Attached files
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
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September 30, 2009
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or
[ ] Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For
the transition period from
|
|
to
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Commission_File_Number_
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000-50217
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ICON Income Fund Nine,
LLC
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(Exact
name of registrant as specified in its
charter)
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Delaware
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13-4183234
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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100 Fifth Avenue, 4th Floor, New York, New York
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10011
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(Address
of principal executive offices)
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(Zip
code)
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(212) 418-4700
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Registrant's
telephone number, including area
code
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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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).
[ ]
Yes [ ] No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or smaller reporting company. See
the definitions of “large accelerated filer,’’ “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange
Act.
Large
accelerated filer [ ] Accelerated
filer [ ] Non-accelerated filer
[X] Smaller reporting
company [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
[ ]
Yes [X] No
Number of
outstanding shares of limited liability company interests of the
registrant on November 1, 2009 is 97,955.
Table
of Contents
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Page
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1
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2
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3
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4
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6
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26
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26
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(A
Delaware Limited Liability Company)
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||||||||
Consolidated
Balance Sheets
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||||||||
Assets
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||||||||
September
30,
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||||||||
2009
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December
31,
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|||||||
(unaudited)
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2008
|
|||||||
Current
assets:
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||||||||
Cash
and cash equivalents
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$ | 1,176,504 | $ | 779,544 | ||||
Current
portion of net investment in finance leases
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5,469,083 | 4,931,094 | ||||||
Other
current assets
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195,951 | 310,792 | ||||||
Assets
held for sale
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303,994 | - | ||||||
Total
current assets
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7,145,532 | 6,021,430 | ||||||
Non-current
assets:
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||||||||
Net
investment in finance leases, less current portion
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19,134,566 | 23,254,147 | ||||||
Leased
equipment at cost (less accumulated depreciation of $15,184,781 and
$12,060,032, respectively)
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75,477,489 | 80,239,768 | ||||||
Investments
in joint ventures
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2,037,050 | 2,386,093 | ||||||
Investment
in unguaranteed residual values
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781,188 | 830,764 | ||||||
Other
non-current assets, net
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1,397,196 | 1,498,942 | ||||||
Total
non-current assets
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98,827,489 | 108,209,714 | ||||||
Total
Assets
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$ | 105,973,021 | $ | 114,231,144 | ||||
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||||||||
Liabilities
and Members' Equity
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||||||||
Current
liabilities:
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||||||||
Current
portion of non-recourse long-term debt
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$ | 15,219,485 | $ | 15,011,601 | ||||
Interest
rate swap contracts
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2,477,787 | 3,513,483 | ||||||
Deferred
revenue
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541,673 | 988,634 | ||||||
Accrued
expenses and other current liabilities
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333,818 | 497,076 | ||||||
Total
current liabilities
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18,572,763 | 20,010,794 | ||||||
Non-current
liabilities:
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||||||||
Non-recourse
long-term debt, less current portion
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51,501,056 | 62,437,098 | ||||||
Total
Liabilities
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70,073,819 | 82,447,892 | ||||||
Commitments
and contingencies (Note 12)
|
||||||||
Members'
Equity:
|
||||||||
Additional
Members
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38,772,514 | 35,721,203 | ||||||
Manager
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(477,963 | ) | (508,786 | ) | ||||
Accumulated
other comprehensive loss
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(2,395,349 | ) | (3,429,165 | ) | ||||
Total
Members' Equity
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35,899,202 | 31,783,252 | ||||||
Total
Liabilities and Members' Equity
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$ | 105,973,021 | $ | 114,231,144 |
See
accompanying notes to consolidated financial statements.
