UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended September 30, 1996
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[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 ---
For the transition period from to
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Commission File Number 33-44413
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ICON Cash Flow Partners, L.P., Series E
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(Exact name of registrant as specified in its charter)
Delaware 13-3635208
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
600 Mamaroneck Avenue, Harrison, New York 10528
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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 E
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
<TABLE>
September 30, December 31,
1996 1995
Assets
<S> <C> <C>
Cash ...................................................... $ 4,015,186 $ 5,826,646
------------ ------------
Investment in finance leases
Minimum rents receivable ............................... 30,777,046 44,696,273
Estimated unguaranteed residual values ................. 11,181,276 12,388,734
Initial direct costs ................................... 595,582 1,046,622
Unearned income ........................................ (4,364,347) (6,988,215)
Allowance for doubtful accounts ........................ (872,508) (783,475)
------------ ------------
37,317,049 50,359,939
------------ ------------
Investment in operating leases
Equipment at cost ...................................... 20,771,628 20,771,628
Initial direct costs ................................... 163,200 408,000
Accumulated depreciation ............................... (2,123,423) (1,327,139)
------------ ------------
18,811,405 19,852,489
------------ ------------
Investment in financings
Receivables due in installments ........................ 21,889,196 10,027,184
Initial direct costs ................................... 154,256 54,798
Unearned income ........................................ (3,720,283) (1,496,344)
Allowance for doubtful accounts ........................ (352,332) (354,969)
------------ ------------
17,970,837 8,230,669
------------ ------------
Net investment in leveraged leases ........................ -- 5,971,629
------------ ------------
Other assets .............................................. 446,430 5,232,064
------------ ------------
Equity investment in joint venture ........................ 39,769 35,445
------------ ------------
Total assets .............................................. $ 78,600,676 $ 95,508,881
============ ============
Liabilities and Partners' Equity
Notes payable - non-recourse .............................. $ 36,425,528 $ 44,415,861
Note payable - non-recourse - securitized ................. 2,025,472 4,326,164
Note payable revolving credit facility .................... 8,000,000 7,400,000
Accounts payable to General Partner and affiliates, net ... 36,935 --
Accounts payable - equipment .............................. -- 1,886,138
Accounts payable - other .................................. 489,568 1,559,564
Security deposits and deferred credits .................... 644,778 1,071,729
Minority interest in joint venture ........................ 44,631 41,724
------------ ------------
47,666,912 60,701,180
------------ ------------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ........................................ (211,057) (172,405)
Limited partners (609,446 and 609,639 units outstanding,
$100 per unit original issue price in 1996 and 1995,
respectively) ........................................ 31,144,821 34,980,106
------------ ------------
Total partners' equity .................................... 30,933,764 34,807,701
------------ ------------
Total liabilities and partners' equity .................... $ 78,600,676 $ 95,508,881
============ ============
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statements of Operations
(unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
---- ---- ---- ----
Revenue
<S> <C> <C> <C> <C>
Finance income $ 1,104,665 $ 1,493,851 $ 3,390,232 $ 4,963,059
Rental income 677,193 677,193 2,031,579 2,031,579
Net gain on sales or remarketing
of equipment 308,409 200,669 1,895,206 475,687
Interest income and other 101,545 100,850 325,541 292,721
Income from equity investment
in joint venture 1,503 1,260 4,324 3,575
Income from leveraged leases - 324,746 200,517 886,445
------------ ------------ ------------ ------------
Total revenues 2,193,315 2,798,569 7,847,399 8,653,066
------------ ------------ ------------ ------------
Expenses
Interest 658,296 1,072,140 2,209,882 3,429,100
