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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 period ended September 30, 2002
-----------------------------------------------------------
[ ] 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 333-54011
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ICON Income Fund Eight A L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-4006824
- --------------------------------------- -----------------------------------
(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
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
September 30, December 31,
Assets 2002 2001
------ ---- ----
Cash and cash equivalents $ 612,960 $ 3,213,445
------------- -------------
Investment in finance leases
Minimum rents receivable 18,027,307 27,530,587
Estimated unguaranteed residual values 32,544,577 32,985,468
Initial direct costs 536,227 780,194
Unearned income (6,988,520) (10,522,087)
Allowance for doubtful accounts (585,000) (585,000)
------------- -------------
43,534,591 50,189,162
------------- -------------
Investment in operating leases
Equipment, at cost 52,734,532 52,734,532
Accumulated depreciation (9,031,041) (5,969,663)
------------- -------------
43,703,491 46,764,869
------------- -------------
Investments in unguaranteed
residual values 3,429,492 4,284,947
------------- -------------
Investments in unconsolidated
joint ventures 1,247,129 1,870,740
------------- -------------
Other assets 899,663 1,450,918
------------- -------------
Total assets $ 93,427,326 $ 107,774,081
============= =============
Liabilities and Partners' Equity
--------------------------------
Notes payable, non-recourse $ 48,794,479 $ 57,687,654
Note payable - line of credit 3,405,871 1,819,912
Due to affiliates 10,518 --
Security deposits and other payables 412,869 1,044,468
Minority interests in joint venture 123,318 113,238
------------- -------------
52,747,055 60,665,272
Partners' equity (deficiency)
General Partner (244,211) (181,482)
Limited partners (743,200.27 units
outstanding, $100 per unit original
issue price) 40,924,482 47,290,291
------------- -------------
Total partners' equity 40,680,271 47,108,809
------------- -------------
Total liabilities and partners' equity $ 93,427,326 $ 107,774,081
============= =============
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Operations
(unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2002 2001 2002 2001
---- ---- ---- ----
Revenues
Rental income $ 1,780,308 $ 1,420,309 $ 5,340,925 $ 3,606,411
Finance income 1,136,546 1,831,394 3,533,567 5,760,582
Income from investment in joint ventures 44,051 87,289 172,739 209,201
Interest income and other 347 7,814 28,530 56,373
Gain on sale of investment in
unguaranteed residual - - - 1,219,910
Gain on sale of equipment - 32,757 78,834 32,757
------------- ------------- ------------- -------------
Total revenues 2,961,252 3,379,563 9,154,595 10,885,234
------------- ------------- ------------- -------------
Expenses
Interest 1,278,377 1,526,447 3,919,623 4,493,832
Depreciation 1,020,459 757,814 3,061,378 1,786,826
Management fees - General Partner 246,139 508,716 972,742 1,469,514
Administrative expense reimbursements
General Partner 101,099 203,655 423,827 589,440
Amortization of initial direct costs 71,582 159,688 243,967 553,630
General and administrative 282,289 156,767 727,488 466,424
Minority interest expense in consolidated
joint venture 3,518 4,921 10,080 15,418
------------- ------------- ------------- -------------
Total expenses 3,003,463 3,318,008 9,359,105 9,375,084
------------- ------------- ------------- -------------
Net (loss) income $ (42,211) $ 61,555 $ (204,510) $ 1,510,150
============= ============= ============= =============
Net (loss) income allocable to:
Limited partners $ (41,789) $ 60,939 $ (202,465) $ 1,495,048
General Partner (422) 616 (2,045) 15,102
------------- ------------- ------------- -------------
$ (42,211) $ 61,555 $ (204,510) $ 1,510,150
============= ============= ============= =============
Weighted average number of limited
partnership units outstanding 744,282 746,131 745,060 746,344
============= ============= ============= =============
Net (loss) income per weighted average
limited partnership unit $ (.06) $ 0.08 $ (0.27) $ 2.00
============= ============= ============= =============
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Nine Months Ended September 30, 2002
and the Year ended December 31, 2001
(unaudited)
Limited Partner Distributions
-----------------------------
Return of Investment Limited General
Capital Income Partners Partner Total
------- ------ -------- ------- -----
(Per weighted average unit)
Balance at
December 31, 2000 $ 55,393,843 $ (100,150) $ 55,293,693
Cash distributions to partners $ 10.75 $ - (8,022,337) (81,039) (8,103,376)
Limited partnership units
redeemed (880 units) (52,192) - (52,192)
Net loss (29,023) (293) (29,316)
--------------- ------------ --------------
Balance at
December 31, 2001 47,290,291 (181,482) 47,108,809
Cash distributions
to partners $ 8.08 $ - (6,007,732) (60,684) (6,068,416)
