UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1999
- ------------------------------------------------------ or [ ] Transition Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee
Required]
For the transition period from ______________________ to _______________________
Commission File Number 33-40044
---------------------------------------------------------
ICON Cash Flow Partners, L.P., Series D
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3602979
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
111 Church Street, White Plains, New York 10601-1505
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 993-1700
-----------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class Name of each exchange on which registered
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interests
- --------------------------------------------------------------------------------
(Title of class)
- --------------------------------------------------------------------------------
(Title of class)
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>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
TABLE OF CONTENTS
Item Page
PART I
1. Business 3-4
2. Properties 4
3. Legal Proceedings 5
4. Submission of Matters to a Vote of Security Holders 5
PART II
5. Market for the Registrant's Securities and Related
Security Holder Matters 5
6. Selected Consolidated Financial and Operating Data 6
7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
8. Consolidated Financial Statements and Supplementary Data 11-28
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 29
PART III
10. Directors and Executive Officers of the Registrant's
General Partner 29-30
11. Executive Compensation 31
12. Security Ownership of Certain Beneficial Owners
and Management 31
13. Certain Relationships and Related Transactions 31
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 32
SIGNATURES 33
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
PART I
Item 1. Business
General Development of Business
ICON Cash Flow Partners, L.P., Series D (the "Partnership") was formed in
February 1991 as a Delaware limited partnership. The Partnership commenced
business operations on its initial closing date, September 13, 1991, with the
admission of 26,905.59 limited partnership units. Between September 14, 1991 and
December 31, 1991, 121,932.48 additional units were admitted. Between January 1,
1992 and June 5, 1992 (the final closing date), 251,161.93 additional units were
admitted bringing the final admission to 400,000 units totaling $40,000,000 in
capital contributions. From 1994 through 1997, the Partnership redeemed 882
limited partnership units leaving 399,118 units outstanding up to December 31,
1999. The sole general partner is ICON Capital Corp.
(the "General Partner").
The Partnership's reinvestment period ended June 5, 1997. The disposition
period began on June 6, 1997. 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 begin the orderly termination
of its operations and affairs. The Partnership has not, and will not invest in
any additional new 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.
Narrative Description of Business
The Partnership is an equipment leasing income fund. The principal
investment objective of the Partnership is to obtain the maximum economic return
from its investments for the benefit of its limited partners. To achieve this
objective the Partnership has: (1) acquired a diversified portfolio of leases
and financing transactions; (2) made monthly cash distributions to its limited
partners from cash from operations, commencing with each limited partner's
admission to the Partnership, (3) re-invested substantially all undistributed
cash from operations and cash from sales in additional equipment and financing
transactions during the reinvestment period; and (4) begun to sell the
Partnership's investments and distribute the cash from sales of such investments
to its limited partners.
The equipment leasing industry is highly competitive. In initiating its
leasing transactions the Partnership competed with leasing companies,
manufacturers that lease their products directly, equipment brokers and dealers
and financial institutions, including commercial banks and insurance companies.
Many competitors are larger than the Partnership and have greater financial
resources.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
The Partnership has no direct employees. The General Partner has full and
exclusive discretion in management and control of the Partnership.
Lease and Financing Transactions
For the years ended December 31, 1999 and 1998, the Partnership did not
purchase any new equipment investments. A summary of the portfolio equipment
cost by category held at December 31, 1999 and 1998 is as follows:
<TABLE>
December 31, 1999 December 31, 1998
----------------- -----------------
Category Cost Percent Cost Percent
<S> <C> <C> <C> <C>
Aircraft ....................... $ 8,188,964 43.2% $ 7,802,583 24.9%
Manufacturing & production ..... 5,113,726 27.0 10,442,728 33.3
Computer systems ............... 3,289,663 17.4 9,293,171 29.6
Restaurant equipment ........... 1,309,350 6.9 1,638,121 5.2
Office furniture & fixtures .... 539,834 2.9 1,179,845 3.8
Telecommunications ............. 59,715 0.3 463,182 1.5
Medical ........................ 126,890 0.7 161,068 0.5
Printing ....................... 87,342 0.5 107,306 0.4
Video production ............... 59,188 0.3 79,414 0.3
Retail systems ................. 39,594 0.2 42,493 0.1
Miscellaneous .................. 118,283 0.6 147,888 0.4
----------- ----- ----------- -----
$18,932,549 100.0% $31,357,799 100.0%
=========== ===== =========== =====
</TABLE>
The Partnership has two leases each of which individually represents
greater than 10% of the total portfolio equipment cost at December 31, 1999. The
underlying equipment for each lease is a DeHavilland DHC-8-102 aircraft and the
total equipment cost represented 18% for each lease of the total portfolio
equipment cost at December 31, 1999.
Item 2. Properties
The Partnership neither owns nor leases office space or equipment for the
purpose of managing its day-to-day affairs.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
Item 3. Legal Proceedings
The Partnership is not a party to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of 1999.
PART II
Item 5. Market for the Registrant's Securities and Related Security Holder
Matters
The Partnership's limited partnership interests are not publicly traded nor
is there currently a market for the Partnership's limited partnership interests.
It is unlikely that any such market will develop.