Amortization of initial direct costs 293,159 366,099 772,400 1,228,086
Depreciation 265,428 265,428 796,284 796,284
Management fees - General Partner 261,194 410,695 868,147 1,240,019
Provision for bad debts 200,000 150,000 400,000 250,000
Administrative expense reimbursement
- General Partner 129,815 199,984 425,208 608,098
General and administrative 124,130 177,187 348,321 425,050
Minority interest in joint venture 1,629 1,388 4,702 3991
------------ ------------ ------------ ------------
Total expenses 1,933,651 2,642,921 5,824,944 7,980,628
------------ ------------ ------------ ------------
Net income $ 259,664 $ 155,648 $ 2,022,455 $ 672,438
============ ========== ============ ===========
Net income allocable to:
Limited partners $ 257,067 $ 154,092 $ 2,002,230 $ 665,714
General Partner 2,597 1,556 20,225 6,724
------------ ------------ ------------ ------------
$ 259,664 $ 155,648 $ 2,022,455 $ 672,438
============ ============ ============ ============
Weighted average number of limited
partnership units outstanding 609,551 609,644 609,551 609,655
============ ============ ============ ============
Net income per weighted average
limited partnership unit $ .42 $ .25 $ 3.28 $ 1.09
============ ============ ============ ============
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Nine Months Ended September 30, 1996 and
the Years Ended December 31, 1995, 1994 and 1993
(unaudited)
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, 1992 .... $ 21,214,015 $ (2,799) $ 21,211,216
Proceeds from issuance
of limited partnership
units (360,815 units) 36,081,537 -- 36,081,537
Sales and
offering expenses .... (4,871,007) -- (4,871,007)
Cash distributions
to partners .......... $ 8.80 $ 3.03 (5,796,799) (58,637) (5,855,436)
Net income .............. 1,484,577 14,996 1,499,573
------------ ------------ ------------
Balance at
December 31, 1993 .... 48,112,323 (46,440) 48,065,883
Cash distributions
to partners .......... $ 11.27 $ 2.48 (8,390,043) (78,582) (8,468,625)
Limited partnership
units redeemed
(728 units) .......... (48,490) -- (48,490)
Net income .............. 1,511,824 15,271 1,527,095
------------ ------------ ------------
Balance at
December 31, 1994 .... 41,185,614 (109,751) 41,075,863
Cash distributions
to partners .......... $ 10.17 $ 2.58 (7,773,082) (78,512) (7,851,594)
Limited partnership
units redeemed
(45 units) ........... (2,370) -- (2,370)
Net income .............. 1,569,944 15,858 1,585,802
------------ ------------ ------------
Balance at
December 31, 1995 .... 34,980,106 (172,405) 34,807,701
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity (continued)
For the Nine Months Ended September 30, 1996 and
the Years Ended December 31, 1995, 1994 and 1993
(unaudited)
Limited Partner
Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted
average unit)
<S> <C> <C> <C> <C> <C>
Cash distributions
to partners $ 6.28 $ 3.28 (5,828,554) (58,877) (5,887,431)
Limited partnership
units redeemed
(192 units) (8,961) - (8,961)
Net income 2,002,230 20,225 2,022,455
------------ -------- ------------
Balance at
September 30, 1996 $ 31,144,821 $ (211,057) $ 30,933,764
=============== ============ =============
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30,
(unaudited)
<S> <C> <C>
1996 1995
---- ----
Cash flows from operating activities:
Net income ................................................. $ 2,022,455 $ 672,438
------------ ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation ............................................ 796,284 796,284
Rental income - assigned operating lease receivables .... (677,193) (2,031,579)
Finance income portion of receivables paid directly
to lenders by lessees .................................. (1,456,812) (2,399,372)
Amortization of initial direct costs .................... 772,400 1,228,086
Net gain on sales or remarketing of equipment ........... (1,895,206) (475,687)
Interest expense on non-recourse financing paid
directly by lessees .................................... 982,645 2,635,870
Interest expense accrued on recourse debt ............... 369,823 139,466
Collection of principal - non-financed receivables ...... 6,638,551 10,098,759
Collection of principal - leverage lease receivables .... -- 143,935
Income from leveraged leases, net ....................... (200,517) (886,445)
Income from equity investment in joint venture .......... (4,324) (3,575)
Changes in operating assets and liabilities:
Allowance for doubtful accounts ........................ 364,718 (150,628)
Accounts payable to General Partner and affiliates, net 36,935 (71,572)
Accounts payable - other ............................... (1,069,996) (70,306)
