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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 June 30, 2002
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[ ] 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 333-37504
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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 (IRS Employer Identification Number)
incorporation or organization)
100 Fifth Avenue, New York, New York 10011
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(212) 418-4700
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Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ x] Yes [ ] No
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Balance Sheets
(unaudited)
June 30, December 31,
2002 2001
---- ----
Assets
Cash and cash equivalents $ 11,270,106 $ 5,684,652
------------- -------------
Investments in finance leases
Minimum rents receivable 28,646,135 32,769,190
Estimated unguaranteed residual values 2,711,893 2,711,893
Initial direct costs 594,789 746,106
Unearned income (5,110,403) (6,568,703)
------------- -------------
26,842,414 29,658,486
------------- -------------
Investments in operating leases
Equipment, at cost 170,077,248 95,156,568
Accumulated depreciation and amortization (17,573,182) (11,456,484)
------------- -------------
152,504,066 83,700,084
------------- -------------
Investments in unconsolidated joint ventures 6,880,139 -
Due from affiliates -- 3,730,884
Investment in unguaranteed residual 2,406,128 2,406,128
Investment in option 2,100,000 2,100,000
Other assets 757,876 2,915,266
Cash held in escrow 431,500 13,723,196
------------- -------------
Total assets $ 203,192,229 $ 143,918,696
============= =============
Liabilities and Partners' Equity
Notes payable, non-recourse $ 141,219,113 $ 76,852,204
Note payable - recourse 400,000 2,900,000
Due to affiliates 69,161
-
Deferred rental income 1,203,404
-
Security deposits and other 1,387,751 1,269,603
Minority interests in joint ventures 1,570,426 1,684,289
------------- -------------
145,849,855 82,706,096
------------- -------------
Partners' equity (deficit)
General Partner (81,534) (42,960)
Limited Partners (749,836.07 and 750,000
units outstanding, $100 per unit original
issue price) 57,423,908 61,255,560
------------- -------------
Total partners' equity 57,342,374 61,212,600
------------- -------------
Total liabilities and partners' equity $ 203,192,229 $ 143,918,696
============= =============
See accompanying notes to financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Statements of Operations
(unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
---- ---- ---- ----
Revenues
Rental income $ 5,806,411 $ 4,472,622 $ 10,818,215 $ 8,654,840
Finance income 708,388 608,123 1,458,300 945,326
Gain on sale of equipment 146,058 - 241,584
-
(Loss) income from investments in
joint ventures 47,397 - 262,807
-
Interest income and other 17,348 15,595 27,667 53,503
------------- ------------- ------------- -------------
Total revenues 6,725,602 5,096,340 12,808,573 9,653,669
------------- ------------- ------------- -------------
Expenses
Depreciation 3,825,406 2,978,153 6,976,917 5,720,408
Interest 2,018,568 1,300,269 3,388,392 2,620,111
Management fees - General Partner 657,244 369,339 1,134,674 565,657
Administrative expense
reimbursements - General Partner 278,657 154,206 503,678 232,733
General and administrative 146,612 33,575 299,037 176,960
Amortization of initial direct costs 70,281 50,704 151,317 74,638
Minority interest expense 39,122 46,577 140,529 86,635
------------- ------------- ------------- -------------
Total expenses 7,035,890 4,932,823 12,594,544 9,477,142
------------- ------------- ------------- -------------
Net (loss) income $ (310,288) $ 163,517 $ 214,029 $ 176,527
============= ============= ============= =============
Net (loss) income allocable to:
Limited partners $ (307,185) $ 161,882 $ 211,889 $ 174,762
General Partner (3,103) 1,635 2,140 1,765
------------- ------------- ------------- -------------
$ (310,288) $ 163,517 $ 214,029 $ 176,527
============= ============= ============= =============
Weighted average number of limited
partnership units outstanding 749,877 360,458 749,565 299,982
============= ============= ============= =============
Net (loss) income per weighted average
limited partnership unit $ (0.41) $ .45 $ 0.28 $ .58
============= ============= ============= =============
See accompanying notes to consolidated financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Statements of Changes in Partners' Equity
For the Six Months Ended June 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 $ 18,765,497 $ (1,316) $ 18,764,181
Proceeds from issuance
of limited partnership
units (530,186.35 units) 53,018,635 -
53,018,635
Sales and offering expenses (6,407,516) -
