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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 2000
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or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the transition period from to
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Commission File Number 333-37504
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ICON Income Fund Eight B L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-4101114
- -------------------------------- ----------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
111 Church Street, White Plains, New York 10601-1505
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 993-1700
-----------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class Name of each exchange on which registered
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interests
- --------------------------------------------------------------------------------
(Title of class)
- --------------------------------------------------------------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
TABLE OF CONTENTS
Item Page
PART I
1. Business 3
2. Properties 4
3. Legal Proceedings 4
4. Submission of Matters to a Vote of Security Holders 4
PART II
5. Market for the Registrant's Securities and Related
Security Holder Matters 5
6. Selected Financial and Operating Data 5
7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations 6-7
8. Consolidated Financial Statements and Supplementary Data 8-21
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 22
PART III
10. Directors and Executive Officers of the Registrant's
General Partner 22-23
11. Executive Compensation 24
12. Security Ownership of Certain Beneficial Owners
and Management 24
13. Certain Relationships and Related Transactions 24
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 25
SIGNATURES 26
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
PART I
Item 1. Business
General Development of Business
ICON Income Fund Eight B L.P. (the "Partnership"), was formed on February
7, 2000 as a Delaware limited partnership. The Partnership's maximum offering is
$75,000,000. The Partnership commenced business operations on its initial
closing date, June 14, 2000, with the admission of 15,815.51 limited partnership
units at $100 per unit representing $1,581,551 of capital contributions. Between
June 15, 2000 and December 31, 2000, 203,998.14 additional units were admitted
representing $20,399,814 of capital contributions, bringing the total limited
partner capital contributions to $21,981,365. Total outstanding units at
December 31, 2000 were 219,813.65.
Segment Information
The Partnership has only one operating segment: the business of financing
or acquiring equipment subject to leases with companies that the Partnership
believes to be creditworthy.
Narrative Description of Business
The Partnership is an equipment leasing income fund. The principal
objective of the Partnership is to obtain the maximum economic return from its
investments for the benefit of its limited partners. To achieve this objective,
the Partnership intends to: (1) acquire a diversified portfolio of low
obsolescence equipment having long lives and high residual values; (2) make
monthly cash distributions to its limited partners from cash from operations,
commencing with each limited partner's admission to the Partnership, continuing
through the Reinvestment Period, which period will end no later than the eighth
anniversary after the final closing date; (3) re-invest substantially all
undistributed cash from operations and cash from sales in additional equipment
and financing transactions during the Reinvestment Period; and (4) sell the
Partnership's investments and distribute the cash from sales of such investments
to its limited partners within twelve to twenty-four months after the end of the
Reinvestment Period.
The equipment leasing industry is highly competitive. In initiating its
leasing transactions, the Partnership competes with leasing companies,
manufacturers that lease their products directly, equipment brokers and dealers
and financial institutions, including commercial banks and insurance companies.
Many competitors are larger than the Partnership and have greater financial
resources.
The Partnership had four lessees, which accounted for more than 10% of
total revenue during the year ended December 31, 2000. Equipment leased to Regus
Business Center Corp., Scandinavian Airlines System, CSK Auto, Inc. and
Petsmart, Inc. contributed 42%, 22%, 16% and 12%, respectively, of total
revenue.
The Partnership has no direct employees. The General Partner has full and
exclusive discretion in management and control of the Partnership.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
Lease and Financing Transactions
For the period ended December 31, 2000 the Partnership purchased subject to
lease $84,993,822 of equipment. The equipment purchased subject to lease
includes $44,515,416 of aircraft equipment leased to Scandinavian Airlines
Systems by a joint venture ("ICON Aircraft 24846, LLC") in which the Partnership
has a 96% ownership interest and $29,705,716 of various types of equipment
leased to 33 lessees by a joint venture ("ICON Cheyenne, LLC") in which the
Partnership has an 87.69% ownership interest. The Partnership also purchased a
total of $10,772,690 of equipment which was subject to lease with CSK Auto,
Inc., Regus Business Center Corp. and Petsmart, Inc.
