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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended September 30, 2002
-----------------------------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
------------------------- --------------------
Commission File Number 0-28136
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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 (IRS Employer
incorporation or organization) Identification Number)
100 Fifth Avenue, New York, New York 10011
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(212) 418-4700
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ x ] Yes [ ] No
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
September 30, December 31,
2002 2001
---- ----
Assets
------
Cash $ 5,795 $ 384,816
------------ ------------
Investment in finance lease
Minimum rents receivable 3,744,353 5,635,382
Estimated unguaranteed residual values 1,880,370 2,033,755
Initial direct costs 1,072 5,563
Unearned income (292,678) (650,225)
Allowance for doubtful accounts (277,068) (277,068)
------------ ------------
5,056,049 6,747,407
------------ ------------
Investment in operating leases
Equipment, at cost 21,965,262 22,051,594
Accumulated depreciation (7,447,852) (5,831,958)
------------ ------------
14,517,410 16,219,636
Investments in unconsolidated joint ventures 891,662 1,321,509
------------ ------------
Other assets 207,560 1,916,251
------------ ------------
Total assets $ 20,678,476 $ 26,589,619
============ ============
(continued on next page)
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Balance Sheets (Continued)
(unaudited)
September 30, December 31,
2002 2001
---- ----
Liabilities and Partners' Equity
--------------------------------
Notes payable - non-recourse $ 12,587,297 $ 15,596,106
Security deposits and deferred credits 752,670 1,022,524
Accounts payable-other 296,760 340,828
Accounts payable-General Partners and affiliates 1,276 94,812
Minority interest in consolidated joint venture 71,290 72,070
------------ ------------
13,709,293 17,126,340
------------ ------------
Partners' equity (deficiency)
General Partner (258,006) (233,078)
Limited partners (378,258 units outstanding,
$100 per unit original issue price) 7,227,189 9,696,357
------------ ------------
Total partners' equity 6,969,183 9,463,279
------------ ------------
Total liabilities and partners' equity $ 20,678,476 $ 26,589,619
============ ============
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Operations
(unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2002 2001 2002 2001
---- ---- ---- ----
Revenues
Rental income $ 877,574 $ 995,537 $ 2,637,113 $ 2,924,452
Finance lease income 114,794 196,819 384,894 695,152
(Loss) gain on sales of equipment (3,298) 73,709 35,781 775,170
Income (loss) from equity investment
in unconsolidated joint ventures 19,596 (18,668) 47,127 (586,453)
Other income 55,492 955 167,593 185,052
------------- ------------- ------------- -------------
Total revenues 1,064,158 1,248,352 3,272,508 3,993,373
------------- ------------- ------------- -------------
Expenses
Depreciation 556,376 455,869 1,670,237 1,317,005
Interest 396,272 381,831 1,257,107 1,448,901
General and administrative 191,961 54,672 458,353 192,017
Management fees - General Partner 98,706 114,257 272,572 333,496
Administrative expense reimbursements
- General Partner 36,157 61,624 117,306 162,278
Amortization of initial direct costs 1,218 2,400 4,491 14,511
Minority interest in joint ventures (180) 1,445 (780) 4,136
------------- ------------- ------------- -------------
Total expenses 1,280,510 1,072,098 3,779,286 3,472,344
------------- ------------- ------------- -------------
Net (loss) income $ (216,352) $ 176,254 $ (506,778) $ 521,029
============= ============= ============= =============
Net (loss) income allocable to:
Limited partners $ (214,188) $ 174,492 $ (501,710) $ 515,819
General Partner (2,164) 1,762 (5,068) 5,210
------------- ------------- ------------- -------------
$ (216,352) $ 176,254 $ (506,778) $ 521,029
============= ============= ============= =============
Weighted average number of limited
partnership units outstanding 378,278 378,168 378,284 378,168
============= ============= ============= =============
Net (loss) income per weighted average
limited partnership unit $ (.57) $ .46 $ (1.33) $ 1.36
============= ============= ============= =============
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 Nine Months Ended September 30, 2002
and the year ended December 31, 2001
(unaudited)
Limited Partner Distributions
-----------------------------
Return of Investment Limited General
Capital Income Partners Partner Total
------- ------ -------- ------- -----
(Per weighted average unit)
Balance at
December 31, 2000 $ 13,529,157 $ (194,393) $ 13,334,764
Cash distributions
