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, 1998
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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 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
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
600 Mamaroneck Avenue, Harrison, New York 10528-1632
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(Address of principal executive offices) (Zip code)
(914) 698-0600
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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 Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Balance Sheets
(unaudited)
March 31, December 31,
1998 1997
Assets
Cash ............................................. $ 66,591 $ 89,212
--------- ---------
Investment in finance leases
Minimum rents receivable ...................... 6,550 4,062
Unearned income ............................... (1,212) (1,212)
Allowance for doubtful accounts ............... (2,123) (2,123)
--------- ---------
3,215 727
--------- ---------
Investment in financings
Receivables due in installments ............... 28,144 59,625
Unearned income ............................... (2,024) (3,181)
Allowance for doubtful accounts ............... (8,907) (19,407)
--------- ---------
17,213 37,037
--------- ---------
Investment in operating leases
Equipment, at cost ............................ 39,887 39,887
Accumulated depreciation ...................... (39,787) (39,787)
--------- ---------
100 100
--------- ---------
Accounts receivable from affiliates .............. 44,137 --
Other assets ..................................... 4,110 10,916
--------- ---------
Total assets ..................................... $ 135,366 $ 137,992
========= =========
Liabilities and Partners' Equity
Security deposits and deferred credits ........... $ 31,179 $ 1,045
Accounts payable - other ......................... 12,672 14,840
--------- ---------
43,851 15,885
--------- ---------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ............................... 183,227 184,757
Limited partners (5,009 units outstanding,
$500 per unit original issue price) ......... (91,712) (62,650)
--------- ---------
Total partners' equity ........................... 91,515 122,107
--------- ---------
Total liabilities and partners' equity ........... $ 135,366 $ 137,992
========= =========
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Statements of Operations
For the Three Months Ended March 31,
(unaudited)
1998 1997
---- ----
Revenues
Net gain on sales or remarketing
of equipment .................................. $12,429 $26,309
Interest income and other ....................... 17,321 1,125
Finance income .................................. 1,157 6,928
------- -------
Total revenues .................................. 30,907 34,362
------- -------
Expenses
Administrative expense reimbursements
- General Partner .............................. 888 1,297
General and administrative ...................... 787 2,931
Management fees - General Partner ............... 507 735
Interest ........................................ -- 2,625
------- -------
Total expenses .................................. 2,182 7,588
------- -------
Net income ......................................... $28,725 $26,774
======= =======
Net income allocable to:
Limited partners ................................ $27,289 $25,435
General Partner ................................. 1,436 1,339
------- -------
$28,725 $26,774
======= =======
Weighted average number of limited
partnership units outstanding ................... 5,009 5,009
======= =======
Net income per weighted average
limited partnership unit ........................ $ 5.45 $ 5.08
======= =======
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 Three Months Ended March 31, 1998 and
the Years Ended December 31, 1997, 1996, and 1995
<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, 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 General Partner
note payable to a
capital contribution - 175,000 175,000
Cash distributions
to partners $ 27.85 $17.15 (225,405) (11,863) (237,268)
Net income 85,900 4,521 90,421
---------- --------- ----------
Balance at
December 31, 1997 (62,650) 184,757 122,107
Cash distributions
to partners $ 5.80 $ 5.45 (56,351) (2,966) (59,317)
Net income 27,289 1,436 28,725
---------- --------- ----------
Balance at March 31, 1998 $ (91,712) $ 183,227 $ 91,515
========== ========= ==========
</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 Three Months Ended March 31,
(unaudited)
<TABLE>
1998 1997
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income .............................................. $ 28,725 $ 26,774
--------- ---------
Adjustments to reconcile net income to net cash
provided by operating activities:
Collection of principal - non-financed receivables ..... 33,246 44,198
Net gain on sales or remarketing of equipment .......... (12,429) (26,309)
Changes in operating assets and liabilities:
Allowance for doubtful accounts ....................... (11,713) --
Accounts payable to General Partner and affiliates, net (43,106) (5,408)
Security deposits and deferred credits ................ 30,134 34,829
Accounts payable - other .............................. (2,168) (2,464)
Other, net ............................................ (75) 1,761
--------- ---------
Total adjustments .................................. (6,111) 46,607
--------- ---------
Net cash provided by operating activities ........... 22,614 73,381
--------- ---------
Cash flows from investing activities:
Proceeds from sales of equipment ........................ 14,082 30,659
--------- ---------
Net cash provided by investing activities ........... 14,082 30,659
--------- ---------
Cash flows from financing activities:
Cash distributions to partners .......................... (59,317) (59,317)
--------- ---------
Net cash used in financing activities ............... (59,317) (59,317)
--------- ---------
Net increase (decrease) in cash ........................... (22,621) 44,723
Cash at beginning of period ............................... 89,212 123,808
--------- ---------
Cash at end of period ..................................... $ 66,591 $ 168,531
========= =========
</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
Interest expense of $2,625 for the three months ended March 31, 1997
consisted entirely of interest on General Partner loans.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Notes to Financial Statements
March 31, 1998
(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 1997 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 was to be
repaid only after the extended Reinvestment Period expired, and, the limited
partners received at least a 6% return on their capital. These notes bore
interest at the lower of 6% or prime. In September 1997 the General Partner
converted the principal outstanding on the loan, $175,000, into a capital
contribution. This contribution increased the General Partner's basis in the
Partnership, however, profits, losses, cash distributions and disposition
proceeds will continue to be allocated 95% to the limited partners and 5% to the
General Partner. Accrued interest of $27,487 on the loans was paid in November
1997.
