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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
For the fiscal year ended December 31, 2003
-------------------------------------------------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
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)
100 Fifth Avenue, 10th Floor, New York, New York 10011
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 418-4700
------------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership Interests
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2) [ ] Yes [X] No
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last day of the registrant's most recently completed second fiscal quarter:
Not applicable. There is no established market for units of limited partnership
interest in the registrant.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
TABLE OF CONTENTS
Item Page
- ---- ----
PART I
1. Business 3-4
2. Properties 4
3. Legal Proceedings 4
4. Submission of Matters to a Vote of Security Holders 4
PART II
5. Market for the Registrant's Securities and Related
Security Holder Matters 4
6. Selected Consolidated Financial Data 5
7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations 6-10
7A. Qualitative and Quantitative Disclosures About Market Risk 11
8. Consolidated Financial Statements 12-32
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 33
9A. Control and Procedures 33
PART III
10. Directors and Executive Officers of the Registrant's General Partner 33-34
11. Executive Compensation 34
12. Security Ownership of Certain Beneficial Owners and Management 34-35
13. Certain Relationships and Related Transactions 35
14. Principal Accounting Fees and Services 35
PART IV
15. Exhibits, Financial Statement Schedules and Reports on Form 8-K 35-36
SIGNATURES 37
Certifications 38-41
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
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 July
31, 1993 (the final closing date), 596,837.34 additional units were admitted
bringing the total admissions to 610,411.51 units totaling $61,041,151 in
capital contributions. From 1994 through 2003, the Partnership redeemed 2,556
limited partnership units leaving 607,855.51 limited partnership units
outstanding at December 31, 2003.
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.
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 managing
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 commencing with each limited partner's admission to the Partnership,
(3) re-invested substantially all undistributed cash from operations and cash
from sales of 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. When seeking its
leasing transactions for acquisition, 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. Because the reinvestment period of the Partnership has
ended, it will no longer be competing for acquisitions. However, competition and
supply and demand may affect the Partnership's ability to optimize value upon
the sale of its equipment.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
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, 2003 and 2002, the Partnership did not
finance or purchase any new equipment.
The lease of an aircraft to Aerovias de Mexico, S.A. de C.V. ("Aeromexico")
represents more than 10% of the Partnership's revenue for the year ended
December 31, 2003. The carrying value of the Aeromexico aircraft represented
approximately 68.7% of the Partnership's assets at December 31, 2003.
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 Company, from time-to-time, in the ordinary course of business,
commences legal actions when necessary to protect or enforce the rights of the
Partnership. We are not a defendant party to any litigation and are not aware of
any pending or threatened litigation against the Partnership.
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 2003.
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 February 29, 2004
-------------- -----------------------
Limited Partners 3,714
General Partner 1
The Partnership made distributions to the limited partners totaling
$1,621,978 and $2,594,024 for the years 2003 and 2002, respectively. For the
three months ended March 30, 2004, the Partnership has made distributions to the
limited partners totaling $140,317.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
Item 6. Selected Consolidated Financial Data
------------------------------------
Year Ended December 31,
-----------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Total revenues $ 2,172,265 $ 5,853,738 $ 5,387,932 $ 6,532,679 $ 10,203,685
================ ============== =============== ============== ===============
Net (loss) income $ (2,892,420) $ 2,301,648 $ (1,395,324) $ 396,430 $ 2,242,510
================ ============== =============== ============== ===============
Net (loss) income allocable
to limited partners $ (2,863,496) $ 2,278,632 $ (1,381,371) $ 392,466 $ 2,220,085
================ ============== =============== ============== ===============
Net (loss) income allocable
to General Partner $ (28,924) $ 23,016 $ (13,953) $ 3,964 $ 22,425
================ ============== =============== ============== ===============
Weighted average number of
limited partnership
units outstanding 607,856 607,856 607,856 607,856 607,856
================ ============== =============== ============== ===============
Net (loss) income per
weighted average limited
partnership unit $ (4.71) $ 3.75 $ (2.27) $ .65 $ 3.65
================ ============== =============== ============== ===============
Distributions to
limited partners $ 1,621,978 $ 2,594,024 $ 1,356,383 $ 3,672,173 $ 4,381,933
================ ============== =============== ============== ===============
Distributions per weighted
average limited
partnership unit $ 2.67 $ 4.27 $ 2.23 $ 6.04 $ 7.21
================ ============== =============== ============== ===============
Distributions to
General Partner $ 16,383 $ 26,202 $ 13,564 $ 37,091 $ 44,258
================ ============== =============== ============== ===============
December 31,
--------------
2003 2002 2001 2000 1999
Total assets $ 15,786,740 $ 22,507,394 $ 32,783,624 $ 46,154,746 $ 64,830,618
================ ============== =============== ============== ===============
Notes Payable $ 9,565,050 $ 11,352,510 $ 21,862,616 $ 32,116,840 $ 46,819,238
================ ============== =============== ============== ===============
Partners' Equity $ 3,764,925 $ 8,295,706 $ 8,614,284 $ 11,379,555 $ 14,692,389
================ ============== =============== ============== ===============
The selected financial data should be read in conjunction with the
consolidated financial statements and related notes included in Item 8 of this
report.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
Item 7. General Partner's Discussion and Analysis of Financial Condition
and Results of Operations
Forward-Looking Information - The following discussion and analysis should
be read in conjunction with the audited consolidated financial statements
included herein. Certain statements within this document may constitute
forward-looking statements made pursuant to the safe harbor provision of the
Private Securities Litigation Reform Act of 1995. These statements are
identified by words such as "anticipate," "believe," "estimate," "expects,"
"intend," "predict" or "project" and similar expressions. This information may
involve risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements. Although the Partnership
believes that the expectations reflected in such forward-looking statements are
based on reasonable assumptions, such statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
projected.
Overview - The results of operations for the year ended December 31, 2003
reflect the risk factors outlined in the Partnership's prospectus. Such risk
factors include, but are not limited to, the decline in the value of the
Partnership's equipment, no guarantee of profitability, the potential of lessee
default, and economic factors such as prevailing interest rates. These risk
factors affect the Partnership's ability to realize income, in that they
increase the Partnership's expenses by way of additional depreciation,
impairment loss, and provision for bad debt. In addition, as the Partnership
liquidates the portfolio and leases expire, the cash flow will decrease.
Under the Operating Agreement of the Partnership, the term of the
Partnership is limited to the life-span of the leases remaining in the portfolio
during the liquidation period. Therefore, as the leases mature, the expected
revenue from the portfolio will decline. However, the Partnership's expenses,
while declining during the liquidation period will increase as a percentage of
lease revenue as certain expenses are fixed; thereby decreasing the
partnership's cash flow.
As the Partnership is currently operating in its liquidation period, the
General Partner diligently monitors the portfolio for any trends that would
affect equipment values.
The Partnership - The Partnership's portfolio consisted of a net investment
in finance leases, financings, operating leases, equipment held for sale or
lease and equity investments in joint ventures representing 14%, 7%, 69%, 9% and
1% of total investments at December 31, 2003, respectively, and 24%, 8%, 67%, 0%
and 1% of total investments at December 31, 2002, respectively. The Partnership
did not finance or purchase any new equipment in 2003, 2002 and 2001.
