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, 1997
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[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number 0-27902
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ICON Cash Flow Partners, L.P., Series D
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3602979
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
600 Mamaroneck Avenue, Harrison, New York 10528-1632
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(Address of principal executive offices) (Zip code)
(914) 698-0600
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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 D
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
<TABLE>
September 30, December 31,
1997 1996
Assets
<S> <C> <C>
Cash ...................................................... $ 4,552,412 $ 413,845
------------ ------------
Investment in finance leases
Minimum rents receivable ............................... 9,918,669 16,784,360
Estimated unguaranteed residual values ................. 6,564,903 7,587,992
Initial direct costs ................................... 169,956 484,908
Unearned income ........................................ (1,752,519) (2,955,625)
Allowance for doubtful accounts ........................ (606,551) (651,546)
------------ ------------
14,294,458 21,250,089
Investment in operating lease equipment, at cost .......... 6,819,250 --
Accumulated depreciation .................................. (203,667) --
------------ ------------
6,615,583 --
------------ ------------
Equity investment in joint venture ........................ 1,160,956 --
------------ ------------
Investment in financings
Receivables due in installments ........................ 3,539,068 15,510,321
Initial direct costs ................................... 15,107 93,060
Unearned income ........................................ (1,189,483) (3,086,270)
Allowance for doubtful accounts ........................ (433,266) (252,223)
------------ ------------
1,931,426 12,264,888
Other assets .............................................. 864,783 334,318
------------ ------------
Total assets .............................................. $ 29,419,618 $ 34,263,140
============ ============
Liabilities and Partners' Equity
Note payable - recourse ................................... $ 2,214,987 $ --
Notes payable - non-recourse .............................. 10,277,783 11,955,886
Note payable - non-recourse - securitized ................. 1,384,291 2,128,538
Note payable revolving credit facility .................... -- 3,386,421
Accounts payable to General Partner and affiliates, net ... 49,972 18,406
Accounts payable - other .................................. 90,860 129,647
Security deposits and deferred credits .................... 2,468,033 269,582
------------ ------------
16,485,926 17,888,480
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ........................................ (217,920) (180,852)
Limited partners (399,118 and 399,158 units outstanding,
$100 per unit original issue price ................... 13,151,612 16,555,512
------------ ------------
Total partners' equity .................................... 12,933,692 16,374,660
------------ ------------
Total liabilities and partners' equity .................... $ 29,419,618 $ 34,263,140
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Statements of Operations
(unaudited)
<TABLE>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
Revenue
<S> <C> <C> <C> <C>
Rental income ...................... $ 456,000 $ -- $ 456,000 $ --
Finance income ..................... 403,973 720,563 1,422,619 2,169,429
Income (loss) from equity investment
in a joint venture ............... 110,574 -- 248,594 --
Net gain on sales or
remarketing of equipment ......... 76,272 62,228 442,719 2,225,636
Interest income and other .......... 20,036 84,110 76,531 226,133
Income from leveraged lease, net ... -- -- -- 369,511
---------- ---------- ---------- ----------
Total revenues ..................... 1,066,855 866,902 2,646,463 4,990,709
---------- ---------- ---------- ----------
Expenses
Interest ........................... 335,708 345,451 852,319 1,268,472
Depreciation ....................... 203,667 -- 203,667 --
Management fees - General Partner .. 140,043 150,916 422,319 548,945
Amortization of initial direct costs 86,206 134,967 289,760 484,165
Administrative expense
reimbursement - General Partner . 67,750 67,810 206,327 236,206
General and administrative ......... 36,575 58,620 145,395 173,562
---------- ---------- ---------- ----------
Total expenses ..................... 869,949 757,764 2,119,787 2,711,350
---------- ---------- ---------- ----------
Net income ............................ $ 196,906 $ 109,138 $ 526,676 $2,279,359
========== ========== ========== ==========
Net income allocable to:
Limited partners ................... $ 194,937 $ 108,047 $ 521,409 $2,256,565
General Partner .................... 1,969 1,091 5,267 22,794
---------- ---------- ---------- ----------
$ 196,906 $ 109,138 $ 526,676 $2,279,359
========== ========== ========== ==========
Weighted average number of limited
