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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, 2000
------------------------------------------------------
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 33-44413
---------------------------------------------------------
ICON Cash Flow Partners, L.P., Series E
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3635208
- -------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
111 Church Street, White Plains, New York 10601-1505
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 993-1700
-----------------------------
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:
Units of Limited Partnership Interests
- --------------------------------------------------------------------------------
(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
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
TABLE OF CONTENTS
Item Page
PART I
1. Business 3-4
2. Properties 5
3. Legal Proceedings 5
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 Consolidated Financial and Operating Data 6
7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
8. Consolidated Financial Statements and Supplementary Data 10-29
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 30
PART III
10. Directors and Executive Officers of the Registrant's
General Partner 30-31
11. Executive Compensation 32
12. Security Ownership of Certain Beneficial Owners
and Management 32
13. Certain Relationships and Related Transactions 33
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 33
SIGNATURES 34
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
PART I
Item 1. Business
General Development of Business
ICON Cash Flow Partners, L.P., Series E (the "Partnership") was formed in
November 1991 as a Delaware limited partnership. The Partnership commenced
business operations on its initial closing date, July 6, 1992, with the
admission of 13,574.17 limited partnership units. Between July 7, 1992 and
December 31, 1992, 236,021.97 additional units were admitted and from January 1,
1993 to July 31, 1993 (the final closing date), 360,815.37 additional units were
admitted bringing the final admission to 610,411.51 units totaling $61,041,151
in capital contributions. From 1994 through 1998, the Partnership redeemed 2,556
limited partnership units. The Partnership did not redeem limited partnership
units in 1999 and 2000, leaving 607,855.51 limited partnership units outstanding
at December 31, 2000. The sole general partner is ICON Capital Corp. (the
"General Partner").
The Partnership's reinvestment period ended July 31, 1998. The disposition
period began on August 1, 1998. 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 begin 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.
During the disposition period the Partnership expects to recover, at a minimum,
the carrying value of its assets.
Segment Information
The Partnership has only one operating segment: the business of acquiring
equipment subject to leases with companies that the Partnership believes to be
creditworthy..
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 has: (1) acquired a diversified portfolio of leases
and financing transactions; (2) made monthly cash distributions to its limited
partners from cash from operations, commencing with each limited partner's
admission to the Partnership, (3) re-invested substantially all undistributed
cash from operations and cash from sales in additional equipment and financing
transactions during the reinvestment period; and (4) begun to sell the
Partnership's investments and distribute the cash from sales of such investments
to its limited partners.
The equipment leasing industry is highly competitive. In initiating its
leasing transactions the Partnership competed 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 greater financial
resources.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
The Partnership has no direct employees. The General Partner has full and
exclusive discretion in management and control of the Partnership.
Lease and Financing Transactions
For the years ended December 31, 2000 and 1999, the Partnership did not
finance or purchase any new equipment. Included in the summary of equipment cost
by category below is 100% of the equipment cost acquired by two joint ventures
in which the Partnership has a 99% and 75% interest. The Partnership accounts
for these investments by consolidating 100% of the assets and liabilities of the
joint ventures and reflecting, as a liability, the related minority interests.
The equipment purchased by three other joint ventures in which the Partnership
has a less than 50% interest are not included in this table. A summary of the
portfolio equipment cost by category held at December 31, 2000 and 1999 is as
follows:
December 31, 2000 December 31, 1999
------------------------- -------------------------
Category Cost Percent Cost Percent
- -------- ---- ------- ---- -------
Aircraft $ 23,010,250 25.7 $ 23,010,250 22.3%
Computer systems 13,380,959 15.0 14,172,782 13.7
Manufacturing & production 12,185,284 13.6 12,901,249 12.5
Telecommunications 8,825,246 9.9 9,976,789 9.7
Furniture and fixtures 8,637,599 9.7 9,497,699 9.2
Retail Systems 8,095,693 9.1 15,973,850 15.5
Restaurant equipment 3,520,639 3.9 4,449,367 4.3
Medical 2,859,011 3.2 3,087,242 3.0
Automotive 2,147,620 2.4 2,240,961 2.2
Material handling 1,370,318 1.5 1,403,993 1.4
Construction 1,347,323 1.5 1,554,753 1.5
Sanitation 1,054,294 1.2 1,054,294 1.0
Miscellaneous 2,977,399 3.3 3,776,956 3.7
------------ ----- ------------ -----
$ 89,411,635 100.0% $103,100,185 100.0%
============ ===== ============ =====
The Partnership has one lease which individually represents greater than
10% of the total portfolio equipment cost at December 31, 2000. The lease is
with Aerovias de Mexico, S.A. de C.V. ("Aero Mexico"). The underlying equipment
is an aircraft and the asset represented 23.2% of the total portfolio cost at
December 31, 2000.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
Item 2. Properties
----------
The Partnership neither owns nor leases office space or equipment for the
purpose of managing its day-to-day affairs.
Item 3. Legal Proceedings
-----------------
The Partnership is not a party to any pending legal proceedings.
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 2000.
PART II
Item 5. Market for the Registrant's Securities and Related Security Holder
Matters
-----------------------------------------------------------------------
The Partnership's limited partnership interests are not publicly traded nor
is there currently a market for the Partnership's limited partnership interests.
It is unlikely that any such market will develop.