Number of Equity Security Holders
Title of Class as of December 31,
- -------------- ---------------------------------
1999 1998
---- ----
Limited partners 3,060 3,060
General Partner 1 1
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
Item 6. Selected Consolidated Financial and Operating Data
<TABLE>
Years Ended December 31,
--------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total revenues ............. $2,658,007 $2,796,813 $3,537,411 $6,011,140 $5,202,055
========== ========== ========== ========== ==========
Net income ................. $ 823,675 $ 688,361 $ 676,730 $2,540,333 $2,793,742
========== ========== ========== ========== ==========
Net income allocable
to limited partners ...... $ 815,438 $ 681,477 $ 669,963 $2,514,930 $2,765,805
========== ========== ========== ========== ==========
Net income allocable
to the General Partner ... $ 8,237 $ 6,884 $ 6,767 $ 25,403 $ 27,937
========== ========== ========== ========== ==========
Weighted average
limited partnership
units outstanding ........ 399,118 399,118 399,138 399,179 399,229
========== ========== ========== ========== ==========
Net income per
weighted average
limited partnership
unit ..................... $ 2.04 $ 1.71 $ 1.68 $ 6.30 $ 6.93
========== ========== ========== ========== ==========
Distributions to
limited partners ......... $2,461,219 $4,074,331 $7,882,867 $5,588,508 $5,589,207
========== ========== ========== ========== ==========
Distributions to the
General Partner .......... $ 24,840 $ 41,155 $ 79,648 $ 56,450 $ 56,457
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
December 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total assets ... $11,621,332 $16,619,860 $22,999,478 $34,263,140 $40,529,733
=========== =========== =========== =========== ===========
Partners' equity $ 3,999,000 $ 5,661,384 $ 9,088,509 $16,374,660 $19,480,356
=========== =========== =========== =========== ===========
</TABLE>
The above selected consolidated financial and operating data should be read
in conjunction with the consolidated financial statements and related notes
appearing elsewhere in this report.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
Item 7. 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, investment in operating lease equipment, investment in financings and an
investment in a joint venture representing 21%, 57%, 16% and 6% of total
investments at December 31, 1999, respectively, and 46%, 36%, 12% and 6% of
total investments at December 31, 1998, respectively.
Results of Operations
Years Ended December 31, 1999 and 1998
For the years ended December 31, 1999 and 1998, the Partnership did not
purchase any new equipment investments. During 1999, the Partnership expended
$1,369,714 on equipment refurbishment.
Revenues for the year ended December 31, 1999 were $2,658,007, representing
a decrease of $138,806 from 1998. The decrease in revenues was attributable to a
decrease in finance income of $127,707 and a decrease in income from an
investment in a joint venture of $167,755. These decreases were partially offset
by an increase in gain on sales of equipment of $170,604 and an increase in
interest income and other of $14,826. Finance income decreased due to a decrease
in the average size of the portfolio from 1998 to 1999. The increase in net gain
on sales of equipment was due to an increase in the number of leases maturing in
which the underlying equipment was sold. The decrease in income from investment
in joint venture was due to a decrease in the average size of the joint
venture's portfolio from 1998 to 1999 and a provision for bad debts recorded by
the venture in 1999.
Expenses for the year ended December 31, 1999 were $1,834,332, representing
a decrease of $274,120 from 1998. The decrease in expenses was attributable
primarily to a decrease in interest expense of $179,619, a decrease in
amortization of initial direct costs of $149,711, a decrease in management fees
of $204,154, and a decrease in administrative expense reimbursements of
$104,610. This was partially offset by a $400,000 reversal of allowance for
doubtful accounts in 1998. The decrease in interest expense resulted from a
decrease in the average debt outstanding from 1998 to 1999. Amortization of
initial direct costs, management fees, general and administrative and
administrative expense reimbursements decreased due to a decrease in the average
size of the portfolio from 1998 to 1999.
Net income for the years ended December 31, 1999 and 1998 was $823,675 and
$688,361, respectively. The net income per weighted average limited partnership
unit was $2.04 and $1.71 for 1999 and 1998, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1998
Years Ended December 31, 1998 and 1997
For the years ended December 31, 1998 and 1997, the Partnership purchased
and leased or financed equipment with an initial cost of $0 and $10,230,431,
respectively, to 0 and 72 lessees or equipment users, respectively.
Revenues for the year ended December 31, 1998 were $2,796,813, representing
a decrease of $740,598 or 21% from 1997. The decrease in revenues was
attributable to a decrease in finance income of $716,557 or 40%, a decrease in
net gain on sales or remarketing of equipment of $268,886 or 59%, a decrease in
income from an equity investment in a joint venture of $172,022 or 48%, and a
decrease in interest income and other of $114,520 or 81%. These decreases were
partially offset by an increase in rental income of $531,387 or 67%. Finance
income decreased due to a decrease in the average size of the portfolio from
1997 to 1998. The decrease in net gain on sales or remarketing of equipment was
due to a decrease in the number of leases maturing in which the underlying
equipment was sold or remarketed and proceeds received were in excess of the
remaining carrying value of the equipment. The decrease in income from equity
investment in joint venture was due to a decrease in the average size of the
joint venture's portfolio from 1997 to 1998. The decrease in interest income and
other resulted from a decrease in the average cash balance from 1997 to 1998.
Rental income increased due to the Partnership's operating lease with U.S.
Airways, Inc. commencing in June 1997 and therefore, rental income for 1998
includes twelve months of rents compared to seven months in 1997.
Expenses for the year ended December 31, 1998 were $2,108,452, representing
a decrease of $752,229 or 26% from 1997. The decrease in expenses was
attributable to a decrease in interest expense of $338,658 or 30%, a decrease in
amortization of initial direct costs of $184,970 or 51%, a decrease in
management fees of $151,229 or 28%, a decrease in administrative expense
reimbursements of $53,671 or 20%, and a 1998 reduction of the allowance for
doubtful accounts of $400,000. These decreases in expenses were partially offset
by an increase in depreciation expense of $307,704 or 86%, and an increase in
general and administrative expense of $68,595 or 34%. The decrease in interest
expense resulted from a decrease in the average debt outstanding from 1997 to
1998. Amortization of initial direct costs, management fees, and administrative
expense reimbursements decreased due to a decrease in the average size of the
portfolio from 1997 to 1998. The reduction of the allowance for doubtful
accounts was a result of the ongoing analysis of delinquency trends and loss
experience, an assessment of overall credit risk and the decline in the
portfolio balance. Depreciation expense increased due to the Partnership's
operating lease with U.S. Airways, Inc. commencing in June 1997 and therefore
depreciation expense for 1998 includes twelve months of ownership compared to
seven months in 1997. The increase in general and administrative expenses was
due to an increase in legal fees incurred related to collection activities on
accounts previously written off.
