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, 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 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,
1998 1997
Assets
<S> <C> <C>
Cash $ 2,271,535 $2,186,149
----------- ----------
Investment in finance leases
Minimum rents receivable 773,065 1,097,491
Estimated unguaranteed residual values 181,874 189,833
Unearned income (75,589) (125,351)
Allowance for doubtful accounts (88,930) (88,499)
----------- ----------
790,420 1,073,474
Investment in financings
Receivables due in installments 892,934 1,212,649
Unearned income (97,503) (149,103)
Allowance for doubtful accounts (94,437) (94,437)
----------- ----------
700,994 969,109
Other assets - 87,621
----------- ----------
Total assets $ 3,762,949 $4,316,353
=========== ==========
Liabilities and Partners' Equity
Accounts payable to General Partner and affiliates, net $ 80,425 $ 36,234
Security deposits, deferred credits and accounts payable-other 502,381 418,625
----------- ----------
582,806 454,859
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (140,598) (133,798)
Limited partners (198,245 and 198,470 units outstanding,
$100 per unit original issue price in 1998 and 1997,
respectively) 3,320,741 3,995,292
----------- ----------
Total partners' equity 3,180,143 3,861,494
----------- ----------
Total liabilities and partners' equity $ 3,762,949 $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
(unaudited)
<TABLE>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Finance income $ 46,398 $ 89,690 $ 100,387 $ 197,039
Interest income and other 32,396 20,495 87,303 40,893
Net gain on sales or remarketing
of equipment 7,715 9,409 86,870 23,121
Income from equity investment
in joint venture - 16,706 - 22,620
----------- ---------- ----------- -----------
Total revenues 86,509 136,300 274,560 283,673
----------- ---------- ----------- -----------
Expenses
General and administrative 21,100 23,515 36,968 29,453
Administrative expense reimbursements
- General Partner 8,172 17,891 16,794 36,864
Management fees - General Partner - 17,537 - 36,263
Interest - - - 4,888
----------- ---------- ----------- -----------
Total expenses 29,272 58,943 53,762 107,468
----------- ---------- ----------- -----------
Net income $ 57,237 $ 77,357 $ 220,798 $ 176,205
=========== ========== =========== ===========
Net income allocable to:
Limited partners $ 56,665 $ 76,583 $ 218,590 $ 174,443
General Partner 572 774 2,208 1,762
----------- ---------- ----------- -----------
$ 57,237 $ 77,357 $ 220,798 $ 176,205
=========== ========== =========== ===========
Weighted average number of limited
partnership units outstanding 198,037 198,336 198,332 198,403
=========== ========== =========== ===========
Net income per weighted average
limited partnership unit $ .29 $ .39 $ 1.10 $ .88
=========== =========== =========== ============
</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, 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)
(continued on next page)
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Statements of Changes in Partners' Equity (continued)
For the Six Months Ended June 30, 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 $ 3.40 $ 1.10 (891,749) (9,008) (900,757)
Limited partnership
units redeemed (225 units) (1,392) - (1,392)
Net income 218,590 2,208 220,798
------------ ----------- -----------
Balance at June 30, 1998 $ 3,320,741 $ (140,598) $ 3,180,143
============ =========== ===========
</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>
1998 1997
---- ----
Cash flows provided by operating activities:
<S> <C> <C>
Net income $ 220,798 $ 176,205
----------- -----------
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)
Net gain on sales or remarketing of equipment (86,870) (23,121)
Interest expense on non-recourse financing paid
directly by lessees - 4,888
Collection of principal - non-financed receivables 535,774 742,881
Income from equity investment in joint venture - (22,620)
Distribution from investment in joint venture - 191,477
Changes in operating assets and liabilities:
Allowance for doubtful accounts 431 (806)
Accounts payable to General Partner and affiliates, net 44,191 64,809
Security deposits and deferred credits 83,756 187,625
Accounts payable - other - 37,077
Other, net 34,013 (50,656)
----------- -----------
Total adjustments 611,295 1,117,526
----------- -----------
Net cash provided by operating activities 832,093 1,293,731
----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment 155,442 88,725
----------- -----------
Net cash provided by investing activities 155,442 88,725
----------- -----------
Cash flows from financing activities:
Cash distributions to partners (900,757) (901,834)
Redemption of limited partnership units (1,392) (4,450)
Net cash used in financing activities (902,149) (906,284)
----------- -----------
Net increase in cash 85,386 476,172
Cash, beginning of period 2,186,149 1,059,310
----------- -----------
Cash, end of period $ 2,271,535 $ 1,535,482
=========== ===========
</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, 1998 and 1997, non-cash activities
included the following:
1998 1997
---- ----
Principal and interest on finance
receivables paid directly by lessees -- $ 419,734
Principal and interest on non-recourse
financing paid directly by lessees -- (419,734)
----------- ------------
$ -- $ --
=========== ============
Interest expense of $0 and $4,888 for the six months ended June 30, 1998
and 1997 consisted of: interest expense on non-recourse financing accrued or
paid directly to lenders by lessees of $0 and $4,888, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements
June 30, 1998
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 delayed 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 six months ended June 30, 1998 and 1997, the Partnership
accrued to the General Partner management fees of $0 and $36,263, 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 $16,794and $36,864 during the
six months ended June 30, 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 bore interest at the rate of 11%. The loan
was paid in full in June 1998. Series B paid $1,375 to the Partnership for
interest related to the note.
