UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended June 30, 1996
--------------------------------------------
[ ] 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 33-36376
ICON Cash Flow Partners, L.P., Series C
(Exact name of registrant as specified in its charter)
Delaware 13-3575099
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
600 Mamaroneck Avenue, Harrison, New York 10528
(Address of principal executive offices) (Zip code)
(914) 698-0600
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ x] Yes [ ] No
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
PART I - FINANCIAL INFORMATION
The following financial statements of ICON Cash Flow Partners, L.P.,
Series C (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 1995 Annual Report on Form 10-K.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
June 30, 1996
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
65%, 25%, 10% and 0% of total investments at June 30, 1996, respectively, and
80%, 9%, 11% and 1% of total investments at June 30, 1995, respectively.
Three Months Ended June 30, 1996 and 1995
Results of Operations
For the three months ended June 30, 1996 and 1995, the Partnership leased
or financed equipment with an initial cost of $1,249,690 and $437,927,
respectively, to 54 and 16 lessees or equipment users, respectively.
Revenues for the three months ended June 30, 1996 were $194,008,
representing a decrease of $70,948, or 27% from 1995. The decrease in revenues
was primarily attributable to a decrease in finance income of $49,767 or 25%.
Results were also affected by a decrease in income from joint venture of $24,515
or 63% and a decrease in interest income and other of $6,052 or 26% from 1995.
These decreases were partially offset by an increase in net gain on sales or
remarketing of equipment of $9,386. The overall decrease in finance income
resulted from the decrease in the average size of the portfolio from 1995 to
1996. 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 decrease in interest income and other
resulted from a decrease in the average cash balance from 1995 to 1996.
Expenses for the three months ended June 30, 1996 were $68,344,
representing a decrease of $138,679 or 67% from 1995. The decrease in expenses
was primarily attributable to a decrease in interest expense of $87,731 or 100%
and a decrease in general and administrative expense of $21,004 or 51% from
1995. Results were also affected by a decrease in amortization of initial direct
costs of $9,082 or 83%, a decrease in administrative expense reimbursements of
$10,316 or 30% and a decrease in management fees of $10,541 or 31% from 1995.
The decrease in interest expense resulted from a decrease in the average debt
outstanding from 1995 to 1996. Amortization of initial direct costs,
administrative expense reimbursements and management fees decreased due to the
decrease in the average size of the portfolio from 1995 to 1996.
Net income for the three months ended June 30, 1996 and 1995 was $125,664
and $57,933, respectively. The net income per weighted average limited
partnership unit was $.63 and $.29 for 1996 and 1995, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended June
30, 1996 and 1995 were net cash provided by operations of $885,771 and $413,422,
respectively, and proceeds from sales of equipment of $355,500 and $485,578,
respectively. These funds, along with previously accumulated excess cash from
operations and proceeds from sales of equipment, were used to make payments on
borrowings, to fund cash distributions and to purchase equipment. The
Partnership intends to continue to purchase additional equipment and to fund
cash distributions utilizing cash accumulated from prior periods, cash from
operations and proceeds from sales of equipment.
Cash distribution to limited partners for the three months ended June 30,
1996 and 1995, which were paid monthly, totalled $446,558 and $449,325,
respectively, of which $124,407 and $57,354 was investment income and $322,141
and $391,971 was a return of capital, respectively. The monthly annualized cash
distribution rate to limited partners was 9.00%, of which 2.51% and 1.15% was
investment income and 6.49% and 7.85% 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 June 30, 1996 and 1995 was $2.25, of which $.63 and $.29 was
investment income and $1.62 and $1.96 was a return of capital, respectively. The
Partnership had non-recourse notes payable at June 30, 1996 and 1995 of
$1,926,122 and $4,681,719, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
June 30, 1996
General Partner's Discussion and Analysis of
Financial Condition and Results of Operations
Six Months Ended June 30, 1996 and 1995
Results of Operations
For the six months ended June 30, 1996 and 1995, the Partnership leased or
financed equipment with an initial cost of $2,179,970 and $1,742,892,
respectively to 54 and 23 lessees or equipment users, respectively, and invested
$1,500,000 in a joint venture in 1995. The weighted average initial transaction
term relating to these transactions for each year was 42 and 55 months,
respectively.
