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, 1999
-----------------------------------------------------------
[ ] 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,
1999 1998
-------- -----------
Assets
<S> <C> <C>
Cash ..................................................... $ 1,720,781 $ 1,983,281
----------- -----------
Investment in financings
Receivables due in installments ...................... 535,625 645,067
Unearned income ...................................... (46,002) (60,405)
Allowance for doubtful accounts ...................... (27,847) (27,847)
----------- -----------
461,776 556,815
----------- -----------
Investment in finance leases
Minimum rents receivable ............................. 369,784 469,525
Estimated unguaranteed residual values ............... 60,706 77,884
Unearned income ...................................... (28,349) (40,861)
Allowance for doubtful accounts ...................... (26,969) (24,127)
----------- -----------
375,172 482,421
----------- -----------
Investment in unconsolidated joint venture ............... 36,170 56,960
----------- -----------
Total assets ............................................. $ 2,593,899 $ 3,079,477
=========== ===========
Liabilities and Partners' Equity
Accounts payable to General Partner and affiliates, net .. $ 113,042 $ 175,586
Security deposits, deferred credits and other payables ... 73,168 70,881
----------- -----------
186,210 246,467
----------- -----------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ...................................... (148,331) (144,078)
Limited partners (198,037 units outstanding,
$100 per unit original issue price in 1998 and 1997,
respectively) ...................................... 2,556,020 2,977,088
----------- -----------
Total partners' equity ................................... 2,407,689 2,833,010
----------- -----------
Total liabilities and partners' equity ................... $ 2,593,899 $ 3,079,477
=========== ===========
</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)
<TABLE>
1999 1998
---- ----
Revenues
<S> <C> <C>
Finance income ..................................... $ 26,885 $ 53,989
Interest income and other .......................... 16,064 34,822
Income from investment
in unconsolidated joint venture .................. 1,941 --
Net gain (loss) on sales or remarketing of equipment (2,576) 79,155
--------- ---------
Total revenues ..................................... 42,314 167,966
--------- ---------
Expenses
General and administrative ......................... 12,330 15,868
Administrative expense reimbursements
- General Partner ................................ 5,311 8,622
Reversal of allowance for doubtful accounts ........ -- (20,085)
--------- ---------
Total expenses ..................................... 17,641 4,405
--------- ---------
Net income ............................................ $ 24,673 $ 163,561
========= =========
Net income allocable to:
Limited partners ................................... $ 24,426 $ 161,925
General Partner .................................... 247 1,636
--------- ---------
$ 24,673 $ 163,561
========= =========
Weighted average number of limited
partnership units outstanding ...................... 198,037 198,187
========= =========
Net income per weighted average limited
partnership unit ................................... $ .12 $ .82
========= =========
</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 Three Months Ended March 31, 1999 and
the Years Ended December 31, 1998, 1997 and 1996
(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, 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)
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 $5.13 $3.87 (1,782,770) (18,017) (1,800,787)
Limited partnership
units redeemed
(208 units) (1,392) - (1,392)
Net income 765,958 7,737 773,695
----------- --------- -----------
Balance at
December 31, 1998 2,977,088 (144,078) 2,833,010
(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 Three Months Ended March 31, 1999 and
the Years Ended December 31, 1998, 1997 and 1996
(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>
Cash distributions
to partners $2.13 $.12 (445,494) (4,500) (449,994)
Net income 24,426 247 24,673
---------- --------- ----------
Balance at March 31, 1999 $2,556,020 $(148,331) $2,407,689
========== ========= ==========
</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>
1999 1998
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income .............................................. $ 24,673 $ 163,561
----------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Net gain on sales or remarketing of equipment .......... 2,576 (79,155)
Interest income accrued on note receivable - affiliate . -- (1,238)
Income from investment in unconsolidated joint venture . (1,941) --
Changes in operating assets and liabilities:
Collection of principal - non-financed receivables .... 161,720 271,699
Distribution from unconsolidated joint venture ........ 22,731 --
Security deposits, deferred credits and other payables (38,697) 93,264
Accounts payable to General Partner and affiliates, net (62,544) 8,002
Other, net ............................................ 67,503 76,751
----------- -----------
Total adjustments ................................ 151,348 369,323
----------- -----------
Net cash provided by operating activities ............. 176,021 532,884
----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment ........................ 11,473 93,238
----------- -----------
Net cash provided by investing activities ............. 11,473 93,238
----------- -----------
Cash flows from financing activities:
Cash distributions to partners .......................... (449,994) (450,425)
Loan to affiliate ....................................... -- (150,000)
----------- -----------
Net cash used in financing activities ................. (449,994) (600,425)
----------- -----------
Net increase (decrease) in cash ............................ (262,500) 25,697
Cash at beginning of period ................................ 1,983,281 2,186,149
----------- -----------
Cash at end of period ...................................... $ 1,720,781 $ 2,211,846
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<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 1998 Annual Report on Form 10-K.
