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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2003
--------------------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 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 (IRS Employer
incorporation or organization) Identification Number)
100 Fifth Avenue New York, New York 10011
(Address of principal executive offices) (Zip code)
(212) 418-4700
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [x] Yes [ ] No
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
September 30, December 31,
2003 2002
---- ----
(unaudited)
Assets
Cash and cash equivalents $ 623,362 $ 1,257,947
-------------- -------------
Investment in finance leases
Minimum rents receivable 998,002 2,252,134
Estimated unguaranteed residual values 1,295,044 1,717,816
Initial direct costs, net 34,766 36,455
Unearned income (93,590) (137,106)
Allowance for doubtful accounts (239,516) (289,301)
-------------- -------------
1,994,706 3,579,998
-------------- -------------
Investment in operating leases
Equipment at cost 6,352,370 14,195,791
Accumulated depreciation (1,228,623) (1,703,583)
-------------- -------------
5,123,747 12,492,208
-------------- -------------
Equipment held for sale or lease, net 20,954,063 19,343,546
-------------- -------------
Net investment in leveraged leases 21,554,366 27,877,708
-------------- -------------
Investment in estimated unguaranteed residual values 4,686,757 20,811,758
-------------- -------------
Investments in unconsolidated joint ventures 3,819,888 3,360,145
-------------- -------------
Due from General Partner and affiliates 375,157 161,458
-------------- -------------
Other assets, net 932,727 1,249,535
-------------- -------------
Total assets $ 60,064,773 $ 90,134,303
============== =============
(continued on next page)
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Condensed Consolidated Balance Sheets - Continued
September 30, December 31,
2003 2002
---- ----
(unaudited)
Liabilities and Partners' Equity
--------------------------------
Notes payable - non-recourse $ 23,581,356 $ 27,186,863
Notes and accrued interest payable - recourse 12,390,412 27,707,802
Due to General Partner and affiliates 39,817 155,542
Security deposits, deferred credits and other payables 982,436 664,692
Minority interest in consolidated joint venture 54,850 53,292
----------------- ----------------
Total liabilities 37,048,871 55,768,191
----------------- ----------------
Commitments and Contingencies
Partners' equity (deficiency)
General Partner (618,748) (505,244)
Limited Partners (987,548 units outstanding,
$100 per unit original issue price) 23,634,650 34,871,356
----------------- ----------------
Total partners' equity 23,015,902 34,366,112
----------------- ----------------
Total liabilities and partners' equity $ 60,064,773 $ 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)
Three Months Nine Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
---- ---- ---- ----
Revenues
Finance income $ 5,308 $ 44,451 $ 43,516 $ 856,136
Rental income 258,390 230,145 1,145,650 751,636
Net income from leveraged leases 108,307 618,833 434,025 1,805,053
Net (loss) gain on sales of equipment (11,000) 2,703,443 119,779 2,711,581
Income from investments in
unconsolidated joint ventures 296,939 315,974 931,513 1,016,894
Interest income and other 20 36,801 2,610 76,748
-------------- ------------- ------------- -------------
Total revenues 657,964 3,949,647 2,677,093 7,218,048
------------- ------------- ------------- -------------
Expenses
Depreciation 1,518,259 1,004,679 4,277,007 3,014,737
Interest 622,365 665,083 2,136,124 2,129,458
General and administrative 392,849 848,374 1,258,207 1,350,149
Management fees - General Partner 103,716 229,754 583,008 878,460
Administrative expense reimbursements -
General Partner 42,563 100,117 237,040 378,639
Provision for impairment 3,750,000 - 3,750,000 -
Amortization of initial direct costs 21,701 96,831 120,029 334,947
Minority interest in consolidated
joint venture 2,162 1,216 3,345 3,643
------------- ------------- ------------- -------------
Total expenses 6,453,615 2,946,054 12,364,760 8,090,033
------------- ------------- ------------- -------------
Net (loss) income $ (5,795,651) $ 1,003,593 $ (9,687,667) $ (871,985)
============= ============= ============= =============
Net (loss) income allocable to:
Limited Partners $ (5,737,694) $ 993,557 $ (9,590,790) (863,265)
General Partner (57,957) 10,036 (96,877) (8,720)
------------- ------------- ------------- -------------
$ (5,795,651) $ 1,003,593 $ (9,687,667) $ (871,985)
============= ============= ============= =============
Weighted average number of limited
partnership units outstanding 987,548 988,219 987,548 988,339
