UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1996
------------------------------------------------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
For the transition period from ______________________ to _______________________
Commission File Number 33-94458
---------------------------------------------------------
ICON Cash Flow Partners L.P. Seven
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3835387
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
600 Mamaroneck Avenue, Harrison, New York 10528-1632
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 698-0600
-----------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class Name of each exchange on
which registered
Securities registered pursuant to Section 12(g) of the Act: None
- --------------------------------------------------------------------------------
(Title of class)
- --------------------------------------------------------------------------------
(Title of class)
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 1
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
TABLE OF CONTENTS
Item Page
PART I
1. Business 3
2. Properties 4
3. Legal Proceedings 4
4. Submission of Matters to a Vote of Security Holders 5
PART II
5. Market for the Registrant's Securities and Related
Security Holder Matters 5
6. Selected Financial and Operating Data 5
7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations 6
8. Financial Statements and Supplementary Data 8-22
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 23
PART III
10. Directors and Executive Officers of the Registrant's
General Partner 23-24
11. Executive Compensation 24
12. Security Ownership of Certain Beneficial Owners
and Management 25
13. Certain Relationships and Related Transactions 25
PART IV
14. Exhibits, Financial Statement Schedules,
Reports and Amendments 26
SIGNATURES 27
Page 2
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
PART I
Item 1. Business
General Development of Business
ICON Cash Flow Partners L.P. Seven (the "Partnership"), was formed on May
23, 1995 as a Delaware limited partnership. The Partnership commenced business
operations on its initial closing date, January 19, 1996 with the admission of
26,367.95 limited partnership units at $100 per unit representing $2,636,795 of
capital contributions. Between January 19, 1996 and December 31, 1996,
249,172.52 additional units were admitted representing $24,917,252 of capital
contributions bringing the total admission to 275,540.47 units totaling
$27,554,047 in capital contributions.
Narrative Description of Business
The Partnership is an equipment leasing income fund. The principal
investment objective of the Partnership is to obtain the maximum economic return
from its investments for the benefit of its limited partners. To achieve this
objective, the Partnership intends to: (1) acquire a diversified portfolio of
short-term, high-yield investments; (2) make monthly cash distributions to its
limited partners from cash from operations, commencing with each limited
partner's admission to the Partnership, continuing through the reinvestment
period, which period will end no later than the eighth anniversary of the final
closing date; (3) re-invest substantially all undistributed cash from operations
and cash from sales in additional equipment and financing transactions during
the reinvestment period; and (4) sell the Partnership's investments and
distribute the cash from sales of such investments to its limited partners
within six to thirty-six months after the end of the reinvestment period. In
addition to acquiring equipment and entering into leases, the Partnership will
(1) acquire equipment already subject to leases originated by affiliates and
non-affiliated lessors and (2) enter into financing transactions, which are (i)
secured by the equipment financed and lease revenues therefrom (if any) and
additional collateral as deemed necessary by the credit review committee of the
General Partner, and (ii) evidenced by the irrevocable obligation of the
lessees.
The equipment leasing industry is highly competitive. In initiating its
leasing transactions, the Partnership will compete with leasing companies,
manufacturers that lease their products directly, equipment brokers and dealers
and financial institutions, including commercial banks and insurance companies.
Many competitors are larger than the Partnership and have access to more
favorable financing. Competitive factors in the equipment leasing business
primarily involve pricing and other financial arrangements, equipment
remarketing capabilities and servicing of customer lessees.
The Partnership has no direct employees. The General Partner has full and
exclusive discretion in management and control of the Partnership.
Page 3
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
Lease and Financing Transactions
For the year ended December 31, 1996, the Partnership purchased and leased
or financed $91,413,127 of equipment, with a weighted average initial
transaction term of 70 months. Included in the summary of equipment cost by
category below is 100% of the equipment cost acquired by a joint venture in
which the partnership has a 99% interest. The partnership accounts for this
investment by consolidating 100% of the assets and liabilities of the joint
venture and reflecting as a liability the related minority interest. A summary
of the portfolio equipment cost by category held at December 31, 1996 is as
follows:
December 31, 1996
Category Cost Percent
Aircraft $ 52,403,337 57.3%
Manufacturing & production 13,574,591 14.8
Computer systems 9,167,523 10.0
Telecommunications 5,266,424 5.8
Material handling 4,632,009 5.1
Office equipment 2,794,979 3.1
Restaurant 984,983 1.1
Furniture and fixtures 794,949 .9
Automotive 487,432 .5
Miscellaneous 392,811 .4
Medical 365,398 .4
Video production 221,530 .2
Retail systems 171,350 .2
Audio 155,811 .2
------------- -----
$ 91,413,127 100.0%
============= =====
The Partnership has three leases which individually represent greater than
10% of the total portfolio equipment cost at December 31, 1996. The leases are
with Federal Express (aircraft), Rowan Companies (manufacturing & production),
and Continental Airlines, Inc. (aircraft) and they represented 44.8%, 13.5% and
12.5%, respectively, of the total portfolio equipment cost at December 31, 1996.