The Partnership accounts for its two joint venture investments by
consolidating 100% of the assets and liabilities of the joint ventures and
reflecting a liability for the related minority interests. ICON Aircraft 24846,
LLC was formed in 2000 with two affiliates, ICON Cash Flow Partners L.P. Seven
and ICON Income Fund Eight A L.P., each of which have a 2% ownership interest.
ICON Cheyenne, LLC was formed in 2000 with three affiliates, ICON Cash Flow
Partners L.P. Six, ICON Cash Flow Partners L.P. Seven and ICON Income Fund Eight
A L.P., which have ownership interests of 1%, 10.31% and 1%, respectively.
Item 2. Properties
----------
The Partnership neither owns nor leases office space or equipment for the
purpose of managing its day-to-day affairs.
Item 3. Legal Proceedings
-----------------
The Partnership is not a party to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of 2000.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
PART II
Item 5. Market for the Registrant's Securities and Related Security Holder
Matters
-----------------------------------------------------------------------
The Partnership's limited partnership interests are not publicly traded nor
is there currently a market for the Partnership's limited partnership units. It
is unlikely that any such market will develop.
Number of Equity Security Holders
Title of Class as of December 31, 2000
-------------- ---------------------------------
Limited Partners 920
General Partner 1
Item 6. Selected Consolidated Financial and Operating Data
--------------------------------------------------
For the Period
February 7, 2000
(date of inception) to
December 31, 2000 (1)
-----------------
Total revenue $ 742,302
==============
Net income $ 291,236
==============
Net income allocable to limited partners $ 288,324
==============
Net income allocable to the General Partner $ 2,912
==============
Weighted average limited partnership units outstanding 132,049
==============
Net income per weighted average limited partnership unit $ 2.18
==============
Distributions to limited partners $ 536,708
==============
Distributions to the General Partner $ 5,228
==============
December 31, 2000
Total assets $ 88,108,178
==============
Partners' equity $ 18,764,181
==============
(1) No data is presented for the periods prior to 2000 since the Partnership
commenced operations on February 7, 2000, the initial closing date. Revenue
and net income for 2000 does not reflect a full year's operations.
The above selected financial data should be read in conjunction with the
consolidated financial statements and related notes appearing elsewhere in this
report.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
Item 7. General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
------------------------------------------------------------------------
ICON Income Fund Eight B L.P. (the "Partnership"), was formed on February
7, 2000 as a Delaware limited partnership. The Partnership's maximum offering is
$75,000,000. The Partnership commenced business operations on its initial
closing date, June 14, 2000, with the admission of 15,815.51 limited partnership
units at $100 per unit representing $1,581,551 of capital contributions. Between
June 15, 2000 and December 31, 2000, additional units were admitted representing
$20,399,814 of capital contributions bringing the total admission to 219,813.65
units totaling $21,981,365 in capital contributions.
Results of Operations for the Period Ended December 31, 2000
For the period ended December 31, 2000, the Partnership purchased equipment
subject to lease with an initial cost of $84,993,822. Revenues for the period
were $742,302, representing finance income of $521,406, rental income of
$164,361 and interest income of $56,535. Expenses for the period totaled
$451,066, representing interest expense of $123,815, depreciation expense of
$111,940, management fees - General Partner of $92,140, general and
administration of $51,576, administrative expense reimbursements - General
Partner of $37,441 and amortization of initial direct costs of $33,510. Net
income for the period was $291,236. The net income per weighted average limited
partnership unit was $2.18.
Liquidity and Capital Resources
The Partnership's primary sources of funds in 2000 were capital
contributions, net of offering expenses, of $19,013,881, net proceeds received
from borrowings of $7,000,000 and net cash generated from operations of
$1,232,206. These funds, along with the assumption of $60,578,610 in
non-recourse notes payable, were used to purchase equipment subject to lease
with an initial cost of $84,993,822 and to fund cash distributions. The
Partnership intends to continue to purchase equipment and fund cash
distributions utilizing funds from capital contributions, additional borrowings
and cash from operations.
Cash distributions to the limited partners, which were paid monthly,
aggregated $536,708 in 2000. The monthly distribution rate in 2000 was 10.75%
(on an annualized basis). Distributions were calculated based on the number of
days each investment unit was in the Partnership.
