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, 1997
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[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number 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>
June 30, December 31,
1997 1996
Assets
<S> <C> <C>
Cash $ 5,156,860 $ 1,203,626
------------ -----------
Investment in finance leases
Minimum rents receivable 26,039,119 31,294,210
Estimated unguaranteed residual values 11,173,898 11,769,952
Initial direct costs 351,750 498,927
Unearned income (3,818,246) (4,515,040)
Allowance for doubtful accounts (827,694) (844,709)
------------ -----------
32,918,827 38,203,340
Investment in operating leases
Equipment at cost 18,014,305 20,771,628
Accumulated depreciation - (2,388,850)
Initial direct costs - 81,600
------------ -----------
18,014,305 18,464,378
Investment in financings
Receivables due in installments 12,103,381 23,057,131
Initial direct costs 39,701 136,330
Unearned income (1,745,608) (3,699,855)
Allowance for doubtful accounts (269,379) (263,231)
------------ -----------
10,128,095 19,230,375
Note receivable - affiliate 5,330,328 -
------------ -----------
Equity investment in joint ventures 59,362 57,290
------------ -----------
Other assets 36,759 775,161
------------ -----------
Total assets $ 71,644,536 $77,934,170
============ ===========
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Balance Sheets (continued)
(unaudited)
<TABLE>
June 30, December 31,
1997 1996
Liabilities and Partners' Equity
<S> <C> <C>
Notes payable - non-recourse $ 29,658,000 $34,168,921
Note payable revolving credit facility 14,817,396 13,000,000
Security deposits and deferred credits 550,799 887,257
Accounts payable - other 393,409 461,109
Accounts payable to General Partner and affiliates, net 49,243 106,642
Minority interest in joint venture 48,563 45,724
Accounts payable - equipment 1,480 71,553
------------ -----------
45,518,890 48,741,206
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (259,063) (228,462)
Limited partners (609,246 and 609,446 units outstanding,
$100 per unit original issue price in 1997 and 1996,
respectively) 26,384,709 29,421,426
------------ -----------
Total partners' equity 26,125,646 29,192,964
------------ ------------
Total liabilities and partners' equity $ 71,644,536 $77,934,170
============ ===========
</TABLE>
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,
1997 1996 1997 1996
---- ---- ---- ----
Revenue
<S> <C> <C> <C> <C>
Finance income $ 969,999 $ 1,135,456 $ 2,084,830 $ 2,285,567
Interest income and other 323,323 115,109 527,205 223,996
Net gain on sales or
remarketing of equipment 112,999 1,348,598 327,998 1,586,797
Income from equity
investment in joint venture 151 1,441 4,246 2,821
Rental income - 677,193 677,193 1,354,386
Income from leveraged leases - - - 200,517
------------ ------------ ------------ -----------
Total revenues 1,406,472 3,277,797 3,621,472 5,654,084
------------ ------------ ------------ -----------
Expenses
Interest 648,584 722,352 1,178,422 1,551,586
Management fees - General Partner 206,073 275,108 474,551 606,953
General and administrative 160,478 136,583 263,065 224,191
Administrative expense
reimbursement - General Partner 111,070 136,277 248,902 295,393
Amortization of initial direct costs 62,280 228,648 325,406 479,241
Depreciation - 265,428 265,428 530,856
Provision for bad debts - 200,000 - 200,000
Minority interest in joint venture (1,904) 1,567 2,172 3,073
----------- ------------ ------------ -----------
Total expenses 1,186,581 1,965,963 2,757,946 3,891,293
------------ ------------ ------------ -----------
Net income $ 219,891 $ 1,311,834 $ 863,526 $ 1,762,791
============ ============ ============ ===========
Net income allocable to:
Limited partners $ 217,692 $ 1,298,716 $ 854,891 $ 1,745,163
General Partner 2,199 13,118 8,635 17,628
------------ ------------ ------------ -----------
$ 219,891 $ 1,311,834 $ 863,526 $ 1,762,791
============ ============ ============ ===========
Weighted average number of limited
partnership units outstanding 609,246 609,544 609,312 609,544
============ ============ ============ ===========
Net income per weighted average
limited partnership unit $ .36 $ 2.13 $ 1.40 $ 2.86
============ ============ ============ ===========
</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, 1997 and the
Years Ended December 31, 1996, 1995 and 1994
<TABLE>
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1993 $ 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
Cash distribution
to partners $ 9.11 $ 3.64 (7,771,164) (78,496) (7,849,660)
Limited partnership
units redeemed
(193 units) (8,960) - (8,960)
Net income 2,221,444 22,439 2,243,883
------------- ----------- ------------
Balance at
December 31, 1996 29,421,426 (228,462) 29,192,964
