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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 2000
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or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the transition period from to
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Commission File Number 33-36376
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ICON Cash Flow Partners L.P. Six
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3723089
- ------------------------------------ -----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
111 Church Street, White Plains, New York 10601-1505
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 993-1700
-----------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class Name of each exchange on which registered
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interests
- --------------------------------------------------------------------------------
(Title of class)
- --------------------------------------------------------------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
TABLE OF CONTENTS
Item Page
PART I
1. Business 3-4
2. Properties 4
3. Legal Proceedings 5
4. Submission of Matters to a Vote of Security Holders 5
PART II
5. Market for the Registrant's Securities and Related
Security Holder Matters 5
6. Selected Consolidated Financial and Operating Data 6
7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
8. Consolidated Financial Statements and Supplementary Data 10-32
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 33
PART III
10. Directors and Executive Officers of the Registrant's
General Partner 33-34
11. Executive Compensation 35
12. Security Ownership of Certain Beneficial Owners
and Management 35
13. Certain Relationships and Related Transactions 35
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 36
SIGNATURES 37
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
PART I
Item 1. Business
General Development of Business
ICON Cash Flow Partners L.P. Six (the "Partnership") was formed on July 8,
1993 as a Delaware limited partnership. The Partnership commenced business
operations on its initial closing date, March 31, 1994, with the admission of
16,537.73 limited partnership units at $100 per unit representing $1,653,773 of
capital contributions. Between April 1, 1994 and December 31, 1994, 111,166.37
additional units were admitted representing $11,116,637 of capital contributions
and from January 1, 1995 to November 8, 1995 (the final closing date),
256,153.02 additional units were admitted, bringing the final admission to
383,857.12 units totaling $38,385,712 in capital contributions. Between 1995 and
1999 the Partnership redeemed 5,488.65 limited partnership units. In 2000, the
Partnership redeemed 200 units leaving 378,168.47 limited partnership units
outstanding at December 31, 2000. The sole general partner is ICON Capital Corp.
(the "General Partner").
The Partnership's reinvestment period ended November 11, 2000. The
disposition period began on November 12, 2000. During the disposition period the
Partnership has and will continue to distribute substantially all distributable
cash from operations and equipment sales to the partners and begin the orderly
termination of its operations and affairs. The Partnership has not and will not
invest in any additional finance or lease transactions during the disposition
period. During the disposition period the Partnership expects to recover, at a
minimum, the carrying value of its assets.
Segment Information
The Partnership has only one operating segment: the business of acquiring
equipment subject to leases with companies that the Partnership believes to be
creditworthy.
Narrative Description of Business
The Partnership is an equipment leasing fund. The principal 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 short-term, high-yield
lease and financing transactions, (2) made monthly cash distributions to its
limited partners from cash from operations, commencing with each limited
partner's admission to the Partnership; (3) re-invested substantially all
undistributed cash from operations and cash from sales in additional equipment
and financing transactions during the reinvestment period; and (4) begun to sell
the Partnership's investments and distribute the cash from sales of such
investments to its limited partners.
The equipment leasing industry is highly competitive. In initiating its
leasing transactions, the Partnership competed with leasing companies,
manufacturers that lease their products directly, equipment brokers and dealers
and financial institutions, including commercial banks and insurance companies.
Many competitors are larger than the Partnership and have greater financial
resources.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
The Partnership has no direct employees. The General Partner has full and
exclusive discretion in management and control of the Partnership.
Lease and Financing Transactions
During the year ended December 31, 2000 and prior to the end of its
Reinvestment Period, the Partnership purchased a portfolio of operating lease
equipment with a value of $7,316,239. During 1999 the Partnership did not
purchase any equipment, leases or financing agreements. Included in the summary
of equipment cost by category below is 100% of the equipment cost acquired by a
joint venture in which the Partnership has a 99% interest. The Partnership
accounts for this investment by consolidating 100% of the assets and liabilities
of the joint venture and reflecting, as a liability, the related minority
interest. The equipment purchased by six other joint ventures in which the
Partnership has a less than 50% interest are not included in this table. A
summary of the portfolio equipment cost by category held at December 31, 2000
and 1999 is as follows:
December 31, 2000 December 31, 1999
----------------------- -----------------------
Category Cost Percent Cost Percent
- -------- ---- ------- ---- -------
Aircraft ....................... $19,100,646 39.0% $19,100,646 39.5%
Manufacturing & production ..... 12,919,665 26.4 14,458,256 29.9
Telecommunications ............. 8,786,280 17.9 10,497,000 21.7
Transport ...................... 4,526,549 9.3 -- --
Construction ................... 1,549,987 3.2 702,731 1.5
Computer systems ............... 1,188,438 2.4 1,757,724 3.6
Furniture and fixtures ......... 290,080 0.6 290,080 0.6
Restaurant equipment ........... 229,637 0.4 370,218 0.8
Printing ....................... 131,452 0.3 629,311 1.3
Material handling .............. 129,488 0.3 263,057 0.6
Miscellaneous .................. 82,303 0.2 251,290 0.5
----------- ----- ----------- -----
$48,934,525 100.0% $48,320,313 100.0%
=========== ===== =========== =====
The Partnership has one lease which individually represents greater than
10% of the total portfolio equipment cost at December 31, 2000. The lease is
with Aerovias de Mexico, S.A. de C.V. ("Aero Mexico"). The underlying equipment
is an aircraft and the asset represented 39.0% of the total portfolio equipment
cost at December 31, 2000.
Item 2. Properties
The Partnership neither owns nor leases office space or equipment for the
purpose of managing its day-to-day affairs.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
Item 3. Legal Proceedings
-----------------
The Partnership is not a party to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of 2000.
PART II
Item 5. Market for the Registrant's Securities and Related Security Holder
Matters
-----------------------------------------------------------------------
The Partnership's limited partnership interests are not publicly traded nor
is there currently a market for the Partnership's limited partnership units. It
is unlikely that any such market will develop.
Number of Equity Security Holders
Title of Class as of December 31,
2000 1999
---- ----
Limited Partners 2,267 2,283
General Partner 1 1
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
Item 6. Selected Consolidated Financial and Operating Data
--------------------------------------------------
Year Ended December 31,
--------------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total revenue $5,893,091 $5,036,158 $6,162,370 $6,510,932 $9,576,756
========== ========== ========== ========== ==========
Net income (loss) $2,289,451 $1,221,020 $ 467,639 $ 35,620 $ (366,967)
========== ========== ========== ========== ==========
Net income (loss) allocable to
limited partners $2,266,556 $1,208,810 $ 462,963 $ 35,264 $ (363,297)
========== ========== ========== ========== ==========
Net income (loss) allocable
to the General Partner $ 22,895 $ 12,210 $ 4,676 $ 356 $ (3,670)
========== ========== ========== ========== ==========
Weighted average limited
partnership units outstanding 378,283 379,187 379,984 381,687 383,196
========== ========== ========== ========== ==========
Net income (loss) per weighted
average limited partnership unit $ 5.99 $ 3.19 $ 1.22 $ .09 $ (.95)
========== ========== ========== ========== ==========
Distributions to limited partners $3,858,906 $4,075,766 $4,085,189 $4,102,940 $4,119,354
========== ========== ========== ========== ==========
Distributions to the General Partner $ 38,995 $ 41,178 $ 41,261 $ 41,444 $ 41,613
========== ========== ========== ========== ==========
December 31,
------------------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total assets $36,337,813 $38,616,693 $44,487,621 $54,837,228 $81,805,142
=========== =========== =========== =========== ===========
Partners' equity $13,334,764 $14,951,046 $17,884,454 $21,605,338 $25,864,652
=========== =========== =========== =========== ===========
The above selected consolidated financial data should be read in
conjunction with the consolidated financial statements and related notes
appearing elsewhere in this report.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
Item 7. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
The Partnership's portfolio consisted of a net investment in finance
leases, operating leases, financings and equity investments in joint ventures
representing 28%, 64%, 0% and 8% of total investments at December 31, 2000,
respectively, and 45%, 45%, 1% and 9% of total investments at December 31, 1999,
respectively.
