UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[ 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, 1996
------------------------------------------------------
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 0-27904
---------------------------------------------------------
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 (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 Interests, filed, pending effectiveness
- --------------------------------------------------------------------------------
(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 1
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
TABLE OF CONTENTS
Item Page
PART I
1. Business 3-4
2. Properties 4
3. Legal Proceedings 4
4. Submission of Matters to a Vote of Security Holders 4
PART II
5. Market for the Registrant's Securities and Related
Security Holder Matters 5
6. Selected Financial and Operating Data 5
7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations 6-8
8. Financial Statements and Supplementary Data 9-23
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 24
PART III
10. Directors and Executive Officers of the Registrant's
General Partner 24-25
11. Executive Compensation 25
12. Security Ownership of Certain Beneficial Owners
and Management 26
13. Certain Relationships and Related Transactions 26
PART IV
14. Exhibits, Reports and Amendments 27
SIGNATURES 28
Page 2
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
PART I
Item 1. Business
General Development of Business
ICON Cash Flow Partners, L.P., Series C (the "Partnership") was formed in
June 1990 as a Delaware limited partnership. The Partnership commenced business
operations on its initial closing date, January 3, 1991, with the admission of
15,249.37 limited partnership units. Between January 4, 1991 and June 21, 1991
(the final closing date), 184,750.63 additional units were admitted bringing the
final admission to 200,000 units totaling $20,000,000 in capital contributions.
During 1993, the Partnership redeemed 100 limited partnership units, during 1995
the Partnership redeemed 1,100 limited partnership units, and during 1996 the
Partnership redeemed 330 limited partnership units leaving 198,470 limited
partnership units outstanding at December 31, 1996. The sole general partner is
ICON Capital Corp. (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: (1) acquired a diversified portfolio of short-term,
high-yield investments; (2) made monthly cash distributions to its limited
partners from cash from operations, commencing with each limited partner's
admission to the Partnership, continuing through the reinvestment period; (3)
re-invested substantially all undistributed cash from operations and cash from
sales in additional equipment and financing transactions during the reinvestment
period; and (4) sell the Partnership's investments and distribute the cash from
sales of such investments to its limited partners within five and one-half to
seven and one-half years of the final closing date. In addition to acquiring
equipment and entering into leases, the Partnership also (1) acquired equipment
already subject to leases originated by affiliates and non-affiliated lessors
and (2) entered 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.
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. The Partnership is currently preparing a new proxy with the Securities
and Exchange Commission. 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. If the Partnership does not receive
consents representing a majority of the outstanding Partnership units then the
Partnership will begin liquidating its investments and distributing the proceeds
as provided in the Partnership Agreement.
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. Competitive factors in the equipment leasing business
primarily involve pricing and other financial arrangements, equipment
remarketing capabilities and servicing of lessees.
The Partnership has no direct employees. The General Partner has full and
exclusive discretion in management and control of the Partnership.
Page 3
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
Lease and Financing Transactions
For the years ended December 31, 1996 and 1995, the Partnership purchased
and leased or financed $2,230,768 and $1,737,300 of equipment, respectively,
with a weighted average initial transaction term of 41 and 51 months,
respectively. At December 31, 1996, the weighted average initial transaction
term of the portfolio was 47 months. A summary of the portfolio equipment cost
by category held at December 31, 1996 and 1995 is as follows:
December 31, 1996 December 31, 1995
----------------- -----------------
Category Cost Percent Cost Percent
Medical $ 3,058,534 26.6% $ 4,851,638 26.5%
Retail systems 2,837,463 24.7 2,995,721 16.4
Restaurant equipment 1,383,351 12.0 1,398,546 7.6
Computer systems 1,286,639 11.2 3,769,162 20.6
Office furniture & fixtures 1,061,720 9.2 2,282,233 12.5
Manufacturing & production 750,314 6.5 722,365 3.9
Printing 237,459 2.1 252,709 1.4
Telecommunications 235,743 2.1 595,486 3.3
Video production 215,136 1.9 265,054 1.4
Sanitation 147,542 1.3 320,635 1.8
Automotive equipment 101,211 .9 - -
Construction 71,035 .6 26,819 .1
Copiers 50,566 .4 - -
Audio Equipment 46,335 .4 - -
Material handling 15,324 .1 - -
Transportation - - 498,500 2.7
Environmental - - 168,456 .9
Miscellaneous - - 173,973 .9
----------- ------- ----------- ------
$11,498,372 100.0% $18,321,297 100.0%
=========== ====== =========== =====
The Partnership has one lease which individually represents greater than
10% of the total portfolio equipment cost at December 31, 1996. The lease is for
medical equipment with New Liberty Hospital and the purchase price of the
equipment represents 13.6% of the total portfolio equipment cost at December 31,
1996.
