UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2004
--------------------------------------------------
[ ] 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 333-67638
ICON Income Fund Nine, LLC
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-4183234
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
100 Fifth Avenue, New York, New York 10011-1505
- --------------------------------------------------------------------------------
(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
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2) [ ] Yes [x] No
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Consolidated Balance Sheets
(Unaudited)
September 30, December 31,
Assets 2004 2003
---- ----
Cash and cash equivalents $ 7,219,944 $ 14,651,555
----------------- -----------------
Investments in finance leases:
Minimum rents receivable 20,963,891 16,958,283
Estimated unguaranteed residual values 1,989,814 1,693,570
Initial direct costs, net 288,581 410,719
Unearned income (2,976,047) (3,462,258)
----------------- -----------------
Net investment in finance leases 20,266,239 15,600,314
----------------- -----------------
Investments in operating leases:
Equipment, at cost 202,730,923 203,919,993
Accumulated depreciation (47,772,502) (31,186,896)
---------------- -----------------
Net investment in operating leases 154,958,421 172,733,097
----------------- -----------------
Investments in joint ventures 5,498,720 3,954,634
Investment in unguaranteed residual values 4,545,979 4,454,003
Due from affiliates 479,849 103,885
Due from Manager - 289,422
Other assets, net 113,571 1,118,267
----------------- -----------------
Total assets $ 193,082,723 $ 212,905,177
================= ==================
Liabilities and Members' Equity
Notes payable - non-recourse $ 121,545,417 $ 134,463,196
Due to affiliates 101,896 -
Accrued expenses and other liabilities 526,487 476,253
Deferred rental income 972,583 -
Minority interest 2,076,697 2,811,859
----------------- -----------------
Total liabilities 125,223,080 137,751,308
----------------- -----------------
Commitments and contingencies
Members' equity:
Manager (one share outstanding, $1,000 per share
original issue price) (185,363) (115,985)
Additional Members (98,861.043 and 98,991.003
shares outstanding, $1,000 per share original issue price) 68,045,006 75,269,854
----------------- -----------------
Total members' equity 67,859,643 75,153,869
----------------- -----------------
Total liabilities and members' equity $ 193,082,723 $ 212,905,177
================= =================
See accompanying notes to consolidated financial statements.
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Consolidated Statements of Operations
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
---- ---- ---- ----
Revenues
Rental income $ 7,212,113 $ 8,503,755 $ 24,185,635 $ 25,798,352
Finance income 430,090 329,321 1,256,038 361,600
Interest income and other 18,018 69,227 77,532 167,795
Income from investments in joint ventures 85,828 48,323 261,594 135,168
Net loss on sales of equipment (69,864) (75) (60,161) (17,851)
------------- ------------- ------------- -------------
Total revenues 7,676,185 8,950,551 25,720,638 26,445,064
------------- ------------- ------------- -------------
Expenses
Depreciation and amortization 5,437,577 6,076,372 17,583,548 18,710,859
Interest 1,719,212 1,986,386 5,264,408 6,146,407
Management fee - Manager 601,840 542,547 1,671,683 1,449,118
Administrative expense reimbursements - Manager 272,178 217,018 818,002 579,647
General and administrative 72,282 221,086 449,211 579,068
Minority interest 18,122 61,153 133,173 101,175
------------- ------------- ------------- -------------
Total expenses 8,121,211 9,104,562 25,920,025 27,566,274
------------- ------------- ------------- -------------
Net loss $ (445,026) $ (154,011) $ (199,387) $ (1,121,210)
============== ============= ============= =============
Net loss allocable to:
Managing member $ (4,450) $ (1,540) $ (1,994) $ (11,212)
Additional members (440,576) (152,471) (197,393) (1,109,998)
------------- ------------- -------------- --------------
$ (445,026) $ (154,011) $ (199,387) $ (1,121,210)
============= ============= ============== =============
Weighted average number of additional
member shares outstanding 98,360 99,216 98,889 87,774
============== ============== ============== =============
Net loss per weighted average
additional member shares $ (4.48) $ (1.54) $ (2.00) $ (12.65)
============== ============== ============== ==============
See accompanying notes to consolidated financial statements.
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Consolidated Statement of Changes in Members' Equity
For the Nine Months Ended September 30, 2004
(Unaudited)
Additional Members Distributions
Return of Investment Additional Managing
Capital Income Members Member Total
------- ------ ------- ------ -----
(Per weighted average share)
Balance at
January 1, 2004 $ 75,269,854 $ (115,985) $ 75,153,869
Cash distributions
to members $ 65.76 $ 0.51 (6,553,272) (67,384) (6,620,656)
Additional member shares
redeemed (585.27 shares) (474,183) - (474,183)
Net loss (197,393) (1,994) (199,387)
--------------- ------------ --------------
Balance at
September 30, 2004 $ 68,045,006 $ (185,363) $ 67,859,643
=============== ============ ==============
See accompanying notes to consolidated financial statements.
