UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended June 30, 1997
-----------------------------------------------------------
[ ] 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 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 (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
- --------------------------------------------------------------------------------
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. Seven
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
<TABLE>
June 30, December 31,
1997 1996
Assets
<S> <C> <C>
Cash $ 1,653,996 $ 698,301
------------ -----------
Investment in finance leases
Minimum rents receivable 57,112,914 15,894,245
Estimated unguaranteed residual values 24,642,353 6,667,481
Initial direct costs 1,796,008 869,559
Unearned income (15,327,928) (3,515,258)
Allowance for doubtful account (130,000) (65,000)
------------ -----------
68,093,347 19,851,027
Investment in estimated unguaranteed residual value 12,325,000 12,325,000
------------ -----------
Net investment in leveraged leases 9,933,138 9,980,633
------------ -----------
Equity investment in joint venture 5,174,931 -
------------ -----------
Investment in financings
Receivables due in installments 1,010,855 6,619,755
Initial direct costs 18,378 143,565
Unearned income (215,920) (1,271,152)
Allowance for doubtful account (20,000) (10,000)
------------ -----------
793,313 5,482,168
Other assets 966,807 148,941
------------ -----------
Total assets $ 98,940,532 $48,486,070
============ ===========
</TABLE>
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
<TABLE>
June 30, December 31,
1997 1996
Liabilities and Partners' Equity
<S> <C> <C>
Notes payable - non-recourse $ 52,964,238 $11,089,945
Note payable - recourse 10,075,000 12,225,000
Note payable - affiliate 4,250,000 -
Accounts payable - other 67,486 54,114
Security deposits and deferred credits 14,913 6,188
Accounts payable - equipment - 1,790,717
Accounts payable - General Partner and affiliate - 438,297
Minority interest 18,134 15,955
------------ -----------
67,389,771 25,620,216
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (24,028) (8,694)
Limited partners (393,611.01 and 275,540.47 units
outstanding, $100 per unit original
issue price in 1997 and 1996, respectively) 31,574,789 22,874,548
------------ -----------
Total partners' equity 31,550,761 22,865,854
------------ -----------
Total liabilities and partners' equity $ 98,940,532 $48,486,070
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Consolidated Statements of Operations
(unaudited)
<TABLE>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Finance income $ 1,320,681 $ 143,282 $ 2,420,206 $ 192,632
Interest income and other 16,342 106,035 40,507 131,820
Net gain on sales or remarketing
of equipment 6,289 - 39,180 -
Income from leveraged leases, net 371,683 - 752,313 -
Income from equity investment
in joint venture 133,925 - 154,733 -
------------ ------------ ----------- ----------
Total revenues 1,848,920 249,317 3,406,939 324,452
------------ ------------ ----------- ----------
Expenses
Interest 915,035 93,788 1,489,576 128,685
Management fees - General Partner 310,152 31,095 667,629 44,531
Amortization of initial direct costs 295,312 30,743 605,921 39,980
Administrative expense
reimbursements - General Partner 137,178 14,272 288,372 20,170
Provision for bad debts 75,000 - 75,000 -
General and administrative 71,789 16,982 109,350 21,790
Minority interest in joint venture 1,085 - 2,179 -
------------ ------------ ----------- ---------
Total expenses 1,805,551 186,880 3,238,027 255,156
------------ ------------ ----------- ----------
Net income $ 43,369 $ 62,437 $ 168,912 $ 69,296
============ ============ =========== ==========
Net income allocable to:
Limited partners $ 42,935 $ 61,813 $ 167,223 $ 68,603
General Partner 434 624 1,689 693
------------ ------------ ----------- ----------
$ 43,369 $ 62,437 $ 168,912 $ 69,296
============ ============ =========== ==========
Weighted average number of limited
partnership units outstanding 371,828 83,994 343,141 83,994
============ ============ =========== ==========
Net income per weighted average
limited partnership unit $ .12 $ .74 $ .49 $ .82