Item 2. Properties
The Partnership neither owns nor leases office space or equipment for the
purpose of managing its day-to-day affairs. The General Partner has exclusive
control over all aspects of the business of the Partnership, including providing
any necessary office space. As such, the General Partner will be compensated for
services related to the management and administration of the Partnership's
business.
Item 3. Legal Proceedings
The Partnership is not a party to any pending legal proceedings.
Page 4
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of 1996.
PART II
Item 5. Market for the Registrant's Securities and Related Security
Holder Matters
The Partnership's limited partnership interest is not publicly traded nor is
there currently a market for the Partnership's limited partnership units. It is
unlikely that any such market will develop.
Number of Equity Security Holders
Title of Class as of December 31, 1996
-------------- ------------------------------
Limited Partners 1,473
General Partner 1
Item 6. Selected Consolidated Financial and Operating Data
Year Ended
December 31, 1996
Total revenue $ 1,564,069
===========
Net income $ 405,451
===========
Net income allocable to limited partners $ 401,396
===========
Net income allocable to the General Partner $ 4,055
===========
Weighted average limited partnership units outstanding 156,222
Net income per weighted average limited partnership unit $ 2.57
===========
Distributions to limited partners $ 1,361,099
===========
Distributions to the General Partner $ 13,749
===========
<TABLE>
December 31,
1996 1995
---- ----
<S> <C> <C>
Total assets $ 48,486,070 $ 1,350,143
============ ============
Partners' equity $ 22,865,854 $ 2,000
============ ============
</TABLE>
No operating data is presented for 1995 and prior since the Partnership
commenced operations on January 19, 1996, the initial closing date.
Page 5
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
The above selected financial data should be read in conjunction with the
consolidated financial statements and related notes appearing elsewhere in this
report.
Item 7. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
ICON Cash Flow Partners L.P. Seven (the "Partnership") was formed on May 23,
1995 as a Delaware limited partnership with an initial capitalization of $2,000.
The Partnership commenced business operations on its initial closing date,
January 19, 1996 with the admission of 26,367.95 limited partnership units at
$100 per unit representing $2,636,795 of capital contributions. Between January
19, 1996 and December 31, 1996, 249,172.52 additional units were admitted
representing $24,917,252 of capital contributions bringing the total admission
to 275,540.47 units totaling $27,554,047 in capital contributions.
The Partnership's portfolio consisted of net investments in finance leases,
equity investment, leveraged leases and financings representing 42%, 26%, 21%
and 11% of total investments at December 31, 1996, respectively.
Results of Operations for the Year Ended December 31, 1996
For the year ended December 31, 1996, the Partnership leased or financed
equipment with an initial cost of $91,413,135 to 198 lessees or equipment users.
On December 31, 1996, the Partnership and an affiliate, ICON Cash Flow Partners,
L.P., Series E ("Series E"), formed a joint venture for the purpose of acquiring
and managing an aircraft currently on lease to Continental Airlines, Inc. in the
amount of $10,905,228 and is included in 1996 total acquisitions. The aircraft
is a 1976 McDonnell Douglas DC-10-30. Series E and the Partnership contributed
$15,955 (1%) and $1,579,514 (99%), respectively, to the joint venture. Profits,
losses and disposition proceeds are allocated 99% to the Partnership and 1% to
Series E and is reflected on the Balance Sheet as an "Investment in leveraged
leases." The weighted average initial transaction term for 1996 was 70 months.
Since the Partnership commenced operations on January 19, 1996, a comparison
of results of operations to prior periods is not presented.
Net income for the year ended December 31, 1996 was $405,451. The net income
per weighted average limited partnership unit was $2.57, weighted from the date
each unit was admitted to the Partnership.
Liquidity and Capital Resources
The Partnership's primary sources of funds in 1996 were capital
contributions, net of offering expenses, of $23,834,251 from limited partners
and cash provided by operations of $973,899. These funds were used to fund cash
distributions and to purchase equipment. The Partnership intends to continue to
purchase equipment and to fund cash distributions utilizing funds from capital
contributions and cash provided by operations.
The Partnership had notes payable of $23,314,945 at December 31, 1996 as a
result of borrowings secured by equipment. These are non-recourse notes which
are being paid directly to the lenders by the lessees.
Cash distributions to the limited partners, which were paid monthly, totaled
$1,361,099, of which $401,396 was investment income and $959,703 was a return of
capital. The limited partner distribution per weighted average unit outstanding
for December 31, 1996 was $8.71, of which $2.57 was investment income and $6.14
was a return of capital.
Page 6
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
On March 11, 1997, the Partnership and two affiliates, ICON Cash Flow
Partners, L.P., Series D and ICON Cash Flow Partners L.P. Six, (collectively
"the Members"), contributed and assigned $6,582,150, $8,671,773 and $6,712,631,
respectively, in equipment lease and finance receivables and residuals to ICON
Receivables 1997-A LLC ("1997-A"), a special purpose entity created by the
Members. The Members received a 29.4%, 40.8% and 29.8% 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 $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 any remaining proceeds will be
distributed to the Members in accordance with their membership interests. The
Partnership will account for its investment in 1997-A under the equity method.
The investment in 1997-A will be increased or decreased by its share of profit
or losses and decreased by any distributions received by 1997-A.