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30,
(Unaudited)
2004 2003
---- ----
Cash flows from operating activities:
Net loss $ (199,387) $ (1,121,210)
---------------- ----------------
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 17,583,548 18,710,859
Interest expense on non-recourse financing
paid directly by lessees 5,253,411 6,055,304
Minority interest 133,173 101,175
Finance income paid directly to lenders by lessees (211,554) -
Rental income paid directly to lenders by lessees (23,119,379) (24,017,855)
Income from investment in joint ventures (261,594) (135,168)
Net loss on sale of equipment 60,161 17,851
Changes in operating assets and liabilities:
Collection of principal - non-financed receivables 2,207,564 946,400
Other assets - (762,609)
Due from Manager 237,791 (32,687)
Due to/from affiliates 542,359 (97,543)
Accrued expenses and other liabilities 50,231 354,008
Deferred rental income 249,861 295,327
----------------- ----------------
Total adjustments 2,725,572 1,435,062
----------------- ----------------
Net cash provided by operating activities 2,526,185 313,852
Cash flows from investing activities:
Proceeds from sales of equipment 213,666 329,409
Investment in operating leases - (2,001,011)
Investment in finance leases (199,487) (17,340,765)
Investment in joint ventures (1,521,600) (389,518)
Investment in unguaranteed residual values, net (97,202) -
Distributions to minority interests in joint ventures (868,334) (1,032,421)
------------------ -----------------
Net cash used in investing activities (2,472,957) (20,434,306)
------------------ ----------------
(continued on next page)
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Consolidated Statements of Cash Flows - Continued
For the Nine Months Ended September 30,
(Unaudited)
2004 2003
---- ----
Cash flows from financing activities:
Issuance of membership shares, net of offering expenses - 37,028,899
Repayment of non-recourse debt - (16,272)
Loans and advances to affiliates (390,000) -
Redemption of additional members shares (474,183) (606,603)
Cash distributions to members (6,620,656) (5,778,998)
------------- -------------
Net cash (used in) provided by financing activities (7,484,839) 30,627,026
------------- -------------
Net (decrease) increase in cash and cash equivalents (7,431,611) 10,506,572
Cash and cash equivalents at beginning of the period 14,651,555 9,456,992
------------- -------------
Cash and cash equivalents at end of the period $ 7,219,944 $ 19,963,564
============= =============
(continued on next page)
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Condensed Consolidated Statement of Cash Flows - Continued
For the Nine Months Ended September 30
(Unaudited)
Supplemental Disclosure of Cash Flow Information
For the nine months ended September 30, 2004 and 2003, non-cash activities
included the following:
2004 2003
---- ----
Principal and interest from finance leases paid
directly to lenders by lessees $ 1,620,728 $ -
Rental income from operating leases paid
directly to lenders by lessees 23,119,379 24,017,855
Deferred rental income on operating leases paid
directly to lenders by lessees 1,386,722 (210,998)
Principal and interest paid directly to lenders by lessees (26,126,829) (23,806,857)
----------------- ----------------
$ - $ -
================= ================
Non-cash portion of investment in finance lease 7,979,500 -
Non-recourse notes payable assumed in investment
in finance lease (7,979,500) -
---------------- -----------------
$ - $ -
================ =================
Debt assumed by lessee upon lease termination $ 23,861 $ 82,832
================ =================
Interest paid directly to lenders by lessees
pursuant to non-recourse financings $ 5,253,411 $ 6,055,304
Other interest paid 10,997 91,103
---------------- ----------------
Total interest expense $ 5,264,408 $ 6,146,407
================ ================
See accompanying notes to consolidated financial statements.
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
September 30, 2004
(Unaudited)
1. Basis of Presentation and Consolidation
The accompanying consolidated financial statements of ICON Income Fund
Nine, LLC (the "LLC") have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC") for Form 10-Q. Accordingly, they
do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes included in the
LLC's 2003 Annual Report on Form 10-K. The results for the interim period are
not necessarily indicative of the results for the full year.
The accompanying consolidated financial statements include the accounts of
the LLC and its wholly owned subsidiaries, ICON Aircraft 128, LLC ICON Railcar
I, LLC and ICON Trianon LLC, ICON Trinidad LLC and ICON Tancred LLC at September
30, 2004 and for the nine months ended September 30, 2004 and 2003 and its
majority ownership interests in ICON/Kenilworth LLC, ICON Aircraft 46835 LLC and
ICON SPK 2023-A, LLC at September 30, 2004 and for the nine months ended
September 30, 2004 and 2003. All material intercompany balances and transactions
have been eliminated in consolidation.
Certain reclassifications have been made to the accompanying consolidated
financial statements for the three and nine months ended September 30, 2003 to
conform to the current period presentation.
2. Organization
The LLC was formed on July 10, 2001 as a Delaware limited liability company
for the purpose of acquiring equipment subject to lease and, to a lesser degree,
acquiring ownership rights to items of leased equipment at lease expiration. The
LLC is currently in its "reinvestment" phase, wherein the LLC seeks to purchase
equipment from time to time through April, 2008. After the "reinvestment
period", the LLC will then begin to sell its assets in the ordinary course of
business during a time frame called the "disposition period". If the LLC
believes it would be beneficial to reinvest the cash flow in equipment during
the disposition period, the LLC may do so, but the Manager will not receive any
additional fees in connection with such reinvestments.
The Manager of the LLC is ICON Capital Corp. (the "Managing Member"), a
Connecticut Corporation. The Managing Member manages and controls the business
affairs of the LLC's equipment, leases and financing transactions under the
partnership agreement.
3. Joint Ventures
The LLC and its affiliates formed six joint ventures, discussed below, for
the purpose of acquiring and managing various assets. The LLC and these
affiliates have substantially identical investment objectives and participate on
the same terms and conditions. The LLC and the other joint venturers have a
right of first refusal to purchase the equipment, on a pro-rata basis, if any of
the other joint venturers desire to sell their interests in the equipment or
joint venture.
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
September 30, 2004
(Unaudited)
3. Joint Ventures - continued
The joint ventures described below are majority owned and are consolidated
with the LLC.
ICON/Kenilworth LLC
- -------------------
The LLC and an affiliate, ICON Income Fund Eight B L.P. ("Fund Eight B"),
an entity managed by the ICON Capital Corp., formed ICON/Kenilworth LLC for the
purpose of acquiring a natural gas-fired 25MW co-generation facility for cash
and non-recourse debt. The LLC and Fund Eight B have ownership interests of 95%
and 5%, respectively. The base lease for the co-generation facility was through
July 2004 and has been extended through 2009. During the extension term, rental
payments will, in part, be a function of natural gas prices. If natural gas
prices are sustained at the current record high levels, rental payments will be
deferred until natural gas prices return to previous levels. The outstanding
balance of the non-recourse debt was fully repaid at the end of the base lease
term in July 2004.
Under the terms of the Renewal Rent Agreement (the "Agreement") the
lessee's rent is contingent upon the price of natural gas. If the price of
natural gas for the quarter is equal to or greater than $4.50 per mmbtu then the
lessee's rent shall be the lesser of the lessee's excess cash, as defined in the
Agreement or the base renewal rent which is $250,000 per quarter. If the price
of natural gas for the quarter is equal to $4.00 per mmbtu but less than $4.50
per mmbtu then the lessee's rent shall be equal to the base renewal rent plus
the first gas price bonus, as defined in the Agreement. If the price of natural
gas for the quarter is less than $4.00 per mmbtu then the lessee's rent shall be
equal to the base renewal rent plus other incentives and a second gas price
bonus, as defined in the Agreement. In accordance with accounting principles
generally accepted in the United States of America the LLC will not accrue
contingent rental income until such time as the payment becomes due.