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 1996.
Page 4
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
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,
- -------------- ---------------------------------
1996 1995
---- ----
Limited partners 1745 1,757
General Partner 1 1
Item 6. Selected Financial and Operating Data
<TABLE>
Years Ended December 31,
-------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total revenues $ 1,170,549 $ 1,059,354 $ 2,136,954 $ 3,304,604 $6,189,139
============ =========== ============ =========== ==========
Net income (loss) $ 923,727 $ 400,885 $ 246,465 $ (49,631) $(1,752,743)
============ =========== ============ =========== ===========
Net income (loss)
allocable to
limited partners $ 914,490 $ 396,876 $ 244,000 $ (49,135) $(1,735,216)
============ =========== ============ =========== ===========
Net income (loss)
allocable to
the General Partner $ 9,237 $ 4,009 $ 2,465 $ (496) $ (17,527)
============ =========== ============ =========== ===========
Weighted average
limited partnership
units outstanding 198,551 199,558 199,900 199,992 200,000
============ =========== ============ =========== ===========
Net income (loss)
per weighted average
limited partnership unit $ 4.61 $ 1.99 $ 1.22 $ (.25) $ (8.68)
============ =========== ============ =========== ===========
Distributions to
limited partners $ 1,786,992 $ 1,796,363 $ 1,799,100 $ 2,466,667 $ 2,800,000
============ =========== ============ =========== ===========
Distributions to the
General Partner $ 18,050 $ 18,144 $ 18,173 $ 24,916 $ 28,283
============ =========== ============ =========== ===========
December 31,
--------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Total assets $ 6,643,704 $ 9,781,663 $ 18,016,023 $23,323,075 $34,327,532
============ =========== ============ =========== ===========
Partners' equity $ 4,691,747 $ 5,583,431 $ 7,035,309 $ 8,606,117 $11,152,439
============ =========== ============ =========== ===========
</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 5
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
Item 7. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
The Partnership's portfolio consisted of net investments in finance leases,
financings, and equity investment in joint venture of 61%, 30% and 9% of total
investments at December 31, 1996, respectively, and 75%, 11% and 14% of total
investments at December 31, 1995, respectively.
For the years ended December 31, 1996 and 1995, the Partnership leased or
financed equipment with initial costs of $2,230,768 and $1,737,300,
respectively, to 55 and 37 lessees or equipment users, respectively. The
weighted average initial transaction term for each year was 41 and 51 months,
respectively.
Results of Operations for the Years Ended December 31, 1996 and 1995
Revenues for the year ended December 31, 1996 were $1,170,549, representing
an increase of $111,195 or 11% from 1995. The increase in revenues was primarily
attributable to an increase in net gain on sales or remarketing of equipment of
$416,081 from 1995. The increase in revenues was partially offset by a decrease
in finance income of $187,108 or 25%, a decrease in income from equity in joint
venture of $88,397 or 85% from 1995. Although there was an overall decrease in
the total number of leases maturing in 1996 compared to 1995, net gain on sales
or remarketing of equipment increased as the result of the Partnership
negotiating a 24 month lease extension on a lease for cafeteria furniture,
fixtures and equipment and several other lease extensions on various hotel
furniture, fixtures, and equipment. These transactions resulted in a total net
gain of $342,087. The decrease in finance income and income from joint venture
resulted from the decrease in the average size of the portfolio from 1995 to
1996. Interest income and other decreased primarily as a result of a decrease in
the average cash balance from 1995 and 1996.
Expenses for the year ended December 31, 1996 were $246,822, representing a
decrease of $411,647 or 66% from 1995. The decrease in expenses was primarily
attributable to a decrease in interest expense of $236,334, a decrease in
general and administrative expense of $70,172 or 65%, a decrease in
administrative expense reimbursements of $36,988 or 28%, a decrease in
management fees of $36,173 or 28%, and a decrease in amortization of initial
direct cost of $31,979 or 82 % from 1995. The decrease in interest expense
resulted from a decrease in the average debt outstanding from 1995 to 1996.
