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 September 30, 2000
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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
-------------------- --------------------------
Commission File Number 0-27912
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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)
111 Church Street, White Plains, New York 10601-1505
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(Address of principal executive offices) (Zip code)
(914) 993-1700
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Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ x ] Yes [ ] No
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
<TABLE>
September 30, December 31,
2000 1999
Assets
<S> <C> <C>
Cash ........................................... $ 2,199,584 $ 2,073,759
------------ ------------
Investment in finance leases
Minimum rents receivable .................... 17,918,425 26,598,335
Estimated unguaranteed residual values ...... 7,968,873 8,420,547
Unearned income ............................. (3,045,531) (4,853,392)
Allowance for doubtful accounts ............. (1,286,963) (1,237,909)
------------ ------------
21,554,804 28,927,581
Investment in financings
Receivables due in installments ............. 11,861,056 18,214,488
Unearned income ............................. (1,485,847) (2,438,302)
Allowance for doubtful accounts ............. (735,231) (735,231)
------------ ------------
9,639,978 15,040,955
------------ ------------
Investment in operating leases
Equipment, at cost .......................... 20,707,984 20,707,984
Accumulated depreciation .................... (4,437,591) (3,997,183)
------------ ------------
16,270,393 16,710,801
Investments in unconsolidated joint ventures ... 581,479 818,191
------------ ------------
Other assets ................................... 1,405,595 1,259,331
------------ ------------
Total assets ................................... $ 51,651,833 $ 64,830,618
============ ============
(continued on next page)
</TABLE>
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Balance Sheets (Continued)
(unaudited)
<TABLE>
September 30, December 31,
2000 1999
Liabilities and Partners' Equity
<S> <C> <C>
Notes payable - securitized debt ........................ $ 17,073,069 $ 25,691,428
Notes payable - non-recourse ............................ 19,270,600 21,127,810
Security deposits, deferred credits and other payables .. 2,793,328 2,758,365
Minority interests in consolidated joint ventures ....... 693,864 560,626
------------ ------------
39,830,861 50,138,229
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ...................................... (401,641) (372,938)
Limited partners (607,856 units outstanding,
$100 per unit original issue price in 2000 and 1999,
respectively) ...................................... 12,222,613 15,065,327
------------ ------------
Total partners' equity .................................. 11,820,972 14,692,389
------------ ------------
Total liabilities and partners' equity .................. $ 51,651,833 $ 64,830,618
============ ============
</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 Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
Revenues
<S> <C> <C> <C> <C>
Finance income ............................. $ 941,365 $ 1,370,980 $ 2,970,483 $ 4,603,894
Rental income .............................. 615,000 615,000 1,845,000 1,845,000
Gain on sales of equipment .............. 94,851 535,577 233,104 770,489
Interest income and other .................. 39,326 33,887 134,364 153,236
Income (loss) from investments in
unconsolidated joint ventures ......... (162,042) 75,407 (96,084) 185,887
----------- ----------- ----------- -----------
Total revenues .......................... 1,528,500 2,630,851 5,086,867 7,558,506
----------- ----------- ----------- -----------
Expenses
Interest ................................ 768,525 986,081 2,328,264 3,210,766
General and administrative .............. 184,316 158,584 552,299 546,361
Minority interest expense in consolidated
joint ventures ........................ 49,983 (148,351) 170,384 (1,143)
Provision for bad debts ................. -- 900,000 -- 1,000,000
Administrative expense reimbursements
General partner ....................... 130,927 111,319 363,366 392,633
Management fees-General partner ......... 211,511 191,764 603,916 665,847
Depreciation ............................ 146,803 146,803 440,408 440,408
Amortization of initial direct costs .... 3,559 6,375 19,686 27,522
----------- ----------- ----------- -----------
Total expenses ............................. 1,495,624 2,352,575 4,478,323 6,282,394
----------- ----------- ----------- -----------
Net income ................................. $ 32,876 $ 278,276 $ 608,544 $ 1,276,112
=========== =========== =========== ===========
Net income allocable to:
Limited partners ........................ $ 32,547 $ 275,493 $ 602,458 $ 1,263,351
General Partner ......................... 329 2,783 6,086 12,761
----------- ----------- ----------- -----------
$ 32,876 $ 278,276 $ 608,544 $ 1,276,112
=========== =========== =========== ===========
Weighted average number of limited
partnership units outstanding 607,856 607,863 607,856 607,863
=========== =========== =========== ===========
Net income per weighted average
limited partnership unit $ .05 $ .45 $ .99 $ 2.08
=========== =========== =========== ===========
