UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1997
------------------------------------------------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
For the transition period from to
------------------- --------------------------
Commission File Number 0-27822
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ICON Cash Flow Partners, L.P., Series B
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3518939
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
600 Mamaroneck Avenue, Harrison, New York 10528-1632
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 698-0600
-----------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class Name of each exchange on which registered
- ------------------------------------ ------------------------------------------
- ------------------------------------ ------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- --------------------------------------------------------------------------------
(Title of class)
- --------------------------------------------------------------------------------
(Title of class)
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>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
TABLE OF CONTENTS
Item Page
PART I
1. Business 3-4
2. Properties 5
3. Legal Proceedings 5
4. Submission of Matters to a Vote of Security Holders 5
PART II
5. Market for the Registrant's Securities and Related
Security Holder Matters 6
6. Selected Financial and Operating Data 6
7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
8. Financial Statements and Supplementary Data 10-25
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 26
PART III
10. Directors and Executive Officers of the Registrant's
General Partner 26-27
11. Executive Compensation 27
12. Security Ownership of Certain Beneficial Owners
and Management 28
13. Certain Relationships and Related Transactions 28
PART IV
14. Exhibits, Reports and Amendments 28-29
SIGNATURES 30
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
PART I
Item 1. Business
General Development of Business
ICON Cash Flow Partners, L.P., Series B (the "Partnership") was formed in
March 1989 as a Delaware limited partnership. The Partnership commenced business
operations on its initial closing date, September 22, 1989, with the admission
of 12,414.89 limited partnership units. Between October 1, 1989 and December 31,
1989, 16,647.07 additional units were admitted. Between January 1, 1990 and
November 16, 1990 (the final closing date), 170,938.04 additional units were
admitted bringing the final admission to 200,000 units totaling $20,000,000 in
capital contributions. During 1995, the Partnership redeemed 200 limited
partnership units leaving 199,800 limited partnership units outstanding at
December 31, 1997, 1996 and 1995. The sole general partner is ICON Capital Corp.
(the "General Partner").
The Partnership's original 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. A majority of the limited partnership
units outstanding responded affirmatively, and the amendments were adopted.
These amendments are effective from and after November 15, 1995 and are as
follows: (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 a portion of
accrued and unpaid management fees, and any 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
will be returned to the Partnership in the form of an additional Capital
Contribution by the General Partner.
Narrative Description of Business
The Partnership is an equipment leasing income fund. The principal
investment objective of the Partnership is to obtain the maximum economic return
from its investments for the benefit of its limited partners. To achieve this
objective, the Partnership has and intends to continue to: (1) acquire a
diversified portfolio of short-term, high-yield investments; (2) make monthly
cash distributions to its limited partners from cash from operations, when cash
is available, commencing with each limited partner's admission to the
Partnership and continuing through the extended Reinvestment Period; (3)
re-invest substantially all undistributed cash from operations and cash from
sales in additional equipment and financing transactions during the extended
Reinvestment Period; and (4) sell the Partnership's investments and distribute
the cash from sales of such investments to its limited partners during the
Liquidation Period. In addition to acquiring equipment and entering into leases,
the Partnership also (1) acquires equipment already subject to leases originated
by affiliates and non-affiliated lessors and (2) enters into financing
transactions, which are (i) secured by the equipment financed and lease revenues
therefrom (if any) and additional collateral as deemed necessary by the credit
review committee of the General Partner, and (ii) evidenced by the irrevocable
obligation of the lessees.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
The equipment leasing industry is highly competitive. In initiating its
leasing transactions, the Partnership competes with leasing companies,
manufacturers that lease their products directly, equipment brokers and dealers
and financial institutions, including commercial banks and insurance companies.
Many competitors are larger than the Partnership and have access to more
favorable financing.
The Partnership has no direct employees. The General Partner has full and
exclusive discretion in management and control of the Partnership.
Lease and Financing Transactions
For the years ended December 31, 1997 and 1996, the Partnership purchased
and leased or financed $822,592 and $523,964 of equipment, respectively, with a
weighted average initial transaction term of 26 and 55 months, respectively. At
December 31, 1997, the weighted average initial transaction term of the
portfolio was 48 months. A summary of the portfolio equipment cost by category
held at December 31, 1997 and 1996 is as follows:
December 31, 1997 December 31, 1996
----------------- -----------------
Category Cost Percent Cost Percent
Telecommunications ........ $ 926,764 24.3% $ 168,953 3.2%
Restaurant equipment ...... 735,121 19.3 747,151 14.1
Manufacturing & production 573,572 15.0 692,101 13.0
Computer systems .......... 486,519 12.8 731,997 13.8
Office furniture & fixtures 446,075 11.7 446,075 8.4
Retail systems ............ 167,119 4.4 1,978,377 37.2
Printing .................. 127,549 3.3 175,597 3.3
Video production .......... 137,291 3.6 164,358 3.1
Medical ................... 89,861 2.4 89,861 1.7
Automotive ................ 55,776 1.5 55,776 1.0
Material handling ......... 26,533 .7 26,533 .5
Audio ..................... 24,542 .6 24,542 .5
Office equipment .......... 14,569 .4 14,569 .2
---------- ----- ---------- -----
$3,811,291 100.0% $5,315,890 100.0%
========== ===== ========== =====
The Partnership has one lease which individually represents greater than
10% of the total portfolio equipment cost at December 31, 1997. The lease is
with Hometown Buffet, Inc., the underlying equipment is restaurant equipment,
furniture and fixtures and the purchase price of the equipment represents 16.2%
of the total portfolio equipment cost at December 31, 1997.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
Item 2. Properties
The Partnership neither owns nor leases office space or equipment for the
purpose of managing its day-to-day affairs. The General Partner has exclusive
control over all aspects of the business of the Partnership, including providing
any necessary office space. As such, the General Partner is compensated for
services related to the management of the Partnership's business.