Revenues for the six months ended June 30, 1996 were $634,837,
representing a decrease of $20,298, or 3% from 1995. The decrease in revenues
was primarily attributable to a decrease in finance income of $143,371 or
32%from 1995. Results were also affected by a decrease in income from equity
investment in a joint venture of $41,945 or 63% and a decrease in interest
income and other of $13,836 or 26% from 1995. These decreases were partially
offset by an increase in net gain on sales or remarketing of equipment of
$178,854. The overall decrease in finance income resulted from the decrease in
the average size of the portfolio from 1995 to 1996. Net gain on sales or
remarketing of equipment increased due to an increase in renewal rentals
received and 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 decrease in
interest income and other resulted from a decrease in the average cash balance
from 1995 to 1996.
Expenses for the six months ended June 30, 1996 were $145,728,
representing a decrease of $287,977 or 66% from 1995. The decrease in expenses
was primarily attributable to a decrease in interest expense of $185,390 or 96%
and a decrease in general and administrative expense of $29,490 or 45% from
1995. Results were also affected by a decrease in amortization of initial direct
costs of $22,417 or 83%, a decrease in administrative expense reimbursements of
$25,279 or 34% and a decrease in management fees of $25,401 or 35% from 1995.
The decrease in interest expense resulted from a decrease in the average debt
outstanding for 1995 to 1996. General and administrative expense, amortization
of initial direct costs, administrative expense reimbursements and management
fees decreased due to the decrease in the average size of the portfolio from
1995 to 1996.
Net income for the six months ended June 30, 1996 and 1995 was $489,109
and $221,430, respectively. The net income per weighted average limited
partnership unit was $2.44 and $1.10 for 1996 and 1995, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the six months ended June
30, 1996 and 1995 were net cash provided by operations of $1,287,828 and
$1,103,487, respectively, proceeds from sales of equipment of $684,326 and
$695,914, respectively. These funds were used to make payments on borrowings, to
fund cash distributions and to purchase equipment. The Partnership intends to
continue to purchase additional equipment and to fund cash distributions
utilizing cash from operations, proceeds from sales of equipment and borrowings.
Cash distributions to limited partners for the six months ended June 30,
1996 and 1995, which were paid monthly, totalled $893,877 and $899,100,
respectively, of which $484,218 and $219,216 was investment income and $409,659
and $679,884 was a return of capital, respectively. The monthly annualized cash
distribution rate to limited partners was 9.00% for 1996 and 1995, of which 4.88
% and 2.20% was investment income and 4.12% and 6.80% was a return of capital,
respectively, calculated as a percentage of each partner's initial capital
contribution. The limited partner distribution per weighted average unit
outstanding for the six months ended June 30, 1996 and 1995 was $4.50, of which
$2.44 and $3.40 was investment income and $2.06 and $1.10 was a return of
capital, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
June 30, 1996
General Partner's Discussion and Analysis of
Financial Condition and Results of Operations
On February 3, 1995, the Partnership and two affiliates, ICON Cash Flow
Partners, L.P., Series B ("Series B"), and ICON Cash Flow Partners, L.P. Six
("L.P. Six") formed ICON Asset Acquisition L.C.C. I ("ICON Asset Acquisition
LLC") as a special purpose liability company. ICON Asset Acquisition LLC was
formed for the purpose of acquiring, managing and securitizing a portfolio of
leases. The Partnership, Series B and L.P. Six contributed $1,500,000 (13.39%
interest), $1,000,000 (8.93% 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.
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 LLC. The
purchase price of the portfolio totalled $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.
