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 March 31, 2000
-----------------------------------------------------------
[ ] 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
---------------------------------------------------------
ICON Income Fund Eight A L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-4006824
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
111 Church Street, White Plains, New York 10601-1505
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(914) 993-1700
- --------------------------------------------------------------------------------
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>
March 31, December 31,
2000 1999
Assets
<S> <C> <C>
Cash ................................................. $ 7,812,919 $ 5,222,028
------------- -------------
Investment in finance leases
Minimum rents receivable .......................... 64,797,742 72,064,245
Estimated unguaranteed residual values ............ 42,536,175 42,536,175
Initial direct costs .............................. 2,115,005 2,327,918
Unearned income ................................... (25,566,612) (27,622,947)
Allowance for doubtful accounts ................... (385,000) (385,000)
------------- -------------
83,497,310 88,920,391
Investment in operating leases
Equipment, at cost ................................ 40,688,100 38,671,600
Accumulated depreciation .......................... (1,235,394) (594,308)
------------- -------------
39,452,706 38,077,292
Investment in unguaranteed residual value ............ 2,592,000 1,150,000
------------- -------------
Investment in joint venture .......................... 3,059,232 2,989,128
------------- -------------
Other assets ......................................... 1,250,150 1,563,052
------------- -------------
Total assets ......................................... $ 137,664,317 $ 137,921,891
============= =============
Liabilities and Partners' Equity
Notes payable - non-recourse ......................... $ 73,702,217 $ 82,790,864
Note payable - line of credit ........................ 5,000,000 5,000,000
Accounts payable - General Partner and affiliates, net 77,518 --
Security deposits, and other payables ................ 1,419,361 521,695
Minority interest in joint venture ................... 137,362 132,909
------------- -------------
80,336,458 88,445,468
Partners' equity (deficiency)
General Partner ................................... (38,926) (24,043)
Limited partners (701,131.54 and 595,184.58
units outstanding, $100 per unit original
issue price in 2000 and 1999, respectively) ..... 57,366,785 49,500,466
------------- -------------
Total partners' equity .......................... 57,327,859 49,476,423
------------- -------------
Total liabilities and partners' equity ............... $ 137,664,317 $ 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
For the Three Months Ended March 31,
(unaudited)
<TABLE>
2000 1999
---- ----
Revenues
<S> <C> <C>
Finance income ........................................ $2,056,335 $ 900,192
Rental Income ......................................... 1,395,000 --
Income from investment in joint venture ............... 70,104 --
Interest income and other ............................. 177,038 28,501
---------- ----------
Total revenues ........................................ 3,698,477 928,693
---------- ----------
Expenses
Interest .............................................. 1,893,718 493,787
Management fees - General Partner ..................... 421,225 264,378
Administrative expense
reimbursements - General Partner .................... 169,412 93,031
Depreciation .......................................... 641,086 --
Amortization of initial direct costs .................. 300,277 54,724
General and administrative ............................ 91,950 11,082
Minority interest expense in consolidated joint venture 4,453 5,824
---------- ----------
Total expenses ........................................ 3,522,121 922,826
---------- ----------
Net income ............................................... $ 176,356 $ 5,867
========== ==========
Net income allocable to:
Limited partners ...................................... 174,592 $ 5,808
General Partner ....................................... 1,764 59
---------- ----------
$ 176,356 $ 5,867
========== ==========
Weighted average number of limited
partnership units outstanding ......................... 648,158 202,420
========== ==========
Net income per weighted average
limited partnership unit .............................. $ .27 $ .03
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Three Months Ended March 31, 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 (105,946.96 units) 10,594,696 - 10,594,696
Sales and
offering expenses (1,218,390) - (1,218,390)
Cash distributions
to partners $2.33 $ .27 (1,684,579) (16,647) (1,701,226)
Net income 174,592 1,764 176,356
----------- -------- -----------
Balance at
March 31, 2000 $57,366,785 $(38,926) $57,327,859
=========== ======== ===========
</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 Three Months Ended March 31,
(unaudited)
<TABLE>
2000 1999
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income .................................................... $ 176,356 $ 5,867
------------ ------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Finance income portion of receivables paid directly
to lenders by lessees .................................... (1,660,094) (535,885)
Interest expense on non-recourse financing paid
directly by lessees ...................................... 1,741,527 425,037
Amortization of initial direct costs ....................... 300,277 54,724
Minority interest expense .................................. 4,453 5,824
Income from investment in joint venture .................... (70,104) --
Depreciation ............................................... 641,086 --
Change in operating assets and liabilities:
Collection of principal - non-financed receivables ..... 963,730 (184,349)
Other assets ............................................ 312,902 (16,224)
Minority interest in joint venture ...................... -- (68,194)
Security deposits, deferred credits and other payables .. 897,666 (89,622)
Accounts payable to General Partner and affiliates, net . 77,518 1,748,934
Other ................................................... (1,364,785) --
------------ ------------
Total adjustments ..................................... 1,844,176 1,340,245
------------ ------------
