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 0-27902
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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,
1999 1998
------------ -----------
Assets
<S> <C> <C>
Cash ....................................................... $ 1,463,996 $ 645,739
------------ ------------
Investment in operating lease equipment, at cost ........... 8,084,407 6,819,250
Accumulated depreciation ................................... (1,540,320) (1,020,538)
------------ ------------
6,544,087 5,798,712
Investment in finance leases
Minimum rents receivable ................................ 1,624,224 3,257,332
Estimated unguaranteed residual values .................. 1,597,420 4,784,614
Initial direct costs .................................... 20,165 42,566
Unearned income ......................................... (275,444) (621,676)
Allowance for doubtful accounts ......................... (220,898) (246,450)
------------ ------------
2,745,467 7,216,386
Investment in financings
Receivables due in installments ......................... 2,745,082 3,079,170
Initial direct costs .................................... 445 1,418
Unearned income ......................................... (893,390) (1,045,785)
Allowance for doubtful accounts ........................ (140,766) (140,766)
------------ ------------
1,711,371 1,894,037
Investment in unconsolidated joint venture ................. 865,419 979,346
------------ ------------
Accounts receivable from General Partner and affiliates, net -- 20,122
Other assets ............................................... 196,117 65,518
------------ ------------
Total assets ............................................... $ 13,526,457 $ 16,619,860
============ ============
</TABLE>
(continued on next page)
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Balance Sheets (Continued)
(unaudited)
<TABLE>
September 30, December 31,
1999 1998
------------ -----------
Liabilities and Partners' Equity
<S> <C> <C>
Note payable - recourse ............................... $ 360,465 $ 870,801
Note payable - non-recourse - secured financing ....... 148,878 499,037
Notes payable - non-recourse .......................... 5,543,656 6,366,111
Accounts payable to General Partner and affiliates, net 20,779 --
Accounts payable - equipment .......................... 986,088 --
Security deposits, deferred credits and other payables 2,387,511 3,222,527
------------ ------------
9,447,377 10,958,476
Commitments and Contingencies
Partners' equity (deficiency)
General Partner .................................... (303,806) (288,004)
Limited partners (399,118 units outstanding,
$100 per unit original issue price) .............. 4,382,886 5,949,388
------------ ------------
Total partners' equity ................................ 4,079,080 5,661,384
------------ ------------
Total liabilities and partners' equity ................ $ 13,526,457 $ 16,619,860
============ ============
</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,
1999 1998 1999 1998
---- ---- ---- ----
Revenue
<S> <C> <C> <C> <C>
Rental income ...................... $ 322,000 $ 342,000 $ 964,613 $ 987,387
Finance income ..................... 102,708 246,806 479,672 850,330
Net gain on sales of equipment ..... 622 40,678 344,069 192,636
Income (loss) from investment
in unconsolidated joint venture .. 40,994 (19,017) 100,128 144,040
Interest income and other .......... 24,240 9,735 33,786 21,737
----------- ----------- ----------- -----------
Total revenues ..................... 490,564 620,202 1,922,268 2,196,130
----------- ----------- ----------- -----------
Expenses
Interest ........................... 152,719 172,046 480,159 613,989
General and administrative ......... 53,382 32,134 167,155 155,901
Management fees - General Partner .. 45,395 96,366 144,646 324,787
Administrative expense
reimbursement - General Partner . 26,867 51,560 86,576 176,850
Amortization of initial direct costs 6,418 67,002 23,374 171,491
Depreciation ....................... 166,752 161,138 519,782 502,984
Reversal of provision for
bad debt ......................... -- (400,000) -- (400,000)
----------- ----------- ----------- -----------
Total expenses ..................... 451,533 180,246 1,421,692 1,546,002
----------- ----------- ----------- -----------
Net income ............................ $ 39,031 $ 439,956 $ 500,576 $ 650,128
=========== =========== =========== ===========
Net income allocable to:
Limited partners ................... $ 38,641 435,556 $ 495,570 $ 643,627
General Partner .................... 390 4,400 5,006 6,501
----------- ----------- ----------- -----------
$ 39,031 $ 439,956 $ 500,576 $ 650,128
=========== =========== =========== ===========
Weighted average number of limited
partnership units outstanding ...... 399,118 399,118 399,118 399,118
=========== =========== =========== ===========
Net income per weighted average
limited partnership unit ........... $ .10 $ 1.09 $ 1.24 $ 1.61
=========== =========== =========== ===========
</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, 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 $ 9,342,242 $ (253,733) $ 9,088,509
Cash distributions
to partners $8.50 $1.71 (4,074,331) (41,155) (4,115,486)
Net income 681,477 6,884 688,361
----------- --------- -----------
Balance at
