Back to GetFilings.com



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, 2001
------------------------------------------------------
or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]

For the transition period from to
----------------------- ----------------------

Commission File Number 33-94458
---------------------------------------------------------

ICON Cash Flow Partners L.P. Seven
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 13-3835387
- --------------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

100 Fifth Avenue, 10TH Floor, New York, New York 10011
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 418-4700
-----------------------------

Securities registered pursuant to Section 12(b) of the Act: None

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.

[ ] Yes [X] No





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

TABLE OF CONTENTS

Item Page

PART I

1. Business 3-4

2. Properties 4

3. Legal Proceedings 4

4. Submission of Matters to a Vote of Security Holders 4

PART II

5. Market for the Registrant's Securities and Related
Security Holder Matters 5

6. Selected Consolidated Financial and Operating Data 5

7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations 6-10

8. Financial Statements and Supplementary Data 11-37

9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 38

PART III

10. Directors and Executive Officers of the Registrant's
General Partner 38-39

11. Executive Compensation 39

12. Security Ownership of Certain Beneficial Owners
and Management 39

13. Certain Relationships and Related Transactions 39

PART IV

14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 40

SIGNATURES 41





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

PART I

Item 1. Business

General Development of Business

ICON Cash Flow Partners L.P. Seven (the "Partnership"), was formed on May
23, 1995 as a Delaware limited partnership. The Partnership's maximum offering
was $100,000,000. The Partnership commenced business operations on its initial
closing date, January 19, 1996 with the admission of 26,367.95 limited
partnership units at $100 per unit representing $2,636,795 of capital
contributions. From January 19, 1996 through September 16, 1998 (the final
closing date) 973,628.86 additional units were admitted representing $97,362,886
of capital contributions bringing the total admission to 999,996.81 units
aggregating $99,999,681 in capital contributions. The Partnership redeemed
11,348 limited partnership units during the years 1997 through 2001, leaving
988,649 limited partnership units outstanding at December 31, 2001.

The Partnership has no direct employees. The General Partner has full and
exclusive discretion in management and control of the Partnership.

Segment Information

The Partnership has only one operating segment: the business of acquiring
equipment subject to leases with companies that the Partnership believes to be
creditworthy.

Narrative Description of Business

The Partnership is an equipment leasing income fund. The principal
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 intends to: (1) acquire a diversified portfolio of low
obsolescence equipment having long lives and high residual values; (2) make
monthly cash distributions to its limited partners commencing with each limited
partner's admission to the Partnership, continuing through the Reinvestment
Period, which period will end no later than the eighth anniversary after the
final closing date; (3) re-invest substantially all undistributed cash from
operations and cash from sales of equipment and financing transactions during
the Reinvestment Period; and (4) sell the Partnership's investments and
distribute the cash from sales of such investments to its limited partners after
the end of the Reinvestment Period.

The equipment leasing industry is highly competitive. When seeking leasing
transactions for acquisition, the Partnership competes 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.

The Partnership had three lessees which accounted for 10% or more of total
revenue for the year ended December 31, 2001. The leases were Federal Express,
Seacor Smit and Seacor Offshore generating 19%, 13% and 12% of total revenue
respectively.






ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

Lease Transactions

During the years ended December 31, 2001 and 2000 the Partnership did not
purchase any equipment. In 2000, a joint venture in which the Company is a 50%
limited partner, exercised an option to acquire a drilling rig and entered into
an operating lease for the rig. This joint venture investment is accounted for
under the equity method.

Also in 2000, the Partnership acquired a 2% interest in a joint venture
("ICON Aircraft 24846, LLC") with two other affiliates acquiring the remaining
joint venture interests. Additionally, the Partnership acquired a 10.31%
interest in a joint venture ("ICON Cheyenne, LLC") with three other affiliates
acquiring the remaining joint venture interests. These joint venture investments
are accounted for under the equity method.

Item 2. Properties

The Partnership neither owns nor leases office space or equipment for the
purpose of managing its day-to-day affairs.

Item 3. Legal Proceedings

The Partnership is not a party to any pending legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth
quarter of 2001.





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

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,
-------------- ----------------------------------------
2001 2000
---- ----
Limited Partners 4,598 4,578
General Partner 1 1

Item 6. Selected Consolidated Financial and Operating Data



Years Ended December 31,
--------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
---- ---- ---- ---- ----


Total revenue $ 9,778,601 $ 18,079,044(1) $ 19,572,257 $ 17,207,618 $ 9,749,244
============= ================ =============== ============== =============

Net (loss) income $ (274,007) $ 4,658,569 $ 3,514,436 $ 2,689,176 $ 2,649,580
============= ================ =============== ============== =============

Net (loss) income allocable
to limited partners $ (271,267) $ 4,611,983 $ 3,479,291 $ 2,662,284 $ 2,623,084
============= ================ =============== ============== =============

Net (loss) income allocable
to the General Partner $ (2,740) $ 46,586 $ 35,145 $ 26,892 $ 26,496
============= ================ =============== ============== =============

Weighted average limited
partnership units outstanding 989,112 989,929 992,719 808,650 413,677
============= ================ =============== ============== =============

Net (loss) income per weighted
average limited partnership unit $ (.27) $ 4.66 $ 3.50 $ 3.29 $ 6.34
============= =============== ============== ============== =============

Distributions to limited partners $ 10,632,716 $ 10,641,411 $ 10,677,316 $ 8,692,479 $ 4,147,829
============= ================ =============== ============== =============

Distributions to the
General Partner $ 100,023 $ 107,493 $ 107,872 $ 87,803 $ 41,125
============= ================ =============== ============== =============

December 31,
------------------------------------------------------------------------------------
2001 2000 1999 1998 1997
---- ---- ---- ---- ----

Total assets $ 109,372,857 $ 134,301,609(1) $ 172,007,288 $ 216,387,240 $ 153,066,319
============== ================ =============== ============== =============

Partners' equity $ 52,863,237 $ 63,916,992 $ 70,045,138 $ 77,741,448 $ 45,901,123
============== ================ =============== ============== =============


(1) Certain amounts have been reclassified from the prior year presentation.
See Note 3 to the financial statements.





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

Item 7. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations

ICON Cash Flow Partners L.P. Seven (the "Partnership"), was formed on May
23, 1995 as a Delaware limited partnership. The Partnership's maximum offering
was $100,000,000. The Partnership commenced business operations on its initial
closing date, January 19, 1996 with the admission of 26,367.95 limited
partnership units at $100 per unit representing $2,636,795 of capital
contributions. From January 19, 1996 through September 16, 1998 (the final
closing date) 973,628.86 additional units were admitted representing $97,362,886
of capital contributions bringing the total admission to 999,996.81 units
aggregating $99,999,681 in capital contributions. The Partnership redeemed
11,348 limited partnership units during the years 1997 through 2001, leaving
988,649 limited partnership units outstanding at December 31, 2001.

The Partnership's portfolio consists of net investments in finance leases,
investments in estimated unguaranteed residual values, leveraged leases,
investments in operating leases, equipment held for sale or lease and equity
investments in joint ventures.

Significant Accounting Policies and Management Estimates

Basis of Accounting and Presentation - The Partnership's records are
maintained on the accrual basis. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and revenues and expenses
during the reporting period. Significant estimates include the allowance for
doubtful accounts and unguaranteed residual values. Management believes that the
estimates and assumptions utilized in preparing its financial statements are
reasonable and prudent. Actual results could differ from those estimates. In
addition, management is required to disclose contingent assets and contingent
liabilities.

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 and depreciated on the straight-line method over the lease term 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 are included in other assets. Initial
direct costs of finance leases and leverage leases are capitalized and are
amortized over the terms of the related leases using the interest method.







ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

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.

Equipment Held for Sale or Lease - The vessels thar are held for sale or
lease are carried at cost less accumulated depreciation, subject to the
Partnership's impairment policy discussed below.

Investments in Estimated Unguaranteed Residual Values - The assets are
carried at cost (which is equal to or less than market value) subject to the
Partnership's policy relating to impairments of residuals discussed below, until
sale of the equipment, at which time a gain or loss will be recognized on each
transaction. No income will be recognized until the underlying equipment is
sold.

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 its 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.

Results of Operations for the Years Ended December 31, 2001 and 2000

Revenues for the year ended December 31, 2001 decreased by $8,300,443 from
$18,079,044 in 2000 to $9,778,601 in 2001. The decrease in revenues resulted
primarily from a decrease in finance income of $9,280,638, a decrease in income
from leveraged leases of $544,808, a decrease in gain on sales of equipment of
$251,342 and losses from investments in joint ventures of $552,951, as compared
to income from joint ventures of $500,662 in 2000.

The decreases in revenue were partially offset by increases in rental
income of $2,711,700 and interest income and other of $118,258. The decrease in
finance income resulted from the continued collection of minimum lease rentals
reducing the investment balance outstanding on which such revenues are based as
well as the expiration of finance leases. Additionally,






ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

the lease of six vessels subject to a finance lease which accounted for
$3,155,577 of finance lease income in 2000 and $643,030 of finance lease income
in 2001 expired in 2001 in accordance with its terms. Upon lease termination of
the finance leases, the vessels were released under short term operating leases

Income from leveraged leases decreased in 2001 primarily due to a
write-down in the fourth quarter of 2001 of the estimated residual of one of the
aircraft under lease. Gain on sales of equipment decreased due primarily to the
gains recorded on the sale of two aircraft in 2000. There were no similar sales
in 2001. Rental income increased as the six vessels discussed above, which were
previously leased under finance leases which expired in 2001, were released
under short term operating leases during 2001. However, in the fourth quarter of
2001, five of the vessels were returned to the Partnership and were off lease at
December 31, 2001. Interest income and other increased primarily from an
increase in the collection of late charges in 2001. The Partnership had an
aggregate loss from its investments in joint ventures of ($552,951) in 2001 as
compared to income from joint ventures of $500,662 in 2000.

Expenses for the year ended December 31, 2001 were $10,052,608 representing
a decrease of $3,367,867 from 2000. The decrease in expenses resulted primarily
from decreases in interest expense of $1,623,475, amortization of initial direct
costs of $906,758, management fees - General Partner of $1,419,408 and a
decrease of administrative expense reimbursements - General Partner of $606,879.
Additionally, the Company recorded a reversal of a provision for bad debts of
$500,000 in 2001 as compared to a provision for bad debts of $400,000 in 2000.
The decreases were partly offset by the increase in depreciation expense of
$2,040,722 due to the reclassification of the six vessels discussed above from
finance leases to operating leases, general and administrative expenses of
$9,015, and minority interest expense of $38,917. The decrease in interest
expense was due primarily to the decrease in the average debt outstanding during
2001 as compared to 2000. Amortization of initial direct costs decreased as a
result of the decrease in the average size of the finance lease portfolio from
2000 to 2001. Management fees - General Partner decreased due to the decrease in
the amount of gross rent (which is the basis of such fee) received in 2001 as
compared to 2000.

Net (loss) income for the years ended December 31, 2001 and 2000 was
($274,007) and $4,658,569, respectively. The net (loss) income per weighted
average limited partnership unit was ($.27) and $4.66 for 2001 and 2000,
respectively. The primary reasons for the decline in net income in 2001 was the
decrease in finance income and losses from unconsolidated joint ventures as
described above.

Results of Operations for the Years Ended December 31, 2000 and 1999

Revenues for the years ended December 31, 2000 were $18,079,044,
representing a decrease of $1,493,213 from 1999. The decrease in revenues
resulted primarily from a decrease in finance income of $3,763,399, which was
partially offset by increases in income from leveraged leases of $1,186,809,
gain on sales of equipment of $507,296, interest income and other of $161,079
and income from investments in joint ventures of $415,002. The decrease in
finance income resulted from a decrease in the average size of the finance lease
portfolio from 1999 to 2000. Income from leveraged leases increased due to an
additional leveraged lease investment made in the fourth quarter of 1999. Gain
on sales of equipment increased due primarily to the sale of two aircraft in
2000. Interest income and other increased primarily from an increase in the
average cash balances from 1999 to 2000. Income from investments in joint
ventures increased due to the addition of the North Sea (Connecticut) Limited
Partnership in 2000.






ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

Expenses for the year ended December 31, 2000 were $13,420,475 representing
a decrease of $2,637,346 from 1999. The decrease in expenses resulted primarily
from decreases in interest expense of $3,249,639 and amortization of initial
direct costs of $336,537. These decreases were partially offset by increases in
general and administrative expenses of $327,929, management fees - General
Partner of $311,234, provision for bad debts of $200,000 and administrative
expense reimbursements- General Partner of $109,532. The decrease in interest
expense resulted from a decrease in the average debt outstanding during 1999 as
compared to 2000. Amortization of initial direct costs decreased as a result of
the decrease in the average size of the finance lease portfolio from 1999 to
2000. General and administrative expenses increased primarily as a result of
higher professional fees. Management fees - General Partner increased due to an
increase in the amount of rents, which is the basis for such fees, (either
directly or through joint ventures) received in 2000 versus 1999. As a result of
an analysis of delinquencies, assessment of overall risk and a review of
historical loss experience, the Partnership determined that a provision for bad
debts of $400,000 was required for the year ended December 31, 2000 compared to
$200,000 for 1999.

Net income for the years ended December 31, 2000 and 1999 was $4,658,569
and $3,514,436, respectively. The net income per weighted average limited
partnership unit was $4.66 and $3.50 for 2000 and 1999, respectively.

Liquidity and Capital Resources

The Partnership's primary sources of funds in 2001 were borrowings of
$2,111,726 and proceeds from the sale of equipment of $7,771,021. The
Partnership used funds of $934,820 in its operating activities. Distributions
to partners aggregated $10,732,739, which exceeded cash generated during the
year. As a result, the Partnership's liquidity was reduced.

The Partnership's notes payable at December 31, 2001 totaled $50,984,856.
These amounts consisted of $29,698,082, in non-recourse notes, and $21,286,774
of recourse notes payable. $20,642,483 of the recourse notes are secured by the
investments in three aircraft residuals with an aggregate carrying value at
$20,811,758 at December 31, 2001. The recourse notes payable also include
amounts outstanding under the lines of credit discussed below. The non-recourse
notes are secured by, and are payable from the proceeds of sale or lease of,
various aircraft and vessels.

The Partnership entered into a recourse line of credit agreement with
Imperial Bank in June 2000. The maximum amount available under the agreement is
$7,500,000. This line of credit is collateralized by certain receivables and
residuals and bears interest at the bank's prime rate plus one percent. At
December 31, 2001, the Partnership had $100,310 outstanding under the line of
credit. The line expires in August 2002.

The Partnership entered into a recourse line of credit agreement with
Pullman Bank in 1998. The maximum amount available under the Facility is
$5,000,000. This line of credit is collateralized by





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

certain receivables and residuals and bears interest at prime plus one half
percent. At December 31, 2001, the Partnership had $543,981 outstanding under
the line of credit. The line expires in December 2002.

Cash distributions to the limited partners for the years ended December 31,
2001 and 2000, which were paid monthly, totaled $10,632,716 and $10,641,411,
respectively, of which $0 and $4,611,983 was investment income and $10,632,716
and $6,029,428 was a return of capital, respectively. The monthly annualized
cash distribution rate to limited partners for the years ended December 31, 2001
and 2000 was 10.75% for each year, of which 0.0% and 4.66% was investment income
and 10.75% and 6.09% was a return of capital, respectively.

As of December 31, 2001, except as noted above, there were no known trends
or demands, commitments, events or uncertainties which are likely to have any
material effect on liquidity. As cash is realized from operations, sales of
equipment and borrowings, the Partnership will invest in equipment leases and
financings where it deems it to be prudent while retaining sufficient cash to
meet its reserve requirements and recurring obligations.

New Accounting Pronouncement

Effective January 1, 2002, the Partnership adopted SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS No. 144).
This statement requires that long-lived assets be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to the future net
cash flows expected to be generated by the asset. If the carrying amount of the
asset exceeds its estimated future cash flows, an impairment charge is
recognized by the amount by which the carrying amount of the asset exceeds the
fair value of the asset. The adoption of SFAS No. 144 did not have any effect on
the Partnership's financial position or results of operations as the provisions
of SFAS No. 144 are similar to the partnership's current policy for impairment
review. SFAS No. 144 requires companies to separately report discontinued
operations and extends that reporting to a component of an entity that either
has been disposed of (by sale, abandonment or in a distribution to the owners)
or classified as held for sale. Assets to be disposed of are reported at the
lower of the carrying amount or fair value less the costs to sell.

Item 7a. Qualitative and Quantitative Disclosures About Market Risk

The Partnership is exposed to certain market risks, including changes in
interest rates and the demand for equipment (and the related residuals) owned by
the Partnership and its investees. Except as described below, the Partnership
believes its exposure to other market risks are insignificant to both its
financial position and results of operations.

The Partnership manages its interest rate risk by obtaining fixed rate debt
for most of its obligations.

The Partnership also borrows funds under two floating rate lines of credit
and is therefore exposed to interest rate risk until the floating rate lines of
credit are repaid. The Partnership's aggregate borrowings under the floating
rate lines of credit as of December 31, 2001 was $644,291. The Partnership
believes the risk associated with rising interest rates under these lines are
not significant.

The Partnership manages its exposure to equipment and residual risk by
monitoring the market and maximizing remarketing proceeds through either
releasing or sale of equipment.





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

Item 8. Consolidated Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Page Number

Independent Auditors' Report 13

Consolidated Balance Sheets as of December 31, 2001 and 2000 14-15

Consolidated Statements of Operations for the Years Ended
December 31, 2001, 2000 and 1999 16

Consolidated Statements of Changes in Partners'
Equity for the Years Ended
December 31, 2001, 2000 and 1999 17

Consolidated Statements of Cash Flows for the Years Ended
December 31, 2001, 2000 and 1999 18-20

Notes to Consolidated Financial Statements 21-35















ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

Consolidated Financial Statements

December 31, 2001

(With Independent Auditors' Report Thereon)















INDEPENDENT AUDITORS' REPORT


The Partners
ICON Cash Flow Partners L.P. Seven:

We have audited the accompanying consolidated balance sheets of ICON Cash Flow
Partners L.P. Seven (a Delaware limited partnership) as of December 31, 2001 and
2000, 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, 2001. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ICON Cash Flow
Partners L.P. Seven as of December 31, 2001 and 2000, and the results of its
operations and its cash flows for each of the years in the three year period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.



/s/ KPMG LLP
--------------------------------------------
KPMG LLP


May 20, 2002
New York, New York





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

Consolidated Balance Sheets

December 31, 2001



2001 2000
---- ----
Assets


Cash and cash equivalents ........................... $ 2,333,871 $ 5,083,906
------------- -------------

Investment in finance leases
Minimum rents receivable ......................... 10,709,068 22,715,520
Estimated unguaranteed residual values ........... 21,817,367 57,929,338
Initial direct costs ............................. 196,525 208,411
Unearned income .................................. (1,043,118) (2,968,048)
Allowance for doubtful accounts .................. (906,374) (1,467,610)
------------- -------------

30,773,468 76,417,611

Net investment in leveraged leases .................. 27,290,900 25,175,398
------------- -------------

Equipment held for sale or lease .................... 18,769,730 --
------------- -------------

Investment in operating lease
Equipment at cost ................................ 4,548,538 --
Accumulated depreciation ......................... (351,269) --
------------- -------------
4,197,269 --
------------- -------------

Investments in estimated unguaranteed residual values 20,811,758 20,811,758
------------- -------------

Investments in joint ventures ....................... 3,114,325 3,910,991
------------- -------------

Other assets ........................................ 2,081,536 2,901,945
------------- -------------

Total assets ........................................ $ 109,372,857 $ 134,301,609
============= =============




(continued on next page)





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

Consolidated Balance Sheets (Continued)

December 31,



2001 2000
---- ----

Liabilities and Partners' Equity


Notes payable - non-recourse ......................... $ 29,698,082 $ 43,974,238
Note payable - recourse .............................. 21,286,774 25,250,812
Accounts payable - General Partner and affiliates .... 3,895,849 59,122
Security deposits, deferred credits and other payables 1,580,461 1,056,953
Minority interest in joint venture ................... 48,454 43,492
------------- -------------
56,509,620 70,384,617

Commitments and Contingencies

Partners' equity (deficiency)
General Partner ................................... (320,630) (217,868)
Limited partners (988,649 and 989,588 units
outstanding, $100 per unit original issue price) 53,183,867 64,134,860
------------- -------------

Total partners' equity .......................... 52,863,237 63,916,992
------------- -------------

Total liabilities and partners' equity ............... $ 109,372,857 $ 134,301,609
============= =============





















See accompanying notes to consolidated financial statements.





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

Consolidated Statements of Operations

For the Years Ended December 31,



2001 2000 1999
---- ---- ----
Revenues


Finance income ................................. $ 4,861,097 $ 14,141,735 $ 17,905,134
Rental income .................................. 2,711,700 -- --
Income from leveraged leases ................... 2,075,504 2,620,312 1,433,503
Net gain on sales of equipment and investments . 371,381 622,723 115,427
(Loss) income from investments in unconsolidated
joint ventures ............................... (552,951) 500,662 85,660
Interest income and other ...................... 311,870 193,612 32,533
------------ ------------ ------------

Total revenues ................................. 9,778,601 18,079,044 19,572,257
------------ ------------ ------------

Expenses

Interest ....................................... 3,959,897 5,583,372 8,833,011
Depreciation expense ........................... 2,040,722 -- --
Management fees - General Partner .............. 1,958,755 3,378,163 3,066,929
General and administrative expense ............. 979,905 970,890 642,961
Administrative expense
reimbursements - General Partner ............. 661,519 1,268,398 1,158,866
Amortization of initial direct costs ........... 907,858 1,814,617 2,151,154
Minority interest expense ...................... 43,952 5,035 4,900
(Reversal of) provision for bad debts .......... (500,000) 400,000 200,000
------------ ------------ ------------

Total expenses ................................. 10,052,608 13,420,475 16,057,821
------------ ------------ ------------

Net (loss) income ................................. $ (274,007) $ 4,658,569 $ 3,514,436
============ ============ ============

Net (loss) income allocable to:
Limited partners ............................... $ (271,267) $ 4,611,983 $ 3,479,291
General Partner ................................ (2,740) 46,586 35,145
------------ ------------ ------------

$ (274,007) $ 4,658,569 $ 3,514,436
============ ============ ============

Weighted average number of limited
partnership units outstanding .................. 989,112 989,929 992,719
============ ============ ============

Net (loss) income per weighted average
limited partnership unit ....................... $ (.27) $ 4.66 $ 3.50
============ ============ ============



See accompanying notes to consolidated financial statements.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Consolidated Statements of Changes in Partners' Equity

For the Years Ended December 31, 2001, 2000 and 1999



Limited Partner Distributions

Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)

Balance at

December 31, 1998 $ 77,825,682 $ (84,234) $ 77,741,448

Limited partnership units
redeemed (6,232 units) (425,558) - (425,558)

Cash distributions to partners $ 7.25 $ 3.50 (10,677,316) (107,872) (10,785,188)

Net income 3,479,291 35,145 3,514,436
------------ ---------- ------------

Balance at
December 31, 1999 70,202,099 (156,961) 70,045,138

Limited partnership units
redeemed (650 units) (37,811) - (37,811)

Cash distributions to partners $ 6.09 $ 4.66 (10,641,411) (107,493) (10,748,904)

Net income 4,611,983 46,586 4,658,569
------------ ---------- ------------

Balance at
December 31, 2000 64,134,860 (217,868) 63,916,992

Limited partnership units
Redeemed (939 units) (47,009) - (47,009)

Cash distributions to partners $ 10.75 $ - (10,632,716) (100,023) (10,732,739)

Net (loss) (271,267) (2,740) (274,007)
------------ ---------- ------------

Balance at
December 31, 2001 $ 53,183,868 $ (320,631) $ 52,863,237
============ ========== ============






See accompanying notes to consolidated financial statements.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Consolidated Statements of Cash Flows

For the Years Ended December 31,



2001 2000 1999
---- ---- ----
Cash flows from operating activities:

Net (loss) income ...................................... $ (274,007) $ 4,658,569 $ 3,514,436
------------ ------------ ------------
Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating activities:
Gain on sales of equipment ........................... (371,381) (622,723) (115,427)
Finance income portion of receivables
paid directly to lenders by lessees ................ (3,938,196) (7,443,380) (14,857,847)
Rental income paid directly to lender by leasee ...... (2,711,700) -- --
Amortization of initial direct costs ................. 907,858 1,814,657 2,151,154
Depreciation expense ................................. 2,040,722 -- --
(Reversal of) provision for bad debts ................ (500,000) 400,000 200,000
Interest expense on non-recourse
financings paid directly by lessees ................ 3,193,787 4,632,496 8,216,602
Income from leveraged leases ......................... (2,075,504) (2,620,312) (1,433,503)
Loss (income) from investments in joint ventures ..... 552,951 (500,662) (85,660)
Minority interest expense ............................ 43,952 5,035 4,900
Changes in operating assets and liabilities 2,196,698 662,916 2,787,784

