`
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 September 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
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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>
September 30, December 31,
2000 1999
Assets
<S> <C> <C>
Cash ......................................... $ 5,720,019 $ 5,222,028
------------- -------------
Investment in finance leases
Minimum rents receivable .................. 59,299,810 72,064,245
Estimated unguaranteed residual values .... 43,012,327 42,536,175
Initial direct costs ...................... 1,389,497 2,327,918
Unearned income ........................... (22,200,560) (27,622,947)
Allowance for doubtful accounts ........... (585,000) (385,000)
------------- -------------
80,916,074 88,920,391
Investment in operating leases
Equipment, at cost ........................ 40,688,100 38,671,600
Accumulated depreciation .................. (2,564,344) (594,308)
------------- -------------
38,123,756 38,077,292
Investment in unguaranteed residual value .... 5,673,696 1,150,000
------------- -------------
Investment in joint venture .................. 3,174,308 2,989,128
------------- -------------
Other assets ................................. 896,559 1,563,052
------------- -------------
Total assets ................................. $ 134,504,412 $ 137,921,891
============= =============
Liabilities and Partners' Equity
Notes payable - non-recourse ................. $ 71,658,902 $ 82,790,864
Note payable - line of credit ................ 4,214,173 5,000,000
Security deposits, and other payables ........ 856,977 521,695
Minority interest in joint venture ........... 146,023 132,909
------------- -------------
76,876,075 88,445,468
Partners' equity (deficiency)
General Partner ........................... (78,372) (24,043)
Limited partners (748,685.04 and 595,184.58
units outstanding, $100 per unit original
issue price in 2000 and 1999, respectively) 57,706,709 49,500,466
------------- -------------
Total partners' equity .................... 57,628,337 49,476,423
------------- -------------
Total liabilities and partners' equity ....... $ 134,504,412 $ 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 Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
Revenues
<S> <C> <C> <C> <C>
Finance income ............................. $ 2,429,991 $ 2,288,637 $ 6,608,675 $ 5,535,159
Rental income .............................. 1,509,083 -- 4,299,083 --
Income from investment in joint venture .... 52,838 4,527 185,180 4,527
Interest income and other .................. 74,721 27,731 396,479 82,772
----------- ----------- ----------- -----------
Total revenues .......................... 4,066,633 2,320,895 11,489,417 5,622,458
----------- ----------- ----------- -----------
Expenses
Interest ................................ 1,872,574 1,083,223 5,612,005 2,682,194
Provision for bad debts ................. -- -- 200,000 385,000
Management fees - General Partner ....... 743,362 378,553 1,485,594 754,727
Administrative expense reimbursements
General Partner ........................ 311,000 132,979 610,988 282,651
Depreciation ............................ 664,475 -- 1,970,036 --
Amortization of initial direct costs .... 322,352 220,997 1,028,421 563,499
General and administrative .............. 99,891 132,461 321,056 193,137
Minority interest expense in consolidated
joint ventures ......................... 4,601 5,060 13,114 15,556
----------- ----------- ----------- -----------
Total expenses ............................. 4,018,255 1,953,273 11,241,214 4,876,764
----------- ----------- ----------- -----------
Net income ................................. $ 48,378 $ 367,622 $ 248,203 $ 745,694
=========== =========== =========== ===========
Net income allocable to:
Limited partners ........................ $ 47,894 $ 363,946 $ 245,721 $ 738,237
General Partner ......................... 484 3,676 2,482 7,457
----------- ----------- ----------- -----------
$ 48,378 $ 367,622 $ 248,203 $ 745,694
=========== =========== =========== ===========
Weighted average number of limited
partnership units outstanding 748,685 441,905 698,371 323,641
=========== =========== =========== ===========
Net income per weighted average
limited partnership unit $ .06 $ .82 $ .35 $ 2.28
=========== ============= =========== ===========
</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 Nine Months Ended September 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
Net proceeds from issuance
of limited partnership
units (153,500.46 units) 15,350,046 - 15,350,046
Sales and
offering expenses (1,765,255) - (1,765,255)
Cash distributions to partners $ 7.70 $ .35 (5,624,269) (56,811) (5,681,080)
Net income 245,721 2,482 248,203
----------- -------- -----------
Balance at
September 30, 2000 $57,706,709 $(78,372) $57,628,337
=========== ======== ===========
</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 Nine Months Ended September 30,
(unaudited)
<TABLE>
2000 1999
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income ................................................. $ 248,203 $ 745,694
------------ ------------
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Provision for bad debts ................................. 200,000 385,000
Finance income portion of receivables paid directly
