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, 1997
-----------------------------------------------------------
[ ] 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 2-99858
---------------------------------------------------------
ICON Cash Flow Partners, L.P., Series A
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3270490
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
600 Mamaroneck Avenue, Harrison, New York 10528
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(914) 698-0600
- --------------------------------------------------------------------------------
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 Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Balance Sheets
(unaudited)
<TABLE>
September 30, December 31,
1997 1996
Assets
<S> <C> <C>
Cash ................................................ $ 167,590 $ 123,808
--------- ---------
Investment in financings
Receivables due in installments .................... 107,350 246,130
Unearned income .................................... (5,599) (21,268)
Allowance for doubtful accounts .................... (29,407) (20,420)
--------- ---------
72,344 204,442
--------- ---------
Investment in finance leases
Minimum rents receivable ........................... 10,689 29,868
Estimated unguaranteed residual values ............. 4,973 11,811
Unearned income .................................... (1,213) (3,160)
Allowance for doubtful accounts .................... (9,123) (24,123)
--------- ---------
5,326 14,396
--------- ---------
Investment in operating leases
Equipment, at cost ................................. 39,887 39,887
Accumulated depreciation ........................... (39,787) (39,787)
--------- ---------
100 100
--------- ---------
Other assets .......................................... 6,186 6,473
--------- ---------
Total assets .......................................... $ 251,546 $ 349,219
========= =========
Liabilities and Partners' Equity
Notes payable - General Partner ....................... $ -- $ 194,613
Accounts payable to General Partner and affiliates, net 71,415 43,760
Security deposits and deferred credits ................ 16,799 3,817
Accounts payable - other .............................. 14,648 13,075
--------- ---------
102,862 255,265
--------- ---------
Commitments and Contingencies
Partners' equity
General Partner .................................... 186,085 17,099
Limited partners (5,009 units outstanding,
$500 per unit original issue price) .............. (37,401) 76,855
--------- ---------
Total partners' equity ................................ 148,684 93,954
--------- ---------
Total liabilities and partners' equity ................ $ 251,546 $ 349,219
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Statements of Operations
(unaudited)
<TABLE>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Net gain on sales or
remarketing of equipment .......... $ 27,334 $ 25,133 $ 66,298 $113,971
Finance income ...................... 3,709 10,234 16,153 37,063
Interest income and other ........... 1,971 2,088 4,019 6,282
-------- -------- -------- --------
Total revenues ...................... 33,014 37,455 86,470 157,316
-------- -------- -------- --------
Expenses
General and administrative .......... 3,233 2,883 15,503 25,609
Interest ............................ 2,625 3,126 7,875 12,331
Administrative expense reimbursements
- General Partner ................. 1,082 1,596 3,459 5,416
Management fees - General Partner ... 607 906 1,951 3,076
-------- -------- -------- --------
Total expenses ...................... 7,547 8,511 28,788 46,432
-------- -------- -------- --------
Net income ............................. $ 25,467 $ 28,944 $ 57,682 $110,884
======== ======== ======== ========
Net income allocable to:
Limited partners .................... $ 24,194 $ 27,497 $ 54,798 $105,340
General Partner ..................... 1,273 1,447 2,884 5,544
-------- -------- -------- --------
$ 25,467 $ 28,944 $ 57,682 $110,884
======== ======== ======== ========
Weighted average number of limited
partnership units outstanding ....... 5,009 5,009 5,009 5,009
======== ======== ======== ========
Net income per weighted average
limited partnership unit ............ $ 4.83 $ 5.49 $ 10.94 $ 21.03
======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Statements of Changes in Partners' Equity
For the Nine Months Ended September 30, 1997 and
the Years Ended December 31, 1996, 1995 and 1994
(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, 1993 $ 481,995 $ (86,582) $ 395,413
Cash distributions
to partners $ 32.73 $ 13.92 (233,651) (12,297) (245,948)
Net income 69,705 3,669 73,374
Capital contributions - 125,000 125,000
--------- ---------- ----------
Balance at
December 31, 1994 318,049 29,790 347,839
Cash distributions
to partners $ 29.09 $ 15.94 (225,533) (11,867) (237,400)
Net income 79,835 4,202 84,037
--------- ---------- ----------
Balance at