(6,407,516)
Cash distributions
to partners $ 8.20 $ 1.62 (4,932,964) (49,845) (4,982,809)
Net income 811,908 8,201 820,109
------------- ------------ -------------
Balance at
December 31, 2001 61,255,560 (42,960) 61,212,600
Redeemed (163.934 units) (12,867) -
(12,867)
Cash distributions to partners $ 5.10 $ 0.28 (4,030,674) (40,714)
(4,071,388)
Net income 211,889 2,140 214,029
------------- ----------- -------------
Balance of
June 30, 2002 $ 57,423,908 $ (81,534) $ 57,342,374
============= =========== =============
See accompanying notes to financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(unaudited)
2002 2001
---- ----
Cash flows from operating activities:
Net income $ 214,029 $ 176,527
------------- -------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Finance income paid directly to lenders (707,098) (152,148)
Depreciation 6,976,917 5,720,408
Amortization of initial direct costs 151,317 74,638
Minority interest expense 140,529 86,635
Income from investments in joint ventures (262,807)
-
Gain on sale of equipment (241,584)
-
Rental income paid directly to lender
by lessees (9,988,471) (8,146,820)
Interest expense on non-recourse financing
paid directly by lessees 3,227,443 1,882,096
Changes in operating assets and liabilities:
Collection of principal, non-financed
receivables 737,601 1,071,662
Other assets 2,157,390 (1,154,251)
Due from affiliates 3,730,884
-
Deferred rental income 1,203,404 1,433,251
Security deposits and other liabilities 118,148 637,160
Due to affiliates 69,161 -
------------- -------------
Total adjustments 7,312,834 1,452,631
------------- -------------
Net cash provided by operating activities 7,526,863 1,629,158
------------- -------------
Cash flows used in investing activities:
Receipt of cash held in escrow 13,291,696 -
Proceeds from the sale of equipment 1,108,666 -
Distribution received from unconsolidated
joint venture 536,993 -
Investments in joint ventures (7,154,326) -
Investment in operating leases (4,250,000) (10,727,951)
Investment in unguaranteed residuals - (1,539,702)
Initial direct costs (2,242,352) (997,951)
Distribution to minority interest in
joint venture (254,392) -
------------- -------------
Net cash provided by (used in) investing activities 1,036,285 (13,265,604)
------------- -------------
See accompanying notes to financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows - (continued)
For the Six Months Ended June 30,
(unaudited)
2002 2001
---- ----
Cash flows from financing activities:
Payment of recourse borrowings (2,500,000) (6,500,000)
Cash distributions to partners (4,071,387) (1,630,198)
Issuance of limited partnership units,
net of offering expenses -- 24,117,852
Payment of non-recourse borrowings -- (1,348,581)
Proceeds from non-recourse borrowings 3,593,693
------------
Net cash (used in) provided by
financing activities (2,977,694) 14,639,073
------------ ------------
Net increase in cash and cash equivalents 5,585,454 3,002,627
Cash and cash equivalents at beginning
of the period 5,684,652 1,315,706
------------ ------------
Cash and cash equivalents at end of the period $ 11,270,106 $ 4,318,333
============ ============
See accompanying notes to financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Consolidated Statements of Cash Flows (continued)
Supplemental Disclosure of Cash Flow Information
For the six months ended June 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 $ 2,960,814 $ --
Rental income assigned operating
lease receivables 9,988,471 8,146,820
Principal and interest paid directly to
lenders by lessees (12,949,285) (8,146,820)
------------ ------------
$ - $ -
============ ============
Fair value of equipment
purchased for debt $ 70,495,058 $ 22,537,075
Non-recourse notes payable
assumed in purchase price (70,495,058) (22,537,075)
------------ ------------
$ - $ -
============ ============
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
June 30, 2002
(Unaudited)
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 primarily formed to acquire various types of equipment subject to lease
with third parties. The Partnership's maximum offering was $75,000,000. The
Partnership commenced business operations on its initial closing date, June 14,
2000, with the admission of limited partners representing 15,815.51 limited
partnership units at the offering price of $100 per unit aggregating $1,581,551
of capital contributions. As of October 17, 2001 (the final closing date),
734,184.49 additional units had been admitted into the Partnership with
aggregate gross proceeds of $73,418,449 bringing the total admission to 750,000
units totaling $75,000,000 in capital contributions. During the six months ended
June 30, 2002, 163.934 units were redeemed for $12,867. Total outstanding units
at June 30, 2002 was 749,836.067.
