UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended March 31, 1998
-----------------------------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
-------------------- -------------------------
Commission File Number 0-27904
---------------------------------------------------------
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 (IRS Employer
incorporation or organization) Identification Number)
600 Mamaroneck Avenue, Harrison, New York 10528-1632
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(914) 698-0600
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ x ] Yes [ ] No
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Balance Sheets
(unaudited)
<TABLE>
March 31, December 31,
1998 1997
Assets
<S> <C> <C>
Cash ......................................................... $ 2,211,846 $ 2,186,149
----------- -----------
Investment in finance leases
Minimum rents receivable .................................. 932,252 1,097,491
Estimated unguaranteed residual values .................... 187,062 189,833
Unearned income ........................................... (98,494) (125,351)
Allowance for doubtful accounts ........................... (88,758) (88,499)
----------- -----------
932,062 1,073,474
Investment in financings
Receivables due in installments ........................... 1,051,983 1,212,649
Unearned income ........................................... (121,937) (149,103)
Allowance for doubtful accounts ........................... (94,437) (94,437)
----------- -----------
835,609 969,109
Note receivable - affiliate .................................. 151,238 --
----------- -----------
Other assets ................................................. -- 87,621
----------- -----------
Total assets ................................................. $ 4,130,755 $ 4,316,353
=========== ===========
Liabilities and Partners' Equity
Accounts payable to General Partner and affiliates, net ...... $ 44,236 $ 36,234
Security deposits, deferred credits and accounts payable-other 511,889 418,625
----------- -----------
556,125 454,859
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ........................................... (136,666) (133,798)
Limited partners (198,187 and 198,245 units outstanding,
$100 per unit original issue price in 1998 and 1997,
respectively) ........................................... 3,711,296 3,995,292
----------- -----------
Total partners' equity ....................................... 3,574,630 3,861,494
----------- -----------
Total liabilities and partners' equity ....................... $ 4,130,755 $ 4,316,353
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Operations
For the Three Months Ended March 31,
(unaudited)
1998 1997
---- ----
Revenues
Net gain on sales or remarketing
of equipment ................................ $ 79,155 $ 13,712
Interest income and other ..................... 54,907 20,398
Finance income ................................ 53,989 107,349
Income from equity investment
in joint venture ............................ --
5,914
Total revenues ................................ 188,051 147,373
-------- --------
Expenses
General and administrative .................... 15,868 5,640
Administrative expense reimbursements
- General Partner ........................... 8,622 18,973
Management fees - General Partner ............. -- 18,726
Interest ...................................... -- 5,186
-------- --------
Total expenses ................................ 24,490 48,525
-------- --------
Net income ....................................... $163,561 $ 98,848
======== ========
Net income allocable to:
Limited partners .............................. $161,925 $ 97,860
General Partner ............................... 1,636 988
-------- --------
$163,561 $ 98,848
======== ========
Weighted average number of limited
partnership units outstanding ................. 198,187 198,470
======== ========
Net income per weighted average limited
partnership unit .............................. $ .82 $ .49
======== ========
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 Three Months Ended March 31, 1998 and
the Years Ended December 31, 1997, 1996 and 1995
(unaudited)
<TABLE>
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1994 $ 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
Cash distributions
to partners $ 4.12 $ 4.88 (1,784,993) (18,030) (1,803,023)
Limited partnership
units redeemed
(225 units) (5,763) - (5,763)
</TABLE>
(continued on next page)
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Changes in Partners' Equity (continued)
For the Three Months Ended March 31, 1998 and
the Years Ended December 31, 1997, 1996 and 1995
(unaudited)
<TABLE>
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
<S> <C> <C> <C> <C> <C>
Net income 968,748 9,785 978,533
------------ ----------- -----------
Balance at
December 31, 1997 3,995,292 (133,798) 3,861,494
Cash distributions
to partners $ 1.43 $ .82 (445,921) (4,504) (450,425)
Net income 161,925 1,636 163,561
------------ ----------- -----------
Balance at March 31, 1998 $ 3,711,296 $ (136,666) $ 3,574,630
============ =========== ===========
</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 Three Months Ended March 31,
(unaudited)
<TABLE>
1998 1997
Cash flows from operating activities:
<S> <C> <C>
Net income ..................................................... $ 163,561 $ 98,848
----------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Collection of principal - non-financed receivables ............ 271,699 447,276
Net gain on sales or remarketing of equipment ................. (79,155) (13,712)
Interest income accrued on note receivable - affiliate ........ (1,238) --