Limited partnership units
edeemed (2,663.62 units) (155,612) - (155,612)
Net loss (202,465) (2,045) (204,510)
--------------- ------------ --------------
Balance at
September 30, 2002 $ 40,924,482 $ (244,211) $ 40,680,271
=============== ============ ==============
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Cash Flows
For the Nine Months Ended September 30,
(unaudited)
2002 2001
---- ----
Cash flows from operating activities:
Net (loss) income $ (204,510) $ 1,510,150
------------ ------------
Adjustments to reconcile net income to
net cash (used in) provided by operating
activities:
Finance income portion of receivables
paid directly to lenders by lessees (3,053,806) (4,453,425)
Rental income paid directly to lender
by lessee (4,967,629) (3,198,566)
Interest expense on non-recourse
financing paid directly by lessees 3,603,024 4,316,336
Amortization of initial direct costs 243,967 553,630
Income from investments in joint venture (172,739) (209,201)
Depreciation 3,061,378 1,786,826
Gain on sale of equipment (78,834) (32,757)
Gain on sale of investment in unguaranteed
residual - (1,219,910)
Minority interest expense 10,080 15,418
Change in operating assets and liabilities:
Non-financed receivables 1,596,213 3,657,674
Due to affiliates 10,518 (537,085)
Other assets 551,255 (510,203)
Security deposits, deferred credits and
other payables (631,599) 335,994
Other - (17,195)
------------ ------------
Total adjustments 171,828 487,536
------------ ------------
Net cash (used in) provided by
operating activities (32,682) 1,997,686
------------ ------------
Cash flows from investing activities:
Equipment and receivables purchased - (1,145,711)
Distribution from unconsolidated
joint ventures 796,350 234,766
Proceeds from sale of investment of
unguaranteed residuals 855,455 2,606,413
Proceeds from sale of equipment 418,461 2,344,649
Acquisition of minority interest in
consolidated joint venture - (55,804)
------------ ------------
Net cash provided by investing activities 2,070,266 3,984,313
------------ ------------
(continued on next page)
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Cash Flows (Continued)
For the Nine Months Ended September 30,
(unaudited)
2002 2001
---- ----
Cash flows from financing activities:
Proceeds from line of credit 3,405,871 -
Repayments of notes payable - line of credit (1,819,912) (1,165,736)
Proceeds from non-recourse debt borrowings - 1,012,555
Repayments of notes payable, non-recourse - (1,356,007)
Redemption of limited partnership units (155,612) (47,267)
Cash distributions to partners (6,068,416) (6,078,354)
------------ ------------
Net cash used in financing activities (4,638,069) (7,634,809)
------------ ------------
Net decrease in cash and cash equivalents (2,600,485) (1,652,810)
Cash and cash equivalents at beginning
of period 3,213,445 3,205,892
------------ ------------
Cash and cash equivalents at end
of period $ 612,960 $ 1,553,082
============ ============
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Cash Flows (Continued)
Supplemental Disclosure of Cash Flow Information
- ------------------------------------------------
For the nine months ended September 30, 2002 and 2001, non-cash activities
included the following:
2002 2001
---- ----
Principal and interest on direct
finance receivables paid directly to
lenders by lessees $ 7,528,569 $ 12,332,032
Rental income assigned - operating
lease receivables 4,967,629 3,198,566
Principal and interest on non-recourse
financing paid directly to lenders
by lessees (12,496,198) (15,530,598)
-------------- -------------
$ - $ -
============== =============
Interest expense of $3,919,623 and $4,493,832 for the nine months ended
September 30, 2002 and 2001 consisted of interest expense on non-recourse
financing paid directly to lenders by lessees of $3,603,024 and $4,316,336 and
other interest of $316,599 and $177,496, respectively.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
1. Basis of Presentation
The consolidated financial statements of ICON Income Fund Eight A L.P. (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 income for each period shown.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to such SEC rules and regulations. Management believes that the disclosures made
are adequate to make the information presented not misleading. The results for
the interim period are not necessarily indicative of the results for the full
year. These consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes included in the Partnership's
2001 Annual Report on Form 10-K.
2. 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, 2002 and 2001
were as follows:
2002 2001
---- ----
Management fees $ 972,742 $ 1,469,514 Charged to Operations
Administrative expense
reimbursements 423,827 589,440 Charged to Operations
----------- -----------
Total $ 1,396,569 $ 2,058,954
=========== ===========
The Partnership and affiliates formed four joint ventures for the purpose
of acquiring and managing various assets. (See Note 3 for additional information
relating to the joint ventures).