The Partnership's Reinvestment Period expired June 19, 1996, five years
after the Final Closing Date. As such the Partnership has discontinued investing
in leased equipment. The Partnership has filed a proxy statement with the
Securities and Exchange Commission (the "SEC") on June 17, 1996 for the purpose
of amending the Partnership Agreement in order to extend the Reinvestment Period
for up to four years. On July 26, 1996, the Partnership received comments on its
filing and will be responding shortly. The Partnership will continue to pay
monthly cash distributions to limited partners at an annualized rate of 9% until
the proxy filing and subsequent vote is finalized. As always the Partnership
will continue to evaluate the operations to determine the ability of the
Partnership to sustain the current distribution rate.
As of June 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 C
(A Delaware Limited Partnership)
Balance Sheets
(unaudited)
June 30, December 31,
1996 1995
Assets
Cash ......................................... $ 656,890 $ 1,777,981
----------- -----------
Investment in finance leases
Minimum rents receivable ................... 3,845,829 4,186,397
Estimated unguaranteed residual values ..... 1,927,754 2,557,247
Initial direct costs ....................... 2,186 6,839
Unearned income ............................ (487,903) (541,052)
Allowance for doubtful accounts ............ (289,229) (289,456)
----------- -----------
4,998,637 5,919,915
Investment in financings
Receivables due in installments ............ 2,428,161 1,149,404
Initial direct costs ....................... -- 73
Unearned income ............................ (407,819) (174,374)
Allowance for doubtful accounts ............ (23,420) (23,420)
----------- -----------
1,996,920 951,683
Equity investment in joint venture ........... 849,944 1,127,930
Other assets ................................. 1,180 4,094
----------- -----------
Total assets ................................. $ 8,503,573 $ 9,781,663
=========== ===========
Liabilities and Partners' Equity
Notes payable - non-recourse ................. $ 1,926,122 $ 2,799,149
Accounts payable to General Partner
and affiliates, net ........................ 496,598 467,028
Security deposits and deferred credits ....... 816,391 932,055
Accounts payable - other ..................... 105,197 --
3,344,308 4,198,232
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ............................ (120,878) (116,740)
Limited partners (198,470 and 198,800
units outstanding,
$100 per unit original issue price in
1996 and 1995, respectively) ............. 5,280,143 5,700,171
----------- -----------
Total partners' equity ....................... 5,159,266 5,583,431
----------- -----------
Total liabilities and partners' equity ....... $ 8,503,573 $ 9,781,663
=========== ===========
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Operations
(unaudited)
<TABLE>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Finance income ..................... $ 151,990 $ 201,757 $ 298,888 $ 442,259
Income from equity investment
in joint venture ................. 14,126 38,641 24,379 66,324
Interest income and other .......... 17,300 23,352 40,005 53,841
Net gain on sales or remarketing
of equipment ..................... 10,592 1,206 271,565 92,711
Rental income ...................... -- -- -- --
--------- ---------
Total revenues ..................... 194,008 264,956 634,837 655,135
--------- --------- --------- ---------
Expenses
Administrative expense reimbursement
- General Partner ................ 23,721 34,037 48,271 73,550
Management fees - General Partner .. 23,436 33,977 47,532 72,933
General and administrative ......... 20,288 41,292 36,646 66,136
Amortization of initial direct costs 1,892 10,974 4,727 27,144
Interest ........................... (993) 86,743 8,552 193,942
Depreciation ....................... -- -- -- --
--------- ---------
Total expenses ..................... 68,344 207,023 145,728 433,705
--------- --------- --------- ---------
Net income ........................... $ 125,664 $ 57,933 $ 489,109 $ 221,430
========= ========= ========= =========
Net income allocable to:
Limited partners ................... $ 124,407 $ 57,354 $ 484,218 $ 219,216
General Partner .................... 1,257 579 4,891 2,214
--------- --------- --------- ---------
$ 125,664 $ 57,933 $ 489,109 $ 221,430
========= ========= ========= =========
Weighted average number of limited
partnership units outstanding ...... 198,622 199,675 198,622 199,769
========= ========= ========= =========
Net income per weighted average
limited partnership unit ........... $ .63 $ .29 $ 2.44 $ 1.10
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Changes in Partners' Equity
For the Six Months Ended June 30, 1996 and
the Years Ended December 31, 1995, 1994 and 1993
(unaudited)
Limited Partner
Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted
average unit)
Balance at
December 31, 1992 $ 11,213,924 $ (61,485) $11,152,439
Cash distributions
