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 33-36376
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ICON Cash Flow Partners L.P. Six
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3723089
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
600 Mamaroneck Avenue, Harrison, New York 10528-1632
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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. Six
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
<TABLE>
June 30, December 31,
1997 1996
Assets
<S> <C> <C>
Cash $ 1,108,147 $ 4,821,624
------------ -----------
Investment in finance leases
Minimum rents receivable 33,662,128 45,645,436
Estimated unguaranteed residual values 11,600,314 11,924,455
Initial direct costs 1,157,061 1,624,309
Unearned income (6,402,906) (9,073,073)
Allowance for doubtful accounts (460,371) (485,627)
------------ -----------
39,556,226 49,635,500
Investment in operating leases
Equipment, at cost 17,150,782 19,371,603
Accumulated depreciation - (1,485,136)
Initial direct costs - 47,945
------------ -----------
17,150,782 17,934,412
Investment in financings
Receivables due in installments 2,953,710 7,737,022
Initial direct costs 39,894 138,928
Unearned income (292,216) (1,165,426)
Allowance for doubtful accounts (13,198) (13,198)
------------ -----------
2,688,190 6,697,326
Equity investment in joint ventures 5,307,340 45,724
------------ -----------
Investment in leveraged lease, net 1,570,414 2,086,672
------------ -----------
Other assets 495,549 583,884
------------ -----------
Total assets $ 67,876,648 $81,805,142
============ ===========
</TABLE>
<PAGE>
ICON Cash Flow Partners L.P. Six
(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 $ 33,420,832 $39,001,676
Note payable - affiliate 5,357,637 -
Note payable - non-recourse - securitized 3,123,298 12,134,273
Security deposits and deferred credits 1,351,177 2,929,380
Minority interest in joint venture 596,263 877,893
Accounts payable - other 197,236 753,769
Accounts payable - General Partner 115,887 -
Accounts payable - equipment - 243,499
------------ -----------
44,162,330 55,940,490
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (92,111) (71,652)
Limited partners (382,739 and 382,864
units outstanding, $100 per unit original
issue price in 1997 and 1996, respectively) 23,680,428 25,936,304
------------ -----------
Total partners' equity 23,714,318 25,864,652
------------ -----------
Total liabilities and partners' equity $ 67,876,648 $81,805,142
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners L.P. Six
(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
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Finance income $ 1,249,929 $ 1,836,365 $ 2,491,348 $ 3,590,727
Rental income 500,000 603,151 902,101 1,206,302
Income from equity investment
in joint venture 136,521 1,568 159,422 3,074
Net gain on sales or
remarketing of equipment 123,242 154,908 202,943 213,505
Income from leveraged lease, net 86,544 - 173,975 -
Interest income and other 29,739 85,910 75,300 201,411
------------ ------------ ------------ ------------
Total revenues 2,125,975 2,681,902 4,005,089 5,215,019
------------ ------------ ------------ ------------
Expenses
Interest 1,027,802 1,305,058 1,693,530 2,486,017
Amortization of initial direct costs 356,425 362,328 774,571 694,047
Depreciation 212,162 212,162 424,324 424,324
Management fees - General Partner 298,019 262,952 565,865 752,437
Administrative expense reimbursement
- General Partner 149,100 133,482 282,107 358,759
General and administrative 126,410 191,923 194,193 360,721
Minority interest in joint venture 26,913 24,988 39,772 43,459
Provision for bad debts - 100,000 - 250,000
------------ ------------ ------------ ------------
Total expenses 2,196,831 2,592,893 3,974,362 5,369,764
------------ ------------ ------------ ------------
Net income (loss) $ (70,856) $ 89,009 $ 30,727 $ (154,745)
============ ============ ============ ============
Net income (loss) allocable to:
Limited partners $ (70,148) $ 88,119 $ 30,419 $ (153,198)
General Partner (709) 890 307 1,547
------------ ------------ ------------ ------------
$ (70,148) $ 89,009 $ 30,727 $ (154,745)
============ ============ ============ ============
Weighted average number of limited
partnership units outstanding 382,201 383,311 382,490 383,311
============ ============ ============ ============
Net income (loss) per weighted average
limited partnership unit $ (.18) $ .23 $ .08 $ (.40)
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners L. P. Six
(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
(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, 1993 $ 1,000 $ 1,000 $ 2,000
Refund of initial
limited partners'
capital contribution (1,000) - (1,000)
Proceeds from issuance
of limited partnership
units (127,704.10 units) 12,770,410 - 12,770,410
Sales and offering expenses (1,724,005) - (1,724,005)
Cash distributions