Results of Operations
Years Ended December 31, 2000 and 1999
The Partnership purchased, in the year 2000, equipment under operating
leases with an initial cost of $7,316,239. There were no equipment purchases
during 1999.
Revenues for the year ended December 31, 2000 were $5,893,091, representing
an increase of $856,933 from 1999. The increase in revenues resulted primarily
from increases in finance income of $587,996, gain on sales of equipment of
$150,925, interest income and other of $77,636, and income from investments in
joint ventures of $32,876. Finance income increased primarily as a result of
renewal rent payments received on certain leases which were in excess of the
remaining residual values of those leases. The increase in gain on sales of
equipment resulted primarily from one sale transaction in 2000 which generated a
gain of approximately $417,000. Interest income and other increased due to an
increase in the average cash balance from 1999 to 2000. The increase in income
from investments in joint ventures resulted primarily from the recognition in
2000 of income realized upon the disposition of the interest in the Rowan joint
venture and the recognition of a full year of income in 2000 from the AIC Trust
in which the Partnership invested in the fourth quarter of 1999.
Expenses for the year ended December 31, 2000 were $3,603,640, representing
a decrease of $211,498 from 1999. The decrease in expenses was primarily due to
decreases in management fees - General Partner of $208,503, amortization of
initial direct costs of $132,822, and administrative expense reimbursements -
General Partner of $113,410. These decreases were partially offset by an
increase in interest expense of $242,248. The decreases in management fees -
General Partner, amortization of initial direct costs and administrative expense
reimbursements - General Partner were a result of a decrease in the average size
of the Partnership's finance lease portfolio from 1999 to 2000. The increase in
interest expense was primarily the result of a higher average debt level in 2000
as compared to 1999.
Net income for the years ended December 31, 2000 and 1999 was $2,289,451
and $1,221,020, respectively. The net income per weighted average limited
partnership unit was $5.99 and $3.19 for 2000 and 1999, respectively.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
Years Ended December 31, 1999 and 1998
For the year ended December 31, 1999, the Partnership did not make any
equipment purchases. For the year ended December 31, 1998, the Partnership
purchased subject to lease equipment with an initial cost of $6,901,428
involving 11 lessees.
Revenues for the year ended December 31, 1999 were $5,036,158, representing
a decrease of $1,126,212 from 1998. The decrease in revenues was due to a
decrease in finance income of $185,113, a decrease in income from leveraged
lease of $213,841, a decrease in income from investments in joint ventures of
$296,483, a decrease in gain on sales of equipment of $396,426 and a decrease in
interest income and other of $58,363. These decreases were partially offset by
an increase in rental income of $24,014 from 1998. The decrease in finance
income resulted from the decrease in the average size of the finance lease
portfolio from 1998 to 1999. Income from the leveraged lease decreased due to
the Partnership's 1998 termination of its lease with Airbus Industrie
("Airbus"). Income from the investments in joint ventures decreased as a result
of one of the underlying joint venture's increasing its provision for bad debts.
Interest income and other decreased due to a decrease in the average cash
balance.
Expenses for the year ended December 31, 1999 were $3,815,138, representing
a decrease of $1,879,593 from 1998. The decrease in expenses was due to a
decrease in amortization of initial direct costs of $718,353, a decrease in
provision for doubtful accounts of $52,997, a decrease in interest expense of
$478,510, a decrease in management fees of $294,521, a decrease in
administrative expense reimbursements of $139,822, a decrease in depreciation
expense of $111,594, and a decrease in general and administrative expense of
$86,383. Interest expense decreased due to a decrease in the average debt
outstanding from 1998 to 1999. Amortization of initial direct costs, management
fees, administrative expense reimbursements and general and administrative
expense decreased due to a decrease in the average size of the portfolio from
1998 to 1999. As a result of the ongoing analysis of delinquency trends and loss
experience, and an assessment of overall credit risk, the Partnership determined
that no additional provision for doubtful accounts was required for the year
ended December 31, 1999.
Net income for the years ended December 31, 1999 and 1998 was $1,221,020
and $467,639, respectively. The net income per weighted average limited
partnership unit was $3.19 and $1.22 for 1999 and 1998, respectively.
Liquidity and Capital Resources
The Partnership's reinvestment period ended November 11, 2000. The
disposition period began on November 12, 2000. 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.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
The Partnership's primary sources of funds for the years ended December 31,
2000, 1999 and 1998 were net cash provided by operations of $1,771,279,
$2,684,592 and $3,543,778, respectively, proceeds from sales of equipment of
$1,708,805, $6,120,773 and $4,473,161, respectively and, in 2000, borrowings of
$11,752,147 and $3,218,916 of additional borrowings assumed on equipment
purchases. These funds were used to fund cash distributions to partners, make
payments on borrowings and, in 1998 and 2000, to fund equipment acquisitions.
The Partnership intends to fund its future debt servicing and cash distributions
requirements utilizing cash from operations and proceeds from sales of
equipment.
Cash distributions to limited partners for the years ended December 31,
2000 and 1999, which were paid monthly, totaled $3,858,906 and $4,075,766,
respectively, of which $2,266,556 and $1,208,810 were investment income and
$1,592,350 and $2,866,956 was a return of capital, respectively. The monthly
annualized cash distribution rate to limited partners in 2000 and 1999 was
10.20% and 10.75%, respectively, of which 5.99% and 3.19% were investment income
and 4.21% and 7.56% were a return of capital, respectively.
As of December 31, 2000, except as noted above, there were no known trends
or demands, commitments, events or uncertainties which are likely to have a
material effect on liquidity. As cash is realized from operations and sales of
equipment, the Partnership will distribute substantially all available cash,
after retaining sufficient cash to meet its reserve requirements and recurring
obligations.
Item 7a. Qualitative and Quantitative Disclosures About Market Risk
The Partnership is exposed to certain market risks, primarily changes in
interest rates. 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.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
Item 8. Consolidated Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Page Number
Independent Auditors' Report 12
Consolidated Balance Sheets as of December 31, 2000 and 1999 13
Consolidated Statements of Operations for the Years Ended
December 31, 2000, 1999 and 1998 14
Consolidated Statements of Changes in Partners' Equity for
the Years Ended December 31, 2000, 1999 and 1998 15
Consolidated Statements of Cash Flows for the Years
Ended December 31, 2000, 1999 and 1998 16-18
Notes to Consolidated Financial Statements 19-32
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Financial Statements
December 31, 2000
(With Independent Auditors' Report Thereon)
INDEPENDENT AUDITORS' REPORT
The Partners
ICON Cash Flow Partners L.P. Six:
We have audited the accompanying consolidated balance sheets of ICON Cash Flow
Partners L.P. Six (a Delaware limited partnership) as of December 31, 2000 and
1999, and the related consolidated statements of operations, changes in
partners' equity and cash flows for each of the years in the three-year period
ended December 31, 2000. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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.