to partners $ 9.22 $ - (3,488,143) (35,204) (3,523,347)
Net loss (344,657) (3,481) (348,138)
--------------- ------------- ---------------
Balance at
December 31, 2001 9,696,357 (233,078) 9,463,279
Cash distributions
to partners $ 5.20 $ - (1,966,158) (19,860) (1,986,018)
Limited partnership units
Redeemed (30 units) (1,300) - (1,300)
Net loss (501,710) (5,068) (506,778)
--------------- ------------- ---------------
Balance at
September 30, 2002 $ 7,227,189 $ (258,006) $ 6,969,183
=============== ============= ===============
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 Nine Months Ended September 30,
(unaudited)
2002 2001
---- ----
Cash flows from operating activities:
Net (loss) income $ (506,778) $ 521,029
----------- -----------
Adjustments to reconcile net (loss)
income to net cash used in operating
activities:
Rental income - paid directly to
lenders by lessees (2,469,596) (2,924,452)
Interest expense on non-recourse
financing paid directly by lessees 1,160,249 1,362,805
Finance income portion of receivables
paid directly to lenders by lessees (348,758) (503,083)
Amortization of initial direct costs
and loan fees 101,349 100,607
(Income) loss from investments
in unconsolidated joint ventures (47,127) 586,453
Depreciation 1,670,237 1,317,005
Gain on sales of equipment (35,781) (775,170)
Minority interest in consolidated
joint venture (780) 4,136
Change in operating assets and
liabilities:
Other assets 4,946 (258,828)
Non-financed receivables 186,250 873,560
Security deposits and deferred
credits (103,962) (212,719)
Accounts payable-other 14,863 129,002
Accounts payable-General Partner
and affiliates (93,735) -
Other 11,226 (49,034)
----------- -----------
Total adjustments 49,381 (349,718)
----------- -----------
Net cash (used in) provided by
operating activities (457,397) 171,311
----------- -----------
Cash flows from investing activities:
Proceeds from sales of equipment 1,588,720 3,654,321
Investment in unconsolidated
joint ventures - (283)
Distributions received from unconsolidated
joint ventures 476,974 136,951
----------- -----------
Net cash provided by investing activities 2,065,694 3,790,989
----------- -----------
(continued on next page)
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (Continued)
For the Nine Months Ended September 30,
(unaudited)
2002 2001
---- ----
Cash flows from financing activities:
Cash distributions to partners (1,986,018) (3,356,236)
Redemption of Limited Partnership units (1,300) -
Principal payments on notes payable -
non-recourse - (1,389,730)
----------- -----------
Net cash used in financing activities (1,987,318) (4,745,966)
----------- -----------
Net decrease in cash (379,021) (783,666)
Cash and cash equivalents at beginning of period 384,816 838,897
----------- -----------
Cash and cash equivalents at end of period $ 5,795 $ 55,231
=========== ===========
See accompanying notes to consolidated financial statements.
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (continued)
Supplemental Disclosures of Cash Flow Information
- -------------------------------------------------
For the nine months ended September 30, 2002 and 2001, non-cash activities
included the following:
2002 2001
---- ----
Principal and interest on direct finance
receivables paid directly to lenders
by lessees $ 1,699,462 $ 1,447,989
Rental income assigned operating
lease receivable 2,469,596 2,924,452
Principal and interest on non-recourse
financing paid directly to lenders
by lessees (4,169,058) (4,372,441)
----------- -----------
$ - $ -
=========== ===========
2002 2001
---- ----
Interest expense:
Interest paid directly to lenders by
lessees pursuant to non-recourse
financings $ 1,160,249 $ 1,362,805
Amortization of loan fee 96,858 86,096
----------- -----------
Total interest expense $ 1,257,107 $ 1,448,901
=========== ===========
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
September 30, 2002
(unaudited)
1. Basis of Presentation
The consolidated financial statements of ICON Cash Flow Partners L.P. Six
(the "Partnership") have been prepared pursuant to the rules and regulations of
the Securities and Exchange Commission (the "SEC") and, in the opinion of
management, include all adjustments (consisting only of normal recurring
accruals) necessary for a fair statement of results for each period shown.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to such SEC rules and regulations. Management believes that the disclosures made
are adequate to make the information presented not misleading. The results for
the interim period are not necessarily indicative of the results for the full
year. These consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes included in the Partnership's
2001 Annual Report on Form 10-K. Certain 2001 amounts have been reclassified to
conform to the 2002 presentation.