3. Consolidated Ventures and Investments in Unconsolidated Joint Ventures
The Partnership and affiliates formed four 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 Boardman Funding L.L.C.
----------------------------
In December 1998, the Partnership and three affiliates, ICON Cash Flow
Partners, L.P., Series C ("Series C"), ICON Cash Flow Partners L.P. Six ("L.P.
Six") and ICON Cash Flow Partners L.P. Seven ("L.P. Seven") formed ICON Boardman
Funding L.L.C. ("ICON BF") for the purpose of acquiring a lease of 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
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements-continued
debt. The Partnership, Series C, L.P. Six, and L.P. Seven received a 98.5%, .5%,
..5% and .5% interest, respectively, in ICON BF. In September 2001, ICON BF
acquired Series C's interest in ICON BF, at a cost of $56,370, which represented
Series C's basis in the joint venture and was funded by the Partnership, L.P.
Six and L.P. Seven in accordance with their remaining interests in ICON BF. The
revised ownership interests are now 98.995%, .5025%, and .5025% for the
Partnership, L.P. Six, and L.P. Seven, respectively. The Partnership's financial
statements include 100% of the assets and liabilities and 100% of the revenues
and expenses of ICON BF. L.P. Six's and L.P. Seven's interests in ICON BF have
been reflected as minority interests in joint ventures on the consolidated
balance sheets and minority interest expense on the consolidated statements of
operations.
Portland General Electric ("PGE") is a wholly owned subsidiary of Enron
Corporation ("Enron"), which filed for Chapter 11 bankruptcy protection in
December 2001. PGE has not filed for bankruptcy. While Enron owns all of PGE's
outstanding common stock, PGE has its own legal entity, owns its assets and is
responsible for its own day-to-day operations. PGE continues to make its lease
payments and is current through October 2002.
Investments In Unconsolidated Joint Ventures
The three joint ventures described below are less than 50% owned and are
accounted for following the equity method.
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 L.P. Seven own
43.73%, 25.51% and 30.76% interests in AIC Trust, respectively. The Partnership
accounts for its investment under the equity method of accounting.
On December 28, 2001, AIC Trust sold its remaining leases, subject to the
related debt, at a loss, for a note receivable of (pound)2,575,000 ($3,744,822
based upon the exchange rate at December 31, 2001) which is payable in six
installments through June 2004. The first two installments on the note were
collected in January and June 2002, respectively. As of September 30, 2002, the
gross amount due is (pound)1,625,000 ($2,494,534 on a discounted basis based
upon the exchange rate at September 30, 2002).
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements-continued
Information as to the unaudited financial position of AIC Trust as of
September 30, 2002 and December 31, 2001 and its results of operations for the
nine months ended September 30, 2002 and 2001 is summarized below:
September 30, 2002 December 31, 2001
------------------ -----------------
Assets $ 2,494,534 $ 3,849,439
============= ============
Liabilities $ 57,447 $ -
============= ============
Equity $ 2,437,087 $ 3,849,439
============= ============
Partnership's share
of equity $ 1,065,738 $ 1,683,360
============= ============
For the Nine Months For the Nine Months
Ended September 30, 2002 Ended September 30, 2001
------------------------ ------------------------
Net income $ 340,533 $ 439,449
============= ============
Partnership's share of
net income $ 148,915 $ 192,171
============= ============
Distributions $ 1,752,885 $ 536,853
= =========== ============
Partnerships share of
distributions $ 766,537 $ 234,766
============= ============
AIC Trust recorded a foreign exchange gain of $200,857 during the nine
months ended September 30, 2002.
ICON Aircraft 24846, LLC
------------------------
In 2000, the Partnership and two affiliates, L.P. Seven 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 an 767-300ER
aircraft leased to a 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 is scheduled to expire in March 2003, at which
time the balance of the non-recourse debt outstanding is scheduled to be
approximately $34,500,000. The Partnership, L.P. Seven and Fund Eight B have
ownership interests of 2.0%, 2.0% and 96%, respectively, in ICON Aircraft 24846.