</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 Nine Months Ended September 30, 2000 and the
Year Ended December 31, 1999
(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, 1998 $17,227,175 $(351,105) $16,876,070
Cash distributions
to partners $3.56 $3.65 (4,381,933) (44,258) (4,426,191)
Net income 2,220,085 22,425 2,242,510
----------- --------- -----------
Balance at
December 31, 1999 15,065,327 (372,938) 14,692,389
Cash distributions
to partners $4.68 $ .99 (3,445,172) (34,789) (3,479,961)
Net income 602,458 6,086 608,544
----------- --------- -----------
Balance at
September 30, 2000 $12,222,613 $(401,641) $11,820,972
=========== ========= ===========
</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 Nine Months Ended September 30,
(unaudited)
<TABLE>
2000 1999
---- ----
Cash flows provided by operating activities:
<S> <C> <C>
Net income ......................................................... $ 608,544 $ 1,276,112
------------ ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation .................................................... 440,408 440,408
Rental income - paid directly to lenders by lessees ............. (1,845,000) (1,845,000)
Provision for bad debts ......................................... -- 1,000,000
Finance income portion of receivables paid directly
to lenders by lessees ........................................ (1,014,883) (1,474,515)
Amortization of initial direct costs ............................ 19,686 27,522
Net gain on sales of equipment .................................. (233,104) (770,489)
Interest expense on non-recourse financing paid
directly by lessees .......................................... 1,332,413 1,691,241
Loss (income) from investments in unconsolidated joint ventures . 96,084 (185,887)
Minority interest expense ....................................... 170,384
Changes in operating assets and liabilities:
Collection of principal - non-financed receivables ............... 12,417,697 8,286,300
Distributions received from unconsolidated joint ventures ........ 140,629 505,778
Security deposits, deferred credits and other payables ........... 34,963 (316,966)
Accounts receivable from General Partner and affiliates, net ..... -- 160,151
Other assets ..................................................... (146,264) 6,547
Minority interests in consolidated joint ventures ................ (37,146) (56,807)
Other, net ....................................................... 216,467 (91,736)
------------ ------------
Total adjustments ............................................... 11,592,334 7,376,547
------------ ------------
Net cash provided by operating activities ....................... 12,200,878 8,652,659
------------ ------------
Cash flows from investing activities:
Proceeds from sales of equipment ................................... 1,880,477 3,155,343
------------ ------------
Net cash provided by investing activities ........................ 1,880,477 3,155,343
------------ ------------
(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 Nine Months Ended September 30,
(unaudited)
<TABLE>
2000 1999
---- ----
Cash flows from financing activities:
<S> <C> <C>
Principal payments on securitized debt ... (8,618,359) (8,394,355)
Proceeds from non-recourse debt .......... 11,943,528
Principal payments on non-recourse debt .. (13,800,738)
Cash distributions to partners ........... (3,479,961) (3,658,425)
------------ ------------
Net cash (used in) financing activities (13,955,530) (12,052,780)
------------ ------------
Net increase (decrease) in cash ............. 125,825 (244,778)
Cash at beginning of period ................. 2,073,759 2,336,094
------------ ------------
Cash at end of period ....................... $ 2,199,584 $ 2,091,316
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Unaudited Consolidated Financial Statements
September 30, 2000
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 presented 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 1999
Annual Report on Form 10-K.
2. Disposition Period
The Partnership's reinvestment period ended on July 31, 1998. The
disposition period commenced on August 1, 1998. During the disposition period
the Partnership has and will continue to distribute substantially all
distributable cash from operations and equipment sales to the partners and
continue the orderly termination of its operations and affairs. The Partnership
will not invest in any additional finance or lease transactions during the
disposition period. During the disposition period, the Partnership expects to
recover, at a minimum, the carrying value of its assets.
3. Related Party Transactions
Fees paid or accrued by the Partnership to the General Partner or its
affiliates for the nine months ended September 30, 2000 and 1999 are as follows:
2000 1999
---- ----
Management fees $603,916 $ 665,847 Charged to operations
Administrative expense
reimbursements 363,366 392,633 Charged to operations
-------- ----------
Total $967,282 $1,058,480
======== ==========
The Partnership has investments in five joint ventures with other
partnerships sponsored by the General Partner. (See Note 4 for additional
information relating to the joint ventures.)
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Unaudited Consolidated Financial Statements - Continued
4. Investments in Joint Ventures
The Partnership and affiliates formed five joint ventures for the purpose
of acquiring and managing various assets.