Item 3. Legal Proceedings
The Partnership is not a party to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of 1997.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
PART II
Item 5. Market for the Registrant's Securities and Related Security Holder
Matters
The Partnership's limited partnership interests are not publicly traded nor
is there currently a market for the Partnership's limited partnership interests.
It is unlikely that any such market will develop.
Number of Equity Security Holders
Title of Class as of December 31,
- -------------- ---------------------------------
1997 1996
---- ----
Limited partners 1,760 1,764
General Partner 1 1
Item 6. Selected Financial and Operating Data
<TABLE>
Years Ended December 31,
--------------------------------------------------------------
1997 1996 1995 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total revenues ................... $ 562,650 $ 519,663 $1,196,522 $1,616,676 $2,712,304
========== ========== ========== ========== ==========
Net income ....................... $ 356,326 $ 549,384 $ 627,878 $ 390,036 $ 230,789
========== ========== ========== ========== ==========
Net income allocable to
limited partners ............... $ 352,763 $ 543,890 $ 621,599 $ 386,136 $ 228,481
========== ========== ========== ========== ==========
Net income allocable to the
General Partner ................ $ 3,563 $ 5,494 $ 6,279 $ 3,900 $ 2,308
========== ========== ========== ========== ==========
Weighted average limited
partnership units outstanding .. $ 199,800 199,800 199,986 200,000 200,000
========== ========== ========== ========== ==========
Net income per weighted
average limited partnership unit $ 1.77 $ 2.72 $ 3.11 $ 1.93 $ 1.14
========== ========== ========== ========== ==========
Distributions to limited partners $1,798,200 $1,798,200 $1,799,763 $1,800,000 $2,466,667
========== ========== ========== ========== ==========
Distributions to the
General Partner ................ $ 18,164 $ 18,164 $ 18,180 $ 18,182 $ 24,917
========== ========== ========== ========== ==========
December 31,
1997 1996 1995 1993 1992
---- ---- ---- ---- ----
Total assets ... $2,066,633 $2,887,443 $5,069,702 $10,144,096 $19,099,869
========== ========== ========== =========== ===========
Partners' equity $ 841,758 $2,301,796 $3,568,776 $ 4,762,808 $ 6,190,954
========== ========== ========== =========== ===========
</TABLE>
The above selected financial and operating data should be read in
conjunction with the financial statements and related notes appearing elsewhere
in this report.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
Item 7. General Partner'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 of
64%, 36%, 0% and less than 1% of total investments at December 31, 1997,
respectively, and 47%, 41%, 11% and less than 1% of total investments at
December 31, 1996, respectively.
For the years ended December 31, 1997 and 1996, the Partnership purchased
and leased or financed equipment with initial costs of $822,592 and $523,964,
respectively, to 93 and 48 lessees or equipment users, respectively and sold its
interest in the joint venture in September 1997 for $210,623.
Results of Operations for the Years Ended December 31, 1997 and 1996
Revenues for the year ended December 31, 1997 were $562,650, representing an
increase of $42,987 or 8% from 1996. The increase in revenues was attributable
to an increase in net gain on sales or remarketing of equipment of $51,951 or
29% and an increase in interest income and other of $20,655 or 81% from 1996.
Results were also affected by a decrease in finance income of $33,640 or 11% and
an increase of income from joint venture of $4,021 or 39% from 1996. The net
gain on sales or remarketing of equipment increased due to an increase in the
number of leases maturing, and the underlying equipment being sold or
remarketed, for which the proceeds received were in excess of the remaining
carrying value of the equipment. The increase in interest income and other
resulted from an increase in the average cash balance from 1996 to 1997, an
increase in the collection of late charges from 1996 to 1997 and miscellaneous
income related to a reversal of accrued sales tax payable in 1997. Finance
income decreased due to a decrease in the average size of the portfolio from
1996 to 1997. The increase in income from equity investment in joint venture
resulted from the gain recognized on the sale of its investment.
Expenses for the year ended December 31, 1997 were $206,324, representing
an increase of $236,045 from 1996. The increase in expenses resulted primarily
from the 1996 reversal of accrued and unpaid management fees of $228,906,
resulting in a net $29,721 credit for that year. This reversal was attributable
to the 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 increase in expenses was also attributable to an increase in
interest expense of $61,249 or 134%, which resulted from an increase in the
average debt outstanding from 1996 to 1997. The increase in expenses was offset
by a decrease in general and administrative expense of $42,874 or 42% and a
decrease in administrative expense reimbursements of $11,232 or 22%. General and
administrative expense decreased due to a decrease in the legal fees and service
charges. Administrative expense reimbursements decreased due to a decrease in
the average size of the portfolio from 1996 to 1997.
Net income for the years ended December 31, 1997 and 1996 was $356,326 and
$549,384, respectively. The net income per weighted average limited partnership
unit was $1.77 and $2.72 for 1997 and 1996, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
Results of Operations for the Years Ended December 31, 1996 and 1995
Revenues for the year ended December 31, 1996 were $519,663,
representing a decrease of $676,859 or 57% from 1995. The decrease in revenues
was primarily attributable to a decrease in net gain on sales or remarketing of
equipment of $303,757 or 63%, a decrease in finance income of $181,541 or 37%, a
decrease in rental income of $104,841 or 100%, a decrease in income from joint
venture of $58,954 or 85%, and a decrease in interest income and other of
$27,766 or 52% from 1995. Net gain on sales or remarketing of equipment
decreased as the result of a decrease in the total number of leases maturing in
1996 compared to 1995. Finance income, rental income and income from joint
venture decreased due to a decrease in the average size of the portfolio from
1995 to 1996. The decrease in interest income and other resulted from a decrease
in the average cash balance from 1995 to 1996.