Number of Equity Security Holders
Title of Class as of December 31,
-------------- ---------------------------------
2000 1999
---- ----
Limited partners 3,736 3,753
General Partner 1 1
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
Item 6. Selected Consolidated Financial and Operating Data
Years Ended December 31,
----------------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total revenues $6,532,679 $10,203,685 $10,087,667 $7,611,293 $9,849,216
========== =========== =========== ========== ==========
Net income $ 396,430 $ 2,242,510 $ 1,047,706 $2,368,585 $2,243,883
========== =========== =========== ========== ==========
Net income allocable
to limited partners $ 392,466 $ 2,220,085 $ 1,037,229 $2,344,899 $2,221,444
========== =========== =========== ========== ==========
Net income allocable
to the General Partner $ 3,964 $ 22,425 $ 10,477 $ 23,686 $ 22,439
========== =========== =========== ========== ==========
Weighted average
limited partnership
units outstanding 607,856 607,856 608,273 609,211 609,503
========== =========== =========== ========== ==========
Net income per
weighted average limited
partnership unit $ .65 $ 3.65 $ 1.71 $ 3.85 $ 3.64
========== =========== =========== ========== ==========
Distributions to
limited partners $3,672,173 $ 4,381,933 $ 7,755,553 $7,768,316 $7,771,164
========== =========== =========== ========== ==========
Distributions to the
General Partner $ 37,091 $ 44,258 $ 78,338 $ 78,468 $ 78,496
========== =========== =========== ========== ==========
Years Ended December 31,
--------------------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total assets $46,154,746 $64,830,618 $86,918,230 $66,917,017 $77,934,170
=========== =========== =========== =========== ===========
Partners' equity $11,379,555 $14,692,389 $16,876,070 $23,689,694 $29,192,964
=========== =========== =========== =========== ===========
The above selected consolidated financial data should be read in
conjunction with the consolidated financial statements and related notes
appearing elsewhere in this report.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
Item 7. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
------------------------------------------------------------------------
The Partnership's portfolio consisted of a net investment in finance
leases, financings, operating leases and equity investments in joint ventures
representing 41%, 22%, 36% and 1% of total investments at December 31, 2000,
respectively, and 48%, 25%, 26% and 1% of total investments at December 31,
1999, respectively. The Partnership did not finance or purchase any new
equipment in 2000 or 1999.
Results of Operations
Years Ended December 31, 2000 and 1999
Revenues for the year ended December 31, 2000 were $6,532,679, representing
a decrease of $3,671,006 from 1999. The decrease in revenues resulted primarily
from a decrease in finance income of $2,762,490, a decrease in gain on sales of
equipment of $647,268 and a loss from investments in unconsolidated joint
ventures of $194,006 in 2000 versus income from investments in unconsolidated
joint ventures of $48,211 in 1999. Finance income decreased due to the decrease
in the average size of the finance lease portfolio. The decrease in gain on
sales of equipment resulted from a decrease in the amount of equipment sold
where the proceeds received were in excess of the remaining carrying value. The
loss from investments in unconsolidated joint ventures in 2000 resulted
primarily from a provision for bad debts of $850,000 being recorded in 2000 by
an underlying joint venture, ICON Receivables 1997-A LLC, with no provision for
bad debts being required to be recorded by this venture in 1999.
Expenses for the year ended December 31, 2000 were $6,136,249, representing
a decrease of $1,824,926 from 1999. The decrease in expenses resulted primarily
from decreases in interest expense of $1,099,333, provision for bad debts of
$500,000, management fees of $180,768 and administrative expense reimbursements
- - General Partner of $80,923. These decreases were partially offset by increases
in minority interest expense in consolidated joint ventures of $32,424 and
general and administrative expense of $36,767.
Interest expense decreased due to a decrease in the average debt
outstanding from 1999 to 2000. The decrease in the provision for bad debts was
the result of determinations made of the level of reserves required during the
1999 and 2000 periods, respectively. These determinations were the result of the
Partnership's ongoing analysis of delinquency trends, loss experience and an
assessment of overall credit risk. Management fees and administrative expense
reimbursements - General Partner decreased due to the decrease in the average
size of the portfolio from 1999 to 2000. The increase in minority interest
expense in consolidated joint ventures resulted from increased earnings levels
within the Partnership's two consolidated joint ventures. General and
administrative expenses increased primarily as a result of higher professional
fees incurred in 2000.
Net income for the years ended December 31, 2000 and 1999 was $396,430 and
$2,242,510, respectively. The net income per weighted average limited
partnership unit was $.65 and $3.65 for 2000 and 1999, respectively.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
Years Ended December 31, 1999 and 1998
Revenues for the year ended December 31, 1999 were $10,203,685,
representing an increase of $116,018 from 1998. The increase in revenues
resulted primarily from an increase in finance income of $463,085 and an
increase in gain on sales of equipment of $248,841. The increases were partially
offset by a decrease in interest income and other of $317,254 and a decrease in
income from equity investments in joint ventures of $290,954. The net gain on
sales of equipment increased due to an increase in the number of leases maturing
in which the underlying equipment was sold. The decrease in interest income and
other was due primarily to decreased average levels of debt outstanding in 1999
versus 1998.
Expenses for the year ended December 31, 1999 were $7,961,175, representing
a decrease of $1,078,786 from 1998. The decrease in expenses resulted primarily
from decreases in interest expense of $389,060, provision for bad debts of
$275,089, management fees of $278,814, administrative expense reimbursements of
$117,474 and in amortization of initial direct costs of $202,107. These
decreases were partially offset by increases in general and administrative
expense of $127,122, depreciation expense of $41,708 and minority interest
expense in joint ventures of $14,928.
Interest expense decreased due to a decrease in the average debt
outstanding from 1998 to 1999. As a result of the ongoing analysis of
delinquency trends, loss experience and an assessment of overall credit risk,
the Partnership recorded provisions for bad debts of $1,000,000 and $1,275,089
for 1999 and 1998. Management fees and administrative expense reimbursements
decreased due to a decrease in the average size of the portfolio from 1998 to
1999. Amortization of initial direct costs decreased due to a decrease in the
average size of the portfolio subject to initial direct costs from 1998 to 1999.
Net income for the years ended December 31, 1999 and 1998 was $2,242,510
and $1,047,706, respectively. The net income per weighted average limited
partnership unit was $3.65 and $1.71 for 1999 and 1998, respectively.
