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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, 2002
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[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
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Commission File Number 0-27902
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ICON Cash Flow Partners, L.P., Series D
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(Exact name of registrant as specified in its charter)
Delaware 13-3602979
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
100 Fifth Avenue, New York, New York 10011-1505
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(Address of principal executive offices) (Zip code)
(212) 418-4700
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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
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
June 30, December 31,
2002 2001
---- ----
Assets
Cash $ -- $ 74,127
----------- -----------
Investment in finance leases
Minimum rents receivable 6,971 24,553
Estimated unguaranteed residual values 42,547 119,400
Initial direct costs --
350
Unearned income --
----------- -----------
(697)
49,518 143,606
----------- -----------
Investment in operating lease equipment, at cost 3,459,597 3,384,869
Accumulated depreciation (1,855,229) (1,650,881)
----------- -----------
1,604,368 1,733,988
Investment in financings
Receivables due in installments 2,324,834 2,390,863
Initial direct costs --
105
Unearned income (396,921) (487,655)
Allowance for doubtful accounts (92,097) (92,097)
----------- -----------
1,835,816 1,811,216
Investment in joint venture 16,974 26,561
----------- -----------
Other assets 47,289 58,052
----------- -----------
Total assets $ 3,553,965 $ 3,847,550
=========== ===========
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Balance Sheets (Continued)
(unaudited)
June 30, December 31,
2002 2001
---- ----
Liabilities and Partners' Equity
Notes payable - non-recourse $ 2,308,802 $ 2,526,490
Security deposits, deferred credits and
other payables 698,242 943,670
----------- -----------
3,007,044 3,470,160
Partners' equity (deficiency)
General Partner (339,127) (340,822)
Limited partners (399,118 units
outstanding, $100 per unit original
issue price) 886,048 718,212
----------- -----------
Total partners' equity 546,921 377,390
----------- -----------
Total liabilities and partners' equity $ 3,553,965 $ 3,847,550
=========== ===========
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Statements of Operations
(unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
---- ---- ---- ----
Revenue
Rental income $ 267,180 $ 147,000 $ 531,016 $ 494,000
Finance income 45,622 63,971 91,427 142,045
(Loss) gain on sales of equipment - 25,709 (11,105) 27,484
Loss from investment
in joint venture (5,474) (451,999) (9,587) (460,751)
Interest and other income 843 105 3,926 6,711
------------- ------------- ------------- -------------
Total revenues 308,171 (215,214) 605,677 209,489
------------- ------------- ------------- -------------
Expenses
Depreciation 102,173 95,946 204,348 191,892
Interest 62,524 77,675 127,330 159,180
General and administrative 62,138 40,895 104,013 91,925
Amortization of initial direct costs - 1,058 455 2,367
------------- ------------- ------------- -------------
Total expenses 226,835 215,574 436,146 445,364
------------- ------------- ------------- -------------
Net income $ 81,336 $ (430,788) $ 169,531 $ (235,875)
============= ============= ============= =============
Net income allocable to:
Limited partners $ 80,523 $ (426,480) $ 167,836 $ (233,516)
General Partner 813 (4,308) 1,695 (2,359)
------------- -------------- ------------- -------------
$ 81,336 $ (430,788) $ 169,531 $ (235,875)
============= ============= ============= =============
Weighted average number of limited
partnership units outstanding 399,118 399,118 399,118 399,118
============= ============= ============= =============
Net income per weighted average
limited partnership unit $ .20 $ (1.07) $ .42 $ (.59)
============= ============ ============= =============
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Six Months Ended June 30, 2002
and the Year Ended December 31, 2001
(unaudited)
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
Balance at
December 31, 2000 $ 1,024,934 $ (337,724) $ 687,210
Cash distributions
to partners $ 0.76 $ 0.71 (588,646) (5,946) (594,592)
Net income 281,924 2,848 284,772
----------- ------------- ------------
Balance at
December 31, 2001 718,212 (340,822) 377,390
Net income 167,836 1,695 169,531
----------- ------------- ------------
Balance at
June 30, 2002 $ 886,048 $ (339,127) $ 546,921
=========== ============= ============
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(unaudited)
2002 2001
---- ----
Cash flows from operating activities:
Net income $ 169,531 $(235,875)
--------- ---------
Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