As of December 31, 2000, 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 the continued offering, operations
or borrowings, the Partnership will continue to invest while retaining
sufficient cash to meet its reserve requirements and recurring obligations.
Item 7a. 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.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
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 also obtained floating rate debt associated with
its acquisition of an aircraft leased to Scandinavian Airlines System. This
floating rate debt service obligation is satisfied by the floating rate rental
stream generated by the lease.
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 December 31, 2000 was $7,000,000. The Partnership believes the risk
associated with rising interest rates under this line is immaterial.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
Item 8. Consolidated Financial Statements and Supplementary Data
--------------------------------------------------------
Index to Financial Statements
Page Number
Independent Auditors' Report 10
Consolidated Balance Sheet as of December 31, 2000 11
Consolidated Statement of Operations for the Period
February 7, 2000 (date of inception)
to December 31, 2000 12
Consolidated Statement of Changes in Partners' Equity
for the Period February 7, 2000
(date of inception) to December 31, 2000 13
Consolidated Statement of Cash Flows for the
Period February 7, 2000 (date of inception)
to December 31, 2000 14-15
Notes to Consolidated Financial Statements 16-21
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Financial Statements
December 31, 2000
(With Independent Auditors' Report Thereon)
INDEPENDENT AUDITORS' REPORT
The Partners
ICON Income Fund Eight B L.P.:
We have audited the accompanying consolidated balance sheet of ICON Income Fund
Eight B L.P. (a Delaware limited partnership) as of December 31, 2000, and the
related statements of operations, changes in partners' equity, and cash flows
for the period from February 7, 2000 (date of inception) to December 31, 2000.
These consolidated financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ICON Income Fund
Eight B L.P. as of December 31, 2000, and the results of its operations and its
cash flows for the period from February 7, 2000 (date of inception) to December
31, 2000 in conformity with accounting principles generally accepted in the
United States of America.
/s/ KPMG LLP
------------------------------------------
KPMG LLP
March 28, 2001
New York, New York
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Balance Sheet
December 31,
2000
----
Assets
Cash ......................................................... $ 1,315,706
------------
Investment in finance leases
Minimum rents receivable .................................. 11,631,296
Estimated unguaranteed residual values .................... 1,233,991
Initial direct costs ...................................... 289,670
Unearned income ........................................... (2,998,971)
------------
10,155,986
Investment in operating leases
Equipment, at cost ........................................ 76,284,645
Accumulated depreciation .................................. (111,940)
------------
76,172,705
Other assets ................................................. 463,781
------------
Total assets ................................................. $ 88,108,178
============
Liabilities and Partners' Equity
Notes payable - non-recourse ................................. $ 60,497,834
Note payable - line of credit ................................ 7,000,000
Security deposits and other .................................. 352,383
Minority interests in joint ventures ......................... 1,493,780
------------
69,343,997
Commitments and Contingencies
Partners' equity (deficiency)
General Partner ........................................... (1,316)
Limited partners (219,813.65 units
outstanding, $100 per unit original issue price) ........ 18,765,497
------------
Total partners' equity .................................. 18,764,181
------------
Total liabilities and partners' equity ....................... $ 88,108,178
============
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Operations
For the Period February 7, 2000 (date of inception) to December 31, 2000
Revenues
Finance income ............................................ $521,406
Rental income ............................................. 164,361
Interest income and other ................................. 56,535
--------
Total revenues ............................................ 742,302
--------
Expenses
Interest .................................................. 123,815
Depreciation .............................................. 111,940
General and administrative ................................ 51,576
Amortization of initial direct costs ...................... 33,510
Management fees - General Partner ......................... 92,140
Administrative expense
reimbursements - General Partner ........................ 37,441
Minority interest expense ................................. 644
--------
Total expenses ............................................ 451,066
--------
Net income ................................................... $291,236
========
Net income allocable to:
Limited partners .......................................... 288,324
