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, 1996
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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 33-28145
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ICON Cash Flow Partners, L.P., Series B
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(Exact name of registrant as specified in its charter)
Delaware 13-3518939
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
600 Mamaroneck Avenue, Harrison, New York 10528
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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 B
(A Delaware Limited Partnership)
Balance Sheets
(unaudited)
September 30, December 31,
1996 1995
---- ----
Assets
Cash ............................................. $ 248,954 $ 860,530
----------- -----------
Investment in finance leases
Minimum rents receivable ....................... 1,609,098 2,315,053
Estimated unguaranteed residual values ......... 214,012 498,371
Initial direct costs ........................... -- 4
Unearned income ................................ (221,062) (322,848)
Allowance for doubtful accounts ................ (125,188) (116,767)
----------- -----------
1,476,860 2,373,813
----------- -----------
Investment in financings
Receivables due in installments ................ 1,510,843 1,356,663
Unearned income ................................ (242,714) (230,908)
Allowance for doubtful accounts ................ (47,798) (47,798)
----------- -----------
1,220,331 1,077,957
----------- -----------
Equity investment in joint venture ............... 403,982 751,860
----------- -----------
Investment in operating leases
Equipment, at cost ............................. 125,592 125,592
Accumulated depreciation ....................... (124,955) (124,955)
----------- -----------
637 637
----------- -----------
Other assets ..................................... 50,200 4,905
----------- -----------
Total assets ..................................... $ 3,400,964 $ 5,069,702
=========== ===========
Liabilities and Partners' Equity
Notes payable - non-recourse ..................... $ 392,908 $ 802,012
Accounts payable to General Partner
and affiliates, net ............................ 149,435 392,686
Accounts payable - other ......................... 141,205 199,455
Security deposits and deferred credits ........... 17,120 106,773
----------- -----------
700,668 1,500,926
----------- -----------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ................................ (144,969) (136,284)
Limited partners (199,800 and 200,000
units outstanding, $100 per unit original
issue price in 1996 and 1995, respectively) .. 2,845,265 3,705,060
----------- -----------
Total partners' equity ........................... 2,700,296 3,568,776
----------- -----------
Total liabilities and partners' equity ........... $ 3,400,964 $ 5,069,702
=========== ===========
See accompanying notes to financial statements
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Statements of Operations
(unaudited)
<TABLE>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Finance income ........................................ $ 77,247 $ 119,598 $ 237,067 $ 394,296
Net gain on sales or
remarketing of equipment ............................ 24,737 (32,868) 153,968 150,361
Income from equity investment
in joint venture .................................... 4,952 6,939 21,211 51,172
Rental income ......................................... -- 28,593 -- 85,779
Interest income and other ............................. 3,345 9,278 22,572 40,617
--------- --------- --------- ---------
Total revenues ........................................ 110,281 131,540 434,818 722,225
--------- --------- --------- ---------
Expenses
General and administrative ............................ 27,664 15,861 92,191 69,181
Interest .............................................. 9,896 44,289 38,895 158,170
Administrative expense reimbursement
- General Partner ................................... 12,924 20,894 38,840 65,769
Amortization of initial direct costs .................. -- 4,044 5 30,720
Management fees - General Partner ..................... -- 19,149 (228,906) 63,462
Depreciation .......................................... -- 14,945 -- 44,835
Provision for bad debts ............................... -- -- -- 25,000
--------- --------- --------- ---------
Total expenses ........................................ 50,484 119,182 (58,975) 457,137
--------- --------- --------- ---------
Net income ............................................... $ 59,797 $ 12,358 $ 493,793 $ 265,088
========= ========= ========= =========
Net income allocable to:
Limited partners ...................................... $ 59,199 $ 12,234 $ 488,855 $ 262,437
General Partner ....................................... 598 124 4,938 2,651
--------- --------- --------- ---------
$ 59,797 $ 12,358 $ 493,793 $ 265,088
========= ========= ========= =========
Weighted average number of limited
partnership units outstanding ......................... 199,800 200,000 199,800 200,000
========= ========= ========= =========
Net income per weighted average
limited partnership unit .............................. $ .30 $ .06 $ 2.45 $ 1.31
========= ========= ========= =========
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Statements of Changes in Partners' Equity
For the Nine Months Ended September 30, 1996 and