The two joint ventures described below are majority owned and are
consolidated with the Partnership.
ICON Cash Flow Partners 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. L.P. Six's investment in ICON Cash Flow LLC I has been
reflected as "Minority interests in consolidated joint ventures."
ICON Receivables 1997-B L.L.C.
In August 1997 the Partnership, L.P. Six and ICON Cash Flow Partners
L.P. Seven ("L.P. Seven") formed 1997-B, a special purpose entity formed for the
purpose of originating leases and securitizing its portfolio. The Partnership,
L.P. Six and L.P. Seven contributed $2,250,000 (75.00% interest), $250,000
(8.33% interest) and $500,000 (16.67% interest), respectively to 1997-B. In
order to fund the acquisition of leases, 1997-B obtained a warehouse borrowing
facility from Prudential Securities Credit Corporation. In October 1998, 1997-B
completed an equipment securitization. The net proceeds from the securitization
of these assets were used to pay-off the remaining 1997-B warehouse facility
balance and any remaining proceeds were distributed to the 1997-B members in
accordance with their membership interests. The Partnership's consolidated
financial statements include 100% of the assets and liabilities of 1997-B. L.P.
Six and L.P. Seven's interests in 1997-B have been reflected as "minority
interests in consolidated joint ventures."
The three joint ventures described below are less than 50% owned and are
accounted for following the equity method.
ICON Cash Flow Partners L.L.C. II
In March 1995 the Partnership and L.P. Six formed a joint venture, 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. The Partnership's investment in the joint venture is accounted for
under the equity method.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Unaudited Consolidated Financial Statements - Continued
Information as to the unaudited financial position and results of
operations of ICON Cash Flow LLC II at September 30, 2000 is summarized below:
September 30, 2000
Assets $17,789,760
===========
Liabilities $11,271,877
===========
Equity $ 6,517,883
===========
Partnership's share of equity $ 65,179
===========
Nine Months Ended
September 30, 2000
Net income $ 611,779
===========
Partnership's share of net income $ 6,117
===========
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 a joint venture, ICON Cash Flow Partners
L.L.C. III ("ICON Cash Flow LLC III"), for the purpose of acquiring and managing
an aircraft. The Partnership and L.P. Seven contributed 1% and 99% of the cash
required for such acquisition, respectively, to ICON Cash Flow LLC III. The
Partnership's investment in the joint venture is accounted for under the equity
method.
Information as to the unaudited financial position and results of
operations of ICON Cash Flow LLC III at September 30, 2000 is summarized below:
September 30, 2000
Assets $ 7,809,573
===========
Liabilities $ 3,577,323
===========
Equity $ 4,232,250
===========
Partnership's share of equity $ 42,321
===========
Nine Months Ended
September 30, 2000
Net income $ 386,805
===========
Partnership's share of net income $ 3,865
===========
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Unaudited Consolidated Financial Statements - Continued
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, contributed and assigned
equipment lease and finance receivables and residuals to ICON Receivables 1997-A
L.L.C. ("1997-A"), a special purpose entity created for the purpose of
originating leases, managing existing contributed assets and securitizing its
portfolio. In September 1997 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. In September 1997, 1997-A
securitized substantially all of its equipment leases and finance receivables
and residuals. 1997-A became the beneficial owner of a trust. The Partnership's
original investment was recorded at cost and is adjusted by its share of
earnings, losses and distributions thereafter.
Information as to the unaudited financial position and results of
operations of 1997-A at September 30, 2000 is summarized below:
September 30, 2000
Assets $10,906,111
===========
Liabilities $ 8,391,992
===========
Equity $ 2,514,119
===========
Partnership's share of equity $ 473,979
===========
Nine Months Ended
September 30, 2000
Net (loss) $ (340,318)
===========
Partnership's share of net (loss) $ (106,066)
===========
Distributions $ 450,866
===========
Partnership's share of distributions $ 140,629
===========
1997-A recorded a provision for bad debt of $500,000 during the three month
period ended September 30, 2000.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
September 30, 2000
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 investments in unconsolidated joint
ventures representing 46%, 21%, 32% and 1% of total investments at September 30,
2000, respectively, and 48%, 26%, 25% and 1% of total investments at September
30, 1999, respectively.