The General Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut corporation. The General Partner manages and controls
the business affairs of the Partnership's equipment, leases and financing
transactions under a management agreement with the Partnership.
2. Basis of Presentation
The financial statements of ICON Income Fund Eight B 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 results for each period shown.
Certain information and footnote disclosures normally included in 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 periods are not necessarily indicative of the results for the full year.
These financial statements should be read in conjunction with the financial
statements and notes included in the Partnership's 2001 Annual Report on Form
10-K.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
June 30, 2002
3. Related Party Transactions
Fees and expenses paid or accrued by the Partnership to the General Partner
or its affiliates directly or on behalf of joint ventures in which the
Partnership has an interest for the period ended June 30, 2002 and 2001 were as
follows:
2002 2001
---- ----
Organization and offering
expenses $ - $ 720,129 Charged to equity
Underwriting commissions - 551,955 Charged to equity
Acquisition fees 2,242,352 1,934,157 Capitalized as part of investment
in operating leases
Acquisition fees 1,231,826 - Capitalized as part of
investment in joint venture
Management fees 1,134,674 565,657 Charged to operations
Administrative expense
reimbursements 503,678 232,733 Charged to operations
------------- ------------
$ 5,112,530 $ 4,004,631
============= ============
During the period ended June 30, 2002, the Partnership paid $2,242,352 and
$1,117,901 respectively, as acquisition fees with respect to its investments in
ICON Aircraft 123, LLC (ICON 123) and ICON Aircraft 126, LLC (ICON 126). These
amounts represent part of the Partnership's investment in acquiring a 100%
interest in ICON 123, and a 50% interest in ICON 126. The amounts are included
under the captions investments in operating leases and investments in joint
ventures, respectively. During the second quarter 2002, the Partnership
reclassified $113,925 of acquisition fees from Other assets to Investments in
unconsolidated joint ventures, as it represented an additional investment in the
joint venture "ICON SPK".
4. 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 Ventures
The two ventures described below are majority owned and are consolidated
with the Partnership.
ICON Cheyenne LLC
In December 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
LLC ("ICON Cheyenne") for the purpose of acquiring a portfolio of leases for an
aggregate purchase price of $29,705,716, which was paid 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 from the application to
the debt of rentals due under the various leases. The leases expire on various
dates through September 2006. The Partnership, L.P. Seven, L.P. Six and Fund
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Eight A have ownership interests of 87.69%, 10.31%, 1.0% and 1.0%, respectively,
in ICON Cheyenne. The Partnership's consolidated financed statements include
100% of the assets and liabilities as well as 100% of the related revenues and
expenses of ICON Cheyenne. The interests of L.P. Seven, L.P. Six and Fund Eight
A in ICON Cheyenne have been reflected as minority interests in joint ventures
on the consolidated balance sheets and minority interest expense on the
consolidated statements of operations.
ICON Aircraft 24846, LLC
In 2000, the Partnership and two affiliates, L.P. Seven and Fund Eight A
formed ICON Aircraft 24846 LLC ("ICON Aircraft 24846") for the purpose of
acquiring an investment in an aircraft leased to a commercial airline for a
purchase price of $44,515,416, which was funded with cash of $2,241,371 and
non-recourse debt of the $42,274,045. The rents and the aircraft have been
assigned to the 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 A have ownership interests of 96.0%, 2.0% and 2.0%, respectively, in ICON
Aircraft 24846. The Partnership's consolidated financial statements include 100%
of the assets and liabilities of ICON Aircraft 24846 as well as 100% of the
related revenues and expenses. L.P. Seven and Fund Eight A's interest in ICON
Aircraft 24846 have been reflected as minority interests in joint ventures on
the consolidated balance sheets and minority interest expense on the
consolidated statements of operations.
Investments in Unconsolidated Joint Ventures
The two joint ventures described below are 50% and 49% owned by the
Partnership and are accounted for under the equity method.