partnership units outstanding ...... 399,118 399,158 399,118 399,158
========== ========== ========== ==========
Net income per weighted average
limited partnership unit ........... $ .49 $ .27 $ 1.31 $ 5.65
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Nine Months Ended September 30, 1997, and
the Years Ended December 31, 1996, 1995 and 1994
(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, 1993 $26,485,996 $ (80,957) $26,405,039
Cash distributions
to partners $ 9.99 $ 4.01 (5,596,503) (56,530) (5,653,033)
Limited partnership units
redeemed (767 units) (39,205) - (39,205)
Net income 1,604,039 16,202 1,620,241
----------- --------- -----------
Balance at
December 31, 1994 22,454,327 (121,285) 22,333,042
Cash distributions
to partners $ 7.07 $ 6.93 (5,589,207) (56,457) (5,645,664)
Limited partnership
units redeemed (25 units) (764) - (764)
Net income 2,765,805 27,937 2,793,742
----------- --------- -----------
Balance at
December 31, 1995 19,630,161 (149,805) 19,480,356
Cash distributions
to partners $ 7.70 $ 6.30 (5,588,508) (56,450) (5,644,958)
Limited partnership units
redeemed (50 units) (1,071) - (1,071)
Net income 2,514,930 25,403 2,540,333
----------- --------- -----------
Balance at
December 31, 1996 16,555,512 (180,852) 16,374,660
Cash distributions
to partners $ 8.52 $ 1.31 (3,924,943) (42,335) (3,967,278)
Limited partnership
units redeemed (40 units) (366) - (366)
Net income 521,409 5,267 526,676
----------- --------- -----------
Balance at
September 30, 1997 $13,151,612 $(217,920) $12,933,692
=========== ========= ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30,
(unaudited)
<TABLE>
1997 1996
---- ----
Cash flows provided by operating activities:
<S> <C> <C>
Net income ................................................. $ 526,676 $ 2,279,359
------------ ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation ............................................ 203,667 --
Finance income portion of receivables paid directly
to lenders by lessees ................................. (688,107) (1,233,695)
Amortization of initial direct costs .................... 289,760 484,165
Net gain on sales or remarketing of equipment ........... (442,719) (2,225,636)
Interest expense on non-recourse financing paid
directly by lessees ................................... 509,110 959,415
Interest expense accrued on non-recourse securitized debt 4,508 10,646
Collection of principal - non-financed receivables ...... 1,442,020 1,738,227
Collection of principle - leveraged leases .............. -- 207,683
Income from leveraged leases ............................ -- (369,511)
Income from equity investment in joint venture .......... (248,594) --
Distribution from equity investment in joint venture .... 3,962,495 --
Changes in operating assets and liabilities:
Allowance for doubtful accounts ...................... 136,048 47,204
Accounts payable to General Partner
and affiliates, net ................................ 31,566 (115,412)
Accounts payable - other ............................. (38,787) (121,686)
Security deposits and deferred credits ............... 2,198,451 197,679
Other, net ........................................... (541,751) (369,178)
------------ ------------
Total adjustments .................................. 6,817,667 (790,099)
------------ ------------
Net cash provided by operating activities .......... 7,344,343 1,489,260
------------ ------------
Cash flows from investing activities:
Proceeds from sales of equipment ........................... 9,095,666 14,932,272
Equipment and receivables purchased ........................ (6,418,117) (15,897,653)
Initial direct costs ....................................... -- (400,559)
------------ ------------
Net cash provided by investing activities ........... 2,677,549 (1,365,940)
------------ ------------
Cash flows from financing activities:
Proceeds from note payable - recourse ...................... 2,700,000 --
Principal payments on note payable - recourse .............. (485,013) --
Principal payments on non-recourse securitized debt ........ (744,247) (1,736,036)
Proceeds from revolving line of credit ..................... -- 4,750,000
Principal payments on revolving line of credit ............. (3,386,421) (1,750,000)
Proceeds from note payable affiliate ....................... 3,500,000 --
Principal payments on note payable affiliate ............... (3,500,000) --
Cash distributions to partners ............................. (3,967,278) (4,233,792)
Redemption of limited partnership units .................... (366) (1,071)
------------ ------------
Net cash used in financing activities ................ (5,883,325) (2,970,899)
------------ ------------
Net increase (decrease) in cash ............................... 4,138,567 (2,847,579)
Cash at beginning of period ................................... 413,845 3,751,899
------------ ------------
Cash at end of period ......................................... $ 4,552,412 $ 904,320
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (continued)
Supplemental Disclosures of Cash Flow Information
During the nine months ended September 30, 1997 and 1996, non-cash activities
included the following:
<TABLE>
1997 1996
---- ----
<S> <C> <C>
Fair value of equipment and receivables purchased
for debt and payables ........................... $(12,321,960) $(10,179,406)
Non-recourse notes payable assumed
in purchase price ............................... 5,727,540 10,179,406
Accounts payable-equipment ......................... 6,594,420
Decrease in investments in finance leases and
financings due to contribution to joint venture . (4,874,857) --
Increase in equity investment in joint venture ..... 4,874,857 --
Principal and interest on direct finance receivables
paid directly to lenders by lessees ............. 5,268,285 6,606,070
Principal and interest on non-recourse financing
paid directly by lessees ........................ (5,268,285) (6,606,070)
------------ ------------
$ -- $ --
============ ============
</TABLE>
Interest expense of $852,319 and $1,268,472 for the nine months ended
September 30, 1997 and 1996 consisted of: interest expense on non-recourse
financing paid or accrued directly to lenders by lessees of $509,110 and
$1,034,194, respectively, interest expense on non-recourse securitized note
payable of $104,512 and $116,905, respectively, interest expense on recourse
note payable of $77,094 and $0, respectively, interest expense on note payable
affiliate of $26,370 and $0, respectively, interest expense on non-recourse debt
of $110,294 and $0, respectively, and other interest of $24,939 and $117,373,
respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
September 30, 1997
(unaudited)
1. Basis of Presentation
The consolidated financial statements of ICON Cash Flow Partners, L.P.,
Series D (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
consolidated 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
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes included in the Partnership's 1996
Annual Report on Form 10-K.
2. Security Deposits and Deferred Credits
Security deposits and deferred credits at September 30, 1997 and December
31, 1996 include $1,483,888 and $219,646, respectively, of proceeds received on
residuals which will be applied upon final remarketing of the related equipment.
3. Related Party Transactions
During the nine months ended September 30, 1997 and 1996, the Partnership
paid or accrued to the General Partner management fees of $422,319 and $548,945,
respectively, and administrative expense reimbursements of $206,327 and
$236,206, respectively. These fees and reimbursements were charged to
operations.
Included in the Partnership's acquisitions for the year ended December 31,
1996 is a financing transaction for $8,756,291. This transaction represents the
financing of free cash and first priority rights of the first $4,000,000 of
residual proceeds from the eventual sale of the equipment related to a leveraged
lease. The free cash results from lease rental payments being greater than the
debt payments. The financing is secured by the underlying equipment, a 1986
McDonnell Douglas DC-10-30F aircraft, currently on lease to Federal Express
Corp. In August 1996 ICON Cash Flow Partners L.P. Seven ("L.P. Seven"), an
affiliate of the Partnership, acquired the residual interest in the leveraged
lease and assumed the related outstanding non-recourse debt. In January 1997
L.P. Seven re-financed the free cash and $2,000,000 of its residual position
with a third party. As a result of this re-financing, the Partnership received
proceeds of $7,221,452 and reduced its interest in the investment.
On June 5, 1997, the Partnership borrowed $3,500,000 from ICON Cash Flow
Partners, L.P., Series E ("Series E"), an affiliate of the Partnership, for the
purpose of acquiring two Boeing DHC-8-102 aircraft currently on lease to US
Airways, Inc. The borrowing was in the form of a short-term note, bore interest
at the rate of 11% and was repaid in September 1997, along with $26,370 in
accrued interest.
4. Investment in Joint Venture
In March 1997 the Partnership and ICON Cash Flow Partners L.P. Six ("L.P. Six"),
and L.P. Seven, contributed and assigned equipment lease and finance receivables
and residuals with a net book value of $4,874,857, $5,553,962 and $5,465,238,
respectively to ICON Receivables 1997-A LLC ("1997-A"), a special purpose entity
created for the purpose of originating new leases, managing existing contributed
assets and, eventually, securitizing its portfolio. In order to fund the
acquisition of new
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
leases, 1997-A obtained a warehouse borrowing facility from Prudential
Securities Credit Corporation (the "1997-A Facility"). Borrowings under the
1997-A Facility were based on the present value of the new leases. Outstanding
amounts under the 1997-A Facility bore interest equal to Libor plus 1.5%.
On September 19, 1997 Series E and L.P. Six contributed and assigned
equipment lease and finance receivables and residuals with a net book value of
$15,698,027 and $5,346,909, respectively to 1997-A. The Partnership, Series E,
L.P. Six and L.P. Seven (collectively the "1997-A Members") received a 17.81%,
31.19% 31.03% and 19.97% interest, respectively, in 1997-A based on the present
value of their related contributions.