Results of Operations
- ---------------------
Years Ended December 31, 2003 and 2002
Revenues for the year ended December 31, 2003 were $2,172,265, representing
a decrease of $3,681,473 or 62.9% from 2002. The decrease in revenues was
partially caused by reduced interest income and other. Interest income and other
decreased $1,956,542 primarily due to a $2,017,763 residual sharing adjustment
in 2002 which did not occur in 2003. Rental income also decreased by $1,462,298,
which resulted from the extension agreement for the Aeromexico lease at reduced
rentals. Finance income also decreased by $449,570, due to the reduction in the
average size of the finance lease portfolio. Income from investments in
unconsolidated joint ventures also decreased by $136,649, from income of $49,797
in 2002 to a loss of $86,852 in 2003. These decreases were partially offset by
an increase in the gain on sales of equipment category of $323,586, from a loss
of $14,300 in 2002 to a gain of $309,286 in 2003.
ICON Cash Flow Partners, L.P.,
Series E (A Delaware Limited Partnership)
December 31, 2003
Expenses for the year ended December 31, 2003 were $5,064,685, representing
an increase of $1,512,595 or 42.6% from 2002. The increase in expenses was
primarily due to a charge of $1,500,000 for an impairment loss on the Aeromexico
aircraft. Offsetting this increase were decreases in most other major categories
of expense. Interest expense decreased by $268,097 due to a reduction in the
average debt outstanding from 2002 to 2003. Management fees and administrative
expense reimbursements decreased by $146,195 and $65,931, respectively, as a
result of the reduction in the average size of the Partnership's lease
portfolio. Minority interest expense also decreased by $172,257 to income of
$119,656 due to losses in the consolidated joint ventures.
Net (loss) income for the years ended December 31, 2003 and 2002 was
$(2,892,420) and $2,301,648, respectively. The net income (loss) per weighted
average limited partnership unit was $(4.71) and $3.75 for 2003 and 2002,
respectively.
Years Ended December 31, 2002 and 2001
Revenues for the year ended December 31, 2002 were $5,853,738, representing
an increase of $465,806 or 8.6% from 2001. The increase in revenues resulted
primarily from an increase in interest income and other. Interest income and
other increased $2,251,228 primarily due to a $2,017,763 one-time adjustment for
a revised estimate of residual sharing values. Income from unconsolidated joint
ventures also increased by $366,660. This increase resulted primarily from the
reversal of a provision for bad debts of $268,834 in 2002 by an underlying joint
venture, ICON Receivables 1997-A LLC, as compared to a provision for bad debts
of $1,825,000 being recorded by this venture in 2001. Offsetting these increases
was a decrease in finance income of $2,007,890. Finance income decreased due to
the reduction in the average size of the finance lease portfolio.
Expenses for the year ended December 31, 2002 were $3,552,090, representing
a decline of $3,231,166 or 47.6% from 2001. The decline in expenses resulted
primarily from a reduction in the provision for bad debts or $2,862,304. As a
result of an analysis of delinquencies, an assessment of overall risk and a
review of historical loss experience, the allowance was adjusted downward by
$700,000 in 2002. Additionally, interest expense decreased by $904,293 in 2002.
The decrease in interest expense resulted from a decrease in the average debt
outstanding from 2001 to 2002. In addition, management fees decreased by
$182,449 and administrative expense reimbursements decreased by $145,465. Both
were a result of the reduction in the average size of the finance lease
portfolio. These decreases were partially offset by an increase in depreciation
expense of $428,839. The increase in depreciation was due to a change in
estimate (reduction) of a residual value of an aircraft in the fourth quarter of
2001 as well as the depreciation on equipment that was reclassified from a
finance lease to an operating lease. Additionally, minority interest expense
increased by $513,588. This increase resulted from an overall increase in income
in one of the Partnership's consolidated joint ventures.
Net income (loss) for the years ended December 31, 2002 and 2001 was
$2,301,648 and $(1,395,324) respectively. The net income (loss) per weighted
average limited partnership unit was $3.75 and $(2.27) for 2002 and 2001,
respectively.
Liquidity and Capital Resources
The Partnership's primary sources of liquidity in 2003, 2002 and 2001 was
net cash provided by operating activities of $1,616,579, $5,255,183 and
$8,300,201, respectively, and proceeds from sales of equipment of $484,966,
$2,394,019 and $738,728, respectively. These funds, as well as funds held in
reserve by the Partnership, were used to pay cash distributions to partners of
$1,638,361, $2,620,226 and $1,369,947 in 2003, 2002 and 2001, respectively, and
debt repayments of $1,132,717, $5,597,034 and $7,335,811 in 2003, 2002 and 2001,
respectively.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
The Partnership's cash flow from operating activities 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 non-recourse debt balance of $9,565,050, of which
$9,383,441 is secured by the aircraft on lease to Aeromexico, matured in January
2004. Although the maturity date has passed, the Partnership has been
negotiating with the lender to extend the maturity date to that of the lease
expiration date of January 2005.
The Partnership has the following contractual obligation as of December 31,
2003. This obligation arises mainly from the acquisition of equipment subject to
lease. Rental payments from the leases associated with this equipment are
assigned to paydown such obligations.
Payments Due By Period
1-2 years
---------
Long-term obligation (notes payable) $ 9,565,050
See Note 6 to the consolidated financial statements, as set forth in Part
II, Item 8, for information regarding non-recourse debt.
The Partnership's reinvestment period ended July 31, 1998. The disposition
period began August 1, 1998, at which time the Partnership began the orderly
termination of its operations and affairs. During the disposition period, the
Partnership has and will continue to distribute substantially all distributable
cash from operations and equipment sales to the partners. The Partnership has
not and will not invest in any additional finance or lease transactions during
the disposition period. Because the Partnership is in 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.
As of December 31, 2003 there were no known trends or demands, commitments,
events or uncertainties apart from those mentioned above which are likely to
have any material effect on liquidity. As cash is realized from operations and
additional borrowings, the Partnership will continue to 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.
We do not consider the impact of inflation to be material in the analysis
of our overall operations.
Significant Accounting Policies
The policies discussed below are considered by the General Partner to be
critical to an understanding of the Partnership's consolidated financial
statements because their application places the most significant demands on the
General Partner's judgments, with financial reporting results relying on
estimation about the effect of matters that are inherently uncertain. Specific
risks for these critical accounting policies are described in the following
paragraphs. For all of these policies, the General Partner cautions that future
events rarely develop exactly as forecast, and the best estimates routinely
require adjustment.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
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 periods. Significant estimates
primarily include the allowance for doubtful accounts and unguaranteed residual
values. In addition, management is required to disclose contingent assets and
contingent liabilities. Actual results could differ from those estimates.
Leases and Revenue Recognition - The Partnership accounts for owned
equipment leased to third parties as finance leases, leveraged leases, or
operating leases, as appropriate. Initial direct costs are capitalized and are
amortized over the terms of the related leases using the interest method.
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 and depreciated on the
straight-line method over the lease term to its estimated residual value at
lease termination and is subject to the Partnership's impairment policy. Related
lease rentals are recognized on the straight line method over the lease terms.
