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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 quarterly period ended September 30, 2003
--------------------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 0-28136
----------------------------------------------------------
ICON Cash Flow Partners L.P. Six
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3723089
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(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
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Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [x] Yes [ ] No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2) [ ] Yes [x] No
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Condensed Consolidated Balance Sheets
September 30, December 31,
2003 2002
---- ----
(unaudited)
Assets
------
Cash and cash equivalents $ 171,456 $ 203,739
------------- ------------
Investment in finance leases
Minimum rents receivable 383,617 755,103
Estimated unguaranteed residual values 649,909 1,105,178
Initial direct costs, net - 706
Unearned income (18,536) (26,665)
Allowance for doubtful accounts (77,068) (277,068)
------------- ------------
937,922 1,557,254
------------- ------------
Investment in operating leases
Equipment at cost 21,060,638 21,965,262
Accumulated depreciation (8,536,165) (7,876,081)
------------- ------------
12,524,473 14,089,181
------------- ------------
Investments in unconsolidated joint ventures 628,149 1,019,138
------------- ------------
Other assets, net 115,769 226,750
------------- ------------
Total assets $ 14,377,769 $ 17,096,062
============= ============
(continued on next page)
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Condensed Consolidated Balance Sheets - Continued
September 30, December 31,
2003 2002
---- ----
(unaudited)
Liabilities and Partners' Equity
--------------------------------
Notes payable - non-recourse $ 9,005,428 $ 9,190,418
Security deposits and deferred credits 887,568 440,818
Accounts payable - other 280,027 299,706
Accounts payable - General Partners and affiliates 520,951 7,138
Minority interest in consolidated joint venture 56,049 68,611
------------- ------------
Total liabilities 10,750,023 10,006,691
------------- ------------
Commitment and Contingencies
Partners' equity (deficiency)
General Partner (291,407) (256,804)
Limited Partners (377,758 and 378,258 units outstanding,
$100 per unit original issue price) 3,919,153 7,346,175
------------- ------------
Total partners' equity 3,627,746 7,089,371
------------- ------------
Total liabilities and partners' equity $ 14,377,769 $ 17,096,062
============= ============
See accompanying notes to condensed consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
---- ---- ---- ----
Revenues
Rental income $ 236,202 $ 877,574 $ 844,699 $ 2,637,113
Finance lease income 10,541 114,794 32,559 384,894
(Loss) gain on sales of equipment (59,954) (3,298) (210,706) 35,781
(Loss) income from investments
in unconsolidated joint ventures (4,568) 19,596 (33,355) 47,127
Interest income and other 82,574 55,492 259,388 167,593
---------- ---------- ------------ ----------
Total revenues 264,795 1,064,158 892,585 3,272,508
---------- ---------- ------------ ----------
Expenses
Depreciation 358,209 556,376 1,072,508 1,670,237
Interest 265,423 396,272 838,587 1,257,107
General and administrative 48,914 191,961 258,436 458,353
Management fees - General Partner 27,104 98,706 93,070 272,572
Administrative expense reimbursements
- General Partner 11,170 36,157 33,630 117,306
Amortization of initial direct costs - 1,218 706 4,491
Minority interest in consolidated joint venture (4,159) (180) (12,562) (780)
Provision for bad debts (reversal) (200,000) - (200,000) -
---------- ---------- ------------ -----------
Total expenses 506,661 1,280,510 2,084,375 3,779,286
---------- ---------- ------------ -----------
Net loss $ (241,866) $ (216,352) $ (1,191,790) $ (506,778)
========== ========== ============ ===========
Net loss allocable to:
Limited Partners $ (239,447) $ (214,188) $ (1,179,872) $ (501,710)
General Partner (2,419) (2,164) (11,918) (5,068)
---------- ---------- ------------ -----------
$ (241,866) $ (216,352) $ (1,191,790) $ (506,778)
========== =========== ============ ===========
Weighted average number of limited
partnership units outstanding 377,758 378,278 377,800 378,284
========== ========== ============ ===========
Net loss per weighted average
limited partnership unit $ (.63) $ (.57) $ (3.12) $ (1.33)
========== ========== ============ ===========
See accompanying notes to condensed consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Condensed Consolidated Statement of Changes in Partners' Equity
Nine Months Ended September 30, 2003
(unaudited)
Limited Partner Distributions
-----------------------------
Return of Investment Limited General
Capital Income Partners Partner Total
------- ------ -------- ------- -----
(Per weighted average unit)
Balance at
January 1, 2003 $ 7,346,175 $ (256,804) $ 7,089,371
