UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended June 30, 1996
----------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _________________ to _________________________
Commission File Number 33-44413
ICON Cash Flow Partners, L.P., Series E
(Exact name of registrant as specified in its charter)
Delaware 13-3635208
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
600 Mamaroneck Avenue, Harrison, New York 10528
(Address of principal executive offices) (Zip code)
(914) 698-0600
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ x] Yes [ ] No
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
PART I - FINANCIAL INFORMATION
The following consolidated financial statements of ICON Cash Flow
Partners, L.P., Series E (the "Partnership") have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission (the "SEC") and,
in the opinion of management, include all adjustments (consisting only of normal
recurring accruals) necessary for a fair statement of income for each period
shown. Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such SEC rules
and regulations. Management believes that the disclosures made are adequate to
make the information represented not misleading. The results for the interim
period are not necessarily indicative of the results for the full year. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes included in the Partnership's 1995
Annual Report on Form 10-K.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
June 30, 1996
General Partner's Discussion and Analysis of
Financial Condition and Results of Operations
The Partnership's portfolio consisted of a net investment in finance
leases, operating leases, leveraged leases, financings and an equity investment
in a joint venture representing 57%, 26%, 0%, 17% and less than 1% of total
investments at June 30, 1996, respectively, and 65%, 21%, 9%, 5%,and less than
1% of leveraged leases of total investments at June 30, 1995, respectively.
Three Months Ended June 30, 1996 and 1995
Results of Operations
For the three months ended June 30, 1996 and 1995, the Partnership leased
or financed equipment with an initial cost of $1,451,940 and $2,266,962,
respectively, to 49 and 17 lessees or equipment users, respectively.
Revenues for the three months ended June 30, 1996 were $3,277,797,
representing an increase of $432,033, or 15% from 1995. The increase in revenues
was primarily attributable to an increase in net gain on sales or remarketing of
equipment of $1,195,841 and an increase in interest income and other of $43,355
or 60% from 1995. These increases were partially offset by a decrease in finance
income of $526,851 or 32% and a decrease in income from leveraged leases of
$279,438 or 100%. 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. Finance income decreased due to a
decrease in the average size of the 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.
Expenses for the three months ended June 30, 1996 were $1,965,963,
representing a decrease of $592,830 or 23% from 1995. The decrease in expenses
was primarily attributable to a decrease in interest expense of $395,314 or 35%,
a decrease in amortization of initial direct costs of $194,831 or 46%, a
decrease in management fees of $115,475 or 30%, a decrease in administrative
expense reimbursements of $58,256 or 30% and a decrease in general and
administrative expense of $29,189 or 18% from 1995. These decreases were
partially offset by an increase in provision for bad debts of $200,000 or 100%,
from 1995. Interest expense decreased due to a decrease in the average debt
outstanding from 1995 to 1996. All other expenses 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 $200,000 provision for bad debts was
required for the three months ended June 30, 1996.
Net income for the three months ended June 30, 1996 and 1995 was
$1,311,834 and $286,971, respectively. The net income per weighted average
limited partnership unit was $2.13 and $.47 for 1996 and 1995, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended June
30, 1996 and 1995 were net cash provided by operations of $2,029,963 and
$3,244,619, respectively, and proceeds from sales of equipment of $8,192,532 and
$1,184,676, respectively. These funds were used to make payments on borrowings,
to fund cash distributions and to purchase equipment. The Partnership intends to
continue to purchase additional equipment and to fund cash distributions
utilizing cash from operations and proceeds from sales of equipment.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
June 30, 1996
General Partner's Discussion and Analysis of
Financial Condition and Results of Operations
Cash distributions to limited partners for the three months ended June 30,
1996 and 1995, which were paid monthly, totaled $1,942,847 and $1,943,256,
respectively, of which $1,298,716 and $284,101 was investment income and
$644,131 and $1,659,155 was a return of capital, respectively. The monthly
annualized cash distribution rate to limited partners was 12.75% for 1996 and
1995, of which 8.52% and 1.86% was investment income and 4.23% and 10.89% was a
return of capital, respectively, calculated as a percentage of each partners
initial capital contribution. The limited partner distribution per weighted
average unit outstanding for the three months ended June 30, 1996 and 1995 was
$3.19 and $3.19, of which $2.13 and $.47 was investment income and $1.06 and
$2.72 was a return of capital, respectively. The Partnership had notes payable
at June 30, 1996 and 1995 of $41,709,722 and $61,041,662, respectively, and such
amounts consisted of $39,070,114 and $53,270,458 in non-recourse notes,
respectively, and $2,639,608 and $7,771,204 in recourse notes, respectively.