Expenses for the year ended December 31, 1996 totaled a net credit of
$29,721, representing a change of $598,365 from 1995. The change 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
$136,800 or 75%, a decrease in depreciation expense of $54,799 or 100%, a
decrease in administrative expense reimbursements of $35,007 or 41% and a
decrease in amortization of initial direct costs of $33,428 or 100% from 1995.
The results were also affected by a decrease in provision for bad debt of
$25,000 or 100% from 1995. Interest expense decreased due to a decrease in the
average debt outstanding from 1995 to 1996. Depreciation, amortization of
initial direct costs and administrative expense reimbursements decreased due to
a decrease in the average size of the portfolio 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 year ended December 31, 1996.
Net income for the years ended December 31, 1996 and 1995 was $549,384
an $627,878, respectively. The net income per weighted average limited
partnership unit was $2.72 and $3.11 for 1996 and 1995, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds in 1997, 1996 and 1995 were
net cash provided by operations of $851,989, $1,002,547 and $999,015,
respectively, proceeds from sales of equipment of $544,232, $600,737 and
$2,148,030, respectively, and proceeds related to a term loan of $1,500,000 in
1997. These funds were used to purchase equipment, invest in a joint venture,
fund cash distributions and to make payments on borrowings.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1996
The Partnership had notes payable of $1,048,541 and $265,154 at
December 31, 1997 and 1996, respectively, as a result of borrowings secured by
equipment. These amounts consisted of $1,048,541 and $0, respectively, in
recourse notes and $0 and $265,154, respectively, in non-recourse notes which
are being paid directly to the lenders by lessees.
Cash distributions to the limited partners for the years ended December
31, 1997, 1996 and 1995, which were paid monthly, totaled $1,798,200, $1,798,200
and $1,799,763 of which $352,763, $543,890, and $621,599 was investment income
and $1,445,437, $1,254,310 and $1,178,164 was a return of capital, respectively.
The monthly annualized cash distribution rate for the years ended December 31,
1997, 1996 and 1995 was 9.00%, of which 1.77%, 2.72% and 3.11% was investment
income and 7.23%, 6.28%, and 5.89% 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 in 1997, 1996
and 1995 was $9.00, of which $1.77, $2.72 and $3.11 was investment income and
$7.23, $6.28 and $5.89 was a return of capital, respectively.
The Partnership has been making monthly cash distributions from net cash
flows from operations at a rate equal to 9% per annum of the Limited Partners
original cash contribution. As a result of our recent evaluation of the existing
portfolio, it was determined that the previous distribution rate of 9% is not
sustainable. As of March 1, 1998, the monthly distribution to limited partners
will be 2% per month, annualized, of their original capital contribution.
However, in the event of asset sales or re-leases that generate additional cash,
these proceeds will be added to distributions.
The Partnership's original 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.
On February 13, 1997, the Partnership borrowed $1,500,000 from a bank
pursuant to a four year term loan agreement. The loan agreement grants a
security interest in certain Partnership payments and collateral for a specified
group of leases and financing transactions. The note bears interest at 9%, and
is payable in consecutive monthly installments. In addition, the loan agreement
contains restrictive covenants which include the maintenance of minimum tangible
net worth and of certain financial ratios.
As of December 31, 1997, except as noted above, there were no known
trends or demands, commitments, events or uncertainties which are likely to have
any material effect on liquidity. As cash is realized from operations, sales of
equipment and borrowings, the Partnership will continue to 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 B
(A Delaware Limited Partnership)
December 31, 1997
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements
Page Number
Independent Auditors' Report 12
Balance Sheets as of December 31, 1997 and 1996 13
Statements of Operations for the Years Ended
December 31, 1997, 1996 and 1995 14
Statements of Changes in Partners' Equity for the
Years Ended December 31, 1997, 1996 and 1995 15
Statements of Cash Flows for the Years Ended
December 31, 1997, 1996 and 1995 16-18
Notes to Financial Statements 19-25
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Financial Statements
December 31, 1997
(With Independent Auditors' Report Thereon)
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
ICON Cash Flow Partners, L.P., Series B:
We have audited the accompanying balance sheets of ICON Cash Flow Partners,
L.P., Series B (a Delaware limited partnership) as of December 31, 1997 and
1996, and the related statements of operations, changes in partners' equity, and
cash flows for each of the years in the three-year period ended December 31,
1997. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ICON Cash Flow Partners, L.P.,
Series B as of December 31, 1997 and 1996, and the results of its operations and
its cash flows for each of the years in the three-year period ended December 31,
1997, in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
----------------------------------
KPMG Peat Marwick LLP
March __, 1998
New York, New York
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Balance Sheets
December 31,
<TABLE>
1997 1996
---- ----
Assets
<S> <C> <C>
Cash .................................................. $ 139,915 $ 123,486
----------- -----------
Investment in finance leases
Minimum rents receivable ........................... 1,229,282 1,319,810
Estimated unguaranteed residual values ............. 251,860 202,614
Unearned income .................................... (220,468) (174,980)
Allowance for doubtful accounts .................... (50,407) (74,557)
----------- -----------
1,210,267 1,272,887
----------- -----------
Investment in financings
Receivables due in installments .................... 805,841 1,377,159
Unearned income .................................... (97,213) (209,095)
Allowance for doubtful accounts .................... (42,827) (47,798)
----------- -----------
665,801 1,120,266
----------- -----------
Equity investment in joint venture .................... -- 351,012
----------- -----------
Investment in operating leases
Equipment, at cost ................................. 119,662 119,662
Accumulated depreciation ........................... (119,562) (119,562)
----------- -----------
100 100
----------- -----------
Other assets .......................................... 50,550 19,692
----------- -----------
Total assets .......................................... $ 2,066,633 $ 2,887,443