The Partnership accounts for its investment under the equity method of
accounting.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements-continued
Information as to the unaudited financial position of ICON Aircraft as of
September 30, 2002 and December 31, 2001 and its results of operations for the
nine months ended September 30, 2002 and 2001 is summarized below:
September 30, 2002 December 31, 2001
------------------ -----------------
Assets $ 39,896,944 $ 41,952,008
============= =============
Liabilities $ 36,327,970 $ 38,945,109
============= =============
Equity $ 3,568,974 $ 3,006,899
============= =============
Partnership's share of
equity $ 71,379 $ 60,138
============= =============
For the Nine Months For the Nine Months
Ended September 30, 2002 Ended September 30, 2001
Net income $ 562,075 $ 405,824
============= =============
Partnership's share of
net income $ 11,241 $ 8,118
============= =============
ICON Cheyenne LLC
-----------------
In December 2000, the Partnership and three affiliates, L.P. Six, L.P.
Seven and Fund Eight B formed ICON Cheyenne LLC ("ICON Cheyenne") for the
purpose of acquiring a portfolio of lease investments. The purchase price
totaled $29,705,716 and was funded with cash of $11,401,151 and the assumption
of non-recourse debt with an unaffiliated third party lender of $18,304,565. The
debt is structured to be amortized by the application to the debt of rentals due
under the various term leases. The Partnership, L.P. Six, L.P. Seven and Fund
Eight B received a 1%, 1%, 10.31% and 87.69% interest, respectively, in ICON
Cheyenne. The Partnership accounts for this investment under the equity method
of accounting.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements-continued
Information as to the unaudited financial position of ICON Cheyenne as of
September 30, 2002 and December 31, 2001 and its results of operations for the
nine months ended September 30, 2002 and 2001 is summarized below:
September 30, 2002 December 31, 2001
------------------ -----------------
Assets $ 19,060,988 $ 23,869,671
============= =============
Liabilities $ 8,059,843 $ 11,145,506
============= =============
Equity $ 11,001,145 $ 12,724,165
============= =============
Partnership's share
of equity $ 110,012 $ 127,242
============= =============
For the Nine Months For the Nine Months
Ended September 30, 2002 Ended September 30, 2001
Net income $ 1,258,307 $ 891,227
============= =============
Partnership's share of
net income $ 12,583 $ 8,912
============= =============
Distributions $ 2,981,327 $ -
============= =============
Partnership's share of
distributions $ 29,813 $ -
============= =============
4. Line of Credit
During the nine months ended September 30, 2002, the Partnership entered
into a new $17,500,000 joint line of credit agreement, shared with Fund Eight B
and L.P. Seven, with Comerica Bank as lender, replacing its prior line of credit
agreement. The Partnership borrowed $3,405,871 under the new agreement and used
$1,819,912 to pay off its borrowings under its prior line of credit. Under the
terms of the agreement, the Partnership may borrow at a rate equal to the
Comerica Bank base rate plus 1% (5.75% at September 30, 2002) and all borrowings
are to be collateralized by the present values of rents receivable and
residuals. The expiration date of the new line of credit agreement is May 31,
2003.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
September 30, 2002
Item 2. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Three Months Ended September 30, 2002 and 2001
Revenues for the quarter ended September 30, 2002 ("2002 Quarter") were
$2,961,252, representing a decrease of $418,311 over the quarter ended September
30, 2001 ("2001 Quarter"). Finance income decreased by $694,848 from $1,831,394
during the 2001 Quarter to $1,136,546 during the 2002 Quarter. The decrease in
finance income resulted from a reduction in the size of the Partnership's
portfolio of leases, as well as a restructuring of two aircraft finance leases
in October 2001 which caused the leases to be re-classified as operating leases.
In addition, income from investment in joint ventures decreased by $43,238. The
decline in the above stated categories of revenue were offset partially by an
increase in rental income of $359,999 from $1,420,309 during the 2001 Quarter to
$1,780,308 during the 2002 Quarter. The increase in rental income resulted
primarily from the restructuring of the aircraft leases mentioned above.
Expenses for the 2002 Quarter were $3,003,463, representing a decrease of
$314,545 over the 2001 Quarter. The reduction in expenses resulted from the
reduction of the Partnership's portfolio of leases, a decline in the average
non-recourse indebtedness by way of application of lease payments in accordance
with the repayment schedules, and from the continued reduction of the
amortization balance of initial direct costs and the method (interest method)
used to calculate amortization of initial direct cost on finance leases.