Liquidity and Capital Resources
The Partnership's reinvestment period ended July 31, 1998. The disposition
period began on August 1, 1998. 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 begin 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.
During the disposition period the Partnership expects to recover, at a minimum,
the carrying value of its assets.
As a result of the Partnership's entering into the disposition period,
future monthly distributions are expected to fluctuate depending on the amount
of asset sale and re-lease proceeds received during that period.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
The Partnership's primary sources of funds in 2000, 1999 and 1998 were net
cash provided by operations of $9,359,980, $11,671,010 and $12,745,950,
respectively, proceeds from sales of equipment of $2,159,942, $3,776,513 and
$2,476,110, respectively, proceeds from non-recourse notes payable of
$11,943,528 in 2000 and proceeds from a warehouse line of credit of $20,703,918
and from securitization debt of $41,175,000 in 1998. These funds were used to
purchase equipment in 1998, and to provide for cash distributions and debt
repayments in 1998, 1999 and 2000.
Cash distributions to the limited partners for the years ended December 31,
2000, 1999 and 1998 totaled $3,672,173, $4,381,933 and $7,755,553, respectively
of which $392,466, $2,220,085 and $1,037,229 was investment income and
$3,279,707, $2,161,848 and $6,718,324 was a return of capital, respectively.
As of December 31, 2000, except as noted above, there were no known trends
or demands, commitments, events or uncertainties which are likely to have a
material effect on liquidity. As cash is realized from operations and sales of
equipment, the Partnership will distribute substantially all available cash,
after retaining sufficient cash to meet its reserve requirements and recurring
obligations.
Item 7a. Qualitative and Quantitative Disclosures About Market Risk
The Partnership is exposed to certain market risks, including changes in
interest rates. The Partnership believes its exposure to other market risks,
including commodity risk and equity price risk, are insignificant to both its
financial position and results of operations.
The Partnership manages its interest rate risk by obtaining fixed rate
debt. The fixed rate debt service obligation streams are generally matched by
fixed rate lease receivable streams generated by the Partnership's lease
investments.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
Item 8. Consolidated Financial Statements and Supplementary Data
--------------------------------------------------------
Index to Consolidated Financial Statements
Page Number
Independent Auditors' Report 12
Consolidated Balance Sheets as of December 31, 2000 and 1999 13
Consolidated Statements of Operations for the Years Ended
December 31, 2000, 1999 and 1998 14
Consolidated Statements of Changes in Partners' Equity for the
Years Ended December 31, 2000, 1999 and 1998 15
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2000, 1999 and 1998 16-18
Notes to Consolidated Financial Statements 19-29
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Financial Statements
December 31, 2000
(With Independent Auditors' Report Thereon)
INDEPENDENT AUDITORS' REPORT
The Partners
ICON Cash Flow Partners, L.P., Series E:
We have audited the accompanying consolidated balance sheets of ICON Cash Flow
Partners, L.P., Series E (a Delaware limited partnership) as of December 31,
2000 and 1999, and the related consolidated statements of operations, changes in
partners' equity and cash flows for each of the years in the three-year period
ended December 31, 2000. These consolidated financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the Unites States of America. 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.
As discussed in Note 1, the Partnership's reinvestment period ended July 31,
1998. The disposition period began on August 1, 1998. 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 begin
the orderly termination of its operations and affairs.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ICON Cash Flow
Partners, L.P., Series E as of December 31, 2000 and 1999, and the results of
its operations and its cash flows for each of the years in the three-year period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States of America.
/s/ KPMG LLP
-------------------------------------
KPMG LLP
March 28, 2001
New York, New York
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Balance Sheets
December 31,
2000 1999
---- ----
Assets
Cash $ 1,030,751 $ 2,073,759
------------ ------------
Investment in finance leases
Minimum rents receivable 13,688,669 26,598,335
Estimated unguaranteed residual values 7,904,259 8,420,547
Unearned income (2,077,737) (4,853,392)
Allowance for doubtful accounts (1,287,212) (1,237,909)
------------ ------------
18,227,979 28,927,581
------------ ------------
Investment in operating leases
Equipment at cost 20,707,984 20,707,984
Accumulated depreciation (4,584,394) (3,997,183)
------------ ------------
16,123,590 16,710,801
------------ ------------
Investment in financings
Receivables due in installments 11,907,064 18,214,488
Unearned income (1,176,563) (2,438,302)
Allowance for doubtful accounts (1,235,231) (735,231)
------------ ------------
9,495,270 15,040,955
------------ ------------
Investments in joint ventures 483,555 818,191
------------ ------------
Other assets 793,601 1,259,331
------------ ------------
Total assets $ 46,154,746 $ 64,830,618
============ ============
Liabilities and Partners' Equity
Notes payable - securitized debt $ 14,318,259 $ 25,691,428
Notes payable - non-recourse 17,798,581 21,127,810
Security deposits, deferred credits and other payables 2,022,692 2,758,365
Minority interests in consolidated joint ventures 635,659 560,626
------------ ------------
34,775,191 50,138,229
------------ ------------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (406,065) (372,938)
Limited partners (607,855.51 units outstanding,
$100 per unit original issue price) 11,785,620 15,065,327
------------ ------------
Total partners' equity 11,379,555 14,692,389
------------ ------------
Total liabilities and partners' equity $ 46,154,746 $ 64,830,618
============ ============
See accompanying notes to consolidated financial statements
