UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2003
--------------------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 33-94458
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ICON Cash Flow Partners L.P. Seven
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(Exact name of registrant as specified in its charter)
Delaware 13-3835387
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
100 Fifth Avenue New York, New York 10011
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(Address of principal executive offices) (Zip code)
(212) 418-4700
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Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [x] Yes [ ] No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). [ ] Yes [x] No
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Condensed Consolidated Balance Sheets
June 30, December 31,
2003 2002
---- ----
(unaudited)
Assets
Cash and cash equivalents $ 442,945 $ 1,257,947
------------ ------------
Investment in finance leases
Minimum rents receivable 1,551,069 2,252,134
Estimated unguaranteed residual values 1,383,405 1,717,816
Initial direct costs, net 34,525 36,455
Unearned income (98,898) (137,106)
Allowance for doubtful accounts (249,127) (289,301)
------------ ------------
2,620,974 3,579,998
------------ ------------
Investment in operating leases
Equipment at cost 15,999,623 14,195,791
Accumulated depreciation (2,589,738) (1,703,583)
------------ ------------
13,409,885 12,492,208
------------ ------------
Equipment held for sale or lease, net 17,982,298 19,343,546
------------ ------------
Net investment in leveraged leases 21,446,059 27,877,708
------------ ------------
Investment in estimated unguaranteed residual values 20,811,758 20,811,758
------------ ------------
Investments in unconsolidated joint ventures 3,715,044 3,360,145
------------ ------------
Due from General Partner and affiliates 160,144 161,458
------------ ------------
Other assets, net 946,957 1,249,535
------------ ------------
Total assets $ 81,536,064 $ 90,134,303
============ ============
(continued on next page)
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Condensed Consolidated Balance Sheets - Continued
June 30, December 31,
2003 2002
---- ----
(unaudited)
Liabilities and Partners' Equity
Notes payable - non-recourse $ 23,250,142 $ 27,186,863
Notes and accrued interest payable - recourse 28,301,293 27,707,802
Due to General Partner and affiliates 66,452 155,542
Security deposits, deferred credits and other payables 1,052,148 664,692
Minority interest in consolidated joint venture 54,476 53,292
-------------- -------------
Total liabilities 52,724,511 55,768,191
-------------- -------------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (560,791) (505,244)
Limited Partners (987,548 units outstanding,
$100 per unit original issue price) 29,372,344 34,871,356
-------------- -------------
Total partners' equity 28,811,553 34,366,112
-------------- -------------
Total liabilities and partners' equity $ 81,536,064 $ 90,134,303
============== =============
See accompanying notes to condensed consolidated financial statements.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Condensed Consolidated Statements of Operations
(unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2003 2002 2003 2002
---- ---- ---- ----
Revenues
Finance income $ 15,186 $ 354,616 $ 38,208 $ 811,685
Rental income 519,574 236,395 887,260 521,491
Income from leveraged leases 75,800 596,050 325,718 1,186,220
Gain on sales of equipment 92,231 - 130,779 8,138
Income from investments in
unconsolidated joint ventures 330,584 332,803 634,574 700,920
Interest income and other 260 1,053 2,590 39,947
------------- ------------- ------------- -------------
Total revenues 1,033,635 1,520,917 2,019,129 3,268,401
------------- ------------- ------------- -------------
Expenses
Depreciation expense 1,379,374 1,005,087 2,758,748 2,010,058
Interest 819,929 721,262 1,513,759 1,464,375
General and administrative 500,939 224,555 865,358 501,775
Management fees - General Partner 36,673 144,303 479,292 648,706
Administrative expense reimbursements
General Partner 15,961 67,178 194,477 278,522
Amortization of initial direct costs (30,352) 106,406 98,328 238,116
Minority interest in consolidated
joint venture - 1,210 1,183 2,427
------------- ------------- ------------- -------------
Total expenses 2,722,524 2,270,001 5,911,145 5,143,979
------------- ------------- ------------- -------------
Net loss $ (1,688,889) $ (749,084) $ (3,892,016) $ (1,875,578)
------------- ------------- ------------- -------------
Net loss allocable to:
Limited Partners $ (1,672,000) $ (741,593) $ (3,853,096) $ (1,856,822)
General Partner (16,889) (7,491) (38,920) (18,756)
------------- ------------- ------------- -------------
$ (1,688,889) $ (749,084) $ (3,892,016) $ (1,875,578)
------------- ------------- ------------- -------------
Weighted average number of limited
partnership units outstanding 987,548 988,219 987,548 988,339
============= ============= ============= =============
Net loss per weighted average
limited partnership unit $ (1.69) $ (0.75) $ (3.90) $ (1.88)
============ ============ ============= ============
See accompanying notes to condensed consolidated financial statements.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Condensed Consolidated Statement of Changes in Partners' Equity
For the Six Months Ended June 30, 2003
(unaudited)
Limited Partner Distributions
-----------------------------
Return of Investment Limited General
