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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 2002 or
|_| Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________ to ________
Commission file number 0-20405
IOS CAPITAL, LLC
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(Exact name of registrant as specified in its charter)
DELAWARE 23-2493042
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1738 Bass Road, Macon, Georgia 31210
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(Address of principal executive offices) (Zip Code)
(478) 471-2300
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
Applicable only to corporate issuers:
Registered debt outstanding of the Company and all wholly-owned subsidiaries as
of August 14, 2002 was $2,392,305,308.
The registrant meets the conditions set forth in General Instruction (H)(1)(a)
and (b) of Form 10-Q and is therefore filing with the reduced disclosure format
contemplated thereby.
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IOS CAPITAL, LLC
INDEX*
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Consolidated Balance Sheets - June 30, 2002 (unaudited) and
September 30, 2001
Consolidated Statements of Income - Three and nine months
ended June 30, 2002 and 2001 (unaudited)
Consolidated Statements of Cash Flows - Nine months ended June
30, 2002 and 2001 (unaudited)
Notes to Condensed Consolidated Financial Statements
(unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
*All amounts contained in this quarterly report on Form 10-Q are in thousands
unless otherwise noted.
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
IOS CAPITAL, LLC
CONSOLIDATED BALANCE SHEETS
June 30,
2002 September 30,
(unaudited) 2001
-------------------------------
Assets
Investments in leases:
Direct financing leases, net of lease default reserve of:
June 30, 2002 - $49,940; September 30, 2001 - $59,158 $ 3,317,628 $ 3,284,106
Less: Unearned income (565,294) (545,451)
---------------------------------
2,752,334 2,738,655
Funded leases, net 249,939 240,965
---------------------------------
3,002,273 2,979,620
Cash 15,456 16,056
Restricted cash 134,670 126,861
Accounts receivable 55,147 91,775
Prepaid expenses and other assets 19,509 10,548
Leased equipment - operating rentals at cost, less accumulated
depreciation of: June 30, 2002 - $42,123; September 30, 2001 - $40,552 65,642 44,793
Property and equipment at cost, less accumulated depreciation of:
June 30, 2002 - $9,299; September 30, 2001 - $10,332 1,434 8,145
---------------------------------
Total assets $ 3,294,131 $ 3,277,798
=================================
Liabilities and Member's Equity
Liabilities:
Accounts payable and accrued expenses $ 64,640 $ 78,011
Accrued interest 7,362 13,873
Due to IKON Office Solutions, Inc. ("IKON") 23,667 182,533
Medium term notes - 82,000
Convertible subordinated notes 300,000 -
Notes payable 276,955 271,292
Lease-backed notes 1,920,400 1,797,389
Asset securitization conduit financing 50,000 193,500
Deferred income taxes 219,264 162,609
---------------------------------
Total liabilities 2,862,288 2,781,207
---------------------------------
Commitments and contingencies
Member's equity:
Contributed capital 179,796 179,796
Retained earnings 274,275 347,169
Accumulated other comprehensive loss (22,228) (30,374)
---------------------------------
Total member's equity 431,843 496,591
---------------------------------
Total liabilities and member's equity $ 3,294,131 $ 3,277,798
=================================
See notes to condensed consolidated financial statements.
IOS CAPITAL, LLC
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three months ended Nine months ended
June 30, June 30,
------------------------------------------------
2002 2001 2002 2001
------------------------------------------------
Revenues:
Lease finance income $ 85,900 $ 81,905 $ 258,601 $ 237,652
Rental income 8,144 7,360 24,288 23,767
Other income 4,894 6,079 15,933 18,139
---------- ----------- ----------- -----------
98,938 95,344 298,822 279,558
---------- ----------- ----------- -----------
Expenses:
Interest 37,337 41,360 113,974 124,818
Lease default, net of recoveries 3,546 4,031 11,455 10,613
General and administrative 15,462 14,262 45,716 43,341
---------- ----------- ----------- -----------
56,345 59,653 171,145 178,772
---------- ----------- ----------- -----------
Income before income taxes 42,593 35,691 127,677 100,786
Provision for income taxes 17,037 14,462 51,071 40,500
---------- ----------- ----------- -----------
Net income $ 25,556 $ 21,229 $ 76,606 $ 60,286
========== =========== =========== ===========
See notes to condensed consolidated financial statements.