As discussed in Note 1, the Partnership's reinvestment period ended November 11,
2000. The disposition period began on November 12, 2000. During the disposition
period the Partnership has and will continue to distribute substantially all
distributable cash from operations and equipment sales to the partners and begin
the orderly termination of its operations and affairs.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ICON Cash Flow
Partners L.P. Six as of December 31, 2000 and 1999, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States of America.
/s/ KPMG LLP
----------------------------------------
KPMG LLP
March 28, 2001
New York, New York
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Balance Sheets
December 31,
2000 1999
---- ----
Assets
Cash $ 838,897 $ 3,991,527
------------ ------------
Investment in finance leases
Minimum rents receivable 7,289,853 11,854,142
Estimated unguaranteed residual values 3,829,489 6,186,947
Initial direct costs 61,740 104,184
Unearned income (1,304,117) (2,586,265)
Allowance for doubtful accounts (277,068) (266,670)
------------ ------------
9,599,897 15,292,338
Investment in operating leases
Equipment, at cost 26,416,885 19,100,646
Accumulated depreciation (4,217,602) (3,592,403)
------------ ------------
22,199,283 15,508,243
Investment in financings
Receivables due in installments 20,340 134,766
Initial direct costs -- 334
Unearned income (445) (6,008)
Allowance for doubtful accounts (4,018) (4,018)
------------ ------------
15,877 125,074
------------ ------------
Investments in unconsolidated joint ventures 3,011,244 3,072,508
------------ ------------
Other assets 672,615 627,003
------------ ------------
Total assets $ 36,337,813 $ 38,616,693
============ ============
Liabilities and Partners' Equity
Note payable - non-recourse - secured financing $ -- $ 103,145
Notes payable - non-recourse 21,194,679 20,677,786
Security deposits and deferred credits 1,463,719 2,700,125
Accounts payable - other 278,253 125,530
Minority interest in joint venture 66,398 59,061
------------ ------------
23,003,049 23,665,647
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (194,393) (178,293)
Limited partners (378,168.47 and 378,368.47
units outstanding, $100 per unit original issue price) 13,529,157 15,129,339
------------ ------------
Total partners' equity 13,334,764 14,951,046
------------ ------------
Total liabilities and partners' equity $ 36,337,813 $ 38,616,693
============ ============
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Operations
For the Years Ended December 31,
2000 1999 1998
---- ---- ----
Revenues
Rental income $2,467,500 $2,460,000 $2,435,986
Finance income 2,558,796 1,970,800 2,155,913
Gains on sales of equipment 589,547 438,622 835,048
Income from leveraged lease -- -- 213,841
Income from investments in joint ventures 89,534 56,658 353,141
Interest income and other 187,714 110,078 168,441
---------- ---------- ----------
Total revenues 5,893,091 5,036,158 6,162,370
---------- ---------- ----------
Expenses
Interest 1,928,625 1,686,377 2,164,887
Management fees - General Partner 466,522 675,025 969,546
Amortization of initial direct costs 42,778 175,600 893,953
Depreciation 625,199 625,199 736,793
Administrative expense reimbursements
- General Partner 232,159 345,569 485,391
General and administrative 291,257 298,031 384,414
Provision for doubtful accounts 9,763 -- 52,997
Minority interest expense 7,337 9,337 6,750
---------- ---------- ----------
Total expenses 3,603,640 3,815,138 5,694,731
---------- ---------- ----------
Net income $2,289,451 $1,221,020 $ 467,639
========== ========== ==========
Net income allocable to:
Limited partners $2,266,556 $1,208,810 $ 462,963
General Partner 22,895 12,210 4,676
---------- ---------- ----------
$2,289,451 $1,221,020 $ 467,639
========== ========== ==========
Weighted average number of limited
partnership units outstanding 378,283 379,187 379,984
========== ========== ==========
Net income per weighted average
limited partnership unit $ 5.99 $ 3.19 $ 1.22
========== ========== ==========
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Years Ended December 31, 2000, 1999 and 1998
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
------- ------ -------- ------- -----
(Per weighted average unit)
Balance at
December 31, 1997 $21,718,078 $(112,740) $21,605,338
-
Cash distributions
to partners $ 9.53 $ 1.22 (4,085,189) (41,261) (4,126,450)
Limited partnership units
redeemed (1,324.92 units) (62,073) - (62,073)
Net income 462,963 4,676 467,639
----------- --------- -----------
Balance at
December 31, 1998 18,033,779 (149,325) 17,884,454
Cash distributions
to partners $ 7.56 $ 3.19 (4,075,766) (41,178) (4,116,944)
Limited partnership units
redeemed (984.73 units) (37,484) - (37,484)
Net income 1,208,810 12,210 1,221,020
----------- --------- -----------
Balance at
December 31, 1999 15,129,339 (178,293) 14,951,046
Cash distributions
to partners $ 4.21 $ 5.99 (3,858,906) (38,995) (3,897,901)
Limited partnership units
redeemed (200 units) (7,832) - (7,832)
Net income 2,266,556 22,895 2,289,451
----------- --------- -----------
Balance at
December 31, 2000 $13,529,157 $(194,393) $13,334,764
=========== ========= ===========
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2000, 1999 and 1998
2000 1999 1998
---- ---- ----
Cash flows from operating activities:
Net income $ 2,289,451 $ 1,221,020 $ 467,639
----------- ----------- -----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 625,199 625,199 736,793
Provision for doubtful accounts 9,763 -- 52,997
Rental income - paid directly to lenders by lessees (2,467,500) (2,460,000) (2,435,986)
Finance income portion of receivables paid directly
to lenders by lessees (1,244,276) (1,665,251) (1,721,166)
Amortization of initial direct costs 42,778 175,600 893,953
Gains on sales of equipment (589,547) (438,622) (835,048)
Income from investments in joint ventures (89,534) (56,658) (353,141)
Interest expense on non-recourse financing
paid directly by lessees 1,850,592 1,652,894 2,041,550
Income from leveraged lease -- -- (213,841)
Minority interest expense in joint venture 7,337 9,337 6,750
Changes in operating assets and liabilities:
Allowance for doubtful accounts 635 (10,374) 112,122
Distributions received from
unconsolidated joint ventures 152,303 753,857 1,000,802
Investments in unconsolidated joint ventures (114,005) (1,788,621) (307,714)
Collection of principal - non-financed receivables 2,354,963 5,258,179 2,274,995
Other assets (45,612) (245,198) 49,231
Security deposits and deferred credits (1,236,406) 128,483 815,548
Minority interest in consolidated joint venture -- -- (4,177)
Accounts payable - other 152,723 (51,867) (40,470)
Accounts payable to General Partner and affiliates -- (425,089) 373,766
Other 72,415 1,703 629,175
----------- ----------- -----------
Total adjustments (518,172) 1,463,572 3,076,139
----------- ----------- -----------
Net cash provided by operating activities 1,771,279 2,684,592 3,543,778
----------- ----------- -----------
(continued on next page)
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows - Continued
2000 1999 1998
---- ---- ----
Cash flows from investing activities:
Proceeds from sales of equipment 1,708,805 6,120,773 4,473,161
Equipment purchased (4,097,323) -- (6,346,897)
Investment in unconsolidated joint ventures (2,250,000) -- --
Proceeds from disposition of investment in
unconsolidated joint venture 2,362,500 -- --
------------ ------------ ------------
Net cash (used in) provided by investing activities (2,276,018) 6,120,773 (1,873,736)
------------ ------------ ------------
Cash flows from financing activities:
Cash distributions to partners (3,897,901) (4,116,944) (4,126,450)
Proceeds from notes payable - non-recourse debt 11,752,147 -- --
Principal payment on notes payable - non-recourse debt (10,391,160) -- --
Principal payments on non-recourse secured financing (103,145) (784,670) (1,356,509)
Redemption of limited partnership units (7,832) (37,484) (62,073)
------------ ------------ ------------
Net cash used in financing activities (2,647,891) (4,939,098) (5,545,032)
------------ ------------ ------------
Net (decrease) increase in cash (3,152,630) 3,866,267 (3,874,990)
Cash at beginning of year 3,991,527 125,260 4,000,250
------------ ------------ ------------
Cash at end of year $ 838,897 $ 3,991,527 $ 125,260
============ ============ ============
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Statements of Cash Flows (Continued)
Supplemental Disclosures of Cash Flow Information
Interest expense of $1,928,625, $1,686,377 and $2,164,887 for the years
ended December 31, 2000, 1999 and 1998 consisted of: interest expense on
non-recourse financing accrued or paid directly to lenders by lessees of
$1,850,592, $1,652,894 and $2,041,550, respectively, and other interest expense
of $78,033, $33,483 and $123,337, respectively.
