UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[ x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended September 30, 1998
-----------------------------------------------------------
[ ] 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
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
600 Mamaroneck Avenue, Harrison, New York 10528-1632
- --------------------------------------------------------------------------------
(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)
September 30, December 31,
1998 1997
------------ -----------
Assets
Cash ............................................ $ 47,581 $ 89,212
--------- ---------
Investment in financings
Receivables due in installments .............. 14,845 59,625
Unearned income .............................. (984) (3,181)
Allowance for doubtful accounts .............. (5,000) (19,407)
--------- ---------
8,861 37,037
--------- ---------
Investment in finance leases
Minimum rents receivable ..................... -- 4,062
Unearned income .............................. -- (1,212)
Allowance for doubtful accounts .............. -- (2,123)
--------- ---------
-- 727
--------- ---------
Investment in operating leases
Equipment, at cost ........................... -- 39,887
Accumulated depreciation ..................... -- (39,787)
--------- ---------
-- 100
--------- ---------
Other assets .................................... -- 10,916
--------- ---------
Total assets .................................... $ 56,442 $ 137,992
========= =========
Liabilities and Partners' Equity
Accounts payable ................................ $ 26,036 $ 14,840
Security deposits and deferred credits .......... 725 1,045
--------- ---------
26,761 15,885
--------- ---------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner .............................. 180,135 184,757
Limited partners (5,009 units outstanding,
$500 per unit original issue price) ........ (150,454) (62,650)
--------- ---------
Total partners' equity .......................... 29,681 122,107
--------- ---------
Total liabilities and partners' equity .......... $ 56,442 $ 137,992
========= =========
See accompanying notes to unaudited 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,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Net gain on sales or
remarketing of equipment .......... $ 45,009 $ 27,334 $ 76,617 $ 66,298
Finance income ...................... 447 3,709 2,115 16,153
Interest income and other ........... 322 1,971 1,780 4,019
-------- -------- -------- --------
Total revenues ...................... 45,778 33,014 80,512 86,470
-------- -------- -------- --------
Expenses
General and administrative .......... 3,447 3,233 14,532 15,503
Administrative expense reimbursements
- General Partner ................. 481 1,082 1,761 3,459
Management fees - General Partner ... 206 607 937 1,951
Reversal of allowance for
doubtful accounts ................. (6,030) -- (22,243) --
Interest ............................ -- 2,625 -- 7,875
-------- -------- -------- --------
Total expenses ...................... (1,896) 7,547 (5,013) 28,788
-------- -------- -------- --------
Net income ............................. $ 47,674 $ 25,467 $ 85,525 $ 57,682
======== ======== ======== ========
Net income allocable to:
Limited partners .................... 45,290 $ 24,194 $ 81,249 $ 54,798
General Partner ..................... 2,384 1,273 4,276 2,884
-------- -------- -------- --------
$ 47,674 $ 25,467 $ 85,525 $ 57,682
======== ======== ======== ========
Weighted average number of limited
partnership units outstanding ....... 5,009 5,009 5,009 5,009
======== ======== ======== ========
Net income per weighted average
limited partnership unit ............ $ 9.04 $ 4.83 $ 16.22 $ 10.94
======== ======== ======== ========
</TABLE>
See accompanying notes to unaudited 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, 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 .............. $ 17.53 $ 16.22 (169,053) (8,898) (177,951)
Net income .................. 81,249 4,276 85,525
--------- --------- ---------
Balance at September 30, 1998 $(150,454) $ 180,135 $ 29,681
========= ========= =========
</TABLE>
See accompanying notes to unaudited 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>
1998 1997
---- ----
Cash flows provided by operating activities:
<S> <C> <C>
Net income ........................................... $ 85,525 $ 57,682
--------- ---------
Adjustments to reconcile net income to net cash
provided by operating activities:
Net gain on sales or remarketing of equipment .... (76,617) (66,298)
Collection of principal - non-financed receivables 46,661 130,076
Changes in operating assets and liabilities:
Accounts payable .............................. 11,196 37,103
Other assets .................................. 11,098 287
Allowance for doubtful accounts ............... (16,530) 6,013
Security deposits and deferred credits ........ (320) 12,982
Other, net .................................... (19,244) (38,917)
--------- ---------
Total adjustments ............................ (43,756) 81,246
--------- ---------
Net cash provided by operating activities ... 41,769 138,928
--------- ---------
Cash flows from investing activities:
Proceeds from sales of equipment ..................... 94,551 82,806
--------- ---------
Net cash provided by investing activities ... 94,551 82,806
--------- ---------
Cash flows from financing activities:
Cash distributions to partners ....................... (177,951) (177,952)
--------- ---------
Net cash used in financing activities ....... (177,951) (177,952)
--------- ---------
Net increase (decrease) in cash ......................... (41,631) 43,782
Cash, beginning of period ............................... 89,212 123,808
--------- ---------
Cash, end of period ..................................... $ 47,581 $ 167,590
========= =========
</TABLE>
See accompanying notes to unaudited 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, 1998 and 1997, non-cash
activities included the following:
1998 1997
---- ----
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 for the nine months ended September 30, 1997
consisted of interest on General Partner loans.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
Notes to Unaudited Financial Statements
September 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 presented 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 nine months ended September 30, 1998 and 1997 the Partnership paid
or accrued to the General Partner management fees of $937 and $1,951 and
administrative expense reimbursements of $1,761 and $3,459, 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.