IOS CAPITAL, LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine months ended
June 30,
--------------------------------
2002 2001
--------------------------------
Cash flows from operating activities
Net income $ 76,606 $ 60,286
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 26,721 20,884
Provision for deferred taxes 39,694 17,229
Provision for lease default 16,444 15,188
Changes in operating assets and liabilities:
Decrease in accounts receivable 36,628 15,231
Increase in prepaid expenses and other assets (13,968) (5,957)
(Decrease) increase in accounts payable and accrued expenses (13,371) 14,334
Decrease in accrued interest (6,511) (9,671)
--------------------------------
Net cash provided by operating activities 162,243 127,524
--------------------------------
Cash flows from investing activities
Purchases of equipment (41,802) (11,996)
Proceeds from terminations of leased equipment 6,280 4,927
Investments in leases:
Additions (1,265,867) (1,478,162)
Cancellations 260,339 234,701
Collections, net of financing income 991,208 1,088,704
--------------------------------
Net cash used in investing activities (49,842) (161,826)
--------------------------------
Cash flows from financing activities
Proceeds from bank borrowings 449,911 473,000
Payments on bank borrowings (593,411) (1,037,795)
Proceeds from medium term notes - 250,000
Payments on medium term notes (82,000) (486,500)
Short-term borrowings, net of repayments 5,663 8,098
Proceeds from issuance of lease-backed notes 720,290 1,226,761
Payments on lease-backed notes (597,279) (495,185)
Proceeds from issuance of convertible subordinated notes 300,000 -
Deposits to restricted cash (7,809) (52,049)
Dividend to IKON (149,500) -
(Decrease) increase in intercompany debt, net (158,866) 150,894
--------------------------------
Net cash (used in) provided by financing activities (113,001) 37,224
--------------------------------
(Decrease) increase in cash (600) 2,922
Cash at beginning of year 16,056 3,998
--------------------------------
Cash at end of period $ 15,456 $ 6,920
================================
See notes to condensed consolidated financial statements.
IOS CAPITAL, LLC
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 1: Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of IOS
Capital, LLC ("IOSC" or the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion
of management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair statement of the results of the interim periods
have been included. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended September 30, 2001. Certain prior year amounts have been
reclassified to conform with the current year presentation.
Note 2: Financial Instruments
As of June 30, 2002, all of the Company's derivatives designated as hedges are
interest rate swaps which qualify for evaluation using the "short cut" method
for assessing effectiveness. As such, there is an assumption of no
ineffectiveness. The Company uses interest rate swaps to fix the interest rates
on its variable rate classes of lease-backed notes, which results in a lower
cost of capital than if we had issued fixed rate notes. During the nine months
ended June 30, 2002, unrealized gains totaling $8,146 after taxes were recorded
in accumulated other comprehensive loss.
Note 3: Unsecured Credit Facility
On May 24, 2002, IKON obtained a new $300,000 unsecured credit facility (the
"New Credit Facility") with a group of lenders. The New Credit Facility replaces
IKON's $600,000 credit facility that was to expire in January 2003 (the "Old
Credit Facility"). Revolving loans are available, with certain sub-limits, to
the Company; IKON Capital, PLC, IKON's leasing subsidiary in the United Kingdom;
and IKON Capital, Inc., IKON's leasing subsidiary in Canada. The New Credit
Facility contractually matures on May 24, 2005. As of June 30, 2002, IKON has no
borrowings outstanding under the New Credit Facility. The New Credit Facility
also provides support for letters of credit for IKON and its subsidiaries. As of
June 30, 2002, letters of credit supported by the New Credit Facility amounted
to $21,418. The remaining amount available to IKON under the New Credit Facility
for borrowings or letters of credit is $278,582, as of June 30, 2002.