Capital Income Partners Partner Total
------- ------ -------- ------- -----
(Per weighted average unit)
Balance at
January 1, 2003 $ 34,871,356 $ (505,244) $ 34,366,112
Cash distributions to partners $ 1.67 $ - (1,645,916) (16,627) (1,662,543)
Net loss (3,853,096) (38,920) (3,892,016)
--------------- ------------ --------------
Balance at
June 30, 2003 $ 29,372,344 $ (560,791) $ 28,811,553
=============== ============ ==============
See accompanying notes to condensed consolidated financial statements.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(unaudited)
2003 2002
---- ----
Cash flows from operating activities:
Net loss $ (3,892,016) $ (1,875,578)
---------------- ---------------
Adjustments to reconcile net loss to
net cash used in operating activities:
Finance income portion of receivables paid directly
to lenders by lessees - (548,118)
Rental income paid directly to lender by lessees (674,894) (378,690)
Interest expense on non-recourse financing paid
directly by lessees 979,521 955,927
Amortization of initial direct costs 98,328 238,116
Depreciation expense 2,758,748 2,010,058
Income from leveraged leases (325,718) (1,186,220)
Income from investments in unconsolidated joint ventures (634,574) (700,920)
Gain on sales of equipment (130,779) (8,138)
Minority interest in consolidated joint venture 1,183 2,427
Changes in operating assets and liabilities, net 1,305,530 (2,507,614)
---------------- ---------------
Total adjustments 3,377,345 (2,123,172)
---------------- ---------------
Net cash used in operating activities (514,671) (3,998,750)
---------------- ---------------
Cash flows from investing activities:
Proceeds from sales of equipment 827,549 271,896
Distributions received from unconsolidated joint ventures 298,564 530,739
---------------- ---------------
Net cash provided by investing activities 1,126,113 802,635
---------------- ---------------
(continued on next page)
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Condensed Consolidated Statements of Cash Flows - Continued
For the Six Months Ended June 30,
(unaudited)
2003 2002
---- ----
Cash flows from financing activities:
Cash distributions to partners (1,662,543) (5,349,354)
Proceeds from notes payable - recourse 690,000 10,800,439
Principal payments on notes payable - recourse (453,901) (3,270,036)
Redemption of limited partnership units - (30,940)
----------- -----------
Net cash (used in) provided by financing activities (1,426,444) 2,150,109
----------- -----------
Net decrease in cash and cash equivalents (815,002) (1,046,006)
Cash and cash equivalents at beginning of period 1,257,947 2,333,871
----------- -----------
Cash and cash equivalents at end of period $ 442,945 $ 1,287,865
=========== ===========
(continued on next page)
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Condensed Consolidated Statements of Cash Flows - Continued
Supplemental Disclosure of Cash Flow Information
For the six months ended June 30, 2003 and 2002, non-cash activities
included the following:
2003 2002
---- ----
Principal and interest on direct finance
receivables paid directly to lenders by lessees $ 4,241,348 $ 1,842,347
Rental income assigned operating lease receivables 674,894 378,690
Principal and interest on non-recourse
financing paid directly to lenders by lessees (4,916,242) (2,221,037)
----------- -----------
$ - $ -
=========== ===========
Interest expense of $1,513,759 and $1,464,375 for the six months ended June
30, 2003 and 2002, respectively, consisted of interest expense on notes payable
non-recourse paid or accrued directly to lenders by lessees of $979,521 and
$955,927 respectively, and interest expense on notes payable - recourse paid or
accrued of $534,238 and $508,448, respectively.
See accompanying notes to condensed consolidated financial statements.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements
June 30, 2003
(unaudited)
1. Basis of Presentation
The condensed consolidated financial statements of ICON Cash Flow Partners
L.P. Seven (the "Partnership") have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC") and, in the
opinion of management, include all adjustments (consisting only of normal
recurring accruals) necessary for a fair statement of results for each period
shown. Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such SEC rules and regulations. Management
believes that the disclosures made are adequate to make the information
represented not misleading. The results for the interim period are not
necessarily indicative of the results for the full year. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes included in the Partnership's 2002
Annual Report on Form 10-K.
The General Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut Corporation. The General Partner manages and controls
the business affairs of the Partnership's equipment, leases and financing
transactions under a management agreement with the Partnership.
2. Disposition Period
The Partnership's reinvestment period ended November, 2002 and the
Partnership immediately commenced its disposition period. During the disposition
period the Partnership has and will continue to distribute substantially all
distributable cash from operations and equipment sales to the partners and begin
the orderly termination of its operations and affairs. The Partnership has not
and will not invest in any additional finance or lease transactions during the
disposition period. During the disposition period the Partnership expects to
recover, at a minimum, the carrying value of its assets.
