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 March 31, 1999
-----------------------------------------------------------
[ ] 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 0-28136
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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
incorporation or organization) Identification Number)
600 Mamaroneck Avenue, Harrison, New York 10528-1632
- --------------------------------------------------------------------------------
(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>
March 31, December 31,
1999 1998
Assets
<S> <C> <C>
Cash ....................................................... $ 526,724 $ 125,260
------------ ------------
Investment in finance leases
Minimum rents receivable ................................ 11,776,717 13,507,407
Estimated unguaranteed residual values .................. 10,286,349 11,238,451
Initial direct costs .................................... 223,606 275,189
Unearned income ......................................... (2,849,291) (3,371,116)
Allowance for doubtful accounts ......................... (224,274) (231,149)
------------ ------------
19,213,107 21,418,782
------------ ------------
Investment in operating leases
Equipment, at cost ...................................... 19,100,646 19,100,646
Accumulated depreciation ................................ (3,123,504) (2,967,204)
------------ ------------
15,977,142 16,133,442
------------ ------------
Investments in unconsolidated joint ventures ............... 1,748,775 1,803,243
------------ ------------
Investment in financings
Receivables due in installments ......................... 680,962 5,431,790
Initial direct costs .................................... 3,055 4,917
Unearned income ......................................... (46,909) (761,705)
Allowance for doubtful accounts ......................... (49,913) (49,913)
------------ ------------
587,195 4,625,089
------------ ------------
Accounts receivable from General Partner and affiliates, net 3,086,340 --
------------ ------------
Other assets ............................................... 363,339 381,805
------------ ------------
Total assets ............................................... $ 41,502,622 $ 44,487,621
============ ============
</TABLE>
(continued on next page)
<PAGE>
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Balance Sheets (Continued)
(unaudited)
<TABLE>
March 31, December 31,
1999 1998
Liabilities and Partners' Equity
<S> <C> <C>
Notes payable - non-recourse ................................. $ 20,892,615 $ 22,491,500
Note payable - non-recourse - secured financing .............. 647,694 887,815
Security deposits and deferred credits ....................... 2,193,292 2,571,642
Accounts payable - other ..................................... 157,490 177,397
Minority interest in consolidated joint venture .............. 51,932 49,724
Accounts payable to General Partner and affiliates, net ...... -- 425,089
------------ ------------
23,943,023 26,603,167
------------ ------------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ........................................... (152,573) (149,325)
Limited partners (379,353.20 units outstanding, $100 per
unit original issue price in 1999 and 1998, respectively) 17,712,172 18,033,779
------------ ------------
Total partners' equity .................................. 17,559,599 17,884,454
------------ ------------
Total liabilities and partners' equity ....................... $ 41,502,622 $ 44,487,621
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Operations
For the Three Months Ended March 31,
(unaudited)
<TABLE>
1999 1998
---- ----
Revenue
<S> <C> <C>
Finance income ........................................ $ 716,141 $ 615,610
Rental income ......................................... 615,000 590,986
Net gain on sales or remarketing
of equipment ........................................ 218,041 94,149
Income from investments
in unconsolidated joint ventures .................... 132,375 126,483
Interest income and other ............................. 6,913 59,511
Income from leveraged lease, net ...................... -- 95,696
---------- ----------
Total revenues ........................................ 1,688,470 1,582,435
---------- ----------
Expenses
Interest .............................................. 460,253 588,261
Management fees - General Partner ..................... 163,360 254,169
Depreciation .......................................... 156,300 159,480
Administrative expense
reimbursements - General Partner .................... 86,213 123,218
General and administrative ............................ 61,416 43,559
Amortization of initial direct costs .................. 53,446 205,583
Minority interest expense in consolidated joint venture 2,208 1,693
Provision for bad debts ............................... -- 100,000
---------- ----------
Total expenses ........................................ 983,196 1,475,963
---------- ----------
Net income ............................................... $ 705,274 $ 106,472
========== ==========
Net income allocable to:
Limited partners ...................................... $ 698,221 $ 105,407
General Partner ....................................... 7,053 1,065
---------- ----------
$ 705,274 $ 106,472
========== ==========
Weighted average number of limited
partnership units outstanding ......................... 379,353 380,379
========== ==========
Net income per weighted average