============ ============ =========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Six Months Ended June 30, 1997, the Year Ended December 31, 1996
and the Period from May 23, 1995 (date of inception)
to December 31, 1995
(unaudited)
<TABLE>
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
Initial partners'
capital contribution
<S> <C> <C> <C> <C> <C>
- 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
Proceeds from issuance of
limited partnership units
(118,223.25 units) 11,822,325 - 11,822,325
Sales and offering expenses (1,596,014) - (1,596,014)
Limited partnership units
redeemed (102.71 units) (8,061) - (8,061)
Cash distributions
to partners $ 4.42 $ .49 (1,685,232) (17,023) (1,702,255)
Net income 167,223 1,689 168,912
------------- --------- -------------
Balance at
June 30, 1997 $ 31,574,789 $ (24,028) $ 31,550,761
============= ========= =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(unaudited)
<TABLE>
1997 1996
Cash flows from operating activities:
<S> <C> <C>
Net income $ 168,912 $ 69,296
------------- ------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Finance income portion of receivables paid directly
to lenders by lessees (2,190,935) (159,364)
Amortization of initial direct costs 605,921 39,980
Gain on sale of equipment (39,180) -
Interest expense on non-recourse financing paid
directly by lessees 1,376,939 127,955
Collection of principal - non-financed receivables 477,046 52,972
Allowance for doubtful accounts 75,000 -
Distribution from equity investment in joint venture 397,564 -
Income from equity investment in joint venture (154,733) -
Income from leveraged leases, net (752,313) -
Change in operating assets and liabilities:
Accounts payable - General Partner and affiliates, net (438,297) 239,569
Accounts payable - other 13,346 108,082
Security deposits and deferred credits 8,725 2,183
Minority interest in joint venture 2,179 -
Other assets (817,866) (98,560)
Other, net 208,355 (13,990)
------------- ------------
Total adjustments (1,228,249) 298,827
------------- ------------
Net cash provided by (used in) operating activities (1,059,337) 368,123
------------- ------------
Cash flows from investing activities:
Equipment and receivables purchased (8,917,036) (1,665,324)
Initial direct costs (1,678,530) (325,758)
Proceeds from sale of equipment 1,986,542 -
------------- ------------
Net cash used in investing activities (8,609,024) (1,991,082)
------------- ------------
Cash flows from financing activities:
Issuance of limited partnership units, net of offering expenses 10,226,311 14,056,383
Proceeds from note payable affiliate 4,250,000 -
Principal payments on recourse debt (2,150,000) -
Cash distributions to partners (1,702,255) (310,967)
Refund of initial limited partners' capital contribution - (1,000)
------------- ------------
Net cash provided by financing activities 10,624,056 13,744,416
------------- ------------
Net increase in cash 955,695 12,121,457
Cash at beginning of period 698,301 2,000
------------- ------------
Cash at end of period $ 1,653,996 $ 12,123,457
============= ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (continued)
Supplemental Disclosure of Cash Flow Information
For the six months ended June 30, 1997 and 1996, non-cash activities
included the following:
<TABLE>
1997 1996
---- ----
Fair value of equipment and receivables
<S> <C> <C>
purchased for debt and payables $ (49,162,092) $ (9,176,980)
Non-recourse notes payable assumed in
purchase price 49,162,092 6,923,217
Accounts payable - equipment - 2,253,763
Principal and interest on direct
finance receivables paid directly
to lenders by lessees 11,138,659 827,892
Principal and interest on non-recourse
financing paid directly to lenders
by lessees (11,138,659) (827,892)
Decrease in investments in finance leases and financings
due to contributions to joint venture 5,190,238 -
Increase in equity investment in joint venture (5,190,238) -
------------- -----------
$ - $ -
============= ===========
</TABLE>
Interest expense of $1,489,576 and $128,685 for the six months ended June
30, 1997 and 1996 consisted of interest expense on non-recourse financing paid
or accrued directly to lenders by lessees of $1,376,939 and $127,955,
respectively, and other interest of $112,637 and $730, respectively.