3. Contingencies
ICON Cash Flow Partners, L.P. Series Seven is the owner of two special
purpose entities that own eight marine vessels originally on charter to
affiliates of Seacor Smit. Five of the eight vessels have outstanding
non-recourse debt with a lender. Under the original loan agreements, with the
SPEs, all charter revenue was paid to the lender to amortize the debt. At the
end of the original charter term of each vessel it was expected that the
individual vessels would be either re-chartered or sold with proceeds directed
to the lender until the debt was fully satisfied. Several of the vessels had
been re-chartered during depressed periods of bareboat charter rates. As such,
the lender has not received the amortization it had originally contemplated and
the non-recourse notes have been declared to be in default. The specific vessels
subject to these notes are the Yankee, Rebel, Frontier, Kodiak Island, and
Osprey. According to recent appraisals, the value of the vessels is estimated to
be between 15.6 and 24.5 million dollars. At August 5, 2003, the total debt
balance was 7.25 million dollars. The SPEs are working with the lender to
resolve the matter while simultaneously in discussions with several parties for
the sale of a number of the vessels.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
4. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the six months ended June 30, 2003 and 2002 were
as follows:
2003 2002
---- ----
Management fees $ 479,292 $ 648,706 Charged to Operations
Administrative expense
reimbursements 194,477 278,522 Charged to Operations
--------- ----------
Total $ 673,769 $ 927,228
========= ==========
The Partnership has formed eight joint ventures with affiliates for the
purpose of acquiring and managing various assets. (See Note 6 for additional
information relating to the joint ventures.)
5. Net Investment in Leveraged Leases
The Partnership has ownership interests in two DC-10-30 aircraft subject to
leveraged leases with Continental Airlines, Inc. ("Continental") (through April
2003) and Federal Express (through July 2004).
Effective May 1, 2003 the Continental aircraft was re-leased to World
Airways, Inc. ("World Airways") for an eight month term with an option for World
Airways to extend the lease for an additional four months. The equipment, which
has an estimated residual value of $2,565,000 was reclassified as an investment
in operating lease. The aircraft is subject to an agreement which provides that
a portion of the residual proceeds are to be paid to a third party.
The net investment in the leveraged leases as of June 30, 2003 and December
31, 2002 consisted of the following:
June 30, December 31,
2003 2002
---- ----
Non-cancelable minimum rents receivable (net of
principal and interest on non-recourse debt) $ 5,810,360 $ 10,002,727
Estimated unguaranteed residual values 17,600,000 20,865,000
Initial direct costs 100,953 181,010
Unearned income (2,065,254) (3,171,029)
------------ -------------
$ 21,446,059 $ 27,877,708
============ =============
Unearned income is recognized from leveraged leases over the life of the
leases at a constant rate of return based on the positive net investment in the
lease in the years such investment is positive. There are no deferred tax
liabilities arising from the Partnership's leveraged lease investments since all
taxes are recognized at the individual partner level rather than at the
Partnership level.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
For the period ended June 30, 2003, the Company reduced the estimated
unguaranteed residual value of the Federal Express aircraft and recorded an
impairment provision of $700,000 as a result of management's analysis which
indicated a lower value at lease termination than initially estimated. The
impairment provision has been reflected in net income from leveraged leases.
6. Consolidated Venture and Investments in Unconsolidated Joint Ventures
The Partnership and affiliates are parties to eight ventures discussed
below for the purpose of acquiring and managing various assets.
Consolidated Venture
The venture described below is majority owned and is consolidated with the
Partnership.
ICON Cash Flow Partners L.L.C. III
----------------------------------
In December 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 L.L.C. III"), for the purpose of acquiring and managing an
aircraft which was on lease to Continental Airlines, Inc. The aircraft is a 1976
McDonnell Douglas DC-10-30 and cost $11,429,751. The lease which was a leveraged
lease expired April 30, 2003. Effective May 1, 2003, the aircraft was leased to
a new lessee, World Airways, Inc. (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 L.L.C. III.
Series E's investment in ICON Cash Flow L.L.C. III has been reflected as
minority interest in consolidated joint venture on the accompanying condensed
consolidated balance sheets statements of operations.
Investments In Unconsolidated Joint Ventures
The seven joint ventures described below are 50% or less owned by the
Partnership and are accounted for under the equity method.
ICON Receivables 1997-A L.L.C.
------------------------------
In March 1997, the Partnership 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 June 30, 2003, 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.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
Information as to the unaudited results of operations of 1997-A for the six
months ended June 30, 2003 and 2002 is summarized below:
Six Months Ended Six Months Ended
June 30, 2003 June 30, 2002
------------- -------------
Net loss $ (39,975) $ (53,832)
============ ============
Partnership's share of net loss $ (7,981) $ (10,746)
============ ============
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.
