period
are not necessarily indicative of the results for the full year. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes included in the Partnership's 1999
Annual Report on Form 10-K.
2. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the six months ended June 30, 2000 and 1999 were
as follows:
2000 1999
---- ----
Underwriting commissions $ 309,561 $ 494,062 Charged to Equity
Organization and offering 232,171 730,792 Charged to Equity
Acquisition fees 2,113,656 1,270,181 Capitalized
Management fees 742,232 376,174 Charged to Operations
Administrative expense
reimbursements 299,988 149,672 Charged to Operations
---------- ----------
Total $3,697,608 $3,020,881
========== ==========
The Partnership and affiliates formed two joint ventures for the purpose
of acquiring and managing various assets. (See Note 3 for additional information
relating to the joint ventures.)
3. Investment in Joint Ventures
The Partnership and affiliates formed two joint ventures discussed below
for the purpose of acquiring and managing various assets.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
AIC Trust
During 1999, ICON Cash Flow Partners L.P. Seven ("L.P. Seven"), an
affiliate of the Partnership, acquired a portfolio of equipment leases for
$6,854,830. Subsequently, L.P. Seven sold interests in this portfolio at various
dates in 1999 to ICON Cash Flow Partners L.P. Six ("L.P. Six"), an affiliate of
the Partnership, for $1,750,000 and to the Partnership for $3,000,000 at book
value, which approximated fair market value at the dates of sale. L.P. Seven
recognized no gain or loss on the sale of these interests to either L.P. Six or
to the Partnership.
As a result of the sales of these interests, as of June 30, 2000 the
Partnership and L.P. Six owned interests aggregating 43.73% and 25.51% in the
lease portfolio with L.P. Seven owning a 30.76% interest at that date. The lease
portfolio is owned and operated as a joint venture ("AIC Trust"). Profits,
losses, excess cash and disposition proceeds are allocated based upon the
Partnerships' percentage ownership interests in the venture during the
respective periods the Partnerships held such interests. The Partnership
accounts for its investment under the equity method of accounting.
Information as to the unaudited financial position and results of
operations of the venture as of and for the period of investment through June
30, 2000 is summarized below:
June 30, 2000
Assets $ 18,050,244
==============
Liabilities $ 10,910,913
==============
Equity $ 7,139,331
==============
Partnership's share of equity $ 3,121,470
==============
Net income $ 302,631
==============
Partnership's share of income $ 132,342
==============
ICON Boardman Funding L.L.C.
In December 1998 the Partnership and three affiliates, ICON Cash Flow
Partners, L.P., Series C ("Series C"), L.P. Six and L.P. Seven formed ICON
Boardman Funding L.L.C. ("ICON BF"), for the purpose of acquiring a lease with
Portland General Electric. The purchase price totaled $27,421,810, and was
funded with cash and non-recourse debt assumed in the purchase price. The
Partnership, Series C, L.P. Six and L.P. Seven received a 98.5%, .5%, .5% and
.5% interest, respectively, in ICON BF. The Partnership's financial statements
include 100% of the assets and liabilities of ICON BF. Series C, L.P. Six and
L.P. Seven's investments in ICON BF have been reflected as "minority interests
in joint venture." Simultaneously with the acquisition of the Portland General
Electric lease by ICON BF, the rent in excess of the senior debt payments was
acquired by L.P. Six for $3,801,108. No gain or loss was recognized on this
transaction.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
June 30, 2000
Item 2. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
The Partnership, was formed on July 9, 1997 as a Delaware limited
partnership. The Partnership's maximum offering is $75,000,000. The Partnership
commenced business operations on its initial closing date, October 14, 1998,
with the admission of 12,000 limited partnership units at $100 per unit
representing $1,200,000 of capital contributions. Between October 15, 1998 and
December 31, 1999, 583,184.58 units were admitted representing $58,318,458 of
capital contributions. Between January 1, 2000 and May 17, 2000, the date of the
final closing of the Partnership's offering, 154,780.42 additional units were
admitted representing $15,478,042 of capital contributions bringing the total
admission to 749,965.04 units totaling $74,996,504 in capital contributions.
The Partnership's portfolio consisted of investments in finance leases,
operating leases, unguaranteed residual values and a joint venture, representing
66%, 30%, 2% and 2% of total investments at June 30, 2000, respectively, and
68%, 29%, 1% and 2% of total investments at June 30, 1999, respectively.
Results of Operations for the Three Months Ended June 30, 2000 and 1999
For the three months ended June 20, 2000 the Partnership leased or financed
additional equipment and residual interests with an initial cost of $8,800,896.
For the three months ended June 30, 2000, the Partnership leased or financed
additional equipment with and initial cost of $5,342,396.
Revenues for the three months ended June 30, 2000 were $3,724,307
representing an increase of $1,351,436 over the three month total for the period
ended June 30, 1999. The increase in revenue resulted primarily from an increase
in rental income of $1,395,000, an increase in interest income and other of
$118,179, and an increase in income from investment in joint venture of $62,238.