General Partner ........................................... 2,912
--------
$291,236
Weighted average number of limited
partnership units outstanding ............................. 132,049
========
Net income per weighted average
limited partnership unit .................................. $ 2.18
========
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Changes in Partners' Equity
For the Period from February 7, 2000 (date of inception) to December 31, 2000
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
Initial partners'
capital contribution $ 1,000 $ 1,000 $ 2,000
Refund of initial
limited partners'
capital contribution (1,000) - (1,000)
Proceeds from issuance
of limited partnership
units (219,813.65 units) 21,981,365 - 21,981,365
Sales and offering expenses (2,967,484) - (2,967,484)
Cash distributions to partners $ 1.88 $ 2.18 (536,708) (5,228) (541,936)
Net income 288,324 2,912 291,236
----------- ------- -----------
Balance at
December 31, 2000 $18,765,497 $(1,316) $18,764,181
=========== ======= ===========
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Cash Flows
For the Period February 7, 2000 (date of inception) to December 31, 2000
Cash flows from operating activities:
Net income ................................................. $ 291,236
------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation ............................................. 111,940
Amortization of initial direct costs ..................... 33,510
Minority interest expense ................................ 644
Changes in operating assets and liabilities:
Collection of principal - non-financed receivables ..... 906,374
Other assets ........................................... (463,781)
Security deposits and other ............................ 352,383
------------
Total adjustments .................................... 941,070
------------
Net cash provided by operating activities .............. 1,232,306
------------
Cash flows from investing activities:
Equipment purchased ........................................ (24,415,212)
Initial direct costs ....................................... (2,386,693)
------------
Net cash used in investing activities .................. (26,801,905)
------------
Cash flows from financing activities:
Initial partners' capital contribution ..................... 2,000
Refund initial limited partner contribution ................ (1,000)
Issuance of limited partnership units,
net of offering expenses ................................. 19,013,881
Proceeds from note payable - line of credit ................ 7,000,000
Cash distributions to partners ............................. (541,936)
Minority interest in joint venture ......................... 1,493,136
Payment of non-recourse borrowings ......................... (80,776)
------------
Net cash provided by financing activities .............. 26,885,305
------------
Net increase in cash .......................................... 1,315,706
Cash at beginning of the period ............................... --
------------
Cash at end of year ........................................... $ 1,315,706
============
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Statement of Cash Flows (continued)
Supplemental Disclosure of Cash Flow Information
For the periods ended December 31, 2000, non-cash activities included the
following:
Fair value of equipment and receivables
purchased for debt ....................................... $ 60,578,610
Non-recourse notes payable assumed in purchase price ........ (60,578,610)
------------
$ --
============
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
December 31, 2000
1. Organization
ICON Income Fund Eight B L.P. (the "Partnership") was formed on February 7,
2000 as a Delaware limited partnership with an initial capitalization of $2,000.
It was formed to acquire various types of equipment, to lease such equipment to
third parties and, to a lesser degree, to enter into secured financing
transactions. The Partnership's maximum offering is $75,000,000. The Partnership
commenced business operations on its initial closing date, June 14, 2000, with
the admission of 15,815.51 limited partnership units at $100 per unit
representing $1,581,551 of capital contributions. As of December 31, 2000,
203,998.14 additional units had been admitted into the Partnership with
aggregate gross proceeds of $20,399,814 bringing the total admission to
219,813.65 units totaling $21,981,365 in capital contributions.
The General Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut corporation. The General Partner will manage and
control the business affairs of the Partnership's equipment, leases and
financing transactions under a management agreement with the Partnership.
ICON Securities Corp., an affiliate of the General Partner, has and will
receive an underwriting commission on the gross proceeds from sales of all
units. The total underwriting compensation to be paid by the Partnership,
including underwriting commissions, sales commissions, incentive fees, public
offering expense reimbursements and due diligence activities is limited to 13.5%
of gross proceeds up to $25,000,000, 13.0% of gross proceeds from $25,000,000 to
$50,000,000 and 12.5% of gross offering proceeds from $50,000,000 to
$75,000,000. Such offering expenses aggregated $2,967,484 at December 31, 2000
and were charged directly to limited partners equity.