For the years ended December 31, 2000, 1999 and 1998 non-cash activities
included the following:
2000 1999 1998
---- ---- ----
Principal and interest on direct finance receivables
paid directly to lenders by lessees $ 3,446,102 $ -- $ 6,583,726
Rental income - assigned operating
lease receivables 2,467,500 2,460,000 2,435,986
Principal and interest on non-recourse financing
paid directly to lenders by lessees (5,913,602) (2,460,000) (9,019,712)
Fair value of equipment and receivables purchased
for debt and payables (3,218,916) -- (554,531)
Non-recourse notes payable assumed in
purchase price 3,218,916 -- 526,499
Accounts payable - equipment -- 28,032
Decrease in investment in finance leases and
financings due to contribution to
unconsolidated joint venture -- 177,956 --
Increase in investments in
unconsolidated joint ventures -- (177,956) --
----------- ----------- -----------
$ -- $ -- $ --
=========== =========== ===========
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
December 31, 2000
1. Organization
ICON Cash Flow Partners L.P. Six (the "Partnership") was formed on July 8,
1993 as a Delaware limited partnership with an initial capitalization of $2,000.
It was formed to acquire various types of equipment, to lease such equipment to
third parties and, to a lesser degree, to enter into secured financing
transactions. The Partnership commenced business operations on its initial
closing date, March 31, 1994 and by its final closing in 1995, 383,857.12 units
had been admitted into the Partnership with aggregate gross proceeds of
$38,385,712. Between 1995 and 1998 the Partnership redeemed 4,503.92 limited
partnership units. In 2000 and 1999 the Partnership redeemed 200 and 984.73
units, respectively, leaving 378,168.47 limited partnership units outstanding at
December 31, 2000.
The Partnership's reinvestment period ended November 11, 2000. The
disposition period began on November 12, 2000. During the disposition period the
Partnership has and will continue to distribute substantially all distributable
cash from operations and equipment sales to the partners and begin the orderly
termination of its operations and affairs. The Partnership has not and will not
invest in any additional finance or lease transactions during the disposition
period. During the disposition period, the Partnership expects to recover, at a
minimum, the carrying value of its assets.
The General Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut corporation. The General Partner manages and controls
the business affairs of the Partnership's equipment leases and financing
transactions under a management agreement with the Partnership.
ICON Securities Corp., an affiliate of the General Partner, received an
underwriting commission on the gross proceeds from sales of all units. The total
underwriting compensation paid by the Partnership, including underwriting
commissions, sales commissions, incentive fees, public offering expense
reimbursements and due diligence activities is limited to 13 1/2% of the gross
proceeds received from the sale of the units. Such offering expenses aggregated
$5,182,071 (including $2,111,214 paid to the General Partner or its affiliates),
and were charged directly to limited partners' equity.
Profits, losses, cash distributions and disposition proceeds are allocated
99% to the limited partners and 1% to the General Partner until each limited
partner has received cash distributions and disposition proceeds sufficient to
reduce its adjusted capital contribution account to zero and receive, in
addition, other distributions and allocations which would provide a 10% per
annum cumulative return, compounded daily, on its outstanding adjusted capital
contribution account. After such time, the distributions will be allocated 90%
to the limited partners and 10% to the General Partner.
2. Significant Accounting Policies
Basis of Accounting and Presentation - The Partnership's records are
maintained on the accrual basis. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets at the
date of the financial statements, and revenues and expenses during the reporting
period. Actual results could differ from those estimates. In addition,
management is required to disclose contingent assets and liabilities.
ICON Cash Flow Partners L.P. Six
(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 Six Corp. and ICON
Cash Flow L.L.C. II. All inter-company accounts and transactions have been
eliminated. The Partnership accounts for its interests in less than 50% owned
joint ventures under the equity method of accounting. In such cases, the
Partnership's original investments are recorded at cost and adjusted for its
share of earnings, losses and distributions thereafter.
Leases - The Partnership accounts for owned equipment leased to third
parties as finance leases, leveraged leases or operating leases, as appropriate.
For finance leases, the Partnership records, at the inception of the lease, the
total minimum lease payments receivable, the estimated unguaranteed residual
values, the initial direct costs related to the leases and the related unearned
income. Unearned income represents the difference between the sum of the minimum
lease payments receivable plus the estimated unguaranteed residual minus the
cost of the leased equipment. Unearned income is recognized as finance income
over the terms of the related leases using the interest method. The
Partnership's net investment in leveraged leases consists of minimum lease
payments receivable, the estimated unguaranteed residual values and the initial
direct costs related to the leases, net of the unearned income and principal and
interest on the related non-recourse debt. Unearned income is recognized as
income from leveraged leases over the life of the lease at a constant rate of
return on the positive net investment. For operating leases, equipment is
recorded at cost and is depreciated on the straight-line method over the lease
terms to their estimated fair market values at lease terminations. Related lease
rentals are recognized on the straight-line method over the lease terms. Billed
and uncollected operating lease receivables, net of allowance for doubtful
accounts, are included in other assets. Initial direct costs of finance leases
and leveraged leases are capitalized and are amortized over the terms of the
related leases using the interest method. Initial direct costs of operating
leases are capitalized and amortized on the straight-line method over the lease
terms. The Partnership's leases have terms ranging from two to five years. Each
lease is expected to provide aggregate contractual rents that, along with
residual proceeds, return the Partnership's cost of its investments along with
investment income.
Investment in Financings - Investment in financings represent the gross
receivables due from the financing of equipment plus the initial direct costs
related thereto less the related unearned income. The unearned income is
recognized as finance income, and the initial direct costs are amortized, over
the terms of the receivables using the interest method. Financing transactions
are supported by a written promissory note evidencing the obligation of the user
to repay the principal, together with interest, which will be sufficient to
return the Partnership's full cost associated with such financing transaction,
together with investment income. Furthermore, the repayment obligation is
collateralized by a security interest in the tangible or intangible personal
property.