Accounts receivable - affiliate ........................ 130,217 --
Security deposits and deferred credits ................. (426,951) 385,075
Minority interest in joint venture ..................... 2,907 2,197
Other assets ........................................... 4,657,514 197,318
Other, net ............................................. 224,902 73,682
------------ ------------
Total adjustments .................................... 9,245,897 9,611,508
------------ ------------
Net cash provided by operating activities ............ 11,268,352 10,283,946
------------ ------------
Cash flows provided by investing activities:
Proceeds from sales of equipment ........................... 9,667,369 2,901,984
Equipment and receivables purchased ........................ (15,018,876) (8,877,419)
Initial direct costs ....................................... (76,732) --
------------ ------------
Net cash used for investing activities ............... (5,428,239) (5,975,435)
------------ ------------
Cash flows from financing activities:
Principal payments on revolving credit facility ............ (8,199,375) --
Cash distributions to partners ............................. (5,887,431) (5,888,745)
Principal payments on secured financing .................... (2,335,806) (6,166,216)
Redemption of limited partnership units .................... (8,961) (2,370)
Proceeds from revolving credit facility .................... 8,780,000 3,900,000
Net cash used for financing activities ............... (7,651,573) (8,157,331)
------------ ------------
Net decrease in cash .......................................... (1,811,460) (3,848,820)
Cash at beginning of period ................................... 5,826,646 6,757,538
------------ ------------
Cash at end of period ......................................... $ 4,015,186 $ 2,908,718
============ ============
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Statement of Cash Flows (continued)
Supplemental Disclosures of Cash Flow Information
During the nine months ended September 30, 1996 and 1995, non-cash activities
included the following:
1996 1995
---- ----
<S> <C> <C>
Principal and interest on direct finance receivables
paid directly to lenders by lessees ............. $ 8,875,299 $ 10,808,654
Rental income assigned operating lease receivable .. 2,031,579 2,031,579
Principal and interest on non-recourse financing
paid directly by lessees ........................ (10,906,878) (12,840,233)
Decrease in investment in finance leases due
to termination of leases ......................... 18,345 755,449
Decrease in notes payable - non-recourse
due to termination of lease ...................... (18,345) (755,449)
------------ ------------
$ -- $ --
============ ============
</TABLE>
Interest expense of $2,209,882 and $3,429,100 for the nine months ended
September 30, 1996 and 1995 consisted of: interest expense on non-recourse
financing accrued or paid directly by lenders to lessees of $1,736,134 and
$2,775,336, respectively, and other interest of $473,748 and $653,764,
respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
September 30, 1996
(unaudited)
1. Basis of Presentation
The consolidated financial statements included herein should be read in
conjunction with the Notes to Consolidated Financial Statements included in the
Partnership's 1995 Annual Report on Form 10-K and have been prepared in
accordance with the accounting policies stated therein.
2. New Accounting Pronouncement
In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which is
effective beginning in 1996.
The Partnership's existing policy with respect to impairment of estimated
residual values is to review, on a quarterly 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.
As a result, the Partnership's policy with respect to measurement and
recognition of an impairment loss associated with estimated residual values is
consistent with the requirements of SFAS No. 121 and, therefore, the
Partnership=s adoption of this Statement in the first quarter of 1996 had no
material effect on the financial statements.
3. Redemption of Limited Partnership Units
The General Partner consented to the Partnership redeeming 192 limited
partnership units during the nine months ended September 30, 1996. The
redemption amount was calculated following the specified redemption formula as
per the Partnership agreement. Redeemed units have no voting rights and do not
share in distributions. The Partnership agreement limits the number of units
which can be redeemed in any one year and redeemed units may not be reissued.
Redeemed limited partnership units are accounted for as a reduction from
partners equity.