to partners $ 7.59 $ 2.21 (311,335) (3,145) (314,480)
Net income 70,181 709 70,890
----------- ---------- ----------
Balance at
December 31, 1994 10,805,251 (1,436) 10,803,815
Proceeds from issuance
of limited partnership
units (256,153.02 units) 25,615,302 - 25,615,302
Sales and
offering expenses (3,458,068) - (3,458,068)
Cash distributions
to partners $ 9.48 $ .29 (2,543,783) (25,694) (2,569,477)
Limited partnership units
redeemed (265 units) (20,827) - (20,827)
Net income 75,307 761 76,068
----------- ---------- ----------
Balance at
December 31, 1995 30,473,182 (26,369) 30,446,813
Cash distributions
to partners $ 10.75 $ - (4,119,354) (41,613) (4,160,967)
Limited partnership units
redeemed (728 units) (54,227) - (54,227)
Net loss (363,297) (3,670) (366,967)
----------- ---------- ----------
Balance at
December 31, 1996 25,936,304 (71,652) 25,864,652
Cash distributions
to partners $ 5.30 $ .08 (2,055,881) (20,766) (2,076,647)
Limited partnership units
redeemed (1552 units) (104,414) - (104,414)
Net income 30,419 307 30,727
----------- ---------- ----------
Balance at
June 30, 1997 $23,806,428 $ (92,111) $23,714,318
=========== ========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners L. P. Six
(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 (loss) $ 30,727 $ (154,745)
------------- ------------
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 424,324 424,324
Rental income - assigned operating lease receivables (902,101) (1,206,302)
Finance income portion of receivables paid directly
to lenders by lessees (1,468,351) (1,950,238)
Amortization of initial direct costs 774,571 694,047
Net gain on sales or remarketing of equipment (202,943) (213,505)
Income from equity investment in joint ventures (159,422) (3,074)
Income from leveraged lease, net (173,975) -
Interest expense on non-recourse financing
paid directly by lessees 1,148,095 1,840,101
Distribution from investment in joint venture 456,162 -
Collection of principal - non-financed receivables 4,226,602 5,300,008
Change in operating assets and liabilities:
Allowance for doubtful accounts - 135,562
Accounts payable to General Partner and affiliates, net 115,887 (1,037,286)
Accounts payable - other (556,533) (196,755)
Security deposits and deferred credits (1,578,203) 305,123
Minority interest in joint ventures (281,630) (503,854)
Other, net 104,500 147,650
------------- ------------
Total adjustments 1,926,983 3,735,801
------------- ------------
Net cash provided by operating activities 1,957,710 3,581,056
------------- ------------
Cash flows from investing activities:
Proceeds from sales of equipment 1,921,587 2,446,193
Equipment and receivables purchased (1,972,832) (7,568,664)
Initial direct costs - (1,070,294)
------------- ------------
Net cash used in investing activities (51,245) (6,192,765)
------------- ------------
Cash flows from financing activities:
Proceeds from note payable - affiliate 7,780,328 -
Proceeds from non-recourse debt 486,879 -
Proceeds from non-recourse securitized debt - 5,941,893
Principal payments on note payable - affiliate (2,450,000) (4,094,790)
Principal payments on non-recourse securitized debt (9,256,088) (599,938)
Cash distributions to partners (2,076,647) (2,082,082)
Redeemed limited partnership units (104,414) (14,173)
------------- ------------
Net cash used in financing activities (5,619,942) (849,090)
------------- ------------
Net decrease in cash (3,713,477) (3,460,799)
Cash, beginning of period 4,821,624 8,981,950
------------- ------------
Cash, end of period $ 1,108,147 $ 5,521,151
============= ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (continued)
Supplemental Disclosures of Cash Flow Information
For the six months ended June 30, 1997 and 1996, non-cash activities included
the following:
<TABLE>
1997 1996
---- ----
<S> <C> <C>
Rental income - assigned operating lease receivable $ 902,101 $ 1,206,302
Principal and interest on direct finance
receivables paid directly to
lenders by lessees 7,151,805 10,234,552
Principal and interest on non-recourse
financing paid directly to lenders by lessees (8,053,906) (11,440,854)
Decrease in investments in finance leases and financings
due to contribution to joint venture 5,575,104 -
Increase in equity investment in joint venture (5,575,104) -
Non-recourse notes payable assumed
in purchase price 186,715 10,114,419
Fair value of equipment and receivables
purchased for debt and payables (186,715) (10,114,419)
------------- ------------
$ - $ -
============= ============
</TABLE>
Interest expense of $1,693,530 and $2,486,017 for the six months ended June
30, 1997 and 1996 consisted of: interest expense on non-recourse financing
accrued or paid directly to lenders by lessees of $1,148,095 and $1,840,010,
respectively, interest expense on non-recourse secured financing of $236,996 and
$457,086, respectively, and other interest of $308,439 and $188,921,
respectively.
