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, 1998
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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 0-27912
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ICON Cash Flow Partners, L.P., Series E
- --------------------------------------------------------------------------------
(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,
1998 1997
Assets
<S> <C> <C>
Cash $ 5,788,660 $ 9,460,337
------------ -----------
Investment in finance leases
Minimum rents receivable 36,203,605 21,979,203
Estimated unguaranteed residual values 10,288,530 7,380,296
Initial direct costs 37,476 225,158
Unearned income (7,464,847) (3,811,419)
Allowance for doubtful accounts (596,324) (553,114)
------------ -----------
38,468,440 25,220,124
Investment in financings
Receivables due in installments 21,820,414 13,732,305
Initial direct costs 846 1,117
Unearned income (3,526,420) (2,563,681)
Allowance for doubtful accounts (90,001) (102,532)
------------ -----------
18,204,839 11,067,209
------------ -----------
Investment in operating leases
Equipment at cost 20,707,984 20,707,984
Accumulated depreciation (3,261,146) (2,864,469)
------------ -----------
17,446,838 17,843,515
Equity investment in joint ventures 1,611,353 1,556,123
------------ -----------
Accounts receivable from General Partner and affiliates, net - 7,104
Other assets 618,379 1,762,605
------------ -----------
Total assets $ 82,138,509 $66,917,017
============ ===========
</TABLE>
(continued on next page)
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Balance Sheets (Continued)
(unaudited)
<TABLE>
June 30, December 31,
1998 1997
Liabilities and Partners' Equity
<S> <C> <C>
Notes payable - non-recourse $ 31,310,191 $25,172,064
Note payable - warehouse facility 26,078,812 16,100,870
Security deposits and deferred credits 2,489,140 675,412
Minority interest in joint venture 1,458,005 854,129
Accounts payable - other 333,581 424,848
Accounts payable to General Partner and affiliates, net 241,076 -
Accounts payable - equipment 52,647 -
------------ ----------
61,963,452 43,227,323
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (318,367) (283,244)
Limited partners (608,346 and 608,446 units outstanding,
$100 per unit original issue price in 1998 and 1997,
respectively) 20,493,424 23,972,938
------------ -----------
Total partners' equity 20,175,057 23,689,694
------------ -----------
Total liabilities and partners' equity $ 82,138,509 $66,917,017
============ ===========
</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,
1998 1997 1998 1997
---- ---- ---- ----
Revenue
<S> <C> <C> <C> <C>
Finance income $ 1,030,909 $ 969,999 $ 2,408,925 $ 2,084,830
Rental income 631,962 - 1,217,700 677,193
Income from equity
investment in joint venture 171,572 151 289,851 4,246
Interest income and other 128,855 323,323 262,963 527,205
Net gain on sales or
remarketing of equipment 701 112,999 271,047 327,998
------------ ------------ ------------ -----------
Total revenues 1,963,999 1,406,472 4,450,486 3,621,472
------------ ------------ ------------ -----------
Expenses
Interest 818,271 648,584 1,837,404 1,178,422
Depreciation 291,581 - 396,677 265,428
Management fees - General Partner 266,590 206,073 699,284 474,551
General and administrative 153,714 160,478 243,853 263,065
Administrative expense
reimbursement - General Partner 148,884 111,070 357,854 248,902
Minority interest in joint venture 80,948 (1,904) 111,743 2,172
Amortization of initial direct costs 24,450 62,280 198,423 325,406
Provision for bad debts - - 200,000 -
------------ ------------ ------------ -----------
Total expenses 1,784,438 1,186,581 4,045,238 2,757,946
------------ ------------ ------------ -----------
Net income $ 179,561 $ 219,891 $ 405,248 $ 863,526
============ ============ ============ ===========
Net income allocable to:
Limited partners $ 177,765 $ 217,692 $ 401,196 $ 854,891
General Partner 1,796 2,199 4,052 8,635
------------ ------------ ------------ -----------
$ 179,561 $ 219,891 $ 405,248 $ 863,526
============ ============ ============ ===========
Weighted average number of limited
partnership units outstanding 608,346 609,246 608,363 609,312
============ ============ ============ ===========
Net income per weighted average
limited partnership unit $ .29 $ .36 $ .66 $ 1.40
============ ============ ============ ===========
</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, 1998 and the
Years Ended December 31, 1997, 1996 and 1995
(Unaudited)
<TABLE>
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 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
(continued on next page)
</TABLE>
<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, 1998 and the
Years Ended December 31, 1997, 1996 and 1995
(Unaudited)
<TABLE>
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
<S> <C> <C> <C> <C> <C>
Cash distribution
