UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended March 31, 1998
-----------------------------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
---------------------- -----------------------
Commission File Number 0-27822
---------------------------------------------------------
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 IRS Employer
incorporation or organization) Identification Number)
600 Mamaroneck Avenue, Harrison, New York 10528-1632
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(914) 698-0600
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ x ] Yes [ ] No
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Balance Sheets
(unaudited)
<TABLE>
March 31, December 31,
1998 1997
---- ----
Assets
<S> <C> <C>
Cash .................................................. $ 113,440 $ 139,915
----------- -----------
Investment in finance leases
Minimum rents receivable ............................ 1,107,757 1,229,282
Estimated unguaranteed residual values .............. 251,047 251,860
Unearned income ..................................... (184,724) (220,468)
Allowance for doubtful accounts ..................... (50,407) (50,407)
----------- -----------
1,123,673 1,210,267
Investment in financings
Receivables due in installments ..................... 687,318 805,841
Unearned income ..................................... (79,164) (97,213)
Allowance for doubtful accounts ..................... (42,827) (42,827)
----------- -----------
565,327 665,801
Investment in operating leases
Equipment, at cost .................................. 119,662 119,662
Accumulated depreciation ............................ (119,562) (119,562)
----------- -----------
100 100
----------- -----------
Other assets .......................................... 22,073 50,550
----------- -----------
Total assets .......................................... $ 1,824,613 $ 2,066,633
=========== ===========
Liabilities and Partners' Equity
Note payable - recourse ............................... $ 921,182 $ 1,048,541
Notes payable - affiliate ............................. 151,238 --
Accounts payable to General Partner and affiliates, net 182,364 103,840
Accounts payable - other .............................. 32,744 58,953
Security deposits and deferred credits ................ 85,058 13,541
----------- -----------
1,372,586 1,224,875
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ..................................... (167,451) (163,555)
Limited partners (199,800 units outstanding,
$100 per unit original issue price) ............... 619,478 1,005,313
----------- -----------
Total partners' equity ................................ 452,027 841,758
----------- -----------
Total liabilities and partners' equity ................ $ 1,824,613 $ 2,066,633
=========== ===========
</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 Three Months Ended March 31,
(unaudited)
1998 1997
---- ----
Revenues
Finance income ................... $ 53,777 $ 69,242
Interest income and other ........ 24,213 7,088
Net gain on sales or remarketing
of equipment ................... 21,164 28,197
Income from equity investment
in joint venture ............... -- 3,944
-------- --------
Total revenues ................... 99,154 108,471
-------- --------
Expenses
Interest ......................... 21,765 21,262
General and administrative ....... 7,182 14,445
Administrative expense
reimbursements - General Partner 5,848 11,922
-------- --------
Total expenses ................... 34,795 47,629
-------- --------
Net income .......................... $ 64,359 $ 60,842
======== ========
Net income allocable to:
Limited partners ................. $ 63,715 $ 60,234
General Partner .................. 644 608
-------- --------
$ 64,359 $ 60,842
======== ========
Weighted average number of limited
partnership units outstanding .... 199,800 199,800
======== ========
Net income per weighted average
limited partnership unit ......... $ .32 $ .30
======== ========
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 Three Months Ended March 31, 1998 and
the Years Ended December 31, 1997, 1996 and 1995
(unaudited)
<TABLE>
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1994 $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
Cash distributions
to partners $ 7.47 $ 1.53 (449,550) (4,540) (454,090)
Net income 63,715 644 64,359
---------- ------------ -----------
Balance at March 31, 1998 $ 619,478 $ (167,451) $ 452,027
========== ============ ===========
</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 Three Months Ended March 31,
(unaudited)
<TABLE>
1998 1997
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income ................................................ $ 64,359 $ 60,842
----------- -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Collection of principal - non-financed receivables ...... 185,615 183,863
Net gain on sales or remarketing of equipment ........... (21,164) (28,197)
Interest expense accrued on note payable affiliate ...... 1,238 --
Distribution from equity investment in joint venture .... -- 82,603
Finance income portion of receivables paid directly to
lenders by lessees .................................... -- (6,244)
Income from equity investment in joint venture .......... -- (3,944)
Interest expense on non-recourse financing paid directly
by lessees ............................................ -- 3,470
Changes in operating assets and liabilities:
Accounts payable to General Partner and affiliates, net . 78,524 (9,945)
Security deposits and deferred credits .................. 71,517 16,332
Accounts payable - other ................................ (26,209) 4,082
Other, net .............................................. 28,759 318
----------- -----------
Total adjustments .................................... 318,280 242,338
----------- -----------
Net cash provided by operating activities ................ 382,639 303,180