Profits, losses, cash distributions and disposition proceeds will be
allocated 99% to the limited partners and 1% to the General Partner until each
limited partner has received cash distributions and disposition proceeds
sufficient to reduce its adjusted capital contribution account to zero and
receive, in addition, other distributions and allocations which would provide an
8% per annum cumulative return on its outstanding adjusted capital contribution
account. After such time, the distributions will be allocated 90% to the limited
partners and 10% to the General Partner.
2. Significant Accounting Policies
Basis of Accounting and Presentation - The Partnership's records are
maintained on the accrual basis. The preparation of financial statements in
conformity with generally accepted accounting principles requires the General
Partner's management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from those estimates. In addition, management is required to disclose contingent
assets and liabilities.
Consolidation - The consolidated financial statements include the accounts
of the Partnership and its majority owned subsidiaries, ICON Cheyenne LLC ("ICON
Cheyenne") and ICON Aircraft 24846, LLC ("ICON Aircraft"). All inter-company
accounts and transactions have been eliminated.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Leases - The Partnership accounts for owned equipment leased to third
parties as finance leases or operating leases, as appropriate. For finance
leases, the Partnership records, at the inception of the lease, the total
minimum lease payments receivable, the estimated unguaranteed residual values,
the initial direct costs related to the leases and the related unearned income.
Unearned income represents the difference between the sum of the minimum lease
payments receivable plus the estimated unguaranteed residual minus the cost of
the leased equipment. Unearned income is recognized as finance income over the
terms of the related leases using the interest method. For operating leases,
equipment is recorded at cost and is depreciated on the straight-line method
over the lease terms to their estimated fair market values at lease
terminations. Related lease rentals are recognized on the straight-line method
over the lease terms. Billed and uncollected operating lease receivables, net of
allowance for doubtful accounts, are included in other assets. Initial direct
costs of finance leases are capitalized and are amortized over the terms of the
related leases using the interest method. Initial direct costs of operating
leases are capitalized and depreciated on the straight-line method over the
lease terms. Each lease is expected to provide aggregate contractual rents that,
along with residual proceeds, return the Partnership's cost of its investments
along with investment income.
Disclosures About Fair Value of Financial Instruments - Statement of
Financial Accounting Standards ("SFAS") No. 107, "Disclosures about Fair Value
of Financial Instruments" requires disclosures about the fair value of financial
instruments, except for lease related instruments. Separate disclosure of fair
value information as of December 31, 2000 with respect to the Company's assets
and certain liabilities is not provided because (i) SFAS No. 107 does not
require disclosures about the fair value of lease arrangements and (ii) the
carrying value of financial instruments, other than lease related investments,
approximates market value and (iii) fair value information concerning certain
non-recourse debt obligations is not practicable to estimate without incurring
excessive costs to obtain all the information that would be necessary to derive
a market rate.
Impairment of Estimated Residual Values - The Partnership's policy with
respect to impairment of estimated residual values is to review, on a periodic
basis, the carrying value of its residuals on an individual asset basis to
determine whether events or changes in circumstances indicate that the carrying
value of an asset may not be recoverable and, therefore, an impairment loss
should be recognized. The events or changes in circumstances which generally
indicate that the residual value of an asset has been impaired are (i) the
estimated fair value of the underlying equipment is less than the Partnership's
carrying value or (ii) the lessee is experiencing financial difficulties and it
does not appear likely that the estimated proceeds from disposition of the asset
will be sufficient to satisfy the remaining obligation to the non-recourse
lender and the Partnership's residual position. Generally in the latter
situation, the residual position relates to equipment subject to third party
non-recourse notes payable where the lessee remits their rental payments
directly to the lender and the Partnership does not recover its residual until
the non-recourse note obligation is repaid in full.
The Partnership measures its impairment loss as the amount by which the
carrying amount of the residual value exceeds the estimated proceeds to be
received by the Partnership from release or resale of the equipment. Generally,
quoted market prices are used as the basis for measuring whether an impairment
loss should be recognized.
Income Taxes - No provision for income taxes has been made as the liability
for such taxes is that of each of the partners rather than the Partnership.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
New Accounting Pronouncement - Effective January 1, 2001, the Partnership
adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended. The adoption of SFAS No. 133 did not have any effect on
the Partnership's financial position or results of operations.