Billed and uncollected operating lease receivables are included in other assets.
Credit Risk - Financial instruments that potentially subject the
Partnership to concentrations of credit risk include cash and cash equivalents,
direct finance lease receivables and accounts receivable. The Partnership places
its cash deposits and temporary cash investments with creditworthy, high quality
financial institutions. The concentration of such deposits and temporary cash
investments is not deemed to create a significant risk to the Partnership.
Accounts receivable represent amounts due from lessees in various industries,
related to equipment on operating and direct financing leases.
The Partnership records a provision for doubtful accounts to provide for
estimated credit losses in its portfolio. The allowance for doubtful accounts is
based on an analysis of delinquency, an assessment of overall risk and a review
of historical loss experience. The Partnership's write-off policy is based on an
analysis of the aging of the Partnership's portfolio, a review of the
non-performing receivables and leases, and prior collection experience. An
account is fully reserved for or written-off when the analysis indicates that
the probability of collection of the account is remote.
Impairment - Residual values of the Partnership's asset portfolio are
periodically reviewed to determine whether events or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. The events
or changes in circumstances which generally indicate that the residual value of
an asset may be 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.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
An impairment loss is measured and recognized only if the estimated
undiscounted future cash flows of the asset are less than their net book value.
The estimated undiscounted future cash flows are the sum of the estimated
residual value of the asset at the end of the asset's expected holding period
and estimates of undiscounted future rents. The residual value assumes, among
other things, that the asset is utilized normally in an open, unrestricted and
stable market. Short-term fluctuations in the market place are disregarded and
it is assumed that there is no necessity either to dispose of a significant
number of the assets simultaneously, if held in quantity, or to dispose of the
asset quickly. Impairment is measured as the difference between the fair value
of the assets and its carrying value on the measurement date.
Recent Accounting Pronouncements
In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
accounting for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities under SFAS No. 133. The
Statement requires that contracts with comparable characteristics be accounted
for similarly and clarifies when a derivative contains a financing component
that warrants special reporting in the statement of cash flows. SFAS No. 149 is
effective for contracts entered into or modified after June 30, 2003, except in
certain circumstances, and for hedging relationships designated after June 30,
2003. The adoption of this standard did not have a material effect on the
Partnership's financial position or results of operations.
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This Statement
establishes standards for how an issuer classifies and measures in its
statements of financial position certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances) because that financial instrument embodies an
obligation of the issuer. This Statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003, except for
mandatorily redeemable financial instruments of nonpublic entities. For
nonpublic entities, the effective date of the provisions of SFAS No. 150 that
relate to mandatorily redeemable financial instruments has been deferred until
fiscal years that begin after December 31, 2003. The adoption of this standard
is not expected to have a material effect on the Partnership's financial
position or results of operations.
In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51. In December 2003, the FASB issued a
revision to FIN 46, or Revised Interpretation, to clarify some of the provisions
of FIN 46. FIN 46 provides guidance on how to identify a variable interest
entity, or VIE, and determine when the assets, liabilities, non-controlling
interests, and results of operations of a VIE must be included in a
partnership's consolidated financial statements. A partnership that holds
variable interests in an entity is required to consolidate the entity if the
partnership's interest in the VIE is such that the partnership will absorb a
majority of the VIE's expected losses and/or receive a majority of the entity's
expected residual returns, if any. VIE's created after January 31, 2003, but
prior to January 1, 2004, may be accounted for either based on the original
interpretation or the Revised Interpretations. However, the Revised
Interpretations must be applied no later than the first quarter of fiscal year
2004. VIE's created after January 1, 2004 must be accounted for under the
Revised Interpretations. There has been no material impact to the Partnership's
financial statements and there is no expected impact from the adoption of the
deferred provisions in the first quarter of fiscal year 2004.
The Partnership does not believe that any other recently issued, but not
yet effective, accounting standards will have a material effect on the
Partnership's financial position or results of operations.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
Item 7A. 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 investees. Except as discussed below, the Partnership
believes its exposure to other market risks 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.
The Partnership manages its exposure to equipment and residual risk by
monitoring the equipment leasing market and maximizing the re-marketing proceeds
received through re-leasing or sale of equipment.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
Item 8. Consolidated Financial Statements
---------------------------------
Index to Consolidated Financial Statements
Page Number
-----------
Independent Auditors' Reports 14-15
Consolidated Balance Sheets as of December 31, 2003 and 2002 16
Consolidated Statements of Operations for the Years Ended
December 31, 2003, 2002 and 2001 17
Consolidated Statement of Changes in Partners' Equity for the Years Ended
December 31, 2001, 2002 and 2003 18
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2003, 2002 and 2001 19-20
Notes to Consolidated Financial Statements 21-32
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Financial Statements
December 31, 2003
(With Independent Auditors' Report Thereon)
The Partners
ICON Cash Flow Partners, L.P., Series E
INDEPENDENT AUDITOR'S REPORT
----------------------------
We have audited the accompanying consolidated balance sheets of ICON Cash Flow
Partners, L.P., Series E (a Delaware limited partnership) and subsidiaries as of
December 31, 2003 and 2002 and the related consolidated statements of
operations, changes in partners' equity and cash flows for each of the two years
in the period ended December 31, 2003. 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 United 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.
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 and subsidiaries as of December 31, 2003 and 2002 and
the results of their operations and their cash flows for each of the two years
in the period ended December 31, 2003 in conformity with accounting principles
generally accepted in the United States of America.
As discussed in Note 1, the Partnership's reinvestment period ended July 31,
1998 and its disposition period commenced. During the disposition period the
Partnership will distribute substantially all distributable cash from operations
and equipment sales to the partners and begin the orderly termination of its
operations and affairs.
/s/ Hays & Company LLP
March 19, 2004
New York, New York
Independent Auditors' Report
----------------------------
The Partners
ICON Cash Flow Partners, L.P., Series E:
We have audited the accompanying consolidated statements of operations,
partners' equity, and cash flows of ICON Cash Flow Partners, L.P., Series E (a
Delaware limited partnership) for the year ended December 31, 2001. 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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United 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 audit provides 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 results of the operations and the cash
flows of ICON Cash Flow Partners, L.P., Series E for the year ended December 31,
2001, in conformity with accounting principles generally accepted in the United
States of America.