Management fees-general partner decrease by $262,577 due to the reduction
of the Partnership's portfolio of leases, upon which such fees are dependant.
Interest expense decreased by $248,070, as a result of a decline in the average
non-recourse indebtedness by way of application of lease payments in accordance
with the repayment schedules. In addition, administrative expense reimbursements
- - general partner decreased by $102,556. The decrease resulted from the
reduction of the Partnership's portfolio of leases upon which such expenses are
dependant. Amortization of initial direct cost decreased by $88,106. This
decrease resulted from the continued reduction of the amortization balance of
initial direct costs and the method (interest method) used to calculate
amortization of initial direct costs on finance leases. An increase in
depreciation expense of $262,645 resulted from the additional aircraft operating
leases discussed above. In addition, general and administrative expenses
increased by $125,522.
Net (loss) income for the 2002 Quarter and the 2001 Quarter was $(42,211)
and $61,555, respectively. The net (loss) income per weighted average limited
partnership unit was $(.06) and $0.08 for the 2002 Quarter and the 2001 Quarter
respectively.
As of September 30, 2002 there were no known trends or demands,
commitments, events or uncertainties, which are likely to have any material
effect on net revenues and the results of operations.
Results of Operations for the Nine Months Ended September 30, 2002 and 2001
For the nine months ended September 30, 2002 ("2002 Period") and 2001
("2001 Period"), the Partnership did not lease or finance any additional
equipment.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
September 30, 2002
Revenues for the nine months ended September 30, 2002 ("2002 Period") were
$9,154,595 representing a decrease of $1,730,639 over the nine months ended
September 2001 ("2001 Period"). The decline in revenue resulted primarily from a
gain on the sale of an investment in a unguaranteed residual of $1,219,910
during the 2001 Period. Finance income decreased by $2,227,015. The decrease in
finance income resulted from a reduction in the size of the Partnership's
portfolio of leases, as well as a restructuring of two aircraft finance leases
in October 2001 which caused the leases to be re-classified as operating leases.
The decline in the above stated categories of revenue were offset partially by
an increase in rental income of $1,734,514. The increase in rental income
resulted from the restructuring of the two aircraft leases mentioned above along
with the re-leasing of an off-lease aircraft to a replacement lessee in April
2001. Such aircraft had been off-lease in 2001 until it was re-leased.
Expenses for the 2002 Period were $9,359,105, representing a decrease of
$15,979 over the 2001 Period.
Interest expense decreased by $574,209 due to a decline in the average
non-recourse indebtedness by way of application of lease payments in accordance
with the repayment schedules. Management fees-general partner decrease by
$496,772, and administrative expense reimbursements - general partner decreased
by $165,613. These decreases resulted from the reduction of the Partnership's
portfolio of leases upon which such expenses are dependant. Amortization of
initial direct cost decreased by $309,663. This decrease resulted from the
continued reduction of the amortization balance of initial direct costs and the
method (interest method) used to calculate amortization of initial direct costs
on finance leases. An increase in depreciation expense of $1,274,552 resulted
from the additional aircraft operating leases discussed above. In addition,
general and administrative expenses increased by $261,064.
Net (loss) income for the 2002 Period and the 2001 Period was $(204,510)
and $1,510,150 respectively. The net (loss) income per weighted average limited
partnership unit was $(0.27) and $2.00 for the 2002 Period and the 2001 Period
respectively.
As of September 30, 2002 there were no known trends or demands,
commitments, events or uncertainties, which are likely to have any material
effect on net revenues and the results of operations.
Liquidity and Capital Resources
In early 2002, the Partnership extended and amended its existing line of
credit arrangement with an unaffiliated third party lender. Under the terms of
the amendment, the maturity date was extended to December 31, 2002, but no
additional borrowings were permitted. During the 2002 Period, the loan was fully
paid with proceeds from a newly established line of credit with Comerica Bank,
from which it borrowed $3,405,871. Under the new line, which was jointly entered
into with Fund Eight B and L.P. Seven and has a joint limit of $17,500,000, the
Partnership may borrow at a rate equal to the Comerica Bank base rate plus 1%
(5.75% at September 30, 2002) with borrowings collateralized by the present
value of rents receivable and residuals. The line expires May 31, 2003.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
September 30, 2002
Besides proceeds from the new line of credit, the Partnership's primary
source of funds for 2002 Period was cash provided by investing activities of
$2,070,267. The Partnership repaid $1,819,912 of its recourse notes payable-old
line of credit during 2002 with proceeds from the newly established line of
credit with Comerica Bank. Because the Partnership paid distributions to
partners totaling $6,068,416, its liquidity was reduced.