Net income for the years ended December 31, 1998 and 1997 was $688,361 and
$676,730, respectively. The net income per weighted average limited partnership
unit was $1.71 and $1.68 for 1998 and 1997, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1998
Liquidity and Capital Resources
The Partnership's reinvestment period ended June 5, 1997. The disposition
period began on June 6, 1997. 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 begin the orderly termination
of its operations and affairs. The Partnership has not, and will not invest in
any additional new finance or lease transactions during the disposition period.
However, it may expend monies to refurbish assets to maintain the value of the
portfolio. During the disposition period, the Partnership expects to recover at
a minimum, the carrying value of its assets
As a result of the Partnership's entering into the disposition period,
future monthly distributions are expected to fluctuate depending on the amount
of asset sale and re-lease proceeds received during that period.
The Partnership's primary sources of funds in 1999, 1998 and 1997 were net
cash provided by operations of $584,985, $3,315,260 and $8,284,703,
respectively, and proceeds from sales of equipment of $3,946,052, $1,394,199 and
$9,741,651, respectively. These funds were used to fund cash distributions and
make payments on borrowings.
The Partnership's notes payable at December 31, 1999 and 1998 totaled
$5,454,155 and $7,735,949, respectively, and consisted of $5,117,839 and
$6,366,111 in non-recourse notes, respectively, $58,146 and $499,037 in a
non-recourse - secured note, respectively, which is paid from proceeds from the
lease portfolio that secured the financing and a note payable of $278,170 and
$870,801, respectively, which is paid from available cash from operations.
Cash distributions to the limited partners in 1999, 1998 and 1997, which
were paid monthly, totaled $2,461,219, $4,074,331 and $7,882,867, respectively,
of which $815,438, $681,477 and $669,963 was investment income and $1,645,781,
$3,392,854 and $7,212,904 was a return of capital, respectively. The monthly
annualized cash distribution rate to limited partners in 1999, 1998 and 1997 was
6.17%, 10.21% and 19.75%, respectively, of which 2.04%, 1.71% and 1.68% was
investment income and 4.13%, 8.50% and 18.07% 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 in 1999, 1998 and 1997 was $6.17, $10.21 and $19.75, respectively,
of which $2.04, $1.71 and $1.68 was investment income and $4.13, $8.50 and
$18.07 was a return of capital, respectively.
As of December 31, 1999, except as noted above, there were no known trends
or demands, commitments, events or uncertainties which are likely to have a
material effect on liquidity. As cash is realized from operations and sales of
equipment, the Partnership will distribute substantially all available cash,
after retaining sufficient cash to meet its reserve requirements and recurring
obligations.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
Item 8. Consolidated Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Page Number
Independent Auditors' Report 12
Consolidated Balance Sheets as of December 31, 1999 and 1998 13-14
Consolidated Statements of Operations for the Years Ended
December 31, 1999, 1998 and 1997 15
Consolidated Statements of Changes in Partners' Equity for the
Years Ended December 31, 1999, 1998 and 1997 16
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997 17-19
Notes to Consolidated Financial Statements 20-28
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Financial Statements
December 31, 1999
(With Independent Auditors' Report Thereon)
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
ICON Cash Flow Partners, L.P., Series D:
We have audited the accompanying consolidated balance sheets of ICON Cash Flow
Partners, L.P., Series D (a Delaware limited partnership) as of December 31,
1999 and 1998, and the related consolidated statements of operations, changes in
partners' equity, and cash flows for each of the years in the three-year period
ended December 31, 1999. These consolidated financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1, the Partnership's reinvestment period ended June 5,
1997. The disposition period began on June 6, 1997. 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 begin
the orderly termination of its operations and affairs.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ICON Cash Flow
Partners, L.P., Series D as of December 31, 1999 and 1998, and the results of
its operations and its cash flows for each of the years in the three-year period
ended December 31, 1999, in conformity with generally accepted accounting
principles.
/s/ KPMG LLP
KPMG LLP
March 28, 2000
New York, New York
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Balance Sheets
December 31,
<TABLE>
1999 1998
---- ----
Assets
<S> <C> <C>
Cash .................................................. $ 287,481 $ 645,739
------------ ------------
Investment in finance leases
Minimum rents receivable ........................... 1,243,687 3,257,332
Estimated unguaranteed residual values ............. 1,422,788 4,784,614
Initial direct costs ............................... 15,236 42,566
Unearned income .................................... (225,317) (621,676)
Allowance for doubtful accounts .................... (224,544) (246,450)
------------ ------------
2,231,850 7,216,386
Investment in operating lease equipment, at cost ...... 8,188,964 6,819,250
Accumulated depreciation .............................. (1,702,723) (1,020,538)
------------ ------------
6,486,241 5,798,712
Investment in financings
Receivables due in installments .................... 2,628,283 3,079,170
Initial direct costs ............................... 395 1,418
Unearned income .................................... (841,135) (1,045,785)
Allowance for doubtful accounts .................... (92,097) (140,766)
------------ ------------
1,695,446 1,894,037
Investment in joint venture ........................... 716,591 979,346
------------ ------------
Accounts receivable from General Partner and affiliates 9,183 20,122
------------ ------------
Other assets .......................................... 194,540 65,518
------------ ------------
Total assets .......................................... $ 11,621,332 $ 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)
December 31,
<TABLE>
1999 1998
---- ----
Liabilities and Partners' Equity
<S> <C> <C>
Note payable ......................................... $ 278,170 $ 870,801
Note payable - non-recourse - secured financing ...... 58,146 499,037
Notes payable - non-recourse ......................... 5,117,839 6,366,111
Security deposits, deferred credits and other payables 2,168,177 3,222,527
------------ ------------
7,622,332 10,958,476
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ................................... (304,607) (288,004)
Limited partners (399,118 units outstanding,