(A
Delaware Limited Liability Company)
|
||||||||||||||||
Consolidated
Statements of Operations
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||||||||||||||||
(unaudited)
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||||||||||||||||
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||||||||||||||||
Three
Months Ended
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Nine
Months Ended
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|||||||||||||||
September 30,
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September 30,
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|||||||||||||||
2009
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2008
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2009
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2008
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|||||||||||||
Revenue:
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||||||||||||||||
Rental
income
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$ | 3,284,630 | $ | 3,816,454 | $ | 10,183,333 | $ | 12,224,104 | ||||||||
Finance
income
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1,138,811 | 1,410,454 | 3,586,908 | 4,333,654 | ||||||||||||
Income
(loss) from investments in joint ventures
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29,561 | (8,269 | ) | 70,843 | (1,973,774 | ) | ||||||||||
Net
gain on sales of equipment and unguaranteed residual
values
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522,113 | 46,439 | 539,437 | 498,293 | ||||||||||||
Interest
and other (loss) income
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(8,075 | ) | (86,180 | ) | 25,259 | 53,057 | ||||||||||
Total
revenue
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4,967,040 | 5,178,898 | 14,405,780 | 15,135,334 | ||||||||||||
Expenses:
|
||||||||||||||||
Management
fees - Manager
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- | - | - | 526,469 | ||||||||||||
Administrative
expense reimbursements - Manager
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- | - | - | 149,844 | ||||||||||||
General
and administrative
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136,338 | 244,049 | 1,306,719 | 1,366,544 | ||||||||||||
Interest
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1,250,488 | 1,528,193 | 3,924,033 | 4,767,277 | ||||||||||||
Depreciation
and amortization
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1,344,756 | 1,418,008 | 4,072,795 | 4,338,548 | ||||||||||||
Impairment
loss
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- | - | - | 3,866,551 | ||||||||||||
Total
expenses
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2,731,582 | 3,190,250 | 9,303,547 | 15,015,233 | ||||||||||||
Net
income
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$ | 2,235,458 | $ | 1,988,648 | $ | 5,102,233 | $ | 120,101 | ||||||||
Net
income allocable to:
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||||||||||||||||
Additional
Members
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$ | 2,213,104 | $ | 1,968,762 | $ | 5,051,211 | $ | 118,900 | ||||||||
Manager
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22,354 | 19,886 | 51,022 | 1,201 | ||||||||||||
$ | 2,235,458 | $ | 1,988,648 | $ | 5,102,233 | $ | 120,101 | |||||||||
Weighted
average number of additional shares
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||||||||||||||||
of
limited liability company interests outstanding
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97,955 | 97,955 | 97,955 | 97,955 | ||||||||||||
Net
income per weighted average additional
|
||||||||||||||||
share
of limited liability company interests
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$ | 22.59 | $ | 20.10 | $ | 51.57 | $ | 1.21 |
See accompanying notes to consolidated financial
statements.
(A
Delaware Limited Liability Company)
|
||||||||||||||||||||
Consolidated
Statements of Changes in Members' Equity
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||||||||||||||||||||
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Accumulated
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|||||||||||||||||||
Additional
Member
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Additional
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Other
Comprehensive
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Total Members' |
|||||||||||||||||
Shares
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Members
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Manager
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Loss
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Equity
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||||||||||||||||
Balance,
December 31, 2008
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97,955 | $ | 35,721,203 | $ | (508,786 | ) | $ | (3,429,165 | ) | $ | 31,783,252 | |||||||||
Net
income
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- | 1,832,610 | 18,511 | - | 1,851,121 | |||||||||||||||
Change
in valuation of interest rate
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||||||||||||||||||||
swap
contracts
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- | - | - | 332,260 | 332,260 | |||||||||||||||
Comprehensive
income
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2,183,381 | |||||||||||||||||||
Cash
distributions to members
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- | (450,585 | ) | (4,551 | ) | - | (455,136 | ) | ||||||||||||
Balance,
March 31, 2009 (unaudited)
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97,955 | 37,103,228 | (494,826 | ) | (3,096,905 | ) | 33,511,497 | |||||||||||||
Net
income
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- | 1,005,497 | 10,157 | - | 1,015,654 | |||||||||||||||
Change
in valuation of interest rate
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||||||||||||||||||||
swap
contracts
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- | - | - | 587,467 | 587,467 | |||||||||||||||
Comprehensive
income
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1,603,121 | |||||||||||||||||||
Cash
distributions to members
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- | (649,765 | ) | (6,563 | ) | - | (656,328 | ) | ||||||||||||
Balance,
June 30, 2009 (unaudited)
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97,955 | 37,458,960 | (491,232 | ) | (2,509,438 | ) | 34,458,290 | |||||||||||||
Net
income
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- | 2,213,104 | 22,354 | - | 2,235,458 | |||||||||||||||
Change
in valuation of interest rate
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||||||||||||||||||||
swap
contracts
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- | - | - | 114,089 | 114,089 | |||||||||||||||
Comprehensive
income
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2,349,547 | |||||||||||||||||||
Cash
distributions to members
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- | (899,550 | ) | (9,085 | ) | - | (908,635 | ) | ||||||||||||
Balance,
September 30, 2009 (unaudited)
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97,955 | 38,772,514 | (477,963 | ) | (2,395,349 | ) | 35,899,202 |
See accompanying notes to consolidated financial
statements.