General and administrative expense, administrative expense reimbursements,
management fees and amortization of initial direct costs 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 years ended December 31, 1996 and 1995.
Net income for the years ended December 31, 1996 and 1995 was $923,727 and
$400,885, respectively. The net income per weighted average limited partnership
unit was $4.61 and $1.99 for 1996 and 1995, respectively.
Results of Operations for the Years Ended December 31, 1995 and 1994
Revenues for the year ended December 31, 1995 were $1,059,354, representing
a decrease of $1,077,600 or 50% from 1994. The decrease in revenues was
primarily attributable to a decrease in finance income of $576,230 or 43%, a
decrease in net gain on sales or remarketing of equipment of $266,157 or 74%, a
decrease in rental income of $262,784 or 100% and a decrease in interest income
and other of $76,138 or 43% from 1994. The decrease in revenues was partially
offset by an increase in income from equity investment in joint venture of
$103,709. The decrease in finance income resulted from the decrease in the
average size of the portfolio from 1994 to 1995. The net gain on sales or
remarketing of equipment decreased due to the decrease in the number of leases
maturing, and the underlying equipment being sold or remarketed, for which the
Page 6
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
proceeds received were in excess of the remaining carrying value of the
equipment. The decrease in rental income resulted from the Partnership's reduced
investment in operating leases. Interest income and other decreased primarily as
a result of a decrease in the average cash balance from 1994 and 1995. The
income from equity investment in joint venture resulted from the Partnership's
investment in a joint venture with two affiliates on February 3, 1995.
Expenses for the year ended December 31, 1995 were $658,469, representing a
decrease of $1,232,020 or 65% from 1994. The decrease in expenses was primarily
attributable to a decrease in interest expense of $667,290 or 72%, a decrease in
depreciation expense of $224,474 or 100%, a decrease in the provision for bad
debts of $141,000 or 100%, a decrease in amortization of initial direct costs of
$115,987 or 75%, a decrease in administrative expense reimbursements of $43,779
or 25% and a decrease in management fees of $42,602 or 25% from 1994. The
decrease in interest expense resulted from the decrease in the average debt
outstanding from 1994 to 1995. Depreciation expense decreased due to the
Partnership's reduced investment in operating leases. 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, 1995. Amortization of initial direct costs,
administrative expense reimbursements and management fees decreased due to a
decrease in the average size of the portfolio from 1994 to 1995. Management fees
were also affected by the reduction in management fee rates. 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 investments under management.
Effective January 1, 1994, the General Partner elected to reduce its management
fees to a flat rate of 2% of rents from all investments under management. The
foregone management fees, the difference between 2% and 5% of rents for certain
types of investments, totaled $138,651 for the year ended December 31, 1995.
These foregone management fees are not accruable in future years. General and
administrative expense remained relatively constant from 1994 to 1995.
Net income for the year ended December 31, 1995 and 1994 was $400,885 and
$246,465, respectively. The net income per weighted average limited partnership
unit was $1.99 and $1.22 for 1995 and 1994, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds in 1996, 1995 and 1994 were net
cash provided by operations of $1,987,290, $391,072 and $2,854,887,
respectively, proceeds from sales of equipment of $ 1,289,421, $3,058,969 and
$1,665,032, respectively, and borrowings related to a term loan of $1,500,000 in
1994. These funds were used to purchase equipment, to fund cash distributions
and to make payments on borrowings. The Partnership intends to continue to fund
cash distributions utilizing cash provided by operations and proceeds from sales
of equipment.
The Partnership had notes payable at December 31, 1996 and 1995 of $994,354
and $2,799,149, respectively, and such amounts consisted of $414,846 and
$1,614,686, respectively, in non-recourse notes which are being paid directly to
the lenders by the lessees and $579,508 and $1,184,463, respectively, in
non-recourse residual value notes, which are payable only to the extent
residuals are realized.