Cash distribution
to partners $ 4.98 $ 1.40 (3,884,370) (39,236) (3,923,606)
Limited partnership
units redeemed
(200 units) (7,238) - (7,238)
Net income 854,891 8,635 863,526
------------- ----------- ------------
Balance at
June 30, 1997 $ 26,384,709 $ (259,063) $ 26,125,646
============= =========== ============
</TABLE>
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>
1997 1996
---- ----
Cash flows provided by operating activities:
<S> <C> <C>
Net income $ 863,526 $ 1,762,791
------------- ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 265,428 530,856
Rental income - assigned operating lease receivables (677,193) (677,193)
Finance income portion of receivables paid directly
to lenders by lessees (647,409) (1,024,086)
Amortization of initial direct costs 325,406 479,241
Net gain on sales or remarketing of equipment (327,998) (1,586,797)
Interest expense on non-recourse financing paid
directly by lessees 314,787 725,947
Interest expense accrued on debt 87,142 369,823
Collection of principal - non-financed receivables 4,981,903 4,474,388
Income from leveraged leases, net - (200,517)
Income from equity investment in joint venture (4,246) (2,821)
Changes in operating assets and liabilities:
Allowance for doubtful accounts 64,649 152,399
Accounts payable to General Partner and affiliates, net (57,399) 75,521
Accounts payable - other (67,700) (1,091,955)
Accounts receivable - affiliate 130,217
Security deposits and deferred credits (336,458) (188,530)
Minority interest in joint venture 2,839 1,877
Other assets 747,693 4,471,557
Other, net (384,800) (40,572)
------------- ------------
Total adjustments 4,286,644 6,599,355
------------- ------------
Net cash provided by operating activities 5,150,170 8,362,146
------------- ------------
Cash flows from investing activities:
Proceeds from sales of equipment 10,103,453 9,382,646
Equipment and receivables purchased (3,856,613) (6,485,280)
Initial direct costs - (76,732)
------------- ------------
Net cash provided by investing activities 6,246,840 2,820,634
------------- ------------
Cash flows from financing activities:
Loans to affiliates (11,280,328) -
Principal payments received on affiliate notes 5,950,000 -
Proceeds from revolving credit facility 4,400,000 780,000
Principal payments on revolving credit facility (2,582,604) (8,199,374)
Redemption of limited partnership units (7,238) (7,252)
Cash distributions to partners (3,923,606) (3,925,152)
Principal payments on secured financing - (1,700,435)
------------- ------------
Net cash used in financing activities (7,443,776) (13,052,213)
------------- ------------
Net increase (decrease) in cash 3,953,234 (1,869,433)
Cash at beginning of period 1,203,626 5,826,646
------------- ------------
Cash at end of period $ 5,156,860 $ 3,957,213
============= ============
</TABLE>
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 (continued)
Supplemental Disclosures of Cash Flow Information
During the six months ended June 30, 1997 and 1996, non-cash activities
included the following:
<TABLE>
1997 1996
---- ----
<S> <C> <C>
Principal and interest on direct finance receivables
paid directly to lenders by lessees $ 3,508,518 $ 5,251,724
Rental income assigned operating lease receivable 677,193 1,354,386
Principal and interest on non-recourse financing
paid directly by lessees (4,185,711) (6,606,110)
------------ -----------
$ - $ -
============ =========
</TABLE>
Interest expense of $1,178,422 and $1,551,586 for the six months ended June
30, 1997 and 1996 consisted of: interest expense on non-recourse financing
accrued or paid directly by lenders to lessees of $314,787 and $1,260,363,
respectively, interest expense on revolving credit facility of $594,313 and
$134,299, respectively, and other interest of $269,322 and $156,924,
respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
June 30, 1997
(unaudited)
1. Basis of Presentation
The 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.
2. Redemption of Limited Partnership Units
The General Partner consented to the Partnership redeeming 200 limited
partnership units during the six months ended June 30, 1997. 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.
3. 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.
ICON Cash Flow LLC I
In September 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
which was on lease to Alaska Airlines, Inc. The Partnership and L.P. Six
contributed 99% and 1% of the cash required for such acquisition, respectively,
to ICON Cash Flow LLC I. ICON Cash Flow LLC I acquired the aircraft, assuming
non-recourse debt and utilizing contributions received from the Partnership and
L.P. Six. The lease is an operating lease. 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." The lease
expired in April 1997.