Six Months Ended June 30, 1996 and 1995
Results of Operations
For the six months ended June 30, 1996 and 1995, the Partnership leased or
financed equipment with an initial cost of $4,679,422 and $3,850,890,
respectively, to 74 and 46 lessees or equipment users, respectively. The
weighted average initial transaction term relating to these transactions was 54
and 56 months.
Revenues for the six months ended June 30, 1996 were $5,654,084,
representing a decrease of $200,413 or 3% from 1995. The decrease in revenues
was primarily attributable to a decrease in finance income of $1,183,641or 34%
and a decrease in income from leveraged leases of $361,182 or 64% from 1995.
These decreases were partially offset by an increase in net gain on sales or
remarketing of equipment of $1,311,779 and interest income and other of $32,125
from 1995. 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. Finance income decreased due to a
decrease in the average size of the 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.
Expenses for the six months ended June 30, 1996 were $3,891,293,
representing a decrease of $1,446,414 or 27% from 1995. The decrease in expenses
was primarily attributable to a decrease in interest expense of $805,374 or 34%,
a decrease in amortization of initial direct cost of $382,746 or 44%, a decrease
in management fees of $222,371 or 27% and a decrease in administrative expense
reimbursements of $112,721 from 1995. These decreases were partially offset by
an increase in provision for bad debts of $100,000 or 100%. Interest expense
decreased due to a decrease in the average debt outstanding from 1995 to 1996.
Amortization of initial direct costs, management fees and administrative expense
reimbursements 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 $200,000 provision for bad debts was required for the six months ended June
30, 1996.
Net income for the six months ended June 30, 1996 and 1995 was $1,762,791
and $516,790, respectively. The net income per weighted average limited
partnership unit was $2.86 and $.84 for 1996 and 1995, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
June 30, 1996
General Partner's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources
The Partnership's primary sources of funds for the six months ended June
30, 1996 and 1995 were net cash provided by operations of $8,362,146 and
$6,722,197, respectively, and proceeds from sales of equipment of $9,382,646 and
$1,681,399, respectively. These funds were used to make payments on borrowings,
to fund cash distributions and to purchase equipment. The Partnership intends to
continue to purchase additional equipment and to fund cash distributions
utilizing cash from operations and proceeds from sales of equipment.
Cash distributions to limited partners for the six months ended June 30,
1996 and 1995, which were paid monthly, totaled $3,885,900 and $3,886,635,
respectively, of which $1,745,163 and $511,622 was investment income and
$2,140,737 and $3,375,013 was a return of capital, respectively. The monthly
annualized cash distribution rate to limited partners was 12.75% for 1996 and
1995, of which 5.73% and 1.68% was investment income and 7.02% and 11.05% was a
return of capital, respectively, calculated as a percentage of each partner's
initial capital contribution. The limited partner distribution per weighted
average unit outstanding for the six months ended June 30, 1996 and 1995 was
$6.38, of which $2.86 and $.84 was investment income and $3.52 and $5.54 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 June 30, 1996 the Partnership had $11,574,689 available for
borrowing under the facility, in which there was no outstanding balance.
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 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's investment in ICON
Cash Flow LLC II has been reflected as "Minority interest in joint venture."