=========== ===========
Liabilities and Partners' Equity
Note payable - recourse ............................... $ 1,048,541 $ --
Notes payable - non-recourse .......................... -- 265,154
Accounts payable to General Partner and affiliates, net 103,840 178,991
Accounts payable - other .............................. 58,953 131,148
Security deposits and deferred credits ................ 13,541 10,354
----------- -----------
1,224,875 585,647
----------- -----------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ..................................... (163,555) (148,954)
Limited partners (199,800 units outstanding,
$100 per unit original issue price) .............. 1,005,313 2,450,750
----------- -----------
Total partners' equity ................................ 841,758 2,301,796
----------- -----------
Total liabilities and partners' equity ................ $ 2,066,633 $ 2,887,443
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Statements of Operations
For the Years Ended December 31,
1997 1996 1995
---- ---- ----
Revenues
Finance income ...................... $ 273,507 $ 307,147 $ 488,688
Net gain on sales or remarketing
of equipment ...................... 228,875 176,924 480,681
Rental income ....................... -- -- 104,841
Income from equity investment in
joint venture ..................... 14,232 10,211 69,165
Interest income and other ........... 46,036 25,381 53,147
---------- ---------- ----------
Total revenues ...................... 562,650 519,663 1,196,522
---------- ---------- ----------
Expenses
Interest ............................ 106,868 45,619 182,419
General and administrative .......... 59,847 102,721 102,334
Administrative expense reimbursements
- General Partner ................. 39,609 50,841 85,848
Amortization of initial direct costs -- 4 33,433
Management fees - General Partner ... -- (228,906) 84,811
Depreciation ........................ -- -- 54,799
Provision for bad debts ............. -- -- 25,000
---------- ---------- ----------
Total expenses (credit) ............. 206,324 (29,721) 568,644
---------- ---------- ----------
Net income ............................. $ 356,326 $ 549,384 $ 627,878
========== ========== ==========
Net income allocable to:
Limited partners .................... $ 352,763 $ 543,890 $ 621,599
General Partner ..................... 3,563 5,494 6,279
---------- ---------- ----------
$ 356,326 $ 549,384 $ 627,878
========== ========== ==========
Weighted average number of limited
partnership units outstanding ....... 199,800 199,800 199,986
========== ========== ==========
Net income per weighted average
limited partnership unit ............ $ 1.77 $ 2.72 $ 3.11
========== ========== ==========
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 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 $ 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 $6.28 $2.72 (1,798,200) (18,164) (1,816,364)
Net income 543,890 5,494 549,384
----------- ---------- -----------
Balance at
December 31, 1996 2,450,750 (148,954) 2,301,796
Cash distributions
to partners $7.23 $1.77 (1,798,200) (18,164) (1,816,364)
Net income 352,763 3,563 356,326
----------- ---------- -----------
Balance at
December 31, 1997 $ 1,005,313 $ (163,555) $ 841,758
=========== ========== ===========
</TABLE>
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 Years Ended December 31,
<TABLE>
1997 1996 1995
---- ---- ----
Cash flows from operating activities:
<S> <C> <C> <C>
Net income .............................................. $ 356,326 $ 549,384 $ 627,878
----------- ----------- -----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation ......................................... -- -- 54,799
Allowance for doubtful accounts ...................... (29,121) -- (13,931)
Finance income portion of receivables paid
directly to lenders by lessees ..................... (7,297) (54,612) (230,865)
Amortization of initial direct costs ................. -- 4 33,433
Net gain on sales or remarketing of equipment ........ (228,875) (176,924) (480,681)
Interest expense on non-recourse financing
paid directly by lessees ........................... 3,798 45,619 154,642
Interest expense accrued - non-recourse debt ......... -- -- 27,777
Collection of principal - non-financed receivables ... 826,839 590,520 818,833
Income from equity investment in joint venture ....... (14,232) (10,211) (69,165)
Distribution from investment in joint venture ........ 158,062 411,059 317,305
Change in operating assets and liabilities:
Accounts payable to General Partner
and affiliates, net .............................. (75,151) (213,695) 165,726
Accounts payable - other ........................... (72,195) (68,307) 2,647
Security deposits and deferred credits ............. 3,187 (96,419) (378,778)
Other, net ........................................... (42,327) 26,129 (30,605)
----------- ----------- -----------
Total adjustments ................................ 522,688 453,163 371,137
----------- ----------- -----------
Net cash provided by operating activities .......... 879,014 1,002,547 999,015
----------- ----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment ..................... 544,232 600,737 2,148,030
Investment in joint venture .......................... -- -- (1,000,000)
Equipment and receivables purchased .................. (822,592) (523,964) (1,856,010)
Proceeds from sale of investment in joint venture .... 183,598 -- --
----------- ----------- -----------
Net cash provided by (used in) investing activities (94,762) 76,773 (707,980)
----------- ----------- -----------
(continued on next page)
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Statements of Cash Flows (continued)
For the Years Ended December 31,
<TABLE>
1997 1996 1995
---- ---- ----
Cash flows from financing activities:
<S> <C> <C> <C>
Cash distributions to partners ........ (1,816,364) (1,816,364) (1,817,943)
Redemption of limited partnership units -- -- (3,967)
Payments on notes payable-recourse .... (451,459) -- --
Proceeds from notes payable-recourse .. 1,500,000 -- --
----------- ----------- -----------
Net cash used in financing activities (767,823) (1,816,364) (1,821,910)
----------- ----------- -----------
Net increase (decrease) in cash .......... 16,429 (737,044) (1,530,875)
Cash, beginning of year .................. 123,486 860,530 2,391,405
----------- ----------- -----------
Cash, end of year ........................ $ 139,915 $ 123,486 $ 860,530
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Statements of Cash Flows (Continued)
Supplemental Disclosures of Cash Flow Information
Interest expense of $106,868, $45,619 and $182,419 for the years ended
December 31, 1997, 1996 and 1995, respectively, consisted of: interest expense
on non-recourse financing accrued or paid directly to lenders by lessees of
$3,798, $45,619 and $182,419, respectively, and interest on a term loan totaling
$103,070 in 1997.