<PAGE>
ICON Cash Flow Partners L. P. Six
(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. Six
(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 1996
Annual Report on Form 10-K.
2. Net Investment in Leveraged Lease
In September 1996 the Partnership acquired, subject to a leveraged lease,
the residual interest in an aircraft. The aircraft is an A-300B4-203 currently
on lease to Airbus. The purchase price was $19,595,956, consisting of $1,409,839
in cash, the assumption of non-recourse senior debt of $12,495,956 and
non-recourse junior debt of $5,590,161.
The net investment in the leveraged lease as of June 30, 1997 consisted of the
following:
Non-cancelable minimum rents receivable (net of
principal and interest on non-recourse debt) $ -
Estimated unguaranteed residual values 4,000,000
Initial direct costs 473,512
Unearned income (2,903,098)
-----------
$ 1,570,414
The non-cancelable rents are being paid directly to the lenders by the
lessees to satisfy the principal and interest on the non-recourse debt assumed.
Prior to the acquisition, the free cash flow (rent in excess of the senior
debt payments or junior debt) was financed by an affiliated partnership, ICON
Cash Flow Partners, L.P., Series E. On January 29, 1997 the Partnership
re-financed the junior debt with a third party.
3. Redemption of Limited Partnership Units
The General Partner consented to the Partnership redeeming 1,552 limited
partnership units during 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 deduction from partners equity.
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements (continued)
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.
ICON Asset Acquisition LLC
On February 3, 1995 the Partnership and two affiliates, ICON Cash Flow
Partners, L.P., Series B ("Series B"), and ICON Cash Flow Partners, L.P., Series
C ("Series C") formed ICON Asset Acquisition L.L.C. I ("ICON Asset Acquisition
LLC") as a special purpose limited liability company. ICON Asset Acquisition LLC
was formed for the purpose of acquiring, managing and securitizing a portfolio
of leases. The Partnership, Series B and Series C contributed $8,700,000 (77.68%
interest), $1,000,000 (8.93% interest) and $1,500,000 (13.39% interest),
respectively, to ICON Asset Acquisition LLC. On February 17, 1995, ICON Asset
Acquisition LLC purchased an existing portfolio of leases. The purchase price of
the portfolio totaled $27,854,266, and the underlying equipment consists of
graphic arts and printing equipment. On September 5, 1995, ICON Asset
Acquisition LLC securitized substantially all of its portfolio and became the
beneficial owner of a trust and the Prudential Insurance Company of America
("Prudential") the lender to the trust. On January 28, 1997, ICON Asset
Acquisition LLC re-financed its outstanding $7,780,000 obligation to Prudential
with proceeds it received from a loan from ICON Cash Flow Partners, L.P., Series
E ("Series E"), an affiliate of the Partnership. The loan is short-term, and is
expected to be re-financed by August 31, 1997. ICON Asset Acquisition LLC is
charged an interest rate that is equal to Series E's cost of funds, which is
approximately 8.0%.
The Partnership's consolidated financial statements include 100% of the
accounts of ICON Asset Acquisition LLC with the affiliates' share reflected as
"Minority interests in joint ventures."