December 31, 1998 5,949,388 (288,004) 5,661,384
Cash distributions
to partners $3.93 $1.24 (2,062,072) (20,808) (2,082,880)
Net income 495,570 5,006 500,576
----------- --------- -----------
Balance at September 30, 1999 $ 4,382,886 $(303,806) $ 4,079,080
=========== ========= ===========
</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>
1999 1998
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income ...................................................... $ 500,576 $ 650,128
----------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Interest expense on non-recourse financing paid directly
to lenders by lessees ........................................ 401,343 457,200
Depreciation ................................................... 519,782 502,984
Reversal of provision for bad debt ............................. -- (400,000)
Finance income portion of receivables paid directly to
lenders by lessees ........................................... (133,747) (303,001)
Rental income paid directly to lenders by lessees .............. (308,073) (248,160)
Income from investment in unconsolidated joint venture ......... (100,128) (144,040)
Amortization of initial direct costs ........................... 23,374 171,491
Net gain on sales or remarketing of equipment .................. (344,069) (192,636)
Changes in operating assets and liabilities:
Collection of principal - non-financed receivables ............ 429,648 1,123,298
Distributions from investments in unconsolidated joint ventures 288,782 145,536
Investment in unconsolidated joint ventures ................... (29,781) (49,780)
Accounts receivable from General Partner and affiliates ....... 20,122
Accounts payable to General Partner and affiliates, net ....... 20,779 (164,151)
Accounts payable - equipment .................................. 986,088 --
Security deposits, deferred credits and other payables ........ (835,016) 823,367
Other, net .................................................... (250,596) 61,099
----------- -----------
Total adjustments ........................................... 688,508 1,783,207
----------- -----------
Net cash provided by operating activities ................... 1,189,084 2,433,335
----------- -----------
Cash flows from investing activities:
Equipment refurbishment ......................................... (1,265,157) --
Proceeds from sales of equipment ................................ 3,814,550 1,135,951
----------- -----------
Net cash provided by investing activities ................... 2,549,393 1,135,951
----------- -----------
</TABLE>
(continued on next page)
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (Continued)
For the Nine Months Ended September 30,
(unaudited)
<TABLE>
1999 1998
---- ----
Cash flows from financing activities:
<S> <C> <C>
Cash distributions to partners ....................... (2,082,880) (3,107,613)
Proceeds from refinancing of non-recourse debt ....... 1,998,154 --
Principal payments on note payable-recourse .......... (510,335) (880,523)
Principal payments on non-recourse - secured financing (350,159) (587,489)
Retirement of non-recourse debt ...................... (1,975,000) --
----------- -----------
Net cash used in financing activities ............ (2,920,220) (4,575,625)
----------- -----------
Net increase (decrease) in cash ......................... 818,257 (1,006,339)
Cash at beginning of period ............................. 645,739 1,154,378
----------- -----------
Cash at end of period ................................... $ 1,463,996 $ 148,039
=========== ===========
</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, 1999 and 1998, non-cash activities
included the following:
<TABLE>
1999 1998
---- ----
<S> <C> <C>
Principal and interest on direct finance
receivables paid directly to lenders by lessees ........... $ 751,700 $ 2,597,115
Rental income assigned operating lease receivable ............ 308,073 248,160
Principal and interest on non-recourse financing
paid directly by lessees .................................. (1,059,773) (2,845,275)
Increase in equity investment in unconsolidated joint ventures 44,946 --
Decrease in investment in finance leases and financings
due to contribution to unconsolidated joint venture ....... (44,946) --
Decrease in investment in finance leases and financings
due to terminations ....................................... 18,399 --
Increase in security deposits and deferred credits ........... 168,780 264,196
Decrease in notes payable non-recourse due to terminations ... (187,179) (264,196)
----------- -----------
$ -- $ --
=========== ===========
</TABLE>
Interest expense of $480,159 and $613,989 for the nine months ended
September 30, 1999 and 1998 consisted of interest expense on non-recourse
financing paid or accrued directly to lenders by lessees of $401,343 and
$457,200, respectively, other interest expense on non-recourse financing of
$23,154 in 1999, interest expense on non-recourse secured financing of
$18,997and $53,725, respectively, interest expense on recourse note payable of
$36,665 and $101,478, respectively, and interest expense on note payable
affiliate of $1,586 in 1998.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
September 30, 1999
(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 presented 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 1998
Annual Report on Form 10-K.