Cash distributions to limited partners for the 2002 Period and the 2001
Period, which were paid monthly, totaled $6,007,732 and $6,017,563 respectively.
As of September 30, 2002, there were no known trends or demands,
commitments, events or uncertainties, which are likely to have any material
effect on liquidity. As cash is realized from operations and additional
borrowings, the Partnership will continue to invest in equipment leases and
financings where it deems it to be prudent while retaining sufficient cash to
meet its reserve requirements and recurring obligations.
Item 3. Qualitative and Quantitative Disclosures About Market Risk
The Partnership is exposed to certain market risks, including changes in
interest rates. The Partnership believes its exposure to other market risks are
insignificant to both its financial position and results of operations.
The Partnership manages its interest rate risk by obtaining fixed rate
debt. The fixed rate debt service obligation streams are generally matched by
fixed rate lease receivable streams generated by the Partnership's lease
investments.
The Partnership 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 the floating rate line of credit
as of September 30, 2002 was $3,405,871. The Partnership believes the risk
associated with rising interest rates under this line is not significant.
The Partnership manages its exposure to equipment and residual risk by
monitoring the market and maximizing re-marketing proceeds received through
re-lease or sale of equipment.
The Partnership has an investment of approximately $22.6 million in
equipment on lease to Portland General Electric (PGE), a utility company, which
is a wholly owned subsidiary of Enron Corporation ("Enron"). In the fourth
quarter of 2001, Enron Corporation filed for Chapter 11 bankruptcy protection.
PGE has not filed for bankruptcy. PGE is current on its lease payments at the
date of this report. Management is continually monitoring the Enron proceedings
to the extent that it could, in the future, impact the Partnership's investment.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
September 30, 2002
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 within 90 days prior to the filing of this
quarterly report. 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. Management has presented the results of its most recent
evaluation to the Partnership's independent auditors, KPMG LLP. 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 Income Fund Eight A L.P.
(A Delaware Limited Partnership)
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter ended
September 30, 2002.
Exhibits
99.1 Certification of Chairman and Chief Executive Officer pursuant to 18
U.S.C.ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
99.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer pursuant to 18 U.S.C.ss.1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
ICON Income Fund Eight A L.P.
(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 Income Fund Eight A L.P.
File No. 333-54011 (Registrant)
By its General Partner,
ICON Capital Corp.
November 14, 2002 /s/ Thomas W. Martin
- ------------------------- ------------------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer
of the Manager of the Registrant)
Certifications - 10-Q
I, Beaufort J.B. Clarke, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ICON Income Fund
Eight A L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statements 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 quarterly report;
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: November 14, 2002
/s/ Beaufort J.B. Clarke
- -----------------------------
Beaufort J. B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
Manager of ICON Income Fund Eight A L.P.
I, Thomas W. Martin, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ICON Income Fund
Eight A L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statements 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 quarterly report;
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: November 14, 2002
/s/ Thomas W. Martin
- ----------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer
of the Manager of the Registrant)
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
September 30, 2002
EXHIBIT 99.1
I, Beaufort J.B. Clarke, Chairman and Chief Executive Officer of ICON
Capital Corp, the sole General Partner of ICON Income Fund Eight A L.P.,
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, 2002
(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 Income Fund Eight A L.P..
Dated: November 14, 2002
/s/ Beaufort J.B. Clarke
-----------------------------------------------------------
Beaufort J.B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
Manager of ICON Income Fund Eight A L.P.
ICON Income Fund Eight A L.P.
(A Delaware Limited Partnership)
September 30, 2002
EXHIBIT 99.2
I, Thomas W. Martin, Executive Vice President (Principal Financial and
Accounting Officer) of ICON Capital Corp, the sole General Partner of ICON
Income Fund Eight A L.P., 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, 2002
(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 Income Fund Eight A L.P..
Dated: November 14, 2002
/s/ Thomas W. Martin
-----------------------------------------------------------
Thomas W. Martin
Executive Vice President (Principal
Financial and Accounting Officer)
ICON Capital Corp.
Manager of ICON Income Fund Eight A L.P.