In June, 1997 ICON Cash Flow LLC I remarketed the aircraft (formally on
lease to Alaska Airlines, Inc.) The aircraft was leased to Aero Mexico. The new
lease is an operating lease which expires in October 2002.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
ICON Cash Flow LLC II
In March 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 which was on lease to Alaska Airlines, Inc. The
Partnership and L.P. Six contributed 1% and 99% of the cash required for such
acquisition, respectively, to ICON Cash Flow LLC II. ICON Cash Flow LLC II
acquired the aircraft, assuming non-recourse debt and utilizing contributions
received from the Partnership and L.P. Six. The lease is an operating lease.
Profits, losses, excess cash and disposition proceeds will be allocated 1% to
the Partnership and 99% to L.P. Six. 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. As of June 30, 1997, the lease with Alaska
Airlines, Inc. was terminated and the aircraft was released to Aero Mexico.
Information as to the financial position and results of operations of ICON Cash
Flow LLC II at June 30, 1997 is summarized below:
June 30, 1997
Assets $ 17,363,474
============
Liabilities $ 13,240,664
============
Equity $ 4,122,810
============
Six Months Ended
June 30, 1997
Net income $ 206,707
============
ICON Cash Flow LLC III
On December 31, 1996, the Partnership and an affiliate, ICON Cash Flow
Partners, L.P. Seven ("L.P. Seven"), formed ICON Cash Flow Partners L.L.C. III
("ICON Cash Flow LLC III"), for the purpose of acquiring and managing an
aircraft currently on lease to Continental Airlines, Inc. The Partnership and
L.P. Seven contributed 1% and 99% of the cash required for such acquisition,
respectively, to ICON Cash Flow LLC III. ICON Cash Flow LLC III acquired the
aircraft, assuming non-recourse debt and utilizing contributions received from
the Partnership and L.P. Seven. The lease is a leveraged lease. Profits, losses,
excess cash and disposition proceeds are allocated 1% to the Partnership and 99%
to L.P. Seven. The General Partner manages and controls the business affairs of
both the Partnership and L.P. Seven. 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
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
joint venture is accounted for under the equity method. Information as to the
financial position and results of operations of ICON Cash Flow LLC III at June
30, 1997 is summarized below:
June 30, 1997
Assets $10,538,504
Liabilities $ 8,725,163
===========
Equity $ 1,813,341
===========
Six Months Ended
June 30, 1997
Net income $ 217,872
===========
4. Related Party Transactions
During the six months ended June 30, 1997 and 1996, the Partnership paid or
accrued to the General Partner management fees of $474,551 and $606,953,
respectively, and administrative expense reimbursements of $248,902 and
$295,393, respectively, which were charged to operations.
During the six months ended June 30, 1997 and 1996, the Partnership paid or
accrued to the General Partner acquisition fees of $0 and $76,732, respectively.
Included in the Partnership's acquisitions for the year ended December 31,
1996 is a financing transaction in the amount of $5,690,161, which represents
the financing of free cash resulting from lease rental payments being greater
than debt payments on a leveraged lease. The financing is secured by the
underlying equipment, a 1983 Airbus A300B4-203 aircraft currently on lease to
A.I. Leasing II, Inc. Subsequent to this financing ICON Cash Flow Partners L.P.
Six ("L.P. Six"), an affiliate of the Partnership, acquired the residual
interest in the leveraged lease and assumed the related outstanding non-recourse
debt. In January, 1997 L.P. Six refinanced the free cash portion of the
leveraged lease with a third party. As a result of this re-financing, the
Partnership received proceeds of $5,792,043 and terminated its interest in the
leveraged lease.
On January 28, 1997, the Partnership lent $7,780,328 to ICON Asset
Acquisition, a joint venture limited liability corporation formed by ICON Cash
Flow Partners L.P., Series B (8.93% interest), ICON Cash Flow Partners L.P.,
Series C (13.39% interest) and ICON Cash Flow Partners L.P. Six (77.68%
interest), all affiliates of the Partnership. The note is short term, bears
interest at the rate of 8% and is expected to be paid in full by August 31,
1997.
On June 5, 1997, the Partnership lent $3,500,000 to ICON Cash Flow
Partners, L.P., Series D, an affiliate of the Partnership. The loan was in the
form of a short-term note, bore interest at the rate of 11% and was repaid,
along with $26,370 in accrued interest, on June 30, 1997.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Item 2. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
The Partnership's portfolio consisted of a net investment in finance
leases, operating leases, financings and equity investment in joint ventures
representing 54%, 29%, 17% and less than 1% of total investments at June 30,
1997, respectively, and 57%, 26%, 17% and less than 1% of total investments at
June 30, 1996, respectively.