The New Credit Facility contains affirmative and negative covenants including
limitations on certain fundamental changes, investments and acquisitions,
mergers, certain transactions with affiliates, creation of liens, asset
transfers, payment of dividends, intercompany loans and certain restricted
payments. The New Credit Facility does not affect IKON or the Company's ability
to continue to securitize receivables. In addition, unless IKON achieves certain
ratings on its long and short term senior, unsecured debt (as defined) or has
not redeemed or defeased $250,000 of the Company's 9.75% Notes due June 15,
2004, all loans under the New Credit Facility mature on December 15, 2003. Cash
dividends may be paid on common stock subject to certain limitations. The New
Credit Facility contains defaults customary for facilities of this type. Failure
to be in compliance with any material provision of the New Credit Facility could
have a material adverse effect on IKON or the Company's liquidity, financial
position and results of operations.
Note 4: Medium Term Notes
During the nine months ended June 30, 2002, the Company repaid $82,000 of 6.30%
medium term notes. The Company has $873,350 available under its medium term
notes program.
Note 5: Convertible Subordinated Notes
On May 13, 2002, the Company issued $300,000 of convertible subordinated notes
(the "Convertible Notes") with an interest rate of 5.0%, which are due on May 1,
2007. The Convertible Notes can be converted into shares of IKON common stock at
any time before maturity at a conversion price of $15.03 per share. Interest
will be paid on the Convertible Notes semi-annually beginning November 1, 2002.
Note 6: Notes Payable
During the nine months ended June 30, 2002, the Company signed promissory notes
and pledged $13,583 of lease receivables for $11,513 of proceeds and repaid
$5,850 of the promissory notes. The notes have various interest rates with
maturities through March 2007.
Note 7: Lease-Backed Notes
In addition to the $1,797,389 of lease-backed notes outstanding on September 30,
2001, on December 28, 2001, IOSC and IKON issued $87,011 and repurchased
$12,460 of lease-backed notes (the "Notes") for a net issuance of $74,551. The
repurchased amount was sold on May 24, 2002 for $10,806. The Notes have a
stated maturity of September 15, 2008 and pay an average yield of 5.06%. The
Notes are collateralized by a pool of office equipment leases or contracts, (the
"Leases") and related assets, acquired or originated by the Company (together
with the equipment financing portion of each periodic lease or rental payment
due under the Leases on or after the related transfer date) and all related
casualty payments, retainable deposits and termination payments. Payments on the
Notes are made from payments on the Leases. The Notes have certain credit
enhancement features available to noteholders, including a reserve account and
an overcollateralization account. On May 21, 2002, IKON Receivables Funding, LLC
(a wholly owned subsidiary of the Company) issued $634,800 of lease-backed notes
(the "2002-1 Notes") pursuant to a shelf registration statement filed with the
Securities and Exchange Commission. The 2002-1 Notes consist of Class A-1
Notes totaling $171,000 with a stated interest rate of 2.044%, Class A-2 Notes
totaling $46,000 with a stated interest rate of 2.91%, Class A-3 Notes totaling
$266,400 with a stated interest rate of 3.90% and Class A-4 Notes totaling
$151,400 with a stated interest rate of 4.68%. The 2002-1 Notes are
collateralized by a pool of office equipment leases or contracts and related
assets and the payments on the 2002-1 Notes are made from payments received on
the equipment leases. The Company repaid $597,279 of lease-backed notes during
the first nine months of fiscal 2002.
Note 8: Asset Securitization Conduit Financing
During the nine months ended June 30, 2002, the Company pledged or transferred
$519,589 in financing lease receivables for $449,911 in cash in connection with
its revolving asset securitization conduit financing agreements. The Company
repaid $593,411 in connection with its issuance of the Notes described above. As
of June 30, 2002, the Company had approximately $655,000 available under
revolving asset securitization conduit financing agreements.
Note 9: Comprehensive Income
Total comprehensive income is as follows:
Three Months Ended Nine Months Ended
June 30, June 30,
-------------------------------------------------------
2002 2001 2002 2001
-------------------------------------------------------
Net income $ 25,556 $ 21,229 $ 76,606 $ 60,286
Cumulative effect of change in accounting principle for derivative
and hedging activities (SFAS 133), net of taxes of $2,314 (3,471)
Net gain (loss) on derivative financial instruments, net of tax expense
(benefit) of: $(1,570) and $1,065, for the three months ended
June 30, 2002 and 2001, respectively; $5,430 and $(10,933), for the
nine months ended June 30, 2002 and 2001, respectively. (2,355) 1,597 8,146 (12,929)
--------- ---------- ---------- ----------
Total comprehensive income $ 23,201 $ 22,826 $ 84,752 $ 43,886
========= ========== ========== ==========
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Pursuant to General Instruction H (2)(a) of Form 10-Q, the following analysis of
the results of operations is presented in lieu of Management's Discussion and
Analysis of Financial Condition and Results of Operations.