$100 per unit original issue price) ............. 4,303,607 5,949,388
------------ ------------
Total partners' equity ............................... 3,999,000 5,661,384
------------ ------------
Total liabilities and partners' equity ............... $ 11,621,332 $ 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
For the Years Ended December 31,
<TABLE>
1999 1998 1997
---- ---- ----
Revenues
<S> <C> <C> <C>
Rental income ............................. $ 1,300,613 $ 1,329,387 $ 798,000
Finance income ............................ 941,539 1,069,246 1,785,803
Income from investment in joint venture ... 19,410 187,165 359,187
Gain on sales of equipment ................ 354,424 183,820 452,706
Interest income and other ................. 42,021 27,195 141,715
----------- ----------- -----------
Total revenues ............................ 2,658,007 2,796,813 3,537,411
----------- ----------- -----------
Expenses
Interest .................................. 602,920 782,539 1,121,197
Depreciation .............................. 682,185 664,121 356,417
Management fees - General Partner ......... 193,017 397,171 548,400
General and administrative ................ 214,256 268,346 199,751
Administrative expense reimbursements
- General Partner ....................... 113,548 218,158 271,829
Amortization of initial direct costs ...... 28,406 178,117 363,087
Reversal of allowance for doubtful accounts -- (400,000) --
----------- ----------- -----------
Total expenses ............................ 1,834,332 2,108,452 2,860,681
----------- ----------- -----------
Net income ................................... $ 823,675 $ 688,361 $ 676,730
=========== =========== ===========
Net income allocable to:
Limited partners .......................... 815,438 681,477 669,963
General Partner ........................... 8,237 6,884 6,767
----------- ----------- -----------
$ 823,675 $ 688,361 $ 676,730
=========== =========== ===========
Weighted average number of limited
partnership units outstanding ............. 399,118 399,118 399,138
=========== =========== ===========
Net income per weighted average
limited partnership unit .................. $ 2.04 $ 1.71 $ 1.68
=========== =========== ===========
</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 Years Ended December 31, 1999, 1998 and 1997
<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, 1996 $16,555,512 $(180,852) $16,374,660
Cash distributions
to partners $ 18.07 $ 1.68 (7,882,867) (79,648) (7,962,515)
Limited partnership
units redeemed
(40 units) (366) - (366)
Net income 669,963 6,767 676,730
----------- --------- -----------
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 $ 4.13 $ 2.04 (2,461,219) (24,840) (2,486,059)
Net income 815,438 8,237 823,675
----------- --------- -----------
Balance at
December 31, 1999 $ 4,303,607 $(304,607) $ 3,999,000
=========== ========= ===========
</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 Years Ended December 31,
<TABLE>
1999 1998 1997
---- ---- ----
Cash flows provided by operating activities:
<S> <C> <C> <C>
Net income ........................................... $ 823,675 $ 688,361 $ 676,730
----------- ----------- -----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Finance income portion of receivables paid
directly to lenders by lessees ................... (168,261) (362,177) (843,479)
Rental income paid directly to lenders by lessees .. (620,426) (330,880) (193,012)
Amortization of initial direct costs ............... 28,406 178,117 363,087
Gain on sales of equipment ......................... (354,424) (183,820) (452,706)
Interest expense on non-recourse financing
paid directly by lessees ......................... 472,953 581,922 811,948
Interest expense accrued on non-recourse
securitized debt ................................. -- 1,455 4,202
Depreciation ....................................... 682,185 664,121 356,417
Reversal of allowance for doubtful accounts ........ -- (400,000) --
Income from investment in joint venture ............ (19,410) (187,165) (359,187)
Changes in operating assets and liabilities:
Collection of principal - non-financed receivables 542,524 1,467,879 1,791,373
Distributions from joint venture ................. 386,657 412,671 4,134,882
Allowance for doubtful accounts .................. 70,575 (237,275) 120,722
Investment in joint venture ...................... (52,616) (49,780) (125,000)
Accounts receivable to General Partner and
affiliates, net ................................ 10,939 (164,151) 145,745
Security deposits, deferred credits
and other payables ............................. (1,188,748) 1,147,809 1,411,293
Other ............................................ (29,044) 88,173 441,688
----------- ----------- -----------
Total adjustments .............................. (238,690) 2,626,899 7,607,973
----------- ----------- -----------
Net cash provided by operating activities ........ 584,985 3,315,260 8,284,703
----------- ----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment ..................... 3,946,052 1,394,199 9,741,651
Refurbishment of operating equipment ................. (1,369,714) -- --
Equipment purchased .................................. -- -- (7,030,431)
----------- ----------- -----------
Net cash provided by investing activities ........ 2,576,338 1,394,199 2,711,220
----------- ----------- -----------
</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 Years Ended December 31,
<TABLE>
1999 1998 1997
---- ---- ----
Cash flows from financing activities:
<S> <C> <C> <C>
Cash distributions to partners ............... (2,486,059) (4,115,486) (7,962,515)
Proceeds from notes payable - non-recourse ... -- 750,000 --
Proceeds from note payable ................... -- -- 2,700,000
Principal payments on note payable ........... (592,631) (1,156,338) (672,861)
Principal payments on non-recourse - secured
financing .................................. (440,891) (696,274) (933,227)
Principal payments on revolving line of credit -- -- (3,386,421)
Redemption of limited partnership units ...... -- -- (366)
------------ ------------ ------------
Net cash used in financing activities .... (3,519,581) (5,218,098) (10,255,390)
------------ ------------ ------------
Net (decrease) increase in cash .............. (358,258) (508,639) 740,533
Cash at beginning of year ....................... 645,739 1,154,378 413,845
------------ ------------ ------------
Cash at end of year ............................. $ 287,481 $ 645,739 $ 1,154,378
============ ============ ============
</TABLE>
Note: Equipment purchased in 1999 represented an upgrade to an existing lease
investment.
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
Interest expense of $602,920, $782,539 and $1,121,197 for the years ended
December 31, 1999, 1998 and 1997 consisted of: interest expense on non-recourse
financing accrued or paid directly to lenders by lessees of $472,953, $581,922
and $811,948, respectively, and other interest of $129,967, $200,617 and
$309,249, respectively.