ICON Aircraft 46835 LLC
- ------------------------
The LLC and an affiliate, Fund Eight B, formed ICON Aircraft 46835, LLC
("ICON 46835") for the purpose of acquiring an investment in a McDonnell Douglas
DC-10-30F aircraft leased to Federal Express Corporation ("Fedex"). The LLC and
Fund Eight B have ownership interests of 85% and 15%, respectively. ICON 46835
acquired the aircraft subject to the Fedex lease with cash and the assumption of
non-recourse debt. The lender has a security interest in the aircraft and an
assignment of the rental payments under the lease. The lease is scheduled to
expire in March 2007, at which time the final lease payment of $2,708,000 will
be used to repay the remaining outstanding balance of the non-recourse debt. The
outstanding balance of the non-recourse debt at September 30, 2004 was
$12,754,529.
ICON SPK 2023-A, LLC
- --------------------
The LLC and an affiliate, Fund Eight B, formed ICON SPK 2023-A for the
purpose of acquiring a portfolio of equipment subject to operating leases. The
leases expire on various dates through April 2008. The LLC and Fund Eight B have
ownership interests of 51% and 49%, respectively.
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
September 30, 2004
(Unaudited)
3. Joint Ventures - continued
The three joint ventures described below are 50% or less owned by the LLC
and are accounted for under the equity method, whereby the LLC's original
investment was recorded at cost and is adjusted by its share of earnings, losses
and distributions of the joint ventures.
ICON Aircraft 126, LLC
- ----------------------
The LLC and an affiliate, Fund Eight B, 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 LLC and Fund Eight B each have ownership
interests of 50% in ICON 126. ICON 126 consolidates the financial position and
operations of D.A.L. in its financial statements. The aircraft is subject to
non-recourse debt provided by unaffiliated lenders. The outstanding balance of
the non-recourse debt secured by this aircraft at September 30, 2004 was
$59,728,210.
Information as to the unaudited results of operations of ICON 126 as of
September 30, 2004, and 2003, is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2004 September 30, 2003
------------------ ------------------
Net income $ 439,908 $ 290,362
================ =================
LLC's share of net income $ 219,954 $ 145,181
================ ==================
ICON GeicJV
- -----------
On April 30, 2004 the LLC and an affiliate, ICON Income Fund Ten, LLC
("Fund Ten"), an entity managed by ICON Capital Corp., formed ICON GeicJV for
the purpose of purchasing information technology equipment on a three year lease
with Government Employees Insurance Company ("GEICO"). The LLC paid $1,521,571,
in cash, for its 26% ownership interest in the joint venture. Fund Ten has a
right of first refusal to purchase the equipment, on a pro-rata basis, if the
affiliate desires to sell its interest in the equipment or joint venture.
Information as to the unaudited results of operations of ICON GeicJV as of
September 30, 2004 is summarized below:
Nine Months Ended Nine Months Ended
September 30, 2004 September 30, 2003
================== ==================
Net income $ 85,340 $ -
=================== ==================
LLC's share of net income $ 22,188 $ -
=================== ==================
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
September 30, 2004
(Unaudited)
3. Joint Ventures - continued
ICON Aircraft 47820 LLC
The LLC and an affiliate, Fund Eight B formed, ICON Aircraft 47820 LLC
("ICON 47820") for the purpose of acquiring an investment in a McDonnell Douglas
DC10-30F aircraft on lease to Fedex. ICON 47820 acquired the aircraft subject to
the Fedex lease for cash and the assumption of non-recourse debt. The LLC and
Fund Eight B have ownership interests of 10% and 90%, respectively, in ICON
47820. The lender has a security interest in the aircraft and an assignment of
the rental payments under the lease. The lease is scheduled to expire in March
2007, at which time the final lease payment of $2,916,523 will be used to repay
the remaining outstanding balance of the non-recourse debt. The outstanding
balance of the non-recourse debt secured by this aircraft, at September 30,
2004, was $13,738,593.
Information as to the unaudited results of operations of ICON 47820 as of
September 30, 2004 and 2003 are summarized below:
Nine Months Ended Nine Months Ended
September 30, 2004 September 30, 2003
------------------ ------------------
Net income (loss) $ 194,516 $ (100,136)
================== =================
LLC's share of net Income (loss) $ 19,452 $ (10,013)
================== ================
4. Investments In Wholly-Owned Subsidiaries
ICON Aircraft 128 LLC
The LLC formed a wholly-owned subsidiary, ICON Aircraft 128 LLC ("ICON
Aircraft 128") for the purpose of acquiring the outstanding stock of HXO
Aircraft Leasing Limited ("HXO"), a Cayman Islands registered company, which
owns, through an Owner Trust, an Airbus A340-313X aircraft which is on lease to
Cathay Pacific through June 2006. The aircraft owned by HXO is subject to
non-recourse debt to unaffiliated lenders. The lender has a security interest in
the aircraft and an assignment of the rental payments under the lease. The
outstanding balance of the non-recourse debt secured by this aircraft, at
September 30, 2004, was $53,794,612.
ICON Railcar I LLC
The LLC formed a wholly-owned subsidiary, ICON Railcar I LLC for the
purpose of acquiring a total of 434 coal gondola railcars. ICON Railcar I
acquired the railcars with cash and the assumption of non-recourse debt, subject
to two separate leases as follows:
(i) 324 railcars on lease to Texas Genco LP; however, since inception the
LLC has sold fourteen of the railcars to the lessee based upon an early
termination provision of the lease due to damage to the railcars. The lenders
have a security interest in the railcars and have been assigned the rental
payments under the lease. The lease is scheduled to expire in 2007 at which time
the balance of the non-recourse debt will be approximately $1,603,000. The
outstanding balance of the non-recourse debt secured by these railcars, at
September 30, 2004, was $2,430,234.