----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment .......................... 22,335 28,364
Equipment and receivables purchased ....................... --
-----------
(822,592)
Net cash provided by (used in) investing activities ...... 22,335 (794,228)
----------- -----------
Cash flows from financing activities:
Cash distributions to partners ............................ (454,090) (454,090)
Proceeds from note payable-affiliate ...................... 150,000 --
Principal payments on note payable - recourse ............. (127,359) (39,708)
Proceeds from note payable - recourse ..................... --
-----------
1,500,000
Net cash provided by (used in) financing activities ...... (431,449) 1,006,202
----------- -----------
Net increase (decrease) in cash ............................. (26,475) 515,154
Cash at beginning of period ................................. 139,915 123,486
----------- -----------
Cash at end of period ....................................... $ 113,440 $ 638,640
=========== ===========
</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)
(unaudited)
Supplemental Disclosures of Cash Flow Information
During the three months ended March 31, 1998 and 1997, non-cash activities
included the following:
1998 1997
Principal and interest on direct finance
receivables paid directly to lenders by lessees $ - $134,476
Principal and interest on non-recourse financing
paid directly by lessees - (134,476)
---------- --------
$ - $ -
========== ========
Interest expense of $21,765 and $21,262 and for the three months ended
March 31, 1998 and 1997 consisted of interest expense on note payable-recourse
of $20,528 and $17,792, interest expense on an affiliate note of $1,237 and $0,
respectively and interest expense on non-recourse financing accrued or paid
directly to lenders by lessees of $0 and $3,470, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements
March 31, 1998
(unaudited)
1. Basis of Presentation
The financial statements of ICON Cash Flow Partners, L.P., Series B (the
"Partnership") have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC") and, in the opinion of
management, include all adjustments (consisting only of normal recurring
accruals) necessary for a fair statement of income for each period shown.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such SEC rules and regulations.
Management believes that the disclosures made are adequate to make the
information represented not misleading. The results for the interim period are
not necessarily indicative of the results for the full year. These financial
statements should be read in conjunction with the financial statements and notes
included in the Partnership's 1997 Annual Report on Form 10-K.
2. 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. 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 were as
follows: (1) extended the Reinvestment Period for a maximum of four additional
years and likewise delay the start and end of the Liquidation Period, and (2)
eliminated 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.
3. Related Party Transactions
For the three months ended March 31, 1998 and 1997, no management fees were
accrued or paid to the General Partner. (See Note 2 for additional information
regarding management fees.) For the three months ended March 31, 1998 and 1997,
the Partnership accrued or paid to the General Partner administrative expense
reimbursements of $5,848 and $11,922, respectively, which were charged to
operations.
In March 1998 an affiliate, ICON Cash Flow Partners, L.P., Series C, lent
the Partnership $150,000. The loan is short term and bears interest at the rate
of 11%.
For the three months ended March 31, 1998 and 1997 no acquisition fees were
paid or accrued by the Partnership.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
4. Notes Payable Recourse
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, or equipment,
of a specified group of leases and financing transactions. The note bears
interest at 9%, and is payable in consecutive monthly installments. The
principal balance outstanding at March 31, 1998 totaled $921,182.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Item 2. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
The Partnership's portfolio consisted of a net investment in finance
leases, financings, operating leases and equity investment in joint venture
representing 66%, 34%, less than 1% and 0% of total investments at March 31,
1998, respectively, and 57%, 34%, less than 1% and 9% of total investments at
March 31, 1997, respectively.
The Partnership did not lease or finance any equipment for the three months
ended March 31, 1998.
Results of Operations for the Three Months Ended March 31, 1998 and 1997
Revenues for the three months ended March 31, 1998 were $99,154,
representing a decrease of $9,317 or 9% from 1997. The decrease in revenues was
due to a decrease in finance income of $15,465 or 22%, a decrease in net gain on
sales or remarketing of equipment of $7,033 or 25% and a decrease in income from
equity investment in joint venture of $3,944 or 100% from 1997. The decrease in
revenue was partially offset by an increase in interest income and other of
$17,125 or 242%. Finance income decreased due to a decrease in the average size
of the portfolio from 1997 to 1998. The decrease in net gain on sales or
remarketing of equipment resulted from a decrease in the total number of leases
maturing and the underlying equipment being sold or remarketed for which
proceeds received were in excess of the remaining carrying value. The decrease
in income from equity investment in joint venture resulted from the
Partnership's 1997 divestiture of its investment in a joint venture. The
increase in interest income and other was primarily due to the Partnership
receiving its pro rata share of a recovery relating to its prior investment in a
joint venture.