During the years ended December 31, 1997, 1996 and 1995, non-cash activities
included the following:
<TABLE>
1997 1996 1995
---- ---- ----
Principal and interest on finance receivables
<S> <C> <C> <C>
paid directly to lenders by lessees ....... $ 268,952 $ 583,524 $ 1,836,759
Principal and interest on non-recourse financing
paid directly by lessee ................... (268,952) (583,524) (1,836,759)
Decrease in notes payable - non-recourse
due to terminations ....................... -- (44,572) (1,437,754)
Decrease in security deposits and
deferred credits .......................... -- -- (388,746)
Decrease in investment in finance leases
due to terminations ....................... -- 44,572 1,826,500
----------- ----------- -----------
$ -- $ -- $ --
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements
December 31, 1997
1. Organization
ICON Cash Flow Partners, L.P., Series B (the "Partnership") was formed on
March 27, 1989 as a Delaware limited partnership with an initial capitalization
of $2,000. It was formed to acquire various types of equipment, to lease such
equipment to third parties and, to a lesser degree, enter into secured financing
transactions. The Partnership's offering period commenced on July 18, 1989 and
by its final closing in 1990, 200,000 units had been admitted into the
Partnership with aggregate gross proceeds of $20,000,000. During 1995, the
Partnership redeemed 200 limited partnership units, leaving 199,800 limited
partnership units outstanding at December 31, 1997, 1996 and 1995.
The General Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut corporation. The General Partner manages and controls
the business affairs of the Partnership's equipment leases and financing
transactions under a management agreement with the Partnership.
ICON Securities Corp., an affiliate of the General Partner, received an
underwriting commission on the gross proceeds of sales of all units. The total
underwriting compensation paid by the Partnership, including underwriting
commissions, sales commissions, incentive fees, public offering expense
reimbursements and due diligence activities was limited to 13 1/2% of the gross
proceeds received from the sale of the units. Such offering costs aggregated
$2,700,000, (including $1,115,218 paid to the General Partner or its
affiliates), and were charged directly to limited partners' equity.
Profits, losses, cash distributions and disposition proceeds are allocated
99% to the limited partners and 1% to the General Partner until each limited
partner has received cash distributions and disposition proceeds sufficient to
reduce its adjusted capital contribution account to zero and receive, in
addition, other distributions and allocations which would provide a 10% per
annum cumulative return, compounded daily, on its outstanding adjusted capital
contribution account. After such time, the distributions will be allocated 90%
to the limited partners and 10% to the General Partner.
2. Amendment to Partnership Agreement
The Partnership's original 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 by the limited partners 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 cumulative unpaid distribution, or the
difference between 14% and 9%, the $127,000 will continue to be deferred.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
3. Significant Accounting Policies
Basis of Accounting and Presentation - The Partnership's records are
maintained on the accrual basis. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Leases - The Partnership accounts for owned equipment leased to third
parties as finance leases or operating leases. For finance leases, the
Partnership records, at the inception of the lease, the total minimum lease
payments receivable, the estimated unguaranteed residual values, the initial
direct costs related to the leases and the related unearned income. Unearned
income represents the difference between the sum of the minimum lease payments
receivable plus the estimated unguaranteed residual minus the cost of the leased
equipment. Unearned income is recognized as finance income over the terms of the
related leases using the interest method. For operating leases, equipment is
recorded at cost and is depreciated on the straight-line method over the lease
terms to their estimated fair market values at lease termination. Related lease
rentals are recognized on the straight-line method over the lease terms. Billed
and uncollected operating lease receivables, net of allowance for doubtful
accounts, are included in other assets. Initial direct costs of finance leases
are capitalized and are amortized over the terms of the related leases using the
interest method. Initial direct costs of operating leases are capitalized and
amortized on the straight-line method over the lease terms. The Partnership's
leases have terms ranging from two to five years. Each lease is expected to
provide aggregate contractual rents that, along with residual proceeds, return
the Partnership's cost of its investments along with investment income.
Investment in Financings - Investment in financings represent the gross
receivables due from the financing of equipment plus the initial direct costs
related thereto less the related unearned income. The unearned income is
recognized as finance income and the initial direct costs are amortized over the
terms of the receivables using the interest method. Financing transactions are
supported by a written promissory note evidencing the obligation of the user to
repay the principal, together with interest, which will be sufficient to return
the Partnership's full cost associated with such financing transaction, together
with some investment income. Furthermore, the repayment obligation is
collateralized by a security interest in the tangible or intangible personal
property.
Disclosures About Fair Value of Financial Instruments - Statement of
Financial Accounting Standards ("SFAS") No. 107, "Disclosures about Fair Value
of Financial Instruments" requires disclosures about the fair value of financial
instruments. Fair value information with respect to the Company's assets and
liabilities is not provided because (i) SFAS No. 107 does not require
disclosures about the fair value of lease arrangements and (ii) the carrying
value of financial assets, other than lease related investments, and liabilities
approximates market value.