2. Disposition Period
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 equipment
sales to the partners and continue the orderly termination of its operations and
affairs. The Partnership has not, and will not invest in any additional finance
or lease transactions during the disposition period. During the disposition
period, the Partnership expects to recover, at a minimum, the carrying value of
its assets.
3. Security Deposits, Deferred Credits and Other Payables
Security deposits, deferred credits and other payables at September 30,
1999 and 1998 include $1,143,907 and $1,835,995 respectively, of proceeds
received on residuals, which will be applied upon final remarketing of the
related equipment.
4. Related Party Transactions
Fees paid or accrued by the Partnership to the General Partner or its
affiliates for the nine months ended September 30, 1999 and 1998 are as follows:
1999 1998
---- ----
Management Fees $144,646 $324,787 Charged to operations
Administrative expense
reimbursements 86,576 176,850 Charged to operations
-------- --------
Total $231,222 $501,637
======== ========
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
The Partnership has an investment in a joint venture with an affiliate.
(See Note 5 for additional information relating to the joint venture.)
5. Investment in Joint Venture
In March 1997 the Partnership, ICON Cash Flow Partners L.P. Six ("L.P.
Six"), and ICON Cash Flow Partners L.P. Seven ("L.P. Seven"), contributed and
assigned equipment lease and finance receivables and residuals to ICON
Receivables 1997-A L.L.C. ("1997-A"), a special purpose entity created for the
purpose of originating leases, managing existing contributed assets and
securitizing its portfolio. In September 1997 ICON Cash Flow Partners, L.P.,
Series E ("Series E"), L.P. Six and L.P. Seven contributed and assigned
additional equipment lease and finance receivables and residuals to 1997-A. The
Partnership, Series E, L.P. Six and L.P. Seven 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. In September 1997, 1997-A securitized substantially all
of its equipment leases and finance receivables and residuals. 1997-A became the
beneficial owner of a trust. The Partnership's original investment was recorded
at cost and is adjusted by its share of earnings, losses, contributions 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, 1999 is summarized
below:
September 30, 1999
------------------
Assets $21,011,645
===========
Liabilities $16,870,651
===========
Equity $ 4,140,994
===========
Partnership's share of equity $ 865,419
===========
Nine Months Ended
September 30, 1999
------------------
Net income $ 562,160
==========
Partnership's share of net income $ 100,128
==========
Distributions $1,621,550
==========
Partnership's share of distributions $ 288,782
==========
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(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 operating
leases, finance leases, financings and investment in unconsolidated joint
venture, representing 54 %, 24%, 15%, and 7% of total investments at September
30, 1999, respectively, and 34%, 47%, 12% and 7% of total investments at
September 30, 1998, respectively.
Results of Operations for the Three Months Ended September 30, 1999 and 1998
The Partnership did not make any investments in leases or financing
agreements in the three months ended September 30, 1998 or the three months
ended September 30, 1999.
In February 1999 the Partnership's two aircraft operating leases with U.S.
Airways, Inc. "U.S. Air" were extended beyond their original expiry date at
decreased rental rates relative to the original rental rates. As of September
30, 1999 one aircraft remains on lease with U.S. Air at this decreased rental
rate. In August 1999 the Partnership terminated one lease and leased the
aircraft to Wideroe's Flyveselskap ASA, a Norwegian air carrier, at a higher
monthly contractual rent relative to the original rental rate with U.S. Air.
This higher rental rate was received as a result of the Partnership refurbishing
the aircraft to make it possible to re-lease. The total monthly contractual
rents for the two aircraft are slightly less than total monthly contractual
rents under the original U.S. Air leases.