Information as to the unaudited results of operations of 1997-B for the six
months ended June 30, 2003 and 2002 is summarized below:
Six Months Ended Six Months Ended
June 30, 2003 June 30, 2002
------------ ------------
Net loss $ (203,652) $ (388,997)
============ ============
Partnership's share of net loss $ (33,949) $ (64,847)
============ ============
ICON/Boardman Facility LLC
--------------------------
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 Facility LLC ("ICON BF"), for the
purpose of acquiring a lease for a coal handling facility with Portland General
Electric, a utility company. The purchase price totaled $27,421,810, and was
funded with cash and non-recourse debt. The remaining venturers' shares in ICON
BF at June 30, 2003 were .5025%, .5025%, and 98.995% for the Partnership, L.P.
Six, and Fund Eight A, respectively. The outstanding debt at June 30, 2003 was
$7,131,576.
Information as to the unaudited results of operations of ICON BF for the
six months ended June 30, 2003 and 2002 is summarized below:
Six Months Ended Six Months Ended
June 30, 2003 June 30, 2002
------------ ------------
Net income $ 701,622 $ 652,963
============ ============
Partnership's share of net income $ 3,525 $ 3,281
============ ============
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
ICON/AIC Trust
--------------
In 1999, ICON/AIC Trust ("AIC Trust") was formed to own and manage a
portfolio of leases in England. The Partnership, L.P. Six and Fund Eight A own
30.76%, 25.51% and 43.73% interests in AIC Trust, respectively.
On December 28, 2001, AIC Trust sold its remaining leases, subject to the
related debt, at a loss for a note receivable of (pound)2,575,000 ($3,744,822
based upon the exchange rate at December 31, 2001) which is payable in six
installments through June 2004. The first two installments on the note of
(pound)475,000 each were collected in 2002 and the third installment of
(pound)450,000 was collected in the first quarter of 2003. As of June 30, 2003,
the gross amount due is (pound)1,175,000 ($1,919,913 based upon the exchange
rate at June 30, 2003).
Information as to the unaudited results of operations of ICON/AIC Trust for
the six months ended June 30, 2003 and 2002 is summarized below:
Six Months Ended Six Months Ended
June 30, 2003 June 30, 2002
------------ -------------
Net income $ 21,313 $ 253,820
============ ============
Partnership's share of net income $ 6,556 $ 78,075
============ ============
Distributions $ 722,005 $ 1,032,763
============ ============
Partnership's share of distribution $ 222,089 $ 317,678
============ ============
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 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%, 1.0%, 1.0% and 87.69%, respectively, in ICON Cheyenne. The
outstanding debt at June 30, 2003 was $2,812,041.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
Information as to the unaudited results of operations of ICON Cheyenne for
the six months ended June 30, 2003 and 2002 is summarized below:
Six Months Ended Six Months Ended
June 30, 2003 June 30, 2002
------------ ------------
Net income $ 132,537 $ 1,019,824
============ ============
Partnership's share of net income $ 13,664 $ 105,144
============ ============
Distributions $ 741,759 $ 2,066,547
============ ============
Partnership's share of distribution $ 76,475 $ 213,061
============ ============
ICON Aircraft 24846 LLC
-----------------------
In 2000, the Partnership and two affiliates, ICON Income Fund Eight A L.P.
("Fund Eight A") and ICON Income Fund Eight B L.P. ("Fund Eight B") formed ICON
Aircraft 24846 LLC ("ICON Aircraft 24846") for the purpose of acquiring an
investment in a 767-300 ER aircraft leased to Scandinavian Airline Systems for a
purchase price of $44,515,416, which was funded with cash of $2,241,371 and
non-recourse debt of $42,274,045. The rents and the aircraft have been assigned
to the unaffiliated non-recourse lender. The lease expired in March 2003, at
which time the balance of the non-recourse debt outstanding was approximately
$34,500,000. ICON Aircraft 24846 is currently remarketing the aircraft, during
which time, it is making interest only payments on the outstanding non-recourse
debt. The Partnership, Fund Eight A and Fund Eight B have ownership interests of
2.0% and 2.0%, and 96.0% respectively, in ICON Aircraft 24846. The outstanding
debt at June 30, 2003 was $34,491,632.
Information as to the unaudited results of operations of ICON Aircraft
24846 for the six months ended June 30, 2003 and 2002 is summarized below:
Six Months Ended Six Months Ended
June 30, 2003 June 30, 2002
------------- -------------
Net (loss) income $ (685,814) $ 374,716
============= ==============
Partnership's share of net (loss) income $ (13,716) $ 7,494
============= ==============
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 $20,002,567 distributed to the joint venturers ($10,001,284
represented the Partnership's 50% share). The other joint venturers are not
affiliates of the Partnership.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
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 June 30, 2003 under this guarantee was
approximately $103,000.