the Years Ended December 31, 1995, 1993 and 1992
(unaudited)
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, 1992 . $ 8,539,241 $ (87,492) $ 8,451,749
Cash distributions to partners $11.19 $1.14 (2,466,667) (24,917) (2,491,584)
Net income ................... 228,481 2,308 230,789
----------- ----------- -----------
Balance at December 31, 1993 . 6,301,055 (110,101) 6,190,954
Cash distributions to partners $ 7.07 $1.93 (1,800,000) (18,182) (1,818,182)
Net income ................... 386,136 3,900 390,036
----------- ----------- -----------
Balance at December 31, 1994 . 4,887,191 (124,383) 4,762,808
Cash distributions to partners $ 5.89 $3.11 (1,799,763) (18,180) (1,817,943)
Limited partnership units
redeemed (200 units) ........ (3,967) -- (3,967)
Net income ................... 621,599 6,279 627,878
----------- ----------- -----------
Balance at December 31, 1995 . 3,705,060 (136,284) 3,568,776
Cash distributions to partners $ 4.30 $2.45 (1,348,650) (13,623) (1,362,273)
Net income ................... 488,855 4,938 493,793
----------- ----------- -----------
Balance at September 30, 1996 $ 2,845,265 $ (144,969) $ 2,700,296
=========== =========== ===========
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Statements of Cash Flows
For the Nine Months Ended September 30,
(unaudited)
1996 1995
---- ----
<S> <C> <C>
Cash flows provided by operating activities:
Net income ............................................... $ 493,794 $ 278,483
----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation ........................................... -- 44,835
Finance income portion of receivables paid
directly to lenders by lessees ........................ (45,325) (197,798)
Amortization of initial direct costs ................... 5 30,720
Net gain on sales or remarketing of equipment .......... (153,968) (150,361)
Interest expense on non-recourse financing paid
directly by lessees ................................... 38,895 133,522
Interest expense accrued on non-recourse debt .......... -- 24,648
Collection of principal - non-financed receivables ..... 447,925 681,149
Income from equity investment in joint venture ......... (21,211) (64,567)
Distribution from investment in joint venture .......... 369,089 31,545
Rental income - assigned operating lease receivables ... -- --
Changes in operating assets and liabilities:
Allowance for doubtful accounts ....................... 8,354 22,119
Accounts payable to General Partner and affiliates, net (243,251) 133,783
Accounts payable - other .............................. (58,250) (22,618)
Security deposits and deferred credits ................ (89,653) (361,715)
Other assets .......................................... (18,796) (14,763)
Other, net ............................................ 91,310 (31,634)
----------- -----------
Total adjustments .................................. 325,124 258,865
----------- -----------
Net cash provided by operating activities .............. 818,918 537,348
----------- -----------
Cash flows provided by (used for) investing activities:
Equipment and receivables purchased ...................... (523,964) (1,527,302)
Investment in joint venture .............................. -- (1,000,000)
Proceeds from sales of equipment ......................... 455,743 1,595,693
----------- -----------
Net cash used for investing activities ................. (68,221) (931,609)
----------- -----------
Cash flows used in financing activities:
Cash distributions to partners ........................... (1,362,273) (1,363,636)
----------- -----------
Net cash used for financing activities ................. (1,362,273) (1,363,636)
----------- -----------
Net decrease in cash ........................................ (611,576) (1,757,897)
Cash, beginning of period ................................... 860,530 2,391,405
----------- -----------
Cash, end of period ......................................... $ 248,954 $ 633,508
=========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Statements of Cash Flows (continued)
(unaudited)
Supplemental Disclosures of Cash Flow Information
During the nine months ended September 30, 1996 and 1995, non-cash
activities included the following:
1996 1995
---- ----
Principal and interest on direct finance
receivables paid directly to lenders by lessees $ 403,428 $ 930,668
Principal and interest on non-recourse financing
paid directly by lessees ........................ (403,428) (930,668)
Decrease in notes payable non-recourse
due to terminations ............................ (44,572) (744,493)
Increase (decrease) in security deposits
and deferred credits ........................... 44,572 (299,114)
Decrease in investment in finance leases
due to terminations ............................ -- 1,043,607
----------- -----------
$ -- $ --
=========== ===========
Interest expense for the nine months ended September 30, 1996 and 1995
consisted of interest expense on non-recourse financing accrued or paid directly
to lenders by lessees of $38,895 and $158,170, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements
September 30, 1996
(unaudited)
1. Basis of Presentation
The financial statements included herein should be read in conjunction with
the Notes to Financial Statements included in the Partnership's 1995 Annual
Report on Form 10-K and have been prepared in accordance with the accounting
policies stated therein.