Revenues for the three months ended September 30, 1999 were $490,564,
representing a decrease of $129,638 or 21% from 1998. The decrease in revenues
resulted from a decrease in finance income of $144,098 or 58 %, a decrease in
net gain on sales of equipment of $40,056 or 98% and a decrease in rental income
of $20,000 or 6% from 1998 to 1999, respectively. These decreases were partially
offset by income from investment in unconsolidated joint venture of $40,994 for
the three months ended September 30, 1999 compared to a loss from investment in
unconsolidated joint venture of $19,017 for the three months ended September 30,
1998 and an increase in interest income and other of $14,505 or 149% from 1998
to 1999. 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 net gain
on sales of equipment was due to 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. A decrease in rental income from 1998 to 1999 is attributable to
changes regarding the U.S. Air aircraft leases noted above. As a result of an
analysis of delinquency, assessment of overall risk and a review of historical
loss experience ICON Receivables 1997-A L.L.C. ("1997-A") recorded a loss
provision of $600,000 for the three months ended September 30, 1998 which
resulted in a loss to the Partnership from investment in unconsolidated joint
venture for that quarter. For the three months ended September 30, 1999, 1997-A
did not record any loss provision and as a result the Partnership earned income
from its investment in unconsolidated joint venture. The increase in interest
income and other was due to an increase in the average cash balance from 1998 to
1999.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Expenses for the three months ended September 30, 1999 were $451,533
representing an increase of $271,287 or 151% from 1998. The increase in expenses
resulted primarily from the Partnership's reversal of $400,000 of provision for
bad debt for the three months ended September 30, 1998. The increase in expenses
was also the result of an increase in general and administrative expenses of
$21,248 or 66% and an increase in depreciation expense of $5,614 or 3% from 1998
to 1999, respectively. These increases were partially offset by a decrease in
amortization of initial direct costs of $60,584 or 90%, a decrease in management
fees of $50,971or 53 %, a decrease in administrative expense reimbursements of
$24,693 or 48% and a decrease in interest expense of $19,327 or 11%. As a result
of better than expected portfolio performance, the Partnership reversed $400,000
of the provision for bad debt for the three months ended September 30, 1998. For
the three months ended September 30, 1999 the Partnership determined that no
adjustment to the provision for bad debt was required. The increase in general
and administrative expense was a result of increases in professional fees and
remarketing expenses which were offset by a decrease in miscellaneous business
tax. The decreases in amortization of initial direct costs, management fees and
administrative expense reimbursements resulted from a decrease in the average
size of the finance lease portfolio from 1998 to 1999. Interest expense
decreased due to a decrease in the average debt outstanding from 1998 to 1999.
Net income for the three months ended September 30, 1999 and 1998 was
$39,031 and $439,956, respectively. The net income per weighted average limited
partnership unit was $.10 and $ 1.09 for 1999 and 1998, respectively.
Results of Operations for the Nine Months Ended September 30, 1999 and 1998
The Partnership did not make any investments in leases or financing
agreements in the nine months ended September 30, 1998 or the three months ended
September 30, 1999.
Revenues for the nine months ended September 30, 1999 were $1,922,268
representing a decrease of $273,862 or 12% from 1998. The decrease in revenues
resulted from a decrease in finance income of $370,658 or 44%, a decrease in
income from investment in unconsolidated joint venture of $43,912 or 30% and a
decrease in rental income of $22,774 or 2% from 1998 to 1999, respectively.
These decreases were partially offset by an increase in net gain on sales of
equipment of $151,433 or 79% and an increase in interest income and other of
$12,049 or 55 % from 1998 to 1999, respectively. 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 income from investment in unconsolidated joint
venture was a result of a decrease in net income of the underlying joint
venture, 1997-A, due to a decrease in the average size of the joint venture's
finance lease portfolio from 1998 to 1999. The decrease in rental income from
1998 to 1999 is attributable to changes regarding the U.S. Air aircraft lease
discussed above. The increase in net gain on sales or remarketing of equipment
was due to an increase in the number of leases maturing and an increase in the
amount of underlying equipment being sold, for which the proceeds received were
in excess of the remaining carrying value of the equipment. The increase in
interest income and other was due to an increase in the average cash balance
from 1998 to 1999.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Expenses for the nine months ended September 30, 1999 were $1,421,692
representing a decrease of $124,310 or 8% from 1998. The decrease in expenses
resulted from a decrease in management fees of $180,141 or 55%, a decrease in
amortization of initial direct costs of $148,117 or 86%, a decrease in interest
expense of $133,830 or 22%, and a decrease in administrative expense
reimbursements of $90,274 or 51%. These decreases were partially offset by the
Partnership's reversal of $400,000 of provision for bad debt for the three
months ended September 30, 1998, an increase in depreciation expense of $16,798
or 3% and an increase in general and administrative expenses of $11,254 or 7%
from 1998 to 1999, respectively. The decreases in management fees, amortization
of initial direct costs and administrative expense reimbursements resulted from
a decrease in the average size of the finance lease portfolio from 1998 to 1999.