Information as to the unaudited results of operations of North Sea for the
six months ended June 30, 2003 and 2002 is summarized below:
Six Months Ended Six Months Ended
June 30, 2003 June 30, 2002
------------ ------------
Net income $ 1,332,950 $ 1,165,039
============ ============
Partnership's share of net income $ 666,475 $ 582,519
============ ============
7. Investment in Operating Leases and Equipment Held for Sale or Lease
During the three months ended June 30, 2003 equipment held for sale or
lease with a net book value of $2,697,632 was reclassified as an investment in
operating lease. The Partnership is continuing to record depreciation on such
equipment. Included in the $17,982,298 of equipment held for sale or lease are
five vessels with an aggregate carrying value of $15,339,147. The Partnership is
currently negotiating the re-lease or sale of such vessels. The net carrying
value of the vessels approximate their estimated fair values based on appraisals
completed in March 2003. The Partnership also reclassified equipment previously
classified as a net investment in leveraged leases to an investment in operating
lease. (See Note 5 for additional information).
8. Line of Credit Agreement
During the quarter ended June 30, 2002, the Partnership entered into a
$17,500,000 joint and several line of credit agreement dated as of May 30, 2002
shared with Fund Eight A and Fund Eight B (the "Initial Funds"), with Comerica
Bank as lender. Under the terms of the agreement, the Partnership may borrow at
a rate equal to the Comerica Bank base rate plus 1% (together, 5.00% at June 30,
2003) and all borrowings are to be jointly and severally collateralized by the
present values of rents receivable and equipment owned by all of the Initial
Funds sharing in the joint line of credit. On December 12, 2002, the agreement
was amended to admit ICON Income Fund Nine, LLC, collectively along with the
Initial Funds (the "Funds"), as a borrower sharing the $17,500,000 joint line of
credit agreement. The Funds have entered into a Contribution Agreement, dated as
of May 30, 2002, as amended December 12, 2002, pursuant to which the Funds have
agreed to restrictions on the amount and the terms of their respective
borrowings under the line of credit in order to minimize the risk that a Fund
would not be able to repay its allocable portion of the outstanding revolving
loan obligation at any time, including restrictions on any Fund borrowing in
excess of the lesser of (A) an amount each Fund could reasonably expect to repay
in one year out of its projected free cash flow, or (B) the greater of (i) the
Borrowing Base (as defined in the line of credit agreement) as applied to such
Fund, and (ii) 50% of the net worth of such Fund. The Contribution Agreement
provides that, in the event a Fund pays an amount under the agreement in excess
of its allocable share of the obligation under the agreement whether by reason
of an Event of Default or otherwise, the other Funds will immediately make a
contribution payment to such Fund in such amount that the aggregate amount paid
by each Fund reflects its allocable share of the aggregate obligations under the
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
agreement. The Funds' obligations to each other under the Contribution Agreement
are collateralized by a subordinate lien on the assets of each participating
Fund. The line of credit which had expired on May 31, 2003 is in the process of
being extended for twelve additional months. The Partnership violated a
financial covenant at December 31, 2002 creating an Event of Default. The bank
granted a waiver to the Partnership with respect to this Event of Default. As of
June 30, 2003, the Partnership had $6,615,439 outstanding under the line.
Aggregate borrowing by all Funds under the line of credit agreement aggregated
$10,199,986 on June 30, 2003.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
June 30, 2003
Item 2. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information - The following discussion and analysis should
be read in conjunction with the audited financial statements dated December 31,
2002. Certain statements within this document may constitute forward-looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. These statements are identified by words such as
"anticipate," "believe," "estimate," "expects," "intend," "predict" or "project"
and similar expressions. This information may involve risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements. Although the Partnership believes that the expectations reflected in
such forward-looking statements are based on reasonable assumptions, such
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected.
Results of Operations for the Three Months Ended June 30, 2003 and 2002
Revenues for the three months ended June 30, 2003 ("2003 Quarter") were
$1,033,635 as compared to $1,520,917 in the quarter ended June 30, 2002 ("2002
Quarter") representing a decrease of $487,282. The decrease in revenues resulted
primarily from a decrease in finance income of $339,430, and income from
leveraged leases of $520,250. The decrease in income was partially offset by
increases in rental income of $283,179 and gain on sales of equipment of
$92,231. The decrease in finance income resulted primarily from (1) a decrease
in the average size of the Partnership's lease portfolio, (2) certain leases
were renewed and are generating lower levels of finance income during the
respective renewal terms and (3) certain finance leases came to term in 2002 and
were reclassified as operating leases during their renewal terms. The decrease
in income from leveraged leases was due to a reduction in the estimated
unguaranteed residual value of $350,000, as result of management's analysis
which indicated a lower rate value at lease termination than initially
estimated. The increase in rental income in the 2003 Quarter resulted from the
rentals associated with equipment which was reclassified from equipment held for
sale or lease subsequent to the 2002 Quarter.