As of December 31, 1996 there were no known trends or demands, commitments,
events or uncertainties which are likely to have any material effect on
liquidity. As cash is realized from operations, sales of equipment and
borrowings, the Partnership will invest in equipment leases and financings where
it deems it to be prudent while retaining sufficient cash to meet its reserve
requirements and recurring obligations as they become due.
Accounting Developments
In June 1996 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No. 125
establishes, among other things, criteria for determining whether a transfer of
financial assets is a sale or a secured borrowing effective for all transfers
occurring after December 31, 1996. The adoption of SFAS No. 125 is not expected
to have a material impact on the Partnership's net income, partners' equity or
total assets.
Page 7
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements
Page Number
Independent Auditors' Report 10
Balance Sheets as of December 31, 1996 and 1995 11
Statements of Operations for the Year Ended December 31, 1996
and for the Period May 23, 1995 (date of inception) to
December 31, 1995 12
Statements of Changes in Partners' Equity for the Year Ended
December 31, 1996 and for the Period May 23, 1995 (date of
inception) to December 31, 1995 13
Statements of Cash Flows for the Year Ended December 31, 1996
and for the Period May 23, 1995 (date of inception) to
December 31, 1995 14-15
Notes to Financial Statements 16-22
Page 8
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Financial Statements
December 31, 1996
(With Independent Auditors' Report Thereon)
Page 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
ICON Cash Flow Partners L.P. Seven:
We have audited the accompanying balance sheets of ICON Cash Flow Partners L.P.
Seven (a Delaware limited partnership) as of December 31, 1996 and 1995, and the
related statements of operations, changes in partners' equity, and cash flows
for the year ended December 31, 1996 and for the period May 23, 1995 (date of
inception) to December 31, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ICON Cash Flow Partners L.P.
Seven as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for the year ended December 31, 1996 and for the period May 23,
1995 (date of inception) to December 31, 1995, in conformity with generally
accepted accounting principles.
March 7, 1997
New York, New York
Page 10
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Balance Sheets
December 31,
<TABLE>
1996 1995
---- ----
Assets
<S> <C> <C>
Cash $ 698,301 $ 2,000
Cash in escrow - 1,348,143
------------ ---------------
698,301 1,350,143
------------ ---------------
Investment in finance leases
Minimum rents receivable 15,894,245 -
Estimated unguaranteed residual values 6,667,481 -
Initial direct costs 869,559 -
Unearned income (3,515,258) -
Allowance for doubtful account (65,000) -
------------ -------
19,851,027 -
------------ -------
Investment in estimated unguaranteed residual value 12,325,000 -
------------ -------
Net investment in leveraged leases 9,980,633 -
------------ -------
Investment in financings
Receivables due in installments 6,619,755 -
Initial direct costs 143,565 -
Unearned income (1,271,152) -
Allowance for doubtful account (10,000) -
------------ -------
5,482,168 -
------------ -------
Other assets 148,941 -
------------ -------
Total assets $ 48,486,070 $ 1,350,143
============ ===============
Liabilities and Partners' Equity
Notes payable - recourse $ 12,225,000 $ -
Notes payable - non-recourse 11,089,945 -
Accounts payable - equipment 1,790,717 -
Accounts payable - General Partner and affiliate 438,297 -
Accounts payable - other 54,114 -
Minority interest in joint venture 15,955 -
Security deposits and deferred credits 6,188 -
Subscriptions pending admission - 1,348,143
-------------- ---------------
25,620,216 1,348,143
------------ ---------------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (8,694) 1,000
Limited partners (275,540.47 and 0 units
outstanding, $100 per unit original
issue price in 1996 and 1995, respectively) 22,874,548 1,000
------------ -----------
Total partners' equity 22,865,854 2,000
------------ -----------
Total liabilities and partners' equity $ 48,486,070 $ 1,350,143
============ ===============
</TABLE>
See accompanying notes to financial statements.
Page 11
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Statements of Operations
For the Year Ended December 31, 1996 and for the Period
May 23, 1995 (date of inception) to December 31, 1995
1996 1995
---------- ----------
Revenues
Finance income .............................. $ 939,924 $ --
Income from leveraged leases, net ........... 366,790 --
Interest income and other ................... 257,355 --
---------- ----------
Total revenues .............................. 1,564,069 --
---------- ----------
Expenses
Interest .................................... 398,200 --
Management fees - General Partner ........... 264,784 --
Amortization of initial direct costs ........ 230,785 --
Administrative expense
reimbursements - General Partner .......... 117,809 --
Provision for bad debt ...................... 75,000 --
General and administrative .................. 72,040 --
---------- ----------
Total expenses .............................. 1,158,618 --
---------- ----------
Net income ..................................... $ 405,451 $ --
========== ==========
Net income allocable to:
Limited partners ............................ $ 401,396 $ --
General Partner ............................. 4,055 --
---------- ----------
$ 405,451 $ --
========== ==========
Weighted average number of limited
partnership units outstanding ............... 156,222 --
========== ==========
Net income per weighted average
limited partnership unit .................... $ 2.57 $ --
========== ==========
See accompanying notes to financial statements.