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statements of Operations
For the Years Ended December 31,
2000 1999 1998
---- ---- ----
Revenues
Finance income $ 3,847,625 $ 6,610,115 $ 6,147,030
Rental income 2,460,000 2,460,000 2,447,700
Gains on sales of equipment 253,737 901,005 652,164
Interest income and other 165,323 184,354 501,608
(Loss) income from investments in
unconsolidated joint ventures (194,006) 48,211 339,165
----------- ----------- -----------
Total revenues 6,532,679 10,203,685 10,087,667
----------- ----------- -----------
Expenses
Interest 3,007,236 4,106,569 4,495,629
Provision for bad debts 500,000 1,000,000 1,275,089
Management fees - General Partner 748,178 928,946 1,207,760
Administrative expense reimbursements
- General Partner 458,930 539,853 657,327
Depreciation 587,211 587,211 545,503
General and administrative 722,414 685,647 558,525
Amortization of initial direct costs 102 33,195 235,302
Minority interest expense in
consolidated joint ventures 112,178 79,754 64,826
----------- ----------- -----------
Total expenses 6,136,249 7,961,175 9,039,961
----------- ----------- -----------
Net income $ 396,430 $ 2,242,510 $ 1,047,706
=========== =========== ===========
Net income allocable to:
Limited partners $ 392,466 $ 2,220,085 $ 1,037,229
General Partner 3,964 22,425 10,477
----------- ----------- -----------
$ 396,430 $ 2,242,510 $ 1,047,706
=========== =========== ===========
Weighted average number of limited
partnership units outstanding 607,856 607,856 608,273
=========== =========== ===========
Net income per weighted average
limited partnership unit $ .65 $ 3.65 $ 1.71
=========== =========== ===========
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Years Ended December 31, 2000, 1999 and 1998
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
------- ------ -------- ------- -----
(Per weighted average unit)
Balance at
December 31, 1997 $23,972,938 $(283,244) $23,689,694
Cash distribution
to partners $ 11.04 $ 1.71 (7,755,553) (78,338) (7,833,891)
Limited partnership
units redeemed
(590 units) (27,439) - (27,439)
Net income 1,037,229 10,477 1,047,706
----------- --------- -----------
Balance at
December 31, 1998 17,227,175 (351,105) 16,876,070
Cash distribution
to partners $ 3.56 $ 3.65 (4,381,933) (44,258) (4,426,191)
Net income 2,220,085 22,425 2,242,510
----------- --------- -----------
Balance at
December 31, 1999 15,065,327 (372,938) 14,692,389
Cash distribution
to partners $ 5.39 $ .65 (3,672,173) (37,091) (3,709,264)
Net income 392,466 3,964 396,430
----------- --------- -----------
Balance at
December 31, 2000 $11,785,620 $(406,065) $11,379,555
=========== ========= ===========
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows
For the Years Ended December 31,
2000 1999 1998
---- ---- ----
Cash flows from operating activities:
Net income $ 396,430 $ 2,242,510 $ 1,047,706
------------ ------------ ------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 587,211 587,211 545,503
Rental income - assigned operating lease receivables (2,460,000) (2,460,000) (2,447,700)
Provision for doubtful accounts 500,000 1,000,000 1,275,089
Finance income portion of receivables paid directly
to lenders by lessees (1,111,381) (1,782,276) (2,120,403)
Amortization of initial direct costs 102 33,195 235,302
Gain on sales of equipment (253,737) (901,005) (652,164)
Interest expense on non-recourse financing
paid directly by lessees 1,750,991 2,165,742 2,484,621
Loss (income) from investments in
unconsolidated joint ventures 194,006 (48,211) (339,165)
Minority interest expense in consolidated joint ventures 112,178 79,754 64,826
Changes in operating assets and liabilities:
Collection of principal - non-financed receivables 9,650,161 11,607,999 8,535,799
Allowance for doubtful accounts 49,303 (437,761) (678,451)
Accounts receivable from affiliates -- 160,151 (153,048)
Distributions received from
unconsolidated joint ventures 140,630 677,198 722,760
Investments in unconsolidated joint ventures -- (84,535) (87,185)
Other assets 465,730 (368,886) 1,027,060
Security deposits, deferred credits and
other payables (735,673) (1,256,508) 2,914,613
Minority interests in consolidated joint ventures (37,145) 877 (359,206)
Other 111,174 455,555 729,993
------------ ------------ ------------
Total adjustments 8,963,550 9,428,500 11,698,244
------------ ------------ ------------
Net cash provided by operating activities 9,359,980 11,671,010 12,745,950
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sales of equipment 2,159,942 3,776,513 2,476,110
Equipment and receivables purchased -- -- (35,359,198)
------------ ------------ ------------
Net cash provided by (used in) investing activities 2,159,942 3,776,513 (32,883,088)
------------ ------------ ------------
(continued on next page)
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (continued)
For the Years Ended December 31,
2000 1999 1998
---- ---- ----
Cash flows from financing activities:
Proceeds from warehouse line of credit -- -- 20,703,918
Principal payments on warehouse line of credit -- -- (36,804,788)
Proceeds of securitized debt -- -- 41,175,000
Principal payments on securitized debt (11,373,169) (11,283,667) (4,199,905)
Proceeds from non-recourse debt 11,943,528 -- --
Principal payments on non-recourse debt (9,424,025) -- --
Redemption of limited partnership units -- -- (27,439)
Cash distributions to partners (3,709,264) (4,426,191) (7,833,891)
------------ ------------ ------------
Net cash (used in) provided by financing activities (12,562,930) (15,709,858) 13,012,895
------------ ------------ ------------
Net (decrease) in cash (1,043,008) (262,335) (7,124,243)
Cash at beginning of year 2,073,759 2,336,094 9,460,337
------------ ------------ ------------
Cash at end of year $ 1,030,751 $ 2,073,759 $ 2,336,094
============ ============ ============
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Statements of Cash Flows (Continued)
Supplemental Disclosures of Cash Flow Information
Interest expense of $3,007,236, $4,106,569 and $4,495,629 for the years
ended December 31, 2000, 1999 and 1998 consisted of: interest expense on
non-recourse financing accrued or paid directly to lenders by lessees of
$1,750,991, $2,165,742 and $2,484,621, respectively; and other interest of
$1,256,245, $1,940,827 and $2,011,008, respectively.