Page 7
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
Cash distributions to the limited partners in 1996, 1995 and 1994, which
were paid monthly, totaled $1,786,992, $1,796,363 and $1,799,100, respectively,
of which $914,490, $396,876 and $244,000 was investment income and $872,502,
$1,399,487 and $1,555,100 was a return of capital, respectively. The monthly
annualized cash distribution rate for 1996, 1995 and 1994 was 9.00%, of which
4.61%, 1.99% and 1.22% was investment income and 4.39%, 7.01% and 7.78% 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 in 1996, 1995 and 1994 was $9.00, of which $4.61, $1.99
and $1.22 was investment income and $4.39, $7.01 and $7.78 was a return of
capital, respectively.
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. 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. If the Partnership does not receive consents
representing a majority of the outstanding Partnership units then the
Partnership will begin liquidating its Investments and distributing the proceeds
as provided in the Partnership Agreement. 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 December 31, 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 continue to pay distributions
while retaining sufficient cash to meet its reserve requirements and recurring
obligations as they become due.
Accounting Developments
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 effective for all transfers
occurring after December 31, 1996. The adoption of SFAS No. 125 is not expected
to have a material impact on the Partnership's net income, partners' equity or
total assets.
Page 8
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements
Page Number
-----------
Independent Auditors' Report 11
Balance Sheets as of December 31, 1996 and 1995 12
Statements of Operations for the Years Ended
December 31, 1996, 1995 and 1994 13
Statements of Changes in Partners' Equity for
the Years Ended December 31, 1996, 1995 and 1994 14
Statements of Cash Flows for the Years Ended
December 31, 1996, 1995 and 1994 15-16
Notes to Financial Statements 17-23
Page 9
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Financial Statements
December 31, 1996
(With Independent Auditors' Report Thereon)
Page 10
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
ICON Cash Flow Partners, L.P., Series C:
We have audited the accompanying balance sheets of ICON Cash Flow Partners,
L.P., Series C (a Delaware limited partnership) as of December 31, 1996 and
1995, 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,
1996. 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 C as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the years in the three-year period ended December 31,
1996 in conformity with generally accepted accounting principles.
March 7, 1997
New York, New York
Page 11
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Balance Sheets
December 31,
1996 1995
---- ----
Assets
Cash $ 1,059,310 $ 1,777,981
------------ -----------
Investment in finance leases
Minimum rents receivable 2,652,295 4,186,397
Estimated unguaranteed residual values 1,228,841 2,557,247
Initial direct costs - 6,839
Unearned income (315,242) (541,052)
Allowance for doubtful accounts (285,600) (289,456)
------------ -----------
3,280,924 5,919,975
------------ -----------
Investment in financings
Receivables due in installments 2,027,328 1,149,404
Initial direct costs - 73
Unearned income (305,587) (174,374)
Allowance for doubtful accounts (23,420) (23,420)
------------ -----------
1,698,321 951,683
------------ -----------
Equity investment in joint venture 526,881 1,127,930
------------ -----------
Other assets 78,268 4,094
------------ -----------
Total assets $ 6,643,704 $ 9,781,663
============ ===========
Liabilities and Partners' Equity
Notes payable - non-recourse $ 994,354 $ 2,799,149
Accounts payable to General Partner
and affiliates, net 510,716 467,028
Security deposits and deferred credits 446,887 932,055
------------ -----------
1,951,957 4,198,232
------------ -----------
Commitments and contingencies
Partners' equity (deficiency)
General Partner (125,553) (116,740)
Limited partners (198,470 and 198,800 units
outstanding, $100 per unit original issue price
in 1996 and 1995, respectively) 4,817,300 5,700,171
------------ -----------
Total partners' equity 4,691,747 5,583,431
------------ -----------
Total liabilities and partners' equity $ 6,643,704 $ 9,781,663
============ ===========
See accompanying notes to financial statements.