to lenders by lessees ................................. (4,975,586) (4,188,513)
Interest expense on non-recourse financing paid
directly by lessees ................................... 5,184,677 2,540,009
Amortization of initial direct costs .................... 1,028,421 563,499
Minority interest expense ............................... 13,114 15,556
Income from investment in joint venture ................. (185,180) (4,527)
Depreciation ............................................ 1,970,036 --
Change in operating assets and liabilities:
Collection of principal - non-financed receivables .. 3,962,513 1,351,490
Other assets ......................................... 666,493 (147,434)
Minority interest in joint venture ................... -- (68,192)
Accounts payable to General Partner .................. -- (806,298)
Security deposits, deferred credits and other payables 335,282 222,600
Other ................................................ (78,637) (214,809)
------------ ------------
Total adjustments .................................. 8,121,133 (351,619)
------------ ------------
Net cash provided by operating activities ............. 8,369,336 394,075
------------ ------------
Cash flows from investing activities:
Equipment and receivables purchased ........................ (5,190,856) (28,068,663)
Investment in unconsolidated joint venture ................. -- (3,000,000)
Investment in unguaranteed residual value .................. (4,523,696) --
Initial direct costs ....................................... (90,000) (2,799,938)
------------ ------------
Net cash used in investing activities ................ (9,804,552) (33,868,601)
------------ ------------
</TABLE>
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Cash Flows (Continued)
For the Nine Months Ended September 30,
(unaudited)
<TABLE>
2000 1999
---- ----
Cash flows from financing activities:
<S> <C> <C>
Issuance of limited partnership units, net of offering expenses 13,584,791 30,916,098
Net proceeds received from non-recourse borrowings ............ -- 4,546,230
Payments of non-recourse debt ................................. (5,184,677) --
Payments of recourse debt - line of credit .................... (785,827) (5,000,000)
Cash distributions to partners ................................ (5,681,080) (2,285,948)
Proceeds from note payable - line of credit ................... -- 5,000,000
------------ ------------
Net cash provided by financing activities ............... 1,933,207 33,176,380
------------ ------------
Net increase (decrease) in cash .................................. 497,991 (298,146)
Cash at beginning of period ...................................... 5,222,028 2,283,067
------------ ------------
Cash at end of period ............................................ $ 5,720,019 $ 1,984,921
============ ============
</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 nine months ended September 30, 2000 and 1999, non-cash activities
included the following:
<TABLE>
2000 1999
---- ----
<S> <C> <C>
Fair value of equipment and receivables
purchased for debt and payables .... $ -- $(57,647,330)
Non-recourse notes payable assumed in
purchase price ..................... -- 53,960,428
Accounts payable - equipment .......... -- 3,686,902
Principal and interest on direct
finance receivables paid directly
to lenders by lessees .............. 11,131,962 11,833,443
Principal and interest on non-recourse
financing paid directly to lenders
by lessees ......................... (11,131,962) (11,833,443)
------------ ------------
$ -- $ --
============ ============
</TABLE>
Interest expense of $5,612,005 and $2,682,194 for the nine months ended
September 30, 2000 and 1999 consisted of: interest expense on non-recourse
financing paid directly to lenders by lessees of $5,184,677 and $2,540,009 and
interest on the recourse note payable of $427,328 and $142,185, respectively.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
September 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 nine months ended September 30, 2000 and 1999
were as follows:
2000 1999
---- ----
Underwriting commissions $ 307,001 $ 709,241 Charged to Equity
Organization and offering 230,250 999,765 Charged to Equity
Acquisition fees 2,113,656 2,799,938 Capitalized
Management fees 1,485,594 754,727 Charged to Operations
Administrative expense
reimbursements 610,988 282,651 Charged to Operations
---------- ----------
Total $4,747,489 $5,546,322
========== ==========
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 September 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
September 30, 2000 is summarized below:
September 30, 2000
Assets $ 17,681,716
==============
Liabilities $ (10,421,507)
==============
Equity $ 7,260,209
==============
Partnership's share of equity $ 3,174,308
==============
Net income $ 433,509
==============
Partnership's share of income $ 185,180
==============
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)
September 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 was $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, 154,780.46 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. At
the end of September 30, 2000, total units outstanding amounted to 748,685.04 as
a result of two third quarter 2000 recision transactions involving 1,280 units.