/s/KPMG LLP
April 15, 2002
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Balance Sheets
December 31, 2003 and 2002
2003 2002
---- ----
Assets
Cash and cash equivalents $ 80,318 $ 746,808
---------------- ---------------
Investment in finance leases
Minimum rents receivable 1,466,112 2,590,191
Estimated unguaranteed residual values 1,266,007 3,197,247
Unearned income (40,551) (120,426)
Allowance for doubtful accounts (578,391) (566,551)
---------------- ---------------
2,113,177 5,100,461
---------------- ---------------
Investment in operating leases
Equipment at cost 19,207,984 21,554,842
Accumulated depreciation (8,357,851) (7,261,999)
---------------- ---------------
10,850,133 14,292,843
---------------- ---------------
Investment in financings
Receivables due in installments 2,446,433 3,157,773
Unearned income (13,238) (81,826)
Allowance for doubtful accounts (1,405,763) (1,403,186)
---------------- ---------------
1,027,432 1,672,761
---------------- ---------------
Equipment held for sale, net 1,489,239 -
---------------- ---------------
Investments in unconsolidated joint ventures 126,594 216,489
---------------- ---------------
Other assets, net 99,847 478,032
---------------- ---------------
Total assets $ 15,786,740 $ 22,507,394
================ ===============
Liabilities and Partners' Equity
Notes payable - non-recourse $ 9,565,050 $ 11,352,510
Security deposits, deferred credits and other payables 684,632 1,667,953
Deferred income 1,118,590 483,436
Due to General Partner and affiliates 594,982 529,572
Minority interests in consolidated joint ventures 58,561 178,217
---------------- ---------------
Total liabilities 12,021,815 14,211,688
---------------- ---------------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (482,075) (436,768)
Limited partners (607,855.51 units outstanding,
$100 per unit original issue price) 4,247,000 8,732,474
---------------- ---------------
Total partners' equity 3,764,925 8,295,706
---------------- ---------------
Total liabilities and partners' equity $ 15,786,740 $ 22,507,394
================ ===============
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, 2003, 2002 and 2001
2003 2002 2001
Revenues
Rental income $ 1,085,543 $ 2,547,841 $ 2,609,465
Finance income 466,013 915,583 2,923,473
Net gain (loss) on sales of equipment 309,286 (14,300) 68,268
Interest income and other 398,275 2,354,817 103,589
(Loss) income from investments in
unconsolidated joint ventures (86,852) 49,797 (316,863)
------------- ------------- -------------
Total revenues 2,172,265 5,853,738 5,387,932
------------- ------------- -------------
Expenses
Depreciation 1,599,866 1,553,222 1,124,383
Impairment loss 1,500,000 - -
Interest 1,160,763 1,428,860 2,333,153
(Reversal of) provision for bad debts - (700,000) 2,162,304
Management fees - General Partner 208,593 354,788 537,237
Administrative expense reimbursements
- General Partner 128,341 194,272 339,737
General and administrative 575,104 606,778 624,122
Amortization of initial direct costs and other 11,674 61,569 123,307
Minority interest (income) expense in
consolidated joint ventures (119,656) 52,601 (460,987)
------------- ------------- -------------
Total expenses 5,064,685 3,552,090 6,783,256
------------- ------------- -------------
Net (loss) income $ (2,892,420) $ 2,301,648 $ (1,395,324)
============= ============= =============
Net (loss) income allocable to:
Limited partners $ (2,863,496) $ 2,278,632 $ (1,381,371)
General Partner (28,924) 23,016 (13,953)
------------- ------------- -------------
$ (2,892,420) $ 2,301,648 $ (1,395,324)
============= ============= =============
Weighted average number of limited
partnership units outstanding 607,856 607,856 607,856
============= ============= =============
Net (loss) income per weighted average
limited partnership unit $ (4.71) $ 3.75 $ (2.27)
============= ============= =============
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Consolidated Statement of Changes in Partners' Equity
For the Years Ended December 31, 2001, 2002 and 2003
Limited Partner Distributions
----------------------------
Return of Investment Limited General
Capital Income Partners Partner Total
------- ------ -------- ------- -----
(Per weighted average unit)
Balance at January 1, 2001 $ 11,785,620 $ (406,065) $ 11,379,555
Cash distributions
to partners $ 2.23 $ - (1,356,383) (13,564) (1,369,947)
Net loss (1,381,371) (13,953) (1,395,324)
--------------- ------------- ----------------
Balance at December 31, 2001 9,047,866 (433,582) 8,614,284
Cash distributions
to partners $ .52 $ 3.75 (2,594,024) (26,202) (2,620,226)
Net income 2,278,632 23,016 2,301,648
--------------- -------------- ----------------
Balance at December 31, 2002 8,732,474 (436,768) 8,295,706
Cash distributions
to partners $ 2.67 $ - (1,621,978) (16,383) (1,638,361)
Net loss (2,863,496) (28,924) (2,892,420)
--------------- ------------- ----------------
Balance at December 31, 2003 $ 4,247,000 $ (482,075) $ 3,764,925
=============== ============= ================
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, 2003, 2002 and 2001
2003 2002 2001
---- ---- ----
Cash flows from operating activities:
Net (loss) income $ (2,892,420) $ 2,301,648 $ (1,395,324)
------------- ------------- --------------
Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating activities:
Depreciation 1,599,866 1,553,222 1,124,383
Impairment loss 1,500,000 - -
Rental income - paid directly to lenders by lessees (900,000) (2,200,000) (2,460,000)
(Reversal of) provision for doubtful accounts - (700,000) 2,162,304
Finance income portion of receivables paid directly
to lenders by lessees (41,561) (193,939) (447,632)
Amortization of initial direct costs 11,674 61,569 123,307
Net (gain) loss on sales of equipment (309,286) 14,300 (68,268)
Interest expense on non-recourse financing
paid directly to lenders by lessees 1,129,191 1,206,993 1,687,354
Loss (income) from investments in
unconsolidated joint ventures 86,852 (49,797) 316,863
Minority interest (income) expense in consolidated
joint ventures (119,656) 52,601 (460,987)
Changes in operating assets and liabilities:
Collection of principal - non-financed receivables 1,371,885 2,605,127 7,376,587
Other assets, net 462,791 54,550 232,256
Security deposits, deferred credits and other payables (983,321) (20,521) 109,358
Deferred income 635,154 306,576 -
Due to General Partner and affiliates 65,410 262,854 -
------------- ------------- --------------
Total adjustments 4,508,999 2,953,535 9,695,525
Net cash provided by operating activities 1,616,579 5,255,183 8,300,201
Cash flows from investing activities:
Proceeds from sales of equipment 484,966 2,394,019 738,728
Distributions received from
unconsolidated joint ventures 3,043 - -
Distribution to minority interests in consolidated
joint ventures - (49,056) -
------------- ------------- --------------
Net cash provided by investing activities 488,009 2,344,963 738,728
------------- ------------- --------------
Cash flows from financing activities:
Principal payments on non-recourse debt (1,132,717) (5,597,034) (7,335,811)
Cash distributions to partners (1,638,361) (2,620,226) (1,369,947)
------------- ------------- --------------
Net cash used in financing activities (2,771,078) (8,217,260) (8,705,758)
------------- ------------- --------------
Net (decrease) increase in cash and cash equivalents (666,490) (617,114) 333,171
Cash and cash equivalents at beginning of year 746,808 1,363,922 1,030,751
------------- ------------- --------------
Cash and cash equivalents at end of year $ 80,318 $ 746,808 $ 1,363,922
============== ============= ==============
(continued on next page)
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Statements of Cash Flows (continued)
For the Years Ended December 31, 2003, 2002 and 2001
Supplemental Disclosures of Cash Flow Information
- -------------------------------------------------
For the years ended December 31, 2003, 2002 and 2001, non-cash activities
included the following:
2003 2002 2001
---- ---- ----
Principal and interest on direct finance
receivables paid directly to lenders
by lessees $ 279,009 $ 3,920,065 $ 2,145,767
Rental income on operating
lease receivables paid directly to lender
by lessee 900,000 2,200,000 2,460,000
Principal and interest on non-recourse debt
paid directly by lessees (1,179,009) (6,120,065) (4,605,767)
---------------- --------------- ---------------
$ - $ - $ -
================ =============== ===============
Non-recourse debt assumed by lessees
upon lease termination $ 604,925 $ - $ -
================ =============== ===============
Interest expense on non-recourse
financing accrued or paid directly
to lenders by lessees $ 1,129,191 $ 1,206,993 $ 1,687,354
Other interest paid 31,572 221,867 645,799
---------------- --------------- ---------------
Total interest expense $ 1,160,763 $ 1,428,860 $ 2,333,153
================ =============== ===============
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2003, 2002 and 2001
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 by the General Partner. 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 2003, the Partnership redeemed
2,556 limited partnership units resulting in 607,855.51 limited partnership
units outstanding at December 31, 2003.