(A
Delaware Limited Liability Company)
|
||||||||
Consolidated
Statements of Cash Flows
|
||||||||
(unaudited)
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||||||||
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Nine
Months Ended
|
|||||||
September 30,
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||||||||
2009
|
2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
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$ | 5,102,233 | $ | 120,101 | ||||
Adjustments
to reconcile net income to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Rental
income paid directly to lenders by lessees
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(9,019,000 | ) | (8,907,429 | ) | ||||
Finance
income
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(3,586,908 | ) | (4,333,654 | ) | ||||
(Income)
loss from investments in joint ventures
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(70,843 | ) | 1,973,774 | |||||
Net
gain on sale of equipment and unguaranteed residual values
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(539,437 | ) | (498,293 | ) | ||||
Depreciation
and amortization
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4,072,795 | 4,338,548 | ||||||
Interest
expense from amortization of debt financing costs
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153,321 | 160,860 | ||||||
Interest
expense on non-recourse financing paid directly
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||||||||
to
lenders by lessees
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3,702,932 | 4,600,811 | ||||||
Impairment
loss
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- | 3,866,551 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Collection
of finance leases
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1,748,284 | 673,592 | ||||||
Other
assets, net
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40,888 | (313,701 | ) | |||||
Deferred
revenue
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(446,961 | ) | (708,289 | ) | ||||
Accrued
expenses and other current liabilities
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85,591 | (82,216 | ) | |||||
Distributions
from joint ventures
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125,248 | 127,513 | ||||||
Net
cash provided by operating activities
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1,368,143 | 1,018,168 | ||||||
Cash
flows from investing activities:
|
||||||||
Proceeds
from sales of equipment
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754,278 | 830,795 | ||||||
Distributions
from joint ventures in excess of profits
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294,638 | 340,938 | ||||||
Net
cash provided by investing activities
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1,048,916 | 1,171,733 | ||||||
Cash
flows from financing activities:
|
||||||||
Cash
distributions to members
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(2,020,099 | ) | (6,240,064 | ) | ||||
Net
cash used in financing activities
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(2,020,099 | ) | (6,240,064 | ) | ||||
Net
increase (decrease) in cash and cash equivalents
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396,960 | (4,050,163 | ) | |||||
Cash
and cash equivalents, beginning of the period
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779,544 | 5,571,481 | ||||||
Cash
and cash equivalents, end of the period
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$ | 1,176,504 | $ | 1,521,318 |
See accompanying notes to consolidated financial
statements.
ICON
Income Fund Nine, LLC
|
||||
(A
Delaware Limited Liability Company)
|
||||
Consolidated
Statements of Cash Flows
|
||||
(unaudited)
|
||||
Nine
Months Ended
|
||||
|
September 30,
|
|||
2009
|
2008
|
Supplemental
disclosure of non-cash investing and financing activities:
|
||||||||
Principal
and interest paid on non-recourse long-term debt
|
|
|||||||
directly
to lenders by lessees
|
$ | 14,439,216 | $ | 18,878,298 |
See accompanying notes to consolidated financial
statements.
5
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(1)
|
ICON
Income Fund Nine, LLC (the “LLC”) was formed on July 11, 2001 as a Delaware
limited liability company. The LLC is engaged in one business segment, the
business of purchasing equipment and leasing it to third parties, providing
equipment and other financing, acquiring equipment subject to lease and, to a
lesser degree, acquiring ownership rights to items of leased equipment at lease
expiration. The LLC will continue until December 31, 2020, unless terminated
sooner.
The
manager of the LLC is ICON Capital Corp., a Delaware corporation (the
“Manager”). The Manager manages and controls the business affairs of the LLC,
including, but not limited to, the equipment leases and other financing
transactions that the LLC entered into pursuant to the terms of the LLC’s
amended and restated operating agreement (the “LLC Agreement”). Additionally,
the Manager has a 1% interest in the profits, losses, cash distributions and
liquidation proceeds of the LLC.
Effective
April 30, 2008, the LLC completed its operating period. On May 1, 2008, the LLC
entered its liquidation period, during which the LLC will sell its assets in the
normal course of business.
Members’
capital accounts are increased for their initial capital contribution plus their
proportionate share of earnings and decreased by their proportionate share of
losses and distributions. Profits, losses, cash distributions and liquidation
proceeds are allocated 99% to the additional members and 1% to the Manager until
each additional member has (a) received cash distributions and liquidation
proceeds sufficient to reduce its adjusted capital account to zero and (b)
received, in addition, other distributions and allocations that would provide an
8% per year cumulative return, compounded daily, on its outstanding adjusted
capital account. After such time, distributions will be allocated 90%
to the additional members and 10% to the Manager.
(2)
|
Summary
of Significant Accounting Policies
|
Basis of
Presentation and Consolidation
The
accompanying consolidated financial statements of the LLC have been prepared in
accordance with U.S. generally accepted accounting principles (“US GAAP”) for
interim financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission for Quarterly Reports on Form
10-Q. In the opinion of the Manager, all adjustments considered
necessary for a fair presentation have been included. These consolidated
financial statements should be read together with the consolidated financial
statements and notes included in the LLC’s Annual Report on Form 10-K for the
year ended December 31, 2008. The results for the interim period are not
necessarily indicative of the results for the full year. The Manager
has evaluated all subsequent events through November 6, 2009, the date the
consolidated financial statements were issued.
The
consolidated financial statements include the accounts of the LLC and its
majority-owned subsidiaries and other controlled entities. All intercompany
accounts and transactions have been eliminated in consolidation. In joint
ventures where the LLC has majority ownership, the financial condition and
results of operations of the joint venture are consolidated. Noncontrolling
interest represents the minority owner’s proportionate share of its equity in
the joint venture. The noncontrolling interest is adjusted for the minority
owner’s share of the earnings, losses, investments and distributions of the
joint venture.