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
September 30, 2004
(Unaudited)
4. Investments In Wholly-Owned Subsidiaries - continued
(ii) 110 railcars on lease to Trinity Rail Management, Inc. The lender has
a security interest in the railcars and has been assigned the rental payments
under the lease. The lease is scheduled to expire in 2010 at which time the
balance of the non-recourse debt will be approximately $387,000. The outstanding
balance of the non-recourse debt secured by these railcars, at September 30,
2004, was $984,637.
ICON Trianon LLC, ICON Trinidad LLC, ICON Tancred LLC
The LLC formed wholly-owned subsidiaries; ICON Trianon LLC, ICON Trinidad
LLC and ICON Tancred LLC (collectively known as "Wilhelmsen") for the purpose of
acquiring three car and truck carrying vessels. The vessels were acquired with
cash and the assumption of non-recourse debt. The vessels are subject to charter
lease with Wilhelmsen Lines Shipowning, a wholly-owned subsidiary of Wallenius
Wilhelmsen Lines ASA, and the charter leases expire in December 2008. The
outstanding balance of the non-recourse debt secured by these carrying vessels,
at September 30, 2004, was $44,804,994.
5. Related Party Transactions
As part of the Comerica Bank Loan and Security Agreement, there is a
Contribution Agreement between the LLC, ICON Cash Flow Partners L.P. Seven
("L.P. Seven"), ICON Income Fund Eight A L.P. ("Fund Eight A"), Fund Eight B and
Fund Ten (each a "Borrower" and collectively, "the Borrowers"). Under the
Contribution Agreement each Borrower is jointly and severally liable for all
amounts outstanding to Comerica Bank. The Contribution Agreement allows a
Borrower to repay another Borrowers obligation to Comerica Bank as long as the
repaid amounts are promptly reimbursed to the paying Borrower. At September 30,
2004, the LLC paid advances to Comerica Bank of, $390,000, on behalf of the
obligations of L.P. Seven. The LLC is accruing interest income at 8.0% per annum
on all unpaid advances. L.P. Seven anticipates repaying these advances either
from rental income, proceeds from equipment sales and the sale of the
Partnership's joint venture interests or a combination of the three.
At September 30, 2004 the LLC was due $56,390 from Fund Ten for a joint
venture investment and $32,945 due from ICON Receivables 1998-A LLC, an
affiliate of the General Partner, for rents collected on the LLC's behalf.
The LLC also has a net payable due to Fund Eight B for approximately
$102,000 relating to unpaid distributions from a consolidated joint venture.
This amount is included in due to affiliates in the accompanying consolidated
balance sheets.
Fees and expenses paid or accrued by the LLC to the Manager or its
affiliates directly or on behalf of joint ventures in which the company has an
interest were as follows for the nine months ended September 30, 2004 and 2003
are as follows:
ICON Income Fund Nine, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
September 30, 2004
(Unaudited)
5. Related Party Transactions - continued
2004 2003
---- ----
Organization and offering expenses $ - $ 626,083 Charged to members equity
Underwriting commissions - 834,777 Charged to members equity
Acquisition fees - 58,282 Capitalized as part of investment
in operating leases
Acquisition fees 5,985 505,070 Capitalized as part of investment
In finance leases
Acquisition fees 45,647 81,863 Capitalized as part of investment
in joint ventures
Management fees 1,671,683 1,449,118 Charged to operations
Administrative expense
reimbursements 818,002 579,647 Charged to operations
----------- ------------
$ 2,541,317 $ 4,134,840
=========== ============
Item 2. Manager's Discussion and Analysis of Financial Condition and Results of
Operations
Forward-Looking Information - The following discussion and analysis should
be read in conjunction with the audited consolidated financial statements and
notes dated December 31, 2003 included in our annual report on Form 10-K.
Certain statements within this document may constitute forward-looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. These statements are identified by words such as
"anticipate," "believe," "estimate," "expects," "intend," "predict" or "project"
and similar expressions. We believe that the expectations reflected in such
forward-looking statements are based on reasonable assumptions. Any such
forward-looking statements are subject to risks and uncertainties and our future
results of operations could differ materially from historical results or current
expectations. Some of these risks are discussed in this report, and include,
without limitation, fluctuations in oil and gas prices; level of fleet additions
by competitors and industry overcapacity; changes in capital spending by
customers in the cargo delivery industry; changing customer demands for vessel
and aircraft; acts of terrorism; unsettled political conditions, war, civil
unrest and governmental actions, especially in higher risk countries of
operations, foreign currency fluctuations; and environmental and labor laws. Our
actual results could differ materially from those anticipated by such
forward-looking statements due to a number of factors, some of which may be
beyond our control, including, without limitation:
o changes in our industry, interest rates or the general economy;
o the degree and nature of our competition;
o availability of qualified personnel;
o cash flows from operating activities may be less than our current level of
expenses and debt obligations;
o the financial condition of lessees; and
o lessee defaults.
a. Overview
We are an equipment leasing business formed on July 10, 2001 which began
active operations on December 18, 2001. We are primarily engaged in the business
of acquiring equipment subject to lease and, to a lesser degree, acquiring
ownership rights to items of leased equipment at lease expiration. We are
currently in our "reinvestment" phase, wherein we seek to purchase equipment
from time to time through April, 2008. After the "reinvestment period", we will
then begin to sell our assets in the ordinary course of business during a time
frame called the "disposition period". If we believe it would benefit us to
reinvest our cash flow in equipment during the disposition period, we may do so,
but the Manager will not receive any additional fees in connection with such
reinvestments.
Our current equipment portfolio, which is held directly or through
investments in joint ventures, consists primarily of:
o An 85% interest in a McDonnell Douglas DC-10-30F aircraft on lease with
Federal Express Corporation with an expiration date of March 31, 2007. This
aircraft lease may be renewed for up to five years thereafter. Our
contribution of the purchase price was $2,550,000 in cash and our pro rata
share of the $22,291,593 in non-recourse debt.
o A 10% interest in a McDonnell Douglas DC-10-30F aircraft on lease with
Federal Express Corporation with an expiration date of March 31, 2007. This
aircraft lease may be renewed for up to five years thereafter. Our
contribution of the purchase price was $307,655 in cash and our pro rata
share of the $24,211,080 in non-recourse debt.
o Various manufacturing equipment on lease with Metaldyne Corporation with an
expiration date of December 31, 2009. The equipment was purchased for
$2,411,556 in cash.
o A Double Kraft Paper Forming Tubing unit equipment on lease with Wildwood
Industries, Inc. with an expiration date of February 28, 2007. The
equipment was purchased for $1,350,000 in cash.
o Microprocessor manufacturing devices on lease with Advance Micro Devices,
Inc. with an expiration of June 30, 2007. The equipment was purchased for
$6,391,258 in cash. Semiconductor memory testing equipment on lease with
Advance Micro Devices, Inc. with an expiration of July 1, 2007. The
equipment was purchased for $4,560,881 in cash.
o A High-End Paper Converting Line and an Inline Tri-fold Finishing System on
lease with Wildwood Industries, Inc. with an expiration of August 31, 2008.