Disclosures About Fair Value of Financial Instruments - Statement of
Financial Accounting Standards ("SFAS") No. 107, "Disclosures about Fair Value
of Financial Instruments" requires disclosures about the fair value of financial
instruments. Separate disclosure of fair value information as of December 31,
2000 and 1999 with respect to the Company's assets and liabilities is not
provided because (i) SFAS No. 107 does not require disclosures about the fair
value of lease arrangements and (ii) the carrying value of financial assets,
other than lease related investments, and certain other payables approximates
market value and (iii) fair value information concerning certain non-recourse
debt obligations is not practicable to estimate without incurring excessive
costs to obtain all the information that would be necessary to derive a market
interest rate.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Redemption of Limited Partnership Units - The General Partner consented to
the Partnership redeeming 1,324.92 units during 1998, 984.73 units in 1999 and
200 units in 2000. The redemption amounts are calculated following the specified
redemption formula in accordance with the Partnership agreement. Redeemed units
have no voting rights and do not share in distributions. The Partnership
agreement limits the number of units which can be redeemed in any one year and
redeemed units may not be reissued. Redeemed limited partnership units are
accounted for as a deduction from partners' equity.
Allowance for Doubtful Accounts - The Partnership records a provision for
doubtful accounts to provide for estimated credit losses in the portfolio. The
allowance for doubtful accounts is based on an analysis of delinquency, an
assessment of overall risk and a review of historical loss experience. The
Partnership's write-off policy is based on an analysis of the aging of the
Partnership's portfolio, a review of the non-performing receivables and leases,
and prior collection experience. An account is fully reserved for or written off
when the analysis indicates that the probability of collection of the account is
remote.
Impairment of Estimated Residual Values - The Partnership's policy with
respect to impairment of estimated residual values is to review, on a periodic
basis, the carrying value of its residuals on an individual asset basis to
determine whether events or changes in circumstances indicate that the carrying
value of an asset may not be recoverable and, therefore, an impairment loss
should be recognized. The events or changes in circumstances which generally
indicate that the residual value of an asset has been impaired are (i) the
estimated fair value of the underlying equipment is less than the Partnership's
carrying value or (ii) the lessee is experiencing financial difficulties and it
does not appear likely that the estimated proceeds from disposition of the asset
will be sufficient to satisfy the remaining obligation to the non-recourse
lender and the Partnership's residual position. Generally in the latter
situation, the residual position relates to equipment subject to third party
non-recourse notes payable where the lessee remits their rental payments
directly to the lender and the Partnership does not recover its residual until
the non-recourse note obligation is repaid in full.
The Partnership measures its impairment loss as the amount by which the
carrying amount of the residual value exceeds the estimated proceeds to be
received by the Partnership from release or resale of the equipment. Generally,
quoted market prices are used as the basis for measuring whether an impairment
loss should be recognized.
Income Taxes - No provision for income taxes has been made as the liability
for such taxes is that of each of the partners rather than the Partnership.
New Accounting Pronouncement - Effective January 1, 2001, the Partnership
adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended. The adoption of SFAS No. 133 did not have any effect on
the Partnership's financial position or results of operations.
3. Net Investment in Leveraged Lease
In September 1996 the Partnership acquired, subject to a leveraged lease,
the beneficial interest in an aircraft. The aircraft was an Airbus A-300B4-203
on lease to Airbus Industrie through 2003. The purchase price of the asset was
$19,595,956 and consisted of $1,409,839 in cash, plus the assumption of
non-recourse senior debt and non-recourse junior debt.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
In December 1998 the Partnership sold its beneficial interest in the
aircraft to Airbus Industrie. The proceeds from the sale totaled $20,834,705 and
were used to pay off the senior debt, the junior debt and a third party under a
residual sharing agreement. The remaining proceeds ($2,647,482 in cash) were
retained by the Partnership. The Partnership recognized an $884,876 gain on the
sale of the beneficial interest.
4. Investments in Joint Ventures
The Partnership and affiliates formed eight joint ventures for the purpose
of acquiring and managing various assets.
The joint venture described below is majority owned and is consolidated
with the Partnership.
ICON Cash Flow Partners L.L.C. II
In March 1995 the Partnership and an affiliate, ICON Cash Flow Partners,
L.P., Series E ("Series E"), formed a joint venture, ICON Cash Flow Partners
L.L.C. II ("ICON Cash Flow LLC II"), for the purpose of acquiring and managing
an aircraft which was on lease to Alaska Airlines, Inc. The Partnership and
Series E contributed 99% and 1% of the cash required for such acquisition,
respectively, to ICON Cash Flow LLC II. ICON Cash Flow LLC II acquired the
aircraft, assuming non-recourse debt and utilizing contributions received from
the Partnership and Series E. The lease is an operating lease. Profits, losses,
excess cash and disposition proceeds are allocated 99% to the Partnership and 1%
to Series E. The Partnership's consolidated financial statements include 100% of
ICON Cash Flow LLC II. Series E's investment in ICON Cash Flow LLC II has been
reflected as "Minority interest in joint venture." The original lease term
expired in April 1997 and Alaska Airlines, Inc. returned the aircraft. In June
1997 ICON Cash Flow LLC II released the aircraft to Aero Mexico. The new lease
is an operating lease which expires in September 2002.
The seven joint ventures described below are less than 50% owned and are
accounted for following the equity method. The Rowan Joint Venture was sold in
the third quarter of 2000.
ICON Cash Flow Partners L.L.C. I
In September 1994 the Partnership and an affiliate, Series E, formed a
joint venture, ICON Cash Flow Partners L.L.C. I ("ICON Cash Flow LLC I"), for
the purpose of acquiring and managing an aircraft which was on lease to Alaska
Airlines, Inc. The Partnership and Series E contributed 1% and 99% of the cash
required for such acquisition, respectively, to ICON Cash Flow LLC I. ICON Cash
Flow LLC I acquired the aircraft, assuming non-recourse debt and utilizing
contributions received from the Partnership and Series E. The lease is an
operating lease. Profits, losses, excess cash and disposition proceeds are
allocated 1% to the Partnership and 99% to Series E. The Partnership's
investment in the joint venture is accounted for under the equity method. The
original lease term expired in April 1997 and Alaska Airlines, Inc. returned the
aircraft. In June 1997 ICON Cash Flow LLC I released the aircraft to Aero
Mexico. The new lease is an operating lease which expires in October 2002.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Information as to the financial position and results of operations of ICON
Cash Flow LLC I as of and for the years ended December 31, 2000 and 1999 is
summarized below:
December 31, 2000 December 31, 1999
Assets $ 18,443,551 $ 16,710,800
================ ===============
Liabilities $ 11,280,394 $ 10,254,831
================ ===============
Equity $ 7,163,157 $ 6,455,969
================ ===============
Partnership's share of equity $ 71,632 $ 64,560
================ ===============
Year Ended Year Ended
December 31, 2000 December 31, 1999
Net income $ 707,188 $ 877,584
================ ===============
Partnership's share of net income $ 7,072 $ 8,776
================ ===============
ICON Receivables 1997-A L.L.C.