Allowance for doubtful accounts ............................... 259 --
Distribution from equity investment in joint venture .......... -- 123,857
Finance income portion of receivables paid
directly to lenders by lessees ............................... -- (9,774)
Income from equity investment in joint venture ................ -- (5,914)
Interest expense on non-recourse financing
paid directly by lessees .................................... -- 5,186
Changes in operating assets and liabilities:
Security deposits, deferred credits and accounts payable-other 93,264 160,210
Accounts payable to General Partner and affiliates, net ...... 8,002 126,039
Other, net ................................................... 76,751 (32,664)
----------- -----------
Total adjustments ....................................... 369,582 800,504
----------- -----------
Net cash provided by operating activities .................... 533,143 899,352
----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment ............................... 92,979 35,514
----------- -----------
Net cash provided by investing activities .................... 92,979 35,514
----------- -----------
Cash flows from financing activities:
Cash distributions to partners ................................. (450,425) (451,068)
Loan to affiliate .............................................. (150,000) --
----------- -----------
Net cash used in financing activities ........................ (600,425) (451,068)
Net increase in cash ............................................. 25,697 483,798
Cash at beginning of period ...................................... 2,186,149 1,059,310
----------- -----------
Cash at end of period ............................................ $ 2,211,846 $ 1,543,108
=========== ===========
</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 three months ended March 31, 1998 and 1997, non-cash
activities included the following:
<TABLE>
1998 1997
---- ----
Principal and interest on finance receivables paid
<S> <C> <C>
directly by lessees $ - $ 209,867
Principal and interest on non-recourse financing paid
directly by lessees - (209,867)
--------- ----------
$ - $ -
========= ==========
</TABLE>
Interest expense of $5,186 for the three months ended March 31, 1997 consisted
of interest expense on non-recourse financing accrued or paid directly to
lenders by lessees.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements
March 31, 1998
(unaudited)
1. Basis of Presentation
The financial statements of ICON Cash Flow Partners, L.P., Series 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 1997 Annual Report on Form 10-K.
2. Amendment to Partnership Agreement
The Partnership's original Reinvestment period expired on June 19, 1996,
five years after the Final Closing Date. The General Partner distributed a
Definitive Consent Statement to the Limited Partners to solicit approval of two
amendments to the Partnership Agreement. A majority of the limited partnership
units outstanding responded affirmatively and the amendments were adopted
accordingly. These amendments are effective from and after June 19, 1996 and
were as follows: (1) extended the Reinvestment Period for a maximum of four and
one half additional years and likewise delay the start and end of the
Liquidation Period, and (2) eliminated the Partnership's obligation to pay the
General Partner $529,125 of the $634,125 accrued and unpaid management fees as
of December 31, 1997 and all additional management fees which would otherwise
accrue during the future Liquidation Period. The remaining $105,000 unpaid
management fees at December 31, 1997 will be paid to the General Partner and
subsequently remitted back to the Partnership in the form of an additional
capital contribution by the General Partner.
3. Related Party Transactions
During the three months ended March 31, 1998 and 1997, the Partnership
accrued to the General Partner management fees of $0 and $18,726, respectively.
An amendment to the original partnership was approved by the limited partners
and became effective in June 1996. This amendment eliminated all subsequent
accruals of management fees for the remainder of the Liquidation Period. (See
Note 2 for further discussion of management fees.) The Partnership paid or
accrued administrative expense reimbursements of $8,622 and $18,973 during the
three months ended March 31, 1998 and 1997, respectively. These fees and
reimbursements were charged to operations.
In March 1998, the Partnership loaned ICON Cash Flow Partners, L.P.,
Series B, an affiliate, $150,000. The loan is short-term and bears interest at
the rate of 11%.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
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 and as of June 19, 1996, all subsequent management
fees were eliminated completely per an amendment to the Partnership Agreement.
(See Note 2 for further discussion on this amendment.)
For the three months ended March 31, 1998 and 1997 no acquisition fees were
paid or accrued by the Partnership.
4. Security Deposits and Deferred Credits
Security deposits and deferred credits at March 31, 1998 and December 31,
1997 include $100,000 and $284,012, respectively, of proceeds received on
residuals which will be applied upon final remarketing of the related equipment.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
March 31, 1998
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 representing 52%, 48%
and 0% of total investments at March 31, 1998, respectively, and 61%, 31% and 8%
of total investments at March 31, 1997, respectively.
The Partnership did not lease or finance any equipment for the three
months ended March 31, 1998.