The equipment was purchased for $957,000 in cash.
o Fifty Great Dane Trailers with Carrier Ultra Refrigeration Units on lease
with Conwell Corporation, a wholly-owned subsidiary of Frozen Foods Express
Industries, Inc., with an expiration date of April 30, 2010. The equipment
was purchased for $1,942,729 in cash.
o A 100% interest in a portfolio of unguaranteed residual values of
miscellaneous equipment on lease to companies in the United Kingdom. The
investment cost was $3,322,542 in cash with the underlying equipment having
debt associated of $34,390,025.
o A 51% interest in a portfolio of leases acquired through a joint venture
(ICON SPK 2023-A LLC) with an affiliate. The investment cost for the LLC
was $3,952,500.
o A 50% interest in an Airbus A 340-313X aircraft on lease to Cathay Pacific
with an expiration date of March 1, 2006. The purchase price of the
equipment was $4,250,000 in cash and non-recourse debt of $70,276,734.
o A 100% interest Airbus A340-313X aircraft on lease to Cathay Pacific with
an expiration date of May 1, 2006. The purchase price of the equipment was
$4,500,000 in cash and non-recourse debt of $64,791,445.
o A 95% interest in a 25 MW co-generation facility on lease to Schering
Plough with an expiration date of June 19, 2009. The lessee has options to
extend the lease for as long as ten years thereafter. The equipment cost
was $7,989,500 in cash and $6,918,091 in non-recourse debt.
o Three car and truck carrying vessels on bareboat charter to Wilhelmsen
Lines with an expiration date of September 22, 2008. The equipment was
purchased for $9,690,060 in cash and non-recourse debt in the amount of
$64,329,764.
o 310 railcars on lease to Texas Genco LP with an expiration date of March
31, 2007. The equipment originally consisted of 324 railcars purchased for
$1,101,429 in cash and $3,322,791 in non-recourse debt. 110 railcars on
lease to Trinity Rail Management, Inc., with an expiration date of April
30, 2010. The equipment was purchased for $126,457 in cash and $1,116,543
in non-recourse debt.
o NCR/Teradata computer equipment and corresponding parts on lease to
Merk-Medco Managed Care LLC ("Medico"). The purchase price was $3,035,805,
which consisted of $74,044 in cash and the assumption of the remaining
outstanding non-recourse debt of $2,961,761. The lease expires on December
1, 2006. NCR/Teradata computer equipment and corresponding parts (Medco 2)
on lease to Medco. The purchase price was $1,751,109, which consisted of
$42,710 in cash and the assumption of the remaining outstanding
non-recourse debt of $1,708,399. The lease expires on December 1, 2006.
o Various computer equipment consisting of DMX hard drives, Brocade 12000
Directors w/ 128 usable ports and associated hardware on lease to Yamaha
Motor Corporation, U.S.A. ("Yamaha"). The purchase price was $3,392,074,
which consisted of an equity contribution of $82,734 and the assumption of
the remaining outstanding non-recourse debt of $3,309,340. The purchase
date was March 31, 2004 with a lease term starting on April 1, 2004 and
expiring on December 1, 2007.
Substantially all of our recurring operating cash flows are generated from
the operations of the single-investor leases in our portfolio. On a monthly
basis, we deduct the expenses related to the recurring operations of the
portfolio from such revenues and assess the amount of the remaining cash flows
that will be required to fund known re-leasing costs and equipment management
costs. Any residual operating cash flows are considered available for
distribution to the investors and are paid monthly (up until the disposition
period.
Industry Factors
Our results continue to be impacted by a number of factors influencing the
equipment leasing industry.
General Economic Conditions
The United States of America's economy appears to be recovering, and we
believe that the leasing industry's outlook for the foreseeable future is
encouraging. We foresee an increase in capital spending by corporations through
2007 which should increase the pool of available secondary market leases, and to
that end, we are seeing more opportunities in this market. Nonetheless, a key
obstacle still facing the leasing industry is the continued low interest rate
environment, which reduces leasing volume inasmuch as customers are more prone
to purchase than lease. Other factors which may negatively affect the leasing
industry are the proposed legal and regulatory changes that may affect tax
benefits of leasing and the continued misperception by many potential lessees,
stemming from Enron, WorldCom and others, that leasing should not play a central
role as a financing alternative. However, as economic growth continues and
interest rates inevitably begin to rise over time, more lessees will return to
the marketplace.
Further Deterioration of the Air Travel Industry.
The aircraft leasing industry is currently in on the downside of a business
cycle, and this has resulted in depressed sales prices for assets such as our
aircraft. It does not appear that the industry will recover significantly in the
very near future, although the LLC is optimistic that within two to three years,
there will be a recovery. However, a further weakening of the industry could
cause the proceeds realized from the future sale of our aircraft, engines, and
flight simulator to be even less than suggested by recent appraisals.