Page 12
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Operations
For the Years Ended December 31,
<TABLE>
1996 1995 1994
---- ---- ----
Revenues
<S> <C> <C> <C>
Finance income $ 574,073 $ 761,181 $ 1,337,411
Net gain on sales or remarketing
of equipment 511,331 95,250 361,407
Interest income and other 69,833 99,214 175,352
Income from equity investment in joint venture 15,312 103,709 -
Rental income - - 262,784
-------------- ------------- --------------
Total revenues 1,170,549 1,059,354 2,136,954
-------------- ------------- --------------
Expenses
Management fees - General Partner 92,360 128,533 171,135
Administrative expense reimbursements
- General Partner 93,494 130,482 174,261
General and administrative 37,247 107,419 104,307
Amortization of initial direct costs 6,912 38,892 154,879
Interest 16,809 253,143 920,433
Depreciation - - 224,474
Provision for bad debt - - 141,000
-------------- ------------- --------------
Total expenses 246,822 658,469 1,890,489
-------------- ------------- --------------
Net income $ 923,727 $ 400,885 $ 246,465
============== ============= ==============
Net income allocable to:
Limited partners $ 914,490 $ 396,876 $ 244,000
General Partner 9,237 4,009 2,465
-------------- ------------- --------------
$ 923,727 $ 400,885 $ 246,465
============== ============= ==============
Weighted average number of limited
partnership units outstanding 198,551 199,558 199,900
============== ============= ==============
Net income per weighted average
limited partnership unit $ 4.61 $ 1.99 $ 1.22
============== ============= ==============
</TABLE>
See accompanying notes to financial statements.
Page 13
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Changes in Partners' Equity
For the Years Ended December 31, 1996, 1995 and 1994
<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 distributions 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
============== =========== ==============
</TABLE>
See accompanying notes to financial statements.
Page 14
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Cash Flows
For the Years Ended December 31,
<TABLE>
1996 1995 1994
---- ---- ----
Cash flows from operating activities:
<S> <C> <C> <C>
Net income $ 923,727 $ 400,885 $ 246,465
------------- -------------- ------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Allowance for doubtful accounts - 34,495 122,835
Finance income portion of receivables paid
directly to lenders by lessees (121,569) (370,961) (1,030,437)
Amortization of initial direct costs 6,912 38,893 154,879
Net gain on sales or remarketing of equipment (511,331) (95,250) (361,407)
Interest expense on non-recourse financing
paid directly by lessees - 171,842 640,106
Interest expense accrued on non-recourse debt 13,896 63,818 202,907
Collection of principal - non-financed receivables 1,564,037 1,016,070 934,239
Income from equity investment in joint venture (15,312) (103,709) -
Distribution from equity investment in joint venture 616,361 475,779 -
Depreciation - - 224,474
Rental income - assigned operating lease receivables - - (172,872)
Change in operating assets and liabilities:
Accounts payable to General Partner
and affiliates, net 43,688 102,673 (133,221)
Security deposits and deferred credits (390,339) (1,372,776) 1,957,034
Other, net (142,780) 29,313 69,885
------------- -------------- ------------
Total adjustments 1,063,563 (9,813) 2,608,422
------------- -------------- ------------
Net cash provided by operating activities 1,987,290 391,072 2,854,887
------------- -------------- ------------
Cash flows from investing activities:
Proceeds from sales of equipment 1,289,421 3,058,969 1,665,032
Investment in joint venture - (1,500,000) -
Equipment and receivables purchased (2,179,971) (2,073,940) (1,838,851)
------------- -------------- ------------
Net cash used in investing activities (890,550) (514,971) (173,819)
------------- -------------- ------------
Cash flows from financing activities:
Redemption of limited partnership units (10,369) (38,256) -
Cash distributions to partners (1,805,042) (1,814,507) (1,817,273)
Principal payments on term loan - - (1,500,000)
Proceeds from term loan - - 1,500,000
------------- -------------- ------------
Net cash used in financing activities (1,815,411) (1,852,763) (1,817,273)
------------- -------------- ------------
Net increase (decrease) in cash (718,671) (1,976,662) 863,795
Cash at beginning of year 1,777,981 3,754,643 2,890,848
------------- -------------- ------------
Cash at end of year $ 1,059,310 $ 1,777,981 $ 3,754,643
============= ============== ============
</TABLE>
See accompanying notes to financial statements.
Page 15
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Cash Flows (Continued)
Supplemental Disclosures of Cash Flow Information
Interest expense of $16,809, $253,143 and $920,433 for the years ended
December 31, 1996, 1995 and 1994 consisted of: interest expense on non-recourse
financing accrued or paid directly to lenders by lessees of $0, $235,660 and
$843,013, respectively, and other interest paid of $16,809, $17,483 and $77,420,
respectively.