2. Amendment to Partnership Agreement
The Partnership's original reinvestment period was to expire 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
include: (1) extending the reinvestment period for a maximum of four and one
half additional years and likewise delaying the start and end of the liquidation
period, and (2) eliminating 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. The remaining $105,000 of unpaid management fees 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
As a result of the approval of the amendments, as discussed in Note 2,
the General Partner did not accrue any management fees for the three months
ended March 31, 1999 and 1998. The Partnership paid or accrued administrative
expense reimbursements of $5,311 and $8,622 during the three months ended March
31, 1999 and 1998, respectively, which were charged to operations.
In March 1998, the Partnership loaned ICON Cash Flow Partners, L.P.,
Series B ("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 $1,238 to the
Partnership for interest related to the note.
In December 1998 the Partnership and three affiliates, ICON Cash Flow
Partners L.P. Six ("L.P. Six"), ICON Cash Flow Partners L.P. Seven ("L.P.
Seven") and ICON Income Fund Eight A L.P. ("Eight A") formed ICON Boardman
Funding LLC ("ICON BF"), for the purpose of acquiring a lease with Portland
General Electric. (See Note 4 for additional information relating to the joint
venture.)
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
4. Investments in Joint Ventures
The Partnership Agreement allows the Partnership to invest in joint
ventures with other limited partnerships sponsored by the General Partner
provided that the investment objectives of the joint ventures are consistent
with that of the Partnership.
In December 1998 the Partnership and three affiliates, L.P. Six, L.P. Seven
and Eight A formed ICON BF, for the purpose of acquiring a lease with Portland
General Electric. The purchase price totaled $27,421,810, and was funded with
cash and non-recourse debt assumed in the purchase price. The Partnership, L.P.
Six, L.P. Seven and Eight A received a .5%, .5%, .5% and 98.5% interest,
respectively, in ICON BF. The Partnership's original investment was recorded at
cost of $56,960 and is adjusted by its share of earnings, losses and
distributions, thereafter. Simultaneously with the acquisition of the Portland
General Electric lease by ICON BF, a portion of the rent receivable in excess of
the senior debt payments was acquired by L.P. Six from ICON BF for $3,801,108.
On March 30, 1999, ICON BF acquired L.P. Six's investment in a portion of
the rent in excess of the senior debt payments for $3,097,637 and financed, with
a third party, all of the rent receivable in excess of the senior debt payments.
ICON BF received $7,643,867 from the financing. There was no gain or loss to
L.P. Six on this transaction. The proceeds from the financing, net of the
purchase of L.P. Six's investment, were distributed to the members of ICON BF in
accordance with their ownership interests.
Information as to the financial position of ICON BF as of March 31, 1999 is
summarized below:
March 31, 1999
Assets $ 25,365,163
===============
Liabilities $ 18,131,166
===============
Equity $ 7,233,997
===============
Partnership's share of equity $ 36,170
===============
Net income $ 388,238
===============
Partnership's share of net income $ 1,941
===============
Distributions $ 4,546,230
===============
Partnership's share of distributions $ 22,731
===============
<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 financings,
finance leases and equity investment in unconsolidated joint venture
representing 53%, 43% and 4% of total investments at March 31, 1999,
respectively, and 48%, 52% and 0% of total investments at March 31, 1998,
respectively.
Results of Operations for the Three Months Ended March 31, 1998 and 1997
For the three months ended March 31, 1999 and 1998, the Partnership did not
enter into any new leases or financing agreements. At March 31, 1999 the
weighted average remaining transaction term of the portfolio was 12 months.
Revenues for the three months ended March 31, 1999 were $42,314
representing a decrease of $125,652 or 75% from 1998. The decrease in revenues
was due to a decrease in net gain on sales or remarketing of equipment of
$81,731 or 103%, a decrease in interest income and other of $18,758 or 54% and a
decrease in finance income of $27,104 or 50%. These decreases were partially
offset by an increase in income from investments in unconsolidated joint
ventures of $1,941. The decrease in net gain on sales or remarketing of
equipment resulted from a decrease in the number of leases maturing and a
decrease in the amount of underlying equipment being sold or remarketed for
which proceeds received were in excess of the remaining carrying value. The
decrease in finance income was due to a decrease in the average size of the
finance lease portfolio from 1998 to 1999. The decrease in interest income and
other was due to a decrease in interest income resulting from a decrease in the
average cash balance from 1998 to 1999, and a decrease in collection of late
charges. In December 1998, the Partnership, along with three affiliates,
contributed to a joint venture, ICON Boardman Funding LLC ("ICON BF"), which
acquired a finance lease with Portland General Electric. Therefore, the
Partnership earned income from unconsolidated joint ventures in the first
quarter of 1999 compared to the first quarter of 1998 when the partnership had
no investment in unconsolidated joint ventures.