During the years ended December 31, 1999, 1998 and 1997, non-cash
activities included the following:
<TABLE>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Principal and interest on finance receivables
paid directly to lender by lessees .......... $ 971,296 $ 2,971,276 $ 6,025,801
Rental income assigned operating lease receivable 620,426 330,880 193,012
Principal and interest on non-recourse financing
paid directly by lessees .................... (1,591,722) (3,302,156) (6,218,813)
Decrease in investments in finance leases and
financings due to contribution in joint venture (51,876) -- (4,805,767)
Increase in equity investment in joint venture ... 51,876 -- 4,805,767
Non-recourse notes payable assumed in
purchase price - finance and operating leases . -- -- 3,200,000
Fair value of equipment and receivables
purchased for debt ............................ -- -- (3,200,000)
Decrease in investment in finance leases due
to termination of leases ...................... -- -- 1,035,175
Decrease in notes payable - non-recourse due to
termination of leases ......................... -- -- (1,035,175)
Decrease in security deposits and deferred credits -- --
----------- ----------- -----------
$ -- $ -- $ --
=========== =========== ===========
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
December 31, 1999
1. Organization
ICON Cash Flow Partners, L.P., Series D (the "Partnership") was formed on
February 21, 1991 as a Delaware limited partnership with an initial
capitalization of $2,000. It was formed to acquire various types of equipment,
to lease such equipment to third parties and, to a lesser degree, to enter into
secured financing transactions. The Partnership's offering period commenced on
August 23, 1991 and by its final closing on June 5, 1992, 400,000 units had been
admitted into the Partnership with aggregate gross proceeds of $40,000,000. From
1994 through 1999, the Partnership redeemed 882 limited partnership units
leaving 399,118 limited partnership units outstanding at December 31, 1999.
The Partnership's reinvestment period ended June 5, 1997. The disposition
period began on June 6, 1997. 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 begin 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.
The General Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut corporation. The General Partner manages and controls
the business affairs of the Partnership's equipment leases and financing
transactions under a management agreement with the Partnership.
ICON Securities Corp., an affiliate of the General Partner, received an
underwriting commission on the gross proceeds from sales of all units. The total
underwriting compensation paid by the Partnership, including underwriting
commissions, sales commissions, incentive fees, public offering expense
reimbursements and due diligence activities was limited to 13 1/2% of the gross
proceeds received from the sale of the units. Such offering costs aggregated
$5,400,000, (including $2,207,188 paid to the General Partner or its
affiliates), and were charged directly to limited partners' equity.
Profits, losses, cash distributions and disposition proceeds are allocated
99% to the limited partners and 1% to the General Partner until each limited
partner has received cash distributions and disposition proceeds sufficient to
reduce its adjusted capital contribution account to zero and receive, in
addition, other distributions and allocations which would provide a 10% per
annum cumulative return on its outstanding adjusted capital contribution
account. After such time, the distributions would be allocated 90% to the
limited partners and 10% to the General Partner.
2. Significant Accounting Policies
Basis of Accounting and Presentation - The Partnership's records are
maintained on the accrual basis. The preparation of financial statements in
conformity with generally accepted accounting principles requires the General
Partner's management to make estimates and assumptions that affect the reported
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
amounts of assets and liabilities at the date of the financial statements, and
revenues and expenses during the reporting period. Actual results could differ
from those estimates. In addition, management is required to disclose contingent
assets and liabilities.
Consolidation - The consolidated financial statements include the accounts
of the Partnership and its wholly owned subsidiary, ICON D Corp. All
inter-company accounts and transactions have been eliminated. The Partnership
accounts for its interest in a less than 50% owned joint venture under the
equity method of accounting. In such cases, the Partnership's original
investments are recorded at cost and adjusted for its share of earnings, losses
and distributions thereafter.
Leases - The Partnership accounts for owned equipment leased to third
parties as finance leases or operating leases, as appropriate. For finance
leases, the Partnership records, at the inception of the lease, the total
minimum lease payments receivable, the estimated unguaranteed residual values,
the initial direct costs related to the leases and the related unearned income.
Unearned income represents the difference between the sum of the minimum lease
payments receivable plus the estimated unguaranteed residual minus the cost of
the leased equipment. Unearned income is recognized as finance income over the
terms of the related leases using the interest method. For operating leases,
equipment is recorded at cost and is depreciated on the straight-line method
over the lease terms to their estimated fair market values at lease
terminations. Related lease rentals are recognized on the straight-line method
over the lease terms. Billed and uncollected operating lease receivables, net of
allowance for doubtful accounts, are included in other assets. Initial direct
costs of finance leases are capitalized and are amortized over the terms of the
related leases using the interest method. Initial direct costs of operating
leases are capitalized and amortized on the straight-line method over the lease
terms. The Partnership's leases have terms ranging from two to five years. Each
lease is expected to provide aggregate contractual rents that, along with
residual proceeds, return the Partnership's cost of its investments along with
investment income.
Investment in Financings - Investment in financings represent the gross
receivables due from the financing of equipment plus the initial direct costs
related thereto less the related unearned income. The unearned income is
recognized as finance income, and the initial direct costs are amortized, over
the terms of the receivables using the interest method. Financing transactions
are supported by a written promissory note evidencing the obligation of the user
to repay the principal, together with interest, which will be sufficient to
return the Partnership's full cost associated with such financing transaction,
together with some investment income. Furthermore, the repayment obligation is
collateralized by a security interest in the tangible or intangible personal
property.
Disclosures About Fair Value of Financial Instruments - Statement of
Financial Accounting Standards ("SFAS") No. 107, "Disclosures about Fair Value
of Financial Instruments" requires disclosures about the fair value of financial
instruments. Separate disclosure of fair value information as of December 31,
1999 and 1998 with respect to the Company's assets and liabilities is not
provided because (i) SFAS No. 107 does not require disclosures about the fair
value of lease arrangements, (ii) the carrying value of financial assets, other
than lease related investments, and payables approximates market value and (iii)
fair value information concerning certain recourse and non-recourse debt
obligations is not practicable to estimate without incurring excessive costs to
obtain all the information that would be necessary to derive a market interest
rate.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Allowance for Doubtful Accounts - The Partnership records a provision for
bad debts to provide for estimated credit losses in the portfolio. The allowance
for doubtful accounts is based on an analysis of delinquency, an assessment of
overall risk and a review of historical loss experience. The Partnership's
write-off policy is based on an analysis of the aging of the Partnership's
portfolio, a review of the non-performing receivables and leases, and prior
collection experience. An account is fully reserved for or written off when the
analysis indicates that the probability of collection of the account is remote.