As of June 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 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)
Consolidated Balance Sheets
(unaudited)
June 30, December 31,
1996 1995
Assets
Cash ........................................... $ 3,957,213 $ 5,826,646
------------ ------------
Investment in finance leases
Minimum rents receivable ..................... 33,687,776 44,696,273
Estimated unguaranteed residual values ....... 11,483,619 12,388,734
Initial direct costs ......................... 707,600 1,046,622
Unearned income .............................. (4,794,209) (6,988,215)
Allowance for doubtful accounts .............. (781,805) (783,475)
------------ ------------
40,302,981 50,359,939
Investment in operating leases
Equipment at cost ............................ 20,771,628 20,771,628
Initial direct costs ......................... 244,800 408,000
Accumulated depreciation ..................... (1,857,995) (1,327,139)
------------ ------------
19,158,433 19,852,489
Investment in financings
Receivables due in installments .............. 14,124,216 10,027,184
Initial direct costs ......................... 173,528 54,798
Unearned income .............................. (2,220,830) (1,496,344)
Allowance for doubtful accounts .............. (351,966) (354,969)
------------ ------------
11,724,948 8,230,669
------------ ------------
Net investment in leveraged leases ............. -- 5,971,629
------------ ------------
Other assets ................................... 635,901 5,232,064
------------ ------------
Equity investment in joint venture ............. 38,266 35,445
------------ ------------
Total assets ................................... $ 75,817,742 $ 95,508,881
============ ============
Liabilities and Partners' Equity
Notes payable - non-recourse ................... $ 2,639,608 $ 44,415,861
Note payable - non-recourse - securitized ...... 39,070,115 4,326,164
Note payable revolving credit facility ......... -- 7,400,000
Accounts payable to General Partner
and affiliates, net .......................... 75,521 --
Accounts payable - equipment ................... -- 1,886,138
Accounts payable - other ....................... 467,610 1,559,564
Security deposits and deferred credits ......... 883,199 1,071,729
Minority interest in joint venture ............. 43,601 41,724
------------ ------------
43,179,654 60,701,180
Commitments and Contingencies
Partners' equity (deficiency)
General Partner .............................. (194,029) (172,405)
Limited partners (609,487 and 609,639 units
outstanding, $100 per unit original issue
price in 1996 and 1995, respectively) ...... 32,832,117 34,980,106
------------ ------------
Total partners' equity ......................... 32,638,088 34,807,701
------------ ------------
Total liabilities and partners' equity ......... $ 75,817,742 $ 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)
<TABLE>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue
Finance income ............................. $1,135,456 $1,662,307 $2,285,567 $3,469,208
Net gain on sales or
remarketing of equipment ................. 1,348,598 152,757 1,586,797 275,018
Rental income .............................. 677,193 677,193 1,354,386 1,354,386
Interest income and other .................. 115,109 71,754 223,996 191,872
Income from equity investment
in joint venture ......................... 1,441 2,315 2,821 2,314
Income from leveraged leases ............... -- 279,438 200,517 561,699
---------- ---------- ---------- ----------
Total revenues ............................. 3,277,797 2,845,764 5,654,084 5,854,497
---------- ---------- ---------- ----------
Expenses
Interest ................................... 722,352 1,117,666 1,551,586 2,356,960
Management fees - General Partner .......... 275,108 390,583 606,953 829,324
Depreciation ............................... 265,428 265,428 530,856 530,856
Amortization of initial direct costs 228,648 423,479 479,241 861,987
Provision for bad debts .................... 200,000 -- 200,000 100,000
General and administrative ................. 136,583 165,772 224,191 247,863
Administrative expense reimbursement
- General Partner ........................ 136,277 194,533 295,393 408,114
Minority interest in joint venture ......... 1,567 1,332 3,073 2,603
---------- ---------- ---------- ----------
Total expenses ............................. 1,965,963 2,558,793 3,891,293 5,337,707
---------- ---------- ---------- ----------
Net income ................................... $1,311,834 $ 286,971 $1,762,791 $ 516,790
========== ==========
Net income allocable to:
Limited partners ........................... $1,298,716 $ 284,101 $1,745,163 $ 511,622
General Partner ............................ 13,118 2,870 17,628 5,168
---------- ---------- ---------- ----------
$1,311,834 $ 286,971 $1,762,791 $ 516,790
========== ========== ========== ==========
Weighted average number of limited
partnership units outstanding .............. 609,544 609,644 609,544 609,663
========== ========== ========== ==========
Net income per weighted average
limited partnership unit ................... $ 2.13 $ .47 $ 2.86 $ .84
========== ========== ========== ==========
</TABLE>
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 Six Months Ended June 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)
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 Six Months Ended June 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)
Cash distributions
to partners $ 3.52 $2.86 (3,885,900) (39,252) (3,925,152)
Limited partnership
units redeemed
(152 units) (7,252) - (7,252)
Net income 1,745,163 17,628 1,762,791
------------ --------- ------------
Balance at
June 30, 1996 $ 32,832,117 $(194,029) $32,638,088
============ ========= ===========
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 Six Months Ended June 30,
(unaudited)
<TABLE>
1996 1995
---- ----
<S> <C> <C>
Cash flows provided by operating activities:
Net income ............................................... $ 1,762,791 $ 516,790
------------ ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation .......................................... 530,856 530,856