ICON Cash Flow LLC I
In September 1994 the Partnership and an affiliate, ICON Cash Flow
Partners, L.P., Series E ("Series E"), 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 Series E contributed 1% and 99% 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 Series E. The lease was an operating lease. Profits, losses,
excess cash and disposition proceeds are allocated 1% to the Partnership and 99%
to Series E. The General Partner manages and controls the business affairs of
both the Partnership and Series E. 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
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements (continued)
venture is accounted for under the equity method. 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.
Information as to the financial position and results of operations of ICON
Cash Flow LLC I as of and for the six months ended June 30, 1997 is summarized
below:
June 30, 1997
Assets $ 18,014,305
=============
Liabilities $ 13,157,957
=============
Equity $ 4,856,348
=============
Six Months Ended
June 30, 1997
Net income $ 217,214
=============
ICON Cash Flow LLC II
In March 1995 the Partnership and an affiliate, ICON Cash Flow Partners,
L.P., Series E ("Series E"), 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 currently on lease to Alaska Airlines, Inc. The Partnership and
Series E contributed 99% and 1% 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 Series E. The lease is an operating lease. Profits, losses,
excess cash and disposition proceeds are allocated 99% to the Partnership and 1%
to Series E. The Partnership's consolidated financial statements include 100% of
ICON Cash Flow LLC II. Series E's investment in ICON Cash Flow LLC II has been
reflected as "Minority interest in joint venture." As of June 30, 1997, the
lease with Alaska Airlines, Inc. was terminated and the aircraft was re-leased
to Aero Mexico.
ICON Receivables 1997-A LLC
On March 11, 1997, the Partnership and two affiliates, ICON Cash Flow
Partners, L.P., Series D and ICON Cash Flow Partners L.P. Seven, (collectively
"the Members"), contributed and assigned $6,712,631, $5,794,273 and $6,582,150
in equipment lease and finance receivables and residuals with a net book value
of $5,553,962, $4,874,857 and $5,465,238, respectively to ICON Receivables
1997-A LLC ("1997-A"), a special purpose entity created by the Members. The
Members received a 34.94%, 30.67% and 34.39% interest, respectively, in 1997-A
based on the present value of their related contributions. 1997-A was formed for
the purpose of originating new leases, managing existing contributed assets and,
eventually, securitizing its portfolio. In order to fund the acquisition of new
leases, 1997-A obtained a warehouse borrowing facility from Prudential
Securities Credit Corporation (the "Facility"). Borrowings under the Facility
are based on the present value of the new leases, provided that in the
aggregate, the amount outstanding cannot exceed
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements (continued)
$20,000,000. Outstanding amounts under the Facility bear interest equal to Libor
plus 1.5%. Collections of receivables from new leases are used to pay down the
Facility, however, in the event of a default, all of 1997- A's assets are
available to cure such default. The net proceeds from the expected
securitization of these assets will be used to pay-off the remaining Facility
balance and the remaining proceeds will be distributed to the Members in
accordance with their membership interests. The Partnership accounts for its
investment in 1997- A under the equity method.
Information as to the financial position and results of operations of
1997-A as of and for the six months ended June 30, 1997 is summarized below:
June 30, 1997
Assets $ 31,019,376
=============
Liabilities $ 15,969,603
=============
Equity $ 15,049,773
=============
Six Months Ended
June 30, 1997
Net income $ 450,002
=============
5. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the six months ended June 30, 1997 and 1996 are as
follows:
<TABLE>
1997 1996
---- ----
<S> <C> <C> <C>
Acquisition fees $ - $ 273,557 Capitalized
Organization and offering - - Charged to Equity
Underwriting commissions - - Charged to Equity
Management fees 565,865 752,437 Charged to Operations
Administrative expense reimbursement 282,107 358,759 Charged to Operations
Sales commissions - 800
----------- -----------
$ 847,972 $ 1,384,753
=========== ===========
</TABLE>
The Partnership has investments in three 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. Six
(A Delaware Limited Partnership)
June 30, 1997
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, leveraged leases and equity investment in a joint
venture of 65%, 28%, 4%, 3% and less than 1% of total investments at June 30,
1997, respectively, and 71%, 21%, 7%, 0% and less than 1% of total investment at
June 30, 1996.