Critical Accounting Policies and Estimates
In response to the SEC's Release No. 33-8040, "Cautionary Advice Regarding
Disclosure About Critical Accounting Policies," we have identified below some of
the accounting principles critical to our business and results of operations. We
determined the critical principles by considering accounting policies that
involve the most complex or subjective decisions or assessments. We state these
accounting policies in Management's Discussion and Analysis of Financial
Condition and Results of Operations and in the notes to the consolidated
financial statements contained in our Annual Report on Form 10-K for our fiscal
year ended September 30, 2001 and at relevant sections in this discussion and
analysis. In addition, we believe our most critical accounting policies include,
but are not limited to, the following:
Residual Values. IKON and IOSC estimate the residual value of equipment sold
under sales-type leases. Our residuals are based on the dollar value of the
equipment. Residual values generally range between 0% to 25% of retail price,
depending on equipment model and lease term. We evaluate residual values
quarterly for impairment. Changes in market conditions could cause actual
residual values to differ from estimated values, which could accelerate the
write-down of the value of the equipment.
Allowances for Receivables. IOSC maintains an allowance for lease defaults for
estimated losses resulting from the inability of its customers to make required
payments. If the financial condition of IKON's customers were to deteriorate,
resulting in an impairment of their ability to make required payments, changes
to our allowance may be required.
Our preparation of this Quarterly Report on Form 10-Q requires us to make
estimates and assumptions that affect amounts reported in the consolidated
financial statements and notes. Actual results could differ from those estimates
and assumptions.
Three Months Ended June 30, 2002 compared with the Three Months Ended June 30,
2001
Revenues
Total revenues increased by $3,594, or 3.8%, in the third quarter of fiscal 2002
compared to the third quarter of fiscal 2001. Lease finance income increased by
$3,995, or 4.9%, due to the growth in the lease receivables portfolio and the
increased average yield of leases in the portfolio in the third quarter of
fiscal 2002 compared to the third quarter of fiscal 2001.
Office equipment that is placed on rental (leases with cancelable terms) by the
IKON marketplaces to its customers, may be purchased by the Company. During the
third quarter of fiscal 2002, the Company purchased $21,500 of rentals compared
to $5,233 during the third quarter of fiscal 2001. The increase in purchases is
due to an increase in rentals written by the IKON marketplaces. Since the
Company can service rentals more efficiently than the IKON marketplaces,
substantially all of the operating rentals written by the IKON marketplaces are
purchased by the Company. Rentals contributed $8,144 during the third quarter of
fiscal 2002, compared to $7,360 in the third quarter of fiscal 2001.
Other income consists primarily of late payment charges, interest income on
restricted cash and various billing fees. Overall, other income decreased by
$1,185, or 19.5%, in the third quarter of fiscal 2002 compared to the third
quarter of fiscal 2001. Interest income on restricted cash decreased by $837, or
69.3%, compared to the third quarter of fiscal 2001, primarily due to the
decline in short-term interest rates. Late payment charges and various billing
fees decreased $264, or 7.4%, compared to the third quarter of fiscal 2001,
primarily due to a reduction in delinquency of the portfolio.
Expenses
Total expenses have decreased by $3,308, or 5.5%, for the three months ended
June 30, 2002 compared to the three months ended June 30, 2001. Average
borrowings to finance the lease portfolio increased by 2.2%, with $2,571,021
outstanding at June 30, 2002. The Company paid a weighted average interest rate
on all borrowings of 5.7% as of June 30, 2002 compared to 6.7% as of June 30,
2001. Primarily, as a result of the decrease in the weighted average interest
rate on all borrowings, interest expense decreased by $4,023, or 9.7%, in the
third quarter of fiscal 2002 compared to the third quarter of fiscal 2001. At
June 30, 2002, the Company's debt to equity ratio, including amounts Due to
IKON, was 6.0 to 1 compared to 5.6 to 1 at June 30, 2001.