ICON Aircraft 126, LLC
In early 2002, the Partnership and ICON Income Fund Nine LLC ("Fund Nine")
formed ICON Aircraft 126, LLC ("ICON 126") for the purpose of acquiring all of
the outstanding shares of Delta Aircraft Leasing Limited ("D.A.L."), a Cayman
Islands registered company, which owns, through an Owner Trust, an Airbus
A340-313X aircraft which is on lease to Cathay Pacific through March 2006. The
stock was acquired as of March 4, 2002 for a total purchase price of $4,250,000
in cash. The aircraft owned by D.A.L. is subject to non-recourse debt provided
by unaffiliated lenders. The lenders have a security interest in the aircraft
and an assignment of the rentals under the lease. As of June 30, 2002, there was
$69,311,550 of debt outstanding under the non-recourse loan. The Partnership and
Fund Nine each own a 50% interest in ICON 126. ICON 126 consolidates the
financial position and results of operations of D.A.L. in its financial
statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
The Partnership's original investment in ICON 126 was recorded at a cost of
$3,242,901, inclusive of related acquisition fees of $1,117,901. Information as
to the consolidated financial position and results of operations of ICON 126 as
of and for the quarter ended June 30, 2002 is summarized below:
June 30, 2002
Assets $ 76,402,520
===============
Liabilities $ 69,832,701
===============
Equity $ 6,569,819
===============
Partnership's share of equity $ 3,284,910
===============
Six Months Ended
June 30, 2002
Net income $ 84,017
===============
Partnership's share of net income $ 42,009
===============
ICON SPK 2023-A, LLC
In the quarter ended March 31, 2002, the Partnership and Fund Nine formed
ICON SPK 2023-A, LLC ("ICON SPK") for the purpose of acquiring a portfolio
leases for an aggregate purchase price of $7,750,000. The purchase was funded
with cash. The leases expires on various dates commencing April 2003 through
April 2008.
The Partnership and Fund Nine have ownership interest of 49% and 51%
respectively. The Partnership accounts for the investment following the equity
method. The Partnership's original investment was recorded at a cost of
$3,797,500 and is adjusted for its share of earnings, losses, and distributions
thereafter.
During the quarter ended June 30, 2002, the Partnership reclassified
$113,925 paid on behalf of the joint venture to the Manager of the joint venture
as additional investment in the joint venture.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
Information as to the financial position and results of operations of ICON
SPK as of and for the quarter ended June 30, 2002 is summarized below:
June 30, 2002
Assets $ 7,843,990
===============
Liabilities $ 506,787
===============
Equity $ 7,337,203
===============
Partnership's share of equity $ 3,595,229
===============
Six Months Ended
June 30, 2002
Net income $ 450,608
===============
Partnership's share of net income $ 220,798
===============
Distributions $ 1,095,904
===============
Partnership's share of distributions $ 536,993
===============
5. Cash Held In Escrow
At June 30, 2002, the Partnership had $431,500 held in escrow by an
unaffiliated third party for investment in a joint venture expected to be
consummated in third quarter 2002. Upon consummation, the Partnership will
assume a 5% interest in the joint venture, while Fund Nine will assume a 95%
interest. The Partnership will then account for the investment following the
equity method.
6. Investment In Subsidiary
In early 2002, the Partnership formed ICON Aircraft 123, LLC ("ICON 123")
as a wholly owned subsidiary for the purpose of acquiring all of the outstanding
shares of Alpha Aircraft Leasing Limited ("A.A.L."), a Cayman Islands registered
company, which owns, through an Owner Trust, an Airbus A340-313X aircraft which
is on lease to Cathay Pacific through March 2006. The stock was acquired in the
first quarter of 2002 for $4,250,000 in cash. The aircraft owned by Alpha is
subject to non-recourse debt provided by unaffiliated lenders. The lenders have
a security interest in the aircraft and an assignment of the rentals under the
lease. The fair value of the aircraft was approximately $75 million at the date
of acquisition and the principal balance of the debt was approximately $70.5
million at such date. ICON 123 consolidates the financial position and results
of operations of A.A.L. in its financial statements. The assets and liabilities
of ICON 123 are consolidated in the Partnership financial statements.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements - Continued
7. New Financing
On May 4, 2002, the Partnership borrowed $3,593,693 under a non-recourse
note using the present value of the remaining rentals due under an aircraft
lease as security. As of June 30, 2002, the outstanding balance of such note was
$3,551,957.