For the years ended December 31, 2000, 1999 and 1998, non-cash activities
included the following:
2000 1999 1998
---- ---- ----
Decrease in investments in finance leases and
financings due to contribution to
unconsolidated joint venture $ -- $ 98,474 $ --
Increase in investments in
unconsolidated joint venture -- (98,474) --
Principal and interest on finance receivables
paid directly to lender by lessees 5,139,723 -- 12,172,619
Rental income - assigned operating
lease receivables 2,460,000 2,460,000 2,447,700
Principal and interest on non-recourse financing
paid directly by lessees (7,599,723) (2,460,000) (14,620,319)
Decrease in investment in finance leases due
to terminations -- (644,704) 2,439,116
Decrease in notes payable - non-recourse due to
terminations -- 644,704 (2,439,116)
Non-recourse notes payable assumed in
purchase price - finance and operating leases -- -- 17,895,192
Fair value of equipment and receivables
purchased for debt and payables -- -- (17,895,192)
------------ ------------ ------------
$ -- $ -- $ --
============ ============ ============
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
December 31, 2000
1. Organization
ICON Cash Flow Partners, L.P., Series E (the "Partnership") was formed on
November 7, 1991 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's offering period commenced on
June 5, 1992 and by its final closing on July 31, 1993, 610,411.51 units had
been admitted into the Partnership with aggregate gross proceeds of $61,041,151.
From 1994 through 1998, the Partnership redeemed 2,556 limited partnership
units. The Partnership did not redeem limited partnership units in 1999 and 2000
leaving 607,855.51 limited partnership units outstanding.
The Partnership's reinvestment period ended July 31, 1998. The disposition
period began on August 1, 1998. 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 begin 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.
During the disposition period, the Partnership expects to recover, at a minimum,
the carrying value of its assets.
The General Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut corporation. The General Partner manages and controls
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, received an
underwriting commission on the gross proceeds from sales of all units. The total
underwriting compensation paid by the Partnership, including underwriting
commissions, sales commissions, incentive fees, public offering expense
reimbursements and due diligence activities was limited to 13 1/2% of the gross
proceeds received from the sale of the units. Such offering costs aggregated
$8,240,555 (including $3,362,551 paid to the General Partner or its affiliates)
and were charged directly to limited partners' equity.
Profits, losses, cash distributions and disposition proceeds are 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 at the date of the financial statements and revenues and expenses
during the reporting period. Actual results could differ from those estimates.
In addition, management is required to disclose contingent assets and
liabilities.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Consolidation - The consolidated financial statements include the accounts
of the Partnership and its majority owned subsidiaries, ICON E Corp., ICON Cash
Flow Partners L.L.C. I ("ICON Cash Flow LLC I") and ICON Receivables 1997-B
L.L.C. ("1997-B"). All inter-company accounts and transactions have been
eliminated. The Partnership accounts for its interests in less than 50% owned
joint ventures under the equity method of accounting. In such cases, the
Partnership's original investments are recorded at cost and adjusted for its
share of earnings, losses and distributions thereafter.
Leases - The Partnership accounts for owned equipment leased to third
parties as finance leases or operating leases, as appropriate. 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. For operating leases,
equipment is recorded at cost and is depreciated on the straight-line method
over the lease terms to their estimated fair market values at lease
terminations. Related lease rentals are recognized on the straight-line method
over the lease terms. Billed and uncollected operating lease receivables, net of
allowance for doubtful accounts, are included in other assets. Initial direct
costs of finance leases are capitalized and are amortized over the terms of the
related leases using the interest method. Initial direct costs of operating
leases are capitalized and amortized on the straight-line method over the lease
terms. The Partnership's leases have terms ranging from two to eight 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.
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. Separate disclosure of fair value information as of December 31,
2000 and 1999 with respect to the Company's assets and liabilities is not
provided because (i) SFAS No. 107 does not require disclosures about the fair
value of lease arrangements, (ii) the carrying value of financial assets, other
than lease related investments, and payables approximates market value and (iii)
fair value information concerning non-recourse debt obligations is not
practicable to estimate without incurring excessive costs to obtain all the
information that would be necessary to derive a market interest rate.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
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 the ongoing analysis of delinquency trends,
loss experience and an assessment of overall credit risk. 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 - The Partnership's policy with
respect to impairment of estimated residual values is to review, on a periodic
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.
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.
New Accounting Pronouncement - Effective January 1, 2001, the Partnership
adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended. The adoption of SFAS No. 133 did not have any effect on
the Partnership's financial position or results of operations.
3. Investments in Joint Ventures
The Partnership and affiliates formed five joint ventures for the purpose
of acquiring and managing various assets.
The two joint ventures described below are majority owned and are
consolidated with the Partnership.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
ICON Cash Flow Partners L.L.C. I
In September 1994 the Partnership and an affiliate, ICON Cash Flow Partners
L.P. Six ("L.P. Six"), formed a joint venture, ICON Cash Flow LLC I, for the
purpose of acquiring and managing an aircraft which was on lease to Alaska
Airlines, Inc. The Partnership and L.P. Six contributed 99% and 1% of the cash
required for such acquisition, respectively, to ICON Cash Flow LLC I. ICON Cash
Flow LLC I acquired the aircraft, assuming non-recourse debt and utilizing
contributions received from the Partnership and L.P. Six. The lease is an
operating lease. Profits, losses, excess cash and disposition proceeds are
allocated 99% to the Partnership and 1% to L.P. Six. The Partnership's
consolidated financial statements include 100% of the assets and liabilities of
ICON Cash Flow LLC I. L.P. Six's investment in ICON Cash Flow LLC I has been
reflected as "Minority interest in joint venture." The original lease term
expired in April 1997 and Alaska Airlines, Inc. returned the aircraft. In June
1997 ICON Cash Flow LLC I released the aircraft to Aero Mexico. The new lease is
an operating lease which expires in October 2002.