Interest expense on non-recourse financing
paid directly to lenders by lessees 127,330 157,549
Depreciation 204,348 191,892
Rental income paid directly to lenders by
lessees (345,018) (294,000)
Finance income-accrued or paid directly to
lenders by lessee (76,488) (94,920)
Loss from investment in joint venture 9,587 460,751
Amortization of initial direct costs 455 2,367
Loss (gain) on sales of equipment 11,105 (27,484)
Changes in operating assets and liabilities:
Non-financed receivables 83,612 72,732
Security deposits, deferred credits and
other payables (245,428) (128,060)
Other assets 10,763 7,173
Other (25,418) 47,509
--------- ---------
Total adjustments (245,152) 395,509
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Net cash (used in) provided by operating
activities (75,621) 159,634
--------- ---------
Cash flows from investing activities-proceeds
from sales of equipment 1,494 362,061
--------- ---------
Cash flows from financing activities:
Cash distributions to partners -- (594,647)
Principal payments on note payable - recourse -- (72,717)
--------- ---------
Net cash used in financing activities -- (667,364)
--------- ---------
Net decrease in cash (74,127) (145,669)
Cash at beginning of period 74,127 152,578
--------- ---------
Cash at end of period $ -- $ 6,909
========= =========
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (Continued)
Supplemental Disclosures of Cash Flow Information
During the six months ended June 30, 2002 and 2001, non-cash activities
included the following:
2002 2001
---- ----
Principal and interest on direct finance
receivables paid directly to lenders
by lessees $ - $ 153,281
Rental income - investments in operating
leases assigned receivable to lenders 345,018 294,000
Principal and interest on non-recourse
financing paid directly by lessees (345,018) (447,281)
------------ -------------
$ - $ -
============ =============
Interest expense of $127,330 and $159,180 for the six months ended June 30,
2002 and 2001 consisted of: interest expense on non-recourse financing paid or
accrued directly to lenders by lessees of $127,330 and $157,549, respectively,
and interest expense on note payable - recourse of $0 and $1,631, respectively.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
June 30, 2002
(unaudited)
1. Basis of Presentation
The consolidated financial statements of ICON Cash Flow Partners, L.P.,
Series D (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 results for each period
shown. Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such SEC rules and regulations. Management
believes that the disclosures made are adequate to make the information
presented not misleading. The results for the interim period are not necessarily
indicative of the results for the full year. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes included in the Partnership's 2001 Annual Report on Form
10-K.
2. Disposition Period
The Partnership's reinvestment period ended June 5, 1997 and the
disposition period began on June 6, 1997. During the disposition period, the
Partnership has and will continue to utilize available cash to pay its
liabilities; distribute substantially all remaining cash from operations and
equipment sales to the partners; and continue the orderly termination of its
operations and affairs. The Partnership has not, and will not invest in any
additional finance or lease transactions during the disposition period.
3. Investment in Joint Venture - Related Party Transactions
In March 1997 the Partnership, ICON Cash Flow Partners L.P. Six ("L.P.
Six"), 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"). In September 1997 ICON Cash Flow Partners,
L.P., Series E ("Series E"), L.P. Six and L.P. Seven contributed and assigned
additional equipment lease and finance receivables and residuals to 1997-A. The
Partnership, Series E, L.P. Six and L.P. Seven own 17.81%, 31.19%, 31.03% and
19.97% interests, respectively, in 1997-A. The Partnership accounts for its
interest in 1997-A under the equity method of accounting.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Information as to the unaudited financial position of 1997-A as of June 30,
2002 and December 31, 2001 and its results of operations for the quarters ended
June 30, 2002 and 2001 are summarized below:
June 30, 2002 December 31, 2001
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Assets $ 633,941 $ 1,856,582
============ =============
Liabilities $ 538,636 $ 1,707,445
============ =============
Equity $ 95,305 $ 149,137
============ =============
Partnership's share of equity $ 16,974 $ 26,561
============ =============
Six Months Ended Six Months Ended
June 30, 2002 June 30, 2001
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Net loss $ (53,832) $ (1,868,675)
============ =============
Partnership's share of
net loss $ (9,587) $ (460,751)
============ =============
1997-A recorded a provision for bad debts of $1,82 5,000 during the six
months period ended June 30, 2001.