Results of Operations for the Three Months Ended September 30, 2000 and 1999
Revenues for the three months ended September 30, 2000 were $4,066,633
representing an increase of $1,745,738 over the three month total for the period
ended September 30, 1999. The increase in revenues resulted from increases in
rental income of $1,509,083, finance income of $141,354, income from investment
in joint venture of $48,311 and interest income and other of $46,990. These
increases resulted from the Partnership continuing to raise capital during 1999
and 2000 and using the funds to invest in equipment resulting in increases in
the Partnership's lease investment portfolios. The increase in interest income
and other resulted from an increase in the average cash balances in the 2000
period versus the 1999 period.
Expenses for the three months ended September 30, 2000 were $4,018,255
representing an increase of $2,064,982 over the three month total for the period
ended September 30, 1999. The increase resulted primarily from increases in
interest expense of $789,351, depreciation of $664,475, management fees of
$364,809, administrative expense of $178,021 and amortization of initial direct
costs of $101,355. 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 1999
through September 2000 and higher levels of operating activity during the 2000
period.
Net income for the three months ended September 30, 2000 and 1999 was
$48,378 and $367,622, respectively. The net income per weighted average limited
partnership unit outstanding was $.06 and $0.82 for 2000 and 1999 periods,
respectively.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
September 30, 2000
Results of Operations for the Nine Months Ended September 30, 2000 and 1999
Revenues for the nine months ended September 30, were $11,489,417
representing an increase of $5,866,959 from 1999. The increase in revenues
resulted from increases in rental income of $4,299,083, finance income of
$1,073,516, interest income of $313,707 and income from investment in joint
venture of $180,653. These increases resulted from the Partnership continuing to
raise capital during 1999 and 2000 and using the funds to invest in equipment
resulting in increases in the Partnership's lease investment portfolios. The
increase in interest income and other resulted from an increase in the average
cash balances in the 2000 period versus the 1999 period.
Expenses for the nine months ended September 30, were $11,241,214
representing an increase of $6,364,450 from 1999. The increase in expenses
resulted primarily from increases in interest expense of $2,929,811,
depreciation expense of $1,970,036, management fees of $730,867, amortization of
initial direct costs of $464,922, administrative expense of $328,337 and general
and administrative expense of $127,919. These increases were partially offset by
a decrease in the 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 1999 through September 2000 and higher
levels of operating activity during the 2000 period. The decrease in the
provision for bad debts was the result of determinations made of the level of
reserves required during the 1999 and 2000 periods.
Net income for the nine months ended September 30, 2000 and 1999 was
$248,203 and $745,694, respectively. The net income per weighted average limited
partnership unit outstanding was $.35 and $2.28 for 2000 and 1999, 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 nine months ended
September 30, 2000 and 1999 were capital contributions, net of offering
expenses, of $13,584,791 in 2000 and $30,916,098 in 1999, and cash provided by
operations of $8,369,336 in 2000. 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 operations and additional
borrowings.
Cash distributions to limited partners for the nine months ended September,
2000 and 1999, which were paid monthly, totaled $5,624,269 and $2,262,516,
respectively.
As of September 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 operations and additional
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
September 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.
November 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)