On September 19, 1997, 1997-A securitized substantially all of its
equipment leases and finance receivables and residuals. The net proceeds from
the securitization totaled $47,140,183, of which $16,658,877 was used to pay
down the 1997-A Facility, and the remaining proceeds, after establishing
reserves for expenses, were distributed to the 1997-A Members based on their
respective interests. 1997-A became the beneficial owner of a trust. The trustee
for the trust is Texas Commerce Bank ("TCB"). In conjunction with this
securitization, the portfolio as well as the General Partner's servicing
capabilities were rated "AA" by Duff & Phelps and Fitch, both nationally
recognized rating agencies. The General Partner, as servicer, is responsible for
managing, servicing, reporting on and administering the portfolio. 1997-A remits
all monies received from the portfolio to TCB. TCB is responsible for disbursing
to the noteholders their respective principal and interest and to 1997-A the
excess of cash collected over debt service from the portfolio. The 1997-A
Members receive their pro rata share of any excess cash on a monthly basis from
1997-A. The Partnership's share of the net proceeds from the securitization
totaled $3,962,495. The Partnership accounts for its investment in 1997-A under
the equity method of accounting. The Partnership's original investment was
recorded at cost and is adjusted by its share of earnings, losses and
distributions thereafter.
Information as to the financial position and results of operations of
1997-A as of and for the nine months ended September 30, 1997 is summarized
below:
September 30, 1997
Assets $ 54,950,026
============
Liabilities $ 49,150,356
============
Equity $ 5,799,670
============
Nine Months Ended
September 30, 1997
Net income $ 677,434
============
5. Lease Acquisition
In June 1997 the Partnership acquired two DeHaviland DHC-8-102 aircraft
currently on lease to U.S. Airways, Inc. The purchase price totaled $6,819,250,
and was funded with $3,619,250 of cash and $3,200,000 in non-recourse debt. The
lease is an operating lease and expires in January 1999. The note bears interest
at 10.34% and is interest only through January 1999. The principal balance is
due in January 1999.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
September 30, 1997
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, operating lease, investment in financings and equity investment in joint
venture representing 62%, 28%, 10% and 9% of total investments at September 30,
1997, respectively, and 66%, 0%, 34% and 0% of total investments at September
30, 1996, respectively.
Results of Operations
Three Months Ended September 30, 1997 and 1996
For the three months ended September 30, 1997 and 1996, the Partnership
leased or financed equipment with an initial cost of $0 and $10,166,670,
respectively, to 0 and 36 lessees or equipment users, respectively.
Revenues for the three months ended September 30, 1997 were $1,066,855
representing an increase of $199,953 or 23% from 1996. The increase in revenues
was attributable to an increase in rental income of $456,000 or 100%, an
increase in income from equity investment of $110,574 or 100%, an increase in
net gain on sales or remarketing of equipment of $14,044 or 23%. These increases
were partially offset by a decrease in finance income of $316,590 or 44% and a
decrease in interest income and other of $64,074 or 76% from 1996. Rental income
increased due to an increase investment in operating leases. Income from equity
investment in joint ventures increased due to the Partnerships increased
investment in these transactions. Finance income decreased due to a decrease in
the average size of the portfolio from 1996 to 1997. The decrease in interest
income and other resulted from a decrease in the average cash balance from 1996
to 1997.
Expenses for the three months ended September 30, 1997 were $869,949,
representing an increase of $112,185 or 15% from 1996. The increase in expenses
was attributable to an increase in depreciation of $203,667 or 100%. The
decrease in expenses was primarily attributable to a decrease in interest
expense of $120,037 or 35% from 1996. Results were also affected by a decrease
in amortization of initial direct cost of $48,761 or 36%, a decrease in general
and administrative expenses of $22,045 or 38%, a decrease in management fees of
$10,873 or 7% and a decrease in administrative expenses reimbursement of $60 or
less than 1% from 1996. Depreciation increased due to an increase in investments
in operating leases. The decrease in interest expense resulted from a decrease
in the average debt outstanding from 1996 to 1997. Management fees, amortization
of initial direct costs and administrative expense reimbursements decreased due
to a decrease in the average size of the portfolio from 1996 to 1997. The
decrease in general and administrative was due primarily to a decrease in legal
fees.
Net income for the three months ended September 30, 1997 and 1996 was
$196,906 and $109,138, respectively. The net income per weighted average limited
partnership unit was $.49 and $.27 for 1997 and 1996, respectively.