4. Investment in Joint Ventures
The Partnership Agreement allows the Partnership to invest in joint ventures
with other limited partnerships sponsored by the General Partner provided that
the investment objectives of the joint ventures are consistent with that of the
Partnership.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
ICON Cash Flow LLC I
On September 21, 1994, the Partnership and an affiliate, ICON Cash Flow
Partners L.P. Six ("L.P. Six"), formed a joint venture, ICON Cash Flow Partners,
L.L.C. I ("ICON Cash Flow LLC I"), for the purpose of acquiring and managing an
aircraft currently on lease to Alaska Airlines, Inc. The aircraft is a 1988
McDonnell Douglas MD-83. The Partnership and L.P. Six contributed $3,730,493
(99%) and $37,682 (1%) of the cash required for such acquisition, respectively,
to ICON Cash Flow LLC I. ICON Cash Flow LLC I acquired the aircraft, assuming
$17,003,454 in non-recourse debt and the contributions received from the
Partnership and L.P. Six. The purchase price of the transaction totaled
$20,771,629. The lease is an operating lease and the lease term expires in March
1997. Profits, losses, excess cash and disposition proceeds are allocated 99% to
the Partnership and 1% to L.P. Six. The Partnership's consolidated financial
statements include 100% of the assets and liabilities of ICON Cash Flow LLC I.
L.P. Six's investment in ICON Cash Flow LLC I has been reflected as "Minority
interest in joint venture."
ICON Cash Flow LLC II
On March 31, 1995, the Partnership and an affiliate, L.P. Six, formed ICON
Cash Flow Partners L.L.C. II, ("ICON Cash Flow LLC II"), for the purpose of
acquiring and managing an aircraft currently on lease to Alaska Airlines, Inc.
The aircraft is a 1987 McDonnell Douglas MD-83. The Partnership and L.P. Six
contributed $30,550 (1%) and $3,024,450 (99%) of the cash required for such
acquisition, respectively, to ICON Cash Flow LLC II. ICON Cash Flow LLC II
acquired the aircraft, assuming $16,315,997 in non-recourse debt and the
contributions received from the Partnership and L.P. Six. The purchase price of
the transaction totaled $19,370,997. The lease is an operating lease and the
lease term expires in March 1997. Profits, losses, excess cash and disposition
proceeds will be allocated 1% to the Partnership and 99% to L.P. Six. The
Partnership 1% investment in ICON Cash Flow LLC II, which is accounted for under
the equity method, totaled $38,266 at September 30, 1996 and has been reflected
as "Equity investment in joint venture." The General Partner manages and
controls the business affairs of both the Partnership and L.P. Six. As a result
of this common control and the Partnership's ability to influence the activities
of the joint venture, the Partnership's investment in the joint venture is
accounted for under the equity method. Information as to the financial position
and results of operations of ICON LLC II at September 30, 1996 is summarized
below:
September 30, 1996
Assets $ 18,098,630
============
Liabilities 14,121,692
Equity $ 3,976,938
============
Nine Months Ended
September 30, 1996
Net income $ 432,442
============
5. Related Party Transactions
During the nine months ended September 30, 1996 and 1995, the Partnership
paid or accrued to the General Partner management fees of $868,147 and
$1,240,019, respectively, and administrative expense reimbursements of $425,208
and $608,098, respectively, which were charged to operations.
During the nine months ended September 30, 1996 and 1995, the Partnership
paid or accrued to the General Partner acquisition fees of $76,732 and $0,
respectively.
6. Net Investment in Leveraged Leases
On April 23, 1996 the Partnership sold its beneficial interest in a trust
which owned towboats and barges that were reflected as the Partnership's
investment in leveraged leases. The net cash proceeds, after paying the
remaining debt obligation and expenses related to the sale, were $7,216,689,
which resulted in a net gain of $997,606.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Partnership's portfolio consisted of a net investment in finance
leases, operating leases, financings, leveraged leases and an equity investment
in joint venture representing 51%, 25%, 24%, 0% and less than 1% of total
investments at September 30, 1996, respectively, and 60%, 21%, 10%, 9% and less
than 1% of total investments at September 30, 1995, respectively.