ICON Receivables 1997-B L.L.C.
In August 1997 the Partnership, L.P. Six and ICON Cash Flow Partners L.P.
Seven ("L.P. Seven") formed 1997-B, a special purpose entity formed for the
purpose of originating leases and securitizing its portfolio. The Partnership,
L.P. Six and L.P. Seven contributed $2,250,000 (75.00% interest), $250,000
(8.33% interest) and $500,000 (16.67% interest), respectively to 1997-B. In
order to fund the acquisition of leases, 1997-B obtained a warehouse borrowing
facility from Prudential Securities Credit Corporation. In October 1998, 1997-B
completed an equipment securitization. The net proceeds from the securitization
of these assets were used to pay-off the remaining 1997-B warehouse facility
balance and any remaining proceeds were distributed to the 1997-B members in
accordance with their membership interests. The Partnership's consolidated
financial statements include 100% of the assets and liabilities of 1997-B. L.P.
Six and L.P. Seven's interests in 1997-B have been reflected as "minority
interests in consolidated joint ventures."
The three joint ventures described below are less than 50% owned and are
accounted for following the equity method.
ICON Cash Flow Partners L.L.C. II
In March 1995 the Partnership and an affiliate, L.P. Six, formed ICON Cash
Flow Partners L.L.C. II, ("ICON Cash Flow LLC II"), for the purpose of acquiring
and managing an aircraft which was on lease to Alaska Airlines, Inc. The
Partnership and L.P. Six contributed 1% and 99% of the cash required for such
acquisition, respectively, to ICON Cash Flow LLC II. ICON Cash Flow LLC II
acquired the aircraft, assuming non-recourse debt and utilizing contributions
received from the Partnership and L.P. Six. The lease is an operating lease.
Profits, losses, excess cash and disposition proceeds are allocated 1% to the
Partnership and 99% to L.P. Six. The Partnership's investment in the joint
venture is accounted for under the equity method. The original lease term
expired in April 1997 and Alaska Airlines, Inc. returned the aircraft. In June
1997 ICON Cash Flow LLC II released the aircraft to Aero Mexico. The new lease
is an operating lease which expires in September 2002.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Information as to the financial position and results of operations of ICON Cash
Flow LLC II is summarized below:
December 31, 2000 December 31, 1999
----------------- -----------------
Assets $ 17,715,748 $ 15,508,243
=============== ===============
Liabilities $ 11,075,944 $ 9,602,143
=============== ===============
Equity $ 6,639,804 $ 5,906,100
=============== ===============
Partnership's share of equity $ 66,398 $ 59,061
=============== ===============
Net income $ 733,704 $ 933,664
=============== ===============
Partnership's share of net income $ 7,337 $ 9,337
=============== ===============
ICON Cash Flow Partners L.L.C. III
In December 1996 the Partnership and an affiliate, L.P. Seven, 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 Partnership and L.P. Seven contributed 1% and 99% of the cash required
for such acquisition, respectively, to ICON Cash Flow LLC III. ICON Cash Flow
LLC III acquired the aircraft, assuming non-recourse debt and utilizing
contributions received from the Partnership and L.P. Seven. Profits, losses,
excess cash and disposition proceeds are allocated 1% to the Partnership and 99%
to L.P. Seven. The Partnership's investment in the joint venture is accounted
for under the equity method.
Information as to the financial position and results of operations of ICON
Cash Flow LLC III is summarized below:
December 31, 2000 December 31, 1999
Assets $ 7,451,970 $ 9,240,416
============== ===============
Liabilities $ 3,094,323 $ 5,394,669
============== ===============
Equity $ 4,357,647 $ 3,845,747
============== ===============
Partnership's share of equity $ 43,576 $ 38,457
============== ===============
Net income $ 511,900 $ 489,968
============== ===============
Partnership's share of net income $ 5,119 $ 4,900
============== ===============
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
ICON Receivables 1997-A L.L.C.
In March 1997 three affiliates of the Partnership, ICON Cash Flow Partners,
L.P., Series D ("Series D"), L.P. Six and L.P. Seven, contributed and assigned
equipment lease and finance receivables and residuals to ICON Receivables 1997-A
L.L.C.("1997-A"), a special purpose entity created for the purpose of
originating leases, managing existing contributed assets and securitizing its
portfolio. In September 1997 the Partnership, L.P. Six and L.P. Seven
contributed and assigned additional equipment lease and finance receivables and
residuals to 1997-A. The Partnership, Series D, L.P. Six and L.P. Seven received
a 31.19%, 17.81%, 31.03% and 19.97% interest, respectively, in 1997-A based on
the present value of their related contributions. The Partnership's
contributions amounted to $15,547,305 in assigned leases and $740,000 of cash in
1997, $87,185 of cash in 1998 and $84,535 of cash and $98,474 in assigned leases
in 1999. In September 1997, 1997-A securitized substantially all of its
equipment leases and finance receivables and residuals. 1997-A became the
beneficial owner of a trust. The Partnership's original investment was recorded
at cost and is adjusted by its share of earnings, losses and distributions
thereafter.
