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, 1997
-----------------------------------------------------------
[ ] 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>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Balance Sheets
(unaudited)
<TABLE>
June 30, December 31,
1997 1996
Assets
<S> <C> <C>
Cash $ 1,535,482 $1,059,310
----------- ----------
Investment in finance leases
Minimum rents receivable 1,665,457 2,652,925
Estimated unguaranteed residual values 1,219,934 1,228,841
Unearned income (199,697) (315,242)
Allowance for doubtful accounts (197,173) (285,600)
----------- ----------
2,488,521 3,280,924
Investment in financings
Receivables due in installments 1,607,087 2,027,328
Unearned income (218,144) (305,587)
Allowance for doubtful accounts (112,653) (23,420)
----------- ----------
1,276,290 1,698,321
Equity investment in joint venture 358,024 526,881
----------- ----------
Other assets 129,973 78,268
----------- ----------
Total assets $ 5,788,290 $6,643,704
=========== ==========
Liabilities and Partners' Equity
Notes payable - non-recourse $ 579,508 $ 994,354
Accounts payable to General Partner and affiliates, net 575,525 510,716
Accounts payable-other 37,077 -
Security deposits, deferred credits and accounts payable-other 634,512 446,887
----------- ----------
1,826,622 1,951,957
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (132,809) (125,553)
Limited partners (198,270 and 198,470 units outstanding,
$100 per unit original issue price in 1997 and 1996,
respectively) 4,094,477 4,817,300
----------- ----------
Total partners' equity 3,961,668 4,691,747
----------- ----------
Total liabilities and partners' equity $ 5,788,290 $6,643,704
=========== ==========
</TABLE>
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,
1997 1996 1997 1996
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Finance income $ 89,690 $ 151,990 $ 197,039 $ 298,888
Interest income and other 20,495 17,300 40,893 40,005
Income from equity investment
in joint venture 16,706 14,126 22,620 24,379
Net gain on sales or remarketing
of equipment 9,409 10,592 23,121 271,565
----------- ---------- ----------- -----------
Total revenues 136,300 194,008 283,673 634,837
----------- ---------- ----------- -----------
Expenses
General and administrative 23,515 19,295 29,453 36,646
Administrative expense reimbursements
- General Partner 17,891 23,721 36,864 48,271
Management fees - General Partner 17,537 23,436 36,263 47,532
Interest - - 4,888 8,552
Amortization of initial direct costs - 1,892 - 4,727
----------- ---------- ---------- -----------
Total expenses 58,943 68,344 107,468 145,728
----------- ---------- ----------- -----------
Net income $ 77,357 $ 125,664 $ 176,205 $ 489,109
=========== ========== =========== ===========
Net income allocable to:
Limited partners $ 76,583 $ 124,407 $ 174,443 $ 484,218
General Partner 774 1,257 1,762 4,891
----------- ---------- ----------- -----------
$ 77,357 $ 125,664 $ 176,205 $ 489,109
=========== ========== =========== ===========
Weighted average number of limited
partnership units outstanding 198,336 198,622 198,403 198,622
=========== ========== =========== ===========
Net income per weighted average
limited partnership unit $ .39 $ .63 $ .88 $ 2.44
=========== ========== =========== ===========
</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, 1997 and
the Years Ended December 31, 1996, 1995 and 1994
(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, 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 $ 4.39 $ 4.61 (1,786,992) (18,050) (1,805,042)
Limited partnership
units redeemed
(330 units) (10,369) - (10,369)
Net income 914,490 9,237 923,727
----------- ----------- ------------
Balance at
December 31, 1996 4,817,300 (125,553) 4,691,747
Cash distribution
to partners $ 3.62 $ .88 (892,816) (9,018) (901,834)
Limited partnership
units redeemed
(200 units) (4,450) - (4,450)
Net income 174,443 1,762 176,205
----------- ----------- ------------
Balance at
June 30, 1997 $ 4,094,477 $ (132,809) $ 3,961,668
=========== =========== ============
</TABLE>
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>
1997 1996
---- ----
Cash flows provided by operating activities:
<S> <C> <C>
Net income $ 176,205 $ 489,109
----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Finance income portion of receivables paid
directly to lenders by lessees (14,028) (75,278)
Amortization of initial direct costs - 4,727
Net gain on sales or remarketing of equipment (23,121) (271,565)
Interest expense on non-recourse financing paid
directly by lessees 4,888 5,638
Collection of principal - non-financed receivables 742,881 828,029
Income from equity investment in joint venture (22,620) (24,379)
Distribution from investment in joint venture 191,477 302,364
Changes in operating assets and liabilities:
Allowance for doubtful accounts (806) (206)
Accounts payable to General Partner and affiliates, net 64,809 29,570
Security deposits and deferred credits 187,625 (73,776)
Accounts payable - other 37,077 105,197
Other, net (32,998) (31,602)
----------- -----------
Total adjustments 1,117,526 798,719