Expenses for the three months ended March 31, 1998 were $34,795,
representing a decrease of $12,834 or 27% from 1997. The decrease in expenses
resulted primarily from the decrease in general and administrative fees of
$7,263 or 51% and a decrease in administrative expense reimbursements of $6,074
or 51% from 1997. The decrease was partially offset by an increase in interest
expense of $503 or 2%. General and administrative expense and administrative
expense reimbursements decreased due to the decrease in the average size of the
portfolio. Interest expense increased due to an increase in the average debt
outstanding from 1997 to 1998.
Net income for the three months ended March 31, 1998 and 1997 was $64,359
and $60,842, respectively. The net income per weighted average limited
partnership unit was $.32 and $.30 for 1998 and 1997, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended March
31, 1998 and 1997 were net cash provided by operations of $382,639 and $303,180,
respectively, proceeds from sales of equipment of $22,335 and $28,364,
respectively and proceeds from borrowings of $150,000 and $1,500,000 in 1998 and
1997, respectively. These funds were used to purchase equipment in 1997, to fund
cash distributions and to make payments on borrowings. The Partnership intends
to fund future cash distributions, to the extent funds are available, utilizing
cash provided by operations and proceeds from sales of equipment.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
Cash distributions to limited partners for the three months ended March 31,
1998 and 1997, which were paid monthly, totaled $449,550, of which $63,715 and
$60,234 was investment income and $385,785 and $389,316 was a return of capital,
respectively. The monthly cash distribution rate was 9.00%, of which 1.5% and
1.0% was investment income and 7.5% and 8.0% was a return of capital,
respectively, calculated as a percentage of each partner's initial capital
contribution. The limited partner distribution per weighted average unit
outstanding for the three months ended March 31, 1998 and 1997 was $2.25, of
which $.32 and $.30 was investment income and $1.93 and $1.95 was a return of
capital, respectively. As a result of a review and analysis of the Partnership's
projected cash flow, the Partnership has decreased the distribution rate to an
annualized rate of 2%. This change was effective for the April 1, 1998
distribution.
On March 31, 1998 the affiliate, ICON Cash Flow Partners, L.P., Series C,
lent the Partnership $150,000. The loan is short term and bears interest at the
rate of 11%.
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, or equipment,
of 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, as defined, and of certain financial ratios. The
principal balance outstanding at March 31, 1998 totaled $921,182.
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 were as
follows: (1) extended the Reinvestment Period for a maximum of four additional
years and likewise delay the start and end of the Liquidation Period, and (2)
eliminated 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.
As of March 31, 1998, except as noted above, there were no known trends or
demands, commitments, events or uncertainties which are likely to have any
material effect on liquidity. As cash is realized from operations, sales of
equipment and borrowings, the Partnership will invest in equipment leases and
financings where it deems it to be prudent while retaining sufficient cash to
meet its reserve requirements and recurring obligations as they become due.
<PAGE>
ICON Cash Flow Partners, L.P., Series B
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 6 - Exhibits and reports on Form 8-K
No reports or Form 8-K were filed by the Partnership during the quarter ended
March 31, 1998.
<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.
May 14, 1998 /s/ Gary N. Silverhardt
- ------------ -----------------------------------------------
Date Gary N. Silverhardt
Chief Financial Officer
(Principal financial and account officer of the
General Partner of the Registrant)
<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 113,440
<SECURITIES> 0
<RECEIVABLES> 1,811,969
<ALLOWANCES> 93,234
<INVENTORY> 10,000
<CURRENT-ASSETS> * 0
<PP&E> 119,662
<DEPRECIATION> 119,562
<TOTAL-ASSETS> 1,824,613
<CURRENT-LIABILITIES> ** 0
<BONDS> 921,182
0
0
<COMMON> 0
<OTHER-SE> 452,027
<TOTAL-LIABILITY-AND-EQUITY> 1,824,613
<SALES> 74,941
<TOTAL-REVENUES> 99,154
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,030
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,765
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 64,359
<EPS-PRIMARY> 0.32
<EPS-DILUTED> 0.32
<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>