============= ============= ============= =============
Net (loss) income per weighted average
limited partnership unit $ (5.81) $ 1.01 $ (9.71) $ (.87)
============= ============= ============= =============
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
Nine Months Ended September 30, 2003
(unaudited)
Limited Partner Distributions
-----------------------------
Return of Investment Limited General
Capital Income Partners Partner Total
------- ------ -------- ------- -----
(Per weighted average unit)
Balance at
January 1, 2003 $ 34,871,356 $ (505,244) $ 34,366,112
Cash distributions to partners $ 1.66 $ - (1,645,916) (16,627) (1,662,543)
Net loss (9,590,790) (96,877) (9,687,667)
--------------- ------------ --------------
Balance at
September 30, 2003 $ 23,634,650 $ (618,748) $ 23,015,902
=============== ============ ==============
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
Nine Months Ended September 30,
(unaudited)
2003 2002
---- ----
Cash flows from operating activities:
Net loss $ (9,687,667) $ (871,985)
---------------- ---------------
Adjustments to reconcile net loss to
net cash used in operating activities:
Finance income portion of receivables paid directly
to lenders by lessees - (548,029)
Rental income paid directly to lenders by lessees (674,894) (568,035)
Interest expense on non-recourse financing paid
directly to lenders by lessees 1,325,332 1,305,328
Amortization of initial direct costs 120,029 334,947
Provision for impairment 3,750,000 -
Depreciation expense 4,277,007 3,014,737
Income from leveraged leases (434,025) (1,805,053)
Income from investments in unconsolidated joint ventures (931,513) (1,016,894)
Net gain on sales of equipment (119,779) (2,711,581)
Minority interest in consolidated joint venture 3,345 3,643
Changes in operating assets and liabilities, net 1,589,567 (830,115)
---------------- ---------------
Total adjustments 8,905,069 (2,821,052)
---------------- ---------------
Net cash used in operating activities (782,598) (3,693,037)
---------------- ---------------
Cash flows from investing activities:
Proceeds from sales of equipment 887,662 6,138,403
Distributions received from unconsolidated joint ventures 325,557 846,563
--------------- ---------------
Net cash provided by investing activities 1,213,219 6,984,966
---------------- ---------------
(continued on next page)
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Condensed Consolidated Statements of Cash Flows - Continued
Nine Months Ended September 30,
(unaudited)
2003 2002
---- ----
Cash flows from financing activities:
Cash distributions to partners (1,662,543) (8,030,472)
Proceeds from notes payable - recourse 690,000 10,800,439
Principal payments on notes payable - recourse (453,901) (5,120,036)
Principal payments of notes payable - non-recourse - (100,000)
Redemption of limited partnership units - (30,940)
---------------- ---------------
Net cash (used in) financing activities (1,426,444) (2,481,009)
---------------- ---------------
Net (decrease) increase in cash and cash equivalents (634,585) 810,920
Cash and cash equivalents at beginning of period 1,257,947 2,333,871
---------------- ---------------
Cash and cash equivalents at end of period $ 623,362 $ 3,144,791
================ ===============
(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 nine months ended September 30, 2003 and 2002, non-cash activities
included the following:
2003 2002
---- ----
Principal and interest on direct finance
receivables paid directly to lenders by lessees $ 4,255,945 $ 1,874,407
Rental income paid directly to lenders by lessees 674,894 568,035
Principal and interest on non-recourse
financing paid directly to lenders by lessees (4,930,839) (2,442,442)
------------ ------------
$ - $ -
============ ============
2003 2002
---- ----
Interest paid directly to lenders by lessees pursuant
to non-recourse financings $ 1,325,332 $ 1,305,328
Other interest 810,792 824,130
------------ -----------
Total interest expense $ 2,136,124 $ 2,129,458
============ ===========
Reduction in recourse notes payable and related investment in unguaranteed
residual values as a result of August 29, 2003 restructuring of agreement (Note
9).
2003 2002
---- ----
Reduction in investment in estimated unguaranteed
residual values $ 16,125,000 $ -
Reduction of note payable-recourse (16,125,000) -
------------- -----------
$ - $ -
============== ===========
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
September 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. Seacor Vessels
The Partnership is the sole owner of two special purpose entities ("SPEs")
that own five marine vessels originally on charter to affiliates of Seacor Smit.