----------- -----------
Net cash provided by operating activities 1,293,731 1,287,828
----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment 88,725 684,327
Equipment and receivables purchased - (2,179,971)
----------- -----------
Net cash provided by (used in) investing activities 88,725 (1,495,644)
----------- -----------
Cash flows from financing activities:
Cash distributions to partners (901,834) (902,906)
Redemption of limited partnership units (4,450) (10,369)
----------- -----------
Net cash used in financing activities (906,284) (913,275)
----------- -----------
Net increase (decrease) in cash 476,172 (1,121,091)
Cash, beginning of period 1,059,310 1,777,981
----------- -----------
Cash, end of period $ 1,535,482 $ 656,890
=========== ===========
</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, 1997 and 1996, non-cash activities
included the following:
<TABLE>
1997 1996
<S> <C> <C>
Principal and interest on finance
receivables paid directly by lessees $ 419,734 $ 643,765
Principal and interest on non-recourse
financing paid directly by lessees (419,734) (643,765)
Decrease in notes payable - non-recourse
due to terminations - (234,900)
Increase in security deposits and deferred
credits due to terminations - 234,900
----------- -----------
$ - $ -
=========== ===========
</TABLE>
Interest expense of $4,888 and $8,552 for the six months ended June 30,
1997 and 1996 consisted of: interest expense on non-recourse financing accrued
or paid directly to lenders by lessees of $4,888 and $5,638, respectively, and
other interest of $0 and $2,914, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements
June 30, 1997
(unaudited)
1. Basis of Presentation
The 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 1996 Annual Report on Form 10-K.
2. 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.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 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. 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 is short-term, and is
expected to be re-financed by August 31, 1997. ICON Asset Acquisition LLC is
charged an interest rate that is equal to Series E's cost of funds, which is
approximately 8.0%.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
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, 1997 is
summarized below:
June 30, 1997
Assets $ 8,468,754
=============
Liabilities $ 5,797,325
=============
Equity $ 2,671,429
=============
Six Months Ended
June 30, 1997
Net income $ 168,931
=============
3. Security Deposits and Deferred Credits
Security deposits and deferred credits at June 30, 1997 and December 31,
1996 include $622,626 and $426,379, respectively, of proceeds received on
residuals which will be applied upon final remarketing of the related equipment.
4. Related Party Transactions
During the six months ended June 30, 1997 and 1996, the Partnership accrued
to the General Partner management fees of $36,263 and $47,532, respectively, and
paid or accrued administrative expense reimbursements of $36,864 and $48,271,
respectively. These fees and reimbursements were charged to operations.
The payment of management fees have been deferred since September 1, 1993
and as of June 30, 1997, $612,726 in management fees have been accrued but not
paid.
Under the original 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, totaled $26,896 for the six months
ended June 30, 1997. 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, 1997 and 1996, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
June 30, 1997
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 and equity investment in joint venture of 61%, 31% and 8% of total
investments at June 30, 1997 respectively, and 65%, 25% and 10% of total
investments at June 30, 1996, respectively.
Results of Operations
Three Months Ended June 30, 1997 and 1996
For the three months ended June 30, 1997 and 1996, the Partnership leased or
financed equipment with an initial cost of $0 and $1,249,690, respectively, to 0
and 54 lessees or equipment users, respectively.
Revenues for the three months ended June 30, 1997 were $136,300,
representing a decrease of $57,708 or 30% from 1996. The decrease in revenues
resulted primarily from a decrease in finance income of $62,300 or 41%. Results
were also affected by a decrease in net gain on sales or remarketing of
equipment of $1,183 or 11% from 1996. These decreases were partially offset by
an increase in interest income and other of $3,195 or 19% and an increase in
income from equity investment in joint venture of $2,580 or 18% from 1996. The
overall decrease in finance income resulted from a decrease in the average size
of the portfolio from 1996 to 1997. Net gain on sales or remarketing of
equipment decreased due to a decrease 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. The increase in income from equity investment in joint
venture resulted from an increase in that entity's gain on sales or remarketing
of equipment for which proceeds received were in excess of the remaining
carrying value of the equipment under investment.