6
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(2)
|
Summary
of Significant Accounting Policies -
continued
|
The LLC
accounts for its noncontrolling interests in joint ventures where the LLC has
influence over financial and operational matters, generally 50% or less
ownership interest, under the equity method of accounting. In such cases, the
LLC's original investments are recorded at cost and adjusted for its share of
earnings, losses and distributions. The LLC accounts for investments in
joint
ventures where the LLC has virtually no influence over financial and operational
matters using the cost method of accounting. In such cases, the LLC's
original investments are recorded at cost and any distributions received are
recorded as revenue. All of the LLC's investments in joint ventures
are subject to its impairment review policy.
Effective
January 1, 2009, the LLC adopted and, for presentation and disclosure purposes,
retrospectively applied the accounting pronouncement relating to noncontrolling
interests in consolidated financial statements. As a result, noncontrolling
interests are reported as a separate component of consolidated equity and net
income attributable to the noncontrolling interest is included in consolidated
net income (loss). The adoption of this standard had no impact on the LLC’s
consolidated financial statements for the nine months ended September 30,
2009.
Asset
Impairments
The
significant assets in the LLC’s portfolio are periodically reviewed, no less
frequently than annually, to determine whether events or changes in
circumstances indicate that the carrying value of an asset may not be
recoverable. An impairment loss will be recognized only if the carrying value of
a long-lived asset is not recoverable and exceeds its fair value. If
there is an indication of impairment, the Manager will estimate the future cash
flows (undiscounted and without interest charges) expected from the use of the
asset and its eventual disposition. Future cash flows are the future cash
inflows expected to be generated by an asset less the future outflows expected
to be necessary to obtain those inflows. If an impairment is
determined to exist, the impairment loss will be measured as the amount by which
the carrying value of a long-lived asset exceeds its fair value and recorded in
the consolidated statement of operations in the period the determination is
made.
The
events or changes in circumstances that generally indicate that an asset may be
impaired are (i) the estimated fair value of the underlying equipment is less
than its carrying value or (ii) the lessee is
experiencing financial difficulties and it does not appear likely that the
estimated proceeds from the disposition of the asset will be sufficient to
satisfy the residual position in the asset and, if applicable, the remaining
obligation to the non-recourse lender. Generally in the latter
situation, the residual position relates to equipment subject to third-party
non-recourse debt where the lessee remits its rental payments directly to the
lender and the LLC does not recover its residual position until the non-recourse
debt is repaid in full. The preparation of the undiscounted cash flows requires
the use of assumptions and estimates, including the level of future rents, the
residual value expected to be realized upon disposition of the asset, estimated
downtime between re-leasing events and the amount of re-leasing costs. The
Manager’s review for impairment includes a consideration of the existence of
impairment indicators including third-party appraisals, published values for
similar assets, recent transactions for similar assets, adverse changes in
market conditions for specific asset types and the occurrence of significant
adverse changes in general industry and market conditions that could affect the
fair value of the asset.
7
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(2)
|
Summary
of Significant Accounting Policies -
continued
|
Use of
Estimates
The
preparation of financial statements in conformity with US GAAP requires the
Manager to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities as
of the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Significant estimates
primarily include the determination of allowance for doubtful accounts,
depreciation and amortization, impairment losses, estimated useful lives and
residual values. Actual results could differ from those estimates.
Reclassifications
Certain
reclassifications have been made to the accompanying consolidated financial
statements in prior periods to conform to the current presentation.
Recently
Adopted Accounting Pronouncements
On
January 1, 2009, the LLC adopted the accounting pronouncement relating to
accounting for fair value measurements, which establishes a framework for
measuring fair value and enhances fair value measurement disclosure for
non-financial assets and liabilities. The adoption of this accounting
pronouncement for non-financial assets and liabilities did not have a
significant impact on the LLC’s consolidated financial statements.
On
January 1, 2009, the LLC adopted the accounting pronouncement that amended the
current accounting and disclosure requirements for derivative instruments. The
requirements were amended to enhance how: (a) an entity uses derivative
instruments; (b) derivative instruments and related hedged items are accounted
for; and (c) derivative instruments and related hedged items affect an entity’s
financial position, financial performance, and cash flows. The LLC was required
to provide such disclosures beginning with the quarter ended March 31,
2009.
During
the quarter ended June 30, 2009, the LLC adopted the accounting pronouncement
that provides additional guidance for estimating fair value in accordance with
the accounting standard for fair value measurements when the volume and level of
activity for the asset or liability have significantly decreased. This
pronouncement also provides guidance for identifying transactions that are not
orderly. This pronouncement was effective prospectively for all interim and
annual reporting periods ending after June 15, 2009. The adoption of this
accounting pronouncement did not have a significant impact on the LLC’s
consolidated financial statements.
During
the quarter ended June 30, 2009, the LLC adopted the accounting pronouncement
that amends the requirements for disclosures about fair value of financial
instruments, regarding the fair value of financial instruments for annual, as
well as interim, reporting periods. This pronouncement was effective
prospectively for all interim and annual reporting periods ending after June 15,
2009. The adoption of this accounting pronouncement did not have a significant
impact on the LLC’s consolidated financial statements.