4. Subsequent Event
On August 11, 2002, the lessee of the Partnership's aircraft, US Airways,
filed for bankruptcy under Chapter 11. The Partnership has not yet determined
the effect, if any, the bankruptcy filing will have on the lease.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Item 2. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Three Months Ended June 30, 2002 and 2001
Revenues for the three months ended June 30, 2002 ("2002 Quarter") were
$308,171, representing an increase of $523,385 from the quarter ended June 30,
2001 ("2001 Quarter"). The increase in revenues resulted primarily from a
decrease in losses from the investment in joint venture of $446,525 and an
increase in rental income of $120,180, which was partially offset by a decrease
in finance income of $18,349 and a decrease in net gain on sales of equipment of
$25,709.
The decrease in losses from the investment in joint ventures was due to a
$1,825,000 provision for bad debts recorded by the venture in the 2001 Quarter.
No such amount was required in the 2002 Quarter. The Partnership's share of the
loss in the 2001 period was $451,999. Rental income increased primarily due to
rents generated by the renewal of certain leases which were reclassified from
finance leases to operating leases in 2002. Finance income decreased due to a
decrease in the size of investments in finance leases from 2001 to 2002 due to
the expiration of the leases. The net gain on sales of equipment decreased
because there was no equipment sold in the 2002 Quarter.
Expenses for the 2002 Quarter were $226,835 representing an increase of
$11,261 as compared to the 2001 Quarter.
Net income (loss) for the 2002 Quarter and the 2001 Quarter was $81,336 and
$(430,788), respectively. The net income (loss) per weighted average limited
partnership unit outstanding was $.20 and $(1.07) for the 2002 Quarter and 2001
Quarter, respectively.
Results of Operations for the Six Months Ended June 30, 2002 and 2001
Revenues for the six months ended June 30, 2002 ("2002 Period") were
$605,677, representing an increase of $396,188 from the quarter ended June 30,
2001 ("2001 Period"). The increase in revenues resulted primarily from a
decrease in losses from investment in joint venture of $451,164 and an increase
in rental income of $37,016. Offsetting those increases was a decrease in
finance income of $50,618 and losses from sales of equipment of $11,105 for the
2002 Period as compared to gains from sales of equipment of $27,484 for the 2001
Period.
The decrease in losses from investment in joint venture was due to a
$1,825,000 provision for bad debts recorded by the venture in the 2001 Period.
The Partnership's share of the loss in the 2001 period was $460,751. Rental
income increased primarily due to rents generated by the renewal of certain
leases which were reclassified from finance leases to operating leases in the
first quarter of 2002 partially offset by a one-time settlement payment of
$200,000 received in the first quarter of 2001. Finance income decreased due to
a decrease in the size of the lease investments in finance leases portfolio from
2001 to 2002 due to the expiration of the leases.
Expenses for the 2002 Period were $436,146 representing a decrease of
$9,218 compared to the 2001 Period.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Net income (loss) for the 2002 Period and 2001 Period was $169,531 and
$(235,875), respectively. The net income (loss) per weighted average limited
partnership unit outstanding was $.42 and $(.59) for the 2002 Period and the
2001 Period respectively.
Liquidity and Capital Resources
The Partnership used all of its available cash to fund its operations
during the 2002 Period and as a result, there was no cash available for
distributions to the limited partners during the 2002 Period. Further, the
Partnership's only current sources of cash are proceeds being collected from one
financing at the rate of $7,000 per month plus certain month to month renewal
lease payments. During the six months ended June 30, 2002, $20,531 was received
from such month to month rentals. The Partnership anticipates that it will begin
receiving cash rentals from a three year lease renewal that commenced in January
2002 upon the repayment of a related residual sharing obligation which is
scheduled to be paid off in the second quarter of 2003. The Partnership's cash
flow may be less than the Partnership's current level of expenses. To the extent
that cash flow is insufficient to pay such expenses, the Partnership may be
required to sell assets prior to maturity or borrow against future cash flows.