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
June 30, 1996
(unaudited)
1. Basis of Presentation
The financial statements of ICON Cash Flow Partners L.P. Seven (the
"Partnership") have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC") and, in the opinion of
management, include all adjustments (consisting only of normal recurring
accruals) necessary for a fair statement of income for each period shown.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such SEC rules and
regulations. Management believes that the disclosures made are adequate to make
the information represented not misleading. The results for the interim period
are not necessarily indicative of the results for the full year. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes included in the Partnership's 1996
Annual Report on Form 10-K.
2. Net Investment in Leveraged 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 currently on lease to Federal Express. 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 of $8,756,291.
On December 31, 1996 the Partnership acquired, subject to a leveraged
lease, the residual interest in an aircraft. The aircraft is a 1976 McDonnell
Douglas DC-10-30 currently on lease to Continental Airlines. 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.
The net investment in leveraged leases as of June 30, 1997 consisted of the
following:
Non-cancelable minimum rents receivable (net of
principal and interest on non-recourse debt) $ 914,666
Estimated unguaranteed residual values 24,818,000
Initial direct costs 1,346,199
Unearned income (17,145,727)
-------------
$ 9,933,138
The non-cancelable rents are being paid directly to the lenders by the
lessees to satisfy the principal and interest on the non-recourse debt assumed.
Unearned income is recognized from leveraged leases over the life of the
lease at a constant rate of return on the positive net investment.
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>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
3. Investment in Joint Venture
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."
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, $5,794,273 and $6,712,631
in equipment lease and finance receivables and residuals with a net book value
of $5,465,238, $4,874,857 and $5,553,962, respectively to ICON Receivables
1997-A LLC ("1997-A"), a special purpose entity created by the Members. The
Members received a 34.39%, 30.67% and 34.94% 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 accounts for its investment in 1997- A under the equity method.
<PAGE>
ICON Cash Flow Partners L. P. Seven
(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 six months ended June 30, 1997 is summarized below:
June 30, 1997
Assets $ 31,019,376
=============
Liabilities $ 15,969,603
=============
Equity $ 15,049,773
=============
Six Months Ended
June 30, 1997
Net income $ 450,002
=============
4. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the six months ended June 30, 1997 and 1996 were
as follows:
1997 1996
Underwriting commissions $ 236,447 $ 325,003 Charged to Equity
Organization and offering 413,781 568,755 Charged to Equity
Acquisition fees 1,678,530 325,758 Capitalized
Management fees 667,629 44,531 Charged to operations
Administrative expense
reimbursements 288,372 20,170 Charged to operations
---------- ----------
Total $3,284,759 $1,284,217
========== ==========
On December 31, 1996, the Partnership and an affiliate formed a joint
venture for the purpose of acquiring and managing an aircraft. (See Note 3 for
additional information relating to the joint venture.)
On March 11, 1997, the Partnership borrowed $4,250,000 from 1997-A , an
affiliate of the Partnership (see Note 3). The note is a short term note, bears
interest at Libor plus 1.5% and will be paid from the Partnership's share of
securitization proceeds.
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Item 2. 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. 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
$2,636,795.17 of capital contributions. Through June 30, 1997, 367,395.78
additional units were admitted, bringing the total units and capital
subscriptions to 393,763.72 and $39,376,372, respectively.
The Partnership's portfolio consisted of a net investment in finance
leases, estimated unguaranteed residual value, leveraged leases, equity
investment in joint venture and financings representing 71%, 13%, 10%, 5% and 1%
of total investments at June 30, 1997, respectively and 77%, 0%, 0% 0% and 23%
at June 30, 1996, respectively.
Results of Operations
Three Months Ended June 30, 1997 and 1996
For the three months ended June 30, 1997 and 1996 the Partnership
leased or financed equipment with an initial cost of $12,121,225 and $5,962,528,
respectively to 6 and 67 lessees or equipment users respectively.