2. Related Party Transactions
Fees paid or accrued by the Partnership to the General Partner or its
affiliates for the nine months ended September 30, 2002 and 2001 are as follows:
2002 2001
---- ----
Management fees $ 272,572 $ 333,496 Charged to operations
Administrative expense
reimbursements 117,306 162,278 Charged to operations
------------ -----------
Total $ 389,878 $ 495,774
============ ===========
The Partnership has investments in seven joint ventures with other
partnerships sponsored by the General Partner. See Note 3 for information
relating to the current joint ventures.
3. Consolidated Ventures and Investments in Unconsolidated Joint Ventures
The Partnership and affiliates have investments in seven ventures involved
in acquiring and managing various assets.
Consolidated Venture
The venture described below is majority owned and consolidated with the
Partnership.
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
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 venture, ICON Cash Flow Partners L.L.C. II
("ICON Cash Flow LLC II"), for the purpose of owning a commercial aircraft
subject to lease. 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, cash flow and disposition proceeds are
allocated 99% to the Partnership and 1% to Series E. The Partnership's
consolidated financial statements include 100% of the assets and liabilities and
revenues and expenses 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 on the
Partnership's consolidated balance sheets and as minority interest expense on
the consolidated statements of operations. The lease of the aircraft expires in
November 2002. The lessee is in the process of negotiating a lease extension
with the Partnership. The extension is expected to be consummated during the
fourth quarter of 2002. When the lease extension terms are determined, the
Partnership will re-evaluate the residual value of the aircraft and assess the
carrying value of the equipment in accordance with its policy regarding
impairment of estimated residual values. The aircraft had a net book value of
approximately $12,984,139 and related outstanding non-recourse debt of
$8,883,696 at September 30, 2002. The net book value of the aircraft at the end
of the current lease term approximates its estimated fair value based on an
appraisal completed in February 2002.
Investments in Unconsolidated Joint Ventures
The six joint ventures described below are less than 50% owned and are
accounted for following the equity method.
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 purchasing a commercial aircraft subject to lease. 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 of accounting whereby the
Partnership's original investment was recorded at cost and was adjusted by its
share of income, losses and distributions thereafter. The lease of the aircraft
expired in October 2002. The lessee is currently utilizing the aircraft and is
the process of negotiating a lease extension with the Partnership. The extension
is expected to be consummated during the fourth quarter of 2002. When the lease
extension terms are determined, the joint venture will re-evaluate the residual
value of the aircraft and assess the carrying value of the equipment in
accordance with its policy regarding impairment of estimated residual values.