In 1998, the Partnership reversed $400,000 of amounts previously included in the
allowance for doubtful accounts.
Impairment of Estimated Residual Values -- The Partnership's policy with
respect to impairment of estimated residual values is to review, on a periodic
basis, the carrying value of its residuals on an individual asset basis to
determine whether events or changes in circumstances indicate that the carrying
value of an asset may not be recoverable and, therefore, an impairment loss
should be recognized. The events or changes in circumstances which generally
indicate that the residual value of an asset has been impaired are (i) the
estimated fair value of the underlying equipment is less than the Partnership's
carrying value or (ii) the lessee is experiencing financial difficulties and it
does not appear likely that the estimated proceeds from disposition of the asset
will be sufficient to satisfy the remaining obligation to the non-recourse
lender and the Partnership's residual position. Generally in the latter
situation, the residual position relates to equipment subject to third party
non-recourse notes payable where the lessee remits their rental payments
directly to the lender and the Partnership does not recover its residual until
the non-recourse note obligation is repaid in full.
The Partnership measures its impairment loss as the amount by which the
carrying amount of the residual value exceeds the estimated proceeds to be
received by the Partnership from release or resale of the equipment. Generally,
quoted market prices are used as the basis for measuring whether an impairment
loss should be recognized.
Income Taxes - No provision for income taxes has been made as the liability
for such taxes is that of each of the partners rather than the Partnership.
New Accounting Pronouncements - In June 1998 the FASB issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
requires that an entity recognize all derivative instruments as either assets or
liabilities in the balance sheet and measure those instruments at fair value.
SFAS No. 133 as amended, is effective for all quarters of fiscal years beginning
after June 15, 2000. The adoption of SFAS No. 133 is not expected to have a
material effect on the Partnership's net income, partners' equity or total
assets.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
3. Investment in Joint Venture
The Partnership and affiliates formed a joint venture for the purpose of
acquiring and managing various assets.
ICON Receivables 1997-A L.L.C.
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. The Partnership's contributions amounted to $4,805,767 in
assigned leases and $125,000 of cash in 1997, $49,780 of cash in 1998 and
$52,616 of cash and $51,876 in assigned leases in 1999. 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 and distributions thereafter.
Information as to the financial position and results of operations of
1997-A as of and for the year ended December 31, 1999 and 1998 is summarized
below:
December 31, 1999 December 31, 1998
Assets $17,967,471 $31,845,710
=========== ===========
Liabilities $14,701,353 $27,065,004
=========== ===========
Equity $ 3,266,388 $ 4,780,706
=========== ===========
Partnership's share of equity $ 716,591 $ 979,346
=========== ===========
Net income $ 108,923 $ 1,050,957
=========== ===========
Partnership's share of net income $ 19,410 $ 187,165
=========== ===========
Distributions to partners $ 2,171,133 $ 2,367,147
=========== ===========
Partnership's share of distributions $ 386,657 $ 412,671
=========== ===========
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
4. Receivables Due in Installments
Non-cancelable minimum annual amounts due on finance leases and financings
as of December 31, 1999 are as follows:
Finance
Year Leases Financings Total
2000 $ 738,808 $ 152,376 $ 891,184
2001 297,350 129,684 427,034
2002 61,657 90,446 152,103
2003 145,872 87,684 233,556
2004 - 2,168,093 2,168,093
---------- ---------- ----------
$1,243,687 $2,628,283 $3,871,970
========== ========== ==========
5. Investment in Operating Lease
In June 1997 the Partnership acquired two DeHaviland DHC-8-102 aircraft and
leased them to U.S. Airways, Inc ("U.S. Air"). The purchase price totaled
$6,819,250 and was funded with $3,619,250 of cash and $3,200,000 in non-recourse
debt. In August 1999 one plane was re-leased to Wideroe's Flyveselskap ASA, a
Norwegian air carrier for a term of four years under a lease which required the
aircraft to be refurbished at a cost of $1,369,714. In November 1999 the
Partnership extended the U.S. Air lease for a term of four years.
The investment in operating leases at December 31, 1999, 1998 and 1997
consisted of the following:
<TABLE>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Equipment cost, beginning of year ......... $ 6,819,250 $ 6,819,250 $ --
Refurbishment of operating equipment ...... 1,369,714 -- --
Equipment purchases ....................... -- -- 6,819,250
----------- ----------- -----------
Equipment cost, end of year ............... 8,188,964 6,819,250 6,819,250
----------- ----------- -----------
Accumulated depreciation, beginning of year (1,020,538) (356,417) --
Depreciation .............................. (682,185) (664,121) (356,417)
----------- ----------- -----------
Accumulated depreciation, end of year ..... (1,702,723) (1,020,538) (356,417)
----------- ----------- -----------
Investment in operating leases, end of year $ 6,486,241 $ 5,798,712 $ 6,462,833
=========== =========== ===========
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
6. Allowance for Doubtful Accounts
The allowance for doubtful accounts related to the investments in finance
leases and financings consisted of the following:
Finance
Leases Financings Total
Balance at December 31, 1996 ....... $ 651,546 $ 252,223 $ 903,769
Accounts written-off .......... (92,545) (74,931) (167,476)
Recovery on accounts previously
written-off ................. 9,284 278,914 288,198
----------- ----------- -----------
Balance at December 31, 1997 ....... 568,285 456,206 1,024,491
Accounts written-off .......... (209,007) (47,034) (256,041)
Recovery on accounts previously
written-off ................. 18,766 -- 18,766
Reversal of allowance for
doubtful accounts ........... (131,594) (268,406) (400,000)
----------- ----------- -----------
Balance at December 31, 1998 ....... 246,450 140,766 387,216
Accounts written-off .......... (79,889) (48,669) (128,558)
Recovery on accounts previously
written-off ................. 57,983 -- 57,983
----------- ----------- -----------
Balance at December 31, 1999 ....... $ 224,544 $ 92,097 $ 316,641
=========== =========== ===========
7. Notes Payable
In May 1997 the Partnership borrowed $2,700,000 from a bank pursuant to a
four year term loan agreement. The loan agreement grants a security interest in
certain Partnership payments and collateral for a specified group of leases and
financing transactions. The note bears interest at 9.25% and is payable in
monthly installments. In addition, the loan agreement contains restrictive
covenants which include the maintenance of minimum tangible net worth and of
certain financial ratios. The Partnership was in compliance with the related
covenants at December 31, 1999. The Partnership had $278,170 outstanding
relating to this note payable at December 31, 1999.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
In December 1995 the Partnership borrowed $4,148,838 by pledging lease
receivables and granting a security interest in the underlying equipment and
receivables relating to a specified group of leases and financing transactions.
