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, 1997
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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 2-99858
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ICON Cash Flow Partners, L.P., Series A
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3270490
- --------------------------------------------------------------------------------
(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>
June 30, December 31,
1997 1996
Assets
<S> <C> <C>
Cash $ 173,966 $ 123,808
------------- ------------
Investment in financings
Receivables due in installments 161,465 246,130
Unearned income (10,340) (21,268)
Allowance for doubtful accounts (35,420) (20,420)
------------- ------------
115,705 204,442
Investment in finance leases
Minimum rents receivable 14,313 29,868
Estimated unguaranteed residual values 11,811 11,811
Unearned income (1,213) (3,160)
Allowance for doubtful accounts (9,124) (24,123)
------------- ------------
15,787 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 $ 311,744 $ 349,219
============= ============
Liabilities and Partners' Equity
Notes payable - General Partner $ 199,863 $ 194,613
Accounts payable to General Partner and affiliates, net 51,883 43,760
Security deposits and deferred credits 40,875 3,817
Accounts payable - other 11,588 13,075
------------- ------------
304,209 255,265
Commitments and Contingencies
Partners' equity
General Partner 12,778 17,099
Limited partners (5,009 units outstanding,
$500 per unit original issue price) (5,243) 76,855
-------------- ------------
Total partners' equity 7,535 93,954
------------- ------------
Total liabilities and partners' equity $ 311,744 $ 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 Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Net gain on sales or
remarketing of equipment $ 12,655 $ 50,794 $ 38,964 $ 88,838
Finance income 5,516 12,221 12,444 26,829
Interest income and other 923 1,545 2,048 4,194
--------- --------- --------- ---------
Total revenues 19,094 64,560 53,456 119,861
--------- --------- --------- ---------
Expenses
General and administrative 9,339 13,810 12,270 22,725
Interest 2,625 3,418 5,250 9,205
Administrative expense reimbursements
- General Partner 1,080 1,793 2,377 3,821
Management fees - General Partner 609 1,018 1,344 2,170
--------- --------- --------- ---------
Total expenses 13,653 20,039 21,241 37,921
--------- --------- --------- ---------
Net income $ 5,441 $ 44,521 $ 32,215 $ 81,940
========= ========= ========= =========
Net income allocable to:
Limited partners $ 5,169 $ 42,295 $ 30,604 $ 77,843
General Partner 272 2,226 1,611 4,097
--------- --------- --------- ---------
$ 5,441 $ 44,521 $ 32,215 $ 81,940
========= ========= ========= =========
Weighted average number of limited
partnership units outstanding 5,009 5,009 5,009 5,009
========= ========= ========= =========
Net income per weighted average
limited partnership unit $ 1.03 $ 8.44 $ 6.11 $ 15.54
========= ========= ========= =========
</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 Six Months Ended June 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
Cash distributions
to partners $ 16.39 $ 6.11 (112,702) (5,932) (118,634)
Net income 30,604 1,611 32,215
----------- ------------- ------------
Balance at
June 30, 1997 $ (5,243) $ 12,778 $ 7,535
=========== ============= ============
</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 Six Months Ended June 30,
(unaudited)
<TABLE>
1997 1996
---- ----
<S> <C> <C>
Cash flows provided by operating activities:
Net income $ 32,215 $ 81,940
------------ ------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Net gain on sales or remarketing of equipment (38,964) (88,838)
Finance income portion of receivables paid
directly to lenders by lessees - (2,545)
Interest expense on non-recourse financing paid
directly by lessees - 1,871
Collection of principal - non-financed receivables 83,065 133,521
Changes in operating assets and liabilities:
Allowance for doubtful accounts - 6,021
Accounts payable to General Partner and affiliates 8,123 10,475
Accounts payable - other 3,763 5,322
Security deposits and deferred credits 37,058 (3,661)
Other, net 1,991 10,023
------------ ------------
Total adjustments 95,036 72,189
------------ ------------
Net cash provided by operating activities 127,251 154,129
------------ ------------
Cash flows from investing activities:
Proceeds from sales of equipment 41,541 111,283
------------ ------------
Net cash provided by investing activities 41,541 111,283
------------ ------------
Cash flows from financing activities:
Cash distributions to partners (118,634) (118,634)
Principal payments on term loan - (116,500)
------------ ------------
Net cash used in financing activities (118,634) (235,134)
------------ ------------
Net increase in cash 50,158 30,278
Cash, beginning of period 123,808 79,759
------------ ------------
Cash, end of period $ 173,966 $ 110,037
============ ============
</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 six months ended June 30, 1997 and 1996, non-cash activities
included the following:
<TABLE>
1997 1996
---- ----
<S> <C> <C>
Principal and interest on direct finance receivables
paid directly to lender by lessee $ - $ 27,083
Principal and interest on non-recourse financing
paid directly by lessee - (27,083)
---------- ----------
$ - $ -
========== ==========
</TABLE>
Interest expense of $5,250 and $9,205 for the six months ended June 30,
1997 and 1996, consisted of: interest on General Partner loans of $5,250 and
$5,250, respectively, interest on non-recourse financing paid directly to
lenders by lessees of $-0- and $1,871, 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
June 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 will 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 bear
interest at the lower of 6% or prime. Interest on the loans will be paid if the
Partnership determines that there are sufficient funds available.
