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, 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
--------------------- -------------------------
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 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)
June 30, December 31,
1998 1997
--------- ------------
Assets
Cash ............................................. $ 61,802 $ 89,212
--------- ---------
Investment in financings
Receivables due in installments ............... 20,636 59,625
Unearned income ............................... (1,432) (3,181)
Allowance for doubtful accounts ............... (11,030) (19,407)
--------- ---------
8,174 37,037
--------- ---------
Investment in finance leases
Minimum rents receivable ...................... 2,050 4,062
Unearned income ............................... (1,212) (1,212)
Allowance for doubtful accounts ............... -- (2,123)
--------- ---------
838 727
--------- ---------
Investment in operating leases
Equipment, at cost ............................ 39,887 39,887
Accumulated depreciation ...................... (39,787) (39,787)
--------- ---------
100 100
--------- ---------
Other assets ..................................... 703 10,916
--------- ---------
Total assets ..................................... $ 71,617 $ 137,992
========= =========
Liabilities and Partners' Equity
Accounts payable - other ......................... $ 11,654 $ 14,840
Security deposits and deferred credits ........... 18,639 1,045
--------- ---------
30,293 15,885
--------- ---------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ............................... 180,718 184,757
Limited partners (5,009 units outstanding,
$500 per unit original issue price) ......... (139,394) (62,650)
--------- ---------
Total partners' equity ........................... 41,324 122,107
--------- ---------
Total liabilities and partners' equity ........... $ 71,617 $ 137,992
========= =========
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,
1998 1997 1998 1997
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Net gain on sales or
remarketing of equipment .......... $19,179 $12,655 $31,608 $38,964
Finance income ...................... 511 5,516 1,668 12,444
Interest income and other ........... 350 923 17,671 2,048
------- ------- ------- -------
Total revenues ...................... 20,040 19,094 50,947 53,456
------- ------- ------- -------
Expenses
General and administrative .......... 10,298 9,339 11,085 12,270
Interest ............................ -- 2,625 -- 5,250
Administrative expense reimbursements
- General Partner ................. 392 1,080 1,280 2,377
Management fees - General Partner ... 224 609 731 1,344
------- ------- ------- -------
Total expenses ...................... 10,914 13,653 13,096 21,241
------- ------- ------- -------
Net income ............................. $ 9,126 $ 5,441 $37,851 $32,215
======= ======= ======= =======
Net income allocable to:
Limited partners .................... $ 8,670 $ 5,169 $35,958 $30,604
General Partner ..................... 456 272 1,893 1,611
------- ------- ------- -------
$ 9,126 $ 5,441 $37,851 $32,215
======= ======= ======= =======
Weighted average number of limited
partnership units outstanding ....... 5,009 5,009 5,009 5,009
======= ======= ======= =======
Net income per weighted average
limited partnership unit ............ $ 1.73 $ 1.03 $ 7.18 $ 6.11
======= ======= ======= =======
</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, 1998 and
the Years Ended December 31, 1997, 1996, and 1995
(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, 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 $15.32 $ 7.18 (112,702) (5,932) (118,634)
Net income 35,958 1,893 37,851
---------- --------- ----------
Balance at June 30, 1998 $ (139,394) $ 180,718 $ 41,324
========== ========= ==========
</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>
1998 1997
---- ----
Cash flows provided by operating activities:
<S> <C> <C>
Net income .................................................... $ 37,851 $ 32,215
--------- ---------
Adjustments to reconcile net income to net cash
provided by operating activities:
Net gain on sales or remarketing of equipment ............. (31,608) (38,964)
Collection of principal - non-financed receivables ........ 40,058 83,065
Changes in operating assets and liabilities:
Allowance for doubtful accounts ........................ (11,713) --
Increase (decrease) account receivable - General Partner
and affiliates ....................................... (3,342) --
Accounts payable to General Partner and affiliates ..... -- 8,123
Accounts payable - other ............................... (3,186) 3,763
Security deposits and deferred credits ................. 17,594 37,058
Other, net ............................................. 18,978 1,991
--------- ---------
Total adjustments ..................................... 18,361 95,036
--------- ---------
Net cash provided by operating activities ............ 56,212 127,251
--------- ---------
Cash flows from investing activities:
Proceeds from sales of equipment .............................. 35,012 41,541
--------- ---------
Net cash provided by investing activities ............ 35,012 41,541
--------- ---------
Cash flows from financing activities:
Cash distributions to partners ................................ (118,634) (118,634)
--------- ---------
Net cash used in financing activities ................ (118,634) (118,634)
--------- ---------
Net increase (decrease) in cash .................................. (27,410) 50,158
Cash, beginning of period ........................................ 89,212 123,808
--------- ---------
Cash, end of period .............................................. $ 61,802 $ 173,966
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Notes to Financial Statements
June 30, 1998
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.
3. Related Party Transactions
For the six months ended June 30, 1998 and 1997 the Partnership paid or
accrued to the General Partner management fees of $731 and $1,344 and
administrative expense reimbursements of $1,280 and $2,377, 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.