to partners $12.33 $ - (2,466,667) (24,916) (2,491,583)
Limited partnership
units redeemed
(100 units) (5,108) - (5,108)
Net loss (49,135) (496) (49,631)
------------ ------ ----------
Balance at
December 31, 1993 8,693,014 (86,897) 8,606,117
Cash distributions
to partners $ 7.78 $1.22 (1,799,100) (18,173) (1,817,273)
Net income 244,000 2,465 246,465
------------ ------- ----------
Balance at
December 31, 1994 7,137,914 (102,605) 7,035,309
Cash distributions
to partners $ 7.01 $1.99 (1,796,363) (18,144) (1,814,507)
Limited partnership
units redeemed
(1,100 units) (38,256) - (38,256)
Net income 396,876 4,009 400,885
------------ ------- ----------
Balance at
December 31, 1995 5,700,171 (116,740) 5,583,431
Cash distribution
to partners $ 2.06 $2.44 (893,877) (9,029) (902,906)
Limited partnership
units redeemed
(330 units) (10,369) - (10,369)
Net income 484,218 4,891 489,109
------------ ------- ----------
Balance at
June 30, 1996 $ 5,280,143 $ (120,878) $ 5,159,266
============ ========== ===========
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Cash Flows
For the Six Months Ended June 30,
(unaudited)
<TABLE>
1996 1995
---- ----
<S> <C> <C>
Cash flows provided by operating activities:
Net income .......................................... $ 489,109 $ 221,430
Adjustments to reconcile net income to net cash
provided by operating activities:
Finance income portion of receivables paid
directly to lenders by lessees .................. (75,278) (236,716)
Amortization of initial direct costs .............. 4,727 27,144
Net gain on sales or remarketing of equipment ..... (271,565) (92,711)
Interest expense on non-recourse financing paid
directly by lessees ............................. (1,172) 141,855
Interest expense accrued on non-recourse debt ..... 6,809 43,345
Collection of principal - non-financed receivables 828,029 464,615
Income from equity investment in joint venture .... (24,379) (66,324)
Distribution from investment in joint venture ..... 302,364 47,299
Changes in operating assets and liabilities:
Allowance for doubtful accounts ................. (206) 52,529
Accounts payable to General Partner and
affiliates, net ............................... 29,570 152,354
Security deposits and deferred credits .......... (73,776) 371,116
Accounts payable - other ........................ 105,197 --
Other, net ...................................... (31,601) (22,449)
----------- -----------
Total adjustments ............................ 798,719 882,057
----------- -----------
Net cash provided by operating activities ......... 1,287,828 1,103,487
Cash flows used for investing activities:
Proceeds from sales of equipment .................... 684,327 695,914
Equipment and receivables purchased ................. (2,179,971) (1,742,892)
Investment in joint venture ......................... -- (1,500,000)
Net cash used for investing activities ............ (1,495,644) (2,546,978)
Cash flows provided by (used for) financing activities:
Cash distributions to partners ...................... (902,906) (908,182)
Redemption of limited partnership units ............. (10,369) (17,215)
Net cash provided by (used for)
financing activities ............................ (913,275) (925,397)
Net decrease in cash .................................. (1,121,091) (2,368,888)
Cash, beginning of period ............................. 1,777,981 3,754,643
----------- -----------
Cash, end of period ................................... $ 656,890 $ 1,385,755
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Cash Flows (continued)
Supplemental Disclosures of Cash Flow Information
During the six months ended June 30, 1996 and 1995, non-cash activities
included the following:
1996 1995
---- ----
Principal and interest on finance
receivables paid directly by lessees ......... $ 643,765 $ 1,886,029
Principal and interest on non-recourse
financing paid directly by lessees ........... (643,765) (1,886,029)
Decrease in notes payable - non-recourse
due to terminations .......................... (234,900) (1,261,622)
Decrease in investment in finance leases
due to terminations .......................... -- 1,261,622
Increase in security deposits and deferred
credits due to terminations .................. (234,900) --
----------- -----------
$ -- $ --
=========== ===========
Interest expense of $8,552 and $193,942 for the six months ended June 30,
1996 and 1995 consisted of: interest expense on non-recourse financing accrued
or paid directly to lenders by lessees of $5,638 and $185,200, respectively, and
other interest of $2,914 and $8,742, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements
June 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. Redemption of Limited Partnership Units
The General Partner consented to the Partnership redeeming 330 limited
partnership units during the six months ended June 30, 1996. The redemption
amount was calculated following the specific redemption formula as per 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 deduction from partners equity.