The results of each of the SPEs are consolidated with the Partnership. These
vessels are subject to 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 outstanding debt. At the end of the original charter term
of each vessel, it was expected that the individual vessels would either be
re-chartered or sold with proceeds paid to the lender until the debt was fully
repaid. Several of the vessels had been re-chartered during depressed periods of
bareboat charter rates. As such, the lender has not received the full payment
and the non-recourse notes have been declared in default. According to recent
appraisals received by the Partnership, the value of the vessels is estimated to
be between $15.6 and $24.5 million. The total outstanding debt balance at
September 30, 2003 is $7.25 million.
On September 4, 2003, the lender took control of the vessels and commenced
remarketing efforts. The General Partner also continues to look for potential
sale or re-charter opportunities on behalf of the SPEs. The SPEs remains the
owner of the vessels and as such are entitled to sale proceeds above the
outstanding debt balance regardless of whether it is the General Partner's or
the lender's remarketing activities that produces a sale. Both the General
Partner and the lender are seeking a sale in line with recent appraised values.
Based upon its recent remarketing efforts, the General Partner believes
that the net book value of the vessels is in excess of current market value, and
as such, has recorded a provision for impairment of $3,750,000.
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 nine months ended September 30, 2003 and 2002
were as follows:
2003 2002
---- ----
Management fees $ 583,008 $ 878,460 Charged to Operations
Administrative expense
reimbursements 237,040 378,639 Charged to Operations
--------- -----------
Total $ 820,048 $ 1,257,099
========= ===========
The Partnership has formed eight joint ventures with affiliates for the
purpose of acquiring and managing various assets. The Partnership is entitled to
receive from ICON Cash Flow Partners L.P. Six $207,612 of distribution that was
received on behalf of the Partnership from AIC/Trust. (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 at that time. 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 lease to Federal Express as of
September 30, 2003 consisted of the following:
September 30,
2003
----
Non-cancelable minimum rents receivable (net of
principal and interest on non-recourse debt) $ 5,810,360
Estimated unguaranteed residual values 17,250,000
Initial direct costs 80,579
Unearned income (1,586,573)
----------------
$ 21,554,366
================
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.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
For the period ended September 30, 2003, the Company reduced the estimated
unguaranteed residual value of the Federal Express aircraft and recorded an
impairment provision of $1,050,000 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 on April 30, 2003. Effective May 1, 2003, the aircraft was
re-leased to 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 September 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
nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net loss $ (50,673) $ (73,135)
================ ================
Partnership's share of net loss $ (10,117) $ (14,605)
================ ================
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 September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net loss $ (199,459) $ (388,997)
=============== ================
Partnership's share of net loss $ (33,250) $ (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 September 30, 2003 were .5025%, .5025%, and 98.995% for the Partnership,
L.P. Six, and Fund Eight A, respectively. The outstanding debt at September 30,
2003 was $7,160,203.
Information as to the unaudited results of operations of ICON BF for the
nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net income $ 1,074,363 $ 1,003,012
=============== ================
Partnership's share of net income $ 5,398 $ 5,041
=============== ================
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 and fourth installment
of (pound)450,000 each was collected through the first three quarters of 2003.
As of September 30, 2003, the gross amount due is (pound)725,000 ($1,231,815
based upon the exchange rate at September 30, 2003).
Information as to the unaudited results of operations of ICON/AIC Trust for
the nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net income $ 32,151 $ 340,534
=============== ================
Partnership's share of net income $ 9,890 $ 104,748
=============== ================
Distributions $ 1,396,948 $ 1,752,886
=============== ================
Partnership's share of distribution $ 429,701 $ 846,563
=============== ================
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 September 30, 2003 was $2,007,229.
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 nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net income $ (12,994) $ 1,258,307
=============== ================
Partnership's share of net income $ (1,340) $ 129,731
=============== ================
Distributions $ 741,759 $ 2,981,327
=============== ================
Partnership's share of distribution $ 76,475 $ 307,375
=============== ================
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 September 30, 2003 was $34,491,632.
Information as to the unaudited results of operations of ICON Aircraft
24846 for the nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net (loss) income $ (2,499,071) $ 562,075
============= ==============
Partnership's share of net (loss) income $ (49,981) $ 11,241
============= ==============
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 September 30, 2003 under this
guarantee was approximately $87,000.