Three Months Ended September 30, 1996 and 1995
For the three months ended September 30, 1996 and 1995, the Partnership
leased or financed equipment with an initial cost of $8,600,934 and $3,910,727,
respectively, to 76 and 7 lessees or equipment users, respectively. Included in
this is the financing of free cash flow, the rent payable by the lessee in
excess of the senior debt payments, relating to an Airbus A-300 B4-203 aircraft
built in 1983 in the amount of $5,690,161. The aircraft is on lease with Airbus
and has a remaining term of approximately six and one half years. Subsequent to
the financing ICON Cash Flow Partners L.P. Six, an affiliate of the Partnership,
acquired, subject to a leveraged lease, the residual interest and assumed the
related outstanding non-recourse senior and junior debt in the aircraft. ICON
Cash Flow Partners L.P. Six is expecting to refinance this with a third party.
This transaction is included in Investment in Financings on the balance sheet as
of September 30, 1996.
Results of Operations
Revenues for the three months ended September 30, 1996 were $2,193,315,
representing a decrease of $605,254 or 22% from 1995. The decrease in revenues
was primarily attributable to a decrease in finance income of $389,186 or 26%
and a decrease in income from leveraged leases of $324,746 or 100% from 1995.
The decrease in these revenues was partially offset by an increase in net gain
on sales or remarketing or equipment of $107,740 or 54%. The overall decrease in
finance income resulted from a decrease in the average size of the finance lease
portfolio from 1995 to 1996. Income from leveraged leases decreased due to the
sale of all of the underlying equipment relating to the Partnership's investment
in leveraged leases. The increase in net gain on sales or remarketing of
equipment was attributed to an increase in the number of leases maturing, and
the underlying equipment being sold or remarketed for which the proceeds
received were in excess of the remaining carrying value of the equipment.
Expenses for the three months ended September 30, 1996 were $1,933,651,
representing a decrease of $709,270 or 27% from 1995. The decrease was primarily
attributable to a decrease in interest expense of $413,844 or 39% and a decrease
in management fees of $149,501 or 36% from 1995. Results were also affected by a
decrease in amortization of initial direct costs or $72,940 or 20%, a decrease
in administrative expense reimbursements of $70,169 or 36% and a decrease in
general and administrative expense of $53,057 or 30%. The decrease in these
expenses was partially offset by an increase in the provision for bad debts of
$50,000 or 33%. Interest expense decreased due to the decrease in the average
debt outstanding from 1995 to 1996. The decrease in management fees,
amortization of initial direct costs, administrative expense reimbursements and
general and administrative expense resulted from a decrease in the average size
of the portfolio from 1995 to 1996. As a result of an analysis of delinquency,
an assessment of overall risk and a review of historical loss experience, it was
determined that a greater provision for bad debts of $50,000 was required for
the three months ended September 30, 1996.
Net income for the three months ended September 30, 1996 and 1995 was
$259,664 and $155,648, respectively. The net income per weighted average limited
partnership unit was $.42 and $.25 for 1996 and 1995, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended
September 30, 1996 and 1995 were net cash provided by operations of $2,906,206
and $3,561,749, respectively, proceeds from sales of equipment of $284,723 and
$1,220,585, respectively and proceeds from a revolving credit facility of
$8,000,000 in 1996. These funds were used to purchase equipment, fund cash
distributions and to make payments on borrowings. The Partnership intends to
continue to purchase additional equipment and fund cash distributions utilizing
cash provided by operations and proceeds from sales of equipment.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Cash distributions to limited partners for the three months ended September
30, 1996 and 1995, which were paid monthly, totaled $1,942,654 and $1,943,223,
respectively, of which $257,067 and $154,092 was investment income and
$1,685,587 and $1,789,131 was a return of capital, respectively. The monthly
annualized cash distribution rate to limited partners was 12.75%, of which 1.69%
and 1.01% was investment income and 11.06% and 11.74% was a return of capital,
respectively, calculated as a percentage of each partners initial capital
contribution. The limited partner distribution rate per weighted average unit
outstanding for the three months ended September 30, 1996 and 1995 was $3.19, of
which $.42 and $.25 was investment income and $2.77 and $2.94 was a return of
capital, respectively.