Rental income - assigned operating lease receivables .. (677,193) (1,354,386)
Finance income portion of receivables paid directly
to lenders by lessees ................................ (1,024,086) (1,667,442)
Amortization of initial direct costs .................. 479,241 861,987
Net gain on sales or remarketing of equipment ......... (1,586,797) (275,018)
Interest expense on non-recourse financing paid
directly by lessees .................................. 725,947 1,800,310
Interest expense accrued on recourse debt ............. 369,823 556,074
Collection of principal - non-financed receivables .... 4,474,388 6,664,171
Collection of principal - leverage lease receivables .. -- 143,935
Income from leveraged leases, net ..................... (200,517) (561,699)
Income from equity investment in joint venture ........ (2,821)
Changes in operating assets and liabilities:
Allowance for doubtful accounts ...................... 152,399 (98,613)
Accounts payable to General Partner and
affiliates, net ................................... 75,521 (155,090)
Accounts payable - other ............................. (1,091,955) (85,746)
Accounts receivable - affiliate ...................... 130,217 --
Security deposits and deferred credits ............... (188,530) 13,751
Minority interest in joint venture ................... 1,877 1,907
Other assets ......................................... 4,471,557 (98,161)
Other, net ........................................... (40,572) (71,429)
------------ ------------
Total adjustments .................................. 6,599,355 6,205,407
------------ ------------
Net cash provided by operating activities .......... 8,362,146 6,722,197
------------ ------------
Cash flows used for investing activities:
Proceeds from sales of equipment ......................... 9,382,646 1,681,399
Equipment and receivables purchased ...................... (6,485,280) (3,610,097)
Initial direct costs ..................................... (76,732) --
Net cash used for investing activities ............. 2,820,634 (1,928,698)
------------ ------------
Cash flows used for financing activities:
Principal payments on debt ............................... (8,199,374) --
Cash distributions to partners ........................... (3,925,152) (3,925,894)
Principal payments on secured financing .................. (1,700,435) (4,316,900)
Redemption of limited partnership units .................. (7,252) (2,370)
Proceeds from debt ....................................... 780,000 --
Net cash used for financing activities ............. (13,052,213) (8,245,164)
------------ ------------
Net decrease in cash ....................................... (1,869,433) (3,451,665)
Cash at beginning of period ................................ 5,826,646 6,757,538
------------ ------------
Cash at end of period ...................................... $ 3,957,213 $ 3,305,873
============ ============
</TABLE>
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 six months ended June 30, 1996 and 1995, non-cash activities
included the following:
1996 1995
---- ----
Accounts payable - equipment ....................... $ -- $ 525,361
Fair value of equipment and receivables purchased
for debt and payables ............................ -- (525,361)
Principal and interest on direct finance receivables
paid directly to lenders by lessees .............. 5,251,724 7,323,428
Rental income assigned operating lease receivable .. 1,354,386 1,354,386
Principal and interest on non-recourse financing
paid directly by lessees ......................... (6,606,110) (8,677,814)
Decrease in investment in finance leases
due to termination of leases ..................... -- 748,173
Decrease in notes payable - non-recourse
due to termination of lease ...................... -- (748,173)
----------- -----------
$ -- $ --
=========== ===========
Interest expense of $1,551,586 and $2,356,960 for the six months ended June
30, 1996 and 1995 consisted of: interest expense on non-recourse financing
accrued or paid directly by lenders to lessees of $1,260,363 and $2,356,384,
respectively, and other interest of $291,223 and $576, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
June 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 152 limited
partnership units during the six months ended June 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 June 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 June 30, 1996 is summarized below:
June 30, 1996
Assets $18,310,792
Liabilities 14,484,161
Equity $3,826,631
Six Months Ended
June 30, 1996
Net income $ 282,135
==========
5. Related Party Transactions
During the six months ended June 30, 1996 and 1995, the Partnership paid or
accrued to the General Partner management fees of $606,953 and $829,324,
respectively, and administrative expense reimbursements of $295,393 and
$408,114, respectively, which were charged to operations.
During the six months ended June 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)
PART II
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults Upon Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
No report on Form 8-K was filed by the registrant during the quarter for which
this report is filed.
<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.
August 13, 1996 Charles Duggan
Date --------------------------------------------
Charles Duggan
Executive Vice President and 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 3,957,213
<SECURITIES> 0
<RECEIVABLES> 53,161,700
<ALLOWANCES> 1,133,771
<INVENTORY> 228,924
<CURRENT-ASSETS> * 0
<PP&E> 20,771,628
<DEPRECIATION> 1,857,995
<TOTAL-ASSETS> 75,817,742
<CURRENT-LIABILITIES> ** 0
<BONDS> 41,709,723
0
0
<COMMON> 0
<OTHER-SE> 32,638,088
<TOTAL-LIABILITY-AND-EQUITY> 75,817,742
<SALES> 5,654,084
<TOTAL-REVENUES> 5,654,084
<CGS> 1,013,170
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,126,537
<LOSS-PROVISION> 200,000
<INTEREST-EXPENSE> 1,551,586
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,762,791
<EPS-PRIMARY> 2.86
<EPS-DILUTED> 2.86
<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>