------------ ------------ ------------

Total adjustments ................................ (916,127) (3,671,973) (3,131,997)
------------ ------------ ------------

Net cash (used in) provided by operating activities (1,190,134) 986,596 382,439
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from the sales of equipment ................... 7,771,021 4,516,096 --
Proceeds from sale of minority interests in consolidated
joint venture ........................................ 3,273,407 2,250,000 --
Distributions received from joint ventures ............. 255,047 10,116,067 570,896
Investments in joint ventures .......................... (283) (1,220,286) (108,364)
Reacquisition of minority interest
in consolidated joint venture ........................ -- (2,362,500) --
Equipment purchased .................................... -- -- (677,632)
Proceeds from sale of interests in unconsolidated
joint venture ........................................ -- -- 4,750,000
Investment in leveraged leases ......................... -- -- (8,553,492)
------------ ------------ ------------

Net cash provided by (used in) investing activities 11,299,192 13,299,377 (4,018,592)
------------ ------------ ------------




(continued on next page)






ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Consolidated Statements of Cash Flows (continued)

For the Years Ended December 31,



2001 2000 1999
---- ---- ----

Cash flows from financing activities:

Proceeds from non-recourse debt ....................... 2,111,726 2,376,033 14,010,000
Principal payments on notes payable - non-recourse .... (77,320) (712,042) (548,659)
Proceeds from recourse debt ........................... -- 5,738,395 5,000,000
Principal payments on notes payable - recourse debt ... (4,369,065) (10,505,763) (2,825,471)
Cash distributions to partners ........................ (10,732,739) (10,748,904) (10,785,188)
Redemption of Limited Partnership units ............... (47,009) (37,811) (425,558)
------------ ------------ ------------

Net cash (used in) provided by financing activities (13,114,407) (13,890,092) 4,425,124
------------ ------------ ------------

Net (decrease) increase in cash and cash equivalents ..... (2,750,035) 395,881 788,971

Cash and cash equivalents at beginning of year ........... 5,083,906 4,688,025 3,899,054
------------ ------------ ------------

Cash and cash equivalents at end of year ................. $ 2,333,871 $ 5,083,906 $ 4,688,025
============ ============ ============


























See accompanying notes to consolidated financial statements.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Statements of Cash Flows (continued)

Supplemental Disclosure of Cash Flow Information

Interest expense of $3,959,897, $5,583,372 and $8,833,011 for the years
ended December 31, 2001, 2000 and 1999 consisted of: interest expense on
non-recourse financings paid or accrued to lenders by lessees and interest on
loans not payable currently of $3,193,787, $4,632,496 and $8,216,602,
respectively, and other interest of $766,110, $950,876 and $616,409,
respectively.

For the years ended December 31, 2001, 2000 and 1999, non-cash activities
included the following:



2001 2000 1999
---- ---- ----
Principal and interest on

finance receivables paid directly
to lenders by lessees ............................... $ 14,680,923 $ 30,849,889 $ 29,448,407
Rental income assigned operating lease receivable ...... 2,711,700 -- --
Principal and interest on non-recourse
financings paid directly to lenders
by lessees .......................................... (17,392,623) (30,849,889) (29,448,407)

Decrease in investment in finance leases due
to terminations ..................................... -- -- (552,002)
Decrease in notes payable non-recourse
due to terminations ................................. -- -- 552,002

Decrease in investments in finance leases and
financings due to contribution to
unconsolidated joint ventures ....................... -- -- (25,605,165)
Decrease in notes payable non-recourse related to leases
contributed to joint venture ........................ -- -- 19,299,854
Increase in investments in
unconsolidated joint ventures ....................... -- -- 6,305,311
------------ ------------ ------------

$ -- $ -- $ --
============ ============ ============


2001
----
Transfer of investment in finance
leases to investment in operating leases $25,007,721
===========

Transfer of investment in operating leases, net of
accumulated depreciation, to equipment held for
sale or lease $18,769,730
===========






ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements

December 31, 2001

1. Organization

ICON Cash Flow Partners L.P. Seven (the "Partnership"), was formed on May
23, 1995 as a Delaware limited partnership. The Partnership's maximum offering
was $100,000,000. The Partnership commenced business operations on its initial
closing date, January 19, 1996 with the admission of 26,367.95 limited
partnership units at $100 per unit representing $2,636,795 of capital
contributions. From January 19, 1996 through September 16, 1998 (the final
closing date) 973,628.86 additional units were admitted representing $97,362,886
of capital contributions bringing the total admission to 999,996.81 units
aggregating $99,999,681 in capital contributions. The Partnership redeemed
11,348 limited partnership units during the years 1997 through 2001, leaving
988,649 limited partnership units outstanding at December 31, 2001.

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
General Partner received organization and offering expenses from the gross
proceeds of such sales. The total underwriting compensation paid by the
Partnership, including underwriting commissions, sales commissions, incentive
fees, public offering expense reimbursements and due diligence activities was
limited to 13 1/2% of the gross proceeds received from the sale of the units.
Such offering expenses aggregated $13,499,957, including $5,499,981 paid to the
General Partner or its affiliates, and such costs were charged directly to
limited partners' equity.

Profits, losses, cash distributions and disposition proceeds are allocated
99% to the limited partners and 1% to the General Partner until each limited
partner has received cash distributions and disposition proceeds sufficient to
reduce its adjusted capital contribution account to zero and receive, in
addition, other distributions and allocations which would provide a 10% per
annum cumulative return, compounded daily, on its outstanding adjusted capital
contribution account. After such time, the distributions will be allocated 90%
to the limited partners and 10% to the General Partner.

2. Significant Accounting Policies

Basis of Accounting and Presentation - The Partnership's records are
maintained on the accrual basis. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and revenues and expenses
during the reporting period. Significant estimates include the allowance for
doubtful accounts and unguaranteed residual values. Management believes that the
estimates and assumptions utilized in preparing its financial statements are
reasonable and prudent. Actual results could differ from those estimates. In
addition, management is required to disclose contingent assets and contingent
liabilities.






ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

Consolidation - The consolidated financial statements include the accounts
of the Partnership and its majority owned subsidiary. All inter-company accounts
and transactions have been eliminated. The Partnership accounts for its
interests in 50% or less owned joint ventures under the equity method of
accounting. In such cases, the Partnership's original investments are recorded
at cost and adjusted for its share of earnings, losses and distributions
thereafter.

Cash and Cash Equivalents - Cash and cash equivalents are defined as cash
in banks and highly liquid investments with original maturity dates of three
months or less.

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 and depreciated on the straight-line method over the lease
term 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 are included in other assets.
Initial direct costs of finance leases and leverage leases are capitalized and
are amortized over the terms of the related leases using the interest method.

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.

Equipment Held For Sale Or Lease - The vessels that are held for sale or
lease are recorded at original equipment cost less accumulated depreciation,
subject to the Partnership's impairment policy discussed below.

Investments in Estimated Unguaranteed Residual Values - The assets are
carried at cost (which is equal to or less than market value), subject to the
Partnership's impairment policy discussed below, until sale of the equipment, at
which time a gain or loss will be recognized on each transaction. No income will
be recognized until the underlying equipment is sold.






ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

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.

Disclosures About Fair Value of Financial Instruments - Statement of
Financial Accounting Standards ("SFAS") No. 107, "Disclosures About Fair Values
of Financial Instruments," requires disclosures about the fair value of
financial instruments, except for lease related instruments. Separate disclosure
of fair value information as of December 31, 2001 and 2000 with respect to the
Company's assets and liabilities is not provided because (i) SFAS No. 107 does
not require disclosures about the fair value of lease arrangements, (ii) the
carrying value of financial assets, other than lease related investments, and
certain payables approximates market value and (iii) fair value information
concerning certain recourse and 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 rate.

Redemption of Limited Partnership Units - The General Partner consented to
the Partnership redeeming 6,232 units during 1999, 650 units in 2000 and 939
units in 2001. 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.

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.

Reclassifications - Certain items have been reclassified to conform with
the 2001 presentation.

New Accounting Pronouncement - Effective January 1, 2002, the Partnership
adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" (SFAS No. 144). This statement requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to the future net cash flows expected to be generated by the asset. If
the carrying amount of the asset exceeds its estimated future






ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

cash flows, an impairment charge is recognized by the amount by which the
carrying amount of the asset exceeds the fair value of the asset. The adoption
of SFAS No. 144 did not have any effect on the Partnership's financial position
or results of operations as the provisions of SFAS No. 144 are similar to the
Partnership's current policy for impairment review. SFAS No. 144 requires
companies to separately report discontinued operations and extends that
reporting to a component of an entity that either has been disposed of (by sale,
abandonment or in a distribution to the owners) or classified as held for sale.
Assets to be disposed of are reported at the lower of the carrying amount or
fair value less the costs to sell.

3. Investments in Joint Ventures

The Partnership and affiliates formed nine joint ventures discussed below
for the purpose of acquiring and managing various assets.

The joint ventures described below are majority owned and are consolidated
with the Partnership.

ICON Cash Flow Partners L.L.C. III

On December 31, 1996, the Partnership and an affiliate, ICON Cash Flow
Partners, L.P., Series E ("Series E") formed ICON Cash Flow Partners L.L.C. III
("ICON Cash Flow LLC III"), for the purpose of acquiring and managing an
aircraft currently on lease to Continental Airlines, Inc. The aircraft is a 1976
McDonnell Douglas DC-10-30 and cost $11,429,751. The lease is a leveraged lease
and the lease term expires in March 2003 (see Note 5). Profits, losses, excess
cash and disposition proceeds are allocated 99% to the Partnership and 1% to
Series E. The Partnership's financial statements include 100% of the assets and
liabilities and 100% of the revenue and expenses of ICON Cash Flow LLC III.
Series E's investment in ICON Cash Flow LLC III has been reflected as minority
interest in joint venture on the consolidated balance sheets and minority
interest expense on the consolidated statements of operations.

Seacor Joint Ventures

On July 13, 2001, the Partnership and an affiliate, ICON Cash Flow Partners
L.P. Eight B ("Fund Eight B"), formed three joint ventures known as "ICON/Janson
Graham LLC," ICON/Pearl Graham LLC" and "ICON Amanda Graham LLC", the three of
which are referred to collectively as the "Seacor Joint Ventures". L.P. Seven
contributed three offshore supply vessels with a net book and approximate market
value of $7,595,271, and Fund Eight B contributed $3,273,407 in cash into the
Seacor Joint Ventures. The Partnership and Fund Eight B received 69.88% and
30.12% ownership interests, respectively, in the Seacor Joint Ventures as a
result of these contributions.

Fund Eight B had the right during the first year of the Seacor Joint
Venture to sell any of the three interests back to the Partnership at a price
equal to 110% of its outstanding investment balance for any vessel that did not
generate rental revenue for a three month period. All three vessels were
off-lease for part of the third quarter and all of the fourth quarter of 2001.
On December 31, 2001, Fund Eight B exercised its right and sold its interest in
the Seacor Joint Venture back to the Partnership for the aggregate price of
$3,644,700, which amount is included on the balance sheet as of December 31,
2001 under the caption Accounts payable - General Partner and affiliates. The
Partnership recognized a loss of $327,341 on the repurchase and recognized
$43,953 as minority interest expense during the life of the joint venture.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

The seven joint ventures described below are 50% or less owned and are
accounted for following the equity method.

ICON Receivables 1997-A L.L.C.

In March 1997, Series E, and affiliates, ICON Cash Flow Partners L.P. Six
("L.P. Six") and ICON Cash Flow Partners L.P. Series D ("Series D") contributed
and assigned equipment lease and finance receivables and residuals to ICON
Receivables 1997-A L.L.C. ("1997-A"). In September 1997, Series E, L.P. Six and
the Partnership contributed and assigned additional equipment lease and finance
receivables and residuals to 1997-A. As of December 31, 2001, the Partnership,
Series E, L.P. Six and Series D own 19.97%, 31.19%, 31.03% and 17.81% interests,
respectively, in 1997-A. The Partnership accounts for its interest in 1997-A
under the equity method of accounting.

Information as to the financial position and results of operations of
1997-A as of and for the years ended December 31, 2001 and 2000 is summarized
below:

December 31, 2001 December 31, 2000

Assets $ 1,856,582 $ 9,002,519
=============== =============

Liabilities $ 1,707,445 $ 6,848,927
=============== =============

Equity $ 149,137 $ 2,153,592
=============== =============

Partnership's share of equity $ 29,783 $ 581,197
=============== =============

Year Ended Year Ended
December 31, 2001 December 31, 2000

Net loss $ (2,004,455) $ (661,929)
================ ==============

Partnership's share of net loss $ (551,414) $ (132,140)
=============== ==============

Distributions $ - $ 450,867
=============== =============

Partnership's share of distributions $ - $ 90,016
=============== =============

1997-A recorded a provision for bad debts of $1,825,000 and $850,000 during
the years ended December 31, 2001 and 2000, respectively.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

ICON Receivables 1997-B L.L.C.