Cash distributions
to partners $ 5.94 $ - (2,245,776) (22,685) (2,268,461)
Limited partnership units
redeemed (500 units) (1,374) - (1,374)
Net loss (1,179,872) (11,918) (1,191,790)
------------- ---------- ------------
Balance at
September 30, 2003 $ 3,919,153 $ (291,407) $ 3,627,746
============= ========== ============
See accompanying notes to condensed consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30,
(unaudited)
2003 2002
---- ----
Cash flows from operating activities:
Net loss $ (1,191,790) $ (506,778)
------------ ------------
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Rental income - paid directly to lenders by lessees (675,000) (2,469,596)
Interest expense on non-recourse financing
paid directly by lessees 792,786 1,160,249
Finance income portion of receivables paid directly
to lenders by lessees - (348,758)
Depreciation 1,072,508 1,670,237
Amortization of initial direct costs and loan fees 46,507 101,349
Provision for bad debts (reversal) (200,000) -
Loss (gain) on sales of equipment 210,706 (35,781)
Loss (income) from investments in unconsolidated
joint ventures 33,355 (47,127)
Minority interest in consolidated joint venture (12,562) (780)
Changes in operating assets and liabilities, net 1,493,422 19,588
------------ ------------
Total adjustments 2,761,722 49,381
------------ ------------
Net cash provided by (used in) operating activities 1,569,932 (457,397)
------------ ------------
Cash flows from investing activities:
Proceeds from sales of equipment 303,841 1,588,720
Distributions received from unconsolidated joint ventures 363,779 476,974
------------ ------------
Net cash provided by investing activities 667,620 2,065,694
------------ ------------
(continued on next page)
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Condensed Consolidated Statements of Cash Flows - Continued
Nine Months Ended September 30,
(unaudited)
2003 2002
---- ----
Cash flows from financing activities:
Cash distributions to partners (2,268,461) (1,986,018)
Redemption of limited partnership units (1,374) (1,300)
------------ -----------
Net cash used in financing activities (2,269,835) (1,987,318)
------------ -----------
Net decrease in cash and cash equivalents (32,283) (379,021)
Cash and cash equivalents at beginning of period 203,739 384,816
----------- -----------
Cash and cash equivalents at end of period $ 171,456 $ 5,795
----------- -----------
(continued on next page)
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Condensed Consolidated Statements of Cash Flows - Continued
Supplemental Disclosures of Cash Flow Information
- -------------------------------------------------
For the nine months ended September 30, 2003 and 2002, non-cash activities
included the following:
2003 2002
---- ----
Principal and interest on direct finance
receivables paid directly to lenders by lessees $ 302,776 $ 1,699,462
Rental income assigned to operating lease receivable 675,000 2,469,596
Principal and interest on non-recourse
financing paid directly to lenders by lessees (977,776) (4,169,058)
---------- -----------
$ - $ -
========== ===========
2003 2002
---- ----
Interest paid directly to lenders by lessees pursuant
to non-recourse financings $ 792,786 $ 1,160,249
Other interest 45,801 96,858
---------- -----------
Total interest expense $ 838,587 $ 1,257,107
========== ===========
See accompanying notes to condensed consolidated financial statements.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements
September 30, 2003
(unaudited)
1. Basis of Presentation
The condensed 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 condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes included in the Partnership's 2002 Annual Report
on Form 10-K. Certain 2002 amounts have been reclassified to conform to the 2003
presentation.
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.
2. Disposition Period
The Partnership's reinvestment period ended on November 11, 2000. The
disposition period commenced 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
continue the orderly termination of its operations and affairs. The Partnership
has not and will not invest in any additional finance or lease transactions
during the disposition period.
3. Related Party Transactions
Fees paid or accrued by the Partnership to the General Partner or its
affiliates for the nine months ended September 30, 2003 and 2002 are as follows:
2003 2002
---- ----
Management fees $ 93,070 $ 272,572 Charged to operations
Administrative expense
reimbursements 33,630 117,306 Charged to operations
---------- ---------
Total $ 126,700 $ 389,878
========== =========
The Partnership has investments in seven joint ventures with other
partnerships sponsored by the General Partner. The Partnership received, on
behalf of ICON Income Fund Eight A L.P. and ICON Cash Flow Partners L.P. Seven,
distribution amounts of $295,152 and $207,612, respectively, from joint venture
ICON/AIC Trust.(See Note 4 for information relating to the current joint
ventures).
