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 September 30, 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
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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>
September 30, December 31,
1999 1998
------------ -----------
Assets
<S> <C> <C>
Cash .................................................. $ 1,207,361 $ 1,983,281
----------- -----------
Investment in financings
Receivables due in installments ................... 371,937 645,067
Unearned income ................................... (23,695) (60,405)
Allowance for doubtful accounts ................... (27,847) (27,847)
----------- -----------
320,395 556,815
----------- -----------
Investment in finance leases
Minimum rents receivable .......................... 217,824 469,525
Estimated unguaranteed residual values ............ 11,900 77,884
Unearned income ................................... (11,144) (40,861)
Allowance for doubtful accounts ................... (26,969) (24,127)
----------- -----------
191,611 482,421
----------- -----------
Investment in unconsolidated joint venture ............ 39,415 56,960
----------- -----------
Other assets .......................................... 3,359 --
----------- -----------
Total assets .......................................... $ 1,762,141 $ 3,079,477
=========== ===========
Liabilities and Partners' Equity
Security deposits, deferred credits and other payables $ 69,612 $ 70,881
Accounts payable to General Partner and affiliates, net -- 175,586
----------- -----------
69,612 246,467
----------- -----------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ................................... (51,530) (144,078)
Limited partners (198,037 units outstanding,
$100 per unit original issue price) ............. 1,744,059 2,977,088
----------- -----------
Total partners' equity ................................ 1,692,529 2,833,010
----------- -----------
Total liabilities and partners' equity ................ $ 1,762,141 $ 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
(unaudited)
<TABLE>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1999 1998 1999 1998
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Net gain on sales of equipment ...... $ 6,771 $ 355,036 $ 46,358 $ 441,906
Finance income ...................... 16,961 39,066 64,528 139,453
Interest income and other ........... 16,397 23,889 49,922 91,107
Income from investment in
unconsolidated joint venture ...... 1,687 -- 5,186 --
--------- --------- --------- ---------
Total revenues ...................... 41,816 417,991 165,994 672,466
--------- --------- --------- ---------
Expenses
General and administrative .......... 22,827 21,798 48,139 58,766
Administrative expense reimbursements
- General Partner ................. 3,433 6,641 13,362 23,435
Reversal of allowance for
doubtful accounts ................. -- (130,000) -- (130,000)
--------- --------- --------- ---------
Total expenses ...................... 26,260 (101,561) 61,501 (47,799)
--------- --------- --------- ---------
Net income ............................. $ 15,556 $ 519,552 $ 104,493 $ 720,265
========= ========= ========= =========
Net income allocable to:
Limited partners .................... $ 15,400 $ 514,356 $ 103,448 $ 713,062
General Partner ..................... 156 5,196 1,045 7,203
--------- --------- --------- ---------
$ 15,556 $ 519,552 $ 104,493 $ 720,265
========= ========= ========= =========
Weighted average number of limited
partnership units outstanding ....... 198,037 198,037 198,037 198,104
========= ========= ========= =========
Net income per weighted average
limited partnership unit ............ $ .08 $ 2.60 $ .52 $ 3.60
========= ========= ========= =========
</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 Nine Months Ended September 30, 1999 and
the Year Ended December 31, 1998
(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, 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
Cash distributions
to partners $6.23 $ .52 (1,336,477) (13,497) (1,349,974)
Capital contribution
General Partner - 105,000 105,000
Net income 103,448 1,045 104,493
----------- --------- -----------
Balance at
September 30, 1999 $ 1,744,059 $ (51,530) $ 1,692,529
=========== ========= ===========
</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 Nine Months Ended September 30,
(unaudited)
<TABLE>
1999 1998
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income .............................................. $ 104,493 $ 720,265
----------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Net gain on sales or remarketing of equipment .......... (46,358) (441,906)
Income from investment in unconsolidated joint venture . (5,186) --
Changes in operating assets and liabilities:
Collection of principal - non-financed receivables .... 449,031 794,907
Distribution from unconsolidated joint venture ........ 22,731 --
Security deposits, deferred credits and other payables (1,269) (364,756)
Miscellaneous receivables and other assets ............ (3,359) 87,620
Accounts payable to General Partner and affiliates, net (175,586) 64,821
Other, net ............................................ (47,634) (83,662)
----------- -----------
Total adjustments ................................ 192,370 57,024
----------- -----------
Net cash provided by operating activities ............. 296,863 777,289
----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment ........................ 172,191 509,808
----------- -----------
Net cash provided by investing activities ............. 172,191 509,808
----------- -----------
Cash flows from financing activities:
Cash distributions to partners .......................... (1,349,974) (1,350,713)
Capital contribution - General Partner .................. 105,000 --
Redemption of limited partnership units ................. -- (1,392)
----------- -----------
Net cash used in financing activities ................. (1,244,974) (1,352,105)
----------- -----------
Net decrease in cash ....................................... (775,920) (65,008)
Cash at beginning of period ................................ 1,983,281 2,186,149
----------- -----------
Cash at end of period ...................................... $ 1,207,361 $ 2,121,141
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Notes to Financial Statements
September 30, 1999
(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. In June 1999, the Partnership paid the remaining $105,000 of previously
accrued management fees to the General Partner. The General Partner subsequently
remitted this amount back to the Partnership as an additional capital
contribution.