In March 1997 the Partnership, ICON Cash Flow Partners, L.P., Series D
("Series D"), and ICON Cash Flow Partners L.P. Seven ("L.P. Seven"), contributed
and assigned equipment lease and finance receivables and residuals to ICON
Receivables 1997-A L.L.C. ("1997-A"), a special purpose entity created for the
purpose of originating leases, managing existing contributed assets securitizing
its portfolio. In September 1997 the Partnership, Series E and L.P. Seven
contributed and assigned additional equipment lease and finance receivables and
residuals to 1997-A. The Partnership, Series D, Series E and L.P. Seven received
a 31.03%, 17.81%, 31.19% and 19.97% interest, respectively, in 1997-A based on
the present value of their related contributions. The Partnership's
contributions amounted to $10,529,804 in assigned leases and $600,000 of cash in
1997, and $86,776 of cash in 1998 and $4,250 of cash and $177,844 in assigned
leases in 1999. In September 1997, 1997-A securitized substantially all of its
equipment leases and finance receivables and residuals. 1997-A became the
beneficial owner of a trust. The Partnership accounts for its investment in
1997-A under the equity method of accounting. The Partnership's original
investment was recorded at cost and is adjusted by its share of earnings, losses
and distributions thereafter.
ICON Cash Flow Partners L. P. Six
(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, 2000 and 1999 is summarized
below:
December 31, 2000 December 31, 1999
----------------- -----------------
Assets $ 9,002,519 $ 17,967,741
================ ===============
Liabilities $ 6,848,927 $ 14,701,353
================ ===============
Equity $ 2,153,592 $ 3,266,388
================ ===============
Partnership's share of equity $ 719,337 $ 1,064,687
================ ===============
Year Ended Year Ended
December 31, 2000 December 31, 1999
Net (loss) income $ (661,929) $ 108,923
================ ===============
Partnership's share of net (loss) income $ (205,424) $ 33,826
================ ===============
Distributions $ 450,867 $ 2,171,133
================ ===============
Partnership's share of distributions $ 139,926 $ 673,811
================ ===============
ICON Receivables 1997-B L.L.C.
In August 1997 the Partnership, Series E and L.P. Seven formed ICON
Receivables 1997-B L.L.C. ("1997-B"), for the purpose of originating leases and
securitizing its portfolio. The Partnership, Series E and L.P. Seven contributed
cash and received an 8.33%, 75.00% and 16.67% interest, respectively, in 1997-B.
The Partnership's cash contributions amounted to $250,000 in 1997, $163,978 in
1998 and $30,260 in 1999. In order to fund the acquisition of leases, 1997-B
obtained a warehouse borrowing facility from Prudential Securities Credit
Corporation (the "1997-B Warehouse Facility"). In October 1998, 1997-B completed
an equipment securitization. The net proceeds from the securitization of these
assets were used to pay-off the remaining 1997-B Warehouse Facility balance and
any remaining proceeds were distributed to the 1997-B members in accordance with
their membership interests. The Partnership accounts for its investment in
1997-B under the equity method of accounting. The Partnership's original
investment was recorded at cost and is adjusted by its share of earnings, losses
and distributions thereafter.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Information as to the financial position and results of operations of
1997-B as of and for the years ended December 31, 2000 and 1999 is summarized
below:
December 31, 2000 December 31, 1999
----------------- -----------------
Assets $ 18,324,933 $ 29,975,710
=============== ===============
Liabilities $ 16,068,825 $ 27,991,447
=============== ===============
Equity $ 2,256,108 $ 1,984,263
=============== ===============
Partnership's share of equity $ 187,933 $ 165,289
=============== ===============
Year Ended Year Ended
December 31, 2000 December 31, 1999
----------------- -----------------
Net income $ 420,423 $ 293,193
=============== ===============
Partnership's share of net income $ 35,021 $ 24,423
=============== ===============
Distributions $ 148,578 $ 688,051
=============== ===============
Partnership's share of distributions $ 12,377 $ 57,315
=============== ===============
ICON Boardman Funding L.L.C.
In December 1998 the Partnership and three affiliates, Series C, L.P. Seven
and ICON Income Fund Eight A L.P. ("Eight A") formed ICON Boardman Funding
L.L.C. ("ICON BF"), for the purpose of acquiring a lease with Portland General
Electric. The purchase price totaled $27,421,810, and was funded with cash and
non-recourse debt assumed in the purchase price. The Partnership, Series C, L.P.
Seven and Eight A received a .5%, .5%, .5% and 98.5% interest, respectively, in
ICON BF. The Partnership's original investment was recorded at cost of $56,960
and is adjusted by its share of earnings, losses and distributions, thereafter.
The Partnership invested an additional $4,112 in 1999. Simultaneously with the
acquisition of the Portland General Electric lease by ICON BF, the rent in
excess of the senior debt payments was acquired by the Partnership for
$3,801,108. On March 30, 1999, ICON BF acquired the Partnership's investment in
a portion of the rent in excess of the senior debt payments for $3,097,637 and
financed, with a third party, all of the rent receivable in excess of the senior
debt payments. ICON BF received $7,643,867 from the financings. There was no
gain or loss to the Partnership on this transaction. The proceeds from the
financing, were then distributed to the members of ICON BF.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Information as to the financial position of ICON BF as of December 31, 2000
and 1999 is summarized below:
December 31, 2000 December 31, 1999
----------------- -----------------
Assets $ 22,744,551 $ 27,740,665
================ ===============
Liabilities $ 12,819,987 $ 18,880,079
================ ===============
Equity $ 9,924,564 $ 8,860,586
================ ===============
Partnership's share of equity $ 49,620 $ 44,299
================ ===============
Net income $ 1,063,978 $ 1,191,629
================ ===============
Partnership's share of net income $ 5,321 $ 5,958
================ ===============
Distributions $ - $ 4,546,230
================ ===============
Partnership's share of distributions $ - $ 22,731
================ ===============
AIC Trust
During 1999, L.P. Seven, an affiliate of the Partnership, acquired a
portfolio of equipment leases for $6,854,830. Subsequently, L.P. Seven sold
interests in this portfolio at various dates in 1999 to Eight A, an affiliate of
the Partnership, for $3,000,000 and to the Partnership for $1,750,000 at book
value, which approximated fair market value at the dates of sale. L.P. Seven
recognized no gain or loss on the sales of these interests to either Eight A or
to the Partnership.
As a result of the sales of these interests, as of December 31, 1999 the
Partnership and Eight A owned interests aggregating 25.51% and 43.73% in the
lease portfolio with L.P. Seven owning a 30.76% interest at that date. The lease
portfolio is owned and operated as a joint venture ("AIC Trust"). Profits,
losses, excess cash and disposition proceeds are allocated based upon the
Partnerships' percentage ownership interests in the venture during the
respective periods the Partnerships held such interests. The Partnership
accounts for its investment under the equity method of accounting.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Information as to the unaudited financial position and results of
operations of the venture as of and for the period of investment through
December 31, 2000 and 1999 is summarized below:
December 31, 2000 December 31, 1999
Assets $ 16,677,641 $ 22,058,522
================ ===============
Liabilities $ 9,311,356 $ 15,221,822
================ ===============
Equity $ 7,366,285 $ 6,836,700
================ ===============
Partnership's share of equity $ 1,868,719 $ 1,733,675
================ ===============
Date of
For the Year Ended Investments Through
December 31, 2000 December 31, 1999
Net income (loss) $ 529,585 $ 64,020
================ ===============
Partnership's share of income (loss) $ 135,044 $ (16,325)
================ ===============
ICON Cheyenne LLC
In 2000, the Partnership and three affiliates, L.P. Seven, Fund Eight A and
ICON Income Fund Eight B ("Fund Eight B") formed ICON Cheyenne LLC ("ICON
Cheyenne") for the purpose of acquiring a portfolio of lease investments. The
purchase price totaled $29,705,716 and was funded with cash and non-recourse
debt assumed. The Partnership, L.P. Seven, Fund Eight A and Fund Eight B
received a 1%, 10.31%, 1% and 87.69% interest, respectively, in ICON Cheyenne.