Interest expense decreased due to a decrease in the average debt outstanding
from 1998 to 1999. As a result of better than expected portfolio performance,
the Partnership reversed $400,000 of the provision for bad debt for the nine
months ended September 30, 1998. For the nine months ended September 30, 1999
the Partnership determined that no adjustment to the provision for bad debt was
required. The increase in general and administrative expense was a result of
increases in professional fees, inspection and appraisal costs, bank fees,
postage and remarketing expenses which were offset by a decrease in
miscellaneous business tax.
Net income for the nine months ended September 30, 1999 and 1998 was
$500,576 and $650,128, respectively. The net income per weighted average limited
partnership unit was $1.24 and $1.61 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 $1,189,084
and $2,433,335, respectively, and proceeds from sales of equipment of $3,814,550
and $1,135,951, respectively. These funds were used to fund cash distributions
and to make payments on borrowings.
Cash distributions to the limited partners for the nine months ended
September 30, 1999 and 1998, which were paid monthly, totaled $2,062,072 and
$3.076,537, respectively, of which $495,570 and $643,627 was investment income
and $1,566,502 and $2,432,910 was a return of capital, respectively. The monthly
annualized cash distribution rate for the nine months ended September 30, 1999
and 1998 was 6.89% and 10.28%, respectively, of which 1.66 % and 2.15% was
investment income and 5.23% and 8.13% was a return of capital, respectively,
calculated as a percentage of each limited 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 $5.17 and
$7.71, respectively, of which $1.24 and $1.61 was investment income and $3.93
and $6.10 was a return of capital, respectively.
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 equipment
sales to the partners and continue the orderly termination of its operations and
affairs. The Partnership has not, and will not invest in any additional finance
or lease transactions during the disposition period. During the disposition
period the Partnership expects to recover, at a minimum, the carrying value of
its assets.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
As a result of the Partnership's entering into the disposition period,
future monthly distributions could, and are expected to, fluctuate depending on
the amount of asset sale and re-lease proceeds received during that period.
In June 1997 the Partnership acquired two DeHaviland DHC-8-102 aircraft and
leased both 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 provided by
Transamerica Business Credit Corporation ("Transamerica"). In October 1998 the
Partnership borrowed an additional $750,000 from Transamerica, bringing the
total non-recourse debt relating to these aircraft to $3,950,000. In August 1999
the Partnership entered into a new 44 month lease with Wideroe's Flyveselskap
ASA on one of the aircraft, and in conjunction with this transaction: a) the
Partnership refinanced $1,975,000 of the Transamerica debt, related to one of
the aircraft, with Christiania Bank OG Kreditkasse ASA ("Christiania Bank"); b)
received a commitment to borrow an additional amount from Christiania Bank to
pay refurbishment costs, bringing the balance of the Christiania Bank loan to
$3,000,000 and; c) committed to retire approximately $975,000 of the
Transamerica debt which would remain as a result of those changes. At September
30, 1999 the Christiania Bank loan balance was $1,998,154 and the Transamerica
loan balance was $1,975,000. (After the end of the quarter, the additional parts
of the contemplated transactions were completed resulting in, as of November 1,
the Christiania Bank principal balance totaling approximately $2,793,681 and the
Transamerica principal balance totaling $1,000,000.) The Christiania Bank debt
will amortize at a rate of libor plus 325 basis points over a period of 44
months with a balloon payment of $1,300,000 due April 9, 2003. The Transamerica
debt will amortize at a rate of 11.0% over a period of 48 months. Until the long
term disposition of the aircraft is determined, it is expected to remain on
lease with U.S. Airways.
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 distribute substantially all available cash, after
retaining sufficient cash to meet its reserve requirements and recurring
obligations.
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 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, 1999.
<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 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> 0000874320
<NAME> ICON Cash Flow Partners, L.P., Series D
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,463,996
<SECURITIES> 0
<RECEIVABLES> 4,369,306
<ALLOWANCES> 361,664
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 8,084,407
<DEPRECIATION> 1,540,320
<TOTAL-ASSETS> 13,526,457
<CURRENT-LIABILITIES> ** 0
<BONDS> 6,052,999
0
0
<COMMON> 0
<OTHER-SE> 4,079,080
<TOTAL-LIABILITY-AND-EQUITY> 13,526,457
<SALES> 1,888,482
<TOTAL-REVENUES> 1,922,268
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 941,533
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 480,159
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 500,576
<EPS-BASIC> 1.24
<EPS-DILUTED> 1.24
<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>