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 $84,184 and $806,246, respectively,
to 1 and 105 lessees or equipment users, respectively.
Revenues for the three months ended June 30, 1997 were $2,125,975,
representing a decrease of $555,927 or 21% from 1996. The decrease in revenues
was due to a decrease in finance income of $586,436 or 32%, a decrease in rental
income of $103,151 or 17%, a decrease in interest income and other of $56,171 or
65% and a decrease in net gain on sales or remarketing of equipment of $31,666
or 20% from 1996. These decreases were partially offset by an increase in income
from equity investment in joint venture of $134,953 or 86% and an increase in
income from leveraged leases of $86,544 or 100% from 1996. The decrease in
finance income resulted from the decrease in the average size of the finance
lease portfolio from 1996 to 1997. Rental income decreased due to the
Partnership's reduced investment in operating leases. Interest income and other
decreased due to a decrease in the average cash balance from 1996 to 1997. The
net gain on sales or remarketing decreased due to a decrease in the number of
leases maturing, and the underlying equipment being sold or remarketed. Income
from equity investment in joint ventures and income from leveraged lease
increased due to the Partnership's increased investment in these transactions in
December 1996 and June 1997.
Expenses for the three months ended June 30, 1997 were $2,196,831,
representing a decrease of $396,062 or 124% from 1996. The decrease in expenses
was due to a decrease in interest expense of $277,256 or 21%, a decrease in
provision for bad debs of $100,000 or 100%, a decrease of general and
administrative expense of $65,513 or 34% and a decrease in amortization of
initial direct costs of $5,903 or 2% from 1996. These decreases were partially
offset by an increase in management fees of $35,067 or 13%, an increase in
administrative expense reimbursements of $15,618 or 12% and an increase in
minority interest in joint venture of $1,925 or 1% from 1996. Interest expense
decreased due to a decrease in the average debt outstanding from 1996 to 1997.
General and administrative and amortization of initial direct costs decreased
due to a decrease in the average size of the portfolio from 1996 to 1997 and as
the result of the Partnership contributing a portion of its portfolio to a joint
venture. Based on an analysis of delinquency, an assessment of overall risk and
historical loss experience, it was determined that no provision for bad debt was
required for the six months ended June 30, 1997.
Net income (loss) for the three months ended June 30, 1997 and 1996 was
$(70,856) and $89,009, respectively. The net income (loss) per weighted average
limited partnership unit was $(.18) and $.23, respectively.
<PAGE>
ICON Cash Flow Partners L.P. Six
(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 $1,825,327 and $9,118,552,
respectively, to 5 and 126 lessees or equipment users, respectively. The
weighted average initial transaction term relating to these transactions was 25
and 52 months, respectively.
Revenues for the six months ended June 30, 1997 were $4,005,089, representing
a decrease of $1,209,930 or 23% from 1996. The decrease in revenues was due to a
decrease in finance income of $1,099,379 or 31%, a decrease in rental income of
$304,201 or 25%, a decrease in interest income and other of $126,111 or 63% and
a decrease in net gain on sales or remarketing of equipment of $10,562 or 5%
from 1996. These decreases were partially offset by an increase in income from
leveraged leases of $173,975 or 100% and an increase in income from equity
investment in joint venture of $156,348 or 51% from 1996. The decrease in
finance and rental income resulted from a decrease in the size of the average
finance and operating lease portfolios from 1996 to 1997. Net gain on sales or
remarketing of equipment decreased due to a decrease in the number of leases
maturing, and the underlying equipment being sold or remarketed. Interest income
and other decreased due to a decrease in the average cash balance from 1996 to
1997. Income from equity investment in joint ventures and income from leveraged
lease increased due to the Partnership's increased investment in these
transactions in December 1996 and June 1997.