In August 1997, the Partnership, Series E and L.P. Six formed ICON
Receivables 1997-B L.L.C. ("1997-B"). The Partnership, Series E and L.P. Six
each contributed cash, equipment leases and residuals and received a 16.67%,
75.00% and 8.33% interest, respectively, in 1997-B. The Partnership accounts for
its investment in 1997-B under the equity method of accounting.

Information as to the financial position and results of operations of
1997-B as of and for the years ended December 31, 2001 and 2000 is summarized
below:

December 31, 2001 December 31, 2000

Assets $ 8,265,689 $ 18,324,933
=============== ===============

Liabilities $ 7,876,692 $ 16,068,825
=============== ===============

Equity $ 388,997 $ 2,256,108
=============== ===============

Partnership's share of equity $ 64,847 $ 376,094
=============== ===============

Year Ended Year Ended
December 31, 2001 December 31, 2000

Net (loss) income $ (1,867,111) $ 420,423
=============== ===============

Partnership's share of net (loss) income $ (311,247) $ 70,085
=============== ===============

Distributions $ - $ 148,578
=============== ===============

Partnership's share of distributions $ - $ 24,768
=============== ===============

1997-B recorded a provision for bad debts of $2,162,304 and $500,000 during
the years ended December 31, 2001 and 2000, 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. Six 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 in ICON BF under the equity
method of accounting.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

In 2001 the 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. Six, and Fund Eight A respectively.

Portland General Electric ("PGE") is a wholly owned subsidiary of Enron
Corporation ("Enron"), which recently filed for Chapter 11 bankruptcy
protection. 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 May 2002.

Information as to the financial position and results of operations of ICON
BF as of and for the years ended December 31, 2001 and 2000 is summarized below:

December 31, 2001 December 31, 2000
----------------- -----------------

Assets $ 24,855,375 $ 26,274,686
=============== ================

Liabilities $ 13,588,934 $ 16,350,122
=============== ================

Equity $ 11,266,441 $ 9,924,564
=============== ================

Partnership's share of equity $ 56,614 $ 49,618
=============== ================

Year Ended Year Ended
December 31, 2001 December 31, 2000
----------------- -----------------

Net income $ 1,341,877 $ 1,063,978
=============== ================

Partnership's share of net income $ 6,713 $ 5,320
=============== ================

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. Six and Fund Eight A own
30.76%, 25.51% 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 installment on the note was collected
in January 2002.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

Information as to the financial position and results of operations of AIC
Trust as of and for the years ended December 31, 2001 and 2000 is summarized
below:

December 31, 2001 December 31, 2000
----------------- -----------------

Assets $ 3,849,439 $ 15,301,480
=============== ================

Liabilities $ - $ 8,543,026
=============== ================

Equity $ 3,849,439 $ 6,758,454
=============== ================

Partnership's share of equity $ 1,184,087 $ 2,089,828
=============== ================

For the Year Ended For the Year Ended
December 31, 2001 December 31, 2000
----------------- -----------------

Net (loss) income $ (2,687,696) $ 529,585
=============== ================

Partnership's share of net (loss) income $ (837,663) $ 162,900
=============== ================

Distributions $ 829,150 $ -
=============== ================

Partnership's share of distributions $ 255,047 $ -
=============== ================

ICON Aircraft 24846, LLC

In 2000, the Partnership and two affiliates, Fund Eight A and Fund Eight B,
formed ICON Aircraft 24846 for the purpose of acquiring an investment in an
aircraft leased to a commercial airline for a purchase price of $44,515,416,
which was funded with cash of $2,241,371 and non-recourse debt of the
$42,274,045. The rents and the aircraft have been assigned to the non-recourse
lender. The lease is scheduled to expire in March 2003, at which time the
balance of the non-recourse debt outstanding is scheduled to be approximately
$34,500,000. The Partnership, Fund Eight A and Fund Eight B have ownership
interests of 2.0%, 2.0% and 96.0%, respectively, in ICON Aircraft 24846. The
Partnership accounts for its investment under the equity method of accounting.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

Information as to the financial position and results of operations of ICON
Aircraft 24846 as of and for the year ended December 31, 2001 and as of December
31, 2000 and for the period of investment through December 31, 2000 is
summarized below:

December 31, 2001 December 31, 2000

Assets $ 41,952,008 $ 44,450,734
================ ===============

Liabilities $ 38,945,109 $ 42,193,269
================ ===============

Equity $ 3,006,899 $ 2,257,465
================ ===============

Partnership's share of equity $ 60,138 $ 45,149
================ ===============

Period of Investment
For the Year Ended Through
December 31, 2001 December 31, 2000
----------------- -----------------

Net income $ 749,435 $ 16,100
================ ===============

Partnership's share net $ 14,989 $ 322
of income ================ ===============

ICON Cheyenne LLC

In December 2000, the Partnership and three affiliates, L.P. Six, Fund
Eight A and 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 term leases. The leases expire on various dates through
September 2006. The Partnership, L.P. Six, Fund Eight A and Fund Eight B have
ownership interests of 10.31%, 1%, 1.0% and 87.69%, respectively, in ICON
Cheyenne. The Partnership accounts for its investment under the equity method of
accounting.







ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

Information as to the financial position and results of operations of ICON
Cheyenne as of and for the year ended December 31, 2001 and as of December 31,
2000 and for the period of investment through December 31, 2000 is summarized
below:

December 31, 2001 December 31, 2000

Assets $ 23,869,671 $ 29,705,716
================ ===============

Liabilities $ 11,145,506 $ 18,304,565
================ ===============

Equity $ 12,724,165 $ 11,401,151
================ ===============

Partnership's share of equity $ 1,311,861 $ 1,175,459
================ ===============

Period of Investment
For the Year Ended Through
December 31, 2001 December 31, 2000
----------------- -----------------

Net income $ 1,323,014 $ -
================ ===============

Partnership's share of net income $ 136,402 $ -
================ ===============

North Sea (Connecticut) Limited Partnership

In 2000, a joint venture, North Sea (Connecticut) Limited Partnership
(North Sea), in which the Partnership is a 50% Class C limited partner,
exercised its option to acquire a drilling rig and leased the rig to the
operator. The lease was then discounted on a non recourse basis, at a bank and
the proceeds were used to pay for the exercise of the option, with the excess
loan proceeds of $20,002,586 distributed to the joint venturers ($10,001,283
represented the Partnership's 50% share). The other joint venturers are not
affiliates. In 2000, the Partnership reflected its pro rata share of the lease
and related debt on its blance sheet. However, during 2001, upon subsequent
review, the transaction was reclassified as an investment in a joint venture.
Amounts in the prior year's financial statements have been reclassified to
reflect the current year's presentation. Neither the net income recorded in 2000
nor the amount of equity at December 31, 2000 was affected by the
reclassification.

The Partnership has guaranteed an amount between the stipulated loss value
provided for in the financing and the loan balance. The maximum amount for which
the Partnership is contingently liable at December 31, 2001 under such guarantee
was approximately $156,000.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

The distribution received from the Partnership in 2000 in the amount of
$10,001,283 is reflected as a reduction in the carrying value of the
Partnership's investment in the joint venture.

Information as to the financial position and results of operations of North
Sea as of and for the years ended December 31, 2001 and 2000 is summarized
below:

December 31, 2001 December 31, 2000

Assets $ 11,169,465 $ 11,834,594
================ ================

Liabilities $ 25,450,283 $ 28,143,812
================ ================

Partners' deficit $ (14,280,818) $ (16,309,218)
================ ================

Partnership's share of equity (deficit) $ 407,090 $ (607,110)
================ ================

Year Ended Year Ended
December 31, 2001 December 31, 2000

Net income $ 2,028,400 $ 788,349
================ ================

Partnership's share of net income $ 1,014,200 $ 394,175
================ ================

Distributions $ - $ 20,002,566
================ ================

Partnership's share of distributions $ - $ 10,001,283
================ ================

In March 2000, L.P. Seven had formed a joint venture for the purpose of
owning the investment in North Sea.

L.P. Seven contributed its investment to the joint venture. Simultaneously,
L.P. Six acquired an interest in this joint venture for $2,250,000. No gain or
loss was recognized by the Partnership at that time. L.P. Six 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. The Partnership had the right
to repurchase the interest in the joint venture from L.P. Six at any time prior
to September 15, 2000 for an amount equal to 105% of L.P. Six's purchase price,
which right it exercised in the third quarter 2000. As a result, the Partnership
recognized a loss on the repurchase of its investment of $112,500.

4. Investments in Estimated Unguaranteed Residual Values

In July 1997, the Partnership entered into an option to acquire the
residual interests in three Boeing 737-300 aircraft currently on lease to
Continental Airlines. The Partnership subsequently exercised its options and
became the owner of the future estimated unguaranteed residuals. The residual
investments cost $20,811,758 and the leases for each aircraft expire in the
fourth quarter of 2003.


ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

5. Net Investment in Leveraged Leases

In August 1996, the Partnership acquired, subject to a leveraged lease, an
interest in an aircraft on lease with Federal Express. The aircraft is a
McDonnell Douglas DC-10-30F built in 1986, and the lease expires in July 2004.
The purchase price was $40,973,585.

In December 1996, the Partnership and an affiliate (see Note 3) acquired,
subject to a leveraged lease, an aircraft on lease with Continental Airlines,
Inc. The aircraft is a McDonnell Douglas DC-10-30 built in 1976, and the lease
expires in March 2003. The purchase price was $11,429,751.

The net investment in the leveraged leases as of December 31, 2001
consisted of the following:

Non-cancelable minimum rents receivable (net of
principal and interest on non-recourse debt) $10,002,727
Estimated unguaranteed residual values 22,700,000
Initial direct costs 335,456
Unearned income (5,747,283)
-----------
$27,290,900

During 2001, the Company reduced the estimated unguaranteed residual value
of one of the aircraft as a result of a recent appraisal which indicated a lower
value at lease termination than initially estimated.

Non-cancelable minimum rents receivable relating to the leveraged leases at
December 31, 2001 are $19,731,077 while the related principal and interest on
non-recourse debt is $9,728,350 at December 31, 2001. Such amounts are due as
follows:

Rents Due Debt Payments
--------- -------------
2002 $ 7,742,360 $7,742,360
2003 6,178,357 1,985,990
2004 5,810,360 -
----------- ----------

$19,731,077 $9,728,350
=========== ==========






ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

6. Investment in Operating Leases

The investment in operating lease at December 31, 2001 consisted of the
following:

2001
----
Equipment cost, beginning of year $ -

Transfer of investment in finance leases
to operating leases 25,007,721

Transfer of operating lease equipment to equipment
held for sale or lease (20,459,183)
------------

Equipment cost, end of year 4,548,538
------------

Accumulated depreciation, beginning of year -

Depreciation expense (2,040,722)

Transfer of accumulated depreciation to equipment
held for sale or lease 1,689,453
------------

Accumulated depreciation, end of year (351,269)
------------

Investment in operating lease, end of year $ 4,197,269
============

The investment in operating leases consisted of six vessels which were
originally on lease to Seacor and were classified as finance leases from their
acquisition in 1997 until 2001 when the finance leases expired. The vessels were
then released on a short term basis and reclassified as operating leases. In the
second half of 2001 five of the six vessels were returned by the lessee. The
sixth vessel remains on a month to month charter. At December 31, 2001, the five
returned vessels were classified as equipment held for sale or lease.