Information as to the financial position and results of operations of
1997-A is summarized below:
December 31, 2000 December 31, 1999
Assets $ 9,002,519 $ 17,967,441
=============== ===============
Liabilities $ 6,848,927 $ 14,701,053
=============== ===============
Equity $ 2,153,592 $ 3,266,388
=============== ===============
Partnership's share of equity $ 373,581 $ 720,673
=============== ===============
Net (loss) income $ (661,929) $ 108,923
=============== ===============
Partnership's share of
net (loss) income $ (206,462) $ 33,974
=============== ===============
Distributions $ 450,867 $ 2,171,133
=============== ===============
Partnership's share of distributions $ 140,630 $ 677,198
=============== ===============
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
4. Receivables Due in Installments
Non-cancelable minimum annual amounts receivable on finance leases and
financings are as follows:
Finance
Year Leases Financings Total
2001 $ 7,857,368 $11,907,064 $19,764,432
2002 4,337,165 -- 4,337,165
2003 1,472,858 -- 1,472,858
2004 21,278 -- 21,278
----------- ----------- -----------
$13,688,669 $11,907,064 $25,595,733
=========== =========== ===========
5. Investment in Operating Lease
The investment in operating lease at December 31, 2000, 1999 and 1998
consisted of the following:
2000 1999 1998
---- ---- ----
Equipment cost, beginning and end of year $ 20,707,984 $ 20,707,984 $ 20,707,984
------------ ------------ ------------
Accumulated depreciation,
beginning of year (3,997,183) (3,409,972) (2,864,469)
Depreciation (587,211) (587,211) (545,503)
------------ ------------ ------------
Accumulated depreciation, end of year (4,584,394) (3,997,183) (3,409,972)
------------ ------------ ------------
Investment in operating lease, end of year $ 16,123,590 $ 16,710,801 $ 17,298,012
============ ============ ============
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
6. Allowance for Doubtful Accounts
The Allowance for Doubtful Accounts related to the investments in finance
leases, financings and operating lease consisted of the following:
Finance Operating
Leases Financings Lease Total
Balance at December 31, 1997 $ 553,114 $ 102,532 $ 158,617 $ 814,263
Provision for doubtful accounts 689,585 744,121 (158,617) 1,275,089
Accounts written-off (322,004) (443,453) -- (765,457)
Recovery on accounts previously
written-off 64,605 22,401 -- 87,006
----------- ----------- ----------- -----------
Balance at December 31, 1998 985,300 425,601 -- 1,410,901
Provision for doubtful accounts 476,143 523,857 -- 1,000,000
Accounts written-off (277,732) (241,094) -- (518,826)
Recovery on accounts previously
written-off 54,198 26,867 81,065
----------- ----------- ----------- -----------
Balance at December 31, 1999 1,237,909 735,231 -- 1,973,140
Provision for doubtful accounts -- 500,000 -- 500,000
Recovery on accounts previously
written-off 49,303 -- -- 49,303
----------- ----------- ----------- -----------
Balance at December 31, 2000 $ 1,287,212 $ 1,235,231 $ -- $ 2,522,443
=========== =========== =========== ===========
7. Notes Payable
As discussed in Note 3, in order to fund the acquisition of additional
leases, 1997-B obtained a warehouse borrowing facility from Prudential
Securities Credit Corporation. In October 1998, 1997-B completed an equipment
securitization resulting in net proceeds of $41,175,000. These proceeds were
used to pay-off $36,804,788 outstanding under the 1997-B warehouse line of
credit. The remaining proceeds were distributed to the 1997-B members in
accordance with their membership interests. The new securitized debt bears
interest at a fixed rate of 6.19% and is payable from receivables related to the
portfolio that secures the debt. At December 31, 2000, there was $14,318,259
outstanding under the notes payable-securitized debt.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Notes payable, bearing interest at rates ranging from 5.2% to 16.5%, mature
as follows:
Notes Payable Notes Payable
Year Securitized Debt Non-Recourse
2001 $ 7,360,608 $ 3,587,261
2002 5,213,886 1,600,191
2003 1,575,793 12,578,986
2004 167,972 32,143
----------- -----------
$14,318,259 $17,798,581
=========== ===========
Included in notes payable - non-recourse above is $1,224,266 in notes
payable due to various third parties in conjunction with the purchase and
assignment of lease transactions as they relate to residual sharing agreements.
The notes are payable only to the extent certain residuals are realized.
8. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the years ended December 31, 2000, 1999 and 1998
are as follows:
Charged to Operations
Management fees $1,207,760
Administrative expense reimbursements 657,327
----------
Year ended December 31, 1998 $1,865,087
==========
Management fees $ 928,946
Administrative expense reimbursements 539,853
----------
Year ended December 31, 1999 $1,468,799
==========
Management fees $ 748,178
Administration expense reimbursements 458,930
----------
Year ended December 31, 2000 $1,207,108
==========
The Partnership has investments in five joint ventures with other
partnerships sponsored by the General Partner. See Note 3 for additional
information relating to the joint ventures.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
9. Security Deposits, Deferred Credits and Other Payables
Security deposits, deferred credits and other payables at December 31, 2000
and 1999 include $1,211,859 and $1,000,000, respectively, of proceeds received
on residuals, which will be applied upon final remarketing of the related
equipment.
10. Subsidiary
In December 1994, the Partnership formed a wholly owned subsidiary, ICON E
Corp., a Massachusetts corporation formed for the purpose of managing equipment
under lease located in the state of Massachusetts. Massachusetts partnerships
are taxed on personal property at a higher rate than corporations, and
therefore, to mitigate such excess property tax, certain leases are being
managed by ICON E Corp., a corporation. The Partnership's consolidated financial
statements include 100% of the accounts of ICON E Corp. As of December 31, 2000,
there was no federal tax liability for ICON E Corp.
11. Commitments and Contingencies
The Partnership has entered into remarketing and residual sharing
agreements with third parties. In connection therewith, remarketing or residual
proceeds received in excess of specified amounts will be shared with these third
parties based on specified formulas. For the years ended December 31, 2000, 1999
and 1998, the Partnership paid $0, $70,842 and $1,701 to third parties as their
share of the proceeds.