Lease default, net of recovery income, decreased by $485, or 12.0%, for the
three months ended June 30, 2002 compared to the three months ended June 30,
2001, due to increased recoveries and decreased funding volume. Depreciation
expense on leased equipment, which is included in general and administrative
expenses, has increased by $579, or 9.4%, due to the increase in purchases of
rentals. Other general and administrative expenses have increased by $621, or
7.7%, in the third quarter of fiscal 2002 compared to the third quarter of
fiscal 2001, due to increased servicing costs of the lease portfolio.
Income Before Income Taxes
Income before income taxes for the third quarter of fiscal 2002 increased by
$6,902, or 19.3%, compared to the third quarter of fiscal 2001 as a result of
the items above.
Income Taxes
Income taxes for the third quarter of fiscal 2002 increased by $2,575, or 17.8%,
compared to the third quarter of fiscal 2001. The effective income tax rate was
40% for the three months ended June 30, 2002 compared to 41% for the three
months ended June 30, 2001. The increase in income taxes is directly
attributable to the increase in income before income taxes for the third quarter
of fiscal 2002 as compared to the third quarter of fiscal 2001.
Nine Months Ended June 30, 2002 compared with the Nine Months Ended June 30,
2001
Revenues
Total revenues increased by $19,264, or 6.9%, for the nine months ended June 30,
2002 compared to the nine months ended June 30, 2001. Lease finance income
increased by $20,949, or 8.8%, due to the growth in the lease receivables
portfolio and the increased average yield of leases in the portfolio for the
nine months ended June 30, 2002 compared to the nine months ended June 30, 2001.
Office equipment that is placed on rental (leases with cancelable terms) by the
IKON marketplaces to its customers, may be purchased by the Company. During the
nine months ended June 30, 2002, the Company purchased $47,960 of rentals
compared to $17,653 during the nine months ended June 30, 2001. The increase in
purchases is due to an increase in rentals written by the IKON marketplaces.
Since the Company can service rentals more efficiently than the IKON
marketplaces, substantially all of the operating rentals written by the IKON
marketplaces are purchased by the Company. Rentals contributed $24,288 during
the nine months ended June 30, 2002, compared to $23,767 in the nine months
ended June 30, 2001.
Other income consists primarily of late payment charges, interest income on
restricted cash and various billing fees. Overall, other income decreased by
$2,206, or 12.2%, in the nine months ended June 30, 2002 compared to the nine
months ended June 30, 2001. Interest income on restricted cash decreased by
$2,868, or 65.4%, compared to the nine months ended June 30, 2001, primarily due
to the decline in short-term interest rates. Late payment charges and various
billing fees increased by $55, or 0.5%, compared to the nine months ended June
30, 2001, primarily due to the increased lease portfolio balance.
Expenses
Total expenses have decreased by $7,627, or 4.3%, for the nine months ended June
30, 2002 compared to the nine months ended June 30, 2001. Average borrowings to
finance the lease portfolio increased by 3.0%, with $2,571,021 outstanding at
June 30, 2002. The Company paid a weighted average interest rate on all
borrowings of 5.7% as of June 30, 2002 compared to 6.7% as of June 30, 2001.
Primarily, as a result of the decrease in the weighted average interest rate on
all borrowings, interest expense decreased by $10,844, or 8.7%, in the nine
months ended June 30, 2002 compared to the nine months ended June 30, 2001. At
June 30, 2002, the Company's debt to equity ratio, including amounts Due to
IKON, was 6.0 to 1 compared to 5.6 to 1 at June 30, 2001.
Lease default, net of recovery income, has increased by $842, or 7.9%, for the
nine months ended June 30, 2002 compared to the nine months ended June 30, 2001,
due to an increase in the loss rate due to general economic conditions.
Depreciation expense on leased equipment, which is included in general and
administrative expenses, has increased by $385, or 1.9%, due to the increase in
purchases of rentals. Other general and administrative expenses have increased
by $1,990, or 8.5%, in the nine months ended June 30, 2002 compared to the nine
months ended June 30, 2001, due to increased servicing costs of the lease
portfolio.