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
Information as to the unaudited financial position and the results of
operations of ICON Cash Flow LLC I as of September 30, 2002 and December 31,
2001 and for the nine months ended September 30, 2002 and 2001 is summarized
below:
September 30, 2002 December 31, 2001
------------------ -----------------
Assets $ 16,656,394 $ 17,856,299
============== =============
Liabilities $ 9,185,403 $ 10,158,274
============== =============
Equity $ 7,470,991 $ 7,698,025
============== =============
Partnership's share of equity $ 74,710 $ 76,981
============== =============
Nine Months Ended Nine Months Ended
September 30, 2002 September 30, 2001
------------------ ------------------
Net (loss) income $ (227,034) $ 378,739
============== =============
Partnership's share of net
(loss) income $ (2,271) $ 3,788
============== =============
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). 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. As of December 31, 2001, the Partnership,
Series D, Series E and L.P. Seven own 31.03%, 17.81%, 31.19% and 19.97%
interests, respectively, in 1997-A. The Partnership accounts for its investment
in 1997-A 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 the results of
operations of 1997-A as of September 30, 2002 and December 31, 2001 and for the
nine months ended September 30, 2002 and 2001 is summarized below:
September 30, 2002 December 31, 2001
------------------ -----------------
Assets $ 468,960 $ 1,856,582
=============== ===============
Liabilities $ 392,958 $ 1,707,445
=============== ===============
Equity $ 76,002 $ 149,137
=============== ===============
Partnership's share of equity $ 23,586 $ 46,277
=============== ===============
Nine Months Ended Nine Months Ended
September 30, 2002 September 30, 2001
------------------ ------------------
Net loss $ (73,135) $ (1,895,962)
=============== ===============
Partnership's share of
net loss $ (22,691) $ (627,297)
=============== ===============
1997-A recorded a provision for bad debts of $1,825,000 during the nine
month period ended September 30, 2001.
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"). The Partnership, Series E and L.P. Seven
each contributed cash, equipment leases and residuals and received an 8.33%,
75.00% and 16.67% interest, respectively, in 1997-B. The Partnership accounts
for its investment in 1997-B 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 the results of
operations of 1997-B as of September 30, 2002 and December 31, 2001 and for the
nine months ended September 30, 2002 and 2001 is summarized below:
September 30, 2002 December 31, 2001
------------------ -----------------
Assets $ 3,184,884 $ 8,265,689
=============== ===============
Liabilities $ 3,184,884 $ 7,876,692
=============== ===============
Equity $ - $ 388,997
=============== ===============
Partnership's share of equity $ - $ 32,403
=============== ===============
Nine Months Ended Nine Months Ended
September 30, 2002 September 30, 2001
------------------ ------------------
Net loss $ (388,997) $ (1,069,591)
=============== ===============
Partnership's share of net loss $ (32,403) $ (89,098)
=============== ===============
1997-B recorded a provision for bad debts of $440,000 and $1,055,114 during
the nine month periods ended September 30, 2002 and 2001, respectively.
ICON Boardman Funding L.L.C.
----------------------------
In December 1998, the Partnership and three affiliates, ICON Cash Flow
Partners, L.P., Series C ("Series C"), L.P. Seven and ICON Income Fund Eight A
L.P. ("Fund Eight A") formed ICON Boardman Funding L.L.C. ("ICON BF"), for the
purpose of acquiring a lease for a coal handling facility with Portland General
Electric, a utility company. The purchase price totaled $27,421,810, and was
funded with cash and non-recourse debt. The Partnership, Series C, L.P. Seven,
and Fund Eight A received a .5%, .5%, .5% and 98.5% interest, respectively, in
ICON BF. The Partnership accounts for its investment under the equity method of
accounting.
In 2001 the other joint venturers in ICON BF acquired Series C's interest
in accordance with their proportionate shares of ICON BF, at an aggregate cost
of $56,370, which represented Series C's carrying value of the investment. The
Partnership's share of the purchase price was $283. The remaining venturers'
shares in ICON BF at December 31, 2001 were .5025%, .5025%, and 98.995% for the
Partnership, L.P. Seven, and Fund Eight A, respectively.
Portland General Electric ("PGE") is a wholly owned subsidiary of Enron
Corporation ("Enron"), which filed for Chapter 11 bankruptcy protection in
December 2001. PGE has not filed for bankruptcy. While Enron owns all of PGE's
outstanding common stock, PGE has its own legal entity, owns its assets and is
responsible for its own day-to-day operations. PGE continues to make its lease
payments and is current through October 2002.