Expenses for the three months ended June 30, 1997 were $58,943, representing
a decrease of $9,401 or 14% from 1996. The decrease in expenses resulted from a
decrease in management fees of $5,899 or 26%, a decrease in administrative
expense reimbursements of $5,830 or 25% and a decrease in amortization of
initial direct costs of $1,892 from 1996. These decreases were partially offset
by an increase in general and administrative expense of $4,330 or 22% from 1996.
Management fees, administrative expense reimbursements and amortization of
initial direct costs decreased due to a decrease in the average size of the
portfolio from 1996 to 1997.
Net income for the three months ended June 30, 1997 and 1996 was $77,357 and
$125,664, respectively. The net income per weighted average limited partnership
unit was $.39 and $.63 for 1997 and 1996, respectively.
Six Months Ended June 30, 1997 and 1996
For the six months ended June 30, 1997 and 1996, the Partnership leased or
financed equipment with an initial cost of $0 and $2,179,970, respectively to 0
and 54 lessees or equipment users, respectively. The weighted average initial
transaction term relating to these transactions for each year was 0 and 42
months, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Revenues for the six months ended June 30, 1997 were $283,673, representing
a decrease of $351,164 or 55% from 1996. The decrease in revenues resulted
primarily from a decrease in net gain on sales or remarketing of equipment of
$248,444 or 92% and a decrease in finance income of $101,849 or 34% from 1996.
Results were also affected by a decrease in income from equity investment in a
joint venture of $1,759 or 7% from 1996. These decreases were partially offset
by an increase in interest income and other of $888. Net gain on sales or
remarketing of equipment decreased due to a decrease 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 finance income resulted from a decrease in the
average size of the portfolio from 1996 to 1997. The decrease in income from
equity investment in joint venture resulted from a decrease in the average size
of the portfolio under investment. The increase in interest income and other
resulted from an increase in the average cash balance from 1996 to 1997.
Expenses for the six months ended June 30, 1997 were $107,468, representing
a decrease of $38,260 or 26% from 1996. The decrease in expenses resulted from a
decrease in administrative expenses reimbursements of $11,407 or 24%, a decrease
in management fees of $11,269 or 24%, a decrease in general and administrative
expenses of $7,193 or 20%, a decrease in amortization of initial direct costs of
$4,727 and a decrease in interest expense of $3,664 from 1996. These decreases
were partially offset by an increase in general and administrative expense of
$1,631 or 5%. The decrease in interest expense resulted from a decrease in the
average debt outstanding for 1996 to 1997. Administrative expense
reimbursements, management fees and amortization of initial direct costs
decreased due to a decrease in the average size of the portfolio from 1996 to
1997.
Net income for the six months ended June 30, 1997 and 1996 was $176,205 and
$489,109, respectively. The net income per weighted average limited partnership
unit was $.88 and $2.44 for 1997 and 1996, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the six months ended June 30,
1997 and 1996 were net cash provided by operations of $1,293,731 and $1,287,828,
respectively, proceeds from sales of equipment of $88,725 and $684,327,
respectively. These funds were used to purchase equipment, in 1996, and fund
cash distributions. The Partnership intends to continue to fund cash
distributions utilizing funds from cash provided by operations and proceeds from
sales of equipment.
Cash distributions to limited partners for the six months ended June 30,
1997 and 1996, which were paid monthly, totaled $892,816 and $893,877,
respectively, of which $174,443 and $484,218 was investment income and $718,373
and $409,659 was a return of capital, respectively. The monthly annualized cash
distribution rate to limited partners was 9.00% for 1997 and 1996, of which
1.76% and 4.88 % was investment income and 7.24% and 4.12% 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, 1997 and 1996 was $4.50, of which
$.88 and $2.44 was investment income and $3.62 and $2.06 was a return of
capital, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
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 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.
The Partnership expects to re-file the proxy statement with the SEC in the near
future. 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 of June 30, 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 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 C
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter ended
June 30, 1997.
<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, 1997 Gary N. Silverhardt
- --------------- -------------------------------------------------
Date Gary N. Silverhardt
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-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,535,482
<SECURITIES> 0
<RECEIVABLES> 4,126,626
<ALLOWANCES> 309,826
<INVENTORY> 77,984
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,788,290
<CURRENT-LIABILITIES> ** 0
<BONDS> 579,508
0
0
<COMMON> 0
<OTHER-SE> 3,961,668
<TOTAL-LIABILITY-AND-EQUITY> 5,788,290
<SALES> 283,673
<TOTAL-REVENUES> 283,673
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 111,404
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (3,936)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 176,205
<EPS-PRIMARY> 0.88
<EPS-DILUTED> 0.88
<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>