limited partnership unit .............................. $ 1.84 $ .28
========== ==========
</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 Three Months Ended March 31, 1999 and
the Years Ended December 31, 1998, 1997 and 1996
(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, 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 $10.66 $.09 (4,102,940) (41,444) (4,144,384)
Limited partnership units
redeemed (2,186 units) (150,550) - (150,550)
Net income 35,264 356 35,620
----------- --------- -----------
Balance at
December 31, 1997 21,718,078 (112,740) 21,605,338
</TABLE>
(continued on next page)
<PAGE>
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity (continued)
For the Three Months Ended March 31, 1999 and
the Years Ended December 31, 1998, 1997 and 1996
(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 distributions
to partners $9.53 $1.22 (4,085,189) (41,261) (4,126,450)
Limited partnership units
redeemed (1,324.92 units) (62,073) - (62,073)
Net income 462,963 4,676 467,639
----------- --------- -----------
Balance at
December 31, 1998 18,033,779 (149,325) 17,884,454
Cash distributions
to partners $ .85 $1.84 (1,019,828) (10,301) (1,030,129)
Net income 698,221 7,053 705,274
----------- --------- -----------
Balance at
March 31, 1999 $17,712,172 $(152,573) $17,559,599
=========== ========= ===========
</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 Three Months Ended March 31,
(unaudited)
<TABLE>
1999 1998
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income ........................................................... $ 705,274 $ 106,472
----------- -----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Rental income - paid directly to lenders by lessees ............... (615,000) (590,986)
Interest expense on non-recourse financing paid directly by lessees 445,283 556,184
Finance income portion of receivables paid directly
to lenders by lessees ........................................... (530,960) (473,308)
Provision for bad debts ........................................... -- 100,000
Amortization of initial direct costs .............................. 53,446 205,583
Income from investments in unconsolidated joint ventures .......... (132,375) (126,483)
Depreciation ...................................................... 156,300 159,480
Income from leveraged lease, net .................................. -- (95,696)
Net gain on sales or remarketing of equipment ..................... (218,041) (94,149)
Change in operating assets and liabilities:
Collection of principal - non-financed receivables ............. 1,247,240 644,312
Distributions received from unconsolidated joint ventures ...... 204,547 176,034
Minority interest in consolidated joint venture ................ 2,208 1,693
Accounts receivable from General Partner and affiliates, net ... (11,351) --
Security deposits and deferred credits ......................... (378,350) 827,814
Investments in unconsolidated joint ventures ................... (17,704) (31,808)
Accounts payable - other ....................................... (19,907) (40,636)
Accounts payable to General Partner and affiliates, net ........ (425,089) (18,603)
Other, net ..................................................... (21,583) (9,340)
----------- -----------
Total adjustments ............................................ (261,336) 1,190,091
----------- -----------
Net cash provided by operating activities ....................... 443,938 1,296,563
----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment ..................................... 1,227,776 530,118
Equipment and receivables purchased .................................. -- (190,413)
----------- -----------
Net cash provided by (used in) investing activities ............ 1,227,776 339,705
----------- -----------
</TABLE>
(continued on next page)
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (Continued)
For the Three Months Ended March 31,
<TABLE>
1999 1998
---- ----
Cash flows from financing activities:
<S> <C> <C>
Cash distributions to partners .................... (1,030,129) (1,032,601)
Principal payments on non-recourse securitized debt (240,121) (326,247)
Redemption of limited partnership units` .......... -- (20,057)
----------- -----------
Net cash used in financing activities ....... (1,270,250) (1,378,905)
----------- -----------
Net increase in cash ................................. 401,464 257,363
Cash at beginning of period .......................... 125,260 4,000,250
----------- -----------
Cash at end of period ................................ $ 526,724 $ 4,257,613
=========== ===========
</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 three months ended March 31, 1999 and 1998, non-cash activities
included the following:
1999 1998
---- ----
Principal and interest on direct finance
receivables paid directly to
lenders by lessees ........................... $ 1,429,168 $ 2,028,592
Rental income assigned operating lease receivable 615,000 590,986
Principal and interest on non-recourse
financing paid directly to lenders by lessees (2,044,168) (2,619,578)
----------- -----------
$ -- $ --
=========== ===========
Interest expense of $460,253 and $588,261 for the three months ended March
31, 1999 and 1998 consisted of: interest expense on non-recourse financing
accrued or paid directly to lenders by lessees of $445,283 and $556,184,
respectively, interest expense on non-recourse secured financing of $14,970 and
$31,358, respectively, and other interest of $0 and $719, respectively.