During the years ended December 31, 1996, 1995 and 1994, non-cash
activities included the following:
<TABLE>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Principal and interest on finance receivables
paid directly by lessee ....................... $ 1,173,063 $ 2,922,879 $ 5,829,965
Rental Income - assigned operating lease receivables -- -- 172,872
Principal and interest on non-recourse financing
paid directly by lessee ....................... (1,173,063) (2,922,879) (6,002,837)
Non-recourse notes payable assumed in purchase price -- -- 79,686
Fair value of equipment and receivables purchased
for debt and payables ......................... -- -- (79,686)
Decrease in notes payable - non-recourse
due to terminations ........................... (412,183) (1,922,142) --
Decrease in investment in finance leases due to
terminations .................................. 412,183 2,194,279 --
Decrease in security deposits and deferred
credits due to terminations ................... -- (272,137) --
----------- ----------- -----------
$ -- $ -- $ --
=========== =========== ===========
</TABLE>
Page 16
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements
December 31, 1996
1. Organization
ICON Cash Flow Partners, L.P., Series C (the "Partnership") was formed on
June 22, 1990 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, to enter into secured
financing transactions. The Partnership's offering period commenced on January
3, 1991 and by its final closing in 1991, 200,000 units had been admitted into
the Partnership with aggregate gross proceeds of $20,000,000. During 1993, the
Partnership redeemed 100 limited partnership units, during 1995 the Partnership
redeemed 1,100 limited partnership units, and during 1996 the Partnership
redeemed 330 limited partnership units, leaving 198,470 limited partnership
units outstanding at December 31, 1996.
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 from 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% of the gross
proceeds received from the sale of the units. Such offering costs aggregated
$2,600,000, (including $1,013,120 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. 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
Page 17
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
terminations. 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. The fair value of certain debt obligations as of December 31, 1996
approximate that which is recorded in these financial statements. Fair value
information with respect to the Company's assets and certain non-recourse notes
payable is not provided because (i) SFAS No. 107 does not require disclosures
about the fair value of lease arrangements, (ii) the carrying value of financial
assets other than lease related investments approximates market value and (iii)
fair value information concerning certain non-recourse debt obligations is not
practicable to estimate without incurring excessive costs to obtain all the
information that would be necessary to derive a market interest rate on a lease
by lease basis.
Investment in Joint Venture - The Partnership accounts for its investment
in a joint venture under the equity method of accounting. The Partnership's
original investment was recorded at cost and is adjusted by its share of
earnings, losses and distributions thereafter.
Redemption of Limited Partnership Units - The General Partner consented to
the Partnership redeeming 100 limited partnership units during 1993, 1,100
limited partnership units during 1995 and 330 limited partnership units during
1996. The redemption amounts were 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 deduction from partners 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 the
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 is effective beginning in 1996.
Page 18
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
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.
3. Investment in Joint Venture
The Partnership Agreement allows the Partnership to invest in joint
ventures with other limited partnerships sponsored by the General Partner
provided that the investment objective of the joint ventures is 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. 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 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 totaled $27,854,266 and the underlying equipment consists
of graphic arts and printing equipment. The terms of the leases in this
portfolio 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.
Page 19
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
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.
On January 28, 1997, ICON Asset Acquisition LLC re-financed its outstanding
obligations of $7,780,000 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 June
30, 1997. The Partnership is charged an interest rate that is equal to Series
E's cost of funds, which is approximately 8.0%. ICON Asset Acquisition LLC has
granted a security interest in all of their underlying assets.