Results of Operations
Three Months Ended June 30, 1997 and 1996
For the three months ended June 30, 1997 and 1996, the Partnership leased
or financed equipment with an initial cost of $1,405,174 and $1,451,940,
respectively, to 5 and 49 lessees or equipment users, respectively.
Revenues for the three months ended June 30, 1997 were $1,406,472,
representing a decrease of $1,871,325 or 57% from 1996. The decrease in revenues
resulted primarily from a decrease in net gain on sales or remarketing of
equipment of $1,235,599 or 92%, a decrease in rental income of $677,193, a
decrease in finance income of $165,457 or 15% and a decrease in equity
investment in joint venture of $1,290 or 89% from 1996. These decreases were
partially offset by an increase in interest income and other of $208,214. Net
gain on sales or remarketing of equipment decreased in comparison to the prior
year due to the prior year gain of $997,606, which resulted from the
Partnership's sale of its investment in leveraged leases. Rental income
decreased due to the Partnership's reduced investment in operating leases.
Finance income decreased due to a decrease in the average size of the portfolio
from 1996 to 1997. The decrease in income from equity investment in joint
venture resulted from a decrease in the average size of the portfolio under
investment. Interest income and other increased due to an increase in the
average cash balance from 1996 to 1997.
Expenses for the three months ended June 30, 1997 were $1,186,581,
representing a decrease of $779,382 or 40% from 1996. The decrease in expenses
resulted primarily from a decrease in depreciation expense of $265,428 or 100%,
a decrease in provision for bad debts of $200,000 or 100%, a decrease in
amortization of initial direct costs of $166,368 or 73%, a decrease in interest
expense of $73,768 or 10%, a decrease in management fees of $69,035 or 25%, a
decrease in administrative expense reimbursements of $25,207 or 18% and a
decrease in minority interest in joint venture of $3,471 from 1996. These
decreases were partially offset by an increase in general and administrative
expense of $23,895 or 18% from 1996. Depreciation expense decreased due to the
Partnership's reduced investment in operating leases. As a result of an analysis
of delinquency, an assessment of overall risk and a review of historical loss
experience it was determined that no provision for bad debts was required for
the six months ended June 30, 1997. Amortization of initial direct costs,
management fees and administrative expense reimbursements decreased due to a
decrease in the average size of the portfolio from 1996 to 1997. Interest
expense decreased due to a decrease in the average debt outstanding from 1996 to
1997.
Net income for the three months ended June 30, 1997 and 1996 was $219,891
and $1,311,834, respectively. The net income per weighted average limited
partnership unit was $.36 and $2.13 for 1997 and 1996, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Six Months Ended June 30, 1997 and 1996
For the six months ended June 30, 1997 and 1996, the Partnership leased or
financed equipment with an initial cost of $4,927,220 and $4,679,422,
respectively, to 64 and 74 lessees or equipment users, respectively. The
weighted average initial transaction term relating to these transactions was 41
and 54 months.
Revenues for the six months ended June 30, 1997 were $3,621,472,
representing a decrease of $2,032,612 or 36% from 1996. The decrease in revenues
resulted primarily from a decrease in net gain on sales or remarketing of
equipment of $1,258,799 or 79%, a decrease in rental income of $677,193 or 50%,
a decrease in finance income of $200,737 or 9% and a decrease in income from
leveraged leases of $200,517 from 1996. These decreases were partially offset by
an increase in interest income and other of $303,209 and equity investment in
joint venture of $1,425 from 1996. Net gain on sales or remarketing of equipment
decreased in comparison to the prior year gain of $997,606, which resulted from
the Partnership's sale of its investment in leveraged leases at that time.
Rental income decreased due to the Partnership's reduced investment in operating
leases. Finance income and income from leveraged leases decreased due to a
decrease in the average size of the finance and leveraged lease portfolios from
1996 to 1997. Interest income and other increased due to an increase in the
average cash balance from 1996 to 1997.
Expenses for the six months ended June 30, 1997 were $2,757,946,
representing a decrease of $1,133,347 or 29% from 1996. The decrease in expenses
resulted primarily from a decrease in interest expense of $373,164 or 24%, a
decrease in depreciation expense of $265,428 or 50%, a decrease in provision for
bad debts of $200,000 or 100%, a decrease in amortization of initial direct
costs of $153,835 or 32%, a decrease in management fees of $132,402 or 22%, a
decrease in administrative expense reimbursements of $46,491 or 16% from 1996
and a decrease in expense related to the minority interest in joint venture of
$901 from 1996. These decreases were partially offset by an increase in general
and administrative expense of $38,874 or 17%. Interest expense decreased due to
a decrease in the average debt outstanding from 1996 to 1997. Depreciation
expense decreased due to the Partnership's reduced investment in operating
leases. As a result of an analysis of delinquency, an assessment of overall risk
and a review of historical loss experience, it was determined that no provision
for bad debts was required for the six months ended June 30, 1997. Amortization
of initial direct costs, management fees and administrative expense
reimbursements decreased due to a decrease in the average size of the protfolio
from 1996 to 1997.