8
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(2)
|
Summary
of Significant Accounting Policies -
continued
|
During
the quarter ended June 30, 2009, the LLC adopted the accounting pronouncement
regarding the general standards of accounting for, and disclosure of, events
that occur after the balance sheet date but before the financial statements are
issued. This pronouncement was effective prospectively for interim and annual
reporting periods ending after June 15, 2009. The adoption of this accounting
pronouncement did not have a significant impact on the LLC’s consolidated
financial statements.
During
the quarter ended September 30, 2009, the LLC adopted Accounting Standards
Codification 105, “Generally Accepted Accounting Principles,” which establishes
the Financial Accounting Standards Board Accounting Standards Codification (the
“Codification”), which supersedes all existing accounting standard documents and
will become the single source of authoritative non-governmental US
GAAP. All other accounting literature not included in the
Codification will be considered non-authoritative. This accounting
standard is effective for interim and annual periods ending after September 15,
2009. The LLC has conformed its consolidated financial statements and related
notes to the new Codification for the quarter ended September 30,
2009.
(3)
|
Net
Investment in Finance Leases
|
Net
investment in finance leases consisted of the following:
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
|
||||||||
Minimum
rents receivable
|
$ | 34,336,367 | $ | 41,504,866 | ||||
Estimated
residual values
|
37,201 | 37,201 | ||||||
Unearned
income
|
(9,769,919 | ) | (13,356,826 | ) | ||||
Net
investment in finance leases
|
24,603,649 | 28,185,241 | ||||||
Less: Current
portion of net
|
||||||||
investment
in finance leases
|
5,469,083 | 4,931,094 | ||||||
Net
investment in finance leases,
|
||||||||
less
current portion
|
$ | 19,134,566 | $ | 23,254,147 |
9
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(4)
|
Leased
Equipment at Cost
|
Leased
equipment at cost consisted of the following:
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Aircraft
|
$ | 48,453,180 | $ | 48,453,180 | ||||
Marine
vessel
|
40,285,787 | 40,285,787 | ||||||
Manufacturing,
telecommunications
|
||||||||
and
computer equipment
|
1,923,303 | 3,560,833 | ||||||
90,662,270 | 92,299,800 | |||||||
Less:
Accumulated depreciation
|
15,184,781 | 12,060,032 | ||||||
$ | 75,477,489 | $ | 80,239,768 |
Depreciation
expense was $1,335,668 and $4,055,754 for the three and nine months ended
September 30, 2009, respectively. Depreciation expense was $1,386,069 and
$4,238,770 for the three and nine months ended September 30, 2008,
respectively.
Manufacturing,
Telecommunications and Computer Equipment
On June
20, 2003, the LLC acquired a manufacturing device previously on lease (the “AMD
Lease”) to Spansion, LLC (“Spansion”). On August 1, 2003, the LLC
acquired semi-conductor memory testing equipment subject to two leases (the
“FASL Leases”) with Spansion. The FASL Leases were each renewed for a 15-month
period commencing on April 1, 2008.
On March
1, 2009, Spansion filed a petition for reorganization under Chapter 11 in United
States Bankruptcy Court. On March 12, 2009, Spansion rejected the
FASL Leases and affirmed the AMD Lease. On June 3, 2009, Spansion
returned the equipment subject to the FASL Leases, which has been classified on
the consolidated balance sheets as assets held for sale and has been recorded at
the lower of its carrying value or fair market value less estimated costs to
sell. Based on the Manager’s assessment of the equipment and
knowledge of the market for such equipment, the lease rejections are not
expected to have a material adverse effect on the LLC’s consolidated financial
statements.
Effective
July 1, 2009, the AMD Lease was extended on a month-to-month basis. On July 29,
2009, the equipment subject to the AMD Lease was sold for approximately $585,000
and the LLC recognized a gain of approximately $432,000.
For all
three Spansion leases, there is a residual interest sharing agreement with a
third-party broker that is payable when a minimum return on investment has been
attained. For the three and nine months ended September 30, 2009, an aggregate
amount of approximately $380,000 and $525,000, respectively, was distributed to
the third party or accrued in accordance with the terms of the residual interest
sharing agreement. For the three and nine months ended September 30, 2008, an
aggregate amount of approximately $161,000 and $594,000, respectively, was
distributed to the third party in accordance with the terms of the residual
interest sharing agreement.