Income Before Income Taxes
Income before income taxes for the nine months ended June 30, 2002 increased by
$26,891, or 26.7%, compared to the nine months ended June 30, 2001 as a result
of the items above.
Income Taxes
Income taxes for the nine months ended June 30, 2002 increased by $10,571, or
26.1%, compared to the nine months ended June 30, 2001. The effective income tax
rate was 40% for the nine months ended June 30, 2002 and June 30, 2001. The
increase in income taxes is directly attributable to the increase in income
before income taxes for the nine months ended June 30, 2002 as compared to the
nine months ended June 30, 2001.
Contractual Obligations
The following summarizes IOSC's significant contractual obligations and
commitments as of June 30, 2002:
Payments Due by Period
Contractual Obligations
Less Than
Total 1 year 1 - 3 years 4 - 5 years After 5 years
- -------------------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Long-term debt $2,547,355 $959,679 $1,153,939 $433,737 -
Operating leases 19,045 3,803 4,483 2,002 8,757
- -------------------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Total $2,566,400 $963,482 $1,158,422 $435,739 $8,757
Payments on long-term debt generally are made from collections of our finance
receivables. At June 30, 2002, long-term debt was $2,547,355 and finance
receivables were $3,016,826.
Forward-Looking Information
This Report includes or incorporates by reference, information which may
constitute forward-looking statements within the meaning of the federal
securities laws. Although the Company believes the expectations contained in
such forward-looking statements are reasonable, it can give no assurances that
such expectations will prove correct. Such forward-looking information is based
upon management's current plans or expectations and is subject to a number of
risks and uncertainties that could significantly affect current plans,
anticipated actions and the Company's and/or IKON's future financial condition
and results. These risks and uncertainties, which apply to both the Company and
IKON, include, but are not limited to, risks and uncertainties relating to:
factors which may affect the Company's ability to recoup the full amount due on
the 1999-1, 1999-2, 2000-1, 2000-2, 2001-1 and 2002-1 Leases (such as lessee
defaults or factors impeding recovery efforts); conducting operations in a
competitive environment and a changing industry (which includes technical
services and products that are relatively new to the industry, IKON, and to the
Company); delays, difficulties, management transitions and employment issues
associated with consolidations and/or changes in business operations; managing
the integration of acquired businesses; existing and future vendor
relationships; risks relating to foreign currency exchange; economic, legal and
political issues associated with international operations; the Company's ability
to access capital and meet its debt service requirements (including sensitivity
to fluctuation in interest rates); and general economic conditions. Certain
additional risks and uncertainties are set forth in the Company's 2001 Annual
Report on Form 10-K filed with the Securities and Exchange Commission. As a
consequence of these and other risks and uncertainties, current plans,
anticipated actions and future financial condition and results may differ
materially from those expressed in any forward-looking statements made by or on
behalf of the Company.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit 4.1 Indenture dated as of May 13, 2002 between IKON, IOSC and
Deutsche Bank Trust Company Americas, as Trustee.
Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
b) Reports on Form 8-K
On April 29, 2002, the Company filed a Current Report on Form 8-K to file, under
Item 5 of the Form, information contained in its parent's press release dated
April 25, 2002 regarding results of its parent for the second quarter of fiscal
year 2002.
On May 7, 2002, the Company filed a Current Report on Form 8-K to file, under
Item 9 of the Form, consolidated balance sheet and cash flow statements of its
parent intended to be considered in the context of the parent's SEC filings
regarding financial statements for the second quarter of fiscal 2002.
On May 29, 2002, the Company filed a Current Report on Form 8-K to file, under
Item 5 of the Form, information contained in its parent's press release dated
May 28, 2002 announcing the completion of a $300 million unsecured revolving
credit facility dated May 24, 2002.
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. This report has also been signed by the
undersigned in his capacity as the chief accounting officer of the Registrant.
IOS CAPITAL, LLC
Date August 14, 2002
By: /s/ Harry G. Kozee
Name: Harry G. Kozee
Title: Vice President - Finance (Chief Accounting Officer)