Results of Operations for the Three Months Ended September 30, 2000 and 1999
Revenues for the three months ended September 30, 2000 were $1,528,500
representing a decrease of $1,102,351 from 1999. The decrease in revenues
resulted from decreases in finance income of $429,615, gain on sales of
equipment of $440,726 and income from equity investment in joint venture of
$237,449. Finance income decreased due to a decrease in the average size of the
finance lease portfolio. The decrease in sales of equipment resulted from a
decrease in the amount of equipment sold where the proceeds received were in
excess of the remaining carrying value. The loss from investment in joint
venture in 2000 resulted primarily from a provision for bad debt of $500,000
being recorded in the third quarter of 2000 by the underlying joint venture,
ICON Receivables 1997-A L.L.C. ("1997-A"). There was no provision of bad debt
recorded in the 1999 third quarter.
Expenses for the three months ended September 30, 2000 were $1,495,624
representing a decrease of $856,951 from 1999. The decrease was due to decreases
in provision for bad debts of $900,000 and interest expense of $217,556. These
decreases were partially offset by an increase in minority interest in joint
venture of $198,334. Based upon a review of historical loss experience and an
assessment of overall risk, the Partnership determined that a provision for bad
debts was not required for the three months ending September 30, 2000. The
decrease in interest expense resulted from a decrease in average debt
outstanding from 1999 to 2000. The increase in minority interest expense
resulted from increased earnings levels within the Partnership's two
consolidated joint ventures.
Net income for the three months ended September 30, 2000 and 1999 was
$32,876 and $278,276, respectively. The net income per weighted average limited
partnership unit was $.05 and $.45 for 2000 and 1999, respectively.
Results of Operations for the Nine Months Ended September 30, 2000 and 1999
Revenues for the nine months ended September 30, 2000 were $5,086,867
representing a decrease of $2,471,639 from 1999. The decrease in revenues
resulted from decreases in finance income of $1,633,411, gain on sales of
equipment of $537,385, income from investment in unconsolidated joint ventures
of $281,971 and interest income and other of $18,872. Finance income decreased
due to a decrease in the average size of the finance lease portfolio. The
decrease in sales of equipment resulted from a decrease in the amount of
equipment sold where the proceeds received were in excess of the remaining
carrying value. Income from investment in joint venture decreased primarily due
to the $500,000 provision for bad debt being recorded by 1997-A in the third
quarter of 2000 with no provision for bad debt being recorded in 1999.
<PAGE>
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Expenses for the nine months ended September 30, 2000 were $4,478,323
representing a decrease of $1,804,071 from 1999. The decrease was due to
decreases in provision for bad debts of $1,000,000, interest expense of
$882,502, management fees of $61,931 and a decrease in administrative expenses
of $29,267. These decreases were partially offset by an increase in minority
interest in joint venture of $171,527. Based upon a review of historical loss
experience and an assessment of overall risk, the Partnership determined that a
provision for bad debts was not required for the nine months ending September
30, 2000. The decrease in interest expense resulted from a decrease in average
debt outstanding from 1999 to 2000. The decrease in management fees and
administrative expense was the result of a decrease in the average size of the
lease investment portfolio from 1999 to 2000. The increase in minority interest
expense resulted from increased earnings levels within the Partnership's two
consolidated joint ventures.
Net income for the nine months ended September 30, 2000 and 1999 was
$608,544 and $1,276,112, respectively. The net income per weighted average
limited partnership unit was $.99 and $2.08 for 2000 and 1999, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the nine months ended
September 30, 2000 and 1999 were net cash provided by operations of $12,200,878
and $8,652,659, respectively, and the proceeds from sales of equipment of
$1,880,477 and $3,155,343, respectively. These funds were used to fund cash
distributions and make payments of borrowings.
Cash distributions to limited partners for the nine months ended September
30, 2000 and 1999 which were paid monthly, totaled $3,445,172 and $3,155,343,
respectively.
The Partnership's reinvestment period ended on July 31, 1998. The
disposition period began August 1, 1998, at which time the Partnership began the
orderly termination of its operations and affairs. During the disposition period
the Partnership has, and will continue to distribute substantially all
distributable cash from operations and equipment sales to the partners. The
Partnership has not, and will not invest in any additional finance or lease
transactions during the disposition period. As a result of the Partnership's
entering into 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.
As of September 30, 2000, except as noted above, there were no known trends
or demands, commitments, events or uncertainties which are likely to have a
material effect on liquidity. As cash is realized from operations and sales of
equipment, the Partnership will distribute substantially all available cash,
after retaining sufficient cash to meet its reserve requirements and recurring
obligations.
<PAGE>
ICON Cash Flow Partners, L.P., Series 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
September 30, 2000.
<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.
November 10, 2000 /s/ Thomas W. Martin
----------------- ----------------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal financial and accounting officer of
the General Partner of the Registrant)