December 31, 1995 172,351 22,125 194,476
Cash distributions
to partners $ 19.06 $ 25.94 (225,405) (11,863) (237,268)
Net income 129,909 6,837 136,746
--------- ---------- ----------
Balance at
December 31, 1996 76,855 17,099 93,954
Conversion of loan to
capital contribution - 175,000 175,000
Cash distributions
to partners $ 22.81 $ 10.94 (169,054) (8,898) (177,952)
Net income 54,798 2,884 57,682
--------- ---------- ----------
Balance at
September 30, 1997 $ (37,401) $ 186,085 $ 148,684
========= ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Statements of Cash Flows
For the Nine Months Ended September 30,
(unaudited)
<TABLE>
1997 1996
---- ----
Cash flows provided by operating activities:
<S> <C> <C>
Net income .............................................. $ 57,682 $ 110,884
--------- ---------
Adjustments to reconcile net income to net cash
provided by operating activities:
Net gain on sales or remarketing of equipment ....... (66,298) (113,971)
Finance income portion of receivables paid
directly to lenders by lessees ................... -- (3,365)
Interest expense on non-recourse financing paid
directly by lessees .............................. -- 2,372
Collection of principal - non-financed receivables .. 130,076 175,768
Changes in operating assets and liabilities:
Allowance for doubtful accounts .................. 6,013 9,189
Accounts payable to General Partner and affiliates 27,655 9,456
Accounts payable - other ......................... 9,448 2,100
Security deposits and deferred credits ........... 12,982 (2,285)
Other assets ..................................... 287 9,416
Other, net ....................................... (38,917) 257
--------- ---------
Total adjustments ............................... 81,246 88,937
--------- ---------
Net cash provided by operating activities ...... 138,928 199,821
--------- ---------
Cash flows from investing activities:
Proceeds from sales of equipment ........................ 82,806 135,686
--------- ---------
Net cash provided by investing activities ...... 82,806 135,686
--------- ---------
Cash flows from financing activities:
Cash distributions to partners .......................... (177,952) (177,951)
Principal payments on term loan ......................... -- (116,500)
--------- ---------
Net cash used in financing activities .......... (177,952) (294,451)
--------- ---------
Net increase in cash ....................................... 43,782 41,056
Cash, beginning of period .................................. 123,808 79,759
--------- ---------
Cash, end of period ........................................ $ 167,590 $ 120,815
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Statements of Cash Flows (continued)
Supplemental Disclosures of Cash Flow Information
During the nine months ended September 30, 1997 and 1996, non-cash
activities included the following:
1997 1996
---- ----
Principal and interest on direct finance receivables
paid directly to lender by lessee ................. $ -- $ 40,625
Principal and interest on non-recourse financing
paid directly by lessee ........................... -- (40,625)
Decrease in notes payable - General Partner ........ (27,488) --
Increase in accounts payable to General Partner
and affiliates, net .............................. 27,488 --
-------- --------
$ -- $ --
======== ========
Interest expense of $7,875 and $12,331 for the nine months ended
September 30, 1997 and 1996, consisted of: interest on General Partner loans of
$7,875 and $7,875, respectively, interest on non-recourse financing paid
directly to lenders by lessees of $-0- and $2,372, respectively, and interest on
the term loan of $-0- and $2,084, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Notes to Financial Statements
September 30, 1997
(unaudited)
1. Basis of Presentation
The financial statements of ICON Cash Flow Partners, L.P., Series A (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 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 financial
statements should be read in conjunction with the financial statements and notes
included in the Partnership's 1996 Annual Report on Form 10-K.
2. General Partner Loan
In February 1995 and March 1995, the General Partner lent $75,000 and
$100,000, respectively, to the Partnership. Principal on the loans is to be
repaid only after the extended Reinvestment Period expires, and, the limited
partners have received at least a 6% return on their capital. These notes bore
interest at the lower of 6% or prime. Interest on the loans is to be paid if the
Partnership determines that there are sufficient funds available. In September
1997 the General Partners converted the principal outstanding on the loan,
$175,000, into a capital contribution. This contribution will not effect the
manner in which profits and loss distribution will be allocated. The interest
portion of the obligation is included in accounts payable to General Partner and
Affiliates at September 30, 1997.