The Partnership accounts for its investment under the equity method of
accounting.
Information as to the financial position and results of operations of the
venture as of December 31, 2000 and for the period of investment through
December 31, 2000 is summarized below:
December 31, 2000
Assets $ 29,705,716
===============
Liabilities $ 18,304,565
===============
Equity $ 11,401,151
===============
Partnership's share of equity $ 114,005
===============
Net income $ -
===============
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Rowan Joint Venture
In December 1996, ICON Cash Flow Partners L.P. Seven ("L.P. Seven")
purchased for $12,325,000 a 50% share of an option to acquire a 100% interest in
a drilling rig, currently on lease to Rowan Companies, Inc.
In March 2000, L.P. Seven formed a joint venture for the purpose of owning
the 50% share of the option to acquire the residual interest in the drilling
rig.
L.P. Seven contributed its investment in the option with a book value of
$12,394,328 to the joint venture ("Rowan Joint Venture"). Simultaneously, the
Partnership acquired an interest in this joint venture for $2,250,000. This
transaction was recorded at cost, which approximated fair market value. L.P.
Seven recognized no gain or loss on the sale of this interest to the
Partnership. The Partnership had the right to put its interest in the joint
venture back to L.P. Seven at any time on or after September 15, 2000 for 110%
of the purchase price. L.P. Seven had the right to repurchase the interest in
the joint venture from the Partnership at any time prior to September 15, 2000
for an amount equal to 105% of the Partnership's purchase price, which right it
exercised in the third quarter 2000. As a result of this transaction, the
Partnership recognized income from equity investment in joint ventures of
$112,500.
5. Receivables Due in Installments
Non-cancelable minimum annual amounts due on finance leases and financings
are as follows:
Finance
Year Leases Financings Total
2001 $2,505,412 $ 15,909 $2,521,321
2002 2,003,823 2,532 2,006,355
2003 1,588,924 1,899 1,590,823
2004 1,191,694 -- 1,191,694
---------- ---------- ----------
$7,289,853 $ 20,340 $7,310,193
========== ========== ==========
6. Investment in Operating Leases
The investment in operating lease at December 31, 2000 and 1999 consisted
of the following:
2000 1999
---- ----
Equipment cost, beginning of year $ 19,100,646 $ 19,100,646
Equipment acquisitions 7,316,239 --
------------ ------------
Equipment cost, end of year 26,416,885 19,100,646
------------ ------------
Accumulated depreciation,
beginning of year (3,592,403) (2,967,204)
Depreciation (625,199) (625,199)
------------ ------------
Accumulated depreciation, end of year (4,217,602) (3,592,403)
------------ ------------
Investment in operating lease $ 22,199,283 $ 15,508,243
============ ============
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
The original investment in an operating lease consists of one aircraft
owned by ICON Cash Flow LLC II, a joint venture owned by the Partnership and
Series E. In June 1997 ICON Cash Flow LLC II released the aircraft (formerly on
lease to Alaska Airlines, Inc.) to Aero Mexico. The new lease is an operating
lease which expires in September 2002. (See Note 4 for additional information
relating to the joint venture.) The new equipment acquisitions consist of
manufacturing, transportation and other equipment on lease to eight lessees. The
lease terms range from June 2001 to November 2002.
7. Allowance for Doubtful Accounts
The allowance for doubtful accounts related to the investments in finance
leases and financings consisted of the following:
Finance
Leases Financings Total
Balance at December 31, 1997 $ 110,120 $ 5,823 $ 115,943
Accounts written-off (16,454) (61,448) (77,902)
Recoveries on accounts
previously written-off 165,724 24,300 190,024
Provision for doubtful accounts 11,919 41,078 52,997
Reclassification (40,160) 40,160 --
--------- --------- ---------
Balance at December 31, 1998 231,149 49,913 281,062
Accounts written-off (19,672) (45,895) (65,567)
Recoveries on accounts
previously written-off 55,193 -- 55,193
--------- --------- ---------
Balance at December 31, 1999 266,670 4,018 270,688
Recoveries on accounts
previously written-off 635 -- 635
Provision for doubtful accounts 9,763 -- 9,763
--------- --------- ---------
Balance at December 31, 2000 $ 277,068 $ 4,018 $ 281,086
========= ========= =========
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
8. Notes Payable
Notes payable non-recourse bear interest at fixed rates ranging from 5.18%
to 10.75% and mature as follows:
Notes Payable
Non-Recourse
2001 $ 5,653,902
2002 3,496,443
2003 10,604,083
2004 1,440,251
------------
$ 21,194,679
============
9. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the years ended December 31, 2000, 1999 and 1998
are as follows:
Charged to
Operations
Management fees $ 969,546
Administrative expense reimbursements 485,391
----------
Year ended December 31, 1998 $1,454,937
==========
Management fees 675,025
Administrative expense reimbursements 345,569
----------
Year ended December 31, 1999 $1,020,594
==========
Management fees $ 466,522
Administrative expense reimbursements 232,159
----------
Year ended December 31, 2000 $ 698,681
==========
The Partnership had investments in eight joint ventures with other
Partnerships sponsored by the General Partner. One of the joint ventures was
sold in 2000. (See Note 4 for additional information relating to the joint
ventures.)
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
10. Subsidiary
In December 1994 the Partnership formed a wholly owned subsidiary, ICON Six
Corp., a Massachusetts corporation, formed for the purpose of managing equipment
under lease located in the state of Massachusetts. Massachusetts partnerships
are taxed on personal property at a higher rate than corporations, and
therefore, to mitigate such excess property tax, certain leases are being
managed by ICON Six Corp. The Partnership's consolidated financial statements
include 100% of the accounts of ICON Six Corp. As of December 31, 2000, there
was no federal tax liability for ICON Six Corp.
11. Commitments and Contingencies
The Partnership entered into remarketing and residual sharing agreements
with third parties. In connection therewith, remarketing or residual proceeds
received in excess of specified amounts will be shared with these parties based
on specified formulas. For the years ended December 31, 2000 and 1999, the
Partnership has not made any payments pursuant to such agreements.