Expenses for the three months ended March 31, 1999 were $17,641
representing an increase of $13,236 or 300%. For the three months ended March
31, 1998 a reversal of the allowance for doubtful accounts reduced quarterly
expenses by $20,085. Without the effect of the reversal, expenses for the three
months ended March 31, 1999 would have decreased compared to the three months
ended March 31, 1998 due to a decrease in general and administrative expense of
$3,538 or 22% and a decrease in administrative expense reimbursements of $3,311
or 38%. Based on an analysis of delinquency, an assessment of overall risk and a
review of historical loss experience, the Partnership determined that no
provision for bad debt was required for the three months ended March 31, 1999.
The decreases in general and administrative expense and administrative expense
reimbursements were a result of a decrease in the average size of the finance
lease portfolio from 1998 to 1999.
Net income for the three months ended March 31, 1999 and 1998 was $24,673
and $163,561, respectively. The net income per weighted average limited
partnership unit was $.12 and $.82 for 1999 and 1998, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended
March 31, 1999 and 1998 were net cash provided by operations of $176,021 and
$532,884, respectively, and proceeds from sales of equipment of $11,473 and
$93,238, respectively. These funds were used to fund cash distributions and to
make a loan to an affiliate in 1998.
Cash distributions to limited partners for the three months ended March
31, 1999 and 1998, which were paid monthly, totaled $445,494 and $445,921,
respectively, of which $24,426 and $161,925 was investment income and $421,068
and $283,996 was a return of capital, respectively. The monthly cash
distribution rate was 9.00%, of which .49% and 3.27% was investment income and
8.51% and 5.73% 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, 1999 and 1998 was $2.25, of which $.12 and $.82 was investment income
and $2.13 and $1.43 was a return of capital, respectively.
The Partnership's original reinvestment period was to expire 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
include: (1) extending the reinvestment period for a maximum of four and one
half additional years and likewise delaying the start and end of the liquidation
period, and (2) eliminating 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. The remaining $105,000 of unpaid management fees 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 December 1998 the Partnership and three affiliates, L.P. Six, L.P. Seven
and Eight A formed ICON Boardman Funding LLC, for the purpose of acquiring a
lease with Portland General Electric. The purchase price totaled $27,421,810,
and was funded with cash and non-recourse debt assumed in the purchase price.
The Partnership, L.P. Six, L.P. Seven and Eight A received a .5%, .5%, .5% and
98.5% interest, respectively, in the joint venture. The Partnership's original
investment was recorded at cost and is adjusted by its share of earnings, losses
and distributions, thereafter. Simultaneously with the acquisition of the
Portland General Electric lease by ICON BF, a portion of the rent receivable in
excess of the senior debt payments was acquired by L.P. Six from ICON BF for
$3,801,108.
On March 30, 1999, ICON BF acquired L.P. Six's investment in a portion of
the rent in excess of the senior debt payments for $3,097,637 and financed, with
a third party, all of the rent receivable in excess of the senior debt payments.
ICON BF received $7,643,867 from the financing. There was no gain or loss to
L.P. Six on this transaction. The proceeds from the financing, net of the
purchase of L.P. Six's investment, were distributed to the members of ICON BF in
accordance with their ownership interests.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
As of March 31, 1999 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.
Year 2000 Issue
The Year 2000 issue arose because many existing computer programs have been
written using two digits rather than four to define the applicable year. As a
result, programs could interpret dates ending in "00" as the year 1900 rather
than the year 2000. In certain cases, such errors could result in system
failures or miscalculations that disrupt the operation of the affected
businesses.
The Partnership uses computer information systems provided by the General
Partner and has no computer information systems of its own. The software related
to the General Partner's primary computer information systems are provided by
third party vendors. The General Partner has formally communicated with these
vendors and has received assurance that their programs are Year 2000 compliant.
In addition, the General Partner has gathered information about the Year 2000
readiness of significant vendors and third-party servicers and continues to
monitor developments in this area. All of the General Partner's peripheral
computer technologies, such as its network operating system and third party
software applications, including payroll and electronic banking have been
evaluated and have been found to be Year 2000 compliant. The ultimate impact of
the Year 2000 issue on the Partnership will depend to a great extent on the
manner in which the issue is addressed by the Partnership's lessees. Each of the
Partnership's lessees will have a material self interest in resolving any Year
2000 issue, however, non-compliance on the part of a lessee could result in lost
or delayed revenues to the Partnership. The effect of this risk to the
Partnership is not determinable.
The General Partner is responsible for costs relating to the assessment and
development of its Year 2000 compliance remediation plan, as well as the testing
of the hardware and software owned or licensed for its personal computers. The
General Partner's costs incurred to date and expected future costs are not
material.
<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, 1999.
<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 13, 1999 /s/ Kevin F. Redmond
- ------------ ---------------------------------------------
Date Kevin F. Redmond
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-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,720,781
<SECURITIES> 0
<RECEIVABLES> 905,409
<ALLOWANCES> 54,816
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,593,899
<CURRENT-LIABILITIES> ** 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,407,689
<TOTAL-LIABILITY-AND-EQUITY> 2,593,899
<SALES> 26,250
<TOTAL-REVENUES> 42,314
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 17,641
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,673
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
<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>