Revenue for the three months ended June 30, 1997 were $1,848,920,
representing an increase of $1,599,603 from 1996. The increase in revenues
resulted primarily from an increase in finance income of $1,177,399 an increase
in income from leveraged leases of $371,683, an increase in income from an
equity investment in a joint venture of $133,925 and an increase in net gain on
sales or remarketing of equipment of $6,289. These increases were partially
offset by a decrease in interest income and other of $89,693 or 85% from 1996.
The increase in finance income resulted from an increase in the average size of
the portfolio from 1996 to 1997. Income from leveraged leases and income from
equity investment in joint venture increased due to the Partnership's increased
investment in these types of transactions. The net gain on sales or remarketing
of equipment increased due to the early termination of a financing transaction.
Interest income and other decreased due to a decrease in the average cash
balance from 1996 to 1997.
Expenses for the three months ended June 30, 1997 were $1,805,551,
representing an increase of $1,618,671 from 1996. The increase in expenses was
due to an increase in interest expense of $821,247, an increase in management
fees of $279,057, an increase in amortization of initial direct costs of
$264,569, an increase in administrative expense reimbursements of $122,906, an
increase in provision for bad debts of $75,000, an increase in general and
administrative expense of $54,807 and an increase in minority interest in joint
venture of $1,085. Interest expense increased due to an increase in the average
debt outstanding from 1996 to 1997. Management fees, amortization of initial
direct costs, administrative expense reimbursements and general and
administrative expense increased due to an increase in the average size of the
portfolio from 1996 to 1997. As a result of an analysis of delinquency, an
assessment of overall risk and a review of historical loss experience, it was
determined that a $75,000 provisions for bad debts was required for the three
months ended June 30, 1997.
Net income for the three months ended June 30, 1997 and 1996 was
$43,369 and $62,437, respectively. The net income per weighted average limited
partnership unit was $.12 and $.74, respectively.
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Six Months Ended June 30, 1997 and 1996
For the six months ended June 30, 1997 and 1996 the Partnership
leased or financed equipment with an initial cost of $56,130,601 and
$10,856,638, respectively to 21 and 75 lessees or equipment users respectively.
The weighted average initial transaction term for each year was 51 and 36 months
respectively.
Revenues for the six months ended June 30, 1997 were $3,406,939,
representing an increase of $3,082,487 from 1996. The increase in revenues
resulted from an increase in finance income of $2,227,574, an increase in income
from leveraged leases of $752,313, an increase in income from equity investment
in joint venture of $154,733 and an increase in net gain on sales or remarketing
of equipment of $39,180. These increases were partially offset by a decrease in
interest income and other of $91,313 or 69% from 1996. The increase in finance
income resulted from the increase in the average size of the portfolio from 1996
to 1997. Income from leveraged leases, and income from equity investment in
joint venture increased due to the Partnership's increased investment in these
types of transactions. The net gain on sales or remarketing of equipment
increased due to the early termination of a financing transaction. Interest
income and other decreased due to a decrease in the average cash balance from
1996 to 1997.
Expenses for the three months ended June 30, 1997 were $3,238,027,
representing an increase of $2,982,871 from 1996. The increase in expenses was
due to an increase in interest expense of $1,360,891, an increase in management
fees of $623,098, an increase in amortization of initial direct costs of
$565,941, an increase in administrative expense reimbursements of $268,202, an
increase in provision for bad debts of $75,000, an increase in general and
administrative expense of $87,560 and an increase in minority interest in joint
venture of $2,179. Interest expense increased due to an increase in the average
debt outstanding from 1996 to 1997. Management fees, amortization of initial
direct costs, administrative expense reimbursement and general and
administrative expense increased due to an increase in the average size of the
portfolio from 1996 to 1997. As a result of an analysis of delinquency, an
assessment of overall risk and a review of historical loss experience, it was
determined that a $75,000 provision for bad debts was required for the six
months ended June 30, 1997.