3. Joint Ventures
The Partnership and affiliates formed two joint ventures discussed below
for the purpose of acquiring and managing various assets.
In 2000 the Partnership and three affiliates, ICON Cash Flow Partners L.P.
Six ("L.P. Six"), ICON Cash Flow Partners L.P. Seven ("L.P. Seven") and ICON
Income Fund Eight A L.P. ("Fund Eight A") formed ICON Cheyenne for the purpose
of acquiring a portfolio of leases with a purchase price of $29,705,716, which
was funded with cash and non-recourse debt assumed. The leases expire from May
2001 to September 2006. The Partnership, L.P. Seven, L.P. Six and Fund Eight A
have ownership interests of 87.69%, 10.31%, 1.0% and 1.0%, respectively, in ICON
Cheyenne. The Partnership's consolidated financial statements include 100% of
the assets and liabilities of ICON Cheyenne. L.P. Seven, L.P. Six and Fund Eight
A's interest in ICON Cheyenne have been reflected as minority interest in joint
ventures.
In 2000 the Partnership and two affiliates, L.P. Seven and Fund Eight A
formed ICON Aircraft for the purpose of acquiring an investment in an aircraft
leased to Scandinavian Airlines System with a purchase price of $44,515,416,
which was funded with cash and non-recourse debt assumed in the purchase price.
The lease expires in March 2003. The Partnership, L.P. Seven and Fund Eight A
have ownership interests of 96%, 2% and 2%, respectively in ICON Aircraft. The
Partnership's consolidated financial statements include 100% of the assets and
liabilities of ICON Aircraft. L.P. Seven and Fund Eight A's interest in ICON
Aircraft have been reflected as minority interest in joint ventures.
4. Receivables Due in Installments
Non-cancelable minimum annual amounts due on finance leases are as follows:
Year
----
2001 $ 3,151,636
2002 3,151,636
2003 3,119,420
2004 1,953,135
2005 255,469
-----------
$11,631,296
===========
ICON Income Fund Eight B L.P.
A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
5. Investment in Operating Leases
In 2000, the Partnership acquired an aircraft leased to Scandinavian
Airlines System ("SAS"). The purchase price totaled $44,515,416 and was acquired
with two other affiliates within the ICON Aircraft joint venture. The rental
payment amount under the SAS lease varies to match the non-recourse floating
rate debt obligations secured by this lease (see Note 6). The Partnership also
acquired in 2000 a portfolio of various types of equipment leased to 33 lessees.
The purchase price totaled $29,705,716 and was acquired with three other
affiliates within the ICON Cheyenne joint venture (see Note 3).
The investment in operating leases at December 31, 2000 consisted of the
following:
Equipment, beginning of year $ -
Equipment acquisitions 74,221,132
Initial direct costs 2,063,513
-----------
Equipment cost, end of year $76,284,645
Accumulated depreciation, beginning of year $ -
Depreciation (111,940)
-----------
Accumulated depreciation, end of year (111,940)
-----------
Investment in operating lease, end of year $76,172,705
===========
6. Notes Payable
Notes payable consists of notes payable non-recourse, representing
$42,193,296 borrowed by the ICON Aircraft joint venture and $18,304,565 borrowed
by the ICON Cheyenne joint venture (see Note 3) and note payable-line of credit.
The ICON Aircraft joint venture note carries a floating interest rate of Libor
plus 2.25% and the ICON Cheyenne joint venture notes carry fixed interest rates
ranging from 5.52% to 10.05%.