The Partnership's reinvestment period ended July 31, 1998 and the
Partnership commenced its disposition period. During the disposition period the
Partnership will 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 will not invest in any additional
finance or lease transactions during the disposition period.
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 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 commencing with each limited partner's admission to the Partnership,
(3) re-invested substantially all undistributed cash from operations and cash
from sales of equipment and financing transactions during the reinvestment
period; and (4) commenced the disposition period and begun to sell the
Partnership's investments and distribute the cash from sales of such investments
to its partners.
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.
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
Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
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. Significant estimates
primarily include the allowance for doubtful accounts and unguaranteed residual
values. In addition, management is required to disclose contingent assets and
contingent liabilities. Actual results could differ from those estimates.
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 Cash Flow Partners
L.L.C. I ("ICON Cash Flow LLC I") and ICON Receivables 1997-B LLC ("1997-B").
All inter-company accounts and transactions have been eliminated in
consolidation. 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.
Cash and Cash Equivalents - Cash and cash equivalents are defined as cash
in banks and highly liquid investments with original maturity dates of three
months or less. The Partnership's cash and cash equivalents are held principally
at one financial institution and at times may exceed insured limits.
Leases and Revenue Recognition - The Partnership accounts for owned
equipment leased to third parties as finance leases, or operating leases, as
appropriate. Initial direct costs are capitalized and are amortized over the
terms of the related leases using the interest or straight-line method, 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 and depreciated on the
straight-line method over the lease term to its estimated residual value at
lease termination and is subject to the Partnership's impairment review policy.
Related lease rentals are recognized on the straight line method over the lease
terms. Billed and uncollected operating lease receivables are included in other
assets.
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.
Credit Risk - Financial instruments that potentially subject the
Partnership to concentrations of credit risk include cash and cash equivalents,
direct finance lease receivables and accounts receivable. The Partnership places
its cash deposits and temporary cash investments with creditworthy, high quality
financial institutions. The concentration of such deposits and temporary cash
investments is not deemed to create a significant risk to the Partnership.
Accounts receivable represent amounts due from lessees in various industries,
related to equipment on operating and direct financing leases.
The Partnership records a provision for doubtful accounts to provide for
estimated credit losses in its portfolio. The allowance for doubtful accounts is
based on an analysis of delinquency, an assessment of overall risk and a review
of historical loss experience. The Partnership's write-off policy is based on an
analysis of the aging of the Partnership's portfolio, a review of the
non-performing receivables and leases, and prior collection experience. An
account is fully reserved for or written-off when the analysis indicates that
the probability of collection of the account is remote.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Impairment - Residual values of the Partnership's asset portfolio are
periodically reviewed to determine whether events or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. The events
or changes in circumstances which generally indicate that the residual value of
an asset may be 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.
An impairment loss is measured and recognized only if the estimated
undiscounted future cash flows of the asset are less than their net book value.
The estimated undiscounted future cash flows are the sum of the estimated
residual value of the asset at the end of the asset's expected holding period
and estimates of undiscounted future rents. The residual value assumes, among
other things, that the asset is utilized normally in an open, unrestricted and
stable market. Short-term fluctuations in the market place are disregarded and
it is assumed that there is no necessity either to dispose of a significant
number of the assets simultaneously, if held in quantity, or to dispose of the
asset quickly. Impairment is measured as the difference between the fair value
of the assets and its carrying value on the measurement date.
Fair Value of Financial Instruments - Statement of Financial Accounting
Standards ("SFAS") No. 107, "Disclosures About Fair Values of Financial
Instruments," requires disclosures about the fair value of financial
instruments, except for lease related assets and liabilities. Separate
disclosure of fair value information as of December 31, 2003 and 2002 with
respect to the Partnership's assets and liabilities is not separately provided
since (i) SFAS No. 107 does not require fair value disclosures of lease
arrangements and (ii) the carrying value of financial assets, other than lease
related investments, and the recorded value of payables approximates market
value.
Income Taxes - No provision for income taxes has been recorded since the
liability for such taxes is that of each of the partners rather than the
Partnership. The Partnership's income tax returns are subject to examination by
the federal and state taxing authorities, and changes, if any, could adjust the
individual income taxes of the partners.
Reclassifications - Certain items from prior years have been reclassified
to conform to the presentation in 2003.
Recent Accounting Pronouncements - In April 2003, the FASB issued SFAS No.
149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities. SFAS No. 149 amends and clarifies accounting for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities under SFAS No. 133. The Statement requires
that contracts with comparable characteristics be accounted for similarly and
clarifies when a derivative contains a financing component that warrants special
reporting in the statement of cash flows. SFAS No. 149 is effective for
contracts entered into or modified after June 30, 2003, except in certain
circumstances, and for hedging relationships designated after June 30, 2003. The
adoption of this standard did not have a material effect on the Partnership's
financial position or results of operations.
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This Statement
establishes standards for how an issuer classifies and measures in its
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
statements of financial position certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances) because that financial instrument embodies an
obligation of the issuer. This Statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003, except for
mandatorily redeemable financial instruments of nonpublic entities. For
nonpublic entities, the effective date of the provisions of SFAS No. 150 that
relate to mandatorily redeemable financial instruments has been deferred until
fiscal years that begin after December 31, 2003. The adoption of this standard
is not expected to have a material effect on the Partnership's financial
position or results of operations.
In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51. In December 2003, the FASB issued a
revision to FIN 46, or Revised Interpretation, to clarify some of the provisions
of FIN 46. FIN 46 provides guidance on how to identify a variable interest
entity, or VIE, and determine when the assets, liabilities, non-controlling
interests, and results of operations of a VIE must be included in a
partnership's consolidated financial statements. A partnership that holds
variable interests in an entity is required to consolidate the entity if the
partnership's interest in the VIE is such that the partnership will absorb a
majority of the VIE's expected losses and/or receive a majority of the entity's
expected residual returns, if any. VIE's created after January 31, 2003, but
prior to January 1, 2004, may be accounted for either based on the original
interpretation or the Revised Interpretations. However, the Revised
Interpretations must be applied no later than the first quarter of fiscal year
2004. VIE's created after January 1, 2004 must be accounted for under the
Revised Interpretations. There has been no material impact to the Partnership's
financial statements and there is no expected impact from the adoption of the
deferred provisions in the first quarter of fiscal year 2004.