Nine Months Ended September 30, 1997 and 1996
For the nine months ended September 30, 1997 and 1996, the Partnership
leased or financed equipment with an initial cost of $10,230,433 and
$18,770,370, respectively, to 42 and 40 lessees or equipment users,
respectively. The weighted average initial term relating to these transactions
was 42 and 39 months, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
September 30, 1997
Revenues for the nine months ended September 30, 1997 were $2,646,463
representing a decrease of $2,344,246 or 47% from 1996. The decrease in revenues
was primarily attributable to a decrease in net gain on sales or remarketing of
equipment of $1,782,917 or 80%, a decrease in finance income of $746,810 or 34%,
a decrease in income from leveraged leases, net of $369,511 or 100% and a
decrease in interest income and other of $149,602 or 66% from 1996. These
decreases were partially offset by an increase in rental income of $456,000 or
100% and the 1997 income from equity investment of $248,594. Net gain on sales
or remarketing of equipment decreased in comparison to the prior year due
primarily to the prior year gain of $1,891,802, which resulted from the
Partnership's sale of its investment in leveraged leases. Finance income
decreased due to a decrease in the average size of the portfolio from 1996 to
1997. Income from leveraged leases decreased as a result of the April 1996 sale
of all underlying equipment relating to the Partnerships investment in leveraged
leases. The decrease in interest income and other resulted from a decrease in
the average cash balance from 1996 to 1997. Rental income increased due to the
June 1997 acquisition of two DeHaviland aircraft currently on lease to U.S.
Airways which were classified as an operating lease. The Partnership did not
have any investments in operating leases during 1996.
Expenses for the nine months ended September 30, 1997 were $2,119,787,
representing a decrease of $591,563 or 22% from 1996. The decrease in expenses
was attributable to a decrease in interest expense of $416,153 or 33%, a
decrease in amortization of initial direct cost of $194,405 or 40%, a decrease
in management fees of $126,626 or 23%, a decrease in administrative expense
reimbursements of $29,879 or 13% and a decrease in general and administrative
expenses of $28,167 or 16% from 1996. The decrease in expenses were partially
offset by an increase in depreciation expense of $203,667 or 100%. The decrease
in interest expense resulted from a decrease in the average debt outstanding
from 1996 to 1997. Management fees, amortization of initial direct costs and
administrative expense reimbursements decreased due to a decrease in the average
size of the portfolio from 1996 to 1997. The decrease in general and
administrative expenses was due to a decrease in legal fees. Depreciation
increased due to an increase in investments in operating leases.
Net income for the nine months ended September 30, 1997 and 1996 was
$526,676 and $2,279,359, respectively. The net income per weighted average
limited partnership unit was $1.31 and $5.65 for 1997 and 1996, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the nine months ended
September 30, 1997 and 1996 were net cash provided by operations of $7,344,343
and $1,489,260, respectively, proceeds from sales of equipment of $9,095,666 and
$14,932,272, respectively, proceeds from recourse borrowings of $2,700,000 in
1997 and proceeds from a revolving line of credit of $1,750,000 in 1996. These
funds were used to purchase equipment, fund cash distributions and make payments
on borrowings.
Cash distributions to limited partners for the nine months ended September
30, 1997 and 1996, which were paid monthly, totaled $3,924,943 and $4,191,454,
respectively, of which $521,409 and $2,256,565 was investment income and
$3,403,534 and $1,934,889 was a return of capital, respectively. The monthly
annualized cash distribution rate to limited partners was 13.11% and 14.00% for
1997 and 1996, of which 1.74% and 7.54% was investment income and 11.37% and
6.46% 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, 1997
and 1996 was $9.83, of which $1.31 and $4.85 was investment income and $8.52 and
$5.65 was a return of capital, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
September 30, 1997
The Partnership entered into a revolving credit agreement (the "Facility")
in October 1992. The facility was amended in March 1996. The maximum amount
available under the Facility was $5,000,000 and at December 31, 1996 the
Partnership had $3,386,421 available for borrowing under the Facility, all of
which was outstanding at year end. The facility had a final maturity date of
January 31, 1997, at which time the Partnership paid the outstanding balance and
terminated the agreement.