The Partnership entered into a recourse line of credit agreement with a
lender in November, 2000, which expires in November 2001. The maximum amount
available under the line is $7,000,000. This line of credit is collateralized by
certain receivables and residuals and bears interest at the rate of prime plus
one percent. At December 31, 2000, the prime rate was 9.5% and the Partnership
had $7,000,000 outstanding under this line of credit. The above notes mature as
follows:
Notes Payable Note Payable -
Year Non-Recourse Line of Credit Total
2001 $10,995,171 $ 7,000,000 $17,995,171
2002 8,595,191 -- 8,595,191
2003 39,154,694 -- 39,154,694
2004 1,163,852 -- 1,163,852
2005 541,752 -- 541,752
Subsequent 47,175 -- 47,175
----------- ----------- -----------
$60,497,835 $ 7,000,000 $67,497,835
=========== =========== ===========
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
7. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the period ended December 31, 2000, were as
follows:
2000
Organization and
offering expenses $ 769,348 Charged to equity
Underwriting commissions 439,627 Charged to equity
Acquisition fees 2,386,693 Capitalized
Management fees 92,140 Charged to operations
Administrative expense
reimbursements 37,441 Charged to operations
-------------
$ 3,725,249
In 2000, the Partnership and three affiliates formed a joint venture ICON
Cheyenne for the purpose of acquiring a portfolio of equipment leases and formed
a joint venture ICON Aircraft with two affiliates to acquire an aircraft which
is on lease to SAS. (See Note 3 for additional information relating to these
joint ventures.)
8. Tax Information (Unaudited)
The following table reconciles net income for financial reporting purposes
to income for federal income tax purposes for the period ended December 31,
2000:
2000
----
Net income per financial statements $ 291,236
Differences due to:
Direct finance leases 1,160,940
Depreciation (1,212,261)
Interest expense 83,585
Other (337,779)
-----------
Partnership (loss) for
federal income tax purposes $ (14,279)
===========
As of December 31, 2000, the partners' capital accounts included in the
financial statements totaled $18,764,181 compared to the partners' capital
accounts for federal income tax purposes of $21,426,150 (unaudited). The
difference arises primarily from commissions reported as a reduction in the
partners' capital accounts for financial reporting purposes but not for federal
income tax purposes, and temporary differences related to direct finance leases,
depreciation, and interest expense.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
9. Quarterly Financial Data (Unaudited)
The following table is a summary of financial data by quarter for the
period from the Partnership's inception on February 7, 2000 through December 31,
2000:
For the Quarters Ended (1)
--------------------------------------
June 30, September 30, December 31,
------- ------------ -----------
2000
Revenues .......................... $11,746 $220,432 $510,124
======= ======== ========
Net income allocable to
limited partners ................ $11,629 $ 95,964 $180,731
======= ======== ========
Net income per weighted
average limited partnership unit $ 0.62 $ 1.33 $ 0.23
======= ======== ========
(1) Partnership's date of inception was February 7, 2000, but operations did not
begin until June 14, 2000, its initial closing date.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
----------------------------------------------------------------------
None
PART III
Item 10. Directors and Executive Officers of the Registrant's General Partner
--------------------------------------------------------------------
The General Partner, a Connecticut corporation, was formed in 1985. The
General Partner's principal offices are located at 111 Church Street, White
Plains, New York 10601-1505, and its telephone number is (914) 993-1700. The
officers of the General Partner have extensive experience with transactions
involving the acquisition, leasing, financing and disposition of equipment,
including acquiring and disposing of equipment subject to leases and full
financing transactions.
The manager of the Partnership's business is the General Partner. The
General Partner is engaged in a broad range of equipment leasing and financing
activities. Through its sales representatives and through various broker
relationships throughout the United States, the General Partner offers a broad
range of equipment leasing services.
The General Partner will perform certain functions relating to the
management of the equipment of the Partnership. Such services include the
collection of lease payments from the lessees of the equipment, re-leasing
services in connection with equipment which is off-lease, inspections of the
equipment, liaison with and general supervision of lessees to assure that the
equipment is being properly operated and maintained, monitoring performance by
the lessees of their obligations under the leases and the payment of operating
expenses.
The officers and directors of the General Partner are as follows:
Beaufort J.B. Clarke Chairman, Chief Executive Officer and Director
Paul B. Weiss President and Director
Thomas W. Martin Executive Vice President and Director
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
Item 10. Continued
Beaufort J. B. Clarke, age 55, has been Chairman, Chief Executive Officer
and Director of the General Partner since 1996. Prior to his present position,
Mr. Clarke was founder and the President and Chief Executive Officer of Griffin
Equity Partners, Inc. Mr. Clarke formerly was an attorney with Shearman and
Sterling and has over 20 years of senior management experience in the United
States leasing industry.