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 1999
(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 1998
Annual Report on Form 10-K.
2. Net Investment in Leveraged Lease
In September 1996 the Partnership acquired, subject to a leveraged lease,
the beneficial interest in an aircraft. In December 1998 the Partnership sold
its interest in the aircraft to Airbus Industrie. The proceeds from the sale
totaled $20,834,705 and were used to pay off the debt and a third party under a
residual sharing agreement. The remaining proceeds were retained by the
Partnership and the Partnership recognized an $884,876 gain on the sale of the
beneficial interest.
3. Related Party Transactions
Fees paid or accrued by the Partnership to the General Partner or its
affiliates for the three months ended March 31, 1999 and 1998 are as follows:
1999 1998
---- ----
Management fees $163,360 $254,169 Charged to operations
Administrative expense
reimbursements 86,213 123,218 Charged to operations
-------- --------
Total $249,573 $377,387
======== ========
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements (continued)
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.)
4. Investment in Joint Ventures
The Partnership and affiliates formed five joint ventures for the purpose
of acquiring and managing various assets.
The joint venture described below is majority owned and is consolidated
with the Partnership.
ICON Cash Flow Partners L.L.C. 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 which was 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." The original lease term
expired in April 1997 and Alaska Airlines, Inc. returned the aircraft. In June
1997 ICON Cash Flow LLC II released the aircraft to Aero Mexico. The new lease
is an operating lease which expires in September 2002.
The four joint ventures described below are less than 50% owned and are
accounted for following the equity method.
ICON Cash Flow Partners L.L.C. I
In September 1994 the Partnership and an affiliate, 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 is an
operating lease. Profits, losses, excess cash and disposition proceeds are
allocated 1% to the Partnership and 99% to Series E. The Partnership's
investment in the joint venture is accounted for under the equity method. The
original lease term expired in April 1997 and Alaska Airlines, Inc. returned the
aircraft. In June 1997 ICON Cash Flow LLC I released the aircraft to Aero
Mexico. The new lease is an operating lease which expires in October 2002.
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements (continued)
Information as to the financial position and results of operations of ICON
Cash Flow LLC I as of and for the three months ended March 31, 1999 is
summarized below:
March 31, 1999
--------------
Assets $ 17,151,209
===============
Liabilities $ 11,365,835
===============
Equity $ 5,785,374
===============
Partnership's share of equity $ 57,854
===============
Three Months Ended
March 31, 1999
------------------
Net income $ 206,989
===============
Partnership's share of net income $ 2,070
===============
ICON Receivables 1997-A L.L.C.
In March 1997 the Partnership, ICON Cash Flow Partners, L.P., Series D
("Series D"), and ICON Cash Flow Partners L.P. Seven ("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, Series E and L.P.
Seven contributed and assigned additional equipment lease and finance
receivables and residuals to 1997-A. The Partnership, Series D, Series E and
L.P. Seven received a 31.03%, 17.81% 31.19% 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 accounts for its investment in 1997-A under the equity
method of accounting. The Partnership's original investment was recorded at cost
and is adjusted by its share of earnings, losses and distributions thereafter.
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements (continued)
Information as to the financial position and results of operations of
1997-A as of and for the three months ended March 31, 1999 is summarized below:
March 31, 1999
--------------
Assets $ 27,759,198
===============
Liabilities $ 23,176,757
===============
Equity $ 4,582,441
===============
Partnership's share of equity $ 1,462,562
===============
Three Months Ended
March 31, 1999
----------------
Net income $ 315,487
===============
Partnership's share of net income $ 97,912
===============
Distributions $ 508,872
===============
Partnership's share of distributions $ 157,928
===============
ICON Receivables 1997-B L.L.C.
In August 1997 the Partnership, Series E and L.P. Seven formed ICON
Receivables 1997-B L.L.C. ("1997-B"), for the purpose of originating leases and
securitizing its portfolio. The Partnership, Series E and L.P. Seven contributed
cash and received an 8.33%, 75.00% and 16.67% interest, respectively, in 1997-B.