The Partnership's only significant assets remaining are a DeHavilland DHC-8-102
aircraft which is subject to a lease which is scheduled to expire in the fourth
quarter of 2003 and whose lease payments are being paid by the lessee directly
to a non-recourse lender. The loan has a $1.7 million balloon payment due at
such time. On August 11, 2002, the lessee of the Partnership's aircraft, US
Airways, filed for bankruptcy under Chapter 11. The Partnership has not yet
determined the effect, if any, the bankruptcy filing will have on the lease. In
addition, the Partnership has a financing receivable with a balloon payment of
$2 million due in July 2004. It is anticipated that cash distributions, if any,
will not be significant until the realization of proceeds from the sale or
release of the DeHavilland aircraft and the maturity of the financing.
The Partnership's reinvestment period ended June 5, 1997 and the
disposition period began on June 6, 1997. During the disposition period the
Partnership has, and will continue to distribute, substantially all
distributable cash from operations and equipment sales to the partners and
continue the orderly termination of its operations and affairs. The Partnership
has not, and will not invest in any additional finance or lease transactions
during the disposition period.
As a result of the Partnership's being in its disposition period, future
monthly distributions, if any are expected to fluctuate depending on the amount
of asset sale and re-lease proceeds received during that period.
Item 3. Qualitative and Quantitative Disclosures About Market Risk
The Partnership is exposed to certain market risks, including changes in
interest rates and the demand for equipment (and the related residuals) owned by
the Partnership and its investee. The Partnership believes its exposure to other
market risks are insignificant to both its financial position and results of
operations.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
The Partnership managed its interest rate risk by obtaining fixed rate
debt. The fixed rate debt service obligation stream matches the fixed rate lease
receivable stream generated by the Partnership's lease investment. The only
outstanding debt at June 30, 2002 is a non recourse loan which matures in
November 2003, associated with a DeHavilland DHC 8-102 aircraft. At lease
termination, a $1.7 million balloon payment is due on the debt, and is expected
to be paid with sale or release proceeds.
The Partnership manages its exposure to equipment and residual risk by
monitoring the market and maximizing the re-marketing proceeds received through
re-leasing or sale of equipment.
ICON Cash Flow Partners, L.P., Series D
(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 June 30, 2002.
Exhibits
99.1 Certification of Chairman and Chief Executive Officer pursuant to 18
U.S.C.ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
99.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer pursuant to 18 U.S.C.ss.1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ICON CASH FLOW PARTNERS, L.P., SERIES D
File No. 33-40044 (Registrant)
By its General Partner,
ICON Capital Corp.
August 14, 2002 /s/ Thomas W. Martin
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Date Thomas W. Martin
Executive Vice President
(Principal financial and accounting officer of
the General Partner of the Registrant)
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
June 30, 2002
EXHIBIT 99-1
I, Beaufort J.B. Clarke, Chairman and Chief Executive Officer of ICON
Capital Corp, the sole General Partner of ICON Cash Flow Partners L.P. Series D,
certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-Q for the period ended June 30, 2002 (the
"Periodic Report") which this statement accompanies fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78m) and
(2) information contained in the Periodic Report fairly presents, in all
material respects, the financial condition and results of operations of
ICON Cash Flow Partners L.P. Series D.
Dated: August 14, 2002
/s/ Beaufort J.B. Clarke
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Beaufort J.B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
sole General Partner of ICON Cash Flow Partners L.P. Series D
ICON Cash Flow Partners, L.P., Series D
(A Delaware Limited Partnership)
June 30, 2002
EXHIBIT 99-2
I, Thomas W. Martin, Executive Vice President (Principal Financial and
Accounting Officer) of ICON Capital Corp, the sole General Partner of ICON Cash
Flow Partners L.P. Series D, certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-Q for the period ended June 30, 2002 (the
"Periodic Report") which this statement accompanies fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78m) and
(2) information contained in the Periodic Report fairly presents, in all
material respects, the financial condition and results of operations of
ICON Cash Flow Partners L.P. Series D.
Dated: August 14, 2002
/s/ Thomas W. Martin
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Thomas W. Martin
Executive Vice President (Principal
Financial and Accounting Officer)
ICON Capital Corp.
sole General Partner of ICON Cash Flow Partners L.P. Series D