Expenses for the 2003 Quarter were $2,722,524 as compared to $2,270,001 in
the 2002 Quarter, representing an increase of $452,523. The increase in expenses
was primarily attributable to an increase in depreciation expense of $374,287,
due primarily to equipment being reclassified from finance leases to operating
leases subsequent to the 2002 Quarter, and an increase in general and
administrative expenses of $276,384. The principal reason for the increase in
general and administrative expenses was the storage and insurance costs
associated with off-lease vessels during the 2003 Quarter. An increase in
interest expense of $98,667 resulted from the debt associated with equipment
which was reclassified to equipment held for sale or lease subsequent to the
2002 Quarter. The increase in expenses were partially offset by a decrease in
management fees - General Partner of $107,630, a decrease in administrative
expense reimbursements - General Partner of $51,217, and a decrease in
amortization of initial direct costs of $136,758. The decreases in management
fees - General Partner and administrative expense reimbursement - General
Partner resulted from the overall decrease in the average size of the
Partnership's lease portfolio. The decrease in amortization of initial direct
costs resulted from the decrease in the average size of the Partnership's
finance lease portfolio.
Net loss for the 2003 Quarter and the 2002 Quarter was $1,688,889 and
$749,084, respectively. The net loss per weighted average limited partnership
unit outstanding was $1.69 and $.75, for the 2003 Quarter and the 2002 Quarter,
respectively.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
June 30, 2003
Results of Operations for the Six Months Ended June 30, 2003 and 2002
Revenues for the six months ended June 30, 2003 ("2003 Period") were
$2,019,129 as compared to $3,268,401 in the Period ended June 30, 2002 ("2002
Period") representing a decrease of $1,249,272. The decrease in revenues
resulted primarily from a decrease in finance income of $773,477, and income
from leveraged leases of $860,502 and income from investments in unconsolidated
joint ventures of $66,346. The decrease in income was partially offset by
increases in gain on sales of equipment of $122,641 and rental income of
$365,769. The decrease in finance income resulted primarily from (1) a decrease
in the average size of the Partnership's lease portfolio, (2) certain leases
were renewed and are generating lower levels of finance income during the
respective renewal terms and (3) certain finance leases came to term in 2002 and
were reclassified as operating leases during their renewal terms. The decrease
in income from leveraged leases was due to a reduction in the estimated
unguaranteed residual value of $700,000, as result of management's analysis
which indicated a lower estimated value at lease termination than initially
projected.
Expenses for the 2003 Period were $5,911,145 as compared to $5,143,979 in
the 2002 Period, representing an increase of $767,166. The increase in expenses
was primarily attributable to an increase in depreciation expense of $748,690,
due primarily to equipment being reclassified from finance leases to operating
leases subsequent to the 2002 Period, an increase in interest expense of $49,384
resulted from the debt associated with equipment which was reclassified to
equipment held for sale or lease subsequent to the 2002 Period and an increase
in general and administrative expenses of $363,583. The principal reason for the
increase in general and administrative expenses was the storage and insurance
costs associated with off-lease vessels during the 2003 Period. The increase in
expenses were partially offset by a decrease in management fees - General
Partner of $169,414, a decrease in administrative expense reimbursements -
General Partner of $84,045, and a decrease in amortization of initial direct
costs of $139,788. The decreases in management fees - General Partner and
administrative expense reimbursement - General Partner resulted from the overall
decrease in the average size of the Partnership's lease portfolio. The decrease
in amortization of initial direct costs resulted from the decrease in the
average size of the Partnership's finance lease portfolio.
Net loss for the 2003 Period and the 2002 Period was $3,892,016 and
$1,875,578, respectively. The net loss per weighted average limited partnership
unit outstanding was $3.90 and $1.88, for the 2003 Period and the 2002 Period,
respectively.
Liquidity and Capital Resources
During the six months ended June 30, 2003, the Partnership used cash in
operating activities of $514,671 and paid distributions to partners of
$1,662,543. The Partnership received $298,564 in distributions from its
unconsolidated joint ventures and $827,549 in proceeds from sales of equipment.