3. Related Party Transactions
During the six months ended June 30, 1997 and 1996 the Partnership paid or
accrued to the General Partner management fees of $1,344 and $2,170 and
administrative expense reimbursements of $2,377 and $3,821, respectively. These
fees and reimbursements were charged to operations.
The payment of management fees have been deferred since September 1, 1993 and
as of June 30, 1997, $36,873 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 $2,661 for the six months ended June 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 six
months ended June 30, 1997 and 1996.
In 1997 and 1996 the Partnership accrued $5,250 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)
June 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 86%,14% and less than 1% of
total investments at June 30, 1997, respectively, and 78%, 22% and less than 1%
of total investments at June 30, 1996, respectively.
Results of Operations
Three Months Ended June 30, 1997 and 1996
Revenues for the three months ended June 30, 1997 were $19,094, representing
a decrease of $45,466 or 70% from 1996. The decrease in revenues was
attributable to a decrease in net gain on sales or remarketing of equipment of
$38,139 or 75%, a decrease in finance income of $6,705 or 55% and a decrease in
interest income and other of $622 or 40%. Net gain on sales or remarketing of
equipment decreased due to a decrease in the renewal rentals received in excess
of estimated unguaranteed residual values. 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.
Expenses for the three months ended June 30, 1997 were $13,563, representing
a decrease of $6,386 or 32% from 1996. The decrease in expenses was attributable
to a decrease in general and administrative expense of $4,471 or 32%, a decrease
in interest expense of $793 or 23%, a decrease in administrative expense
reimbursements of $713 or 40%, and a decrease in management fees of $409 or 40%.
General and administrative expense, 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 June 30, 1997 and 1996 was $5,441 and
$44,521, respectively. The net income per weighted average limited partnership
unit was $1.03 and $8.44 for 1997 and 1996, respectively.
Six Months Ended June 30, 1997 and 1996
Revenues for the six months ended June 30, 1997 were $53,456, representing a
decrease of $66,405 or 55% from 1996. The decrease in revenues was attributable
to a decrease in net gain on sales or remarketing of equipment of $49,874 or
56%, a decrease in finance income of $14,385 or 54% and a decrease in interest
income and other of $2,146 or 51%. Net gain on sales or remarketing of equipment
decreased due to a decrease in the renewal rentals received in excess of
estimated unguaranteed residual values. 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 six months ended June 30, 1997 were $21,241, representing a
decrease of $16,680 or 44% from 1996. The decrease in expenses was attributable
to a decrease in general and administrative expense of $10,455 or 46%, a
decrease in interest expense of $3,955 or 43%, a decrease in administrative
expense reimbursements of $1,444 or 38%, and a decrease in management fees of
$826 or 38% from 1996. General and administrative expense, 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 six months ended June 30, 1997 and 1996 was $32,215 and
$81,940, respectively. The net income per weighted average limited partnership
unit was $6.11 and $15.54 for 1997 and 1996, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the six months ended June 30,
1997 and 1996 were net cash provided by operations of $127,251 and $154,129,
respectively, and proceeds from sales of equipment of $41,541 and $111,283,
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 will be
repaid only after the extended Reinvestment Period expires, and, the limited
partners receive their minimum return. These notes bear interest at the lower of
6% or prime. Interest on the loans will be paid if the Partnership determines
that there are sufficient funds available.
Cash distributions to limited partners for the six months ended June 30, 1997
and 1996, which were paid quarterly, totaled $112,702, of which $30,604 and
$77,843 was investment income and $82,098 and $34,860 was a return of capital,
respectively. The quarterly annualized cash distribution rate to limited
partners was 9.00%, of which 2.44% and 6.22% was investment income and 6.56% and
2.78% 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 six months ended June 30, 1997 and
1996 was $22.50, of which $6.11 and $15.54 was investment income and $16.39 and
$6.96 was a return of capital, respectively.
As of June 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 June 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.
August 13, 1997 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
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 173,966
<SECURITIES> 0
<RECEIVABLES> 182,222
<ALLOWANCES> 44,544
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 39,887
<DEPRECIATION> 39,787
<TOTAL-ASSETS> 311,744
<CURRENT-LIABILITIES> ** 0
<BONDS> 199,863
0
0
<COMMON> 0
<OTHER-SE> 7,535
<TOTAL-LIABILITY-AND-EQUITY> 311,744
<SALES> 53,456
<TOTAL-REVENUES> 53,456
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,991
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,250
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,215
<EPS-PRIMARY> 6.11
<EPS-DILUTED> 6.11
<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>