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 the results of
operations of ICON BF as of September 30, 2002 and December 31, 2001 and for the
nine months ended September 30, 2002 and 2001 is summarized below:
September 30, 2002 December 31, 2001
------------------ -----------------
Assets $ 22,629,512 $ 24,855,375
=============== ===============
Liabilities $ 10,360,059 $ 13,588,934
=============== ===============
Equity $ 12,269,453 $ 11,266,441
=============== ===============
Partnership's share of equity $ 61,654 $ 56,614
=============== ===============
Nine Months Ended Nine Months Ended
September 30, 2002 September 30, 2001
------------------ ------------------
Net income $ 1,003,012 $ 1,027,862
=============== ===============
Partnership's share of net income $ 5,040 $ 5,139
=============== ===============
AIC Trust
---------
In 1999, ICON/AIC Trust ("AIC Trust") was formed to own and manage a
portfolio of leases in England. The Partnership, L.P. Seven and Fund Eight A own
25.51%, 30.76% and 43.73% interests in AIC Trust, respectively. The Partnership
accounts for its investment under the equity method of accounting.
On December 28, 2001, AIC Trust sold its remaining leases, subject to the
related debt, at a loss, for a note receivable of (pound)2,575,000 ($3,744,822
based upon the exchange rate at December 31, 2001) which is payable in six
installments through June 2004. The first two installments on the note were
collected in January and June 2002, respectively. As of September 30, 2002, the
gross amount due is (pound)1,625,000 ($2,494,534 on a discounted basis based
upon the exchange rate at September 30, 2002).
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 the results of
operations of AIC Trust as of September 30, 2002 and December 31, 2001 and for
the nine months ended September 30, 2002 and 2001 is summarized below:
September 30, 2002 December 31, 2001
------------------ -----------------
Assets $ 2,494,534 $ 3,849,439
============= =============
Liabilities $ 57,447 $ -
============= =============
Equity $ 2,437,087 $ 3,849,439
============= =============
Partnership's share of equity $ 621,701 $ 981,992
============= =============
Nine Months Ended Nine Months Ended
September 30, 2002 September 30, 2001
------------------ ------------------
Net income $ 340,534 $ 439,449
============= =============
Partnership's share of
net income $ 86,870 $ 112,103
============= =============
Distributions $ 1,752,886 $ 536,853
============= =============
Partnership's share of
distributions $ 447,161 $ 136,951
============= =============
AIC Trust recorded a foreign exchange gain of $200,857 during the nine
months ended September 30, 2002.
ICON Cheyenne LLC
-----------------
In December 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 of $11,401,151
and the assumption of non-recourse debt with an unaffiliated third party lender
of $18,304,565. The debt is structured to be amortized by the application to the
debt of rentals due under the various term leases. The leases expire on various
dates through September 2006. 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.
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 the results of
operations of ICON Cheyenne as of September 30, 2002 and December 31, 2001 and
for the nine months ended September 30, 2002 and 2001 is summarized below:
September 30, 2002 December 31, 2001
------------------ -----------------
Assets $ 19,060,988 $ 23,869,671
=============== ==============
Liabilities $ 8,059,843 $ 11,145,506
=============== ==============
Equity $ 11,001,145 $ 12,724,165
=============== ==============
Partnership's share of
equity $ 110,011 $ 127,242
=============== ==============
Nine Months Ended Nine Months Ended
September 30, 2002 September 30, 2001
------------------ ------------------
Net income $ 1,258,307 $ 891,227
=============== ==============
Partnership's share of
net income $ 12,582 $ 8,912
=============== ==============
Distributions $ 2,981,327 $ -
=============== ==============
Partnership's share of
distributions $ 29,813 $ -
=============== ==============
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
September 30, 2002
Item 2. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Three Months Ended September 30, 2002 and 2001
Rental income decreased by $117,963 or 12% in the quarter ended September
30, 2002 ("2002 Quarter") as compared to the quarter ended September 30, 2001
("2001 Quarter") due to the expiration of operating leases since the 2001
Quarter. Finance lease income decreased by $82,025 or approximately 42% in the
2002 Quarter as compared to the 2001 Quarter due primarily to the continued
collection of rentals reducing the investment in financing leases, on which
finance lease income is based. The Partnership recorded (losses) gains on sales
of equipment of $(3,298) in the 2002 Quarter as compared to $73,709 in the 2001
Quarter; earned income (loss) from its equity investments in joint ventures of
$19,596 in the 2002 Quarter as compared to $(18,668) in the 2001 Quarter and
other income of $55,492 in the 2002 Quarter as compared to $955 in the 2001
Quarter.