Nine Months Ended September 30, 1996 and 1995
For the nine months ended September 30, 1996 and 1995, the Partnership
leased or financed equipment with an initial cost of $13,280,357 and $7,761,617,
respectively, to 150 and 53 lessees or equipment users, respectively and
invested $30,550 in a joint venture in 1995. The weighted average initial
transaction term relating to these transactions was 53 and 44 months,
respectively.
Results of Operations
Revenues for the nine months ended September 30, 1996 were $7,847,399,
representing a decrease of $805,667 or 9% from 1995. The decrease in revenues
was primarily attributable to a decrease in finance income of $1,572,827 or 32%
and a decrease in income from leveraged leases of $685,928 or 77%. The decrease
in these revenues was partially offset by an increase in net gain on sales or
remarketing of equipment of $1,419,519, and an increase in interest income and
other of $32,820 or 11%. The overall decrease in finance income resulted from a
decrease in the average size of the finance lease portfolio from 1995 to 1996.
Income from leveraged leases decreased due to the sale of all of the underlying
equipment relating to the Partnership's investment in leveraged leases. The
increase in net gain on sales or remarketing of equipment was attributable to
the sale of the underlying equipment relating to the Partnership's investment in
leveraged leases. This sale resulted in a net gain of $997,606. The increase in
interest income and other resulted from an increase in the average cash balance
from 1995 to 1996.
Expenses for the nine months ended September 30, 1996 were $5,824,944,
representing a decrease of $2,155,684 or 27% from 1995. The decrease in expenses
was primarily attributable to a decrease in interest expense of $1,219,218 or
36% and a decrease in amortization of initial direct cost of $455,686 or 37%
from 1995. Results were also affected by a decrease in management fees of
$371,872 or 30%, a decrease in administrative fees of $182,890 or 30% and a
decrease in general and administrative expense of $76,729. The decrease in these
expenses was partially offset by an increase in provision for bad debt of
$150,000, or 60%. Interest expense decreased due to a decrease in the average
debt outstanding from 1995 to 1996. Amortization of initial direct cost,
management fees, administrative expense reimbursements and general and
administrative expense decreased due to a decrease in the average size of the
portfolio from 1995 to 1996. As a result of an analysis of delinquency, an
assessment of overall risk and a review of historical loss experience, it was
determined that a greater provision for bad debts of $150,000 was required for
the nine months ended September 30, 1996.
Net income for the nine months ended September 30, 1996 and 1995 was
$2,022,455 and $672,438, respectively. The net income per weighted average
limited partnership unit was $3.28 and $1.09 for 1996 and 1995, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Liquidity and Capital Resources
The Partnership's primary sources of funds for the nine months ended
September 30, 1996 and 1995 were net cash provided by operations of $11,268,352
and $10,283,946, respectively, proceeds from sales of equipment of $9,667,369
and $2,901,984, respectively, and proceeds from a revolving credit facility of
$8,780,000 and $3,900,000 respectively. These funds were used to purchase
equipment, fund cash distributions and to make payments on borrowings. The
Partnership intends to continue to purchase additional equipment and fund cash
distributions utilizing cash provided by operations and proceeds from sales of
equipment.
Cash distributions to limited partners for the nine months ended September
30, 1996 and 1995, which were paid monthly, totaled $5,828,554 and $5,829,858,
respectively, of which $2,002,230 and $665,714 was investment income and
$3,826,324 and $5,164,144 was a return of capital, respectively. The monthly
annualized cash distribution rate to limited partners was 12.75% and 12.75%, of
which 4.38% and 1.45% was investment income and 8.37% and 11.30% was a return of
capital, respectively, calculated as a percentage of each partners initial
capital contribution. The limited partner distribution rate per weighted average
unit outstanding for the nine months ended September 30, 1996 and 1995 was
$9.56, of which $3.28 and $1.09 was investment income and $6.28 and $8.47 was a
return of capital, respectively.