Page 12
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Statements of Changes in Partners' Equity
For the Year Ended December 31, 1996
and for the Period May 23, 1995 (date of inception)
to December 31, 1995
<TABLE>
Limited Partner
Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
<S> <C> <C> <C> <C> <C>
Initial partners'
capital contribution
- May 23, 1995 $ 1,000 $ 1,000 $ 2,000
------------- --------- -------------
Balance at
December 31, 1995 1,000 1,000 2,000
Refund of initial
limited partners'
capital contribution (1,000) - (1,000)
Proceeds from issuance
of limited partnership
units (275,540.47 units) 27,554,047 - 27,554,047
Sales and
offering expenses (3,719,796) - (3,719,796)
Cash distributions
to partners $ 6.14 $ 2.57 (1,361,099) (13,749) (1,374,848)
Net income 401,396 4,055 405,451
------------- --------- -------------
Balance at
December 31, 1996 $ 22,874,548 $ (8,694) $ 22,865,854
============= ========= =============
</TABLE>
See accompanying notes to financial statements.
Page 13
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Statements of Cash Flows
For the Year Ended December 31, 1996 and for the Period May
23, 1995 (date of inception) to December 31, 1995
<TABLE>
1996 1995
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income ................................................. $ 405,451 $ --
------------ ------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Allowance for doubtful accounts ......................... 75,000 --
Finance income portion of
receivables paid directly
to lenders by lessees ................................. (608,965) --
Amortization of initial direct costs .................... 230,785 --
Interest expense on non-recourse
financing paid directly by lessees .................... 395,645 --
Collection of principal
- non-financed receivables ............................ 498,027 --
Income from leveraged leases, net ....................... (366,790) --
Change in operating assets and liabilities:
Other assets ......................................... (148,941) --
Account payable to General Partner and affiliates, net 438,297 --
Accounts payable - other ............................. 54,114 --
Minority interest in joint venture ................... 15,955 --
Security deposits and deferred credits ............... 6,189 --
Other, net ........................................... (20,868) --
------------ ------------
Total adjustments .................................. 568,448 --
------------ ------------
Net cash provided by operating activities ............. 973,899 --
------------ ------------
Cash flows from investing activities:
Equipment and receivables purchased ........................ (19,898,183) --
Initial direct costs ....................................... (2,737,818) --
Equity investment .......................................... (100,000) --
------------ ------------
Net cash used in investing activities ................. (22,736,001) --
------------ ------------
Cash flows from financing activities:
Issuance of limited partnership units,
net of offering expenses ................................. 23,834,251 --
Initial limited and General Partner capital contributions .. -- 2,000
Cash distributions to partners ............................. (1,374,848) --
Refund of initial limited partners'
capital contribution ..................................... (1,000) --
------------ ------------
Net cash provided by financing activities ............. 22,458,403 2,000
------------ ------------
Net increase in cash ......................................... 696,301 2,000
Cash at beginning of year .................................... 2,000 --
------------ ------------
Cash at end of year .......................................... $ 698,301 $ 2,000
============ ============
</TABLE>
See accompanying notes to financial statements.
Page 14
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Statements of Cash Flows (continued)
Supplemental Disclosure of Cash Flow Information
For the year ended December 31, 1996, non-cash activities included the
following:
1996
Fair value of equipment and receivables
purchased for debt and payables .............. $(59,189,952)
Non-recourse notes payable assumed in
purchase price ............................... 57,399,235
Accounts payable - equipment ................... 1,790,717
Principal and interest on direct
finance receivables paid directly
to lenders by lessees ........................ 3,625,762
Principal and interest on non-recourse
financing paid directly to lenders
by lessees ................................... (3,625,762)
$ --
============
Interest expense of $398,200 for the year ended December 31, 1996 consisted
of interest expense on non-recourse financing paid or accrued directly to
lenders by lessees of $395,645 and other interest of $2,555.
Page 15
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements
December 31, 1996
1. Organization
ICON Cash Flow Partners L.P. Seven (the "Partnership") was formed on May
23, 1995 as a Delaware limited partnership with an initial capitalization of
$2,000. It was formed to acquire various types of equipment, to lease such
equipment to third parties and, to a lesser degree, to enter into secured
financing transactions. The Partnership commenced business operations on its
initial closing date, January 19, 1996, with the admission of 26,367.95 limited
partnership units at $100 per unit representing $2,636,795 of capital
contributions. As of December 31, 1996, 249,172.52 additional units had been
admitted into the Partnership with aggregate gross proceeds of $24,917,252
bringing the total admission to 275,540.47 units totaling $27,554,047 in capital
contributions.
The General Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut corporation. The General Partner will manage and
control the business affairs of the Partnership's equipment, leases and
financing transactions under a management agreement with the Partnership.
ICON Securities Corp., an affiliate of the General Partner, will receive an
underwriting commission on the gross proceeds from sales of all units. The total
underwriting compensation to be paid by the Partnership, including underwriting
commissions, sales commissions, incentive fees, public offering expense
reimbursements and due diligence activities will be limited to 13 1/2% of the
gross proceeds received from the sale of the units. Such offering expenses
aggregated $3,719,796 (including $1,515,472 paid to the General Partner or its
affiliates (See Note 9)) and were charged directly to limited partners' equity.