There were no acquisition fees paid or accrued by the Partnership for the
nine months ended September 30, 1998 and 1997.
4. Year 2000
The Partnership relies on computer information systems for its transaction
processing and for general data processing. The Year 2000 issue arose because
many existing computer programs have been written using two digits rather than
four to define the applicable year. As a result, the program could interpret
dates ending in "00" as the year 1900 rather than the year 2000. In certain
cases, such errors could result in system failures or miscalculations that
disrupt the operation of the affected businesses.
The Partnership uses computer information systems provided by the General
Partner and has no computer information systems of its own. The software related
to the General Partner's primary computer information systems are provided by
third parties vendors. The General Partner has formally communicated with these
vendors and has received assurance that their programs are Year 2000 compliant.
In addition, the General Partner has gathered information about the Year 2000
readiness of significant vendors and third-party servicers and continues to
monitor developments in this area. All of the General Partner's peripheral
computer technologies, such as its network operating system and third party
software applications, including payroll and electronic banking have been
evaluated and have been found to be Year 2000 compliant. The ultimate impact of
the Year 2000 issue on the Partnership will depend to a great extent on the
manner in which the issue is addressed by the Partnership's lessees. Each of the
Partnership's lessees will have a material self interest in resolving any Year
2000 issue, however, non-compliance on the part of a lessee could result in lost
or delayed revenues to the Partnership. The effect of this risk to the
Partnership is not determinable.
The General Partner is responsible for costs relating to the assessment and
development of its Year 2000 compliance remediation plan, as well as the testing
of the hardware and software owned or licensed for its personal computers. The
General Partner's costs incurred to date and expected future costs are not
material.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
September 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 100%, 0% and 0% of total
investments at September 30, 1998, respectively, and 88%, 12% and less than 1%
of total investments at September 30, 1997, respectively.
Results of Operations
Three Months Ended September 30, 1998 and 1997
Revenues for the three months ended September 30, 1998 were $45,778,
representing an increase of $12,764 or 39% from 1997. The increase in revenues
was attributable to an increase in net gain on sale or remarketing of equipment
of $17,675 or 65%. This increase was partially offset by a decrease in finance
income of $3,262 or 88% and a decrease in interest income and other of $1,649 or
84%. Net gain on sales or remarketing of equipment increased due to an increase
in renewal rentals received on an operating lease. The operating lease was
terminated in September 1998. 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 September 30, 1998 were ($1,896),
representing a change of $9,443 from 1997. The change in expenses was
attributable to a decrease in interest expense of $2,625 or 100%, a decrease in
administrative expense reimbursements of $601 or 56%, a decrease in management
fees of $401 or 66% and a reduction of the allowance for doubtful accounts of
$6,030. These decreases were partially offset by an increase in general and
administrative expense of $214 or 7%. 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. The reduction of the allowance for doubtful accounts resulted from an
analysis of delinquency, an assessment of overall risk and a review of
historical loss experience.
Net income for the three months ended September 30, 1998 and 1997 was $47,674
and $25,467, respectively. The net income per weighted average limited
partnership unit was $9.04 and $4.83 for 1998 and 1997, respectively.
Nine Months Ended September 30, 1998 and 1997
Revenues for the nine months ended September 30, 1998 were $80,512,
representing a decrease of $5,958 or 7% from 1997. The decrease in revenues was
attributable to a decrease in finance income of $14,038 or 87% and a decrease in
interest income of $2,239 or 56%. These decreases were partially offset by an
increase in net gain on sale or remarketing of equipment of $10,319 or 16%. 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 charge income. Net gain on sales or
remarketing of equipment increased due to an increase in renewal rentals
received on an operating lease. The operating lease was terminated in September
1998.