Because the Partnership's use of cash exceeded its sources of cash during the
quarter, its liquidity was reduced.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
June 30, 2003
During the quarter ended June 30, 2002, the Partnership entered into a
$17,500,000 joint and several line of credit agreement dated as of May 30, 2002
shared with Fund Eight A and Fund Eight B (the "Initial Funds"), with Comerica
Bank as lender. Under the terms of the agreement, the Partnership may borrow at
a rate equal to the Comerica Bank base rate plus 1% (together, 5.00% at June 30,
2003) and all borrowings are to be jointly and severally collateralized by the
present values of rents receivable and equipment owned by all of the Initial
Funds sharing in the joint line of credit. On December 12, 2002, the agreement
was amended to admit ICON Income Fund Nine, LLC, collectively along with the
Initial Funds (the "Funds"), as a borrower sharing the $17,500,000 joint line of
credit agreement. The Funds have entered into a Contribution Agreement, dated as
of May 30, 2002, as amended December 12, 2002, pursuant to which the Funds have
agreed to restrictions on the amount and the terms of their respective
borrowings under the line of credit in order to minimize the risk that a Fund
would not be able to repay its allocable portion of the outstanding revolving
loan obligation at any time, including restrictions on any Fund borrowing in
excess of the lesser of (A) an amount each Fund could reasonably expect to repay
in one year out of its projected free cash flow, or (B) the greater of (i) the
Borrowing Base (as defined in the line of credit agreement) as applied to such
Fund, and (ii) 50% of the net worth of such Fund. The Contribution Agreement
provides that, in the event a Fund pays an amount under the agreement in excess
of its allocable share of the obligation under the agreement whether by reason
of an Event of Default or otherwise, the other Funds will immediately make a
contribution payment to such Fund in such amount that the aggregate amount paid
by each Fund reflects its allocable share of the aggregate obligations under the
agreement. The Funds' obligations to each other under the Contribution Agreement
are collateralized by a subordinate lien on the assets of each participating
Fund. The line of credit which had expired on May 31, 2003 is in the process of
being extended for twelve additional months. The Partnership violated a
financial covenant at December 31, 2002 creating an Event of Default. The bank
granted a waiver to the Partnership with respect to this Event of Default. As of
June 30, 2003, the Partnership had $6,615,439 outstanding under the line.
Aggregate borrowing by all Funds under the line of credit agreement aggregated
$10,199,986 on June 30, 2003.
Cash distributions to limited partners for the 2003 Period and the 2002
Period, which were paid monthly, totaled $1,645,916 and $5,304,971,
respectively.
ICON Cash Flow Partners, L.P. Series Seven is the owner of two special
purpose entities that own eight marine vessels originally on charter to
affiliates of Seacor Smit. Five of the eight vessels have outstanding
non-recourse debt with a lender. Under the original loan agreements, with the
SPEs, all charter revenue was paid to the lender to amortize the debt. At the
end of the original charter term of each vessel it was expected that the
individual vessels would be either re-chartered or sold with proceeds directed
to the lender until the debt was fully satisfied. Several of the vessels had
been re-chartered during depressed periods of bareboat charter rates. As such,
the lender has not received the amortization it had originally contemplated and
the non-recourse notes have been declared to be in default. The specific vessels
subject to these notes are the Yankee, Rebel, Frontier, Kodiak Island, and
Osprey. According to recent appraisals, the value of the vessels is estimated to
be between 15.6 and 24.5 million dollars. At August 5, 2003, the total debt
balance was 7.25 million dollars. The SPEs are working with the lender to
resolve the matter while simultaneously in discussions with several parties for
the sale of a number of the vessels.
The Partnership's reinvestment period ended November 2000, and the
disposition period began. During the disposition period, the Partnership has and
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
June 30, 2003
will continue to distribute substantially all distributable cash from operations
and equipment sales to the partners and continue the orderly termination of its
operations and affairs. The Partnership has not and will not invest in any
additional finance or lease transactions during the disposition period.
We do not consider the impact of inflation to be material in the analysis
of our overall operations.
Item 3. Qualitative and Quantitative Disclosures About Market Risk Not
Applicable
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 borrows funds under a floating rate line of credit and is
therefore exposed to interest rate risk until the floating rate line of credit
is repaid. The Partnership's borrowings under its floating rate line of credit
as of June 30, 2003 aggregated $6,615,439.
The Partnership manages its exposure to equipment and residual risk by
monitoring the market and maximizing remarketing proceeds through either
releasing or sales of equipment.
Item 4. Controls and Procedures
Beaufort J.B. Clarke and Thomas W. Martin, the Principal Executive and
Principal Financial Officers, respectively, of ICON Capital Corp. ("ICC"), the
General Partner of the Partnership, have evaluated the disclosure controls and
procedures of the Partnership as of the quarter ended June 30, 2003. As used
herein, the term "disclosure controls and procedures" has the meaning given to
the term by Rule 13a-14 under the Securities Exchange Act of 1934, as amended
("Exchange Act"), and includes the controls and other procedures of the
Partnership that are designed to ensure that information required to be
disclosed by the Partnership in the reports that it files with the SEC under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms. As part of their evaluation,
Messrs. Clarke and Martin conferred with the finance and accounting staff of ICC
and the finance and accounting staff of ICON Holdings Corp., the parent of ICC.
Based upon their evaluation, Messrs. Clarke and Martin have concluded that the
Partnership's disclosure controls and procedures provide reasonable assurance
that the information required to be disclosed by the Partnership in this report
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms applicable to the preparation of this
report.
There have been no significant changes in the Partnership's internal
controls or in other factors that could significantly affect the Partnership's
internal controls subsequent to the evaluation described above conducted by
ICC's principal executive and financial officers.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
- ---------------------------
Item 1 - Legal Proceedings
- --------------------------
The Partnership, from time-to-time, in the ordinary course of business,
commences legal actions when necessary to protect or enforce the rights of the
Partnership. We are not a defendant party to any litigation and are not aware of
any pending or threatened litigation against the Partnership.