2. New Accounting Pronouncement
In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which is
effective beginning in 1996.
The Partnership's existing policy with respect to impairment of estimated
residual values is to review, on a quarterly basis, the carrying value of its
residuals on an individual asset basis to determine whether events or changes in
circumstances indicate that the carrying value of an asset may not be
recoverable and, therefore, an impairment loss should be recognized. The events
or changes in circumstances which generally indicate that the residual value of
an asset has been impaired are (i) the estimated fair value of the underlying
equipment is less than the Partnership's carrying value or (ii) the lessee is
experiencing financial difficulties and it does not appear likely that the
estimated proceeds from disposition of the asset will be sufficient to satisfy
the remaining obligation to the non-recourse lender and the Partnership's
residual position. Generally in the latter situation, the residual position
relates to equipment subject to third party non-recourse notes payable where the
lessee remits their rental payments directly to the lender and the Partnership
does not recover its residual until the non-recourse note obligation is repaid
in full.
The Partnership measures its impairment loss as the amount by which the
carrying amount of the residual value exceeds the estimated proceeds to be
received by the Partnership from release or resale of the equipment. Generally,
quoted market prices are used as the basis for measuring whether an impairment
loss should be recognized.
As a result, the Partnership's policy with respect to measurement and
recognition of an impairment loss associated with estimated residual values is
consistent with the requirements of SFAS No. 121 and, therefore, the
Partnership's adoption of this Statement in the first quarter of 1996 had no
material effect on the financial statements.
3. Investment in Joint Venture
The Partnership Agreement allows the Partnership to invest in joint
ventures with other limited partnerships sponsored by the General Partner
provided that the investment objectives of the joint ventures are consistent
with that of the Partnership.
On February 3, 1995, the Partnership and two affiliates, ICON Cash Flow
Partners, L.P. Series C ("Series C"), and ICON Cash Flow Partners L.P. Six
("L.P. Six") formed ICON Asset Acquisition L.L.C. I ("ICON Asset Acquisition
LLC") as a special purpose limited liability company. ICON Asset Acquisition LLC
was formed for the purpose of acquiring, managing and securitizing a portfolio
of leases. The Partnership, Series C and L.P. Six contributed $1,000,000 (8.93%
interest), $1,500,000 (13.39% interest) and $8,700,000 (77.68% interest),
respectively, to ICON Asset Acquisition LLC. ICON Asset Acquisition LLC
established a warehouse line of credit with ContiTrade Services Corp. with a
maximum amount available of $20,000,000. The warehouse line expires on August
31, 1995 and borrowings under the line bear interest at the rate of LIBOR plus
3%. The Partnership's 8.93% investment in
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
ICON Asset Acquisition LLC, which is accounted for under the equity method,
totaled $1,012,688 at September 30, 1996. The General Partner manages and
controls the business affairs of the Partnership, Series C and L.P. Six. As a
result of this common control and the Partnership's ability to influence the
activities of the joint venture, the Partnership's investment in the joint
venture is accounted for under the equity method. Profits, losses, excess cash
and disposition proceeds are allocated to the Partnership in direct relation to
its respective interest in the joint venture.
On February 17, 1995, ICON Asset Acquisition LLC purchased 975 finance
leases of an existing lease portfolio from First Sierra Financial, Inc.
utilizing $16,273,793 of proceeds from the warehouse line, $10,857,427 in
contributions received from the Partnership and affiliates and $723,046 in cash
adjustments at closing, relating primarily to rents received by the seller from
lessees prior to closing and for the benefit of ICON Asset Acquisition L.L.C.
The purchase price of the portfolio totaled $27,854,266, the underlying
equipment consists of graphic arts and printing equipment and the terms of the
leases range from 12 to 72 months. ICON Asset Acquisition LLC acquired lease
contracts which were less than 60 days delinquent, and, which met the
Partnership's overall credit underwriting criteria. The purchase price of the
portfolio was determined by discounting the future contractual cash flows. All
such leases are net leases and are reported and accounted for as finance leases.
The Partnership accounts for its investment in ICON Asset Acquisition LLC as an
equity investment.