4. Consolidated Venture and Investments in Unconsolidated Joint Ventures
The Partnership and affiliates have investments in seven ventures involved
in acquiring and managing various assets.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
Consolidated Venture
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 ICON Cash Flow Partners L.L.C. II ("ICON
Cash Flow LLC II"), for the purpose of acquiring and managing an aircraft
subject to an operating lease with a U.S. based commercial airline. In 1997,
upon the scheduled termination of the lease, the aircraft was remarketed to
Aerovias de Mexico, S.A. de C.V. ("Aeromexico") under a lease that expired in
November 2002. At that time an extension agreement was consummated with
Aeromexico. The lease extension terms call for a 15 month rental at $75,000 per
month. At the end of the 15 months, Aeromexico has an option to renew for two
twelve-month renewal periods at the then current fair market value rental rate.
The Partnership and Series E acquired interests of 99% and 1%, respectively, in
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. 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 the assets and liabilities and revenues and
expenses of ICON Cash Flow LLC II. Series E's investment in ICON Cash Flow LLC
II is reflected as minority interest in consolidated joint venture on the
Partnership's condensed consolidated balance sheets and as minority interest in
consolidated joint venture on the condensed consolidated statements of
operations.
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 acquiring and managing an aircraft subject to an operating lease
with a U.S. based commercial airline. In 1997, the aircraft was remarketed to
Aeromexico under a lease which expired in October 2002. In November 2002 an
extension agreement was consummated with Aeromexico. The lease extension terms
call for a 15 month rental at $75,000 per month. At the end of the 15 months,
Aeromexico has an option to renew for two twelve-month renewal periods at the
then current fair market value rental rate. The Partnership and Series E
acquired interests of 1% and 99%, respectively, in 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. 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 whereby the Partnership's original investment was
recorded at cost and is adjusted by its share of earnings, losses and
distributions. The outstanding non-recourse debt at September 30, 2003 was
$9,331,944.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
Information as to the unaudited results of operations of ICON Cash Flow LLC
I for the nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net loss $ (1,448,363) $ (227,034)
============= ============
Partnership's share of net loss $ (14,484) $ (2,271)
============= ============
ICON Receivables 1997-A LLC
---------------------------
In March 1997, the Partnership and its affiliates, 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 LLC ("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 September
30, 2003, 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.
Information as to the unaudited results of operations of 1997-A for the
nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net loss $ (50,673) $ (73,135)
============ ============
Partnership's share of net loss $ (15,726) $ (22,691)
============ ============
ICON Receivables 1997-B LLC
---------------------------
In August 1997, the Partnership and affiliates, Series E and L.P. Seven,
formed ICON Receivables 1997-B LLC ("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.
Information as to the unaudited results of operations of 1997-B for the
nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net loss $ (199,459) $ (388,997)
============ ===========
Partnership's share of net loss $ (16,615) $ (32,403)
============ ===========
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
ICON/Boardman Facility LLC
--------------------------
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 Facility LLC ("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 remaining venturers' shares in ICON
BF at September 30, 2003 were .5025%, .5025%, and 98.995% for the Partnership,
L.P. Seven, and Fund Eight A, respectively. The outstanding debt at September
30, 2003 was $7,160,203.
Information as to the unaudited results of operations of ICON BF for the
nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net income $ 1,074,363 $ 1,003,012
============= ============
Partnership's share of net income $ 5,399 $ 5,040
============= ============
ICON/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 in AIC Trust 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 of
(pound)475,000 each were collected in 2002 and the third and fourth installment
of (pound)450,000 each was collected through the first three quarters of 2003.
As of September 30, 2003, the gross amount due is (pound)725,000 ($1,231,815
based upon the exchange rate at September 30, 2003).
Information as to the unaudited results of operations of AIC Trust for the
nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net income $ 32,151 $ 340,534
============ ============
Partnership's share of net income $ 8,201 $ 86,870
============ ============
Distributions $ 1,396,948 $ 1,752,886
============ ============
Partnership's share of distributions $ 356,361 $ 447,161
============ ============
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
ICON Cheyenne LLC
-----------------
In December 2000, the Partnership and three affiliates, L.P. Seven, Fund
Eight A and ICON Income Fund Eight B L.P. ("Fund Eight B") formed ICON Cheyenne
LLC ("ICON Cheyenne") for the purpose of acquiring a portfolio of leases for an
aggregate purchase price of $29,705,716, which was paid for 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 leases. The leases
expire on various dates through September 2006. The Partnership, L.P. Seven,
Fund Eight A and Fund Eight B have ownership interests of 1%, 10.31%, 1% and
87.69% respectively, in ICON Cheyenne. The Partnership accounts for its
investment under the equity method of accounting. The outstanding debt at
September 30, 2003 was $2,007,229.