Results of Operations for the Three Months Ended March 31, 1998 and 1997
Revenues for the three months ended March 31, 1998 were $188,051,
representing an increase of $40,678 or 28% from 1997. The increase in revenues
resulted primarily from an increase in net gain on sales or remarketing of
equipment of $65,443 or 477% and an increase in interest expense and other of
$34,509 or 169% from 1997. The increase was partially offset by a decrease in
finance income of $53,360 or 50% and a decrease in income from equity investment
in joint venture of $5,914 or 100%. Net gain on sales or remarketing of
equipment increased due to an increase in the number of leases maturing, and the
underlying equipment being sold or remarketed, for which the proceeds received
were in excess of the remaining carrying value of the equipment. Interest income
and other increased due to an increase in the average cash balance from 1997 to
1998 and the Partnership receiving its pro rata share of a recovery relating to
its prior investment in a joint venture. The decrease in finance income resulted
from a decrease in the average size of the portfolio from 1997 to 1998. The
decrease in income from equity investment in joint venture resulted from the
Partnership's 1997 divestiture of its investment in a joint venture.
Expenses for the three months ended March 31, 1998 were $24,490,
representing a decrease of $24,035 or 50% from 1997. The decrease in expenses
resulted from the decrease in management fees of $18,726 or 100%, a decrease in
administrative expense reimbursements of $10,351 or 55% and a decrease in
interest expense of $5,914 or 100%. The decrease was partially offset by an
increase in general and administrative expenses of $10,228. The decrease in
management fees resulted from the elimination of the Partnership's obligation to
pay such fees as a result of an amendment to the Partnership Agreement. The
decrease in administrative expense reimbursements resulted from the decrease in
the average size of the portfolio from 1997 to 1998. Interest expense decreased
due to a decrease in the average debt outstanding from 1997 to 1998. General and
administrative expenses increased due to an increase in legal expense and other
professional services expenses.
Net income for the three months ended March 31, 1998 and 1997 was $163,561
and $98,848, respectively. The net income per weighted average limited
partnership unit was $.82 and $.48 for 1998 and 1997, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended
March 31, 1998 and 1997 were net cash provided by operations of $533,143 and
$899,352, respectively, and proceeds from sales of equipment of $92,979 and
$35,514, respectively. These funds were used to fund cash distributions, lend to
an affiliate and make payments on borrowings.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Cash distributions to limited partners for the three months ended March
31, 1998 and 1997, which were paid monthly, totaled $445,921 and $446,558,
respectively, of which $161,925 and $97,860 was investment income and $97,223
and $348,698 was a return of capital, respectively. The monthly cash
distribution rate was 9.00%, of which 3.27% and 1.97% was investment income and
5.73% and 7.03% was a return of capital, respectively, calculated as a
percentage of each partner's initial capital contribution. The limited partner
distribution per weighted average unit outstanding for the three months ended
March 31, 1998 and 1997 was $2.25, of which $.82 and $.49 was investment income
and $1.43 and $1.76 was a return of capital, respectively.
The Partnership's original Reinvestment period expired on June 19, 1996,
five years after the Final Closing Date. The General Partner distributed a
Definitive Consent Statement to the Limited Partners to solicit approval of two
amendments to the Partnership Agreement. A majority of the limited partnership
units outstanding responded affirmatively and the amendments were adopted
accordingly. These amendments are effective from and after June 19, 1996 and
were as follows: (1) extended the Reinvestment Period for a maximum of four and
one half additional years and likewise delay the start and end of the
Liquidation Period, and (2) eliminated the Partnership's obligation to pay the
General Partner $529,125 of the $634,125 accrued and unpaid management fees as
of December 31, 1997 and all additional management fees which would otherwise
accrue during the future Liquidation Period. The remaining $105,000 unpaid
management fees at December 31, 1997 will be paid to the General Partner and
subsequently remitted back to the Partnership in the form of an additional
capital contribution by the General Partner.
In March 1998, the Partnership loaned ICON Cash Flow Partners, L.P.,
Series B, an affiliate, $150,000. The loan is short-term and bears interest at
the rate of 11%.
As of March 31, 1998, except as noted above, there were no known trends or
demands, commitments, events or uncertainties which are likely to have any
material effect on liquidity. As cash is realized from operations, sales of
equipment and borrowings, the Partnership will continue to pay distributions
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
March 31, 1998.
<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.
May 14, 1998 /s/ Gary N. Silverhardt
- ------------ ------------------------------------------
Date Gary N. Silverhardt
Chief Financial Officer
(Principal financial and account officer
of the General Partner of the Registrant)
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000866878
<NAME> ICON Cash Flow Partners, L.P., Series C
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,211,846
<SECURITIES> 0
<RECEIVABLES> 1,984,235
<ALLOWANCES> 183,195
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,130,755
<CURRENT-LIABILITIES> ** 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,574,630
<TOTAL-LIABILITY-AND-EQUITY> 4,130,755
<SALES> 133,144
<TOTAL-REVENUES> 188,051
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 24,490
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 163,561
<EPS-PRIMARY> 0.82
<EPS-DILUTED> 0.82
<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>