Information as to the unaudited results of operations of North Sea for the
nine months ended September 30, 2003 and 2002 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2003 September 30, 2002
------------------ ------------------
Net income $ 2,021,826 $ 1,691,169
================ ================
Partnership's share of net income $ 1,010,913 $ 845,585
================ ================
7. Investment in Operating Leases and Equipment Held for Sale or Lease
During the three months ended September 30, 2003 equipment classified as
investment in operating leases was re-classified as equipment held for sale or
lease with a net book value of $6,272,253. The Partnership is continuing to
record depreciation on such equipment while it is pursuing re-leasing
opportunities.
Included in equipment held for sale or lease at September 30, 2003 are
seven vessels (five of which are discussed in Note 3) with an aggregate carrying
value of $18,539,696. The Partnership is currently negotiating the re-lease or
sale of such vessels (see Note 3 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
September 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
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Condensed Consolidated Financial Statements - Continued
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 was extended for twelve
additional months expiring May 31, 2004. 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 September
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 September 30, 2003.
9. Investment in Unguaranteed Residual
On August 29, 2003, the Partnership re-negotiated its investment in
unguaranteed residual values with AAR Aircraft & Engine Sales Leasing, Inc.
which originally gave the Partnership the rights to purchase three Boeing 737
aircraft. The modification resulted in the Partnership's obligations under the
original agreement being revised, releasing the Partnership from a $16,125,000
recourse obligation and reducing the residual values opportunities. The
Partnership, was originally obligated to repay its investment cost which had
consisted of three promissory notes aggregating $3,612,091 accruing interest at
8.5% per annum through the maturity date of November 27, 2003, in addition to a
non-interest bearing $16,125,000 obligation. The modified agreement converted
these notes to a single recourse promissory note of $5,751,009, accruing
interest at 5% per annum. The revised maturity date is November 27, 2006. As of
September 30, 2003, the outstanding principal and accrued interest was
$5,774,972.
The modification agreement provides the Partnership with an investment in
the unguaranteed residual value of the three aircraft, which is valued at
$4,686,757 at September 30, 2003. If any or all of the aircraft are sold prior
to the maturity date of the recourse promissory note, then the Partnership may
have all or portion of the then outstanding balance of the recourse promissory
note forgiven. If the aircraft are sold after the maturity date of the recourse
promissory note, then the Partnership would be entitled to receive 33
1/3(percent) of the net proceeds in excess of the net book value of the
aircraft, as defined by the modification agreement.
The Partnership is also required to prepay $500,000 of interest related to
the recourse promissory note during the quarter ended December 31, 2003. In
addition, the Partnership is obligated to prepay a portion of the recourse
promissory note with 50% of the proceeds from the sale of its assets which are
not subject to senior secured debt.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
September 30, 2003
Item 2. General Partner's Discussion and Analysis of Financial Condition
and Results of Operations
Forward-Looking Information - The following discussion and analysis should
be read in conjunction with the audited financial statements dated December 31,
2002. Certain statements within this document may constitute forward-looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. These statements are identified by words such as
"anticipate," "believe," "estimate," "expects," "intend," "predict" or "project"
and similar expressions. This information may involve risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements. Although the Partnership believes that the expectations reflected in
such forward-looking statements are based on reasonable assumptions, such
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected.
Results of Operations for the Three Months Ended September 30, 2003 and 2002
Revenues for the three months ended September 30, 2003 ("2003 Quarter")
were $657,964 as compared to $3,949,647 in the quarter ended September 30, 2002
("2002 Quarter") representing a decrease of $3,291,683. The decrease in revenues
resulted primarily from a decrease in finance income of $39,143, decreases in
gain on sales of equipment of $2,714,443 and income from leveraged leases of
$510,526. 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 decrease in gain on sales of equipment was due to a sale of
equipment in the 2002 Quarter whereas no similar sale occurred in the 2003
Quarter.