Information as to the unaudited results of operations of ICON Cheyenne for
the nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net (loss) income $ (12,994) $ 1,258,307
=========== ============
Partnership's share of net (loss) income $ (130) $ 12,582
=========== ============
Distributions $ 741,759 $ 2,981,327
=========== ============
Partnership's share of distributions $ 7,418 $ 29,813
=========== ============
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
September 30, 2003
Item 2. General Partner's Discussion and Analysis of Financial Condition
and Results of Operations
Forward-Looking Information - The following discussion and analysis should
be read in conjunction with the audited financial statements dated December 31,
2002. Certain statements within this document may constitute forward-looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. These statements are identified by words such as
"anticipate," "believe," "estimate," "expects," "intend," "predict" or "project"
and similar expressions. This information may involve risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements. Although the Partnership believes that the expectations reflected in
such forward-looking statements are based on reasonable assumptions, such
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected.
Results of Operations for the Three Months Ended September 30, 2003 and 2002
Revenues for the three months ended September 30, 2003 ("2003 Quarter")
were $264,795, representing a decrease of $799,363 or 75.1% from the three
months ended September 30, 2002 ("2002 Quarter"). The decrease in revenues
resulted primarily from a decrease in rental income of $641,372. This was due to
the expiration of operating leases (and subsequent sale of underlying equipment)
as well as the extension agreement for the Aerovias de Mexico, S.A. de C.V.
("Aeromexico") lease at reduced rentals. Finance lease income also decreased by
$104,253 due to the reduction in the average size of the finance lease
portfolio. In addition, losses on sales of equipment increased by $56,656 due to
a greater amount of equipment being sold for less than the Partnership's
carrying value of the equipment. These decreases were offset by an increase in
interest income and other of $27,082, due partially to a loss recovery on a
lease to Raymond Access Limited which was terminated in December 2002.
Expenses for the 2003 Quarter were $506,661, representing a decrease of
$773,849 or 60.4% from the 2002 Quarter. The decrease in expenses resulted
partly from a reduction in the provision for bad debts of $200,000. As a result
of an analysis of delinquencies, an assessment of overall risk and a review of
historical loss experience, the allowance was adjusted downward. Depreciation
expense decreased by $198,167 due to the expiration of operating leases and sale
of underlying equipment. General and administrative expenses also decreased by
$143,047 due mainly to a decrease in professional fees. In addition, interest
expense decreased by $130,849, resulting from a reduction in the average debt
outstanding from 2002 to 2003. Management fees - general partner decreased by
$71,602 and administrative expense reimbursements - general partner decreased by
$24,987, both as a result of the reduction in the average size of the
Partnership's lease portfolio.
Net loss for the 2003 Quarter and the 2002 Quarter was $241,866 and
$216,352 respectively. The net loss per weighted average limited partnership
unit outstanding was $.63 and $.57 for the 2003 Quarter and 2002 Quarter,
respectively.
Results of Operations for the Nine Months Ended September 30, 2003 and 2002
Revenues for the nine months ended September 30, 2003 ("2003 Period") were
$892,585, representing a decrease of $2,379,923 or 72.7% from the nine months
ended September 30, 2002 ("2002 Period"). The decrease in revenues resulted
primarily from a decrease in rental income of $1,792,414. This was due to the
expiration of operating leases (and subsequent sale of underlying equipment) as
well as the extension agreement for the Aeromexico lease. In addition, finance
lease income decreased by $352,335 due to the reduction in the average size of
the finance lease portfolio. Gain on sales of equipment also decreased by
$246,487 to a loss of $210,706 and income from investments in unconsolidated
joint ventures decreased by $80,482 to a loss of $33,355. These decreases were
partially offset by an increase in interest income and other of $91,795. This
increase was due both to a one-time adjustment based on a revised estimate of
residual notes outstanding and a loss recovery on a lease to Raymond Access
Limited which was terminated in December 2002.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
September 30, 2003
Expenses for the 2003 Period were $2,084,375, representing a decrease of
$1,694,911 or 44.8% from the 2002 Period. The decrease in expenses was partially
the result of a reduction in depreciation expense of $597,729. Depreciation
expense decreased due to the expiration of operating leases and sale of
underlying equipment. In addition, interest expense decreased by $418,520,
resulting from a reduction in the average debt outstanding from 2002 to 2003.