Profits, losses, cash distributions and disposition proceeds will be
allocated 99% to the limited partners and 1% to the General Partner until each
limited partner has received cash distributions and disposition proceeds
sufficient to reduce its adjusted capital contribution account to zero and
receive, in addition, other distributions and allocations which would provide a
10% per annum cumulative return, compounded daily, on its outstanding adjusted
capital contribution account. After such time, the distributions will be
allocated 90% to the limited partners and 10% to the General Partner.
2. Significant Accounting Policies
Basis of Accounting and Presentation - The Partnership's records are
maintained on the accrual basis. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Leases - The Partnership accounts for owned equipment leased to third
parties as finance leases or leveraged leases. For finance leases, the
Partnership records, at the inception of the lease, the total minimum lease
payments receivable, the estimated unguaranteed residual values, the initial
direct costs related to the leases and the related unearned income. Unearned
income represents the difference between the sum of the minimum lease payments
receivable plus the estimated unguaranteed residual minus the cost of the leased
equipment. Unearned income is recognized as finance income over the terms of the
related leases using the interest method. The Partnership's net investment in
leveraged leases consists of minimum lease payments
Page 16
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
receivable, the estimated unguaranteed residual values and the initial direct
costs related to the leases, net of the unearned income and principal and
interest on the related non-recourse debt. Unearned income is recognized as
income from leveraged leases over the life of the lease at a constant rate of
return on the positive net investment. Initial direct costs of finance leases
and leverage leases are capitalized and are amortized over the terms of the
related leases using the interest method. The Partnership's leases have terms
ranging from two to five years. Each lease is expected to provide aggregate
contractual rents that, along with residual proceeds, return the Partnership's
cost of its investments along with investment income.
Investment in Financings - Investment in financings represent the gross
receivables due from the financing of equipment plus the initial direct costs
related thereto less the related unearned income. The unearned income is
recognized as finance income, and the initial direct costs are amortized, over
the terms of the receivables using the interest method. Financing transactions
are supported by a written promissory note evidencing the obligation of the user
to repay the principal, together with interest, which will be sufficient to
return the Partnership's full cost associated with such financing transaction,
together with some investment income. Furthermore, the repayment obligation is
collateralized by a security interest in the tangible or intangible personal
property.
Investment in Estimated Unguaranteed Residual Value - The Partnership
purchased a 50% interest of an option to acquire equipment. The asset will be
carried at cost until sale or release of the equipment, at which time a gain or
loss will be recognized on the transaction.
Disclosures About Fair Value of Financial Instruments - Statement of
Financial Accounting Standards ("SFAS") No. 107, "Disclosures about Fair Value
of Financial Instruments" requires disclosures about the fair value of financial
instruments, except for lease related instruments. At December 31, 1996, the
carrying value of the Partnership's financial assets other than lease related
investments, approximates fair value.
Allowance for Doubtful Accounts - The Partnership records a provision for
bad debts to provide for estimated credit losses in the portfolio. The allowance
for doubtful accounts is based on an analysis of delinquency, an assessment of
overall risk and a review of historical loss experience. The Partnership's
write-off policy is based on an analysis of the aging of the Partnership's
portfolio, a review of the non-performing receivables and leases, and prior
collection experience. An account is fully reserved for or written off when the
analysis indicates that the probability of collection of the account is remote.
Impairment of Estimated Residual Values - In March 1995, the FASB issued
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," which is effective beginning in 1996.
Page 17
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
The Partnership's policy with respect to impairment of estimated residual
values is to review, on a quarterly basis, the carrying value of its residuals
on an individual asset basis to determine whether events or changes in
circumstances indicate that the carrying value of an asset may not be
recoverable and, therefore, an impairment loss should be recognized. The events
or changes in circumstances which generally indicate that the residual value of
an asset has been impaired are (i) the estimated fair value of the underlying
equipment is less than the Partnership's carrying value or (ii) the lessee is
experiencing financial difficulties and it does not appear likely that the
estimated proceeds from disposition of the asset will be sufficient to satisfy
the remaining obligation to the non-recourse lender and the Partnership's
residual position. Generally in the latter situation, the residual position
relates to equipment subject to third party non-recourse notes payable where the
lessee remits their rental payments directly to the lender and the Partnership
does not recover its residual until the non-recourse note obligation is repaid
in full.
The Partnership measures its impairment loss as the amount by which the
carrying amount of the residual value exceeds the estimated proceeds to be
received by the Partnership from release or resale of the equipment. Generally,
quoted market prices are used as the basis for measuring whether an impairment
loss should be recognized.
As a result, the Partnership's policy with respect to measurement and
recognition of an impairment loss associated with estimated residual values is
consistent with the requirements of SFAS No. 121 and, therefore, the
Partnership's adoption of this Statement in the first quarter of 1996 had no
material effect on the financial statements.
Income Taxes - No provision for income taxes has been made as the liability
for such taxes is that of each of the partners rather than the Partnership.
3. Residual Investment
On December 31, 1996, the Partnership purchased a 50% share of an option to
acquire a 100% interest in a mobile offshore drilling rig, currently on lease
with Rowan Companies Inc. The purchase price of the 50% investment was
$12,325,000 and consisted of $100,000 in cash and $12,225,000 promissory note.