Investment in Joint Venture - The Partnership accounted for its investment
in joint venture under the equity method of accounting. The Partnership's
original investment was recorded at cost and was adjusted by its share of
earnings, losses and distributions thereafter. The Partnership liquidated its
investment in the joint venture in September 1997 and received $183,598 in
proceeds for the sale of its investment.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
Redemption of Limited Partnership Units - The General Partner consented to
the Partnership redeeming 200 limited partnership units during 1995. The
redemption amount was calculated following the specified redemption formula in
accordance with the Partnership agreement. Redeemed units have no voting rights
and do not share in distributions. The Partnership agreement limits the number
of units which can be redeemed in any one year and redeemed units may not be
reissued. Redeemed limited partnership units are accounted for as a reduction
from partner's equity.
Allowance for Doubtful Accounts - The Partnership records a provision for
bad debts to provide for estimated credit losses in the portfolio. The allowance
for doubtful accounts is based on an analysis of delinquency, an assessment of
overall risk and a review of historical loss experience. The Partnership's
write-off policy is based on an analysis of the aging of the Partnership's
portfolio, a review of the non-performing receivables and leases, and prior
collection experience. An account is fully reserved for or written off when such
analysis indicates that the probability of collection of the account is remote.
Impairment of Estimated Residual Values - 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 became effective beginning in 1996.
The Partnership's 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.
Income Taxes - No provision for income taxes has been made as the liability
for such taxes is that of each of the partners rather than the Partnership.
New Accounting Pronouncements - In June 1996 the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards ("SFAS") No.
125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities." SFAS No. 125 establishes, among other things,
criteria for determining whether a transfer of financial assets is a sale or a
secured borrowing. SFAS No. 125 is effective for all transfers occurring after
December 31, 1996. The adoption of SFAS No. 125 did not have a material impact
on the Partnership's net income, partners' equity or total assets.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
4. 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. On February 17, 1995, ICON Asset
Acquisition LLC purchased an existing portfolio of leases. The purchase price of
the portfolio totaled $27,854,266, and the underlying equipment consists of
graphic arts and printing equipment. On September 5, 1995, ICON Asset
Acquisition LLC securitized substantially all of its portfolio and became the
beneficial owner of a trust and the Prudential Insurance Company of America
("Prudential") the lender to the trust. On January 28, 1997, ICON Asset
Acquisition LLC re-financed its outstanding $7,780,000 obligation to Prudential
with proceeds it received from a loan from ICON Cash Flow Partners, L.P., Series
E ("Series E"), an affiliate of the Partnership. The loan accrued interest at
11%, which approximates the rate Series E would earn on similar investments.
On September 19, 1997 L.P. Six purchased, from the Partnership and Series
C, their investment in ICON Asset Acquisition LLC. The Partnership and Series
C's investments were purchased at book value, which approximated market value at
that time. ICON Asset Acquisition LLC became a 100% owned subsidiary of L.P Six.
ICON Asset Acquisition LLC paid its obligation ($4,730,328) to Series E on
September 19, 1997. L.P Six transferred all of ICON Asset Acquisition LLC's
assets to its own account and dissolved ICON Asset Acquisition LLC in the fourth
quarter 1997.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
5. Receivables Due in Installments
Non-cancelable minimum annual amounts due on finance leases and
financings are as follows:
Finance
ear Leases Financings Total
- ---- ------ ---------- -----
1998 $ 570,080 $398,242 $ 968,322
1999 453,209 242,226 695,435
2000 153,588 148,771 302,359
2001 52,405 16,602 69,007
--------- -------- ----------
$1,229,282 $805,841 $2,035,123
========== ======== ==========
6. Investment in Operating Leases
The investment in operating leases at December 31, 1997, 1996 and 1995
consisted of the following:
1997 1996 1995
---- ---- ----
Equipment cost, beginning of year ......... $ 119,662 $ 125,592 $ 125,592
Equipment sold ............................ -- (5,930) --
--------- --------- ---------
Equipment cost, end of year ............... 119,662 119,662 125,592
--------- --------- ---------
Accumulated depreciation, beginning of year (119,562) (124,955) (70,156)
Depreciation .............................. -- -- (54,799)
Equipment sold ............................ -- 5,393 --
--------- --------- ---------
Accumulated depreciation, end of year ..... (119,562) (119,562) (124,955)
--------- --------- ---------
Investment in operating leases, end of year $ 100 $ 100 $ 637
========= ========= =========
The investment in operating leases at December 31, 1997 and 1996 related to
a lease with Richman Gordman Stores, Inc. The original lease term expired in
1995. The lease is currently on renewal and it is expected that the underlying
equipment will be remarketed in 1998.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
7. Allowance for Doubtful Accounts
The allowance for doubtful accounts related to the investments in finance
leases, financings and operating leases consisted of the following:
<TABLE>
Finance Operating
Leases Financings Leases Total
<S> <C> <C> <C> <C>
Balance at December 31, 1994 ....... $ 162,965 $ 35,131 $ 6,901 $ 204,997
Charged to operations ......... 20,000 5,000 -- 25,000
Accounts written-off .......... (64,683) (8,216) -- (72,899)
Recovery on accounts previously
written-off ................. 11,085 883 22,000 33,968
Transfer within accounts ...... (12,600) 15,000 (2,400) --
--------- --------- --------- ---------
Balance at December 31, 1995 ....... 116,767 47,798 26,501 191,066
Accounts written-off .......... (77,106) -- -- (77,106)
Recovery on accounts previously
written-off ................. 8,395 -- -- 8,395
Transfer within accounts ...... 26,501 -- (26,501) --
--------- --------- --------- ---------
Balance at December 31, 1996 ....... 74,557 47,798 -- 122,355
Accounts written-off .......... (24,150) (4,971) -- (29,121)
--------- --------- --------- ---------
Balance at December 31, 1997 ....... $ 50,407 $ 42,827 $ -- $ 93,234
========= ========= ========= =========
</TABLE>
8. Notes Payable
On February 13, 1997, the Partnership borrowed $1,500,000 from a bank
pursuant to a four year term loan agreement. The agreement grants a security
interest in certain Partnership lease rental payments and collateral relating to
a specified group of leases and financing transactions. The loan bears interest
at 9%, and is payable in monthly installments. At December 31, 1997, $1,048,541
was outstanding under the loan.