Expenses for the 2003 Quarter were $6,453,615 as compared to $2,946,054 in
the 2002 Quarter, representing an increase of $3,507,561. The increase in
expenses was primarily attributable to a provision for residual impairment of
$3,750,000 due to a decrease in the value of several of the Partnership's
equipment held for sale or lease and an increase in depreciation expense of
$513,580, due primarily to equipment being reclassified from finance leases to
operating leases subsequent to the 2002 Quarter. The increase in expenses was
partially offset by an a decrease in general and administrative expenses of
$455,525. The principal reason for the decrease in general and administrative
expenses was professional fees in the 2002 Quarter not present in the 2003
Quarter. The decrease in management fees - General Partner of $126,038, and a
decrease in administrative expense reimbursements - General Partner of $57,554
resulted from the overall decrease in the average size of the Partnership's
lease portfolio. The decrease in amortization of initial direct costs of $75,130
resulted from the decrease in the average size of the Partnership's finance
lease portfolio.
Net (loss) income for the 2003 Quarter and the 2002 Quarter was
$(5,795,651) and $1,003,593, respectively. The net (loss) income per weighted
average limited partnership unit outstanding was $(5.81) and $1.01, for the 2003
Quarter and the 2002 Quarter, respectively.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
September 30, 2003
Results of Operations for the Nine Months Ended September 30, 2003 and 2002
Revenues for the nine months ended September 30, 2003 ("2003 Period") were
$2,677,093 as compared to $7,218,048 in the Period ended September 30, 2002
("2002 Period") representing a decrease of $4,540,955. The decrease in revenues
resulted primarily from decreases in finance income of $812,620, income from
leveraged leases of $1,371,028 and decreases in gain on sales of equipment of
$2,591,802. The decrease in income was partially offset by an increase in rental
income of $394,014. 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 $1,050,000, as result of management's analysis
which indicated a lower estimated value at lease termination than initially
projected. The decrease in gain on sales of equipment was due to a sale of
equipment in the 2002 Quarter whereas no similar sale occurred in the 2003
Quarter. The increase in rental income was due to equipment, previously held as
a leveraged lease, which was re-leased in the second quarter of 2003.
Expenses for the 2003 Period were $12,364,760 as compared to $8,090,033 in
the 2002 Period, representing an increase of $4,274,727. The increase in
expenses was primarily attributable to an increase in depreciation expense of
$1,262,270, due primarily to equipment being reclassified from finance leases to
operating leases subsequent to the 2002 Period and a provision for residual
impairment of $3,750,000 due to a decrease in the value of several of the
Partnership's equipment held for sale or lease. The increase in expenses was
partially offset by a decrease in management fees - General Partner of $295,452,
a decrease in administrative expense reimbursements - General Partner of
$141,599, and a decrease in amortization of initial direct costs of $214,918.
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 $9,687,667 and
$871,985, respectively. The net loss per weighted average limited partnership
unit outstanding was $9.71 and $.87, for the 2003 Period and the 2002 Period,
respectively.
Liquidity and Capital Resources
During the nine months ended September 30, 2003, the Partnership used cash
in operating activities of $755,605 and paid distributions to partners of
$1,662,543. The Partnership received $325,557 in distributions from its
unconsolidated joint ventures and $887,662 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)
September 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
September 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 was extended for twelve
additional months expiring May 31, 2004. 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 September
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 September 30, 2003.
Cash distributions to limited partners for the 2003 Period and the 2002
Period, which were paid monthly, totaled $1,645,916 and $7,959,806,
respectively.
The Partnership is the sole owner of two special purpose entities ("SPEs")
that own five marine vessels originally on charter to affiliates of Seacor Smit.
The result of each of the SPEs are consolidated with the Partnership. These
vessels are subject to 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 outstanding debt. At the end of the original charter term
of each vessel, it was expected that the individual vessels would either be
re-chartered or sold with proceeds paid to the lender until the debt was fully
repaid. Several of the vessels had been re-chartered during depressed periods of
bareboat charter rates. As such, the lender has not received the full payment
and the non-recourse notes have been declared in default. According to recent
appraisals received by the Partnership, the value of the vessels is estimated to
be between $15.6 and $24.5 millions. The total outstanding debt balance is $7.25
million.
On September 4, 2003, the lender took control of the vessels and commenced
remarketing efforts. The General Partner also continues to look for potential
sale or re-charter opportunities on behalf of the SPEs. The SPEs remains the
owner of the vessels and as such are entitled to sale proceeds above the
outstanding debt balance regardless of whether it is the General Partner's or
the lender's remarketing activities that produces a sale. Both the General
Partner and the lender are seeking a sale in line with recent appraised values.