Expenses for the 2002 Quarter were $1,280,510 as compared to $1,072,098 in
the 2001 Quarter, an increase of $208,412. The increase in expenses was
partially due to an increase in depreciation expense of $100,507. Depreciation
expense increased as a result of a change (reduction) in the estimate of the
residual value of an aircraft in the fourth quarter of 2001. Additionally,
general and administrative expenses increased by $137,289 in the 2002 Quarter as
compared to the 2001 Quarter, due principally to an increase in professional
fees.
Net (loss) gain for the 2002 Quarter and the 2001 Quarter was $(216,352)
and $176,254, respectively. The (loss) gain per weighted average limited
partnership unit outstanding was $(.57) and $.46 for the 2002 Quarter and the
2001 Quarter, respectively.
Results of Operations for the Nine Months Ended September 30, 2002 and 2001
Rental income decreased by $287,339 or 10% in the nine months ended
September 30, 2002 ("2002 Period") as compared to the nine months ended
September 30, 2001 ("2001 Period") due to the expiration of operating leases
(and subsequent sale of underlying equipment) since the 2001 Period. Finance
lease income decreased by $310,258 or approximately 45% in the 2002 Period as
compared to the 2001 Period due primarily to the continued collection of rentals
reducing the investment in financing leases, on which finance lease income is
based. The Partnership recorded gains on sales of equipment of $35,781 in the
2002 Period as compared to $775,170 in the 2001 Period; earned income (loss)
from its equity investments in joint ventures of $47,127 in the 2002 Period as
compared to $(586,453) in the 2001 Period and other income of $167,593 in the
2002 Period as compared to $185,052 in the 2001 Period. The loss from equity
investments in the 2001 period was primarily due to the loss recorded by 1997-A,
of which the Partnership's share was $627,297.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
September 30, 2002
Expenses for the 2002 Period were $3,779,286 as compared to $3,472,344 in
the 2001 Period, an increase of $306,942. The increase in expenses was primarily
the result of an increase in depreciation expense of $353,232. This increase was
partially offset by a decrease in interest expense of $191,794. Additionally,
general and administrative expenses increased by $266,336 in the 2002 Period as
compared to the 2001 Period, due principally to an increase in professional
fees. Depreciation expense increased as a result of a change (reduction) in the
estimate of the residual value of an aircraft in the fourth quarter of 2001.
Interest expense decreased due to a lower average debt balance outstanding in
2002 as compared to 2001 as the result of continued repayment of such debt.
Net (loss) income for the 2002 Period and the 2001 Period was $(506,778)
and $521,029, respectively. The net (loss) income per weighted average limited
partnership unit outstanding was $(1.33) and $1.36 for the 2002 Period and the
2001 Period, respectively.
Liquidity and Capital Resources
The Partnership's reinvestment period ended November 11, 2000 and 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 cash from sales of equipment to 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. As a result of the Partnership's entering into the
disposition period, future monthly distributions are expected to fluctuate
depending on the amount of asset sale and re-lease proceeds generated during the
period.
The Partnership's primary source of funds for the 2002 Period was proceeds
from the sale of equipment of $1,588,720 (of which $1,552,256 represented a
collection of a receivable from a sale completed in late 2001) and distributions
from joint ventures of $476,974. These funds were used to pay operating expenses
and cash distributions to partners. The Partnership's outstanding debt is
non-recourse and is being serviced directly by the related lessees. The
Partnership intends to fund its future operating needs from finance and
operating leases and proceeds from sales of equipment. Cash distributions to
limited partners for the 2002 Period and the 2001 Period totaled $1,966,158 and
$3,322,637, respectively.
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
September 30, 2002
Item 3. Qualitative and Quantitative Disclosures About Market Risk
The Partnership is exposed to certain market risks, primarily changes in
interest rates and the demand for equipment and residuals owned by the
Partnership and its investees. 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 market and maximizing the re-marketing proceeds received.