On September 5, 1995, ICON Asset Acquisition LLC securitized substantially
all of its portfolio. Proceeds from the securitization were used to pay down its
existing line of credit and excess proceeds were returned to the Partnership
based on its pro rata interest. ICON Asset Acquisition LLC became the beneficial
owner of a trust and the Prudential Insurance Company of America ("Prudential")
is treated as the lender to the trust. The trustee for the trust is Texas
Commerce Bank ("TCB"). In conjunction with this securitization, the portfolio,
as well as the General Partner's servicing capabilities, were rated "A" by Duff
& Phelps, a nationally recognized rating agency. The General Partner, as
servicer, is responsible for managing, servicing, reporting on, and
administering the portfolio. All monies received from the portfolio are remitted
to TCB. TCB is responsible for disbursing to Prudential its respective principal
and interest, and to ICON Asset Acquisition LLC, the excess of cash collected
over debt service from the portfolio. ICON Asset Acquisition LLC accounts for
this investment as an investment in finance leases and financings. Prudential's
investment in the trust is accounted for as non-recourse debt on ICON Asset
Acquisition LLC's books and records. All monies received and remitted to TCB
from the securitized portfolio are accounted for as a reduction in related
finance lease and financing receivables and all amounts paid to Prudential by
TCB are accounted for as a reduction of non-recourse debt. Information as to the
financial position and results of operations of ICON Asset Acquisition LLC as of
and for the three months ended September 30, 1996 is summarized below:
September 30, 1996
Assets $ 14,618,581
==============
Liabilities 10,092,913
Equity $ 4,525,668
==============
Nine Months Ended
September 30, 1996
Net income $ 237,521
=============
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
4. Amendment to Partnership Agreement
The Partnership's Reinvestment Period expired on November 15, 1995, five
years after the Final Closing Date. The General Partner distributed a Definitive
Consent Statement to the Limited Partners to solicit approval of two amendments
to the Partnership Agreement. These amendments were agreed to and are effective
from and after November 15, 1995. The amendments: (1) extend the Reinvestment
Period for a maximum of four additional years and likewise delay the start and
end of the Liquidation Period, and (2) eliminate the Partnership's obligation to
pay the General Partner $220,000 of the $347,000 accrued and unpaid management
fees as of November 15, 1995, and $171,000 of additional management fees which
would otherwise accrue during the present Liquidation Period. The portion of the
accrued and unpaid management fees that would be payable to the General Partner,
or $127,000 ($347,000 less $220,000) will be returned to the Partnership in the
form of an additional Capital Contribution by the General Partner and until the
limited partners have received their cummulative unpaid distribution, or the
difference between 14% and 9%, the $127,000 will continue to be deferred.
5. Related Party Transactions
For the nine months ended September 30, 1996, due to the approval of the
amendments as discussed in Note 3, the Partnership reversed accrued and unpaid
management fees in the amount of $228,906. During the nine months ended
September 30, 1995, the Partnership paid or accrued to the General Partner
management fees of $63,462. For the nine months ended September 30, 1996 and
1995, the Partnership paid or accrued to the General Partner administrative
expense reimbursements of $38,840 and $25,916 respectively, which were charged
to operations.
The Partnership and two affiliates, Series E and L.P. Six, formed a joint
venture, ICON Asset Acquisition LLC (see Note 2 for additional information
relating to the joint venture).
For the nine months ended September 30, 1996 and 1995, there were no
acquisition fees paid or accrued by the Partnership.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Item 2. Management's Discussion and analysis of Financial Condition and
Results of Operations
The Partnership's portfolio consisted of a net investment in finance
leases, financings, equity investment in joint venture, and operating leases
representing 54%, 43%, 14% and less than 1% of total investments at September
30, 1996, respectively, and 66%, 19%, 15% and 1% of total investments at
September 30, 1995, respectively.
Three Months Ended September 30, 1996 and 1995
For the three months ended September 30, 1995 the Partnership leased or
financed equipment with an initial cost of $82,920, to 3 lessees or equipment
users.
Results of Operations
Revenues for the three months ended September 30, 1996 were $110,281,
representing a decrease of $34,655 or 24% from 1995. The decrease in revenues
was primarily attributable to a decrease in finance income of $42,351 or 35%
from 1995. Results were also affected by a decrease in rental income of $28,593
or 100%, a decrease in income from joint venture of $15,382 or 76% and a
decrease in interest income of $5,933 or 64% from 1995. The decrease in these
revenues was partially offset by an increase in income from net gain on sales or
remarketing of equipment of $57,605. The increase in net gain on sales or
remarketing of equipment resulted from equipment being sold or remarketed for
proceeds which were greater than the remaining carrying value of the equipment.