The Partnership had notes payable of $265,154 at December 31, 1996, as a
result of borrowings secured by equipment. This amount consisted wholly of
non-recourse notes being paid directly to the lenders by lessees and was paid
off in June 1997.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
9. Related Party Transactions
For the year ended December 31, 1996, as a result of the approval of the
amendments as discussed in Note 8, the Partnership reversed accrued and unpaid
management fees in the amount of $228,906. During the years ended December 31,
1995, the Partnership paid or accrued to the General Partner management fees of
$84,811. During the years ended December 31, 1997, 1996 and 1995 the Partnership
paid or accrued to the General Partner administrative expense reimbursements of
$39,609, $50,841 and $85,848, respectively. These fees and reimbursements were
charged to operations.
In 1995, the Partnership and two affiliates, Series C and L.P. Six, formed
a joint venture, ICON Asset Acquisition LLC. In September 1997 ICON Asset
Acquisition LLC sold its entire investment in leases to L.P. Six. The proceeds
from the sale were used to pay off its obligation to Series E and Purchase, from
the Partnership and Series C, their investment in ICON Asset Acquisition LLC.
The Partnership and Series C's investment was purchased at book value, which
approximated market value at that time. L.P. Six transferred all of ICON Asset
Acquisition LLC's assets to its own accounts and dissolved ICON Asset
Acquisition LLC.
For the years ended December 31, 1997, 1996 and 1995, there were no
acquisition fees paid or accrued by the Partnership.
10. Tax Information (Unaudited)
The following table reconciles net income for financial reporting purposes
to income for federal income tax purposes for the years ended December 31:
1997 1996 1995
---- ---- ----
Net income per financial statements $356,326 $549,384 $ 627,878
Differences due to:
Direct finance leases 625,885 343,508 2,470,125
Depreciation (531,244) (85,102) (2,312,657)
Provision for losses (18,942) (53,479) (185)
Gain (loss) on sale of equipment (377,615) (25,080) 1,561,190
Other (9,415) 11,150 16,937
--------- -------- -----------
Partnership income for
federal income tax purposes $ 44,995 $740,381 $ 2,363,288
======== ======== ===========
As of December 31, 1997, the partners' capital accounts included in the
financial statements totaled $841,758 compared to the partners' capital accounts
for federal income tax purposes of $9,009,026 (unaudited). The difference
arises primarily from commissions reported as a reduction in the partners'
capital for financial reporting purposes but not for federal income tax
purposes, and temporary differences related to direct finance leases,
depreciation and provision for losses.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant's General Partner
The General Partner, a Connecticut corporation, was formed in 1985. The
General Partner's principal offices are located at 600 Mamaroneck Avenue,
Harrison, New York 10528-1632, and its telephone number is (914) 698-0600. The
officers of the General Partner have extensive experience with transactions
involving the acquisition, leasing, financing and disposition of equipment,
including acquiring and disposing of equipment subject to operating leases and
full payout leases.
The manager of the Partnership's business is the General Partner. The
General Partner is engaged in a broad range of equipment leasing and financing
activities. Through its sales representatives and through various broker
relationships throughout the United States, the General Partner offers a broad
range of equipment leasing services, including tax-oriented leasing and
financing. In addition, the General Partner offers financial consulting and
placement services for which fees are earned as a result of successful
placements of various secured financings and mortgages.
The General Partner is performing or causing to be performed certain
functions relating to the management of the equipment of the Partnership. Such
services include the collection of lease payments from the lessees of the
equipment, releasing services in connection with equipment which is off-lease,
inspections of the equipment, liaison with and general supervision of lessees to
assure that the equipment is being properly operated and maintained, supervision
of maintenance being performed by third parties, monitoring performance by the
lessees of their obligations under the leases and the payment of operating
expenses.
The officers and directors of the General Partner are as follows:
Beaufort J.B. Clarke President, Chief Executive Officer and Director
Thomas W. Martin Executive Vice President and Director
Paul B. Weiss Executive Vice President
Gary N. Silverhardt Senior Vice President and Chief Financial Officer
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
Beaufort J. B. Clarke, age 51, is President, Chief Executive Officer and
Director of both the General Partner and ICON Securities Corp. (the
"Dealer-Manager"). Prior to his present position, Mr. Clarke was founder and the
President and Chief Executive Officer of Griffin Equity Partners, Inc. Mr.
Clarke formerly was an attorney with Shearman and Sterling and has over 20 years
of senior management experience in the United States leasing industry.
Thomas W. Martin, age 43, is Executive Vice President of both the General
Partner and the Dealer-Manager. Prior to his present position, Mr. Martin was
the Executive Vice President and Chief Financial Officer of Griffin Equity
Partners, Inc. Mr. Martin has over 13 years of senior management experience in
the leasing business, particularly in the area of syndication.