<PAGE>
ICON Cash Flow Partners, L.P., Series A
(A Delaware Limited Partnership)
September 30, 1998
Expenses for the nine months ended September 30, 1998 were ($5,013),
representing a change of $33,801 from 1997. The change in expenses was
attributable to a decrease in general and administrative expense of $971 or 6%,
a decrease in interest expense of $7,875 or 100%, a decrease in administrative
expense reimbursements of $1,698 or 49%, a decrease in management fees of $1,014
or 52% from 1997 and a reduction of the allowance for doubtful accounts of
$22,243. 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. The reduction of the allowance for doubtful accounts
resulted from an analysis of delinquency, an assessment of overall risk and a
review of historical loss experience.
Net income for the nine months ended September 30, 1998 and 1997 was $85,525
and 57,682, respectively. The net income per weighted average limited
partnership unit was $16.22 and $10.94 for 1998 and 1997, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the nine months ended
September 30, 1998 and 1997 were net cash provided by operations of $41,769 and
$138,928, respectively, and proceeds from sales of equipment of $94,551 and
$82,806, respectively. These funds were used to fund cash distributions. The
Partnership intends to fund future cash distributions utilizing existing cash
and future cash provided by operations.
Cash distributions to limited partners for the nine months ended September
30, 1998 and 1997, which were paid quarterly, totaled $169,053 and $169,054,
respectively, of which $81,249 and $54,798 was investment income and $87,804 and
$114,255 was a return of capital, respectively. The quarterly annualized cash
distribution rate to limited partners was 9.00% for 1998 and 1997, of which
4.33% and 2.92% was investment income and 4.67% and 6.08% 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, 1998 and 1997 was $33.75, of
which $16.22 and $10.94 was investment income and $17.53 and $22.81 was a return
of capital, respectively. As a result of a review and analysis of the
Partnership's projected cash flow, the Partnership decreased the distribution
rate to an annualized rate of 2%. This change was effective for the October 15,
1998 distribution.
The Partnership relies on computer information systems for its transaction
processing and for general data processing. The Year 2000 issue arose because
many existing computer programs have been written using two digits rather than
four to define the applicable year. As a result, the program could interpret
dates ending in "00" as the year 1900 rather than the year 2000. In certain
cases, such errors could result in system failures or miscalculations that
disrupt the operation of the affected businesses.
The Partnership uses computer information systems provided by the General
Partner and has no computer information systems of its own. The software related
to the General Partner's primary computer information systems are provided by
third parties vendors. The General Partner has formally communicated with these
vendors and has received assurance that their programs are Year 2000 compliant.
In addition, the General Partner has gathered information about the Year 2000
readiness of significant vendors and third-party servicers and continues to
monitor developments in this area. All of the General Partner's peripheral
computer technologies, such as its network operating system and third party
software applications, including payroll and electronic banking have been
evaluated and have been found to be Year 2000 compliant. The ultimate impact of
the Year 2000 issue on the Partnership will depend to a great extent on the
manner in which the issue is addressed by the Partnership's lessees. Each of the
Partnership's lessees will have a material self interest in resolving any Year
2000 issue, however, non-compliance on the part of a lessee could result in lost
or delayed revenues to the Partnership. The effect of this risk to the
Partnership is not determinable.
The General Partner is responsible for costs relating to the assessment and
development of its Year 2000 compliance remediation plan, as well as the testing
of the hardware and software owned or licensed for its personal computers. The
General Partner's costs incurred to date and expected future costs are not
material.
As of September 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, the
Partnership will 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 September 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.
February 18, 1999 /s/Kevin F. Redmond
- -------------------------- ----------------------------------------
Date Kevin F. Redmond
Vice President and
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 47,581
<SECURITIES> 0
<RECEIVABLES> 14,845
<ALLOWANCES> 5,000
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 56,442
<CURRENT-LIABILITIES> ** 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 29,681
<TOTAL-LIABILITY-AND-EQUITY> 56,442
<SALES> 78,732
<TOTAL-REVENUES> 80,512
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 17,230
<LOSS-PROVISION> (22,243)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 85,525
<EPS-PRIMARY> 16.22
<EPS-DILUTED> 16.22
<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>