4. Net Investment in Leveraged Leases
On August 20, 1996, the partnership acquired, subject to a leveraged lease,
the residual interest in an aircraft. The aircraft is a McDonnell Douglas
DC-10-30F, built in 1986. It is on lease with Federal Express and has a
remaining lease term of eight years. The purchase price was $40,973,585
consisting of $6,000,000 in cash and the assumption of non-recourse senior debt
of $26,217,294 and non-recourse junior debt ("junior debt") of $8,756,291.
On December 31, 1996, the Partnership acquired, subject to a leveraged
lease, an aircraft on lease with Continental Airlines, Inc. The aircraft is a
1976 McDonnell Douglas DC-10-30 and has a remaining lease term of six years. The
purchase price was $11,320,923 consisting of $2,104,262 in cash and the
assumption of non-recourse senior debt of $9,216,661.
Page 18
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
The net investment in the leveraged leases as of December 31, 1996 consisted of
the following:
Non-cancelable minimum rents receivable (net of
principal and interest on non-recourse debt) $ 912,334
Estimated unguaranteed residual values 24,818,000
Initial direct costs 1,493,850
Unearned income (17,243,551)
-------------
$ 9,980,633
Unearned income is recognized from leveraged leases over the life of the
lease at a constant rate of return on the positive net investment.
Non-cancelable minimum rents receivable relating to the leveraged leases at
December 31, 1996 are $59,355,209 and are due as follows:
1997 $ 7,905,694
1998 7,742,360
1999 7,742,360
2000 8,022,359
2001 8,022,359
Thereafter 19,920,077
-----------
$59,355,209
Principal and interest on non-recourse debt assumed in the purchase of the
leveraged leases is $58,442,875 at December 31, 1996 and matures as follows:
1997 $ 7,903,360
1998 7,742,360
1999 7,742,360
2000 7,742,359
2001 7,742,359
Thereafter 19,570,077
-----------
$58,442,875
Prior to the acquisition of the Federal Express transaction, the free cash
flow, the rent in excess of the senior debt payments, was financed by an
affiliated partnership, ICON Cash Flow Partners, L.P., Series D, (i.e., the
junior debt). On January 29, 1997, the Partnership refinanced a portion of the
junior debt with a third party.
Page 19
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
5. Receivables Due in Installments
Non-cancelable minimum annual amounts due on finance leases and financings
are as follows:
Finance
Year Leases Financings Total
1997 $ 6,717,166 $1,605,580 $ 8,322,746
1998 5,448,549 1,573,995 7,022,544
1999 2,109,963 1,446,541 3,556,504
2000 1,331,567 1,219,017 2,550,584
2001 285,835 685,174 971,009
Thereafter 1,165 89,448 90,613
------------ ---------- ------------
$ 15,894,245 $6,619,755 $ 22,514,000
============ ========== ============
6. Allowance for Doubtful Accounts
The allowance for doubtful accounts related to the investments in finance
leases and financings consisted of the following:
Finance
Leases Financings Total
Balance at December 31, 1995 $ - $ - $ -
Charged to operations 65,000 10,000 75,000
----------- ----------- ----------
Balance at December 31, 1996 $ 65,000 $ 10,000 $ 75,000
=========== =========== ==========
7. Notes Payable
Notes payable consists of notes payable non-recourse bearing interest at rates
ranging from 6.5% to 9.4%, which are being paid directly to the lenders by the
lessees, and notes payable recourse as they relate to the Partnership's
acquisition of an offshore drilling rig (See Note 3). These notes mature as
follows:
Notes Payable Notes Payable
Year Non-Recourse Recourse Total
1997 $ 5,711,953 $ 2,150,000 $ 7,861,953
1998 3,467,450 2,250,000 5,717,450
1999 1,108,786 2,250,000 3,358,786
2000 762,877 5,575,000 6,337,877
2001 38,879 - 38,879
-------------- ------------ -----------
$ 11,089,945 $ 12,225,000 $23,314,945
============== ============ ===========
Page 20
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
8. 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.
On December 31, 1996, the Partnership and an affiliate, ICON Cash Flow
Partners, L.P. Series E ("Series E") formed ICON Cash Flow Partners L.L.C. III
("ICON Cash Flow LLC III"), for the purpose of acquiring and managing an
aircraft currently on lease to Continental Airlines, Inc. The aircraft is a 1976
McDonnell Douglas DC-10-30. The Partnership and Series E contributed $1,579,514
(99%) and $15,955 (1%) of the cash required for such acquisition, respectively,
to ICON Cash Flow LLC III. ICON Cash Flow LLC III acquired the aircraft,
assuming $9,309,759 in non-recourse debt and utilizing contributions received
from the Partnership and Series E. The purchase price of the transaction totaled
$10,905,228. The lease is a leveraged lease and the lease term expires in March
2003. Profits, losses, excess cash and disposition proceeds are allocated 99% to
the Partnership and 1% to Series E. The Partnership's financial statements
include 100% of the assets and liabilities of ICON Cash Flow LLC III. Series E's
investment in ICON Cash Flow LLC III has been reflected as "Minority interest in
joint venture."
9. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the year ended December 31, 1996 were as follows:
Underwriting commissions $ 551,081 Charged to Equity
Organization and offering expenses 964,391 Charged to Equity
Acquisition fees 2,737,818 Capitalized
Management fees 264,784 Charged to operations
Administrative expense
reimbursements 117,809 Charged to operations
Total $ 4,635,883
=============
On December 31, 1996, the Partnership and an affiliate formed a joint
venture for the purpose of acquiring and managing an aircraft. (See Note 7 for
additional information relating to the joint venture.)
Page 21
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements - Continued
10. Commitments and Contingencies
On March 11, 1997, the Partnership and two affiliates, ICON Cash Flow
Partners, L.P., Series D and ICON Cash Flow Partners L.P. Six, (collectively
"the Members"), contributed and assigned $6,582,150, $8,671,773 and $6,712,631,
respectively, in equipment lease and finance receivables and residuals to ICON
Receivables 1997-A LLC ("1997-A"), a special purpose entity created by the
Members. The Members received a 29.4%, 40.8% and 29.8% 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 $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 will account for its investment in 1997-A under the equity method.
The investment in 1997-A will be increased or decreased by its share of profit
or losses and decreased by any distributions received by 1997-A.
11. Tax Information (Unaudited)
The following table reconciles net income for financial reporting purposes
to income for federal income tax purposes for the year ended December 31, 1996:
Net income per financial statements $ 405,451
Differences due to:
Direct finance leases (258,725)
Depreciation -
Provision for losses -
Loss on sale of equipment -
Other -
-----------
Partnership income for
federal income tax purposes $ 146,726
============
As of December 31, 1996, the partners' capital accounts included in the
financial statements totaled $22,865,854 compared to the partners' capital
accounts for federal income tax purposes of $26,326,924 (unaudited). The
difference arises primarily from commissions reported as a reduction in the
partners' capital accounts for financial reporting purposes but not for federal
income tax purposes, and temporary differences related to direct finance leases,
depreciation and provision for losses.
Page 22
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant's General Partner
The General Partner, a Connecticut corporation, was formed in 1985. The
General Partner's principal offices are located at 600 Mamaroneck Avenue,
Harrison, New York 10528-1632, and its telephone number is (914) 698-0600. The
officers of the General Partner have extensive experience with transactions
involving the acquisition, leasing, financing and disposition of equipment,
including acquiring and disposing of equipment subject to operating leases and
full payout leases.
The manager of the Partnership's business is the General Partner. The
General Partner is engaged in a broad range of equipment leasing and financing
activities. Through its sales representatives and through various broker
relationships throughout the United States, the General Partner offers a broad
range of equipment leasing services, including tax-oriented leasing and
financing. In addition, the General Partner offers financial consulting and
placement services for which fees are earned as a result of successful
placements of various secured financings and mortgages.
The General Partner will perform certain functions relating to the
management of the equipment of the Partnership. Such services include the
collection of lease payments from the lessees of the equipment, releasing
services in connection with equipment which is off-lease, inspections of the
equipment, liaison with and general supervision of lessees to assure that the
equipment is being properly operated and maintained, supervision of maintenance
being performed by third parties, monitoring performance by the lessees of their
obligations under the leases and the payment of operating expenses.
The officers and directors of the General Partner are as follows:
Beaufort J.B. Clarke President, Chief Executive Officer and Director
Thomas W. Martin Executive Vice President and Director
Paul B. Weiss Executive Vice President
Gary N. Silverhardt Vice President and Chief Financial Officer
Neil A. Roberts Director
Tim Spring Director
Beaufort J. B. Clarke, age 50, is President, Chief Executive Officer and
Director of both the General Partner and the Dealer-Manager. Prior to his
present position, Mr. Clarke was founder and the President and Chief Executive
Officer of Griffin Equity Partners, Inc. Mr. Clarke formerly was an attorney
with Shearman and Sterling and has over 20 years of senior management experience
in the United States leasing industry.
Page 23
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
Item 10. Continued
Thomas W. Martin, age 42, is Executive Vice President of both the General
Partner and the Dealer- Manager. Prior to his present position, Mr. Martin was
the Executive Vice President and Chief Financial Officer of Griffin Equity
Partners, Inc. Mr. Martin has over 12 years of senior management experience in
the leasing business, particularly in the area of syndication.
Paul B. Weiss, age 36, is Executive Vice President of the General Partner.
Mr. Weiss has been exclusively engaged in lease portfolio acquisitions since
1988 from his affiliations with Griffin Equity Partners (as Executive Vice
President and co-founder in 1993); Gemini Financial Holdings (as Senior Vice
President- Portfolio Acquisitions and a member of the executive committee from
1991-1993) and Pegasus Capital Corporation (as Vice President-Portfolio
Acquisitions).
Gary N. Silverhardt, age 36, is Vice President and Chief Financial Officer
of the General Partner. He joined the General Partner in 1989. Prior to joining
the General Partner, Mr. Silverhardt was previously employed by Coopers &
Lybrand from 1985 to 1989, most recently as an Audit Supervisor. Prior to 1985,
Mr. Silverhardt was employed by Katz, Schneeberg & Co. from 1983 to 1985. Mr.
Silverhardt received a B.S. degree from the State University of New York at New
Paltz in 1983 and is a Certified Public Accountant.