The Partnership does not believe that any other recently issued, but not
yet effective, accounting standards will have a material effect on the
Partnership's financial position or results of operations.
3. Joint Ventures
The Partnership and its affiliates formed five joint ventures for the
purpose of acquiring and managing various assets. The Partnership and its
affiliates have identical investment objectives and participate on the same
terms and conditions. The Partnership has a right of first refusal to purchase
the equipment, on a pro-rata basis, if any of the affiliates desire to sell
their interest in the equipment.
Consolidated Joint Ventures
The two joint ventures described below are majority owned and are
consolidated with the Partnership.
ICON Cash Flow Partners L.L.C.
------------------------------
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, for
the purpose of acquiring and managing an aircraft on lease with a U.S. based
commercial airline. The Partnership and L.P. Six acquired interests of 99% and
1%, respectively, in ICON Cash Flow LLC. In 1997, upon the scheduled termination
of the lease, the aircraft was remarketed to Aerovias de Mexico, S.A. de C.V.
("Aeromexico") under a lease that originally expired in October 2002. At that
time, an extension agreement was entered into with Aeromexico which provided for
an initial 15 month rental at $75,000 per month. At the end of the 15 month
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
renewal period, Aeromexico had the option to renew for two additional
twelve-month periods at similar monthly rental rates. Aeromexico has exercised
its first right to renew and the lease expiration was extended to January 2005.
ICON Cash Flow LLC acquired the aircraft, assuming non-recourse debt and
utilizing cash received from the Partnership and L.P. Six. Profits, losses,
excess cash and disposition proceeds of the joint venture are allocated 99% to
the Partnership and 1% to L.P. Six. The Partnership's consolidated financial
statements include 100% of the assets, liabilities, revenues and expenses of
ICON Cash Flow LLC. L.P. Six's investment in ICON Cash Flow LLC is reflected as
minority interest in joint venture on the Partnership's consolidated balance
sheets and as minority interest (income) expense on its consolidated statements
of operations.
ICON Receivables 1997-B LLC
---------------------------
In August 1997, the Partnership and its affiliates, L.P. Six and ICON Cash
Flow Partners L.P. Seven ("L.P. Seven"), formed 1997-B for the purpose of
securitizing the cash flow collections from a portfolio of leases. The
Partnership, L.P. Six and L.P. Seven each contributed cash, equipment leases and
residuals and received a 75.00%, 8.33% and 16.67% interest, respectively, in
1997-B.
The Partnership's consolidated financial statements include 100% of the
assets and liabilities and revenues and expenses of 1997-B. L.P. Six and L.P.
Seven's investments in 1997-B have been recorded as minority interests in
consolidated joint ventures on the consolidated balance sheets and statements of
operations.
Unconsolidated 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 on lease with a U.S. based commercial airline. The
Partnership and L.P. Six acquired interests of 1% and 99%, respectively, in ICON
Cash Flow LLC II. In 1997, upon the scheduled termination of the lease, the
aircraft was remarketed to Aeromexico under a lease that expired in November
2002. At that time, an extension agreement was entered into with Aeromexico
which provided for an initial 15 month rental at $75,000 per month. At the end
of the 15 month renewal period, Aeromexico had the option to renew for two
additional twelve-month periods at similar monthly rental rates. Aeromexio has
exercised its first right to renew and the lease expiration was extended to
January 2005. ICON Cash Flow LLC II acquired the aircraft, assuming non-recourse
debt and utilizing cash received from the Partnership and L.P. Six. Profits,
losses, excess cash and disposition proceeds are allocated 1% to the Partnership
and 99% to L.P. Six. The outstanding non-recourse debt at December 31, 2003 was
$9,043,249.
Information as to the financial position and results of operations of ICON
Cash Flow LLC II as of and for the years ended December 31, 2003 and 2002 is
summarized below:
December 31, 2003 December 31, 2002
----------------- -----------------
Assets $ 12,736,517 $ 15,750,363
=============== ===============
Liabilities $ 9,091,902 $ 8,932,485
=============== ===============
Equity $ 3,644,615 $ 6,817,878
=============== ===============
Partnership's share of equity $ 36,446 $ 68,179
=============== ===============
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
For the Year Ended For the Year Ended
December 31, 2003 December 31, 2002
----------------- -----------------
Net loss $ (3,173,263) $ (345,864)
=============== ===============
Partnership's share of net loss $ (31,733) $ (3,459)
=============== ===============
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 which was on lease to Continental Airlines,
Inc. The aircraft is a 1976 McDonnell Douglas DC-10-30 with an original cost of
$11,429,751. The original lease, which was accounted for as a leveraged lease,
expired on April 30, 2003. Effective May 1, 2003, the aircraft was re-leased to
World Airlines, Inc. on a power-by-the-hour basis. 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.
Information as to the financial position and results of operations of ICON
Cash Flow LLC III as of the years ended December 31, 2003 and 2002 is summarized
below:
December 31, 2003 December 31, 2002
----------------- -----------------
Assets $ 2,287,230 $ 5,337,603
=============== ===============
Liabilities $ - $ -
=============== ================
Equity $ 2,287,230 $ 5,337,603
=============== ===============
Partnership's share of equity $ 22,872 $ 53,376
=============== ===============
For the Year Ended For the Year Ended
December 31, 2003 December 31, 2002
----------------- -----------------
Net (loss) income $ (2,746,103) $ 483,785
=============== ===============
Partnership's share of net (loss) income $ (27,461) $ 4,838
=============== ===============
Distributions $ 304,270 $ -
=============== ===============
Partnership's share of distributions $ 3,043 $ -
=============== ===============
ICON Receivables 1997-A LLC
- ---------------------------
In March and September 1997, the Partnership and affiliates, 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 LLC ("1997-A") for the purpose of securitizing the cash flow
collections from a portfolio of leases. As of December 31, 2003, the
Partnership, Series D, L.P. Six and L.P. Seven own 31.19%, 17.81%, 31.03% and
19.97% interests, respectively, in 1997-A.