Item 4. Controls and Procedures
Beaufort J.B. Clarke and Thomas W. Martin, the Principal Executive and
Principal Financial Officers, respectively, of ICON Capital Corp. ("ICC"), the
General Partner of the Partnership, have evaluated the disclosure controls and
procedures of the Partnership within 90 days prior to the filing of this
quarterly report. As used herein, the term "disclosure controls and procedures"
has the meaning given to the term by Rule 13a-14 under the Securities Exchange
Act of 1934, as amended ("Exchange Act"), and includes the controls and other
procedures of the Partnership that are designed to ensure that information
required to be disclosed by the Partnership in the reports that it files with
the SEC under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms. As part of their
evaluation, Messrs. Clarke and Martin conferred with the finance and accounting
staff of ICC and the finance and accounting staff of ICON Holdings Corp., the
parent of ICC. Management has presented the results of its most recent
evaluation to the Partnership's independent auditors, KPMG LLP. Based upon their
evaluation, Messrs. Clarke and Martin have concluded that the Partnership's
disclosure controls and procedures provide reasonable assurance that the
information required to be disclosed by the Partnership in this report is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms applicable to the preparation of this report.
There have been no significant changes in the Partnership's internal
controls or in other factors that could significantly affect the Partnership's
internal controls subsequent to the evaluation described above conducted by
ICC's principal executive and financial officers.
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
- ---------------------------
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
No reports on Form 8-K were filed during the quarter ended September 30, 2002.
Exhibits
- --------
99.1 Certification of Chairman and Chief Executive Officer pursuant to 18
U.S.C.ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
99.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer pursuant to 18 U.S.C.ss.1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ICON Cash Flow Partners L. P. Six
File No. 33-36376 (Registrant)
By its General Partner,
ICON Capital Corp.
November 14, 2002 /s/ Thomas W. Martin
- ------------------------ --------------------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer of
the Manager of the Registrant)
Certifications - 10-Q
I, Beaufort J.B. Clarke, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ICON Cash Flow
Partners L.P. Six;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly 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
quarterly 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-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures 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 quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
c) presented in this quarterly 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, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; 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; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: November 14, 2002
/s/ Beaufort J.B. Clarke
- -----------------------------
Beaufort J. B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
Manager of ICON Cash Flow Partners L.P. Six
I, Thomas W. Martin, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ICON Cash Flow
Partners L.P. Six;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly 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
quarterly 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-14 and 15d-14) for the registrant and we have:
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
a) designed such disclosure controls and procedures 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 quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly 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, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; 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; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: November 14, 2002
/s/ Thomas W. Martin
- ----------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer
of the Manager of the Registrant)
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
September 30, 2002
EXHIBIT 99.1
I, Beaufort J.B. Clarke, Chairman and Chief Executive Officer of ICON
Capital Corp, the sole General Partner of ICON Cash Flow Partners L.P. Six,
certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-Q for the period ended September 30, 2002
(the "Periodic Report") which this statement accompanies, fully complies
with the requirements of Section 13(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78m) and
(2) information contained in the Periodic Report fairly presents, in all
material respects, the financial condition and results of operations of
ICON Cash Flow Partners L.P. Six.
Dated: November 14, 2002
/s/ Beaufort J.B. Clarke
--------------------------------------------------------
Beaufort J.B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
Manager of ICON Cash Flow Partners L.P. Six
ICON Cash Flow Partners L. P. Six
(A Delaware Limited Partnership)
September 30, 2002
EXHIBIT 99.2
I, Thomas W. Martin, Executive Vice President (Principal Financial and
Accounting Officer) of ICON Capital Corp, the sole General Partner of ICON Cash
Flow Partners L.P. Six, certify, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) the Quarterly Report on Form 10-Q for the period ended September 30, 2002
(the "Periodic Report") which this statement accompanies, fully complies
with the requirements of Section 13(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78m) and
(2) information contained in the Periodic Report fairly presents, in all
material respects, the financial condition and results of operations of
ICON Cash Flow Partners L.P. Six.
Dated: November 14, 2002
/s/ Thomas W. Martin
------------------------------------------------------
Thomas W. Martin
Executive Vice President (Principal
Financial and Accounting Officer)
ICON Capital Corp.
Manager of ICON Cash Flow Partners L.P. Six