The Partnership's cash contributions amounted to $250,000 in 1997 and $163,978
in 1998. In order to fund the acquisition of leases, 1997-B obtained a warehouse
borrowing facility from Prudential Securities Credit Corporation (the "1997-B
Warehouse Facility"). 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 accounts for its investment in
1997-B under the equity method of accounting. The Partnership's original
investment was recorded at cost and is adjusted by its share of earnings, losses
and distributions thereafter.
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements (continued)
Information as to the financial position and results of operations of
1997-B as of and for the three months ended March 31, 1999 is summarized below:
March 31, 1999
--------------
Assets $ 37,443,824
===============
Liabilities $ 35,136,630
===============
Equity $ 2,307,194
===============
Partnership's share of equity $ 192,189
===============
Three Months Ended
March 31, 1999
------------------
Net income $ 365,571
===============
Partnership's share of net income $ 30,452
===============
Distributions $ 286,775
===============
Partnership's share of distributions $ 23,888
===============
ICON Boardman Funding L.L.C.
In December 1998 the Partnership and three affiliates, Series C, L.P. Seven
and ICON Income Fund Eight A L.P. ("Eight A") formed ICON Boardman Funding
L.L.C. ("ICON BF"), for the purpose of acquiring a lease with Portland General
Electric. The purchase price totaled $27,421,810, and was funded with cash and
non-recourse debt assumed in the purchase price. The Partnership, Series C, L.P.
Seven and Eight A received a .5%, .5%, .5% and 98.5% interest, respectively, in
ICON BF. The Partnership's original investment was recorded at cost of $56,960
and is adjusted by its share of earnings, losses and distributions, thereafter.
Simultaneously with the acquisition of the Portland General Electric lease by
ICON BF, a portion of the rent receivable in excess of the senior debt payments
was acquired by the Partnership from ICON BF for $3,801,108.
On March 30, 1999, ICON BF acquired the Partnership's investment in a
portion of the rent receivable in excess of the senior debt payments for
$3,097,637 and financed, with a third party, all of the rent receivable in
excess of the senior debt payments. There was no gain or loss to the Partnership
on this transaction. ICON BF received $7,643,867 from the financing. The
proceeds from the financing, net of the purchase of the Partnership's
investment, were distributed to the members of ICON BF in accordance with their
ownership interests. The $3,097,637 is included on the Partnership's balance
sheet in accounts receivable from General Partner and affiliates, net.
<PAGE>
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements (continued)
Information as to the financial position and results of operations of ICON
BF as of and for the three months ended March 31, 1999 is summarized below:
March 31, 1999
Assets $ 25,365,163
===============
Liabilities $ 18,131,166
===============
Equity $ 7,233,997
===============
Partnership's share of equity $ 36,170
===============
Three Months Ended
March 31, 1999
Net income $ 388,238
===============
Partnership's share of net income $ 1,941
===============
Distributions $ 4,546,230
===============
Partnership's share of distributions $ 22,731
===============
<PAGE>
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
March 31, 1999
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, investments in unconsolidated joint ventures,
financings and leveraged leases of 51%, 42%, 5%, 2% and 0% of total investments
at March 31, 1999, respectively, and 53%, 35%, 4%, 4% and 4% of total
investments at March 31, 1998, respectively.
Results of Operations for the Three Months Ended March 31, 1999 and 1998
For the three months ended March 31, 1999 the Partnership did not enter
into any new leases or financing agreements. For the three months ended March
31, 1998, the Partnership leased or financed additional equipment with an
initial cost of $190,413 to 4 lessees or equipment users. At March 31, 1999 the
weighted average remaining transaction term of the portfolio was 21 months.