Net cash provided by operating activities ................ 2,020,532 1,346,112
------------ ------------
Cash flows from investing activities:
Equipment and receivables purchased ........................... (2,016,500) (11,483,308)
Investment in unguaranteed residual ........................... (1,442,000)
Initial direct costs .......................................... -- (1,164,706)
------------ ------------
Net cash used in investing activities ................... (3,458,500) (12,648,014)
------------ ------------
Cash flows from financing activities:
Issuance of limited partnership units, net of offering expenses 9,376,306 11,335,440
Net proceeds received from non-recourse borrowings ............ 4,546,230
Payments of non-recourse debt ................................. (3,646,221) (5,000,000)
Cash distributions to partners ................................ (1,701,226) (418,413)
------------ ------------
Net cash provided by financing activities ............... 4,028,859 10,463,257
------------ ------------
Net increase (decrease) in cash .................................. 2,590,891 (838,645)
Cash at beginning of period ...................................... 5,222,028 2,283,067
------------ ------------
Cash at end of period ............................................ $ 7,812,919 $ 1,444,422
============ ============
</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 three months ended March 31, 2000 and 1999, non-cash activities
included the following:
2000 1999
---- ----
Fair value of equipment and receivables
purchased for debt and payables .... $ -- $(27,340,236)
Non-recourse notes payable assumed in
purchase price ..................... -- 19,220,334
Accounts payable - equipment .......... -- 8,119,902
Principal and interest on direct
finance receivables paid directly
to lenders by lessees .............. 7,183,953 7,279,005
Principal and interest on non-recourse
financing paid directly to lenders
by lessees ......................... (7,183,953) (7,279,005)
------------ ------------
$ -- $ --
============ ============
Interest expense of $1,893,718 and $493,787 for the three months ended
March 31, 2000 and 1999 consisted of: interest expense on non-recourse financing
paid directly to lenders by lessees of $1,741,527 and $425,037 and interest on
the recourse note payable of $152,191 and $68,750, respectively.
<PAGE>
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 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 three months ended March 31, 2000 and 1999
were as follows:
2000 1999
---- ----
Underwriting commissions $ 211,894 $ 261,684 Charged to Equity
Organization and offering 158,920 440,318 Charged to Equity
Acquisition fees 610,500 1,164,706 Capitalized
Management fees 421,225 264,378 Charged to Operations
Administrative expense
reimbursements 169,412 93,031 Charged to Operations
---------- ----------
Total $1,571,951 $2,224,117
========== ==========
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 March 31, 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 March
31, 2000 is summarized below:
March 31, 2000
Assets $ 18,647,975
==============
Liabilities $ 11,650,322
==============
Equity $ 6,997,653
==============
Partnership's share of equity $ 3,059,232
==============
Net income $ 160,247
==============
Partnership's share of income $ 70,104
==============
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)
March 31, 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 March 31, 2000, 105,946.96
additional units were admitted representing $10,594,696 of capital contributions
bringing the total admission to 701,131.54 units totaling $70,113,154 in capital
contributions.
The Partnership's portfolio consisted of investments in finance leases,
operating leases, unguaranteed residual values and a joint venture, representing
65%, 31%, 2% and 2% of total investments at March 31, 2000, respectively, and
68%, 29%, 1% and 2% of total investments at March 31, 1999, respectively.
Results of Operations for the Three Months Ended March 31, 2000 and 1999
For the three months ended March 31, 2000 the Partnership leased or
financed additional equipment and residual interests with an initial cost of
$3,458,500. For the three months ended March 31, 1999, the Partnership leased or
financed additional equipment with an initial cost of $6,889,069.
Revenues for the three months ended March 31, 2000 were $3,698,477
representing an increase of $2,769,784. The increase in revenue resulted
primarily from an increase in finance income of $1,156,143, an increase in
rental income of $1,395,000, an increase in interest income and other of
$148,537 and an increase in income from investment in joint venture $70,104.
These increases resulted overall 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 of April 1999 through March 2000 and
an increase in the average cash balances in the 2000 period versus the 1999
period.
Expenses for the three months ended March 31, 2000 were $3,522,121
representing an increase of $2,599,295. The increase in expenses resulted
primarily from increases in interest expense of $1,399,931, depreciation expense
of $641,086, amortization of initial direct costs of $245,553, management fees
of $156,847 and general and administrative fees of $80,868. 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 April 1999
through March 2000 and higher levels of operating activity during the 2000
period.
Net income for the three months ended March 31, 2000 and 1999 was $176,356
and $5,867, respectively. The net income per weighted average limited
partnership unit outstanding was $.27 and $.03 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 three months ended March
31, 2000 and 1999 were capital contributions, net of offering expenses, of
$9,376,306 and $11,335,440, cash provided by operations of $2,020,532 and
$1,346,112 and net proceeds received from non-recourse borrowing of $0 and
$4,546,230, respectively. 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 three months ended March 31,
2000 and 1999, which were paid monthly, totaled $1,684,579 and $414,229,
respectively of which $174,592 and $5,808 was investment income and $1,509,987
and $408,421 was a return of capital, respectively.
As of March 31, 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
March 31, 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.
May 12, 2000 /s/ Thomas W. Martin
- ------------ ---------------------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal financial and accounting officer
of the General Partner of the Registrant)