The loan (described herein as notes payable - non-recourse - secured financing)
bears interest at a fixed rate of 8.02%, and is payable from receivable proceeds
from the portfolio that has secured it. The Partnership had $58,146 outstanding
under the note at December 31, 1999.
In June 1997 the Partnership acquired two DeHaviland DHC-8-102 aircraft and
leased them to U.S. Air. The purchase price totaled $6,819,250 of which the
Partnership borrowed $3,200,000 in non-recourse debt from Transamerica Business
Credit Corp. ("Transamerica") (described herein as notes payable -
non-recourse). In October 1998 the Partnership borrowed an additional $750,000
from Transamerica, to refurbish one of the two aircraft, bringing the total
non-recourse debt relating to this transaction to $3,950,000.
In August 1999 the Partnership refinanced $2,000,000 of the Transamerica
debt with a new lender, Christiania Bank of Norway ("Christiania"), and borrowed
an additional $1,000,000 from Christiania. The maturity date of this $3,000,000
borrowing from Christiania is November 2003. The Partnership negotiated a fixed
rate of 9.6% on this debt in October 1999. This debt is collateralized by the
lease with Wideroe's Flyveselskap ASA and the underlying equipment.
In October 1999 the Partnership retired $975,000 of Transamerica debt and
refinanced a separate $1,000,000 of debt for a four year term at a fixed rate of
11%. This debt is collateralized by the lease with U.S. Air and the underlying
equipment.
Notes bear interest at rates ranging from 5.2% to 12% and mature as
follows:
<TABLE>
Note Payable Christiania Transamerica Other
Non-Recourse Notes Payable Notes Payable Notes Payable
Note Payable Secured Financing Non-Recourse Non-Recourse Non-Recourse Total
<S> <C> <C> <C> <C> <C> <C>
2000 $ 205,076 $ 58,146 $ 390,998 $ 212,482 $ 895,580 $ 1,762,282
2001 73,094 - 430,229 237,070 281,323 1,021,716
2002 - - 473,398 264,503 194,861 932,762
2003 - - 1,468,129 269,266 - 1,737,395
------------ ------------- ------------- ------------- ------------- -------------
$ 278,170 $ 58,146 $ 2,762,754 $ 983,321 $ 1,371,764 $ 5,454,155
============ ============= ============= ============= ============= =============
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
8. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the years ended December 31, 1999, 1998 and 1997
are as follows:
Charged to
Operations
Management fees ..................... $548,400
Administrative expense reimbursements 271,829
--------
Year ended December 31, 1997 ........ $820,229
========
Management fees ..................... $397,171
Administrative expense reimbursements 218,158
--------
Year ended December 31, 1998 ........ $615,329
========
Management fees ..................... $193,017
Administrative expense reimbursements 113,548
--------
Year ended December 31, 1999 ........ $306,565
========
9. Security Deposits, Deferred Credits and Other Payables
Security deposits, deferred credits and other payables at December 31, 1999
and December 31, 1998 include $408,912 and $2,097,485, respectively, of proceeds
received on residuals which will be applied upon final remarketing of the
related equipment.
10. Subsidiary
In December 1994 the Partnership formed a wholly owned subsidiary, ICON D
Corp., a Massachusetts corporation, formed for the purpose of managing equipment
under lease located in the state of Massachusetts. Massachusetts partnerships
are taxed for personal property at a higher rate than corporations, and
therefore, to mitigate such excess property tax, certain leases are being
managed by ICON D Corp, a corporation. The Partnership's consolidated financial
statements include 100% of the accounts of ICON D Corp. As of December 31, 1999,
there was no federal tax liability for ICON D Corp.
11. Commitments and Contingencies
The Partnership has entered into remarketing and residual sharing
agreements with third parties. In connection therewith, remarketing or residual
proceeds received in excess of specified amounts will be shared with third
parties based on specified formulas. For the years ended December 31, 1999, 1998
and 1997, the Partnership paid $152,739, $116,400 and $366,466, respectively, to
third parties as their share of the proceeds.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
12. Tax Information (Unaudited)
The following reconciles net income for financial reporting purposes to
income (loss) for federal income tax purposes for the years ended December 31:
1999 1998 1997
---- ---- ----
Net income per financial statements $ 823,675 $ 688,361 $ 676,730
Differences due to:
Direct finance leases .......... 1,315,734 3,337,161 5,998,911
Depreciation and amortization .. (2,020,504) (3,431,801) (4,339,289)
Provision for losses ........... (70,575) 162,724 138,489
Loss on sale of equipment ...... (686,442) (349,203) 631,921
Other .......................... (78,444) (320,877) 376,745
----------- ----------- -----------
Partnership (loss) income for
federal income tax purposes .... $ (716,556) $ 86,365 $ 3,483,507
=========== =========== ===========
As of December 31, 1999, the partners' capital accounts included in the
financial statements totaled $3,999,000 compared to the partners' capital
accounts for federal income tax purposes of $16,426,766 (unaudited). The
difference arises primarily from commissions reported as a reduction in the
partners' capital for financial reporting purposes but not for federal income
tax purposes, and temporary differences related to direct finance leases,
depreciation and provision for losses.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant's General Partner
The General Partner, a Connecticut corporation, was formed in 1985. The
General Partner's principal offices are located at 111 Church Street, White
Plains, New York 10601-1505, and its telephone number is (914) 993-1700. The
officers of the General Partner have extensive experience with transactions
involving the acquisition, leasing, financing and disposition of equipment,
including acquiring and disposing of equipment subject to leases and full
financing transactions.