Information as to the financial position and results of operations of ICON
Asset Acquisition LLC as of and for the year ended December 31, 1996 and as of
and for the period ended December 31, 1995 are summarized below:
December 31, 1996 December 31, 1995
----------------- -----------------
Assets $ 12,490,084 $ 24,960,875
=============== ==============
Liabilities $ 8,557,586 $ 16,539,596
=============== ==============
Equity $ 3,932,498 $ 8,421,279
=============== ==============
Year Ended Period Ended
December 31, 1996 December 31, 1995
----------------- -----------------
Net income $ 114,350 $ 774,525
=============== ==============
Page 20
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
4. Receivables Due in Installments
Non-cancelable minimum annual amounts due on finance leases and financings
are as follows:
Finance
Year Leases Financings Total
1997 $ 1,539,842 $ 766,300 $ 2,306,142
1998 610,837 606,833 1,217,670
1999 343,415 366,431 709,846
2000 150,329 245,517 395,846
2001 8,502 42,247 50,749
------------- ------------ --------------
$ 2,652,925 $ 2,027,328 $ 4,680,253
============= ============ ==============
5. Investment in Operating Leases
The investment in operating leases at December 31, 1996, 1995 and 1994
consisted of the following:
<TABLE>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Equipment cost, beginning of year $ - $ 110,945 $ 1,487,361
Equipment sold - (110,945) (1,376,416)
-------------- --------------- --------------
Equipment cost, end of year - - 110,945
-------------- --------------- --------------
Accumulated depreciation, beginning of year - (83,753) (997,240)
Depreciation - - (224,474)
Equipment sold - 83,753 1,137,961
-------------- --------------- --------------
Accumulated depreciation, end of year - - (83,753)
-------------- --------------- --------------
Initial direct costs, net of accumulated
amortization, end of year - - -
-------------- --------------- --------------
Investment in operating leases, end of year $ - $ - $ 27,192
============== =============== ==============
</TABLE>
Page 21
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
6. 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, 1993 $ 147,205 $ 4,660 $ 3,681 $ 155,546
Charged to operations 141,000 - - 141,000
Accounts written-off (32,673) (15,667) - (48,340)
Recovery on accounts previously
written-off 30,175 - - 30,175
Transfer within accounts (32,500) 34,427 (1,927) -
----------- ---------- ----------- -----------
Balance at December 31, 1994 253,207 23,420 1,754 278,381
Accounts written-off (74,003) - - (74,003)
Recovery on accounts previously
written-off 108,498 - - 108,498
Transfer within accounts 1,754 - (1,754) -
----------- ---------- ----------- ---------
Balance at December 31, 1995 289,456 23,420 - 312,876
Accounts written-off (12,308) - - (12,308)
Recovery on accounts previously
written-off 8,452 - - 8,452
----------- ---------- ----------- -----------
Balance at December 31, 1996 $ 285,600 $ 23,420 $ - $ 309,020
=========== ========== =========== ===========
</TABLE>
7. Notes Payable
The Partnership converted a three-year secured revolving credit agreement
to a $1,500,000 term loan, secured by leases and financing transactions, in
January 1994. The term loan bore interest at prime plus 1% and was payable in
monthly installments. The term loan was repaid in November 1994.
The notes payable non-recourse, bearing interest at rates ranging from
8.175% to 15%, mature in 1997. Included in these notes are $579,508 in notes
payable non-recourse due to various third parties in conjunction with the
purchase and assignment of lease transactions as they relate to residual sharing
agreements. These notes are payable only to the extent residuals are realized,
which are estimated to occur in 1997. All other notes payable non-recourse are
being paid directly to the lenders by the lessees.
Page 22
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
8. Related Party Transactions
During the years ended December 31, 1996, 1995 and 1994, the Partnership
paid or accrued to the General Partner management fees of $92,360, $128,533 and
$171,135, respectively, and paid or accrued administrative expense
reimbursements of $93,494, $130,482 and $174,261, respectively. These fees and
reimbursements were charged to operations.
The Partnership and two affiliates, Series B and L.P. Six, formed a joint
venture, ICON Asset Acquisition LLC (See Note 3 for additional information
relating to the joint venture).
There were no acquisition fees paid or accrued by the Partnership to the
General Partner for the years ended December 31, 1996, 1995 and 1994,
respectively.
9. Security Deposits and Deferred Credits
Security deposits and deferred credits at December 31, 1996 and 1995
include $426,379 and $646,639, respectively, of proceeds received on residuals
which will be applied upon final remarketing of the related equipment.
10. Commitments and Contingencies
The Partnership has entered into residual sharing and remarketing
agreements with third party agents ("Agent"). Under these agreements, proceeds
from the sale or remarketing of equipment is shared between the Partnership and
Agent after certain hurdles are met. Residual sharing and remarketing agreements
typically cover a group of leases, or "Pools." The Partnership records residual
values at amounts equal to or less than the Partnership's share of first tier
proceeds. After the first tier has been met, second tier proceeds are retained
by the Agent and are used to satisfy related non-recourse residual value notes.
Proceeds in excess of the first and second tier proceeds are shared with the
Agent as specified in each individual remarketing agreement.
At December 31, 1996 the Partnership had two active residual sharing and
remarketing Pools. The first Pool consists of four leases, of which two have
been terminated and two are active. The remaining net investment related to the
first Pool totaled $35,235 at December 31, 1996. The second Pool consists of
fourteen leases, of which thirteen have been terminated and one is active. The
remaining net investment related to the second Pool totaled $46,969 at December
31, 1996.