to partners $ 8.90 $ 3.85 (7,768,316) (78,468) (7,846,784)
Limited partnership
units redeemed
(1,000 units) (25,071) - (25,071)
Net income 2,344,899 23,686 2,368,585
------------ ----------- ------------
Balance at
December 31, 1997 23,972,938 (283,244) 23,689,694
Cash distributions
to partners $ 5.72 $ .66 (3,878,314) (39,175) (3,917,489)
Limited partnership
units redeemed
(100 units) (2,394) - (2,394)
Net income 401,196 4,052 405,248
------------ ----------- ------------
Balance at
June 30, 1998 $ 20,493,424 $ (318,367) $ 20,175,057
============ =========== ============
</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>
1998 1997
---- ----
Cash flows provided by operating activities:
<S> <C> <C>
Net income $ 405,248 $ 863,526
------------- ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 396,677 265,428
Rental income - assigned operating lease receivables (1,217,700) (677,193)
Finance income portion of receivables paid directly
to lenders by lessees (783,797) (647,409)
Amortization of initial direct costs 198,423 325,406
Net gain on sales or remarketing of equipment (271,047) (327,998)
Interest expense on non-recourse financing paid
directly by lessees 1,017,110 314,787
Interest expense accrued on debt - 87,142
Collection of principal - non-financed receivables 3,388,793 4,981,903
Income from equity investment in joint venture (289,851) (4,246)
Distribution from investment in joint venture 254,895 -
Changes in operating assets and liabilities:
Allowance for doubtful accounts 30,679 64,649
Accounts receivable - affiliate 7,104 -
Other assets 1,133,576 747,693
Security deposits and deferred credits 1,813,728 (336,458)
Minority interest in joint venture 603,876 2,839
Accounts payable - other (91,267) (67,700)
Accounts payable to General Partner and affiliates, net 241,076 (57,399)
Other, net (37,686) (384,800)
------------- ------------
Total adjustments 6,394,589 4,286,644
------------- ------------
Net cash provided by operating activities 6,799,837 5,150,170
------------- ------------
Cash flows from investing activities:
Proceeds from sales of equipment 1,332,911 10,103,453
Equipment and receivables purchased (17,842,210) (3,856,613)
Investment in joint venture (20,274) -
------------- --------------
Net cash provided by (used in) investing activities (16,529,573) 6,246,840
------------- ------------
(continued on next page)
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (Continued)
For the Six Months Ended June 30,
(unaudited)
<TABLE>
1998 1997
---- ----
Cash flows from financing activities:
<S> <C> <C>
Loans to affiliates - (11,280,328)
Principal payments received on affiliate notes - 5,950,000
Proceeds from warehouse credit line 15,187,893 -
Principal payments on warehouse credit line (5,209,951) -
Proceeds from revolving credit facility - 4,400,000
Principal payments on revolving credit facility - (2,582,604)
Redemption of limited partnership units (2,394) (7,238)
Cash distributions to partners (3,917,489) (3,923,606)
Principal payments on secured financing - -
------------- ------------
Net cash provided by (used in) financing activities 6,058,059 (7,443,776)
------------- ------------
Net increase (decrease) in cash (3,671,677) 3,953,234
Cash at beginning of period 9,460,337 1,203,626
------------- ------------
Cash at end of period $ 5,788,660 $ 5,156,860
============= ============
</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, 1998 and 1997, non-cash activities
included the following:
<TABLE>
1997 1996
---- ----
Principal and interest on direct finance receivables
<S> <C> <C>
paid directly to lenders by lessees $ 6,934,383 $ 3,508,518
Rental income assigned operating lease receivable 1,217,700 677,193
Principal and interest on non-recourse financing
paid directly by lessees (8,152,083) (4,185,711)
Non-recourse notes payable assumed in purchase price 13,273,100 -
Fair value of equipment and receivables purchased for debt (13,273,100) -
------------ -----------
$ - $ -
============ ===========
</TABLE>
Interest expense of $1,837,404 and $1,178,422 for the six months ended June
30, 1998 and 1997 consisted of: interest expense on non-recourse financing
accrued or paid directly by lenders to lessees of $1,017,110 and $314,787,
respectively, interest expense on warehouse credit line of $820,294 and
$594,313, respectively, and other interest of $0 and $269,322, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
June 30, 1998
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 1997
Annual Report on Form 10-K.
2. Disposition Period
The Partnership's Reinvestment Period ends on July 31, 1998. The
Disposition Period begins on August 1, 1998 and is expected to continue through
February 1, 2001. During the Disposition Period the Partnership will distribute
cash from operations and sales in excess of its reserve requirements and
anticipated obligations. The Partnership will not reinvest in any leased
equipment during the Disposition Period.