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
1997-A as of and for the years ended December 31, 2003 and 2002 is summarized
below:
December 31, 2003 December 31, 2002
---------------- -----------------
Assets $ 810,802 $ 694,761
=============== ===============
Liabilities $ 595,106 $ 390,389
=============== ===============
Equity $ 215,696 $ 304,372
=============== ===============
Partnership's share of equity $ 67,276 $ 94,934
=============== ===============
For the Year Ended For the Year Ended
December 31, 2003 December 31, 2002
----------------- -----------------
Net (loss) income $ (88,676) $ 155,235
=============== ===============
Partnership's share of
net (loss) income $ (27,658) $ 48,418
=============== ===============
4. Receivables Due in Installments
Non-cancelable minimum amounts due on finance leases and financings are as
follows:
Year Ending Finance
December 31, Leases Financings Total
------------ ------ ---------- -----
2004 $ 1,441,265 $ 2,446,433 $ 3,887,698
2005 24,847 - 24,847
---------------- ------------- ------------
$ 1,466,112 $ 2,446,433 $ 3,912,545
================ ============= =============
During 2003, equipment recorded as a finance lease with a net book value of
$1,489,239 was reclassified to equipment held for sale.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
The allowance for doubtful accounts related to the investments in finance
leases and financings consisted of the following:
Finance
Leases Financings Total
------ ---------- -----
Balance at January 1, 2001 $ 1,287,212 $ 1,235,231 $ 2,522,443
Provision for doubtful accounts 775,248 1,387,056 2,162,304
Accounts written-off or recovered (174,142) (1,407,730) (1,581,872)
-------------- ------------- --------------
Balance at December 31, 2001 1,888,318 1,214,557 3,102,875
(Reversal of) provision for doubtful accounts (1,400,153) 700,153 (700,000)
Accounts written-off or recovered 78,386 (511,524) (433,138)
-------------- ------------ -------------
Balance at December 31, 2002 566,551 1,403,186 1,969,737
(Reversal of) provision for doubtful accounts (2,577) 2,577 -
Accounts written-off or recovered 14,417 - 14,417
-------------- ------------- --------------
Balance at December 31, 2003 $ 578,391 $ 1,405,763 $ 1,984,154
============== ============= ==============
5. Investment in Operating Leases
The investment in operating leases at December 31, 2003, 2002 and 2001
consisted of the following:
2003 2002 2001
---- ---- ----
Equipment at cost, beginning of year $ 21,554,842 $ 21,554,842 $ 20,707,984
Impairment loss (1,500,000) - -
Transfer from finance lease residual - - 846,858
Dispositions (846,858) - -
-------------- --------------- ---------------
Equipment at cost, end of year 19,207,984 21,554,842 21,554,842
--------------- --------------- ---------------
Accumulated depreciation
beginning of year (7,261,999) (5,708,777) (4,584,394)
Depreciation expense (1,599,866) (1,553,222) (1,124,383)
Accumulated depreciation, dispositions 504,014 - -
--------------- --------------- ---------------
Accumulated depreciation, end of year (8,357,851) (7,261,999) (5,708,777)
--------------- --------------- ---------------
Investment in operating leases, end of year $ 10,850,133 $ 14,292,843 $ 15,846,065
=============== =============== ===============
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
During 2003 the Partnership reduced the salvage value on the Aeromexico
aircraft. An impairment loss of $1,500,000 was recorded as a result of an
appraisal which indicated a lower fair market value at lease termination than
initially estimated.
The lease with Aeromexico (as discussed in Note 3) accounted for
approximately 58% of the Partnership's rental and finance income during the year
ended December 31, 2003.
Non-cancelable minimum rental amounts due on operating leases are as
follows:
Year Ending
December 31, Amount
------------ ------
2004 $ 900,000
2005 75,000
---------------
$ 975,000
===============
6. Notes Payable
The non-recourse notes payable consist of:
(i) At December 31, 2003 and 2002, notes payable totaling $158,749 and
$1,245,283, respectively, bearing interest at 6.19% per annum and payable
from receivables related to the portfolio of leases that secure the debt,
and
(ii) At December 31, 2003 and 2002, $9,406,301 and $10,107,227, respectively, of
other non-recourse notes bearing interest at rates ranging from 7.48% to
11.83%, of which $9,383,441 and $9,186,243, respectively, is secured by the
aircraft on lease with Aeromexico. The note matured in January 2004 and the
Partnership is currently negotiating an extension of the maturity date
through the extended lease term of January 2005.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
7. 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, 2001, 2002 and 2003
are as follows:
Charged to
Operations
----------
Management fees $ 537,237
Administrative expense reimbursements 339,737
-------------
Year ended December 31, 2001 $ 876,974
=============
Management fees $ 354,788
Administrative expense reimbursements 194,272
-------------
Year ended December 31, 2002 $ 549,060
=============
Management fees $ 208,593
Administrative expense reimbursements 128,341
-------------
Year ended December 31, 2003 $ 336,934
=============
In accordance with the terms of the Management Agreement, the Partnership
pays the General Partner management fees based on a percentage of rentals
received either directly by the Partnership or through joint ventures (ranging
from 1% to 7%). In addition, the General Partner is reimbursed for
administrative expenses incurred by it in connection with the Partnership's
operations.
At December 31, 2003 amounts due to General Partner and affiliates of
$594,982 consisted of approximately $43,000 due to the General Partner for
management fees and administrative expense reimbursements and approximately
$551,982 due to affiliates that relates to rents received on behalf of such
affiliates. . At December 31, 2002, there were no liabilities to the General
Partner and amounts due to affiliates was $529,572.
The Partnership has investments in five joint ventures with other
partnerships sponsored by the General Partner.
8. Interest income and other
Interest income and other was $398,275, $2,354,817, and $103,589,
respectively, for the years ended December 31, 2003, 2002 and 2001. This
category captures bank interest as well as any other miscellaneous income. For
the year ended December 31, 2003 miscellaneous income included, in part, a
$198,241 revised estimate of residual sharing values as well as revised
estimates of other liabilities. For the year ended December 31, 2002
miscellaneous income included a $2,017,763 revised estimate of residual sharing
values.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
9. Tax Information (Unaudited)
The following table reconciles net (loss) income for financial statement
reporting purposes to loss for federal income tax reporting purposes for the
years ended December 31:
2003 2002 2001
---- ---- ----
Net (loss) income for financial statement
reporting purposes $ (2,892,420) $ 2,301,648 $ (1,395,324)
Differences due to:
Direct finance leases 492,161 (141,396) 1,818,815
Depreciation and amortization 2,608,644 (841,698) (2,839,850)
(Recovery) provision for losses (1,814,907) (700,000) 580,432
Gain (loss) on sales of equipment 341,527 3,872 (543,376)
Other 554,888 (1,767,921) (162,269)
-------------- -------------- ---------------
Partnership loss for federal income
tax reporting purposes $ (710,107) $ (1,145,495) $ (2,541,572)
============== ============== ===============
As of December 31, 2003, the partners' capital accounts for financial
statement reporting purposes totaled $3,764,925 compared to the partners'
capital accounts for federal income tax reporting purposes of $4,572,065
(unaudited). The difference arises primarily from sales expenses and commissions
reported as a reduction in the partners' capital for financial statement
reporting purposes but not for federal income tax reporting purposes, offset by
temporary differences related to direct finance leases, depreciation and
amortization, recovery for losses and gain (loss) on sales of equipment.
10. Selected Quarterly Financial Data (Unaudited)
The following table is a summary of selected financial data by quarter for
the years ended December 31, 2003 and 2002:
For the Quarter Ended
---------------------
March 31, June 30, September 30, December 31,
--------- -------- ------------- ------------
2003
Revenues $ 1,051,615 $ 365,481 $ 343,652 $ 411,517
============== ============= ============= ==============
Net income (loss) allocable to
limited partners $ 14,052 $ (505,165) $ (469,935) $ (1,902,448)(1)
============== ============= ============= ==============
Net income (loss) per weighted
average limited partnership unit $ .02 $ (.82) $ (.77) $ (3.14)
============== ============= ============= ==============
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
2002
Revenues $ 962,813 $ 926,660 $ 740,463 $ 3,223,802
============== ============= ============= =============
Net (loss) income allocable to
limited partners $ (351,321) $ (489,909) $ 354,629(2)$ 2,765,233(3)
============== ============= ============= =============
Net (loss) income per weighted
average limited partnership unit $ (.58) $ (.81) $ .58 $ 4.56
============== ============= ============= =============
(1) In the fourth quarter of 2003 the Partnership recorded an impairment of
$1,500,000 based upon a recent appraisal of the Aeromexico aircraft.