10
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(4)
|
Leased
Equipment at Cost - continued
|
Aggregate
annual minimum future rents receivable from the LLC’s non-cancelable operating
leases consisted of the following at September 30, 2009:
For
the period October 1 to December 31, 2009
|
$ | 3,270,541 | ||
For
the year ending December 31, 2010
|
$ | 12,490,388 | ||
For
the year ending December 31, 2011
|
$ | 8,913,000 |
(5)
|
Investments
in Joint Ventures
|
The LLC
and one of its affiliates, ICON Income Fund Eight B, L.P., an entity also
managed and controlled by the Manager (“Fund Eight B”), formed a joint venture,
discussed below, for the purpose of acquiring and managing a leased
aircraft. The LLC and Fund Eight B have substantially identical
investment objectives and participate on the same terms and
conditions. Each of the LLC and Fund Eight B has a right of first
refusal to purchase the equipment, on a pro-rata basis, if the other member
desires to sell its interests in the equipment or joint venture.
ICON
Aircraft 126, LLC
During
February 2002, the LLC and 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, a Cayman Islands registered company that owns, through
an owner trust, an Airbus A340-313X MSN 126 (“Aircraft 126”). Aircraft 126 was
subject to a lease with Cathay Pacific Airways Limited (“Cathay”) at the time of
purchase, which was consummated during March 2002. The lease was initially
scheduled to expire in March 2006, but has been extended to July 1, 2011. The
LLC and Fund Eight B each have a 50% ownership interest in ICON
126.
Information
as to the results of operations of ICON 126 is summarized below:
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenue
|
$ | 1,592,143 | $ | 1,592,785 | $ | 4,776,433 | $ | 4,778,327 | ||||||||
Net
loss
|
$ | (27,452 | ) | $ | (102,997 | ) | $ | (108,810 | ) | $ | (4,204,698 | ) | ||||
LLC's
share of net loss
|
$ | (13,726 | ) | $ | (51,498 | ) | $ | (54,405 | ) | $ | (2,102,349 | ) |
Net loss in joint ventures for the nine
months ended September 30, 2008 was primarily due to the recognition of an
impairment loss of $3,900,000 by ICON 126. ICON 126 did not record a similar
impairment charge during the nine months ended September 30, 2009.
ICON
Global Crossing II, LLC
On
September 27, 2006, the LLC and ICON Income Fund Ten, LLC, an entity also
managed by the Manager (“Fund Ten”), formed ICON Global Crossing II, LLC
(“Global Crossing II”), with original ownership interests of approximately 17%
and 83%, respectively. The total capital contributions made to Global Crossing
II were approximately $12,044,000, of which the LLC’s share was approximately
$2,000,000.
11
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(5)
|
Investments
in Joint Ventures - continued
|
On
September 28, 2006, Global Crossing II purchased telecommunications equipment
for approximately $12,044,000. This equipment is subject to a 48-month lease
with Global Crossing Telecommunications, Inc. (“Global Crossing”) that commenced
on November 1, 2006. The Manager was paid an acquisition fee of $60,000 relating
to this transaction. On October 31, 2006, ICON Leasing Fund Eleven, LLC, an
entity also managed by the Manager (“Fund Eleven”), made a capital contribution
of approximately $1,841,000 to Global Crossing II. The contribution
changed the ownership interests for the LLC, Fund Ten and Fund Eleven at October
31, 2006 to 14.40%, 72.34% and 13.26%, respectively. The additional
contribution was used to purchase telecommunications equipment subject to a
48-month base lease term with Global Crossing that commenced on November 1,
2006.
Information
as to the results of operations of Global Crossing II is summarized
below:
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenue
|
$ | 980,952 | $ | 980,952 | $ | 2,942,856 | $ | 2,942,856 | ||||||||
Net
income
|
$ | 300,601 | $ | 300,210 | $ | 869,950 | $ | 873,347 | ||||||||
LLC's
share of net income
|
$ | 43,287 | $ | 43,230 | $ | 125,273 | $ | 125,762 |
(6)
|
Investment
in Unguaranteed Residual Values
|
On
December 31, 2003, the LLC entered into an agreement with Summit Asset
Management Limited to acquire a 90% interest in the unguaranteed residual values
of manufacturing and technology equipment valued at approximately $37,713,000
and on lease to various lessees located in the United Kingdom for approximately
$4,454,000. The LLC’s investment return is contingent upon the
residual value of the equipment after repayment of the debt. For the three
months ended September 30, 2009, the LLC did not receive any proceeds from the
sale of unguaranteed residual values. For the nine months ended September 30,
2009, the LLC received approximately $18,000 in proceeds from the sale of
unguaranteed residual values and recognized a net loss of approximately $32,000.
For the three and nine months ended September 30, 2008, the LLC received
approximately $101,000 and $608,000, respectively, in proceeds from the sale of
unguaranteed residual values and recognized a net gain of approximately $46,000
and $185,000, respectively.
(7)
|
Non-Recourse
Long-Term Debt
|
The
aggregate maturities of non-recourse long-term debt were as follows at September
30, 2009:
For
the period October 1 to December 31, 2009
|
$ | 4,283,445 | ||
For
the year ending December 31, 2010
|
15,262,908 | |||
For
the year ending December 31, 2011
|
36,374,188 | |||
For
the year ending December 31, 2012
|
5,400,000 | |||
For
the year ending December 31, 2013
|
5,400,000 | |||
$ | 66,720,541 |
As of
September 30, 2009 and December 31, 2008, the LLC had net debt financing costs
of $336,512 and $489,835, respectively. For the three and nine months
ended September 30, 2009, the LLC recognized amortization expense related to the
capitalized debt financing costs of $48,788 and $153,321, respectively. For the
three and nine months ended September 30, 2008, the LLC recognized amortization
expense related to the capitalized debt financing costs of $43,006 and $160,860,
respectively.