Neil A. Roberts, age 47, has been the Managing Director of Summit Asset
Management Limited, a subsidiary of The Summit Group PLC, since 1991. Mr.
Roberts has over 25 years of experience in the leasing and finance business,
including positions with Kleinwort Benson Group, the United Kingdom subsidiary
of Hongkong and Shanghai Banking Corporation and Chemical Bank.
Timothy R. Spring, age 39, Commercial Director of Summit Asset Management
Limited, a subsidiary of The Summit Group PLC, since 1991. Mr. Spring has over
13 years of leasing experience in the United Kingdom. He was formerly Lease
Commercial Director at Kleinwort Benson Group, the United Kingdom subsidiary of
Hongkong and Shanghai Banking Corporation and Chemical Bank.
Item 11. Executive Compensation
The Partnership has no directors or officers. The General Partner and its
affiliates were paid or accrued the following compensation and reimbursement for
costs and expenses for the years ended December, 31, 1996.
Entity Capacity Type of Compensation 1996
------ -------- -------------------- ----
ICON Capital Corp. General Partner Organization and offering
expenses $ 964,391
ICON Capital Corp. Manager Acquisition fees 2,737,818
ICON Capital Corp. General Partner Management fees 264,784
ICON Securities Corp.Dealer-Manager Underwriting commissions 551,081
ICON Capital Corp. General Partner Administrative expense
reimbursements 117,809
-----------
$ 4,635,883
===========
Page 24
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) The Partnership is a limited partnership and therefore does not have voting
shares of stock. No person of record owns, or is known by the Partnership to
own beneficially, more than 5% of any class of securities of the
Partnership.
(b) As of March 7, 1997, Directors and Officers of the General Partner do not
own any equity securities of the Partnership.
(c) The General Partner owns the equity securities of the Partnership set forth
in the following table:
Title Amount Beneficially Percent
of Class Owned of Class
General Partner Represents initially a 1% and potentially a 100%
Interest 10% interest in the Partnership's income, gain
and loss deductions.
Item 13. Certain Relationships and Related Transactions
None other than those disclosed in Item 11 herein.
Page 25
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements - See Part II, Item 8 hereof.
2. Financial Statement Schedule - None.
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set
forth therein is included in the Financial Statements or Notes thereto.
3. Exhibits - The following exhibits are incorporated herein by reference:
(i) Amended and Restated Agreement of Limited Partnership (Incorporated by
reference to Exhibit A to Amendment No. 2 to Form S-1 Registration
Statement No. 2-99858 filed with the Securities and Exchange
Commission on December 12, 1986).
(ii) Certificate of Limited Partnership of the Partnership (Incorporated
herein by reference to Exhibit 3.01 to Form S-1 Registration Statement
No. 2-99858 filed with the Securities and Exchange Commission on
August 23, 1985 and to Exhibit 3.01 to Amendment No. 1 to Form S-1
Registration Statement No. 2-99858 filed with the Securities and
Exchange Commission on August 27, 1986).
(iii)Form of Management Agreement between the Partnership and Crossgate
Leasing, Inc. (Incorporated herein by reference to Exhibit 10.01 to
Amendment No. 1 to Form S-1 Registration Statement No. 2-99858 filed
with the Securities and Exchange Commission on August 27, 1986).
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter
ended December 31, 1996.
Page 26
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
December 31, 1996
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ICON CASH FLOW PARTNERS L.P. Seven
File No. 33-94458 (Registrant)
By its General Partner, ICON Capital Corp.
Date: March 28, 1997 Beaufort J.B. Clarke
---------------------------------------------
Beaufort J.B. Clarke
President, Chief Executive Officer
and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacity and on the dates indicated.
ICON Capital Corp.
sole General Partner of the Registrant
Date: March 28, 1997 Beaufort J.B. Clarke
---------------------------------------------
Beaufort J.B. Clarke
President, Chief Executive Officer
and Director
Date: March 28, 1997 Thomas W. Martin
---------------------------------------------
Thomas W. Martin
Executive Vice President and Director
Date: March 28, 1997 Gary N. Silverhardt
---------------------------------------------
Gary N. Silverhardt
Vice President and Chief Financial Officer
Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Act by Registrant Which have not Registered Securities
Pursuant to Section 12 of the Act
No annual report or proxy material has been sent to security holders. An annual
report will be sent to the limited partners and a copy will be forwarded to the
Commission.
Page 27
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000947986
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1996
<CASH> 698,301
<SECURITIES> 0
<RECEIVABLES> 83,385,381
<ALLOWANCES> 75,000
<INVENTORY> 0
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 93,973,586
<CURRENT-LIABILITIES> ** 0
<BONDS> 68,802,460
0
0
<COMMON> 0
<OTHER-SE> 22,865,854
<TOTAL-LIABILITY-AND-EQUITY> 93,973,586
<SALES> 2,768,240
<TOTAL-REVENUES> 2,768,240
<CGS> 230,785
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 454,633
<LOSS-PROVISION> 75,000
<INTEREST-EXPENSE> 1,602,371
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 405,451
<EPS-PRIMARY> 2.57
<EPS-DILUTED> 2.57
<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>