7. Finance Lease Receivables

Non-cancelable minimum annual amounts due on finance leases are as follows:

Year Amount

2002 $ 9,335,375
2003 1,001,193
2004 372,500
--------------

$ 10,709,068






ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

8. Allowance for Doubtful Accounts

The allowance for doubtful accounts related to the investments in finance
leases and other receivables included in other assets consisted of the
following:

Finance Other
Leases Receivables Total

Balance at December 31, 1998 .. $ 868,450 $ 8,771 $ 877,221

Provision for bad debts ....... 199,160 840 200,000
----------- ----------- -----------

Balance at December 31, 1999 .. 1,067,610 9,611 1,077,221

Provision for bad debts ....... 400,000 -- 400,000
----------- ----------- -----------

Balance at December 31, 2000 .. 1,467,610 9,611 1,477,221

Reversal of previous provisions
for bad debts ............... (500,000) -- (500,000)

Writeoffs ..................... (61,236) -- (61,236)
----------- ----------- -----------

Balance at December 31, 2001 .. $ 906,374 $ 9,611 $ 915,985
=========== =========== ===========

9. Notes Payable

Notes payable consists of non-recourse notes payable of $29,698,082 and
recourse notes payable of $21,286,774, of which $20,642,483 is secured by the
Partnership's investment in estimated unguaranteed residuals (see Note 4) and
$644,291 relates to line of credit agreements discussed below. The non-recourse
notes are secured by leased equipment, bear interest at rates ranging from 6.5%
to 9.4% and mature as follows:

Notes Payable Note Payable
Year Non-Recourse Recourse Total

2002 $ 11,533,009 $ 644,291 $12,177,300
2003 3,467,344 20,642,483 24,109,827
2004 14,697,729 - 14,697,729
------------ ----------- -----------

$ 29,698,082 $21,286,774 $50,984,856
============ =========== ===========





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

The Partnership entered into a $5,000,000 line of credit agreement (the
"Facility") with a bank in 1998 which is secured by certain receivables and
residuals and accrues interest at prime (4.75% at December 31, 2001) plus one
half percent. At December 31, 2001, the Partnership had $543,981 outstanding
under the Facility. The Facility expires in December 2002 and is renewable on a
bi-annual basis.

The Partnership entered into a $7,500,000 recourse line of credit agreement
(the "Second Facility") with another bank in June 2000 which is secured by
certain receivables and residuals and accrues interest at the rate of prime
(4.75% at December 31, 2001) plus one percent. At December 31, 2001, the
Partnership had $100,310 outstanding under the Second Facility. The Second
Facility expires in August 2002 and is renewable annually.

10. Related Party Transactions

Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the years ended December 31, 2001, 2000 and 1999
were as follows:

Charged to
Capitalized Operations

Management fees ..................... $ -- $3,066,929
Administrative expense reimbursements -- 1,158,866
---------- ----------

Year ended December 31, 1999 ........ $ -- $4,225,795
========== ==========

Management fees ..................... $ -- $3,378,163
Acquisition fees .................... 495,732 --
Administrative expense reimbursements -- 1,268,398
---------- ----------

Year ended December 31, 2000 ........ $ 495,732 $4,646,561
========== ==========

Management fees ..................... $ -- $1,958,755
Administrative expense reimbursements -- 661,519
---------- ----------

Year ended December 31, 2001 ........ $ -- $2,620,274
========== ==========

In accordance with the Management Agreement, the Partnership pays the
General Partner management fees based on a percentage of rentals received
directly or through joint ventures (ranging from 1% to 7%) and acquisition fees
based on the value of transactions (3%). In addition, the General Partner is
reimbursed for expenses incurred by it in connection with the Partnership's
operations. (See Note 1 for information relating to organization and offering
expenses and underwriting commissions).

The Partnership had investments in nine joint ventures with other
partnerships sponsored by the General Partner. See Note 3 for additional
information relating to the joint ventures.






ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued

11. Tax Information (Unaudited)

The following table reconciles net (loss) income for financial reporting
purposes to loss for federal income tax purposes for the years ended December
31, 2001, 2000 and 1999:



2001 2000 1999
---- ---- ----

Net (loss) income

per financial statements ......... $ (274,007) $ 4,658,569 $ 3,514,436

Differences due to:
Direct finance leases ............ 13,063,864 23,809,930 18,112,472
Depreciation ..................... (23,786,000) (36,903,785) (34,162,751)
(Reversal of) provision for losses (500,000) 400,000 200,000
Loss (gain) on sale of equipment . (2,088,097) 1,020,325 (905,600)
Other ............................ 943,199 (213,838) 5,487,465
------------ ------------ ------------
Partnership loss for
federal income tax purposes ....... $(12,641,041) $ (7,228,799) $ (7,753,978)
============ ============ ============


As of December 31, 2001, the partners' capital accounts included in the
financial statements totaled $52,863,237 compared to the partners' capital
accounts for federal income tax purposes of $21,988,098 (unaudited) as of
December 31, 2001. 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. Seven
(A Delaware Limited Partnership)

Notes to Financial Statements - Continued



12. Quarterly Financial Data (Unaudited)

The following table is a summary of financial data by quarter for the years
ended December 31, 2001 and 2000:



For the Quarters Ended
---------------------------------------------------------------

March 31, June 30, September 30, December 31,
-------- ------- ------------ -----------
2001

Revenues (1) ..................... $ 3,126,104 $ 2,744,266 $ 4,194,989 $ (286,758)
============== ============== ============== ===========

Net income allocable to
limited partners ............... $ 219,631 $ 154,463(2)$ 1,174,870(3)$(1,820,231)(4)
============== ============== ============== ===========

Net income per weighted
average limited partnership unit $ .22 $ .16 $ 1.19 $ (1.84)
============== ============== ============== ===========
2000

Revenues (1) ..................... $ 4,760,082 $ 5,188,013 $ 5,633,804 $ 2,497,145
============== ============== ============== ===========

Net income allocable to
limited partners ............... $ 996,463 $ 1,475,474 $ 1,733,815 $ 406,231
============== ============== ============== ===========

Net income per weighted
average limited partnership unit $ 1.01 $ 1.49 $ 1.75 $ .41
============== ============== ============== ===========


(1) Revenues reflect the reclassifications discussed in note 3.

(2) Includes approximately $460,000 of losses in the second quarter from
investments in joint ventures.

(3) Includes gains on sales of equipment of approximately $460,000 and rental
income in excess of related depreciation of approximately $620,000 on six
vessels under short term operating leases.

(4) Includes approximately $1.1 million of losses in the fourth quarter from
investments in two joint ventures as well as depreciation expense of
$671,215 and storage and insurance costs of $131,822 with respect to five
vessels which were off lease in the fourth quarter of 2001 and thus did not
generate any rental revenue during such period. These items were partially
offset by a $500,000 reversal of provision for bad debts.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

December 31, 2001

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 100 Fifth Avenue, 10th Floor,
New York, New York 10011, and its telephone number is (212) 418-4700. The
officers of the General Partner have extensive experience with transactions
involving the acquisition, leasing, financing and disposition of equipment,
including acquiring and disposing of equipment subject to leases and full
financing transactions.

The manager of the 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 performs 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

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 41, 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.





ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)

December 31, 2001

Thomas W. Martin, age 48, 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.

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, 2001, 2000 and 1999.



Entity Capacity Type of Compensation 2001 2000 1999
------ -------- -------------------- ---- ---- ----


ICON Capital Corp. General Partner Acquisition fees $ - $ 495,732 $ -
ICON Capital Corp. General Partner Management fees 1,958,755 3,378,163 3,066,929
ICON Capital Corp. General Partner Administrative expense
reimbursements 661,519 1,268,398 1,158,866
----------- ---------- ----------

$ 2,620,274 $5,142,293 $4,225,795
=========== ========== ==========


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 31, 2002, Directors and Officers of the General Partner do not
own any equity securities of the Partnership.

(c) The General Partner owns the equity securities of the Partnership set forth
in the following table:

Title Amount Beneficially Percent
of Class Owned of Class
- --------------- ---------------------------------------------- --------
General Partner Represents initially a 1% and potentially a 100%
Interest 10% interest in the Partnership's income, gain
and loss deductions.

Item 13. Certain Relationships and Related Transactions

See Item 11 for a discussion of the Partnership's related party
transactions. See Note 3 for a discussion of the Partnership's related party
investments in joint ventures.





ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

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. 3 to Form S-1 Registration Statement
No. 33-94458 filed with the Securities and Exchange Commission on
November 9, 1995)

(ii) Form of Selling Dealer Agreement (Incorporated by reference to
Exhibit 1.2 to Amendment No. 3 to Form S-1 Registration Statement
No. 33-94458 filed with the Securities and Exchange Commission on
November 9, 1995)

(iii)Amended and Restated Agreement of Limited Partnership
(Incorporated herein by reference to Exhibit A to Amendment No. 3
to Form S-1 Registration Statement No. 33-94458 filed with the
Securities and Exchange Commission on November 9, 1995)

(b) Reports on Form 8-K

No reports on Form 8-K were filed by the Partnership during the quarter
ended December 31, 2001.

(c) Exhibits

(d) Unconsolidated Joint Venture Financial Statements

ICON Receivable 1997-A LLC - as of and for the years ended December 31,
2001 and 2000 ICON Receivable 1997-B LLC - as of and for the year ended
December 31, 2001 ICON AIC Trust - as of and for the years ended December
31, 2001 and 2000 ICON Cheyenne LLC - as of and for the year ended December
31, 2001 ICON North Sea (Connecticut) Limited Partnership - as of and for
the year ended December 31, 2001









ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001

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. Seven
File No. 33-94458 (Registrant)
By its General Partner, ICON Capital Corp.


Date: April 15, 2002 /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: May 15, 2002 /s/ Beaufort J.B. Clarke
----------------------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director


Date: May 15, 2002 /s/ Paul B. Weiss
----------------------------------------------
Paul B. Weiss
President and Director


Date: May 15, 2002 /s/ Thomas W. Martin
----------------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer)



Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrant Which have not Registered Securities Pursuant to
Section 12 of the Act

No annual report or proxy material has been sent to security holders. An annual
report will be sent to the limited partners and a copy will be forwarded to the
Commission.







Exhibit 99

ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)

December 31, 2001


Unconsolidated Joint Venture Financial Statements

ICON Receivable 1997-A LLC - as of and for the years ended December 31, 2001 and
2000 ICON Receivable 1997-B LLC - as of and for the year ended December 31, 2001
ICON AIC Trust - as of and for the years ended December 31, 2001 and 2000 ICON
Cheyenne LLC - as of and for the year ended December 31, 2001 ICON North Sea
(Connecticut) Limited Partnership - as of and for the year ended December 31,
2001













ICON Receivables 1997-A L.L.C.

Financial Statements

December 31, 2001 and 2000

(With Independent Auditors' Report Thereon)















INDEPENDENT AUDITORS' REPORT


The Members ICON Receivables 1997-A L.L.C.

We have audited the accompanying balance sheets of ICON Receivables 1997-A
L.L.C. (the "Company") as of December 31, 2001 and 2000, and the related
statements of operations, changes in members' equity, and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
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 Company is winding down its portfolio and will
distribute available cash to its members when all assets are liquidated and all
obligations are paid.

In our opinion, the consolidated financial statements referred to the above
present fairly, in all material respects, the financial position of ICON
Receivables 1997-A L.L.C. as of December 31 2001 and 2000, and the results of
its operations and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.



/s/KPMG LLP
--------------------------------------------
KPMG LLP


April 15, 2002
New York, New York






ICON Receivables 1997-A L.L.C.

Balance Sheets

December 31,




Assets 2001 2000
------ ---- ----


Cash ................................................. $ 673,740 $ 619,719
----------- -----------

Investment in finance leases
Minimum rents receivable .......................... 2,984,147 4,594,866
Estimated unguaranteed residual values ............ 269,211 565,788
Unearned income ................................... (134,914) (354,592)
Allowance for doubtful accounts ................... (2,174,224) (786,560)
----------- -----------
944,220 4,019,502
----------- -----------

Investment in financings
Minimum rents receivable .......................... -- 4,570,567
Unearned income ................................... -- (245,371)
Allowance for doubtful accounts ................... -- (802,699)
----------- -----------
-- 3,522,497
----------- -----------

Other assets ......................................... 238,622 840,801
----------- -----------

Total assets ......................................... $ 1,856,582 $ 9,002,519
=========== ===========

Liabilities and Members' Equity

Notes payable non-recourse ........................... $ 1,157,730 $ 5,016,098
Security deposits, deferred credits and other payables 549,715 1,832,829
----------- -----------

Total liabilities .................................... 1,707,445 6,848,927
----------- -----------

Members' equity ...................................... 149,137 2,153,592
----------- -----------

Total liabilities and members' equity ................ $ 1,856,582 $ 9,002,519
=========== ===========













See accompanying notes to financial statement.





ICON Receivables 1997-A L.L.C.

Statements of Operations

For the Years Ended December 31,



2001 2000
---- ----

Revenue


Finance income .............................. $ 465,049 $ 960,903
Interest income and other ................... 56,001 135,580
Gain on remarketing of equipment ............ 26,997 161,410
----------- -----------

Total revenues ............................. 548,047 1,257,893
----------- -----------

Expenses

General and administrative and other expenses 531,747 450,902
Interest expense ............................ 195,755 618,920
Provision for doubtful accounts ............. 1,825,000 850,000
----------- -----------
Total expenses .............................. 2,552,502 1,919,822
----------- -----------

Net loss ...................................... $(2,004,455) $ (661,929)
=========== ===========


























See accompanying notes to financial statement.






ICON Receivables 1997-A L.L.C.