3. Related Party Transactions
During the nine months ended September 30, 1997 and 1996 the Partnership paid
or accrued to the General Partner management fees of $1,951 and $3,076 and
administrative expense reimbursements of $3,459 and $5,416, respectively. These
fees and reimbursements were charged to operations.
The payment of management fees have been deferred since September 1, 1993 and
as of September 30, 1997, $37,480 in management fees have been accrued but not
paid.
Under the original Partnership agreement, the General Partner was entitled to
management fees at either 2% or 5% of rents, depending on the type of investment
under management. In conjunction with the solicitation to amend the Limited
Partnership Agreement, effective, January 31, 1995, the General Partner reduced
its management fees to a flat rate of 1% of rents for all investments under
management. The General Partner previously reduced its management fees on
January 1, 1994 to a flat rate of 2%. The foregone management fees, the
difference between the flat rate (1%) and the allowable rates per the
Partnership Agreement (2% or 5%) of rents for certain types of investments,
totaled $3,736 for the nine months ended September 30, 1997. These foregone
management fees are not accruable in future years.
There were no acquisition fees paid or accrued by the Partnership for the
nine months ended September 30, 1997 and 1996.
In 1997 and 1996 the Partnership accrued $7,875 in interest due the General
Partner related to notes payable with the General Partner (see Note 2).
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
September 30, 1997
Item 2. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
The Partnership's portfolio consisted of a net investment in financings,
finance leases and operating leases representing 88%,12% and less than 1% of
total investments at September 30, 1997, respectively, and 79%, 20% and 1% of
total investments at September 30, 1996, respectively. . Results of Operations
Three Months Ended September 30, 1997 and 1996
Revenues for the three months ended September 30, 1997 were $33,014,
representing a decrease of $4,441 or 12% from 1996. The decrease in revenues was
attributable to a decrease in finance income of $6,525 or 64% and a decrease in
interest income and other of $117 or 6%. The decrease in revenues was partially
offset by an increase in net gain on sales or remarketing of equipment of $2,201
or 9%. The decrease in finance income resulted from a decrease in the average
size of the portfolio from 1996 to 1997. The decrease in interest income and
other resulted from a decrease in the collection of late charges. The net gain
on sales or remarketing of equipment increased due to an increase in the number
of leases maturing, and the underlying equipment being sold or remarketed, for
which the proceeds received were in excess of the remaining carrying value of
the equipment.
Expenses for the three months ended September 30, 1997 were $7,547,
representing a change of $964 or 11% from 1996. The change in expenses was
attributable to a decrease in administrative expense reimbursement of $514 or
32%, a decrease in interest expense of $501 or 16%, and a decrease in management
fees of $299 or 33%. The decrease in expenses was partially offset by an
increase in general and administrative of $350 or 12%. Administrative expense
reimbursements and management fees decreased due to a decrease in the average
size of the portfolio from 1996 to 1997. The decrease in interest expense
resulted from a decrease in the average debt outstanding from 1996 to 1997.
Net income for the three months ended September 30, 1997 and 1996 was $25,467
and $28,944, respectively. The net income per weighted average limited
partnership unit was $4.83 and $5.49 for 1997 and 1996, respectively.