The manager of the Registrant's business is the General Partner. The
General Partner is engaged in a broad range of equipment leasing and financing
activities. Through its sales representatives and through various broker
relationships throughout the United States, the General Partner offers a broad
range of equipment leasing services.
The General Partner is performing or causing to be performed certain
functions relating to the management of the equipment of the Partnership. Such
services include the collection of lease payments from the lessees of the
equipment, re-leasing services in connection with equipment which is off-lease,
inspections of the equipment, liaison with and general supervision of lessees to
assure that the equipment is being properly operated and maintained, monitoring
performance by the lessees of their obligations under the leases and the payment
of operating expenses.
The officers and directors of the General Partner are as follows:
Beaufort J.B. Clarke Chairman, Chief Executive Officer and Director
Paul B. Weiss President and Director
Thomas W. Martin Executive Vice President and Director
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1998
Beaufort J. B. Clarke, age 54, has been Chairman, Chief Executive Officer
and Director of the General Partner since 1996. Prior to his present position,
Mr. Clarke was founder and the President and Chief Executive Officer of Griffin
Equity Partners, Inc. Mr. Clarke formerly was an attorney with Shearman and
Sterling and has over 20 years of senior management experience in the United
States leasing industry.
Paul B. Weiss, age 39, is President and Director of the General Partner.
Mr. Weiss has been exclusively engaged in lease acquisitions since 1988 from his
affiliations with the General Partner since 1996, Griffin Equity Partners (as
Executive Vice President from 1993-1996); Gemini Financial Holdings (as Senior
Vice President-Portfolio Acquisitions from 1991-1993) and Pegasus Capital
Corporation (as Vice President-Portfolio Acquisitions from 1988-1991). He was
previously an investment banker and a commercial banker.
Thomas W. Martin, age 46, has been Executive Vice President of the General
Partner since 1996. Prior to his present position, Mr. Martin was the Executive
Vice President and Chief Financial Officer of Griffin Equity Partners, Inc.
(1993-1996), Gemini Financial Holdings (as Senior Vice President from 1992-1993)
and Chancellor Corporation (as Vice President-Syndications from 1985-1992). Mr.
Martin has 17 years of senior management experience in the leasing business.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
Item 11. Executive Compensation
The Partnership has no directors or officers. The General Partner and its
affiliates were paid or accrued the following compensation and reimbursement for
costs and expenses for the years ended December 31, 1999, 1998 and 1997.
<TABLE>
Type of
Entity Capacity Compensation 1999 1998 1997
------ -------- ------------ ---- ---- ----
<S> <C> <C> <C> <C> <C>
ICON Capital Corp. General Partner Management fees $193,017 $397,171 $548,400
ICON Capital Corp. General Partner Administrative expense
reimbursements 113,548 218,158 271,829
-------- -------- --------
$306,565 $615,329 $820,229
======== ======== ========
</TABLE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) The registrant is a limited partnership and therefore does not have voting
shares of stock. No person of record owns, or is known by the Partnership to own
beneficially, more than 5% of any class of securities of the Partnership.
(b) As of March 24,2000, Directors and Officers of the General Partner do not
own any equity securities of the Partnership.
(c) The General Partner owns the equity securities of the Partnership set forth
in the following table:
Title Amount Beneficially Percent
of Class Owned of Class
-------- --------------------------------------------- --------
General Partner Represents initially a 1% and potentially a 100%
Interest 10% interest in the Partnership's income, gain
and loss deductions.
Profits, losses, cash distributions and disposition proceeds are allocated
99% to the limited partners and 1% to the General Partner until each investor
has received cash distributions and disposition proceeds sufficient to reduce
its adjusted capital contribution account to zero and receive, in addition,
other distributions and allocations which would provide a 10% per annum
cumulative return, compounded daily, on the outstanding adjusted capital
contribution account. After such time, the distributions will be allocated 90%
to the limited partners and 10% to the General Partner.
Item 13. Certain Relationships and Related Transactions
See Item 11 for a discussion of the Partnership's related party
transactions. See Note 3 for a discussion of the Partnership's related party
investment in joint venture.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements - See Part II, Item 8 hereof.
2. Financial Statement Schedule - None.
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in the Financial Statements or Notes thereto.
3. Exhibits - The following exhibits are incorporated herein by reference:
(a) 1. Financial Statements - See accompanying index to financial statements,
Item 8.
2. Exhibits - The following exhibits are incorporated herein by references:
(i) Form of Dealer-Manager Agreement (Incorporated by reference to Exhibit
1.1 to Form S-1 Registration Statement No. 33-40044 filed with the
Securities and Exchange Commission on April 18, 1991)
(ii) Form of Selling Dealer Agreement (Incorporated by reference to Exhibit
1.2 to Form S-1 Registration Statement No. 33-40044 filed with the
Securities and Exchange Commission on April 18, 1991)
(iii)Amended and Restated Agreement of Limited Partnership (Incorporated
herein by reference to Exhibit A to Amendment No. 4 to Form S-1
Registration Statement No. 33-40044 filed with the Securities and
Exchange Commission on August 14, 1991)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter ended
December 31, 1999.
<PAGE>
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
December 31, 1999
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: March 29, 2000 /s/ Beaufort J.B. Clarke
------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacity and on the dates indicated.
ICON Capital Corp.
sole General Partner of the Registrant
Date: March 29, 2000 /s/ Beaufort J.B. Clarke
------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Date: March 29, 2000 /s/ Paul B. Weiss
-----------------
Paul B. Weiss
President and Director
Date: March 29, 2000 /s/ Thomas W. Martin
--------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer)
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrant Which have not Registered Securities Pursuant to
Section 12 of the Act
No annual report or proxy material has been sent to security holders. An annual
report will be sent to the limited partners and a copy will be forwarded to the
Commission.