Paul B. Weiss, age 37, is Executive Vice President of the General Partner.
Mr. Weiss has been exclusively engaged in lease portfolio acquisitions since
1988 from his affiliations with Griffin Equity Partners (as Executive Vice
President and co-founder in 1993); Gemini Financial Holdings (as Senior Vice
President-Portfolio Acquisitions and a member of the executive committee from
1991-1993) and Pegasus Capital Corporation (as Vice President-Portfolio
Acquisitions).
Gary N. Silverhardt, age 37, is Senior Vice President and Chief Financial
Officer of the General Partner. He joined the General Partner in 1989. Prior to
joining the General Partner, Mr. Silverhardt was previously employed by Coopers
& Lybrand from 1985 to 1989, most recently as an Audit Supervisor. Prior to
1985, Mr. Silverhardt was employed by Katz, Schneeberg & Co. from 1983 to 1985.
Mr. Silverhardt received a B.S. degree from the State University of New York at
New Paltz in 1983 and is a Certified Public Accountant.
Item 11. Executive Compensation
The Partnership has no directors or officers. The General Partner and its
affiliates were paid or accrued the following compensation and reimbursement for
costs and expenses for the years ended December 31, 1997, 1996 and 1995.
<TABLE>
Entity Capacity Type of Compensation 1997 1996 1995
- ----------------- --------------- ---------------------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
ICON Capital Corp. General Partner Administrative expense
reimbursements $ 39,609 $ 50,841 $ 85,848
ICON Capital Corp. General Partner Management fees - (228,906) 84,811
-------- --------- --------
$ 39,609 $(170,865) $170,659
======== ========= ========
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) The Partnership is a limited partnership and therefore does not have voting
shares of stock. No person of record owns, or is known by the Partnership
to own beneficially, more than 5% of any class of securities of the
Partnership.
(b) As of March 20, 1998, Directors and Officers of the General Partner do not
own any equity securities of the Partnership.
(c) The General Partner owns the equity securities of the Partnership set forth
in the following table:
Title Amount Beneficially Percent
of Class Owned of Class
- ------------------------ ----------------------------- --------
General Partner Interest Represents initially a 1% and 100%
potentially a 10% interest in
the Partnership's income, gain
and loss deductions.
Profits, losses, cash distributions and disposition proceeds are allocated
99% to the limited partners and 1% to the General Partner until each investor
has received cash distributions and disposition proceeds sufficient to reduce
his adjusted capital contribution account to zero and receive, in addition,
other distributions and allocations which would provide a 10% per annum
cumulative return, compounded daily, on the outstanding adjusted capital
contribution account. After such time, the distributions will be allocated 90%
to the limited partners and 10% to the General Partner.
Item 13. Certain Relationships and Related Transactions
None other than those disclosed in Item 11 herein.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements - See Part II, Item 8 hereof.
2. Financial Statement Schedule - None.
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set
forth therein is included in the Financial Statements or Notes thereto.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
3. Exhibits - The following exhibits are incorporated herein by reference:
(i) Amended and Restated Agreement of Limited Partnership (Incorporated by
reference to Exhibit A to Amendment No. 2 to Form S-1 Registration
Statement No. 2-99858 filed with the Securities and Exchange
Commission on December 12, 1986).
(ii) Certificate of Limited Partnership of the Partnership (Incorporated
herein by reference to Exhibit 3.01 to Form S-1 Registration Statement
No. 2-99858 filed with the Securities and Exchange Commission on
August 23, 1985 and to Exhibit 3.01 to Amendment No. 1 to Form S-1
Registration Statement No. 2-99858 filed with the Securities and
Exchange Commission on August 27, 1986).
(iii)Form of Management Agreement between the Partnership and Crossgate
Leasing, Inc. (Incorporated herein by reference to Exhibit 10.01 to
Amendment No. 1 to Form S-1 Registration Statement No. 2-99858 filed
with the Securities and Exchange Commission on August 27, 1986).
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the year
ended December 31, 1997.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
December 31, 1997
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership 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.
Date: March 31, 1998 /s/ Beaufort J. B. Clarke
------------------------------------------------
Beaufort J. B. Clarke
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacity and on the dates indicated.
ICON Capital Corp.
sole General Partner of the Registrant
Date: March 31, 1998 /s/ Beaufort J. B. Clarke
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Beaufort J. B. Clarke
President, Chief Executive Officer and Director
Date: March 31, 1998 /s/ Thomas W. Martin
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Thomas W. Martin
Executive Vice President and Director
Date: March 31, 1998 /s/ Gary N. Silverhardt
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Gary N. Silverhardt
Sr. Vice President and Chief Financial Officer
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrant Which have not Registered Securities Pursuant to
Section 12 of the Act
No annual report or proxy material has been sent to security holders. An annual
report will be sent to the limited partners and a copy will be forwarded to the
Commission.
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<NAME> ICON Cash Flow Partners, L.P., Series B
<CIK> 0000849278
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 139,915
<SECURITIES> 0
<RECEIVABLES> 2,042,522
<ALLOWANCES> 93,234
<INVENTORY> 10,000
<CURRENT-ASSETS> * 0
<PP&E> 119,662
<DEPRECIATION> 119,562
<TOTAL-ASSETS> 2,066,633
<CURRENT-LIABILITIES> ** 0
<BONDS> 1,048,541
0
0
<COMMON> 0
<OTHER-SE> 841,758
<TOTAL-LIABILITY-AND-EQUITY> 2,066,633
<SALES> 516,614
<TOTAL-REVENUES> 562,650
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 99,456
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 106,868
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 356,326
<EPS-PRIMARY> 1.77
<EPS-DILUTED> 1.77
<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>