The provision for bad debts was reduced by $200,000. As a result of an analysis
of delinquencies, an assessment of overall risk and review of historical loss
experience, the allowance was adjusted downward. General and administrative
expenses also decreased by $199,917 due mainly to a decrease in professional
fees. Management fees - general partner decreased by $179,502 and administrative
expense reimbursements - general partner decreased by $83,676, both as a result
of the reduction in the average size of the Partnership's lease portfolio.
Net loss for the 2003 Period and the 2002 Period was $1,191,790 and
$506,778 respectively. The net loss per weighted average limited partnership
unit outstanding was $3.12 and $1.33 for the 2003 Period and 2002 Period,
respectively.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the 2003 Period were net
cash provided by operating activities of $1,569,932, distributions received from
unconsolidated joint ventures of $363,779 and proceeds from sales of equipment
of $303,841. These funds were used to pay operating expenses and cash
distributions to partners.
Cash distributions to limited partners for the 2003 Period and 2002 Period
totaled $2,245,776 and $1,966,158, respectively. It is anticipated that the
Partnership will continue to generate sufficient cash from operations in order
to meet its current obligations.
The Partnership's reinvestment period ended on November 11, 2000. The
disposition period commenced 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
continue the orderly termination of its operations and affairs. The Partnership
has not and will not invest in any additional finance or lease transactions
during the disposition period. As a result of the Partnership's entering into
the disposition period, future monthly distributions are expected to fluctuate
depending on the amount of asset sale and re-lease proceeds received during that
period.
As of September 30, 2003, 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.
We do not consider the impact of inflation to be material in the analysis
of our overall operations.
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
September 30, 2003
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 as of the quarter ended September 30, 2003. 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.
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 1 - Legal Proceedings
The Partnership, from time-to-time, in the ordinary course of business,
commences legal actions when necessary to protect or enforce the rights of the
Partnership. We are not a defendant party to any litigation and are not aware of
any pending or threatened litigation against the Partnership.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
32.1 Certification of Chairman and Chief Executive Officer.
32.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer.
33.1 Certification of Chairman and Chief Executive Officer pursuant to 18 U.S.C.
(Section)1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
33.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer pursuant to 18 U.S.C. (Section)1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
ICON Cash Flow Partners L.P. 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 13, 2003 /s/ Thomas W. Martin
----------------- ------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer of
the General Partner of the Partnership)
Certifications - 10-Q
---------------------
EXHIBIT 32.1
I, Beaufort J.B. Clarke, certify that:
1. I have reviewed this quarterly report of ICON Cash Flow Partners L.P. Six;
2. Based on my knowledge, this report does not contain any untrue statement 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
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this 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 report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the Partnership and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
Partnership, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Partnership's internal
control over financial reporting that occurred during the
Partnership's most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Partnership's
internal control over financial reporting; and
5. The Partnership's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Partnership's auditors and the audit committee of the Partnership's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Partnership's internal
control over financial reporting.
Dated: November 13, 2003
/s/ Beaufort J.B. Clarke
- -----------------------------
Beaufort J. B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
sole General Partner of ICON Cash Flow Partners L.P. Six
Certifications - 10-Q
---------------------
EXHIBIT 32.2
I, Thomas W. Martin, certify that:
1. I have reviewed this quarterly report of ICON Cash Flow Partners L.P. Six;
2. Based on my knowledge, this report does not contain any untrue statement 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
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Partnership as of, and for, the periods presented in this report;
4. The Partnership's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the Partnership and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
Partnership, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Partnership's internal
control over financial reporting that occurred during the
Partnership's most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Partnership's
internal control over financial reporting; and
5. The Partnership's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Partnership's auditors and the audit committee of the Partnership's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Partnership's internal
control over financial reporting.
Dated: November 13, 2003
/s/ Thomas W. Martin
- ----------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer
of the General Partner of the Partnership)
ICON Capital Corp.
sole General Partner of ICON Cash Flow Partners L.P. Six
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
September 30, 2003
EXHIBIT 33.1
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, 2003
(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 13, 2003
/s/ Beaufort J.B. Clarke
- ------------------------------------------------------
Beaufort J.B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
sole General Partner of ICON Cash Flow Partners L.P. Six
ICON Cash Flow Partners L.P. Six
(A Delaware Limited Partnership)
September 30, 2003
EXHIBIT 33.2
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, 2003
(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 13, 2003
/s/ Thomas W. Martin
- -------------------------------------------------------
Thomas W. Martin
Executive Vice President (Principal
Financial and Accounting Officer)
ICON Capital Corp.
sole General Partner of ICON Cash Flow Partners L.P. Six