Included in the Partnership's acquisitions for the year ended December 31,
1996 is a financing transaction for $8,756,291. This transaction represents the
financing of free cash and first priority rights of the first $4,000,000 of
residual proceeds from the eventual sale of the equipment related to a leveraged
lease. The free cash results from lease rental payments being greater than the
debt payments. The financing is secured by the underlying equipment, a 1986
McDonnell Douglas DC-10-30F aircraft, currently on lease to Federal Express
Corp. In August 1996 L.P. Seven, an affiliate of the Partnership, acquired the
residual interest in the leveraged lease and assumed the related outstanding
non-recourse debt. In January 1997 L.P. Seven re-financed the free cash and
$2,000,000 of its residual position with a third party. As a result of this
re-financing, the Partnership received proceeds of $7,221,452 and reduced its
interest in the investment.
In March 1997 the Partnership and L.P. Six and L.P. Seven, contributed and
assigned equipment lease and finance receivables and residuals with a net book
value of $4,874,857, $5,553,962 and $5,465,238, respectively to ICON Receivables
1997-A LLC ("1997-A"), a special purpose entity created for the purpose of
originating new leases, managing existing contributed assets and, eventually,
securitizing its portfolio. In order to fund the acquisition of new leases,
1997-A obtained a warehouse borrowing facility from Prudential Securities Credit
Corporation (the "1997-A Facility"). Borrowings under the 1997-A Facility were
based on the present value of the new leases. Outstanding amounts under the
1997-A Facility bore interest equal to Libor plus 1.5%.
On September 19, 1997 Series E and L.P. Six contributed and assigned
equipment lease and finance receivables and residuals with a net book value of
$15,698,027 and $5,346,909, respectively to 1997-A. The Partnership, Series E,
L.P. Six and L.P. Seven (collectively the "1997-A Members") received a 17.81%,
31.19% 31.03% and 19.97% interest, respectively, in 1997-A based on the present
value of their related contributions.
On September 19, 1997, 1997-A securitized substantially all of its
equipment leases and finance receivables and residuals. The net proceeds from
the securitization totaled $47,140,183, of which $16,658,877 was used to pay
down the 1997-A Facility, and the remaining proceeds, after establishing
reserves for expenses, were distributed to the 1997-A Members based on their
respective interests. 1997-A became the beneficial owner of a trust. The trustee
for the trust is Texas Commerce Bank ("TCB"). In conjunction with this
securitization, the portfolio as well as the General Partner's servicing
capabilities were rated "AA" by Duff & Phelps and Fitch, both nationally
recognized rating agencies. The General Partner, as servicer, is responsible for
managing, servicing, reporting on and administering the portfolio. 1997-A remits
all monies received from the portfolio to TCB. TCB is responsible for disbursing
to the noteholders their respective principal and interest and to 1997-A the
excess of cash collected over debt service from the portfolio. The 1997-A
Members receive their pro rata share of any excess cash on a monthly basis from
1997-A. The Partnership's share of the net proceeds from the securitization
totaled $3,962,495. The Partnership accounts for its investment in 1997-A under
the equity method of accounting. The Partnership's original investment was
recorded at cost and is adjusted by its share of earnings, losses and
distributions thereafter.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
September 30, 1997
The Partnership's Reinvestment Period ended June 5, 1997. The Disposition
Period began on June 6, 1997 and is expected to continue through June 5, 2002.
During the Disposition Period the Partnership has, and will continue to
distribute substantially all distributable cash from operations and sales to the
partners and begin the orderly termination of its operations and affairs. The
Partnership has not, and will not reinvest in any leased equipment during the
Disposition Period.
As of September 30, 1997, 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 invest in equipment leases and
financings 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 D
(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 during the quarter ended September 30, 1997.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(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 D
File No. 33-40044 (Registrant)
By its General Partner,
ICON Capital Corp.
November 14, 1997 /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> 0000874320
<NAME> ICON Cash Flow Partners, L.P., Series D
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,552,412
<SECURITIES> 0
<RECEIVABLES> 17,265,701
<ALLOWANCES> 1,039,817
<INVENTORY> 34,591
<CURRENT-ASSETS> * 0
<PP&E> 6,819,250
<DEPRECIATION> 203,667
<TOTAL-ASSETS> 29,419,618
<CURRENT-LIABILITIES> ** 0
<BONDS> 13,877,061
0
0
<COMMON> 0
<OTHER-SE> 12,933,692
<TOTAL-LIABILITY-AND-EQUITY> 29,419,618
<SALES> 2,646,463
<TOTAL-REVENUES> 2,646,463
<CGS> 493,427
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 774,041
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 852,319
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 526,676
<EPS-PRIMARY> 1.31
<EPS-DILUTED> 1.31
<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>