For the years ended December 31, 1996 and 1995, the Partnership paid
$21,319 and $694,649, respectively, to third parties as their share under the
agreements.
Page 23
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
11. Tax Information (Unaudited)
The following reconciles the net income for financial reporting purposes
to income (loss) for federal income tax purposes for the years ended December
31:
<TABLE>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Net income per financial statements $ 923,727 $ 400,885 $ 246,465
Differences due to:
Direct finance leases 821,604 3,709,662 6,667,933
Depreciation - (5,323,953) (8,815,695)
Provision for losses 1,856 396,827 127,488
Gain (loss) on sale of equipment (9,703) 164,684 (2,001,746)
Other 30,619 2,122 164,079
------------- --------------- ---------------
Partnership income (loss) for
federal income tax purposes $ 1,768,103 $ (649,773) $ (3,611,476)
============= =============== ===============
</TABLE>
As of December 31, 1996, the partners' capital accounts included in the
financial statements totaled $4,691,747 compared to the partners' capital
accounts for federal income tax purposes of $10,070,128 (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 24
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
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 Vice President and Chief Financial Officer
Neil A. Roberts Director
Tim Spring Director
Beaufort J. B. Clarke, age 50, 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. Page 25
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
Thomas W. Martin, age 42, 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 12 years of senior management experience in
the leasing business, particularly in the area of syndication.
Paul B. Weiss, age 36, 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 36, is 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.
Neil A. Roberts, age 47, has been the Managing Director of Summit Asset
Management Limited, a subsidiary of The Summit Group PLC, since 1991. Mr.
Roberts has over 25 years of experience in the leasing and finance business,
including positions with Kleinwort Benson Group, the United Kingdom subsidiary
of Hongkong and Shanghai Banking Corporation and Chemical Bank.
Timothy R. Spring, age 39, Commercial Director of Summit Asset Management
Limited, a subsidiary of The Summit Group PLC, since 1991. Mr. Spring has over
13 years of leasing experience in the United Kingdom. He was formerly Lease
Commercial Director at Kleinwort Benson Group, the United Kingdom subsidiary of
Hongkong and Shanghai Banking Corporation and Chemical Bank.
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, 1996, 1995 and 1994.
<TABLE>
Entity Capacity Type of Compensation 1996 1995 1994
------ -------- -------------------- ---- ---- ----
<S> <C> <C> <C>
ICON Capital Corp. General Partner Administrative expense
reimbursements $ 93,494 $ 130,482 $ 174,261
ICON Capital Corp. General Partner Management fees 92,360 128,533 171,135
----------- ------------ -----------
$ 185,854 $ 259,015 $ 345,396
=========== ============ ===========
</TABLE>
Page 26
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
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 7, 1997, 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 Represents initially a 1% and 100%
Interest 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
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 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.
Page 27
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
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.
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 quarter
ended December 31, 1996.
Page 28
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
December 31, 1996
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 C
File No. 33-36376 (Registrant)
By its General Partner,ICON Capital Corp
Date: March 28, 1997 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 28, 1997 Beaufort J.B. Clarke
--------------------
Beaufort J.B. Clarke
President, Chief Executive Officer
and Director
Date: March 28, 1997 Thomas W. Martin
----------------
Thomas W. Martin
Executive Vice President and Director
Date: March 28, 1997 Gary N. Silverhardt
-------------------
Gary N. Silverhardt
Vice President and
Chief Financial Officer
(Principal Financial and Account 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 29
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000866878
<NAME> ICON Cash Flow Partners, L.P., Series C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1996
<CASH> 1,059,310
<SECURITIES> 0
<RECEIVABLES> 5,319,572
<ALLOWANCES> 309,020
<INVENTORY> 46,961
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,643,704
<CURRENT-LIABILITIES> ** 0
<BONDS> 994,354
0
0
<COMMON> 0
<OTHER-SE> 4,691,747
<TOTAL-LIABILITY-AND-EQUITY> 6,643,704
<SALES> 1,170,549
<TOTAL-REVENUES> 1,170,549
<CGS> 6,913
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 249,877
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (9,968)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 923,727
<EPS-PRIMARY> 4.61
<EPS-DILUTED> 4.61
<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>