(2) In the third quarter of 2002 the Partnership reversed the provision for bad
debts by $700,000.
(3) In the fourth quarter of 2002 the Partnership recorded a one-time
adjustment of $2,017,763, due to a revised estimate of residual sharing
values, which is captured in the category interest income and other.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
The information required by Item 304 of Regulation S-K was filed as part of
the Partnership's Form 8-K filed on February 5, 2003.
Item 9A. Control and Procedures
----------------------
The Partnership carried out an evaluation, under the supervision and with
the participation of management of ICON Capital Corp., the Manager of the
Partnership, including the Chief Executive Officer and the Principal Financial
Officer, of the effectiveness of the design and operation of the Partnership's
disclosure controls and procedures as of the end of the period covered by this
report pursuant to the Securities Exchange Act of 1934. Based upon the
evaluation, the Chief Executive Officer and the Principal Financial Officer
concluded that the Partnership's disclosure controls and procedures were
effective.
There were no significant changes in the Partnership's internal control
over financial reporting during the Partnership's fourth fiscal quarter that
have materially affected, or are likely to materially affect, the Partnership's
internal control over financial reporting.
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 100 Fifth Avenue, New York,
New York 10011, and its telephone number is (212) 418-4700. 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.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
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
Beaufort J.B. Clarke, age 57, 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 43, 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 50, 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 19 years of senior management experience in the leasing business.
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, 2003, 2002 and 2001.
Entity Capacity Type of Compensation 2003 2002 2001
------ -------- -------------------- ---- ---- ----
ICON Capital Corp. General Partner Management fees $ 208,593 $ 354,788 $ 537,237
ICON Capital Corp. General Partner Administrative expense
reimbursements 128,341 194,272 339,737
--------------- -------------- -------------
$ 336,934 $ 549,060 $ 876,974
=============== ============== =============
In accordance with the terms of the Management Agreement, the Partnership
pays the General Partner management fees based on a percentage of rentals
received either directly by the Partnership or through joint ventures (ranging
from 1% to 7%). In addition, the General Partner is reimbursed for expenses
incurred by it in connection with the Partnership's operations. The General
Partner also owns a 1% interest in the profits and distributions of the
Partnership.
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.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
(b) As of March 30, 2004, Directors and Officers of the General Partner do not
own any equity securities of the Partnership.
(c) The General Partner owns the equity securities of the Partnership set forth
in the following table:
Title Amount Beneficially Percent
of Class Owned of Class
-------- ----- --------
General Partner Represents initially a 1% and potentially a 100%
Interest 10% interest in the Partnership's income, gain
and loss deductions.
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.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
See Item 11 for a discussion of the Partnership's related party
transactions.
See Notes 3 and 7 to the consolidated financial statements for a discussion
of the Partnership's related party transactions.
Item 14. Principal Accounting Fees and Services
2003 2002 Description
---- ---- -----------
Audit fees $ 24,000 $ - Audit and review
Audit related fees - -
Tax fees 1,000 - Tax compliance
All other fees - -
----------- --------
Total $ 25,000 $ -
=========== ========
PART IV
Item 15. 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 the information required to be set forth therein is included
in the consolidated financial statements or notes thereto.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
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)
(iv) Unconsolidated Joint Venture Financial Statements ICON
Receivables 1997-A LLC - as of and for the years ended December
31, 2002 and 2001
(b) Reports on Form 8-K
None
(c) Exhibits
31.1 Rule 13a-14(a)/15d-14(a) certifications
31.2 Rule 13a-14(a)/15d-14(a) certifications
32.1 Certification of Chairman and Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Executive Vice President and Principal Financial
and Accounting Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
ICON Cash Flow Partners, L.P., Series E
(A Delaware Limited Partnership)
December 31, 2003
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 30, 2004 /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 30, 2004 /s/ Beaufort J.B. Clarke
---------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Date: March 30, 2004 /s/ Paul B. Weiss
---------------------------------
Paul B. Weiss
President and Director
Date: March 30, 2004 /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.
Exhibit 31.1
Principal Executive Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
Certifications - 10-K
---------------------
I, Beaufort J.B. Clarke, certify that:
1. I have reviewed this annual report on Form 10-K of ICON Cash Flow Partners
L.P. Series E;
2. Based on my knowledge, this annual report does not contain any untrue
statements of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this annual report our conclusions
about the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this annual report based on such
evaluation; and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the board of directors of the Corporate
Manager (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control, are reasonably likely to materially
affect the Partnership ability to record, process, summarize and
report financial information and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting any corrective actions with regard
to significant deficiencies and material weaknesses.
Dated: March 30, 2004
/s/ Beaufort J.B. Clarke
- -----------------------------
Beaufort J. B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
sole General Partner of ICON Cash Flow Partners L.P. Series E
Exhibit 31.2
Principal Executive Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
Certifications - 10-K
---------------------
I, Thomas W. Martin, certify that:
1. I have reviewed this annual report on Form 10-K of ICON Cash Flow Partners
L.P. Series E;
2. Based on my knowledge, this annual report does not contain any untrue
statements of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this annual report our conclusions
about the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this annual report based on such
evaluation; and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the board of directors of the Corporate
Manager (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control, are reasonably likely to materially
affect the Partnership ability to record, process, summarize and
report financial information and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting any corrective actions with regard
to significant deficiencies and material weaknesses.
Dated: March 30, 2004
/s/ Thomas W. Martin
- ----------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer
of the General Partner of the Registrant)
ICON Capital Corp.
sole General Partner of ICON Cash Flow Partners L.P. Series E
EXHIBIT 32.1
Certification of Chief Executive Officer Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
(18 U.S.C. 1350)
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
E, in connection with the Annual Report of ICON Cash Flow Partners L.P. Series
E. (the "Partnership") on Form 10-K for the year ended December 31, 2003, as
filed with the Securities and Exchange Commission on the date hereof (the
"Annual Report") certify, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that to the best of my knowledge and belief:
(1) the Annual Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m);
and
(2) the information contained in the Annual Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership
Dated: March 30, 2004
/s/ Beaufort J.B. Clarke
-------------------------------------------------------
Beaufort J.B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
sole General Partner of ICON Cash Flow Partners L.P. Series E
EXHIBIT 32.2
Certification of Chief Executive Officer Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
(18 U.S.C. 1350)
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 E, in connection with the Annual Report of ICON Cash
Flow Partners L.P. Series E. (the "Partnership") on Form 10-K for the year ended
December 31, 2003, as filed with the Securities and Exchange Commission on the
date hereof (the "Annual Report") certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
(1) the Annual Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m);
and
(2) the information contained in the Annual Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership
Dated: March 30, 2004
/s/ Thomas W. Martin
-------------------------------------------------------
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 E