Revenues for the three months ended March 31, 1999 were $1,688,470
representing an increase of $106,035 or 7% from 1998. The increase in revenues
was due to an increase in net gain on sales or remarketing of equipment of
$123,892 or 132%, an increase in finance income of $100,531 or 16%, an increase
in rental income of $24,014 or 4% and an increase in income from investments in
unconsolidated joint ventures of $5,892 or 5%. These increases were partially
offset by a decrease in income from leveraged leases of $95,696 or 100% and a
decrease in interest income and other of $52,598 or 88%. The increase in net
gain on sales or remarketing of equipment resulted from an increase in the
number of leases maturing and an increase in the amount of underlying equipment
being sold or remarketed for which proceeds received were in excess of the
remaining carrying value. Although the average size of the finance lease
portfolio decreased from 1998 to 1999, finance income increased because finance
income in 1999 included an adjustment related to a finance lease acquired in
September 1998. Rental income increased due to increased rentals in 1999 as a
result of the Partnership's revision of the operating lease with Aerovias de
Mexico, S.A. de C.V. ("Aero Mexico") in April of 1998. The increase in income
from equity investment in joint ventures was due to an increase in the average
size of the finance lease portfolio of one of the underlying joint ventures,
ICON Receivables 1997-B, from 1998 to 1999. The decrease in income from
leveraged leases was a result of the Partnership's 1998 termination of its lease
with Airbus Industrie. The decrease in interest income and other was primarily
due to a decrease in interest income resulting from a decrease in the average
cash balance from 1998 to 1999.
Expenses for the three months ended March 31, 1999 were $983,196
representing a decrease of $492,767 or 33%. The decrease in expenses was a
result of a decrease in amortization of initial direct costs of $152,137 or 74%,
a decrease in interest expense of $128,008 or 22%, a decrease in provision for
bad debt taken of $100,000 or 100%, a decrease in management fees of $90,809 or
36%, a decrease in administrative expense reimbursements of $37,005 or 30%, and
a decrease in depreciation expense of $3,180 or 2%. These decreases were
partially offset by an increase in general and administrative expense of $17,857
or 41%. The decreases in amortization of initial direct costs, management fees
and administrative expense reimbursements were a result of a decrease in the
average size of the finance lease portfolio from 1998 to 1999. Interest expense
decreased as a result of a decrease in the average debt outstanding from 1998 to
1999. As a result of an analysis of delinquency,
<PAGE>
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
assessment of overall risk and a review of historical loss experience, the
Partnership determined that no additional provision for bad debt was required
for the three months ended March 31, 1999. The increase in general and
administrative expense was a result of increased professional fees incurred for
the refinancing of the debt related to the Aero Mexico lease in April 1998 and
increased printing and postage costs.
Net income for the three months ended March 31, 1999 and 1998 was $705,274
and $106,472, respectively. The net income per weighted average limited
partnership unit outstanding was $1.84 and $.28 for 1999 and 1998, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended March
31, 1999 and 1998 were net cash provided by operations of $443,938 and
$1,296,563, respectively, and proceeds from sales of equipment of $1,227,776 and
$530,118, respectively. These funds were used to fund cash distributions, to
make payments on borrowings and to purchase equipment in 1998. The Partnership
intends to continue to purchase additional equipment and to fund cash
distributions utilizing cash provided by operations and proceeds from sales of
equipment.
Cash distributions to limited partners for the three months ended March 31,
1999 and 1998, which were paid monthly, totaled $1,019,828 and $1,022,275,
respectively, of which $698,221 and $105,407 was investment income and $321,607
and $916,868 was a return of capital, respectively. The monthly annualized cash
distribution rate to limited partners was 10.75%, of which 7.36% and 1.11% was
investment income and 3.39% and 9.64% was a return of capital, respectively. The
limited partner distribution per weighted average unit outstanding in 1999 and
1998 was $2.69 of which $1.84 and $.28 was investment income and $.85 and $2.41
was a return of capital, respectively.
In March 1997 the Partnership, ICON Cash Flow Partners, L.P., Series D
("Series D"), and ICON Cash Flow Partners L.P. Seven ("L.P. Seven"), contributed
and assigned equipment lease and finance receivables and residuals to ICON
Receivables 1997-A LLC ("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, ICON Cash Flow
Partners, L.P., Series E ("Series E") and L.P. Seven contributed and assigned
additional equipment lease and finance receivables and residuals to 1997-A. The
Partnership, Series D, Series E and L.P. Seven received a 31.03%, 17.81% 31.19%
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.
<PAGE>
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
In August 1997 the Partnership, Series E and L.P. Seven formed ICON
Receivables 1997-B LLC ("1997-B"), a special purpose entity formed for the
purpose of originating leases and securitizing its portfolio. The Partnership,
Series E and L.P. Seven contributed $250,000 (8.33% interest), $2,250,000
(75.00% 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 (the "1997-B Warehouse
Facility"). 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 original investment was recorded at cost and is adjusted by
its share of earnings, losses and distributions thereafter.