Net income for the six months ended June 30, 1997 and 1996 was $863,526 and
$1,762,791, respectively. The net income per weighted average limited
partnership unit was $1.40 and $2.86 for 1997 and 1996, 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 six months ended June
30, 1997 and 1996 were net cash provided by operations of $5,150,170 and
$8,362,146, respectively, proceeds from sales of equipment of $10,103,453 and
$9,382,646, respectively and proceeds from the revolving credit facility of
$4,400,000 and $780,000, respectively. These funds were used to purchase
equipment, fund cash distributions and make payments on borrowings. The
Partnership intends to continue to purchase additional equipment and to fund
cash distributions utilizing cash provided by operations and proceeds from sales
of equipment.
Cash distributions to limited partners for the six months ended June 30,
1997 and 1996, which were paid monthly, totaled $3,884,371 and $3,885,900,
respectively, of which $854,891 and $1,745,163 was investment income and
$3,029,480 and $2,140,737 was a return of capital, respectively. The monthly
annualized cash distribution rate to limited partners was 12.75% for 1997 and
1996, of which 2.81% and 5.73% was investment income and 9.94% and 7.02% 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, 1997 and 1996 was
$6.38, of which $1.40 and $2.86 was investment income and $4.98 and $3.52 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, 1997 the Partnership had $14,817,396 available for
borrowing and outstanding under the facility.
Included in the Partnership's acquisitions for the year ended December 31,
1996 is a financing transaction in the amount of $5,690,161, which represents
the financing of free cash, resulting from lease rental payments being greater
than debt payments on a leveraged lease. The financing is secured by the
underlying equipment, a 1983 Airbus A300B4-203 aircraft currently on lease to
A.I. Leasing II, Inc. Subsequent to this financing ICON Cash Flow Partners L.P.
Six ("L.P. Six"), an affiliate of the Partnership, acquired the residual
interest in the leveraged lease and assumed the related outstanding non-recourse
debt. In January, 1997 L.P. Six refinanced the free cash portion of the
leveraged lease with a third party. As a result of this re-financing, the
Partnership received proceeds of $5,792,043 and terminated its interest in the
leveraged lease.
On January 28, 1997, the Partnership lent $7,780,328 to ICON Asset
Acquisition, a joint venture limited liability corporation formed by ICON Cash
Flow Partners L.P., Series B (8.93% interest), ICON Cash Flow Partners L.P.,
Series C (13.39% interest) and ICON Cash Flow Partners L.P. Six (77.68%
interest), all affiliates of the Partnership. The note is short term, bears
interest at the rate of 8%, (the Partnership's approximate cost of funds) and is
expected to be paid in full by August 31, 1997.
On June 5, 1997, the Partnership lent $3,500,000 to ICON Cash Flow
Partners, L.P., Series D, a affiliate of the Partnership. The loan was in the
form of a short-term note, bore interest at the rate of 11% and was paid in full
on June 30, 1997.
As of June 30, 1997, except as noted above, there were no known trends or
demands, commitments, events or uncertainties which are likely to have any
material effect on liquidity. As cash is realized from operations, sales of
equipment and borrowings, the Partnership will invest in equipment leases and
financings where it deems it to be prudent while retaining sufficient cash to
meet its reserve requirements and recurring obligations as they become due.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter ended
June 30, 1997.
<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 14, 1997 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 5,156,860
<SECURITIES> 0
<RECEIVABLES> 44,143,995
<ALLOWANCES> 1,097,073
<INVENTORY> 1,932,151
<CURRENT-ASSETS> * 0
<PP&E> 18,014,305
<DEPRECIATION> 0
<TOTAL-ASSETS> 71,644,536
<CURRENT-LIABILITIES> ** 0
<BONDS> 44,475,396
0
0
<COMMON> 0
<OTHER-SE> 26,125,645
<TOTAL-LIABILITY-AND-EQUITY> 71,644,536
<SALES> 3,621,472
<TOTAL-REVENUES> 3,621,472
<CGS> 593,006
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 986,518
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,178,422
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 863,526
<EPS-PRIMARY> 1.40
<EPS-DILUTED> 1.40
<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>