During the quarter ended June 30, 2002, the Partnership entered into a
$17,500,000 joint line of credit agreement shared with Fund Eight A and L.P.
Seven, with Comerica Bank as lender. Under the terms of the agreement, the
Partnership may borrow at a rate equal to the Comerica Bank base rate plus 1%
(5.75% at June 30, 2002) and all borrowings are to be collateralized by the
present values of rents receivable and residuals. The expiration date of this
line of credit is May 31, 2003. As of June 30, 2002, there were no borrowings by
the Partnership under the line.
8. Contingencies
Limited partners who purchased units after June 7, 2001 and before August
18, 2001 have the right to require the Partnership to repurchase his or her
units within the one-year period following such purchase since certain
information contained in the prospectus used during this period was not as
current as required by the rules of the Securities and Exchange Commission. The
repurchase price would be equal to the offering price per unit less any
distributions received with respect to such units. 142,049.4793 units were sold
during this period resulting in gross offering proceeds of $14,204,947.93 which
units comprise 18.94% of all units that the Partnership sold. If a substantial
number of these limited partners choose to have their units repurchased and the
Partnership's available cash were less than the amount needed to repurchase the
units, the Partnership would have to sell equipment or borrow in order to fund
these repurchases. If the Partnership were not able to resell the repurchased
units, the Partnerships investments may be less diversified than they would have
been if the maximum offering were raised. There were no unit repurchase
transactions as a result of this repurchase offer through August 14, 2002.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
June 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 June 30, 2002 and 2001
Revenues for the three months ended June 30, 2002 were $6,725,602
representing an increase of $1,629,262 over the three months ended June 30,
2001. The increase in revenue resulted from continued purchase of equipment
subject to lease. Increases were comprised of increases in rental income of
$1,333,789, finance income of $100,265, gain on sale of equipment of $146,058,
and $47,397 from investment in joint venture. During the second quarter 2002,
the Partnership sold equipment from the Cheyenne portfolio for total proceeds of
$579,089 which resulted in a gain of $146,058.
Expenses for the three months ended June 30, 2002 were $7,035,890
representing an increase of $2,103,067 over the 2001 period. The increase in
expenses resulted from the increase in the size of the Partnership's lease
portfolio, an increase in the Partnership's borrowing levels and overall growth
in size of the operations of the Partnership from one year ago and is consistent
with the Partnership's level of operations.
Depreciation expense increased by $847,253, due to the additional
investments in operating leases made subsequent to June 30, 2001. Interest
expense increased by $718,299, due to an increase in the Partnership's borrowing
levels. Management fees - General Partner increased by $287,905 and
administrative expense reimbursements-general partner increased by $124,451. The
increase in management fees was consistent with increases in rentals (including
operating leases, finance leases and through joint ventures) on which such fees
are based. The increase in administrative expense reimbursement - General
Partner was consistent with the increase in operating activities of the
Partnership. General and administrative expenses increased by $113,037 and
amortization of initial direct cost of increased by $19,577. These increases
were partially off-set by a decrease in minority interest expense of $7,455.
Minority interest expense decreased due to the reduction of the lease portfolio
size of ICON Cheyenne.
Net (loss) income for the three months ended June 30, 2002 and 2001 was
$(310,288) and $163,517, respectively. The net income per weighted average
limited Partnership unit outstanding was $(0.41) and $0.45 for the 2002 and 2001
periods, respectively.
Results of Operations for the Six Months Ended June 30, 2002 and 2001
Revenues for the six months ended June 30, 2002 were $12,808,573
representing an increase of $3,154,904 over the six months ended June 30, 2001.
The increase in revenue resulted from continued purchase of equipment subject to
lease. Increases in rental income of $2,163,375, finance income of $512,974,
income from investment in joint venture of $262,807, and gain on sale of
equipment of $241,584, were partially off-set by a decrease in interest income
and other of $25,836. During the six months ended June 30, 2002, the Partnership
sold equipment from the Cheyenne portfolio for total proceeds of $1,108,666
which resulted in a gain of $241,584.