Based upon its recent remarketing efforts, the General Partner believes
that the net book value of the vessels is in excess of current market value, and
as such, has recorded a provision for impairment of $3,750,000.
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
September 30, 2003
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.
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
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 September 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 September 30, 2003. As
used herein, the term "disclosure controls and procedures" has the meaning given
to the term by Rule 13a-14 under the Securities Exchange Act of 1934, as amended
("Exchange Act"), and includes the controls and other procedures of the
Partnership that are designed to ensure that information required to be
disclosed by the Partnership in the reports that it files with the SEC under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms. As part of their evaluation,
Messrs. Clarke and Martin conferred with the finance and accounting staff of ICC
and the finance and accounting staff of ICON Holdings Corp., the parent of ICC.
Based upon their evaluation, Messrs. Clarke and Martin have concluded that the
Partnership's disclosure controls and procedures provide reasonable assurance
that the information required to be disclosed by the Partnership in this report
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms applicable to the preparation of this
report.
There have been no significant changes in the Partnership's internal
controls or in other factors that could significantly affect the Partnership's
internal controls subsequent to the evaluation described above conducted by
ICC's principal executive and financial officers.
ICON Cash Flow Partners L.P. 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 on Senior Securities
The Partnership is the sole owner of two special purpose entities ("SPEs")
that own five marine vessels originally on charter to affiliates of Seacor
Smit. The result of each of the SPEs are consolidated with the Partnership.
These vessels are subject to 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 outstanding debt. At the end of the original charter term
of each vessel, it was expected that the individual vessels would either be
re-chartered or sold with proceeds paid to the lender until the debt was fully
repaid. Several of the vessels had been re-chartered during depressed periods of
bareboat charter rates. As such, the lender has not received the full payment
and the non-recourse notes have been declared in default. According to recent
appraisals received by the Partnership, the value of the vessels is estimated to
be between $15.6 and $24.5 millions. The total outstanding debt balance is $7.25
million.
On September 4, 2003, the lender took control of the vessels and commenced
remarketing efforts. The General Partner also continues to look for potential
sale or re-charter opportunities on behalf of the SPEs. The SPEs remains the
owner of the vessels and as such are entitled to sale proceeds above the
outstanding debt balance regardless of whether it is the General Partner's or
the lender's remarketing activities that produces a sale. Both the General
Partner and the lender are seeking a sale in line with recent appraised values.
Based upon its recent remarketing efforts, the General Partner believes
that the net book value of the vessels is in excess of current market value, and
as such, has recorded a provision for impairment of $3,750,000.
Item 6 - Exhibits and Reports on Form 8K
(a) Exhibits
32.1 Certification of Chairman and Chief Executive Officer.
32.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer.
33.1 Certification of Chairman and Chief Executive Officer pursuant to 18
U.S.C. (Section)1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
33.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer pursuant to 18 U.S.C. (Section)1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
ICON Cash Flow Partners L.P. 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.
November 14, 2003 /s/ Thomas W. Martin
----------------- -------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer
of the General Partner of the Partnership)
Certifications - 10-Q
---------------------
EXHIBIT 32.1
I, Beaufort J.B. Clarke, certify that:
1. I have reviewed this quarterly report of ICON Cash Flow Partners L.P.
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: November 14, 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 32.2
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: November 14, 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)
September 30, 2003
EXHIBIT 33.1
I, Beaufort J.B. Clarke, Chairman and Chief Executive Officer of ICON
Capital Corp., the sole General Partner of ICON Cash Flow Partners L.P. 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 September 30, 2003
(the "Periodic Report") which this statement accompanies fully complies
with the requirements of Section 13(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78m) and
(2) information contained in the Periodic Report fairly presents, in all
material respects, the financial condition and results of operations of
ICON Cash Flow Partners L.P. Seven.
Dated: November 14, 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)
September 30, 2003
EXHIBIT 33.2
I, Thomas W. Martin, Executive Vice President (Principal Financial and
Accounting Officer) of ICON Capital Corp., the sole General Partner of ICON Cash
Flow Partners L.P. 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 September 30,
2003 (the "Periodic Report") which this statement accompanies fully
complies with the requirements of Section 13(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m) and
(2) information contained in the Periodic Report fairly presents, in all
material respects, the financial condition and results of operations
of ICON Cash Flow Partners L.P. Seven.
Dated: November 14, 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