12. Tax Information (Unaudited)
The following table reconciles net income for financial reporting purposes
to income for federal income tax purposes for the years ended December 31:
2000 1999 1998
---- ---- ----
Net income per financial statements $ 2,289,451 $ 1,221,020 $ 467,639
Differences due to:
Direct finance leases ........... 1,996,665 1,933,804 8,548,014
Depreciation .................... (4,158,021) (5,546,928) (7,834,138)
Provision for losses ............ (271,528) (119,975) (8,554)
Loss on sale of equipment ....... (411,606) (1,098,989) 50,639
Other ........................... 9,631 204,129 (4,839,645)
----------- ----------- -----------
Partnership (loss) for
federal income tax purposes ...... $ (545,408) $(3,406,939) $(3,616,045)
=========== =========== ===========
As of December 31, 2000, the partners' capital accounts included in the
financial statements totaled $13,334,764 compared to the partners' capital
accounts for federal income tax purposes of $7,624,151 (unaudited). The
difference arises primarily from commissions reported as a reduction in the
partners' capital accounts for financial reporting purposes but not for federal
income tax purposes, and temporary differences related to direct finance leases,
depreciation and provision for losses.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
13. Quarterly Financial Data (Unaudited)
The following table is a summary of financial data by quarter for the years
ended December 31, 2000 and 1999:
For the Quarters Ended
--------------------------------------------------
March 31, June 30, September 30, December 31,
-------- ------- ------------ -----------
2000
Revenues .................... $1,195,997 $1,818,017 $1,790,912 $1,088,165
========== ========== ========== ==========
Net income allocable to
limited partners .......... $ 334,848 $ 926,252 $ 940,638 $ 64,818
========== ========== ========== ==========
Net income per weighted
average limited partnership unit $ 0.88 $ 2.45 $ 2.49 $ 0.17
========== ========== ========== ==========
1999
Revenues .................... $1,688,470 $1,203,568 $1,105,540 $1,038,580
========== ========== ========== ==========
Net income allocable to
limited partners .......... $ 698,221 $ 161,675 $ 237,276 $ 111,638
========== ========== ========== ==========
Net income per weighted
average limited partnership unit $ 1.84 $ 0.43 $ 0.63 $ 0.29
========== ========== ========== ==========
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
----------------------------------------------------------------------
None
PART III
Item 10. Directors and Executive Officers of the Registrant's General Partner
--------------------------------------------------------------------
The General Partner, a Connecticut corporation, was formed in 1985. The
General Partner's principal offices are located at 111 Church Street, White
Plains, New York 10601-1505, and its telephone number is (914) 993-1700. The
officers of the General Partner have extensive experience with transactions
involving the acquisition, leasing, financing and disposition of equipment,
including acquiring and disposing of equipment subject to leases and full
financing transactions.
The manager of the Partnership's business is the General Partner. The
General Partner is engaged in a broad range of equipment leasing and financing
activities. Through its sales representatives and through various broker
relationships throughout the United States, the General Partner offers a broad
range of equipment leasing services.
The General Partner will perform certain functions relating to the
management of the equipment of the Partnership. Such services include the
collection of lease payments from the lessees of the equipment, re-leasing
services in connection with equipment which is off-lease, inspections of the
equipment, liaison with and general supervision of lessees to assure that the
equipment is being properly operated and maintained, monitoring performance by
the lessees of their obligations under the leases and the payment of operating
expenses.
The officers and directors of the General Partner are as follows:
Beaufort J.B. Clarke Chairman, Chief Executive Officer and Director
Paul B. Weiss President and Director
Thomas W. Martin Executive Vice President and Director
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
Beaufort J. B. Clarke, age 55, has been Chairman, Chief Executive Officer
and Director of the General Partner since 1996. Prior to his present position,
Mr. Clarke was founder and the President and Chief Executive Officer of Griffin
Equity Partners, Inc. Mr. Clarke formerly was an attorney with Shearman and
Sterling and has over 20 years of senior management experience in the United
States leasing industry.
Paul B. Weiss, age 40, is President and Director of the General Partner.
Mr. Weiss has been exclusively engaged in lease acquisitions since 1988 from his
affiliations with the General Partner since 1996, Griffin Equity Partners (as
Executive Vice President from 1993-1996); Gemini Financial Holdings (as Senior
Vice President-Portfolio Acquisitions from 1991-1993) and Pegasus Capital
Corporation (as Vice President-Portfolio Acquisitions from 1988-1991). He was
previously an investment banker and a commercial banker.
Thomas W. Martin, age 47, has been Executive Vice President of the General
Partner since 1996. Prior to his present position, Mr. Martin was the Executive
Vice President and Chief Financial Officer of Griffin Equity Partners, Inc.
(1993-1996), Gemini Financial Holdings (as Senior Vice President from 1992-1993)
and Chancellor Corporation (as Vice President-Syndications from 1985-1992). Mr.
Martin has 17 years of senior management experience in the leasing business.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
Item 11. Executive Compensation
The Partnership has no directors or officers. The General Partner and its
affiliates were paid or accrued the following compensation and reimbursement for
costs and expenses for the years ended December, 31, 2000, 1999 and 1998.
Type of
Entity Capacity Compensation 2000 1999 1998
------ -------- ------------ ---- ---- ----
ICON Capital Corp. General Partner Management fees $ 466,522 $ 675,025 $ 969,546
ICON Capital Corp. General Partner Admin. expense
reimbursements 232,159 345,569 485,391
---------- ---------- ----------
$ 698,681 $1,020,594 $1,454,937
========== ========== ==========
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
(a) The Partnership is a limited partnership and therefore does not have voting
shares of stock. No person of record owns, or is known by the Partnership
to own beneficially, more than 5% of any class of securities of the
Partnership.
(b) As of March 19, 2001, Directors and Officers of the General Partner do not
own any equity securities of the Partnership.
(c) The General Partner owns the equity securities of the Partnership set forth
in the following table:
Title Percent
of Class Amount Beneficially Owned of Class
-------- ------------------------- --------
General Partner Represents initially a 1% and potentially a 100%
Interest 10% interest in the Partnership's income, gain
and loss deductions.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
See Item 9 for a discussion of the Partnership's related party
transactions.
See Note 4 for a discussion of the Partnership's related party investments
in joint ventures.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
(a) 1. Financial Statements - See Part II, Item 8 hereof.
2. Financial Statement Schedule - None.
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set
forth therein is included in the Financial Statements or Notes
thereto.
3. Exhibits - The following exhibits are incorporated herein by reference:
(i) Form of Dealer-Manager Agreement (Incorporated by reference to
Exhibit 1.1 to Amendment No. 1 to Form S-1 Registration Statement
No. 33-36376 filed with the Securities and Exchange Commission on
November 9, 1993)
(ii) Form of Selling Dealer Agreement (Incorporated by reference to
Exhibit 1.2 to Amendment No. 1 to Form S-1 Registration Statement
No. 33-36376 filed with the Securities and Exchange Commission on
November 9, 1993)
(iii)Amended and Restated Agreement of Limited Partnership
(Incorporated herein by reference to Exhibit A to Amendment No. 1
to Form S-1 Registration Statement No. 33-36376 filed with the
Securities and Exchange Commission on November 9, 1993)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter
ended December 31, 2000.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
December 31, 2000
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ICON CASH FLOW PARTNERS L.P. Six
File No. 33-36376 (Registrant)
By its General Partner, ICON Capital Corp.
Date: March 28, 2001 /s/ Beaufort J.B. Clarke
----------------------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacity and on the dates indicated.
ICON Capital Corp.
sole General Partner of the Registrant
Date: March 28, 2001 /s/ Beaufort J.B. Clarke
----------------------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Date: March 28, 2001 /s/ Paul B. Weiss
----------------------------------------------
Paul B. Weiss
President and Director
Date: March 28, 2001 /s/ Thomas W. Martin
----------------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer)
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrant Which have not Registered Securities Pursuant to
Section 12 of the Act
No annual report or proxy material has been sent to security holders. An annual
report will be sent to the limited partners and a copy will be forwarded to the
Commission.