In December 1998 the Partnership and three affiliates, ICON Cash Flow
Partners, L.P., Series C ("Series C"), L.P. Seven and ICON Income Fund Eight A
L.P. ("Eight A") formed ICON Boardman Funding LLC ("ICON BF"), for the purpose
of acquiring a lease with Portland General Electric. The purchase price totaled
$27,421,810, and was funded with cash and non-recourse debt assumed in the
purchase price. The Partnership, Series C, L.P. Seven and Eight A received a
.5%, .5%, .5% and 98.5% interest, respectively, in ICON BF. The Partnership's
original investment was recorded at cost of $56,960 and will be adjusted by its
share of earnings, losses and distributions, thereafter. Simultaneously with the
acquisition of the Portland General Electric lease by ICON BF, a portion of the
rent receivable in excess of the senior debt payments was acquired by the
Partnership from ICON BF for $3,801,108.
On March 30, 1999, ICON BF acquired the Partnership's investment in a
portion of the rent receivable in excess of the senior debt payments for
$3,097,637 and financed, with a third party, all of the rent receivable in
excess of the senior debt payments. There was no gain or loss to the Partnership
on this transaction. ICON BF received $7,643,867 from the financing. The
proceeds from the financing, net of the purchase of the Partnership's
investment, were distributed to the members of ICON BF in accordance with their
ownership interests. The $3,097,637 is included on the Partnership's balance
sheet in accounts receivable from General Partner and affiliates, net.
As of March 31, 1998 there were no known trends or demands, commitments,
events or uncertainties which are likely to have any material effect on
liquidity. As cash is realized from operations, sales of equipment and
borrowings, the Partnership will invest in equipment leases and financings where
it deems it to be prudent while retaining sufficient cash to meet its reserve
requirements and recurring obligations.
Year 2000 Issue
The Year 2000 issue arose because many existing computer programs have been
written using two digits rather than four to define the applicable year. As a
result, programs could interpret dates ending in "00" as the year 1900 rather
than the year 2000. In certain cases, such errors could result in system
failures or miscalculations that disrupt the operation of the affected
businesses.
<PAGE>
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
The Partnership uses computer information systems provided by the General
Partner and has no computer information systems of its own. The software related
to the General Partner's primary computer information systems are provided by
third party vendors. The General Partner has formally communicated with these
vendors and has received assurance that their programs are Year 2000 compliant.
In addition, the General Partner has gathered information about the Year 2000
readiness of significant vendors and third-party servicers and continues to
monitor developments in this area. All of the General Partner's peripheral
computer technologies, such as its network operating system and third party
software applications, including payroll and electronic banking have been
evaluated and have been found to be Year 2000 compliant. The ultimate impact of
the Year 2000 issue on the Partnership will depend to a great extent on the
manner in which the issue is addressed by the Partnership's lessees. Each of the
Partnership's lessees will have a material self interest in resolving any Year
2000 issue, however, non-compliance on the part of a lessee could result in lost
or delayed revenues to the Partnership. The effect of this risk to the
Partnership is not determinable.
The General Partner is responsible for costs relating to the assessment and
development of its Year 2000 compliance remediation plan, as well as the testing
of the hardware and software owned or licensed for its personal computers. The
General Partner's costs incurred to date and expected future costs are not
material.
<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 during the quarter ended March 31, 1999.
<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.
May 14, 1999 /s/ Kevin F. Redmond
- ------------ ---------------------------------------------
Date Kevin F. Redmond
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
<NAME> ICON Cash Flow Partners L.P. Six
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 526,724
<SECURITIES> 0
<RECEIVABLES> 12,457,679
<ALLOWANCES> 274,187
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 19,100,646
<DEPRECIATION> 3,123,504
<TOTAL-ASSETS> 41,502,622
<CURRENT-LIABILITIES> ** 0
<BONDS> 21,540,309
0
0
<COMMON> 0
<OTHER-SE> 17,559,599
<TOTAL-LIABILITY-AND-EQUITY> 41,502,622
<SALES> 1,681,557
<TOTAL-REVENUES> 1,688,470
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 522,943
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 460,253
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 705,274
<EPS-PRIMARY> 1.84
<EPS-DILUTED> 1.84
<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>