12
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(8)
|
Revolving
Line of Credit, Recourse
|
The LLC
and certain entities sponsored and organized by the Manager, Fund Eight B, Fund
Ten, Fund Eleven, ICON Leasing Fund Twelve, LLC (“Fund Twelve”) and ICON
Equipment and Corporate Infrastructure Fund Fourteen, L.P. (“Fund Fourteen” and,
together with the LLC, Fund Eight B, Fund Ten, Fund Eleven and Fund Twelve, the
“Borrowers”), are parties to a Commercial Loan Agreement, as amended (the “Loan
Agreement”), with California Bank & Trust (“CB&T”). The Loan Agreement
provides for a revolving line of credit of up to $30,000,000 pursuant to a
senior secured revolving loan facility (the “Facility”), which is secured by all
assets of the Borrowers not subject to a first priority lien, as defined in the
Loan Agreement. Each of the Borrowers is jointly and severally liable for all
amounts borrowed under the Facility. At September 30, 2009, no amounts were
accrued related to the LLC’s joint and several obligations under the Facility.
Amounts available under the Facility are subject to a borrowing base that is
determined, subject to certain limitations, on the present value of the future
receivables under certain lease agreements and loans in which the Borrowers have
a beneficial interest.
The
Facility expires on June 30, 2011 and the Borrowers may request a one year
extension to the revolving line of credit within 390 days of the then-current
expiration date, but CB&T has no obligation to extend. The interest rate for
general advances under the Facility is CB&T’s prime rate and the interest
rate on up to five separate advances that are permitted to be made under the
Facility is the rate at which U.S. dollar deposits can be acquired by CB&T
in the London Interbank Eurocurrency Market plus 2.5% per year, provided that
neither interest rate is permitted to be less than 4.0% per year. The interest
rate at September 30, 2009 was 4.0%. In addition, the Borrowers are obligated to
pay a quarterly commitment fee of 0.50% on unused commitments under the
Facility.
Aggregate
borrowings by all Borrowers under the Facility amounted to $7,625,000 at
September 30, 2009. The LLC had no borrowings outstanding under the Facility as
of such date. The balances of $365,000 and $7,260,000 were borrowed by Fund
Eight B and Fund Eleven, respectively. Subsequent to September 30, 2009, Fund
Eight B and Fund Eleven repaid $150,000 and $5,000,000, respectively, which
reduced Fund Eight B’s and Fund Eleven’s outstanding loan balances to $215,000
and $2,260,000, respectively.
Pursuant
to the Loan Agreement, the Borrowers are required to comply with certain
covenants. At September 30, 2009, the Borrowers were in compliance
with all covenants.
(9)
|
Transactions
with Related Parties
|
In
accordance with the terms of the LLC Agreement, the LLC paid the Manager (i)
management fees ranging from 1% to 7% based on a percentage of the rentals
recognized either directly by the LLC or through its joint ventures, and (ii)
acquisition fees, through the end of the operating period, of 3% of the purchase
price of the LLC’s investments. In addition, the Manager was
reimbursed for administrative expenses incurred in connection with the LLC’s
operations. The Manager also has a 1% interest in the LLC’s profits, losses,
cash distributions and liquidation proceeds.
The
Manager performs certain services relating to the management of the LLC’s
equipment leasing and financing activities. Such services include, but are not
limited to, the collection of lease payments from the lessees of the equipment,
re-leasing services in connection with equipment which is off-lease, inspections
of the equipment, liaising with and general supervision of lessees to ensure
that the equipment is being properly operated and maintained, monitoring
performance by the lessees of their obligations under the leases and the payment
of operating expenses.
13
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(9)
|
Transactions
with Related Parties - continued
|
Administrative
expense reimbursements are costs incurred by the Manager or its affiliates that
are necessary to the LLC’s operations. These costs include the Manager’s
and its affiliates’ legal, accounting, investor relations and operations
personnel, as well as professional fees and other costs that are charged to the
LLC based upon the percentage of time such personnel dedicate to the
LLC. Excluded are salaries and related costs, travel expenses and other
administrative costs incurred by individuals with a controlling interest in the
Manager.
Effective
April 1, 2008 and May 1, 2008, the Manager waived its rights to all future
administrative expense reimbursements and management fees, respectively. For the
three and nine months ended September 30, 2009, the Manager waived $83,168 and
$265,775 of administrative expense reimbursements, respectively, and $262,161
and $822,643 of management fees, respectively. For the three and nine months
ended September 30, 2008, the Manager waived $105,518 and $243,839 of
administrative expense reimbursements, respectively, and $414,506 and $737,536
of management fees, respectively.