3. Related Party Transactions
During the three months ended March 31, 1998 and 1997 the Partnership paid
or accrued to the General Partner management fees of $507 and $735 and
administrative expense reimbursements of $888 and $1,297, respectively. These
fees and reimbursements were charged to operations.
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%. These foregone management fees are not
accruable in future years.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Notes to Financial Statements
There were no acquisition fees paid or accrued by the Partnership for the
three months ended March 31, 1998 and 1997.
In 1997 the Partnership accrued $2,625 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)
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 of 83%, 7% and less than 1% of total
investments at March 31, 1998, respectively, and 79%, 13% and less than 1% of
total investments at March 31, 1997, respectively.
Results of Operations for the Three Months Ended March 31, 1998 and 1997
Revenues for the three months ended March 31, 1998 were $30,907,
representing a decrease of $3,455 or 10% from 1997. The decrease in revenues was
primarily due to a decrease in net gain on sales or remarketing of equipment of
$13,880 or 53% and a decrease in finance income of $5,771 or 83% from 1997. The
decrease in revenues was partially offset by an increase in interest income and
other of $16,196. 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. The decrease in finance income resulted from a decrease in
the average size of the portfolio from 1997 to 1998. The increase in interest
income and other resulted from a reduction in excessive allowance for doubtful
accounts taken after an analysis of delinquency, an assessment of credit risk
and a review of historical loss experience.
Expenses for the three months ended March 31, 1998 were $2,182,
representing a decrease of $5,406 or 71% from 1997. The decrease in expenses was
due to a decrease in general and administrative expenses of $2,144 or 73%, a
decrease in interest expense of $2,625 or 100%, a decrease in administrative
expense reimbursements of $409 or 32% and a decrease in management fees of $228
or 31% from 1997. Interest expense decreased due to the decrease in average debt
outstanding from 1997 to 1998. The decrease in general and administrative
expenses, management fees and administrative expense reimbursements resulted
from a decrease in the average size of the portfolio from 1997 to 1998.
Net income for the three months ended March 31, 1998 and 1997 was $28,725
and $26,774, respectively. The net income per weighted average limited
partnership unit was $5.45 and $5.08 in 1998 and 1997, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended
March 31, 1998 and 1997 were net cash provided by operations of $22,614 and
$73,381, respectively, and proceeds from sales of equipment of $14,082 and
$30,659, respectively. These funds were used fund cash distributions. The
Partnership intends to fund future cash distributions, to the extent funds are
available, utilizing cash provided by operations and proceeds from sales of
equipment.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Cash distributions to limited partners for the three months ended March
31, 1998 and 1997, which were paid quarterly, totaled $56,351 individually, of
which $27,289 and $25,435 was investment income and $29,062 and $30,916 was a
return of capital, respectively. The quarterly annualized distribution rate was
9.00%, of which 2.08% and 4.00% was investment income and 6.92% and 5.00% 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 three months ended March 31, 1998 and 1997 was
$11.25 of which $5.45 and $5.08 was investment income and $5.80 and $6.17 was a
return of capital, respectively.
As of March 31, 1998, 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 March 31, 1998.
<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.
May 14, 1998 /s/ Gary N. Silverhardt
- ------------ -----------------------------------------------------
Date Gary N. Silverhardt
Senior Vice President and 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 66,591
<SECURITIES> 0
<RECEIVABLES> 47,889
<ALLOWANCES> 11,030
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 39,887
<DEPRECIATION> 39,787
<TOTAL-ASSETS> 135,366
<CURRENT-LIABILITIES> ** 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 91,515
<TOTAL-LIABILITY-AND-EQUITY> 135,366
<SALES> 13,586
<TOTAL-REVENUES> 30,907
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,182
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,725
<EPS-PRIMARY> 5.45
<EPS-DILUTED> 5.45
<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>