Expenses for the six months ended June 30, 1997 were $3,974,362, representing
a decrease of $1,395,402 or 221% from 1996. The decrease in expenses was due to
a decrease in interest expense of $792,487 or 32%, a decrease in provision for
bad debts of 250,000 or 100%, a decrease in management fees of $186,572 or 25%,
a decrease in general and administrative expense of $166,528 or 46%, a decrease
in administrative expense reimbursements of $76,652 or 21% and a decrease in
minority interest in joint venture of $3,687 or 8% from 1996. These decreases
were partially offset by an increase in amortization of initial direct cost of
$80,524 or 12% from 1996. Interest expense decreased due to decrease in average
debt outstanding from 1996 to 1997. Management fees, general and administrative
and administrative expense reimbursements decreased due to a decrease in the
average size of the portfolio from 1996 to 1997 and as the result of the
Partnership contributing a portion of its portfolio to a joint venture. Based on
an analysis of delinquency, an assessment of overall risk and historical loss
experience, it was determined that no provision for bad debt was required for
the six months ended June 30, 1997.
Net income (loss) for the six months ended June 30, 1997 and 1996 was $30,727
and $(154,745), respectively. The net loss per weighted average limited
partnership unit was $.08 and $(.40), respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the six months ended June 30,
1997 and 1996 were cash provided by operations of $1,957,710 and $3,581,056,
respectively, proceeds from sales of equipment of $1,921,587 and $2,446,193,
respectively and proceeds from note payable affiliate of $7,780,328 in 1997.
These funds were used to make payments on borrowings, to fund cash distributions
and to purchase equipment. The Partnership intends to purchase additional
equipment and to fund cash distributions utilizing capital contributions, cash
from operations, proceeds from sales of equipment and borrowings.
<PAGE>
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Cash distributions to limited partners for the six months ended June 30, 1997
and 1996, which were paid monthly, totaled $2,055,881 and $2,061,269,
respectively, of which $30,419 and $0 was investment income and $2,025,462 and
$2,061,269 was a return of capital, respectively. The monthly annualized cash
distribution rate to limited partners was 10.75%, of which .16% and 0% was
investment income and 10.60% and 10.75% was a return of capital, respectively,
calculated as a percentage of each partners initial capital contribution. The
limited partner distribution per weighted average unit outstanding for the six
months ended June 30, 1997 and 1996 was $5.38 of which $.08 and $0 was
investment income and $5.30 and $5.38 was a return of capital, respectively.
On March 11, 1997, the Partnership and two affiliates, ICON Cash Flow
Partners, L.P., Series D and ICON Cash Flow Partners L.P. Seven, (collectively
"the Members"), contributed and assigned $6,712,631, $5,794,273 and $6,582,150
in equipment lease and finance receivables and residuals with a net book value
of $5,553,962, $4,874,857 and $5,465,238, respectively to ICON Receivables
1997-A LLC ("1997-A"), a special purpose entity created by the Members. The
Members received a 34.94%, 30.67% and 34.39% interest, respectively, in 1997-A
based on the present value of their related contributions. 1997-A was formed for
the purpose of originating new leases, managing existing contributed assets and,
eventually, securitizing its portfolio. In order to fund the acquisition of new
leases, 1997-A obtained a warehouse borrowing facility from Prudential
Securities Credit Corporation (the "Facility"). Borrowings under the Facility
are based on the present value of the new leases, provided that in the
aggregate, the amount outstanding cannot exceed $25,000,000. Outstanding amounts
under the Facility bear interest equal to Libor plus 1.5%. Collections of
receivables from new leases are used to pay down the Facility, however, in the
event of a default, all of 1997- A's assets are available to cure such default.
The net proceeds from the expected securitization of these assets will be used
to pay-off the remaining Facility balance and the remaining proceeds will be
distributed to the Members in accordance with their membership interests. The
Partnership accounts for its investment in 1997- A under the equity method.
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 closings of limited
partnership units, 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. Six
(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. Six
(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. Six
File No. 33-36376 (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> 0000910632
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,108,147
<SECURITIES> 0
<RECEIVABLES> 64,302,009
<ALLOWANCES> 473,569
<INVENTORY> 85,358
<CURRENT-ASSETS> * 0
<PP&E> 17,150,782
<DEPRECIATION> 0
<TOTAL-ASSETS> 67,876,648
<CURRENT-LIABILITIES> ** 0
<BONDS> 23,599,523
0
0
<COMMON> 0
<OTHER-SE> 23,714,318
<TOTAL-LIABILITY-AND-EQUITY> 67,876,648
<SALES> 4,005,089
<TOTAL-REVENUES> 4,005,089
<CGS> 1,238,667
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,042,165
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,693,530
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,727
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
<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>