Statements of Changes in Members' Equity

For the Years Ended December 31, 2001 and 2000

Total

Balance at December 31, 1999 $ 3,266,388
-----------

Net loss ................... (661,929)

Distributions to members ... (450,867)
-----------

Balance at December 31, 2000 2,153,592

Net loss ................... (2,004,455)
-----------

Balance at December 31, 2001 $ 149,137
===========































See accompanying notes to financial statement.





ICON Receivables 1997-A L.L.C.

Statements of Cash Flows

For the Years Ended December 31,



2001 2000
---- ----

Cash flows from operating activities:

Net loss ............................................... $(2,004,455) $ (661,929)
----------- -----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Gain from the sale of finance leases ................... (26,997) (161,410)
Provision for doubtful accounts ........................ 1,825,000 850,000
Changes in operating assets and liabilities:
Collection of principal .............................. 4,476,202 5,518,901
Other assets ......................................... 602,179 349,534
Security deposits, deferred credits and other payables (1,283,114) 340,695
----------- -----------

Total adjustments .................................. 5,593,270 6,897,720
----------- -----------

Net cash provided by operating activities .......... 3,588,815 6,235,791
----------- -----------

Cash flows from investing activities:
Proceeds from the sales of equipment ................... 323,574 1,379,988
----------- -----------

Net cash provided by investing activities .......... 323,574 1,379,988
----------- -----------

Cash flows from financing activities:
Principal payments on notes payable non-recourse ....... (3,858,368) (8,193,119)
Distributions to members ............................... -- (450,867)
----------- -----------

Net cash used in investing activities .............. (3,858,368) (8,643,986)
----------- -----------

Net increase (decrease) in cash ........................... 54,021 (1,028,207)

Cash at the beginning of the year ......................... 619,719 1,647,926
----------- -----------

Cash at the end of the year ............................... $ 673,740 $ 619,719
=========== ===========

Supplemental information-interest paid .................... $ 194,555 $ 640,625
=========== ===========










See accompanying notes to financial statement.





ICON RECEIVABLES 1997-A L.L.C.

Notes to Financial Statement

December 31, 2001

1. Organization

ICON Receivables 1997-A L.L.C. (the "Company"), was formed in March 1997
and commenced business operations in 1997. In 1997, ICON Cash Flow Partners
L.P., Series D ("Series D"), ICON Cash Flow Partners, L.P., Series E ("Series
E"), ICON Cash Flow Partners L.P. Six ("L.P. Six") and ICON Cash Flow Partners
L.P. Seven ("L.P. Seven") contributed and assigned equipment leases and finance
receivables and residuals to the Company. The financial statements reflect the
Company's management of such contributed assets. Since its formation, the
Company has not entered into any new transactions other than owning and managing
the assets contributed for the benefit of the members. The Company is managed by
the General Partner of the Company's members. The Company is winding down its
portfolio and will distribute available cash to its members when all assets are
liquidated and all obligations are paid.

2. Significant Accounting Policies

Basis of Accounting and Presentation - The Company's records are maintained
on the accrual basis. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the dates of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.

Leases - The Company's leases are accounted for as finance leases. As such,
the Company recorded, at the inception of the lease, the total minimum lease
payments receivable, the estimated unguaranteed residual values 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.

Investment in Financings - Investment in financings represented the gross
receivables due from the financing of equipment less the related unearned
income. The unearned income was recognized as finance income over the terms of
the receivables using the interest method.

Allowance for Doubtful Accounts - The Company 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
Company's write-off policy is based on an analysis of the aging of the Company'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.

Income Taxes - No provision for income taxes has been made as the liability
for such taxes is that of each of the members rather than the Company.






ICON RECEIVABLES 1997-A L.L.C.

Notes to Financial Statement

December 31, 2001

Impairment of Estimated Residual Values - The Company'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 assets 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 that the estimated fair
value of the underlying equipment is less than the Company's carrying value.

The Company 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 Company from release or resale of the equipment.

Effective January 1, 2002, the Company adopted SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" (SFAS No. 144). This
statement requires that long-lived assets be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to the future net cash flows
expected to be generated by the asset. If the carrying amount of the asset
exceeds its estimated future cash flows, an impairment charge is recognized by
the amount by which the carrying amount of the asset exceeds the fair value of
the asset. SFAS No. 144 requires companies to separately report discontinued
operations and extends that reporting to a component of an entity that either
has been disposed of (by sale, abandonment or in a distribution to the owners)
or classified as held for sale. Assets to be disposed of are reported at the
lower of the carrying amount or fair value less the costs to sell. The adoption
of SFAS No. 144 did not have any effect on the Company's financial position or
results of operations as the provisions of SFAS No. 144 are similar to the
Company's current policy for impairment review.

3. Finance Lease Receivables

Non-cancelable minimum annual amounts due on finance leases at December 31,
2001 are as follows:

Year Amount

2002 $2,926,097
2003 40,036
2004 18,014
----------

$2,984,147

The Company's allowance for doubtful accounts relates to a significant
amount of past due receivables which are reflected in the above table as due in
2002.






ICON RECEIVABLES 1997-A L.L.C.

Notes to Financial Statement

December 31, 2001

4. 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, 1999 ...... $ 101,122 $ 66,788 $ 167,910

Recoveries on accounts
previously written-off ...... 274,938 296,411 571,349
Provision for doubtful accounts 410,500 439,500 850,000
----------- ----------- -----------

Balance at December 31, 2000 ...... 786,560 802,699 1,589,259

Accounts written-off ........... (437,336) (802,699) (1,240,035)
Provision for doubtful accounts 1,825,000 -- 1,825,000
----------- ----------- -----------

Balance at December 31, 2001 ...... $ 2,174,224 $ -- $ 2,174,224
=========== =========== ===========

5. Notes Payable

The notes payable are non-recourse, bear interest at rates ranging from
6.435% to 6.95% and are secured by and payable from the collections of finance
lease receivables and proceeds from the sales of residuals.

6. Other Assets

Other assets include amounts due from affiliates of $241,380 and $263,700
at December 31, 2001 and 2000, respectively which represent amounts collected by
an affiliate on the Company's behalf.
















ICON Receivables 1997-B L.L.C.

Financial Statement

December 31, 2001

(With Independent Auditors' Report Thereon)

















INDEPENDENT AUDITORS' REPORT


The Partners ICON Receivables 1997-B L.L.C.

We have audited the accompanying balance sheet of ICON Receivables 1997-B L.L.C.
(the "Company") as of December 31, 2001, and the related statement of
operations, changes in members' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

As discussed in Note 1, the Company is winding down its portfolio and will
distribute available cash to its members when all assets are liquidated and all
obligations are paid.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ICON Receivables 1997-B L.L.C.
as of December 31 2001, and the results of its operations and its cash flows for
the year then ended, in conformity with accounting principles generally accepted
in the United States of America.


/s/KPMG LLP
--------------------------------------------
KPMG LLP


April 15, 2002
New York, New York









ICON Receivables 1997-B L.L.C.

Balance Sheet

December 31, 2001


Assets

Cash .................................... $ 622,425
-----------

Investment in finance leases
Minimum rents receivable ............. 3,216,235
Estimated unguaranteed residual values 255,001
Unearned income ...................... (145,673)
Allowance for doubtful accounts ...... (1,098,719)
-----------
2,226,844

Investment in financings
Receivables due in installments ...... 6,783,818
Unearned income ...................... (408,920)
Allowance for doubtful accounts ...... (1,161,097)
-----------
5,213,801

Other assets ............................ 202,619
-----------

Total assets ............................ $ 8,265,689
===========


Liabilities and Members' Equity

Notes payable - non recourse ............ $ 6,982,448
Other liabilities ....................... 638,550
Due to affiliates ....................... 255,694
-----------

Total liabilities ....................... 7,876,692
-----------

Members' equity ......................... 388,997
-----------

Total liabilities and members' equity ... $ 8,265,689
===========










See accompanying notes to financial statements.





ICON Receivables 1997-B L.L.C.

Statement of Operations

For the Year Ended December 31, 2001


Revenue

Finance income ...................... $ 1,154,382
Interest income and other ........... 76,235
Gain from the sale of investments ... 49,540
-----------

Total revenues ......................... 1,280,157
-----------

Expenses

General and administrative expense .. 215,859
Interest expense .................... 645,798
Amortization of loan origination fees 123,307
Provision for doubtful accounts ..... 2,162,304
-----------

Total expenses ......................... 3,147,268
-----------

Net loss ............................... $(1,867,111)
===========

























See accompanying notes to financial statements.






ICON Receivables 1997-B L.L.C.

Statement of Changes in Members' Equity

For the Year Ended December 31, 2001



Balance at December 31, 2000 $ 2,256,108

Net loss ................... (1,867,111)
-----------

Balance at December 31, 2001 $ 388,997
===========




































See accompanying notes to financial statements.





ICON Receivables 1997-B L.L.C.

Statement of Cash Flows

For the Year Ended December 31, 2001


Cash flows from operating activities:
Net loss ......................................... $(1,867,111)
-----------
Adjustments to reconcile net loss to
net cash provided by operating activities:
Gain from the sale of investments ................ (49,540)
Amortization of loan origination fees ............ 123,307
Provision for doubtful accounts .................. 2,162,304
Changes in operating assets and liabilities:
Collection of principal on leases and financings 5,991,296
Other assets ................................... (35,125)
Other liabilities .............................. 818
Due to affiliates .............................. 518,082
-----------

Total adjustments ................................ 8,711,142
-----------

Net cash provided by operating activities ........ 6,844,031
-----------

Cash flows from investing activities:
Proceeds from the sale of equipment .............. 410,759
-----------

Net cash provided by investing activities ........ 410,759
-----------

Cash flows from financing activities:
Principal payments on notes payable - non-recourse (7,335,811)
-----------

Net cash used in investing activities ............... (7,335,811)
-----------

Net decrease in cash ................................ (81,021)

Cash at the beginning of the year ................... 703,446
-----------

Cash at the end of the year ......................... $ 622,425
===========

Supplemental disclosures of cash flow information:
Interest paid during the year .................... $ 645,798
===========








See accompanying notes to financial statements.






ICON Receivables 1997-B L.L.C.

Notes to Financial Statement

December 31, 2001

1. Organization

ICON Receivables 1997-B L.L.C. (the "Company"), was formed in August 1997
by three affiliated partnerships, ICON Cash Flow Partners L.P., Series E
("Series E"), ICON Cash Flow Partners L.P. Six ("L.P. Six") and ICON Cash Flow
Partners L.P. Seven ("L.P. Seven"), who contributed and assigned equipment
leases and finance receivables and residuals to the Company. These financial
statements reflect the Company's management of such contributed assets. Since
its formation, the Company has not entered into any transactions other than
owning and managing the assets contributed for the benefit of the members. The
servicing of the assets is provided by ICON Capital Corp, the general partner of
each of the members. The Company is winding down its portfolio and will
distribute available cash to its members when all assets are liquidated and all
obligations are paid.

2. Significant Accounting Policies

Basis of Accounting and Presentation - The Company's records are maintained
on the accrual basis. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Leases - The Company accounts for owned equipment leased to third parties
as finance leases. As such, the Company recorded the total minimum lease
payments, the estimated unguaranteed residual values 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 following the interest method.

Investment in Financings - Investment in financings represent the gross
receivables due from the financing of equipment less the related unearned
income. The unearned income is recognized as finance income over the terms of
the financings following the interest method.

Allowance for Doubtful Accounts - The Company 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
Company'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 Company'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 that the estimated fair
value of the underlying equipment is less than the Company's carrying value.





ICON Receivables 1997-B L.L.C.

Notes to Financial Statement-Continued

The Company 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 Company from release or resale of the equipment.

Income Taxes - No provision for income taxes has been made as the liability
for such taxes is that of each of the members rather than the Company.

3. Receivables Due in Installments

Non-cancelable minimum annual amounts due on finance leases and financing
are as follows:

Finance
Year Leases Financings Total

2002 $ 2,872,076 $ 3,333,605 $ 6,205,681
2003 344,159 1,580,054 1,924,213
2004 -- 1,870,159 1,870,159
----------- ----------- -----------

$ 3,216,235 $ 6,783,818 $10,000,053
=========== =========== ===========

The Company's allowance for doubtful accounts relates to a significant amount
of past due receivables which are reflected in the above table as due in 2002.

4. 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, 2000 .. $ 500,913 $ 1,181,770 $ 1,682,683

Accounts written-off .......... (177,442) (1,407,729) (1,585,171)
Provision for doubtful accounts 775,248 1,387,056 2,162,304
----------- ----------- -----------

Balance at December 31, 2001 .. $ 1,098,719 $ 1,161,097 $ 2,259,816
=========== =========== ===========

5. Notes Payable

The notes payable are non-recourse, bear interest at a rate of 6.19% and
are secured by and payable from the collections of finance lease receivables and
financings and proceeds from the sales of residuals. Loan origination fees are
being amortized over the life of the loan.