Therewere no acquisition fees paid or accrued by the Partnership for the
six months ended June 30, 1998 and 1997.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
June 30, 1998
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 95%, 5% and less than 1% of
total investments at June 30, 1998, respectively, and 86%, 14% and less than 1%
of total investments at June 30, 1997, respectively.
Results of Operations
Three Months Ended June 30, 1998 and 1997
Revenues for the three months ended June 30, 1998 were $20,040,
representing an increase of $946 or 5% from 1997. The increase in revenues was
attributable to an increase in net gain on sales or remarketing of equipment of
$6,524 or 52%. This increase was principally offset by a decrease in finance
income of $5,005 or 91% and a decrease in interest income and other of $573 or
62%. Net gain on sales or remarketing of equipment increased due to an increase
in the renewal rentals received on an operating lease. The decrease in finance
income resulted from a decrease in the average size of the portfolio from 1997
to 1998. 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, 1998 were $10,914,
representing a decrease of $2,739 or 20% from 1997. The decrease in expenses was
attributable to a decrease in interest expense of $2,625 or 100%, a decrease in
administrative expense reimbursements of $688 or 64% and a decrease in
management fees of $385 or 63%. These decreases were partially offset by an
increase in general and administrative expense of $959 or 10%. The decrease in
interest expense resulted from the September 1997 conversion of the General
Partner loan to a capital contribution. Administrative expense reimbursements
and management fees decreased due to a decrease in the average size of the
portfolio from 1997 to 1998. General and administrative expenses increased due
to an increase in legal costs associated with collection activities on a
previously written-off account.
Net income for the three months ended June 30, 1998 and 1997 was $9,126 and
$5,441, respectively. The net income per weighted average limited partnership
unit was $1.73 and $1.03 for 1998 and 1997, respectively.
Six Months Ended June 30, 1998 and 1997
Revenues for the six months ended June 30, 1998 were $50,947, representing
a decrease of $2,509 or 5% from 1997. The decrease in revenues was attributable
to a decrease in finance income of $10,776 or 87% and a decrease in net gain on
sales or remarketing of equipment of $7,356 or 19%. These decreases were
partially offset by an increase in interest income and other of $15,623 or 763%.
The decrease in finance income resulted from a decrease in the average size of
the portfolio from 1997 to 1998. 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 estimated unguaranteed residual values. The increase in interest
income and other resulted from the reversal of excessive allowance for doubtful
accounts.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
June 30, 1998
Expenses for the six months ended June 30, 1998 were $13,096, representing
a decrease of $8,145 or 38% from 1997. The decrease in expenses was attributable
to a decrease in general and administrative expense of $1,185 or 10%, a decrease
in interest expense of $5,250 or 100%, a decrease in administrative expense
reimbursements of $1,097 or 46%, and a decrease in management fees of $613 or
46% from 1997. General and administrative expense, administrative expense
reimbursements and management fees decreased due to the decrease in the average
size of the portfolio from 1997 to 1998. The decrease in interest expense
resulted from the September 1997 conversion of the General Partner loan to a
capital contribution.
Net income for the six months ended June 30, 1998 and 1997 was $37,851 and
$32,215, respectively. The net income per weighted average limited partnership
unit was $7.18 and $6.11 for 1998 and 1997, respectively. Liquidity and Capital
Resources
The Partnership's primary sources of funds for the six months ended June
30, 1998 and 1997 were net cash provided by operations of $56,212 and $127,251,
respectively, and proceeds from sales of equipment of $35,012 and $41,541,
respectively. These funds were used to fund cash distributions. The Partnership
intends to fund future cash distributions utilizing cash provided by operations
and proceeds from sales of equipment.
Cash distributions to limited partners for the six months ended June 30, 1998
and 1997, which were paid quarterly, totaled $112,702, of which $35,958 and
$30,604 was investment income and $76,744 and $82,098 was a return of capital,
respectively. The quarterly annualized cash distribution rate to limited
partners was 9.00%, of which 2.88% and 2.44% was investment income and 6.12% and
6.56% 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, 1998 and
1997 was $22.50, of which $7.18 and $6.11 was investment income and $15.32 and
$16.39 was a return of capital, respectively.
As of June 30, 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 and sales of
equipment, the Partnership will invest in equipment leases and financings and
make cash distributions, 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, 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.
August 14, 1998 /s/ Gary N. Silverhardt
- --------------- ----------------------------------------------
Date Gary N. Silverhardt
Chief Financial Officer
(Principal financial and account officer of
the General Partner of the Registrant)
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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 61,802
<SECURITIES> 0
<RECEIVABLES> 35,881
<ALLOWANCES> 11,030
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 39,887
<DEPRECIATION> 39,787
<TOTAL-ASSETS> 71,617
<CURRENT-LIABILITIES> ** 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 41,324
<TOTAL-LIABILITY-AND-EQUITY> 71,617
<SALES> 33,276
<TOTAL-REVENUES> 50,947
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,096
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,851
<EPS-PRIMARY> 7.18
<EPS-DILUTED> 7.18
<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>