3. Redemption of Limited Partnership Units
The General Partner consented to the Partnership redeeming limited
partnership units during the six months ended June 30, 1998. 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 L.L.C. 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.
The Partnership and L.P. Six contributed 99% and 1% of the cash required for
such acquisition, respectively, to ICON Cash Flow LLC I. The Partnership's
consolidated financial statements include 100% of the assets and liabilities of
ICON Cash Flow LLC I.
ICON Cash Flow L.L.C. II
In March 1995 the Partnership and 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. The Partnership and L.P. Six contributed 1% and 99% of the cash
required for such acquisition, respectively, to ICON Cash Flow LLC II.
Information as to the unaudited financial position and results of
operations of ICON LLC II at June 30, 1998 is summarized below:
June 30, 1998
Assets $ 16,873,018
============
Liabilities $ 11,931,872
============
Equity $ 4,941,146
============
Six Months Ended
June 30, 1998
Net income $ 272,762
============
ICON Cash Flow L.L.C. III
In December 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.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Information as to the unaudited financial position and results of operations of
ICON LLC III at June 30, 1998 is summarized below:
June 30, 1998
Assets $ 13,636,998
============
Liabilities $ 11,379,538
============
Equity $ 2,257,460
============
Six Months Ended
June 30, 1998
Net income $ 223,952
============
ICON Receivables 1997-A L.L.C.
In March 1997, three affiliates of the Partnership, ICON Cash Flow
Partners, L.P., Series D ("Series D"), L.P. Six and L.P. Seven (collectively the
"1997-A Members"), contributed and assigned equipment lease and finance
receivables and residuals to ICON Receivables 1997-A L.L.C. ("1997-A"), a
special purpose entity created for the purpose of originating new leases,
managing existing contributed assets and, eventually, securitizing its
portfolio. In September 1997 the Partnership, L.P. Six and L.P. Seven
contributed and assigned additional equipment lease and finance receivables and
residuals to 1997-A. The Partnership, Series D, L.P. Six and L.P. Seven received
a 31.19%, 17.81% 31.03% and 19.97% interest, respectively, in 1997-A based on
the present value of their related contributions.
Information as to the unaudited financial position and results of
operations of 1997-A at June 30, 1998 is summarized below:
June 30, 1998
Assets $ 41,416,082
============
Liabilities $ 35,235,264
============
Equity $ 6,180,818
============
Six Months Ended
June 30, 1998
Net income $ 915,589
============
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
ICON Receivables 1997-B L.L.C.
In August 1997 the Partnership, L.P. Six and L.P. Seven (collectively, the
"1997-B Members") formed ICON Receivables 1997-B L.L.C. ("1997-B"), for the
purpose of originating lease transactions and ultimately securitizing its
portfolio. On July 30, 1998, 1997-B securitized substantially all of its
equipment leases and finance receivables and residuals. The net proceeds from
the securitization totaled $40,806,901, of which $30,930,921 was used to pay
down the 1997-B's debt, and the remaining proceeds, after establishing reserves
for expenses, were distributed to the 1997-B Members based on their respective
interests. 1997-B became the beneficial owner of a trust. The trustee for the
trust is Manufacturers and Traders Trust Company ("M&T"). In conjunction with
this securitization, the portfolio as well as the General Partner's servicing
capabilities were rated by Duff & Phelps and Fitch, both nationally recognized
rating agencies. The General Partner, as servicer, is responsible for managing,
servicing, reporting on and administering the portfolio. 1997-B remits all
monies received from the portfolio to M&T. M&T is responsible for disbursing to
the noteholders their respective principal and interest and to 1997-B the excess
of cash collected over debt service from the portfolio. The 1997-B Members
receive their pro rata share of any excess cash on a monthly basis from 1997-B.
The Partnership's consolidated financial statements include 100% of the assets
and liabilities of 1997-B, while L.P. Six and L.P. Seven's minority interests
have been reflected as a liability on the consolidated balance sheets.
5. Related Party Transactions
During the six months ended June 30, 1998 and 1997, the Partnership paid or
accrued to the General Partner management fees of $699,284 and $474,551,
respectively, and administrative expense reimbursements of $357,854 and
$248,902, respectively, which were charged to operations.
For the six months ended June 30, 1998 and 1997 no acquisition fees were
paid or accrued by the Partnership.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
June 30, 1998
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, financings, operating leases, and equity investment in joint ventures
representing 51%, 24%, 23%, and 2% of total investments at June 30, 1998,
respectively, and 54%, 17%, 29% and less than 1% of total investments at June
30, 1997, respectively.