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 B ("Series B"), and ICON Cash Flow Partners, L.P. Six
("L.P. Six") formed ICON Asset Acquisition L.C.C. I ("ICON Asset Acquisition
LLC") as a special purpose liability company. ICON Asset Acquisition LLC was
formed for the purpose of acquiring, managing and securitizing a portfolio of
leases. The Partnership, Series B and L.P. Six contributed $1,500,000 (13.39%
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
interest), $1,000,000 (8.93% 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.
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 LLC. The purchase price
of the portfolio totalled $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 will be 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 six months ended June 30, 1996 is
summarized below:
June 30, 1996
Assets $ 18,156,505
============
Liabilities $ 11,811,289
============
Equity $ 6,345,216
============
Six Months Ended
June 30, 1996
Net income $ 182,069
============
5. Security Deposits and Deferred Credits
Security deposits and deferred credits at June 30, 1996 and December 31, 1995
include $252,776 and $646,639, respectively, of proceeds received towards the
estimated unguaranteed residual values of leased equipment, which will be
applied upon final remarketing of the related equipment.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
6. Related Party Transactions
During the six months ended June 30, 1996 and 1995, the Partnership accrued
to the General Partner management fees of $47,532 and $72,933, respectively, and
paid or accrued administrative expense reimbursements of $48,271 and $73,550,
respectively, which were charged to operations.
The payment of management fees have been deferred since September 1, 1993 and
as of June 30, 1996, $531,636 in management fees have been accrued but not paid.
Under the Partnership agreement, the General Partner is entitled to
management fees at either 2% or 5% of rents, depending on the type of investment
under management. Effective January 1, 1994, the General Partner elected to
reduce its management fees to a flat rate of 2% of rents for all investments
under management. The foregone management fees, the difference between 2% and 5%
of rents for certain types of investments, totalled $41,765 for the six months
ended June 30, 1996. These foregone management fees are not accruable in future
years.
The Partnership, and two affiliates, Series B and L.P. Six, formed a joint
venture, ICON Asset Acquisition LLC (See Note 2 for additional information
relating to the joint venture).
There were no acquisition fees paid or accrued by the Partnership for the six
months ended June 30, 1996 and 1995, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
PART II
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults Upon Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Reports and Amendments
The Partnership did not file any amendments during the six months ended June 30,
1996.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(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 C
File No. 33-36376 (Registrant)
By its General Partner,
ICON Capital Corp.
August 13, 1996 Charles Duggan
Date -------------------------------------------
Charles Duggan
Executive Vice President and 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> 0000866878
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 656,890
<SECURITIES> 0
<RECEIVABLES> 7,308,680
<ALLOWANCES> 312,649
<INVENTORY> 708
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,503,573
<CURRENT-LIABILITIES> ** 0
<BONDS> 1,926,122
0
0
<COMMON> 0
<OTHER-SE> 5,159,265
<TOTAL-LIABILITY-AND-EQUITY> 8,503,573
<SALES> 634,837
<TOTAL-REVENUES> 634,837
<CGS> 4,727
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 132,449
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,552
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 489,109
<EPS-PRIMARY> 2.44
<EPS-DILUTED> 2.44
<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>