<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 due to an amendment to the Partnership
Agreement. (See Note 2 for further discussion on this amendment.)
For the six months ended June 30, 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 June 30, 1998 and December 31,
1997 include $287,235 and $133,787, 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)
June 30, 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 of 53%, 47%, and 0% of total
investments at June 30, 1998 respectively, and 61%, 31% and 8% of total
investments at June 30, 1997, respectively.
Results of Operations
Three Months Ended June 30, 1998 and 1997
The Partnership did not lease or finance any equipment for the three months
ended June 30, 1998
Revenues for the three months ended June 30, 1998 were $86,509, representing
a decrease of $49,791 or 37% from 1997. The decrease in revenues resulted
primarily from a decrease in finance income of $43,292 or 48%. Results were also
affected by a decrease in income from equity investment in joint venture of
$16,706 or 100% from 1997, and a decrease in net gain on sales or remarketing of
equipment of $1,694 or 18% from 1997. These decreases were partially offset by
an increase in interest income and other of $11,901 or 58%. The overall 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. 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 1997 to 1998.
Expenses for the three months ended June 30, 1998 were $29,272, representing
a decrease of $29,671 or 50% from 1997. The decrease in expenses resulted from a
decrease in management fees of $17,537 or 100%, a decrease in administrative
expense reimbursements of $9,719 or 54% and a decrease in general and
administrative expense of $2,415 or 10% from 1997. 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. Administrative
expense reimbursements expenses decreased due to a decrease in the average size
of the portfolio from 1997 to 1998. General and administrative expenses
decreased due to an decrease in legal expense and other professional services
expenses.
Net income for the three months ended June 30, 1998 and 1997 was $57,237 and
$77,357, respectively. The net income per weighted average limited partnership
unit was $.29 and $.39 for 1998 and 1997, respectively.
Six Months Ended June 30, 1998 and 1997
The Partnership did not lease or finance any equipment for the six months
ended June 30, 1998.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
June 30, 1998
Revenues for the six months ended June 30, 1998 were $274,560, representing
a decrease of $9,113 or 3% from 1997. Results were affected by a decrease in
finance income of $96,652 or 49% from 1997, and a decrease in income from equity
investment in a joint venture of $22,620 or 100% from 1997. These decreases were
partially offset by an increase in net gain on sales or remarketing of equipment
of $63,749 or 276% and an increase in interest income and other of $46,410 or
114%. 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. Net gain on sales or remarketing of equipment
increased due to an increase in the number of leases maturing, and the
underlying equipment being sold or remarketed for which the proceeds received
were in excess of the remaining carrying value of the equipment. The increase in
interest income and other resulted from an increase in the average cash balance
from 1997 to 1998.
Expenses for the six months ended June 30, 1998 were $53,762, representing
a decrease of $53,706 or 50% from 1997. The decrease in expenses resulted from a
decrease in management fees of $36,263 or 100%, a decrease in administrative
expenses reimbursements of $20,070 or 55%, and a decrease in interest expense of
$4,888 from 1997. The decrease was partially offset by an increase in general
and administrative expenses of $7,515 or 26%. 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. Administrative expense
reimbursements decreased due to a 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 six months ended June 30, 1998 and 1997 was $220,798 and
$176,205, respectively. The net income per weighted average limited partnership
unit was $1.10 and $.88 for 1998 and 1997, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the six months ended June 30,
1998 and 1997 were net cash provided by operations of $832,093 and $1,293,731,
respectively, and proceeds from sales of equipment of $155,442 and $88,725,
respectively. These funds were used to fund cash distributions.
Cash distributions to limited partners for the six months ended June 30,
1998 and 1997, which were paid monthly, totaled $891,749 and $892,816,
respectively, of which $210,988 and $174,443 was investment income and $680,761
and $718,373 was a return of capital, respectively. The monthly annualized cash
distribution rate to limited partners was 9.00% for 1998 and 1997, of which
2.13% and 1.76% was investment income and 6.87% and 7.24% 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, 1998 and 1997 was $4.50, of which
$1.10 and $.88 was investment income and $3.40 and $3.62 was a return of
capital, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
June 30, 1998
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. 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 delayed the start and end of the Liquidation Period, and (2)
eliminated the Partnership's obligation to pay the General Partner a portion of
accrued and unpaid management fees, and any additional management fees which
would otherwise accrue during the future Liquidation Period. The portion of the
accrued and unpaid management fees that would be payable to, 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.
As of June 30, 1998, except as noted above, there were no known trends or
demands, commitments, events or uncertainties which are likely to have a
material effect on liquidity. As cash is realized from operations and sales of
equipment, the Partnership will invest in equipment leases and financings and
make cash distributions 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, 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.
August 14, 1998 /s/ 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
<NAME> ICON Cash Flow Partners, L.P., Series C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,271,534
<SECURITIES> 0
<RECEIVABLES> 1,665,999
<ALLOWANCES> 183,368
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,762,949
<CURRENT-LIABILITIES> ** 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,180,143
<TOTAL-LIABILITY-AND-EQUITY> 3,762,950
<SALES> 187,257
<TOTAL-REVENUES> 274,560
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 53,762
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 220,798
<EPS-PRIMARY> 1.10
<EPS-DILUTED> 1.10
<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>