Results of Operations
Three Months Ended June 30, 1998 and 1997
For the three months ended June 30, 1998 and 1997, the Partnership leased
or financed equipment with an initial cost of $15,136,793 and $1,405,174,
respectively, to 44 and 5 lessees or equipment users, respectively. The weighted
average initial transaction term relating to these transactions was 47 and 65
months.
Revenues for the three months ended June 30, 1998 were $1,963,399,
representing an increase of $557,527 or 39.6% from 1998. The increase in
revenues resulted primarily from an increase in rental income of $631,962 or
100%, an increase in income from equity investment in joint venture of $171,421
and an increase in finance income of $60,910 or 6.3% from 1997. These increases
were partially offset by a decrease in interest income and other of $194,468 or
66.2% and a decrease in net gain on sales or remarketing of equipment of
$112,298 or 99.4%. Rental income increased due to the release of the operating
equipment to a new lessee. The original operating lease came off lease in March
1997. The equipment was released in 1997 under new terms. Income from equity
investment in joint venture increased due to the Partnership's increased
investment in these ventures. Finance income increased due to an increase in the
average size of the portfolio from 1997 to 1998. Net gain on sales or
remarketing of equipment decreased from 1997 to 1998 due to a decrease in the
number of leases maturing and the underlying equipment being sold or remarketed,
for which the proceeds received were in excess of the average carrying value of
the equipment. Interest income and other decreased due to a decrease in the
average cash balance from 1997 to 1998 and a decrease in late charges received.
Expenses for the three months ended June 30, 1998 were $1,784,438,
representing an increase of $597,857 or 50.4% from 1997. The increase in
expenses resulted primarily from an increase in depreciation expense of $291,581
or 100%,, an increase in interest expense of $169,687 or 26.2%, an increase in
minority investment in joint venture of $82,852, an increase in management fees
of $60,517 or 29.4% and an increase in administrative reimbursement of $37,814
or 34.1% from 1997. These increases were partially offset by a decrease in
amortization of initial directs costs of $37,830 or 60.8% and a decrease in
general and administrative expenses of $6,764 or 4.2% from 1997. Depreciation
expense increased due to the release of the operating equipment to a new lessee.
The original operating lease came off lease in March 1997. The equipment was
released in 1997 under new terms. Interest expense increased due to an increase
in the average outstanding debt from 1997 to 1998. Minority interest in joint
venture increased due to the increase in income related to the Partnership's
consolidated investment in a joint venture. Management fees and administrative
expense reimbursement increased due to an increase in the average size of the
portfolio from 1997 to 1998. Amortization of indirect costs decreased due to a
decrease in the portfolio of leases which are subject to initial indirect costs
from 1997 to 1998. 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 three months ended June 30,
1998.
Net income for the three months ended June 30, 1998 and 1997 was $179,561
and $219,891, respectively. The net income per weighted average limited
partnership unit was $.29 and $.36 for 1998 and 1997, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
June 30, 1998
Six Months Ended June 30, 1998 and 1997
For the six months ended June 30, 1998 and 1997, the Partnership leased or
financed equipment with an initial cost of $31,167,958 and $4,927,220,
respectively, to 137 and 64 lessees or equipment users, respectively. The
weighted average initial transaction term relating to these transactions was 50
and 41 months, respectively.
Revenues for the six months ended June 30, 1998 were $4,450,486,
representing an increase of $829,014 or 22.9% from 1997. The increase in
revenues resulted primarily from an increase in rental income of $540,507 or
79.8%, an increase in finance income of $324,095 or 15.6%, an increase in income
from equity investment in joint ventures of $285,605 or 67.3% from 1997. These
increases were partially offset by a decrease in interest income and other of
$264,242 or 50% and a decrease in net gain on sales or remarketing of equipment
of $56,951 from 1997. Rental income increased due to the release of the
operating equipment to a new lessee. The original operating lease came off lease
in March 1997. The equipment was released in 1997 under new terms. Finance
income increased due to an increase in the average size of the finance lease
portfolios from 1997 to 1998. Income from equity investment in joint venture
increased due to the Partnership's increased investment in these ventures.
Interest income and other decreased due to a decrease in the average cash
balance from 1997 to 1998. Net gain on sales or remarketing of equipment
decreased from 1997 to 1998 was due to a decrease in the number of leases
maturing and the underlying equipment being sold or remarketed, for which the
proceeds received were in excess of the average carrying value of the equipment.