Nine Months Ended September 30, 1997 and 1996
Revenues for the nine months ended September 30, 1997 were $86,470,
representing a decrease of $70,846 or 45% from 1996. The decrease in revenues
was attributable to a decrease in net gain on sales or remarketing of equipment
of $47,673 or 42%, a decrease in finance income of $20,910 or 56% and a decrease
in interest income and other of $2,263 or 36%. The net gain on sales or
remarketing of equipment decreased due to a decrease in the number of leases
maturing, and the underlying equipment being sold or remarketed, for which the
proceeds received were in excess of the remaining carrying value of the
equipment. The decrease in finance income resulted from a decrease in the
average size of the portfolio from 1996 to 1997. The decrease in interest income
and other resulted from a decrease in the collection of late charges.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Expenses for the nine months ended September 30, 1997 were $28,788,
representing a change of $17,644 or 38% from 1996. The change in expenses was
attributable to a decrease in general and administrative expense of $10,106 or
39%, a decrease in interest expense of $4,456 or 36%, a decrease in
administrative expense reimbursements of $1,957 or 36%, and a decrease in
management fees of $1,125 or 37% from 1996. The decrease in general and
administrative expenses was due primarily to a decrease in legal fees and
service charges. Administrative expense reimbursements and management fees
decreased due to the decrease in the average size of the portfolio from 1996 to
1997. The decrease in interest expense resulted from a decrease in the average
debt outstanding from 1996 to 1997.
Net income for the nine months ended September 30, 1997 and 1996 was $57,682
and $110,884, respectively. The net income per weighted average limited
partnership unit was $10.94 and $21.03 for 1997 and 1996, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the nine months ended
September 30, 1997 and 1996 were net cash provided by operations of $139,928 and
$199,821, respectively, and proceeds from sales of equipment of $82,806 and
$135,686, respectively. These funds were used to fund cash distributions and to
make payments on borrowings. The Partnership intends to fund future cash
distributions utilizing cash provided by operations and proceeds from sales of
equipment.
In February 1995 and March 1995, the General Partner lent $75,000 and
$100,000, respectively, to the Partnership. Principal on the loans is to be
repaid only after the extended Reinvestment Period expires, and, the limited
partners receive their minimum return. These notes bore interest at the lower of
6% or prime. Interest on the loans is to be paid if the Partnership determines
that there are sufficient funds available. In September 1997 the General
Partners converted the principal outstanding on the loan, $175,000, into a
capital contribution. This contribution will not effect the manner in which
profits and loss distribution will be allocated. The interest portion of the
obligation is included in accounts payable to General Partner and Affiliates at
September 30, 1997.
Cash distributions to limited partners for the nine months ended September
30, 1997 and 1996, which were paid quarterly, totaled $169,054, of which
$169,054 and $10,534 was investment income and $0 and $63,714 was a return of
capital, respectively. The quarterly annualized cash distribution rate to
limited partners was 9.00%, of which 9.00% and 5.58% was investment income and
0% and 3.42% was a return of capital, respectively, calculated as a percentage
of each partner's initial capital contribution. The limited partner distribution
per weighted average unit outstanding for the nine months ended September 30,
1997 and 1996 was $33.75, of which $10.94 and $21.03 was investment income and
$22.81 and $12.72 was a return of capital, respectively.
As of September 30, 1997, except as noted above, 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, sales of
equipment and borrowings, the Partnership will 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 as they become due.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(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 during the quarter ended September 30, 1997.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(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 CASH FLOW PARTNERS, L.P., SERIES A
File No. 2-99858 (Registrant)
By its General Partner,
ICON Capital Corp.
November 14, 1997 /s/ Gary N. Silverhardt
- ----------------- ---------------------------------------------
Date Gary N. Silverhardt
Chief Financial Officer
(Principal financial and account officer of
the General Partner of the Registrant)
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000775346
<NAME> ICON Cash Flow Partners, L.P., Series A
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 167,590
<SECURITIES> 0
<RECEIVABLES> 122,386
<ALLOWANCES> 38,530
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 39,887
<DEPRECIATION> 39,787
<TOTAL-ASSETS> 251,546
<CURRENT-LIABILITIES> ** 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 146,684
<TOTAL-LIABILITY-AND-EQUITY> 251,546
<SALES> 86,470
<TOTAL-REVENUES> 86,470
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 20,913
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,875
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,682
<EPS-PRIMARY> 10.94
<EPS-DILUTED> 10.94
<FN>
* The Partnership has an unclassified balance sheet in its financial
statements due to the nature of its industry. A value of "0" was used for
current assets and liabilities.
** The Partnership has an unclassified balance sheet in its financial
statements due to the nature of its industry. A value of "0" was used for
current assets and liabilities.
</FN>
</TABLE>