b. Results of Operations for the Three Months Ended September 2004, and 2003
Revenues for the quarterly periods ended September 30, 2004 (the "2004
Quarter") and 2003 (the "2003 Quarter") are summarized as follows:
- --------------------------------- ----------------------------------------------
For Quarter Ended, September 30, 2004
- --------------------------------- ---------------------------------------
- --------------------------------- ------------ ------------ -------------
2004 Quarter 2003 Quarter Change
- --------------------------------- ------------ ------------ -------------
- --------------------------------- ------------ ------------ -------------
Total Revenue $ 7,676,185 $ 8,950,551 $ (1,274,366)
- --------------------------------- ------------ ------------ -------------
- --------------------------------- ------------ ------------ -------------
Rental income $ 7,212,113 $ 8,503,755 $ (1,291,642)
- --------------------------------- ------------ ------------ -------------
- --------------------------------- ------------ ------------ -------------
Finance income $ 430,090 $ 329,321 $ 100,769
- --------------------------------- ------------ ------------ -------------
- --------------------------------- ------------ ------------ -------------
Income from investments in joint
ventures $ 85,828 $ 48,323 $ 37,505
- --------------------------------- ------------ ------------ -------------
- --------------------------------- ------------ ------------ -------------
Net loss on sales of equipment $ (69,864) $ (75) $ (69,789)
- --------------------------------- ------------ ------------ -------------
- --------------------------------- ------------ ------------ -------------
Interest and other income $ 18,018 $ 69,227 $ (51,209)
- --------------------------------- ------------ ------------ -------------
Revenues for the 2004 Quarter decreased $1,274,366, or 14.2%, as compared
to the 2003 Quarter. Rental income decreased due to lease terminations from the
ICON SPK lease portfolio subsequent to the 2003 Quarter. The increase in finance
income for the 2004 Quarter was due primarily to the acquisition of the Medco
and Yamaha leases during the 2004 Period as compared to the 2003 Quarter. Income
from investment in joint ventures increased due to additional investments in
ICON GeicJV during the quarter. We sold some equipment during the 2004 quarter
and recorded a loss on the sale. Interest income and other also decreased as the
LLC had less cash on deposit, due to utilization of funds for investment.
Expenses for the quarterly periods ended September 30, 2004 and 2003 are
summarized as follows:
- ------------------------------------ -----------------------------------------
For Quarter Ended, September 30, 2004
- ------------------------------------ ------------- ---------------------------
- ------------------------------------ ------------- ------------- -------------
2004 Quarter 2003 Quarter Change
- ------------------------------------ ------------- ------------- -------------
- ------------------------------------ ------------- ------------- -------------
Total Expense $ 8,121,211 $ 9,104,562 $ (983,351)
- ------------------------------------ ------------- ------------- -------------
- ------------------------------------ ------------- ------------- -------------
Depreciation and amortization $ 5,437,577 $ 6,076,372 $ (638,795)
- ------------------------------------ ------------- ------------- -------------
- ------------------------------------ ------------- ------------- -------------
Interest $ 1,719,212 $ 1,986,386 $ (267,174)
- ------------------------------------ ------------- ------------- -------------
- ------------------------------------ ------------- ------------- -------------
Management fee - Manager $ 601,840 $ 542,547 $ 59,293
- ------------------------------------ ------------- ------------- -------------
- ------------------------------------ ------------- ------------- -------------
Administrative expense
reimbursements - Manager $ 272,178 $ 217,018 $ 55,160
- ------------------------------------ ------------- ------------- -------------
- ------------------------------------ ------------- ------------- -------------
General and administrative $ 72,282 $ 221,086 $ (148,804)
- ------------------------------------ ------------- ------------- -------------
- ------------------------------------ ------------- ------------- -------------
Minority interest $ 18,122 $ 61,153 $ (43,031)
- ------------------------------------ ------------- ------------- -------------
Expenses for the 2004 Quarter decreased $983,351, or 10.8%, as compared to
the 2003 Quarter. The decrease in depreciation and amortization is directly
related to the termination of investments in operating leases subsequent to the
2003 Quarter. Interest expense decreased due to the reduction in the average
outstanding debt balances between the quarters. The increase in management fees
- - Manager and administration fee reimbursement - Manager was due to the increase
in the size of our lease portfolio and overall growth in the size of our
operations from the 2003 Quarter to the 2004 Quarter. General and administrative
expenses decreased due to a reduction of our outsourcing activities since the
2003 Quarter.
Net Loss
As a result of the foregoing factors, our net loss for the 2004 Quarter and
the 2003 Quarter was $445,026 and $154,011, respectively. The net loss per
weighted average additional member shares outstanding for the 2004 Quarter and
the 2003 Quarter was $4.48 and $1.54, respectively.
c. Results of Operations for the Nine Months Ended September 2004, and 2003
Revenues for the nine month periods ended September 30, 2004 (the "2004
Period") and 2003 (the "2003 Period") are summarized as follows:
- ------------------------------------- ------------------------------------------
For Period Ended, September 30, 2004
- ------------------------------------- ------------ --------------- -------------
- ------------------------------------- ------------ --------------- -------------
2004 Period 2003 Period Change
- ------------------------------------- ------------ --------------- -------------
- ------------------------------------- ------------ --------------- -------------
Total Revenue $25,720,638 $ 26,445,064 $ (724,426)
- ------------------------------------- ------------ --------------- -------------
- ------------------------------------- ------------ --------------- -------------
Rental income $24,185,635 $ 25,798,352 $ (1,612,717)
- ------------------------------------- ------------ --------------- -------------
- ------------------------------------- ------------ --------------- -------------
Finance income $ 1,256,038 $ 361,600 $ 894,438
- ------------------------------------- ------------ --------------- -------------
- ------------------------------------- ------------ --------------- -------------
Income from investments in joint
ventures $ 261,594 $ 135,168 $ 126,426
- ------------------------------------- ------------ --------------- -------------
- ------------------------------------- ------------ --------------- -------------
Net loss on sales of equipment $ (60,161) $ (17,851) $ (42,310)
- ------------------------------------- ------------ --------------- -------------
- ------------------------------------- ------------ --------------- -------------
Interest and other income $ 77,532 $ 167,795 $ (90,263)
- ------------------------------------- ------------ --------------- -------------
Revenues for the 2004 Period decreased $724,426, or 2.7%, as compared to
the2003 Period. The decrease in revenues resulted primarily from termination of
leases primarily from ICON SPK's portfolio. The increase in finance income for
the 2004 Quarter was due primarily to the acquisition of the Medco and Yamaha
leases during the 2004 Period as compared to the 2003 Period. Income from
investment in joint ventures increased due to additional investments in ICON
GeicJV during the 2004 Period. Interest income and other also decreased as the
LLC had less cash on deposit, due to utilization of funds for investment.