Expenses for the six months ended June 30, 1998 were $4,045,238,
representing an increase of $1,287,292 or 46.7% from 1997. The increase in
expenses resulted primarily from an increase in interest expense of $658,982 or
55.9%, an increase in management fees of $224,733 or 47.4%, an increase in
provision for bad debts of $200,000 or 100%, an increase in depreciation expense
of $131,249 or 49.5%, an increase in expense related to the minority interest in
joint venture of $109,571 and an increase in administrative expense
reimbursements of $108,952 or 43.8% from 1997. These increases were partially
offset by an decrease in amortization of initial directs of $126,983 or 39.0%,
and a decrease in general and administrative expense of $19,212 or 7.3%.
Interest expense increased due to an increase in the average debt outstanding
from 1997 to 1998. Management fees and administrative expense reimbursement
increased due to an increase in the average size of the portfolio from 1997 to
1998. As a result of an analysis of delinquency, an assessment of overall risk
and a review of historical loss experience, it was determined that an additional
provision for bad debts was required for the six months ended June 30, 1998 in
the amount of $200,000. Depreciation expense increased due to the release of the
operating equipment to a new lessee. The original operating lease came off lease
in March 1997. The equipment was released in 1997 under new terms. Minority
investment in joint venture increased due to the increase in income related to
the Partnership's consolidated investment in a joint venture. Amortization of
initial directs costs decreased due to a decrease in the portfolio of leases
that are subject to initial indirect costs from 1997 to 1998. General and
administrative expenses decreased primarily due to a reduction in a bank service
fees from 1997 to 1998.
Net income for the six months ended June 30, 1998 and 1997 was $405,248 and
$863,526, respectively. The net income per weighted average limited partnership
unit was $.66 and $1.40 for 1998 and 1997, respectively.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
June 30, 1998
Liquidity and Capital Resources
The Partnership's primary sources of funds for the six months ended June
30, 1998 and 1997 were net cash provided by operations of $6,799,837 and
$5,150,170, respectively, proceeds from sales of equipment of $1,332,911 and
$10,103,453, respectively , proceeds from the warehouse line of credit of
$15,187,893 in 1998 and proceeds from the revolving credit facility of
$4,400,000 in 1997. These funds were used to purchase equipment, fund cash
distributions and make payments on borrowings. The Partnership intends to
continue 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,
1998 and 1997, which were paid monthly, totaled $3,878,314 and $3,884,371,
respectively, of which $401,195 and $854,891 was investment income and
$3,477,119 and $3,029,480 was a return of capital, respectively. The monthly
annualized cash distribution rate to limited partners was 12.75% for 1998 and
1997, of which 1.32% and 2.81% was investment income and 11.43% and 9.94% 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, 1998 and 1997 was
$6.38, of which $.66 and $1.40 was investment income and $5.72 and $4.98 was a
return of capital, respectively.
The Partnership's Reinvestment Period ends July 31, 1998. The
Disposition Period begins August 1, 1998 and is expected to continue through
July 31, 2003. During the Disposition Period the Partnership will distribute
cash from operations and sales in excess of its reserve requirements and
anticipated obligations. Once the Partnership enters the Disposition Period,
future monthly distributions could, and are expected to fluctuate depending on
the amount of asset sale and re-lease proceeds received during that period. The
Partnership will not reinvest in any leased equipment during the Disposition
Period.
As of June 30, 1998, except as noted above, there were no known trends or
demands, commitments, events or uncertainties which are likely to have a
material effect on liquidity. As cash is realized from operations, sales of
equipment and borrowings, the Partnership will invest in equipment leases and
financings, through the end of the Reinvestment Period, 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, 1998.
<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, 1998 /s/ 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
<NAME> ICON Cash Flow Partners, L.P., Series E
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 5,788,660
<SECURITIES> 0
<RECEIVABLES> 58,229,019
<ALLOWANCES> 686,325
<INVENTORY> 41,001
<CURRENT-ASSETS> * 0
<PP&E> 20,707,984
<DEPRECIATION> 3,261,146
<TOTAL-ASSETS> 82,138,509
<CURRENT-LIABILITIES> ** 0
<BONDS> 57,389,002
0
0
<COMMON> 0
<OTHER-SE> 20,175,057
<TOTAL-LIABILITY-AND-EQUITY> 82,138,509
<SALES> 4,187,523
<TOTAL-REVENUES> 4,450,486
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,007,834
<LOSS-PROVISION> 200,000
<INTEREST-EXPENSE> 1,837,404
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 405,248
<EPS-PRIMARY> 0.66
<EPS-DILUTED> 0.66
<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>