Item 3 - Defaults Upon Senior Securities
- ----------------------------------------
ICON Cash Flow Partners, L.P. Series Seven is the owner of two special
purpose entities that own eight marine vessels originally on charter to
affiliates of Seacor Smit. Five of the eight vessels have outstanding
non-recourse debt with a lender. Under the original loan agreements, with the
SPEs, all charter revenue was paid to the lender to amortize the debt. At the
end of the original charter term of each vessel it was expected that the
individual vessels would be either re-chartered or sold with proceeds directed
to the lender until the debt was fully satisfied. Several of the vessels had
been re-chartered during depressed periods of bareboat charter rates. As such,
the lender has not received the amortization it had originally contemplated and
the non-recourse notes have been declared to be in default. The specific vessels
subject to these notes are the Yankee, Rebel, Frontier, Kodiak Island, and
Osprey. According to recent appraisals, the value of the vessels is estimated to
be between 15.6 and 24.5 million dollars. At August 5, 2003, the total debt
balance was 7.25 million dollars. The SPEs are working with the lender to
resolve the matter while simultaneously in discussions with several parties for
the sale of a number of the vessels.
Item 6 - Exhibits and Reports on Form 8K
- ----------------------------------------
(a) Exhibits
99.1 Certification of Chairman and Chief Executive Officer.
99.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer.
99.3 Certification of Chairman and Chief Executive Officer pursuant to 18
U.S.C. (Section)1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.4 Certification of Executive Vice President and Principal Financial and
Accounting Officer pursuant to 18 U.S.C. (Section)1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ICON Cash Flow Partners L.P. Seven
File No. 33-94458 (Registrant)
By its General Partner,
ICON Capital Corp.
August 13, 2003 /s/ Thomas W. Martin
---------------------- --------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer
of the General Partner of the Partnership)
Certifications - 10-Q
EXHIBIT 99.1
I, Beaufort J.B. Clarke, certify that:
1. I have reviewed this quarterly report of ICON Cash Flow Partners L.P.
Seven;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Partnership as of, and for, the periods presented in this report;
4. The Partnership's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the Partnership and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
Partnership, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Partnership's internal
control over financial reporting that occurred during the
Partnership's most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Partnership's
internal control over financial reporting; and
5. The Partnership's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Partnership's auditors and the audit committee of the Partnership's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Partnership's internal
control over financial reporting.
Dated: August 13, 2003
/s/ Beaufort J.B. Clarke
- -----------------------------
Beaufort J. B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
General Partner of ICON Cash Flow Partners L.P. Seven
Certifications - 10-Q
EXHIBIT 99.2
I, Thomas W. Martin, certify that:
1. I have reviewed this quarterly report of ICON Cash Flow Partners L.P.
Seven;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Partnership as of, and for, the periods presented in this report;
4. The Partnership's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the Partnership and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
Partnership, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Partnership's internal
control over financial reporting that occurred during the
Partnership's most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Partnership's
internal control over financial reporting; and
5. The Partnership's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Partnership's auditors and the audit committee of the Partnership's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Partnership's internal
control over financial reporting.
Dated: August 13, 2003
/s/ Thomas W. Martin
- ----------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting officer
of the General Partner of the Partnership)
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
June 30, 2003
EXHIBIT 99.3
I, Beaufort J.B. Clarke, Chairman and Chief Executive Officer of ICON
Capital Corp., the sole General Partner of ICON Cash Flow Partners L.P. Seven,
certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-Q for the period ended June 30, 2003 (the
"Periodic Report") which this statement accompanies fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78m) and
(2) information contained in the Periodic Report fairly presents, in all
material respects, the financial condition and results of operations of
ICON Cash Flow Partners L.P. Seven.
Dated: August 13, 2003
/s/ Beaufort J.B. Clarke
------------------------------------------------------
Beaufort J.B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
General Partner of ICON Cash Flow Partners L.P. Seven
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
June 30, 2003
EXHIBIT 99.4
I, Thomas W. Martin, Executive Vice President (Principal Financial and
Accounting Officer) of ICON Capital Corp., the sole General Partner of ICON Cash
Flow Partners L.P. Seven, certify, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) the Quarterly Report on Form 10-Q for the period ended June, 30 2003 (the
"Periodic Report") which this statement accompanies fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78m) and
(2) information contained in the Periodic Report fairly presents, in all
material respects, the financial condition and results of operations of
ICON Cash Flow Partners L.P. Seven.
Dated: August 13, 2003
/s/ Thomas W. Martin
-------------------------------------------------------
Thomas W. Martin
Executive Vice President (Principal
Financial and Accounting Officer)
ICON Capital Corp.
General Partner of ICON Cash Flow Partners L.P. Seven