6. Due to Affiliates

The amount due to affiliates represents collected rentals deposited in the
Company's bank account on behalf of affiliated companies.














ICON/AIC TRUST

Financial Statements

December 31, 2001 and 2000

(With Independent Auditors' Report Thereon)











INDEPENDENT AUDITORS' REPORT


The Partners
ICON/AIC TRUST

We have audited the accompanying balance sheets of ICON/AIC TRUST as of December
31, 2001 and 2000, and the related statements of operations, changes in
beneficial interestholders' equity, and cash flows for the years then ended.
These financial statements are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these 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 3, the Trust sold all of its finance leases, subject to its
remaining non-recourse debt, on December 28, 2001. As a result, as of December
31, 2001, the only significant asset owned by the Trust is a note receivable
representing the proceeds of the sale which is collectible over the two and one
half year period ended June 2004.

In our opinion, the financial statements referred to the above present fairly,
in all material respects, the financial position of ICON/AIC TRUST as of
December 31, 2001 and 2000, and the results of its operations and its cash flows
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.


/s/KPMG LLP
--------------------------------------------
KPMG LLP


April 15, 2002
New York, New York






ICON/AIC TRUST

Balance Sheets

December 31,



2001 2000
---- ----
Assets

Investment in finance leases

Minimum rents receivable ............................... -- $ 9,331,709
Unguaranteed residual values ........................... -- 7,760,304
Initial direct costs ................................... -- 182,260
Unearned income ........................................ -- (1,972,793)
------------ ------------

-- 15,301,480
------------ ------------

Note receivable (note 3) .................................. 3,645,250 --
Due from affiliate (note 4) ............................... 204,189 --
------------ ------------

Total assets .............................................. $ 3,849,439 $ 15,301,480
============ ============


Liabilities and Beneficial Interestholders' Equity

Notes payable - non-recourse .............................. $ -- $ 8,543,026
------------ ------------

Beneficial interestholders' equity ........................ 3,849,439 6,758,454
------------ ------------

Total liabilities and beneficial interestholders' equity .. $ 3,849,439 $ 15,301,480
============ ============






















See accompanying notes to financial statements.






ICON/AIC TRUST

Statements of Operations

For the Years Ended December 31,



2001 2000
---- ----
Revenue


Finance income ..................................... $ 921,436 $ 1,540,381
----------- -----------

Total revenue ......................................... 921,436 1,540,381
----------- -----------

Expenses

Loss from the sales of investments in finance leases 2,472,400 --
Foreign currency loss .............................. 607,831 --
Interest expense ................................... 434,526 829,944
Amortization of initial direct costs ............... 94,375 180,852
----------- -----------

Total expenses ........................................ 3,609,132 1,010,796
----------- -----------

Net (loss) income ..................................... $(2,687,696) $ 529,585
=========== ===========


























See accompanying notes to financial statements.






ICON/AIC TRUST

Statements of Changes in Beneficial Interestholders' Equity

For the Years Ended December 31,



2001 2000
---- ----



Beneficial interestholders' equity, beginning of the year
(net of accumulated other comprehensive
income of $607,831 and $62,915) $ 6,758,454 $ 6,773,785

Distributions to beneficial interestholders (829,150) -

Net (loss) income $ (2,687,696) $ 529,585

Other comprehensive loss - foreign
translation loss - (544,916)
Realization of foreign translation loss
on sales of investment in finance leases 607,831 -
-------------- --------------

Comprehensive loss (2,079,865) (15,331)
------------- -------------

Beneficial interestholders' equity, end of year $ 3,849,439 $ 6,758,454
============= ============

December 31, 2001 December 31, 2000
----------------- -----------------

Accumulated other comprehensive loss - foreign
translation loss $ - $ (607,831)

Other beneficial interestholders' equity 3,849,439 7,366,285
------------- -------------

Beneficial interestholders' equity $ 3,849,439 $ 6,758,454
============= =============

















See accompanying notes to financial statements.





ICON/AIC TRUST

Statements of Cash Flows

For the Years Ended December 31,



2001 2000
---- ----
Cash flows from operating activities:

Net (loss) income .................................. $(2,687,696) $ 529,585
----------- -----------
Adjustments to reconcile net (loss) income to
net cash used in operating activities:
Loss from the sale of investments in finance leases 2,472,400 --
Foreign currency loss .............................. 607,831 --
Finance income portion of receivables paid directly
to lenders by lessees ............................ (921,436) (1,540,381)
Interest expense on non-recourse financing paid
directly to lenders by lessees ................... 434,526 829,944
Amortization of initial direct costs ............... 94,375 180,852
Changes in operating assets:
Due from affiliate ............................... (204,189) --
Collection of principal-non-financed receivables . 154,053 --
----------- -----------

Total adjustments .................................. 2,637,560 (529,585)
----------- -----------

Net cash used in operating activities .............. (50,136) --
----------- -----------

Cash flows from investing activities:
Proceeds from sales of investments in finance leases 879,286 --
----------- -----------

Cash flows used in financing activities:
Cash distributions to beneficial interestholders ... (829,150) --
----------- -----------

Net increase in cash .................................. -- --

Cash at the beginning of the year ..................... -- --
----------- -----------

Cash at the end of the year ........................... $ -- $ --
=========== ===========













See accompanying notes to financial statements.






ICON/AIC TRUST

Statements of Cash Flows (Continued)

For the Years Ended December 31,

Supplemental Disclosure of Cash Flow Information

For the years ended December 31, 2001 and 2000, non-cash activities included
the following:

2001 2000
---- ----
Principal and interest on direct finance
receivables paid directly to lenders by lessees $ 4,973,382 $ 7,368,662
Principal and interest on non-recourse
financing paid directly to lenders by lessees . (4,973,382) (7,368,662)
----------- -----------

$ -- $ --
=========== ===========

Interest expense of $434,526 and $829,944 for the years ended December 31,
2001 and 2000 respectively, consisted of interest expense on non-recourse
financing paid or accrued directly to lenders by lessees.







ICON/AIC TRUST

Notes to Financial Statements

December 31, 2001

1. Organization

ICON/AIC TRUST (the "Trust"), was formed and commenced business operations
in 1999 to accept a contribution of equipment leases in the United Kingdom,
subject to related debt, from ICON Cash Flow Partners L.P. Seven (L.P. Seven).
Subsequently, L.P. Seven sold interests in the Trust to ICON Cash Flow Partners
L.P. Eight A ("Fund Eight A") and to ICON Cash Flow Partners L.P. Six ("L.P.
Six").

2. Significant Accounting Policies

Basis of Accounting and Presentation - The Trust's records are maintained
on the accrual basis. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the dates of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates. The contributed leases were all receivable in British pounds sterling
and the related non-recourse debt was payable in British pounds sterling. As a
result, the functional currency of the Trust is the British pounds sterling. The
financial statements are translated into U.S. dollars and resulting translation
gains and losses are included as other comprehensive income.

Leases - The Trust accounted for owned equipment leased to third parties as
finance leases. For finance leases, the Trust recorded, 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. Initial direct costs of finance leases
were capitalized and amortized over the terms of the related leases using the
interest method.

Impairment of Estimated Residual Values - The Trust's policy with respect
to impairment of estimated residual values was to review, on a periodic basis,
the carrying value of its residuals on an individual assets basis to determine
whether events or changes in circumstances indicated that the carrying value of
an asset was not recoverable and, therefore, an impairment loss should have been
recognized. The events or changes in circumstances which generally indicated
that the residual value of an asset had been impaired were (i) the estimated
fair value of the underlying equipment was less than the Trust's carrying value
or (ii) the lessee was experiencing financial difficulties and it did not appear
likely that the estimated proceeds from the disposition of the asset would be
sufficient to satisfy the remaining obligation to the non-recourse lender and
the Trust's residual position.

Income Taxes - No provision for income taxes has been made as the liability
for such taxes is that of each of the beneficial interestholders' rather than
the Trust.






ICON/ AIC TRUST

Notes to Financial Statements (Continued)
December 31, 2001

3. Sale of Finance Leases

On December 28, 2001, the Trust sold its remaining investment in finance
leases subject to the remaining related non-recourse debt, for a note which is
collectible over a two and one half year period. The gross note amount is
(pound)2,575,000 or $3,744,822 based upon the currency exchange rate at December
31, 2001. The receivable (converted into US dollars) is due as follows:

January 2002 (paid) $ 690,792
June 2002 690,793
January 2003 654,435
June 2003 618,077
January 2004 545,362
June 2004 545,363
-----------
3,744,822
Less interest included
in the payments (99,572)
-----------

$ 3,645,250


Foreign currency gains or losses will be recorded as currency rates change.

4. Related Party Transactions

The Trust is managed by the General Partner of the Trust's beneficial
interestholders. The costs were not significant and were absorbed by the members
in proportion to their sharing interests. As of December 31, 2001, amounts due
from an affiliate represented cash held by L.P. Seven on behalf of the Trust.
















ICON Cheyenne L.L.C.

Financial Statements

December 31, 2001

(With Independent Auditors' Report Thereon)


















INDEPENDENT AUDITORS' REPORT


The Members
ICON Cheyenne L.L.C.

We have audited the accompanying balance sheet of ICON Cheyenne L.L.C. (the
"Company") as of December 31, 2001 and the related statements of operations,
changes in members' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to the above present fairly,
in all material respects, the financial position of ICON Cheyenne L.L.C. as of
December 31, 2001, and the results of its operations and its cash flows for the
year ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.


/s/KPMG LLP
--------------------------------------------
KPMG LLP


April 15, 2002
New York, New York







ICON Cheyenne L.L.C.

Balance Sheet

December 31, 2001

ASSETS

Cash ................................ $ 279,550
------------

Investment in operating leases:
Equipment cost ................... 28,832,836
Accumulated depreciation ......... (6,386,270)
------------
22,446,566

Due from affiliates ................. 878,015
Other assets ........................ 265,540
------------

Total assets ........................ $ 23,869,671
============

LIABILITIES AND MEMBERS' EQUITY

Notes payable, non-recourse ......... $ 10,223,768
Accounts payable .................... 25,318
Deferred income and other ........... 896,420
------------
11,145,506

Member's equity ..................... 12,724,165
------------

Total liabilities and members' equity $ 23,869,671
============





















See accompanying notes to financial statements.






ICON Cheyenne L.L.C.

Statement of Operations

For the Year Ended December 31, 2001

Revenues

Rental income ............ $8,830,255
Gain on sale of equipment 92,695
Interest income and other 90,230
----------

Total revenues ........... 9,013,180
----------

Expenses

Depreciation expense ..... 6,722,261
Interest expense ......... 931,643
General and administrative 36,262
----------

Total expenses ........... 7,690,166
----------

Net income ............... $1,323,014
==========
























See accompanying notes to financial statements.







ICON Cheyenne L.L.C.

Statement of Changes in Members' Equity

For the Year Ended December 31, 2001

Members' equity at December 31, 2000 ... $11,401,151

Net income ............................. 1,323,014
-----------

Members' equity as of December. 31, 2001 $12,724,165
===========





































See accompanying notes to financial statements.






ICON Cheyenne L.L.C.

Statement of Cash Flows

For the Year Ended December 31, 2001

Cash flows from operating activities:
Net income .................................... $ 1,323,014
-----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation expense .......................... 6,722,261
Rental income paid directly
to lenders by lessees ....................... (8,426,301)
Interest expense on non-recourse financing paid
directly by lessees ......................... 931,643
Gain on sale of equipment ..................... (92,695)
Changes in operating assets and liabilities:
Due from affiliates ......................... (878,015)
Accounts payable ............................ 25,318
Deferred income and other ................... 896,420
Other assets ................................ (265,540)
-----------

Total adjustments ............................. (1,086,909)
-----------

Net cash provided by operating activities ........ 236,105
-----------

Cash flows from investing activities:
Proceeds from sale of equipment ............... 629,514
-----------

Cash flows used in financing activities:
Repayment of non-recourse debt ................ (586,069)
-----------

Net change in cash ............................... 279,550

Cash at the beginning of the year ................ --
-----------

Cash at the end of the year ...................... $ 279,550
===========













See accompanying notes to financial statements.





ICON Cheyenne L.L.C.

Statement of Cash Flows (Continued)

Supplemental Disclosure of Cash Flow Information

For the years December 31, 2001 and 2000, non-cash activities included the
following:

2001

Rental income paid directly to lenders by lessees $ 8,426,301
Principal and interest on non-recourse debt
paid directly to lenders by lessees ........... (8,426,301)
-----------

$ --
===========

Interest expense of $931,643 for the year ended December 31, 2001 consisted
solely of interest expense on non-recourse financing paid or accrued directly to
lenders by lessees.


