Expenses for the nine month periods ended September 30, 2004 (the "2004
Period") and 2003 (the "2003 Period") are summarized as follows:
- -------------------------------- -----------------------------------------------
For Period Ended, September 30, 2004
- -------------------------------- -----------------------------------------------
- -------------------------------- -------------- ------------- --------------
2004 Period 2003 Period Change
- -------------------------------- -------------- ------------- --------------
- -------------------------------- -------------- ------------- --------------
Total Expense $ 25,920,025 $ 27,566,274 $ (1,646,249)
- -------------------------------- -------------- ------------- --------------
- -------------------------------- -------------- ------------- --------------
Depreciation and amortization $ 17,583,548 $ 18,710,859 $ (1,127,311)
- -------------------------------- -------------- ------------- --------------
- -------------------------------- -------------- ------------- --------------
Interest $ 5,264,408 $ 6,146,407 $ (881,999)
- -------------------------------- -------------- ------------- --------------
- -------------------------------- -------------- ------------- --------------
Management fee - Manager $ 1,671,683 $ 1,449,118 $ 222,565
- -------------------------------- -------------- ------------- --------------
- -------------------------------- -------------- ------------- --------------
Administrative expense
reimbursements - Manager $ 818,002 $ 579,647 $ 238,355
- -------------------------------- -------------- ------------- --------------
- -------------------------------- -------------- ------------- --------------
General and administrative $ 449,211 $ 579,068 $ (129,857)
- -------------------------------- -------------- ------------- --------------
- -------------------------------- -------------- ------------- --------------
Minority interest $ 133,173 $ 101,175 $ 31,998
- -------------------------------- -------------- ------------- --------------
Expenses for the 2004 Period decreased $1,646,249, or 6.0%, as compared to
the 2003 Period. The decrease in depreciation and amortization are directly
related to the termination of investments in operating leases subsequent to the
2003 Period. Interest expense decreased due to the reduction in the average
outstanding debt balances between the Periods. The increase in management fees -
Manager and administration fee reimbursement - Manager was due to the increase
in the size of our lease portfolio and overall growth in the size of our
operations from the 2003 Period to the 2004 Period. General and administrative
expenses decreased due to a reduction of our outsourcing activities since the
2003 Quarter.
Net Loss
As a result of the foregoing factors, net loss for the 2004 Period and the
2003 Period was $199,387 and $1,121,210, respectively. The net loss per weighted
average additional member shares outstanding for the 2004 Period and the 2003
Period was $2.00 and $12.65, respectively.
d. Liquidity and Capital Resources
Cash Requirements
We have sufficient funds necessary to maintain current operations and to
continue to invest in business essential assets subject to lease. We are
currently focused on increasing cash flow through acquisition of more "income"
leases.
Sources of Cash
Operations
For the nine months ended September 30, 2004, our primary source of
liquidity was from operating activities. These funds, as well as funds held in
reserve by us, were used primarily in investing activities. Equipment subject to
finance leases were purchased for $199,487 and an investment in a joint venture
of $1,521,600. We also recognized additional investment of $97,202 in the
residual interest of a portfolio attained in the first quarter and made
distribution to minority interest of $868,334. We expect to continue acquiring
equipment subject to lease, and also make other types of related investments.
Financings and Recourse Borrowings
Certain affiliates of ours, specifically; LLC; ICON Income Fund Eight A
L.P.; ICON Income Fund Eight B L.P. and ICON Cash Flow Partners L.P. Seven
(collectively, the "Initial Funds"), are parties to a Loan and Security
Agreement dated as of May 30, 2002, as amended (the "Loan Agreement"). Under the
terms of the Loan Agreement, the Initial Funds may borrow money from Comerica
Bank with all borrowings to be jointly and severally collateralized by (i) cash
and (ii) the present values of certain rents receivable and equipment owned by
the Initial Funds. Such Loan Agreement, effective August 5, 2004, was amended to
add ICON Income Fund Ten, LLC as a borrower to the Loan Agreement. The
expiration of the Loan Agreement is December 31, 2004.
In connection with the Loan Agreement, the Initial Funds previously entered
into a Contribution Agreement dated as of May 30, 2002, as amended (the
"Contribution Agreement"). Pursuant to the Contribution Agreement, the Initial
Funds agreed to restrictions on the amount and the terms of their respective
borrowings under the Loan Agreement in order to minimize the unlikely risk that
a Fund would not be able to repay its allocable portion of the outstanding
revolving loan obligation at any time, including restrictions on any Fund
borrowing in excess of the lesser of (A) an amount each Fund could reasonably
expect to repay in one year out of its projected free cash flow, or (B) the
greater of (i) the Borrowing Base (as defined in the line of credit agreement)
as applied to such Fund, and (ii) 50% of the net worth of such Fund. The
Contribution Agreement provides that, in the event a Fund pays an amount under
the agreement in excess of its allocable share of the obligation under the
agreement whether by reason of an Event of Default or otherwise, the other Funds
will promptly make a contribution payment to such Fund in such amount that the
aggregate amount paid by each Fund reflects its allocable share of the aggregate
obligations under the agreement. The Initial Funds' obligations to each other
under the Contribution Agreement are collateralized by a subordinate lien on the
assets of each participating Fund. In order to facilitate ICON Income Fund Ten,
LLC's addition to the Contribution Agreement, the Funds entered into a Second
Amended and Restated Contribution Agreement effective as of August 5, 2004. The
Second Amended and Restated Contribution Agreement contain substantially
identical terms and limitations as did the original Contribution Agreement.
At September 30, 2004, we paid to Comerica Bank on behalf of ICON Cash Flow
Partners L.P. Seven $390,000, under the provisions of the Contribution
Agreement. We are accruing interest income at 8.0% per annum on all unpaid
advances. ICON Cash Flow Partners L.P. Seven anticipates repayment either from
rental income, proceeds from equipment sales or the sale of their joint venture
interests or a combination of the three.
Aggregate borrowings by all funds under the line of credit agreement
amounted to $9,417,992 at September 30, 2004. We currently have no borrowings
under this line.
Distributions
We made cash distributions to members of $6,620,656 during the nine months
ended September 30, 2004 and $5,778,998 for the nine months ended September 30,
2003. A majority of such distributions are reflected as a return of capital.
Uncertainties
At September 30, 2004, except as noted above in the Overview section and
listed below in the Risk Factors section, and to the best of our knowledge and
belief, there were no known trends or demands, commitments, events or
uncertainties which are likely to have a material effect on liquidity. As cash
is realized from operations, or borrowings, we will continue to invest in
transactions, while retaining sufficient cash to meet our reserve requirements
and recurring obligations.