Paul B. Weiss, age 40, is President and Director of the General Partner.
Mr. Weiss has been exclusively engaged in lease acquisitions since 1988 from his
affiliations with the General Partner since 1996, Griffin Equity Partners (as
Executive Vice President from 1993-1996); Gemini Financial Holdings (as Senior
Vice President-Portfolio Acquisitions from 1991-1993) and Pegasus Capital
Corporation (as Vice President-Portfolio Acquisitions from 1988-1991). He was
previously an investment banker and a commercial banker.
Thomas W. Martin, age 47, has been Executive Vice President of the General
Partner since 1996. Prior to his present position, Mr. Martin was the Executive
Vice President and Chief Financial Officer of Griffin Equity Partners, Inc.
(1993-1996), Gemini Financial Holdings (as Senior Vice President from 1992-1993)
and Chancellor Corporation (as Vice President-Syndications from 1985-1992). Mr.
Martin has 17 years of senior management experience in the leasing business.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
Item 11. Executive Compensation
----------------------
The Partnership has no directors or officers. The General Partner and its
affiliates were paid or accrued the following compensation and reimbursement for
costs and expenses for the period ended December, 31, 2000.
Entity Capacity Type of Compensation 2000
------ -------- -------------------- ----
ICON Capital Corp. General Partner Organization and offering expenses $ 769,348
ICON Securities Corp. Dealer-Manager Underwriting commissions 439,627
ICON Capital Corp. Manager Acquisition fees 2,386,693
ICON Capital Corp. General Partner Management fees 92,140
ICON Capital Corp. General Partner Administrative expense reimbursements 37,441
----------
$3,725,249
==========
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
(a) The Partnership is a limited partnership and therefore does not have voting
shares of stock. No person of record owns, or is known by the Partnership
to own beneficially, more than 5% of any class of securities of the
Partnership.
(b) As of March 26, 2001, Directors and Officers of the General Partner do not
own any equity securities of the Partnership.
(c) The General Partner owns the equity securities of the Partnership set forth
in the following table:
Title Percent
of Class Amount Beneficiallly Owned of Class
-------- -------------------------- --------
General Partner Represents initially a 1% and potentially a 100%
Interest 10% interest in the Partnership's income, gain
and loss deductions.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
None other than those disclosed in Item 11 herein.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
(a) 1. Financial Statements - See Part II, Item 8 hereof.
2. Financial Statement Schedule - None.
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set
forth therein is included in the Financial Statements or Notes thereto.
3. Exhibits - The following exhibits are incorporated herein by reference:
(i) Amended and Restated Agreement of Limited Partnership
(Incorporated by reference to Exhibit 4.1 to Post-Effective
Amendment No. 6 to Form S-1 Registration Statement No. 333-54001
filed with the Securities and Exchange Commission on May 19,
2000).
(ii) Certificate of Limited Partnership of the Partnership
(Incorporated herein by reference to Exhibit 4.3 to
Post-Effective Amendment No. 6 Form S-1 Registration Statement
No. 333-54001 filed with the Securities and Exchange Commission
on May 19, 2000.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter
ended December 31, 2000.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
December 31, 2000
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ICON Income Fund Eight B L.P.
File No. 333-37504 (Registrant)
By its General Partner, ICON Capital Corp.
Date: March 28, 2001 /s/ Beaufort J.B. Clarke
------------------------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacity and on the dates indicated.
ICON Capital Corp.
sole General Partner of the Registrant
Date: March 28, 2001 /s/ Beaufort J.B. Clarke
------------------------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Date: March 28, 2001 /s/ Paul B. Weiss
------------------------------------------------
Paul B. Weiss
President and Director
Date: March 28, 2001 /s/ Thomas W. Martin
------------------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer)
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrant Which have not Registered Securities Pursuant to
Section 12 of the Act
No annual report or proxy material has been sent to security holders. An annual
report will be sent to the limited partners and a copy will be forwarded to the
Commission.