The overall decrease in finance income resulted from the decrease in the average
size of the portfolio from 1995 to 1996. Interest income and other decreased due
to a decrease in the average cash balance from 1995 to 1996. The decrease in
rental income resulted from the Partnership's reduced investment in operating
leases.
Expenses for the three months ended September 30, 1996 were $50,484,
representing a decrease of $68,698 or 58% from 1995. The decrease in expenses
was primarily attributable to a decrease in interest expense of $34,392 or 78%
from 1995. Results were also affected by a decrease in management fees of
$19,149 or 100%, a decrease in administrative expense reimbursements of $7,970
or 38%, a decrease in amortization of initial direct costs of $4,044 or 100% and
a decrease in depreciation expense of $14,945 or 100%. Interest expense
decreased due to a decrease in the average debt outstanding from 1995 to 1996.
The decrease in management fees was attributable to an amendment to the
Partnership Agreement, which was adopted on March 20, 1996. The amendment
eliminates the partnership's obligation to pay management fees effective from
and after November 15, 1995.
Net income for the three months ended September 30, 1996 and 1995 was
$59,797 and $25,753, respectively. The net income per weighted average limited
partnership unit was $.30 and $.13 for 1996 and 1995, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended
September 30, 1996 and 1995 were net cash provided by operations of $326,917 and
$260,471, respectively, and proceeds from sales of equipment of $455,743 and
$363,752, respectively. These funds were used to purchase equipment, fund cash
distributions and make payments on borrowings. The Partnership intends to
continue to purchase additional equipment and fund cash distributions utilizing
cash provided by operations and proceeds from sales of equipment.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Cash distributions to limited partners for the three months ended September
30, 1996 and 1995, which were paid monthly, totaled $449,550 and $450,000, of
which $59,198 and $25,495 was investment income and $390,352 and $424,505 was a
return of capital, respectively. The monthly annualized cash distribution rate
to limited partners was 9.00%, of which 1.17% and .51% was investment income and
7.83% and 8.49% was a return of capital, respectively, calculated as a
percentage of each partners initial capital contribution. The limited partner
distribution per weighted average unit outstanding for the three months ended
September 30, 1996 and 1995 was $2.25, of which $.30 and $.13 was investment
income and $1.95 and $2.12 was a return of capital, respectively. The
Partnership had non-recourse notes payable at September 30, 1996 and 1995 of
$392,908 and $1,531,789, respectively.
Nine Months Ended September 30, 1996 and 1995
For the nine months ended September 30, 1996 and 1995 the Partnership
leased or financed equipment with an initial cost of $523,964 and $1,574,649 to
17 and 43 lessees or equipment users, respectively. The weighted average initial
transaction term relating to these transactions was 55 and 53 months,
respectively.
Results of Operations
Revenues for the nine months ended September 30, 1996 were $434,818,
representing a decrease of $300,802 or 41% from 1995. The decrease in revenues
was primarily attributable to a decrease in finance income of $157,229 or 40%
and a decrease in rental income of $85,779 or 100% from 1995. Results were also
affected by a decrease in equity investment in joint venture of $43,356 or 67%
and a decrease in interest income and other of $18,045 or 44% from 1995. The
decrease in these revenues was partially offset by an increase in income from
net gain on sales or remarketing of equipment of $3,607. The overall decrease in
finance income resulted from the decrease in the average size of the portfolio
from 1995 to 1996. The decrease in rental income resulted from the Partnership's
reduced investment in operating leases. Interest income and other decreased due
to a decrease in the average cash balance from 1995 to 1996.
Expenses for the nine months ended September 30, 1996 were ($58,975),
representing a decrease of $516,112 from 1995. The decrease in expenses resulted
primarily from a reversal of accrued and unpaid management fees of $228,906.