Risk Factors
Set forth below and elsewhere in this report and in other documents we file
with the Securities and Exchange Commission are risks and uncertainties that
could cause our actual results to differ materially from the results
contemplated by the forward-looking statements contained in this report and
other periodic statements we make, including but not limited to, the following:
o Natural Gas Prices are high, which significantly affects the value of the
co-generation facility. Rental payments are in part a function of natural
gas prices. If natural gas prices are sustained at their current high
levels, rental payments will be deferred until prices return to their
previous levels. High natural gas prices will also affect the viability of
the cogeneration plant and may impede our ability to realize a profit from
our investment.
e. Inflation and Interest Rates
The potential effects of inflation on us are difficult to predict. If the
general economy experiences significant rates of inflation, however, it could
affect us in a number of ways. The cost of equipment acquisitions could increase
with inflation and revenues from existing leases would not generally increase
with inflation, as we do not currently have or expect to have rent escalation
clauses tied to inflation in our leases. Nevertheless, the anticipated residual
values to be realized upon the sale or re-lease of equipment upon lease
terminations (and thus the overall cash flow from our leases) may be expected to
increase with inflation as the cost of similar new and used equipment increases.
If interest rates increase significantly, the lease rates that we can
obtain on future leases may be expected to increase as the cost of capital is a
significant factor in the pricing of lease financing. Leases already in place,
for the most part, would not be affected by changes in interest rates.
Item 3. Qualitative and Quantitative Disclosures About Market Risk
We are exposed to certain market risks, including changes in interest rates
and the demand for equipment (and the related residuals) owned by us.
We attempt to manage our interest rate risk by obtaining fixed rate debt
either directly or through our joint ventures. The fixed rate debt service
obligation streams are generally matched by fixed rents receivable by us from
our lease investments.
We attempt to manage our exposure to equipment and residual risk by
monitoring the market and maximizing re-marketing proceeds received through
re-lease or sale of equipment.
Item 4. Controls and Procedures
We carried out an evaluation, under the supervision and with the
participation of management of ICON Capital Corp., our Manager, including the
Chief Executive Officer and the Principal Financial and Accounting Officer, of
the effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report pursuant to the
Securities Exchange Act of 1934. Based upon the evaluation, the Chief Executive
Officer and the Principal Financial and Accounting Officer concluded that our
disclosure controls and procedures were effective. There were no significant
changes in our internal control over financial reporting during our third
quarter that have materially affected, or are likely to materially affect, our
internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
From time-to-time, in the ordinary course of business, we are involved in
legal actions when necessary to protect or enforce our rights. We are not a
defendant party to any pending litigation and are not aware of any pending or
threatened litigation against us, except as stated below.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
32.1 Certification of Chairman and Chief Executive Officer
32.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer.
33.1 Certification of Chairman and Chief Executive Officer pursuant to 18 U.S.C.
(Section)1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
33.2 Certification of Executive Vice President and Principal Financial and
Accounting Officer pursuant to 18 U.S.C. (Section)1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Report on Form 8-K - None
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 Nine, LLC
By its Manager,
ICON Capital Corp.
November 22, 2004 /s/ Thomas W. Martin
----------------------- -----------------------------------------
Date Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer)
ICON Capital Corp.
Manager of ICON Income Fund Nine, LLC
Exhibit 32.1
Principal Executive Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
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
Nine, LLC (the "LLC");
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 consolidated financial statements and other
financial information included in this quarterly report, fairly present in
all material respects the consolidated 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 officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we
have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
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 and presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this quarterly report based on
such evaluation; and
c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the registrant's
internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the board of directors of the Manager (or
persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control, are reasonably likely to materially
affect the registrant's ability to record, process, summarize and
report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Dated: November 22, 2004
/s/ Beaufort J.B. Clarke
- -----------------------------
Beaufort J. B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp., Manager of ICON Income Fund Nine, LLC
Exhibit 32.2
Principal Financial Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
Certifications - 10-Q
I, Thomas W. Martin, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ICON Income Fund
Nine, LLC (the "LLC");
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 consolidated financial statements and other
financial information included in this quarterly report, fairly present in
all material respects the consolidated 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 officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we
have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
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 and presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this quarterly report based on
such evaluation; and
c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the registrant's
internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the board of directors of the Manager (or
persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control, are reasonably likely to materially
affect the registrant's ability to record, process, summarize and
report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Dated: November 22, 2004
/s/ Thomas W. Martin
- ----------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer)
ICON Capital Corp., Manager of ICON Income Fund Nine, LLC
EXHIBIT 33.1
I, Beaufort J.B. Clarke, Chairman and Chief Executive Officer of ICON
Capital Corp, the Manager of ICON Income Fund Nine, LLC, certify, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), that, to the
best of my knowledge and belief:
(1) the Quarterly Report on Form 10-Q for the period ended September 30,
2004 (the "Periodic Report") which this statement accompanies fully
complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m); and
(2) the information contained in the Periodic Report fairly presents, in
all material respects, the financial condition and results of
operations of ICON Income Fund Nine, LLC.
Dated: November 22, 2004
/s/ Beaufort J.B. Clarke
- ------------------------------------------------------
Beaufort J.B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
Manager of ICON Income Fund Nine, LLC
EXHIBIT 33.2
I, Thomas W. Martin, Executive Vice President (Principal Financial and
Accounting Officer) of ICON Capital Corp, the Manager of ICON Income Fund Nine,
LLC, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. 1350), that, to the best of my knowledge:
(1) the Quarterly Report on Form 10-Q for the period ended September 30, 2004
(the "Periodic Report") which this statement accompanies fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (15 U.S.C. 78m); and
(2) the information contained in the Periodic Report fairly presents, in all
material respects, the financial condition and results of operations of
ICON Income Fund Nine, LLC.
Dated: November 22, 2004
/s/ Thomas W. Martin
- -------------------------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer)
ICON Capital Corp.
Manager of ICON Income Fund Nine, LLC