These increases resulted from the Partnership continuing to raise capital during
1999 and 2000 and using the funds to invest in equipment and residuals resulting
in increases in the Partnership's lease investment portfolios during the twelve
month period July 1999 through June 2000 and an increase in the average cash
balances in the 2000 period versus the 1999 period.
Expenses for the three months ended June 30, 2000 were $3,700,838
representing an increase of $1,700,172 over the three month total for the period
ended June 30, 1999. The increase in expenses resulted primarily from increases
in interest expense of $740,529, depreciation expense of $664,475, management
fees of $209,211, amortization of initial direct costs of $118,014, general and
administrative expenses of $79,621, and administrative fees of $73,935. These
increases were partially offset by a decrease in provision for bad debts of
$185,000. The increase in interest expense is due to an increase in the average
debt outstanding from 1999 to 2000. The increase in all other noted expense
categories is due to the overall increases in the Partnership's lease investment
portfolios resulting from equipment acquisition activity during the twelve month
period of July 1999 through June 2000 and higher levels of operating activity
during the 2000 period. Based upon a review of leases within the portfolio, the
partnership determined that a $200,000 provision for bad debts was required in
the second quarter of 2000.
Net income for the three months ended June 30, 2000 and 1999 was $23,469
and $372,205, respectively. The net income per weighted average limited
partnership unit outstanding was $.03 and $1.13 for 2000 and 1999 periods,
respectively.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
June 30, 2000
Results of Operations for the Six Months Ended June 30, 2000 and 1999
Revenues for the six months ended June 30, 2000 were $7,422,784
representing an increase of $4,121,220 over the three month total for the period
ended June 30, 1999. The increase in revenue resulted from an increase in rental
income of $2,790,000, an increase in finance income of $932,162, an increase in
interest income and other of $266,716, and an increase in income from investment
in joint ventures of $132,342. These increases resulted from the Partnership
continuing to raise capital during 1999 and 2000 and using the funds to invest
in equipment and residuals resulting in increases in the Partnership's lease
investment portfolios during the twelve month period July 1999 and June 2000 and
an increase in the average cash balances in the 2000 period versus the 1999
period.
Expenses for the six months ended June 30, 2000 were $7,222,959
representing an increase of $4,299,467 over the six month total for the period
ended June 30, 1999. The increase in expenses resulted primarily from increases
in interest expense of $2,140,460, depreciation expense of $1,305,561,
management fees of $366,058, amortization of initial direct costs of $363,567,
general and administrative expenses of $160,489, and administrative fees of
$150,316. The increase in expenses was partially offset by a decrease in
provision for bad debts of $185,000. The increase in interest expense is due to
an increase in the average debt outstanding from 1999 to 2000. The increase in
all other noted expense categories is due to the overall increases in the
Partnership's lease investment portfolios resulting from equipment acquisition
activity during the twelve month period of July 1999 through June 2000 and
higher levels of operating activity during the 2000 period. Based upon a review
of leases within the portfolio, the partnership determined that a $200,000
provision for bad debts was required for the six month period ended June 30,
2000.
Net income for the six months ended June 30, 2000 and 1999 was $199,825 and
$378,072, respectively. The net income per weighted average limited partnership
unit outstanding was $0.29 and $1.42 for 2000 and 1999 periods, respectively.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Liquidity and Capital Resources
The Partnership's primary sources of funds for the six months ended June
30, 2000 and 1999 were capital contributions, net of offering expenses, of
$13,650,531 in 2000 and $21,502,011 in 1999, cash provided by operations of
$5,867,235 in 2000, and net proceeds received from non-recourse borrowing of
$5,146,230 in 1999. These funds were used to purchase or finance equipment
investments, to make payments on borrowings and fund cash distributions. The
Partnership intends to continue to purchase equipment and fund cash
distributions utilizing funds from capital contributions, cash from operations
and additional borrowings.
Cash distributions to limited partners for the six months ended June, 2000
and 1999, which were paid monthly, totaled $3,610,012 and $1,181,401,
respectively of which $197,827 and $374,291 was investment income and $3,412,185
and $807,110 was a return of capital, respectively.
As of June 30, 2000 there were no known trends or demands, commitments,
events or uncertainties which are likely to have any material effect on
liquidity. As cash is realized from the continued offering, operations, or
borrowings, the Partnership will continue to invest in equipment leases and
financings where it deems it to be prudent while retaining sufficient cash to
meet its reserve requirements and recurring obligations.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter ended
June 30, 2000.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ICON Income Fund Eight A L.P.
File No. 333-54011 (Registrant)
By its General Partner,
ICON Capital Corp.
August 10, 2000 /s/ Thomas W. Martin
-------------------------- -----------------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal financial and accounting officer
of the General Partner of the Registrant)