Net income for the six months ended June 30, 1997 and 1996 was
$168,912 and $69,296, respectively. The net income per weighted average limited
partnership unit was $.49 and $.82, respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the six months ended
June 30, 1997 and 1996 were capital contributions, net of offering expenses, of
$10,226,311 and $14,056,383, from limited partners, respectively, net cash
provided by operations of $368,123 in 1996, proceeds from sale of equipment of
$1,986,542 in 1997 and proceeds from affiliate note of $4,250,000 in 1997. These
funds were used to make payments on borrowings, fund cash distributions and to
purchase equipment. The Partnership intends to purchase additional equipment and
fund cash distributions utilizing capital contributions cash provided by
operations, proceeds from sales of equipment and borrowings.
Cash distributions to limited partners for the six months ended June
30, 1997 and 1996, which were paid monthly, totaled $1,685,232 and $307,857,
respectively, of which $167,223 and $68,603 was investment income and $1,518,009
and $239,254 was a return of capital, respectively. The monthly annualized cash
distribution rate to limited partners was 9.8% and 7.3% for 1996 and 1997, of
which 1.0% and 1.6% was investment income and 8.8% and 5.7% was a return of
capital respectively, calculated as a percentage of each partner's initial
capital contribution. The limited partner distribution per weighted average unit
outstanding for the six months ended June 30, 1997 and 1996 was $4.91 and $3.67,
respectively, of which $.49 and $.82 was investment income and $4.42 and $2.85
was a return of capital, respectively.
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
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, $5,794,273 and $6,712,631
in equipment lease and finance receivables and residuals with a net book value
of $5,465,238, $4,874,857 and $5,553,962, respectively to ICON Receivables
1997-A LLC ("1997-A"), a special purpose entity created by the Members. The
Members received a 34.39%, 30.67% and 34.94% interest, respectively, in 1997-A
based on the present value of their related contributions. 1997-A was formed for
the purpose of originating new leases, managing existing contributed assets and,
eventually, securitizing its portfolio. In order to fund the acquisition of new
leases, 1997-A obtained a warehouse borrowing facility from Prudential
Securities Credit Corporation (the "Facility"). Borrowings under the Facility
are based on the present value of the new leases, provided that in the
aggregate, the amount outstanding cannot exceed $25,000,000. Outstanding amounts
under the Facility bear interest equal to Libor plus 1.5%. Collections of
receivables from new leases are used to pay down the Facility, however, in the
event of a default, all of 1997-A's assets are available to cure such default.
The net proceeds from the expected securitization of these assets will be used
to pay-off the remaining Facility balance and the remaining proceeds will be
distributed to the Members in accordance with their membership interests. The
Partnership accounts for its investment in 1997-A under the equity method.
As of June 30, 1997, except as noted above, there were no known
trends or demands, commitments, events or uncertainties which are likely to have
any material effect on liquidity. As cash is realized from operations, sales of
equipment and borrowings, the Partnership will invest in equipment leases and
financings where it deems it to be prudent while retaining sufficient cash to
meet its reserve requirements and recurring obligations as they become due.
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter ended
June 30, 1997.
<PAGE>
ICON Cash Flow Partners L. P. Seven
(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. Seven
File No. 33-94458 (Registrant)
By its General Partner,
ICON Capital Corp.
August 14, 1997 Gary N. Silverhardt
- --------------- ---------------------------------------------
Date Gary N. Silverhardt
Chief Financial Officer
(Principal financial and account officer
of the General Partner of the Registrant)
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000947986
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,653,996
<SECURITIES> 0
<RECEIVABLES> 137,031,332
<ALLOWANCES> 150,000
<INVENTORY> 193,361
<CURRENT-ASSETS> * 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 98,940,532
<CURRENT-LIABILITIES> ** 0
<BONDS> 22,510,573
0
0
<COMMON> 0
<OTHER-SE> 31,550,787
<TOTAL-LIABILITY-AND-EQUITY> 98,940,532
<SALES> 3,406,939
<TOTAL-REVENUES> 3,406,939
<CGS> 608,100
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,065,351
<LOSS-PROVISION> 75,000
<INTEREST-EXPENSE> 1,489,576
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 168,912
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.49
<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>