Expenses for the six months ended June 30, 2002 were $12,594,544
representing an increase of $3,117,402 over the 2001 period. The increase in
expenses resulted from the increase in the size of the Partnership's lease
portfolio, an increase in the Partnership's borrowing levels and overall growth
in size of the operations of the Partnership from one year ago and is consistent
with the Partnership's level of operations.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
June 30, 2002
Depreciation expense increased by $1,256,509, due to the additional
investments in operating leases made subsequent to June 30, 2001. Management
fees - General partner increased by $569,017 and administrative expense
reimbursements - general partner increased by $270,945 in the six months ended
June 30, 2002 as compared to the prior year quarter. The increase in management
fees was consistent with increases in rentals (including operating leases,
finances leases and through joint ventures) on which such fees are based. The
increase in administrative expense reimbursements - General Partner was
consistent with the increase in operating activities of the Partnership.
Minority interest expense increased by $53,894, amortization of initial direct
costs increased by $76,679, interest expense increased by $768,281 and general
and administrative expenses increased by $122,077 in the six months as compared
to 2001.
Net income for the six months ended June 30, 2002 and 2001 was $214,029 and
$176,527, respectively. The net income per weighted average limited Partnership
unit outstanding was $0.28 and $0.58 for the 2002 and 2001 periods,
respectively.
Liquidity and Capital Resources
The Partnership's primary source of funds for the six months ended June 30,
2002 was cash provided by operating activities of $7,526,863 and a return of
$13,291,696 from cash in escrow, as well as the collection of sales proceeds due
from L.P. Seven of $3,644,701from the sale of an interest in a joint venture in
December 2001 and proceeds from non-recourse borrowings of $3,593,693.
Such funds were utilized for investments in leases and joint ventures, with
related costs aggregating $13,646,678, (including initial direct costs
(acquisition fees) of $2,242,352), repayment of amounts outstanding under a line
of credit of $2,500,000, cash to make cash distributions to partners of
$4,071,387. As cash is realized from operations and with proceeds from
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.
During the second quarter of 2002, the Partnership entered into a new
$17,500,000 joint line of credit agreement, shared with Fund Eight A and L.P.
Seven. Under the new line, the Partnership may borrow at a rate equal to the
Comerica Bank base rate plus 1% (5.75% at June 30, 2002), with borrowings
collateralized by the present values of rents receivable and residuals. The line
expires May 31, 2003. As of June 30, 2002, no amounts were borrowed by the
Partnership under the line.
As of June 30, 2002 there were no known trends or demands, commitments,
events or uncertainties, which are likely to have any material effect on
liquidity.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
June 30, 2002
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 may borrow funds under a floating rate line of credit and
therefore may be exposed to interest rate risk until the floating rate line of
credit is repaid. The Partnership had no borrowings outstanding under the
floating rate line of credit as of June 30, 2002.
Kmart, Inc., with whom the Partnership has five leases, filed for
bankruptcy in January 2002. The Partnership's finance leases with Kmart were
acquired during 2001 for prices aggregating $18,234,262, comprised of a cash
investment of $681,720 and the assumption of $17,552,542 of non-recourse debt.
Through August 1, 2002, Kmart has made all scheduled rental payments. The
bankruptcy court has not ruled on the affirmation of the Partnership's leases as
of the date of this report.
ICON Income Fund Eight B 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
June 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 B 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 B L.P.
File No. 333-37504(Registrant)
By its General Partner,
ICON Capital Corp.
August 14, 2002 /s/ Thomas W. Martin
- ------------------------ --------------------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal financial and accounting officer of the
General Partner of the Registrant)
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
June 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 B 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 June 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 B L.P..
Dated: August 14, 2002
/s/ Beaufort J.B. Clarke
------------------------------------------------------
Beaufort J.B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
sole General Partner of ICON Income Fund Eight B L.P.
ICON Income Fund Eight B L.P.
(A Delaware Limited Partnership)
June 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 B 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 June 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 B L.P..
Dated: August 14, 2002
/s/ Thomas W. Martin
-------------------------------------------------------
Thomas W. Martin
Executive Vice President (Principal
Financial and Accounting Officer)
ICON Capital Corp.
sole General Partner of ICON Income Fund Eight B L.P.