12. Tax Information (Unaudited)
The following reconciles net income for financial reporting purposes to
income for federal income tax purposes for the years ended December 31:
2000 1999 1998
---- ---- ----
Net income per financial statements $ 396,430 $ 2,242,510 $ 1,047,706
Differences due to:
Direct finance leases 2,938,653 4,842,466 5,618,432
Depreciation (4,142,464) (5,719,775) (7,028,534)
Provision for losses 478,812 (40,171) (33,272)
Loss on sale of equipment (1,171,655) (392,115) 2,971,331
Other 1,375,963 (135,838) (887,487)
----------- ----------- -----------
Partnership income (loss) for
federal income tax purposes $ (124,261) $ 797,077 $ 1,688,176
=========== =========== ===========
As of December 31, 2000, the partners' capital accounts included in the
financial statements totaled $11,379,555 compared to the partners' capital
accounts for federal income tax purposes of $18,462,366 (unaudited). The
difference arises primarily from commissions reported as a reduction in the
partners' capital for financial reporting purposes but not for federal income
tax purposes, and temporary differences related to direct finance leases,
depreciation and provision for losses.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
13. Quarterly Financial Data (Unaudited)
The following table is a summary of financial data by quarter for the
years ended December 31, 2000 and 1999:
For the Quarters Ended
--------------------------------------------------------------
March 31, June 30, September 30, December 31,
-------- ------- ------------ -----------
2000
Revenues $ 1,828,783 $ 1,729,583 $ 1,528,500 $ 1,445,813
============== ============== ============== ===========
Net income (loss) allocable to
limited partners $ 360,198 $ 209,713 $ 32,547 $ (209,992)
============== ============== ============== ===========
Net income (loss) per weighted
average limited partnership unit $ 0.59 $ 0.35 $ 0.05 $ (0.34)
============== ============== ============== ===========
1999
Revenues $ 2,649,490 $ 2,278,165 $ 2,630,851 $ 2,645,179
============== ============== ============== ===========
Net income allocable to
limited partners $ 650,219 $ 337,639 $ 275,493 $ 956,734
============== ============== ============== ===========
Net income per weighted
average limited partnership unit $ 1.07 $ 0.56 $ 0.45 $ 1.57
============== ============== ============== ===========
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
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 111 Church Street, White
Plains, New York 10601-1505, and its telephone number is (914) 993-1700. 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 leases and full
financing transactions.
The manager of the Registrant'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.
The General Partner is performing or causing to be performed 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, re-leasing 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, 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 Chairman, Chief Executive Officer and Director
Paul B. Weiss President and Director
Thomas W. Martin Executive Vice President and Director
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
Beaufort J. B. Clarke, age 55, has been Chairman, Chief Executive Officer
and Director of the General Partner since 1996. 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.
Paul B. Weiss, age 40, is President and Director of the General Partner.
Mr. Weiss has been exclusively engaged in lease acquisitions since 1988 from his
affiliations with the General Partner since 1996, Griffin Equity Partners (as
Executive Vice President from 1993-1996); Gemini Financial Holdings (as Senior
Vice President-Portfolio Acquisitions from 1991-1993) and Pegasus Capital
Corporation (as Vice President-Portfolio Acquisitions from 1988-1991). He was
previously an investment banker and a commercial banker.
Thomas W. Martin, age 47, has been Executive Vice President of the General
Partner since 1996. Prior to his present position, Mr. Martin was the Executive
Vice President and Chief Financial Officer of Griffin Equity Partners, Inc.
(1993-1996), Gemini Financial Holdings (as Senior Vice President from 1992-1993)
and Chancellor Corporation (as Vice President-Syndications from 1985-1992). Mr.
Martin has 17 years of senior management experience in the leasing business.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
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, 2000, 1999 and 1998.
Entity Capacity Type of Compensation 2000 1999 1998
------ -------- -------------------- ---- ---- ----
ICON Capital Corp. General Partner Management fees $ 748,178 $ 928,946 $1,207,760
ICON Capital Corp. General Partner Administrative expense
reimbursements 458,930 539,853 657,327
---------- ---------- ----------
$1,207,108 $1,468,799 $1,865,087
========== ========== ==========
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
(a) The registrant 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 19, 2001, 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 Percent
of Class Amount Beneficially 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.
Profits, losses, cash distributions and disposition proceeds are allocated
99% to the limited partners and 1% to the General Partner until each investor
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 the outstanding adjusted capital
contribution account. After such time, the distributions will be allocated 90%
to the limited partners and 10% to the General Partner.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
See Item 11 for a discussion of the Partnership's reimbursable management
fees and administrative expenses.
See Note 3 for a discussion of the Partnership's related party investments
in joint ventures.
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) Form of Dealer-Manager Agreement (Incorporated by reference to
Exhibit 1.1 to Amendment No. 2 to Form S-1 Registration Statement
No. 33-44413 filed with the Securities and Exchange Commission on
June 4, 1992)
(ii) Form of Selling Dealer Agreement (Incorporated by reference to
Exhibit 1.2 to Amendment No. 2 to Form S-1 Registration Statement
No. 33-44413 filed with the Securities and Exchange Commission on
June 4, 1992)
(iii)Amended and Restated Agreement of Limited Partnership
(Incorporated herein by reference to Exhibit A to Amendment No. 2
to Form S-1 Registration Statement No. 33-44413 filed with the
Securities and Exchange Commission on June 4, 1992)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter ended
December 31, 2000.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2000
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 E
File No. 33-44413 (Registrant)
By its General Partner, ICON Capital Corp.
Date: March 28, 2001 /s/ Beaufort J.B. Clarke
-----------------------------------------------
Beaufort J.B. Clarke
Chairman, 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, 2001 /s/ Beaufort J.B. Clarke
--- ------------------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Date: March 28, 2001 /s/ Paul B. Weiss
----------------------------------------------
Paul B. Weiss
President and Director
Date: March 28, 2001 /s/ Thomas W. Martin
----------------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting 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.