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 nine months ended
September 30, 1999 and 1998. The Partnership paid or accrued administrative
expense reimbursements of $13,362 and $23,435 during the nine months ended
September 30, 1999 and 1998, respectively, which were charged to operations.
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
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 and for the nine
months ended September 30, 1999 is summarized below:
September 30, 1999
------------------
Assets $26,362,449
===========
Liabilities $18,479,556
===========
Equity $ 7,882,893
===========
Partnership's share of equity $ 39,415
===========
Nine Months Ended
September 30, 1999
------------------
Net income $1,037,134
==========
Partnership's share of net income $ 5,186
==========
Distributions $4,546,230
==========
Partnership's share of distributions $ 22,731
==========
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
September 30, 1999
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 58%, 35%, and 7% of total investments at September 30, 1999,
respectively, and 51%, 49% and 0% of total investments at September 30, 1998,
respectively.
Results of Operations for the Three Months Ended September 30, 1999 and 1998
For the three months ended September 30, 1999 and 1998, the Partnership
did not enter into any new leases or financing agreements.
Revenues for the three months ended September 30, 1999 were $41,816
representing a decrease of $376,175 or 90% from 1998. The decrease in revenues
was primarily due to a decrease in net gain on sales of equipment of $348,265 or
98%, a decrease in finance income of $22,105 or 57%, and a decrease in interest
income and other of $7,492 or 31%. 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 the proceeds received were in excess of the remaining
carrying value of the equipment. 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 the amount of
late charges, and a decrease in the average cash balance from 1998 to 1999.
Expenses for the three months ended September 30, 1999 were $26,260
representing an increase of $127,821 or 126%. The increase in expenses was due
to the reversal of allowance for doubtful accounts of $130,000 that occurred in
1998. The increase was also due to an increase in general and administrative
expenses of $1,029 or 5%, which was partially offset by a decrease in
administrative expense reimbursements of $3,208 or 48%.
Net income for the three months ended September 30, 1999 and 1998 was
$15,556 and $519,552, respectively. The net income per weighted average limited
partnership unit was $.08 and $2.60 for 1999 and 1998, respectively.
Results of Operations for the Nine Months Ended September 30, 1999 and 1998
For the nine months ended September 30, 1999 and 1998, the Partnership did
not enter into any new leases or financing agreements.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
Revenues for the nine months ended September 30, 1999 were $165,994,
representing a decrease of $506,472 or 75% from 1998. The decrease in revenues
was due to a decrease in net gain on sales or remarketing of equipment of
$395,548 or 90%, a decrease in finance income of $74,925 or 54%, and a decrease
in interest income and other of $41,185 or 45% from 1998. There was also an
increase in income from investment in unconsolidated joint venture of $5,186.
The decrease in net gain on sales or remarketing of equipment was due to a
decrease in the number of leases maturing, and the underlying equipment being
sold or remarketed, for which the proceeds received were in excess of the
remaining carrying value of the equipment. The decrease in finance income
resulted from a decrease in the average size of the portfolio from 1998 to 1999.
The decrease in interest income and other resulted from a decrease in the
average cash balance from 1998 to 1999. This decrease is partially offset by an
increase in income from joint venture of $5,186. 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 an
unconsolidated joint venture for the nine months ended September 30, 1999
compared to no comparable income in the nine months ended September 30, 1998
when the partnership had no investment in unconsolidated joint ventures.
Expenses for the nine months ended September 30, 1999 were $61,501,
representing an increase of $109,300. The increase in expenses was due to the
reversal in allowance for doubtful accounts of $130,000 that occurred in 1998.
This increase was partially offset by a decrease in general and administrative
expenses of $10,627 or 18% and a decrease in administrative expense
reimbursements of $10,073 or 43%.
Net income for the nine months ended September 30, 1999 and 1998 was
$104,493 and $720,265, respectively. The net income per weighted average limited
partnership unit was $.52 and $3.60 for 1999 and 1998, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the nine months ended
September 30, 1999 and 1998 were net cash provided by operations of $296,862 and
$777,289, respectively, and proceeds from sales of equipment of $172,191 and
$509,808, 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 nine months ended September
30, 1999 and 1998, which were paid monthly, totaled $1,336,477 and $1,337,201,
respectively, of which $103,448 and $713,062 was investment income and
$1,233,029 and $624,139 was a return of capital, respectively. The monthly
annualized cash distribution rate for the nine months ended September 30, 1999
and September 30, 1998 was 9.0%, of which .70% and 4.80% was investment income
and 8.30% and 4.20% 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 nine months ended
September 30, 1999 and 1998 was $6.75 and $6.75, respectively, of which $.52 and
$3.60 was investment income and $6.23 and $3.15 was a return of capital,
respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series C
(A Delaware Limited Partnership)
As of September 30, 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 and sales of equipment,
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
September 30, 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.
November 12, 1999 /s/ Thomas W. Martin
- ----------------- ---------------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal financial and accounting 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,207,361
<SECURITIES> 0
<RECEIVABLES> 589,761
<ALLOWANCES> 54,816
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,762,141
<CURRENT-LIABILITIES> ** 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,692,529
<TOTAL-LIABILITY-AND-EQUITY> 1,762,141
<SALES> 116,072
<TOTAL-REVENUES> 165,994
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 61,501
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 104,493
<EPS-BASIC> 0.52
<EPS-DILUTED> 0.52
<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>