The Partnership entered into a three year revolving credit agreement (the
"Facility") in January 1995. The maximum amount available under the Facility is
$25,000,000 and at Septembr 30, 1996, the Partnership had $12,795,305 available
for borrowing, of which $8,000,000 was outstanding.
On April 23, 1996, the Partnership sold its beneficial interest in a trust
which owned towboats and barges that were reflected as the Partnership's
investment in leveraged leases. The net cash proceeds, after paying the
remaining debt obligation, and expenses related to the sale, were $7,216,689,
which resulted in a net gain of $997,606.
On March 31, 1995 the Partnership and an affiliate, ICON Cash Flow
Partners, L.P. Six ("L.P. Six"), formed ICON Cash Flow Partners L.L.C. II ("ICON
Cash Flow LLC II"), for the purpose of acquiring and managing an aircraft
currently on lease to Alaska Airlines, Inc. The aircraft is a 1987 McDonnell
Douglas MD-83. The Partnership and L.P. Six contributed $30,550 (1%) and
$3,024,450 (99%) of the cash required for such acquisition, respectively, to
ICON Cash Flow LLC II. ICON Cash Flow LLC II acquired the aircraft, assuming
$16,315,997 in non-recourse debt and utilizing contributions received from the
Partnership and L.P. Six. The purchase price of the transaction totaled
$19,370,997. The lease is an operating lease and the lease term expires in March
1997. Profits, losses, excess cash and disposition proceeds are allocated 1% to
the Partnership and 99% to L.P. Six. The Partnership's investment in ICON Cash
Flow LLC II has been reflected as "Equity investment in joint venture."
As of September 30, 1996, except as noted above, there were no known trends
or demands, commitments, events or uncertainties which are likely to have any
material effect on liquidity. As cash is realized from operations, sales of
equipment and borrowings, the Partnership will continue to invest in equipment
leases and financings where it deems it to be prudent while retaining sufficient
cash to meet its reserve requirements and recurring obligations as they become
due.
New Accounting Pronouncement
In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which is
effective beginning in 1996. The new standard is similar to the Partnership's
existing accounting policies relating to the impairment of estimated residual
values. As a result, adoption of SFAS No. 121 in the first quarter of 1996 had
no impact on the Partnership's financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 6 - Exhibits And Reports on Firm 8-K
Form 8-K was filed September 4, 1996, Item 1, Change in Control of Registrant.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(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 E
File No. 33-44413 (Registrant)
By its General Partner,
ICON Capital Corp.
December 24, 1996 Gary N. Silverhardt
- ----------------- ---------------------------------------
Date Gary N. Silverhardt
Chief Financial Officer
(Principal financial and account officer
of the General Partner of
the Registrant)
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000881788
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 4,015,186
<SECURITIES> 0
<RECEIVABLES> 56,512,726
<ALLOWANCES> 1,224,840
<INVENTORY> 146,781
<CURRENT-ASSETS> * 0
<PP&E> 20,771,628
<DEPRECIATION> 2,123,423
<TOTAL-ASSETS> 78,561,971
<CURRENT-LIABILITIES> ** 0
<BONDS> 46,451,000
0
0
<COMMON> 0
<OTHER-SE> 30,933,764
<TOTAL-LIABILITY-AND-EQUITY> 78,561,971
<SALES> 7,847,399
<TOTAL-REVENUES> 7,847,399
<CGS> 1,573,386
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,641,676
<LOSS-PROVISION> 400,000
<INTEREST-EXPENSE> 2,209,882
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,022,455
<EPS-PRIMARY> 3.28
<EPS-DILUTED> 3.28
<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>