See accompanying notes to financial statements.






ICON Cheyenne L.L.C.

Notes to Financial Statements

December 31, 2001

1. Organization

ICON Cheyenne LLC (the "LLC") was formed December 27, 2000 as a joint
venture between four affiliates; ICON Income Fund Eight B ("Fund Eight B"), ICON
Cash Flow Partners L.P. Seven ("L.P. Seven"), ICON Cash Flow Partner L.P. Six
("L.P. Six") and ICON Income Fund Eight A ("Fund Eight A"). The purpose of the
LLC was to acquire a portfolio of leases consisting of various types of
industrial and manufacturing equipment. The total purchase price of the
portfolio acquired was $29,705,716 and was financed by cash of $11,401,151 and
non-recourse debt of $18,304,565. Fund Eight B has a majority interest of
87.69%, while L.P. Seven, L.P. Six and Fund Eight A have 10.31%, 1% and 1%
interests, respectively.

Profits, losses, cash distributions and disposition proceeds are allocated
to the members in accordance to their share of interest.

2. Significant Accounting Policies

Basis of Accounting and Presentation - The LLC's records are maintained on
the accrual basis. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Leases - All leases in the LLC's portfolio are classified as operating
leases. 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 following the
straight-line method over the lease terms. Billed and uncollected operating
lease receivables are included in other assets.

Impairment of Assets - The LLC's policy with respect to impairment of
estimated salvage values of operating leases is to review, on a periodic basis,
the carrying value on an individual asset 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 LLC'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 LLC's carrying
value. Generally in the latter situation, the carrying value relates to
equipment subject to third party non-recourse notes payable where the lessee
remits its rental payments directly to the lender and the LLC does not recover
its carrying value until the non-recourse note obligation is repaid in full.

Income Taxes - No provisions for income taxes has been made as liability
for such taxes is that of each member rather than the LLC.





ICON Cheyenne L.L.C.

Notes to Financial Statements (Continued)

December 31, 2001

3. Investment In Operating Leases

In December 2000, the LLC acquired a portfolio of operating leases
involving various types of equipment for a total cost of $29,705,716. During the
year ended December 31, 2001, the LLC sold a portion of such equipment upon
termination of the underlying leases with lessees.

The investment in operating leases at December 31, 2001 consisted of the
following:

Equipment cost, January 1, 2001 ................. $ 29,705,716

Equipment sold .................................. (872,880)
------------

Equipment cost, December 31, 2001 ............... 28,832,836
------------

Accumulated depreciation, January 1, 2001 ....... --

Depreciation expense ............................ (6,722,261)

Accumulated depreciation on equipment sold ...... 335,991
------------

Accumulated depreciation, December 31, 2001 ..... (6,386,270)
------------

Investment in operating leases, December 31, 2001 $ 22,446,566
============

Non-cancellables rents from operating leases are due as follows:

Year Amount

2002 $ 5,788,426
2003 3,786,622
2004 1,354,145
2005 644,354
2006 61,360
--------------

$ 11,634,907







ICON Cheyenne L.L.C.

Notes to Financial Statements (Continued)

December 31, 2001

4. Notes Payable

Notes payable consists of notes payable, non-recourse, which accrue
interest at rates ranging from 5.52% to 10.05%, and which are being paid
directly to the lenders by the lessees.

The notes mature as follows:

Year Amount

2002 $ 4,765,112
2003 3,556,465
2004 1,279,030
2005 623,161
--------------

$ 10,223,768

5. Related Party Transactions

Amounts due from Affiliates represent rental payments received by Income
Fund Eight B of $797,307 and rental payments received by L.P. Six of $80,708 on
behalf of the LLC. Such amounts were remitted to the LLC in 2002.















North Sea (Connecticut) Limited Partnership

Financial Statement

December 31, 2001

(With Independent Auditors' Report Thereon)





Page 86

Last printed 05/20/02 12:37 PM










INDEPENDENT AUDITORS' REPORT


The Partners
North Sea (Connecticut) Limited Partnership

We have audited the accompanying balance sheet of North Sea (Connecticut)
Limited Partnership (the "Partnership") as of December 31, 2001, and the related
statements of operations, changes in partners' deficit, and cash flows for the
year ended December 31, 2001. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of North Sea (Connecticut) Limited
Partnership as of December 31 2001, and the results of its operations and its
cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.



/s/Cohen & Schaeffer P.C.
-----------------------------------
Cohen & Schaeffer P.C.


April 29, 2002
New York, New York






North Sea (Connecticut) Limited Partnership

Balance Sheet

December 31, 2001


Assets

Rents receivable ............................. $ 2,233,401
Equipment subject to operating lease,
net of accumulated depreciation of $804,016 8,936,064
------------

Total assets ................................. $ 11,169,465
============

Liabilities and Partners' Deficit

Note payable, non-recourse ................... $ 24,743,746
Accrued interest payable ..................... 706,537
------------

Total liabilities ............................ 25,450,283
------------

Commitments and Contingencies

Partners' deficit
General Partner ........................... (27,959)
Limited Partners .......................... (14,252,859)
------------

Total Partners' deficit ...................... (14,280,818)
------------

Total liabilities and Partners' deficit ...... $ 11,169,465
============

















See accompanying notes to financial statements.





North Sea (Connecticut) Limited Partnership

Statement of Operations

For the Year Ended December 31, 2001



Revenue - rental income from operating lease $5,121,175
----------

Expenses:

Interest expense ........................ 2,541,450
Depreciation expense .................... 551,325
----------

Total expenses ............................. 3,092,775
----------

Net income ................................. $2,028,400
==========





























See accompanying notes to financial statements.






North Sea (Connecticut) Limited Partnership

Statement of Changes in Partners' Deficit

For the Year Ended December 31, 2001





Class A Class B Class C
General Limited Limited Limited
Partner Partners Partners Partner Total


Balance at December 31, 2000 $ (48,243) $ (9,957,582) $ (5,696,283) $ (607,110) $(16,309,218)

Net income ................. 20,284 993,916 -- 1,014,200 2,028,400
--------- ------------ ------------ ------------ ------------

Balance at December 31, 2001 $ (27,959) $ (8,963,666) $ (5,696,283) $ 407,090 $(14,280,818)
========= ============ ============ ============ ============
































See accompanying notes to financial statements.






North Sea (Connecticut) Limited Partnership

Statement of Cash Flows

For the Year Ended December 31, 2001





Cash flows from operating activities:

Net income ................................................................... $ 2,028,400
-----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation ................................................................. 551,325
Rentals paid directly to lender by lessee .................................... (5,234,978)
Interest on non-recourse financing
paid directly to lender by lessee ........................................... 2,616,225
Rents receivable ............................................................. 113,804
Accrued interest payable ..................................................... (74,776)
-----------

Total adjustments .............................................................. (2,028,400)
-----------

Net cash provided by operating activities ...................................... --
-----------

Net increase decrease in cash .................................................. --

Cash at the beginning of the year .............................................. --
-----------

Cash at the end of the year .................................................... $ --
===========


Supplemental Disclosures of Cash Flow Information

Interest expense of $2,541,450 for the year ended December 31, 2001,
consisted of interest expense on non-recourse financing accrued or paid directly
to lender by lessee ............................................................

For the year ended December 31, 2001 non-cash activities included the
following:

Rents receivable
paid directly to lender by lessee ............................................ $ 5,234,978
Principal and interest on non-recourse financing
paid directly to lender by lessee ............................................ (5,234,978)
-----------

$ --
===========







See accompanying notes to financial statements.





North Sea (Connecticut) Limited Partnership

Notes to Financial Statement

December 31, 2001

3. Organization

North Sea (Connecticut) Limited Partnership (the "Partnership") was formed
in 1994 when the General Partner contributed $27,750 and the Class A limited
partners contributed a total of $2,747,250. Subsequently, the Partnership
admitted Class B and Class C Limited Partners. In 1994, the Partnership acquired
an option for a cost of $2,905,000 to purchase a mobile drilling rig and related
property for an exercise price as defined, depending on the date of exercise,
through September 15, 2000. In 2000 the Partnership exercised it's option to
purchase the mobile oil rig and related property for $6,650,000 plus legal fees
of $185,000 and entered into an operating lease with the user of the rig.

4. Significant Accounting Policies

Basis of Accounting and Presentation - The Partnership's records are
maintained on the accrual basis. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

The Partnership's lease is accounted for as an operating lease.
Accordingly, the rentals due under the lease are recognized on a straight line
basis over the lease term. The equipment is being depreciated over its estimated
useful remaining life.

Impairment of Estimated Residual Values - The Partnership's policy with
respect to impairment of its equipment is to review, on a periodic basis, the
carrying value of the equipment to determine whether events or changes in
circumstances indicate that the carrying value may not be recoverable and,
therefore, an impairment loss should be recognized. The events or changes in
circumstances which generally indicate that the asset has been impaired are (i)
the estimated fair value of the 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.

The Partnership measures its impairment loss as the amount by which the
carrying value of the equipment exceeds the estimated proceeds to be received by
the Partnership from release or sale of the equipment.

New accounting pronouncement effective January 1, 2002, the Company adopted
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
(SFAS No. 144). This statement requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to the future net cash flows expected to be generated by the asset. If the
carrying amount of the asset exceeds its estimated future cash flows, an
impairment charge is recognized by the amount by which the carrying amount of
the asset






North Sea (Connecticut) Limited Partnership

Notes to Financial Statement

December 31, 2001

exceeds the fair value of the asset. SFAS No. 144 requires companies to
separately report discontinued operations and extends that reporting to a
component of an entity that either has been disposed of (by sale, abandonment or
in a distribution to the owners) or classified as held for sale. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
the costs to sell. The adoption of SFAS No. 144 did not have any effect on the
Company's financial position or results of operations as the provisions of SFAS
No. 144 are similar to the Company's current policy for impairment review.

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.

3. Operating Lease - Minimum Lease Rentals

Non-cancelable minimum annual amounts due from the operating lease are as
follows:

Year Amount

2002 $ 5,234,978
2003 5,234,978
2004 5,234,978
2005 5,234,978
2006 5,234,978
Thereafter 7,852,469
-----------

$34,027,359

4. Note Payable

The note payable, non-recourse, accrues interest at a rate of 9.79 % per
annum and matures as follows:

Year Amount

2002 $ 2,881,403
2003 3,170,397
2004 3,488,375
2005 3,838,245
2006 4,223,206
Thereafter 7,142,120
-----------

$24,743,746

The lessee pays rent directly to the lender to repay the note payable. The
lender has a security interest in the lease and the mobil oil rig and related
property and the scheduled lease payments due under the lease and assigned to
the lender are sufficient to repay the note payable and interest thereon.





North Sea (Connecticut) Limited Partnership

Notes to Financial Statement

December 31, 2001


5. Partners Equity And Distributions

Allocation Of Net Income And Loss

(a) Net income for each year of the Partnership is allocated among the
Partners as follows:

(1) First, to the extent net loss had been allocated to the Class B
Limited Partners or the General Partner in any prior year, as
defined, net income equal to the aggregate amount of such
unrecovered net loss shall be allocated first to the General
Partner and then to the Class B Limited Partners and

(2) Any remaining net income shall be allocated to the General
Partner, the Class A Limited Partners and the Class C Limited
Partner in proportion to the percentage interests of 1%, 49% and
50%, respectively.

There have been no net losses allocated to the Class B Limited
Partners or the General Partner prior to 2001.

(b) Net loss for each fiscal year of the Partnership is allocated among
the Partners as follows:

(1) Net loss for each year is allocated among the General Partner,
the Class A Limited Partners and the Class C Limited Partner in
proportion to their percentage interests of 1%, 49% and 50%,
respectively, and

(2) The net loss allocated to any Partner with respect to any year
shall not exceed the maximum amount of net loss that can be so
allocated without causing such Partner to have a capital account
deficit at the end of such fiscal year. The net loss as defined
is then allocated to the Class B Limited Partners until their
capital accounts have been reduced to zero, and thereafter to the
General Partner.

Distributions

The Partnership makes distributions to the Partners, as follows:

(a) Distributions of available cash other than available cash with respect
to the remaining share, as defined, shall be distributed to the
General Partner, the Class A Limited Partners and the Class C Limited
Partner, as and when determined by the General Partner, in accordance
with their percentage interests of 1%, 49% and 50% respectively.

(b) Distributions from the remaining share, as defined, shall be
distributed 50% to the Class B Limited Partner and 50% to the Class C
Limited Partner.