This reversal was attributable to the solicitation of an affirmative vote of the
limited partners to amend the Partnership agreement. The amendment, which was
adopted on March 20, 1996 is effective from and after November 15, 1995 and
specifically eliminates the Partnership's obligation to pay such fees. The
decrease in expenses also resulted from a decrease in interest expense of
$119,275 or 75% , a decrease in the provision for bad debts of $25,000 or 100%,
a decrease in amortization of initial direct costs of $30,715 or 100%, a
decrease in depreciation expense of $44,835 or 100%, and a decrease in
administrative expense reimbursements of $26,929 or 40% from 1995. Interest
expense decreased due to a decrease in the average debt outstanding from 1995 to
1996. As a result of an analysis of delinquency, an assessment of overall risk
and a review of historical loss experience, it was determined that no provision
for bad debts was required for the nine months ended September 30, 1996.
Amortization of initial direct costs, depreciation expense, and administrative
expense reimbursements decreased due to the decrease in the average size of the
portfolio.
Net income for the nine months ended September 30, 1996 and 1995 was
$493,793 and $278,483, respectively. The net income per weighted average limited
partnership unit was $2.45 and $1.38 for 1996 and 1995, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Liquidity and Capital Resources
The Partnership's primary sources of funds for the nine months ended
September 30, 1996 and 1995 were net cash provided by operations of $818,918 and
$537,348, respectively, and proceeds from sales of equipment of $455,743 and
$1,595,693, respectively. These funds were used to purchase equipment, fund cash
distributions and make payments on borrowings. The Partnership intends to
continue to purchase additional equipment and fund cash distributions utilizing
cash provided by operations and proceeds from sales of equipment.
Cash distributions to limited partners for the nine months ended September
30, 1996 and 1995, which were paid monthly, totaled $1,348,650, of which
$488,855 and $275,698 was investment income and $859,795 and $1,074,302 was a
return of capital, respectively. The monthly annualized cash distribution rate
to limited partners was 9.00%, of which 3.24% and 2.04% was investment income
and 5.76% and 6.96% was a return of capital, respectively, calculated as a
percentage of each partners initial capital contribution. The limited partner
distribution per weighted average unit outstanding for the nine months ended
September 30, 1996 and 1995 was $6.75, of which $2.45 and $1.38 was investment
income and $4.30 and $5.37 was a return of capital, respectively.
The Partnership's Reinvestment Period expired on November 15, 1995, five
years after the Final Closing Date. The General Partner distributed a Definitive
Consent Statement to the Limited Partners to solicit approval of two amendments
to the Partnership Agreement. As of March 20, 1996 these amendments were agreed
to and are effective from and after November 15, 1995. The amendments: (1)
extend the Reinvestment Period for a maximum of four additional years and
likewise delay the start and end of the Liquidation Period, and (2) eliminate
the Partnership's obligation to pay the General Partner $220,000 of the $347,000
accrued and unpaid management fees as of November 15, 1995, and $171,000 of
additional management fees which would otherwise accrue during the present
Liquidation Period. The portion of the accrued and unpaid management fees that
would be payable to the General Partner, or $127,000 ($347,000 less $220,000)
will be returned to the Partnership in the form of an additional Capital
Contribution by the General Partner and until the limited partners have received
their cummulative unpaid distribution, or the difference between 14% and 9%, the
$127,000 will continue to be deferred.
As of September 30, 1996, 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.
New Accounting Pronouncement
In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which is
effective beginning in 1996. The new standard is similar to the Partnership's
existing accounting policies relating to the impairment of estimated residual
values. As a result, adoption of SFAS No. 121 in the first quarter of 1996 had
no impact on the Partnership's financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
Form 8-K was filed on September 4, 1996, Item 1, Change in Control of
Registrant.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(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 B
File No. 33-28145 (Registrant)
By its General Partner,
ICON Capital Corp.
November 12, 1996 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> 0000849278
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 248,954
<SECURITIES> 0
<RECEIVABLES> 2,870,177
<ALLOWANCES> 172,986
<INVENTORY> 50,201
<CURRENT-ASSETS> * 0
<PP&E> 125,592
<DEPRECIATION> 124,955
<TOTAL-ASSETS> 3,400,965
<CURRENT-LIABILITIES> ** 0
<BONDS> 392,908
0
0
<COMMON> 0
<OTHER-SE> 2,700,297
<TOTAL-LIABILITY-AND-EQUITY> 3,400,965
<SALES> 434,819
<TOTAL-REVENUES> 434,819
<CGS> 4
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (97,874)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,895
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 493,794
<EPS-PRIMARY> 2.45
<EPS-DILUTED> 2.45
<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>