Fees and
other expenses paid or accrued by the LLC to the Manager or its affiliates were
as follows:
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||||||
Entity
|
Capacity
|
Description
|
2009
|
2008
|
2009
|
2008
|
||||||||||||||
ICON
Capital Corp.
|
Manager
|
Management
fees (1)
|
$ | - | $ | - | $ | - | $ | 526,469 | ||||||||||
ICON
Capital Corp.
|
Manager
|
Administrative
expense reimbursements (1)
|
- | - | - | 149,844 | ||||||||||||||
$ | - | $ | - | $ | - | $ | 676,313 | |||||||||||||
(1)
Amount charged directly to operations.
|
(10)
|
Derivative
Financial Instruments
|
The LLC
may enter into derivative transactions for purposes of hedging specific
financial exposures, including movements in foreign currency exchange rates and
changes in interest rates of its non-recourse long-term debt. The LLC enters
into these instruments only for hedging underlying exposures. The LLC does not
hold or issue derivative financial instruments for purposes other than hedging,
except for warrants, which are not hedges. Certain derivatives may not meet the
established criteria to be designated as qualifying accounting hedges, even
though the LLC believes that these are effective economic hedges.
The LLC
accounts for derivative financial instruments in accordance with the accounting
pronouncements, which establish accounting and reporting standards for
derivative financial instruments. These accounting pronouncements require the
LLC to recognize all derivatives as either assets or liabilities on the
consolidated balance sheets and measure those instruments at fair value. The LLC
recognizes the fair value of all derivatives as either assets or liabilities on
the consolidated balance sheets and changes in the fair value of such
instruments are recognized immediately in earnings unless certain accounting
criteria established by the accounting pronouncements are met. These criteria
demonstrate that the derivative is expected to be highly effective at offsetting
changes in the fair value or expected cash flows of the underlying exposure at
both the inception of the hedging relationship and on an ongoing basis and
include an evaluation of the counterparty risk and the impact, if any, on the
effectiveness of the derivative. If these criteria are met, which the LLC must
document and assess at inception and on an ongoing basis, the LLC recognizes the
changes in fair value of such instruments in accumulated other comprehensive
income (loss) (“AOCI”), a component of equity on the consolidated balance
sheets. Changes in the fair value of the ineffective portion of all derivatives
are recognized immediately in earnings.
14
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(10)
|
Derivative
Financial Instruments -
continued
|
Interest
Rate Risk
The LLC’s
objectives in using interest rate derivatives are to add stability to interest
expense and to manage its exposure to interest rate movements of its variable
non-recourse debt. The LLC’s hedging strategy to accomplish this objective is to
match the projected future business cash flows with the underlying debt service.
Interest rate swaps designated as cash flow hedges involve the receipt of
floating-rate interest payments from a counterparty in exchange for the LLC
making fixed interest rate payments over the life of the agreements without
exchange of the underlying notional amount.
As of
September 30, 2009, the LLC had four floating-to-fixed interest rate swaps
relating to the three car and truck carrying vessels on bareboat charter
(“Wilhelmsen Vessels”) to Wilhelmsen Lines Shipowning AS (“Wilhelmsen”) and the
Samar Spirit, an Aframax product tanker (“Samar Spirit”), on lease to Teekay
Corporation (“Teekay”), designated as cash flow hedges with an aggregate
notional amount of $35,313,075. These interest rate swaps have
maturity dates ranging from July 25, 2011 to September 23, 2013.
For these
derivatives, the LLC reports the gain or loss from the effective portion of
changes in the fair value of derivatives designated and qualifying as cash flow
hedges in AOCI and such gain or loss is subsequently reclassified into earnings
in the period that the hedged forecasted transaction affects earnings and within
the same line item on the statement of operations as the impact of the hedged
transaction. During the nine months ended September 30, 2009, the LLC recorded
no hedge ineffectiveness in earnings. At September 30, 2009, total
unrealized loss recorded to AOCI related to the change in fair value of these
interest rate swaps was approximately $2,395,000.
During
the twelve months ending September 30, 2010, the LLC estimates that
approximately $1,501,000 will be transferred from AOCI to interest
expense.
The table
below presents the fair value of the LLC’s derivative financial instruments and
classification within the LLC’s consolidated balance sheet as of September 30,
2009:
Derivatives
designated as hedging instruments:
|
Liability
Derivative
|
||||
Balance Sheet
Location
|
Fair Value
|
||||
Interest
rate swaps
|
Interest
rate swap contracts
|
$ | 2,477,787 |
15
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(10)
|
Derivative
Financial Instruments -
continued
|
The
tables below present the effect of the LLC’s derivative financial instruments
designated as cash flow hedging instruments on the consolidated statements of
operations for the three and nine months ended September 30, 2009:
Three
months ended September 30, 2009
|
||||||||||||||
Derivatives
|
Amount
of Gain (Loss) Recognized in AOCI on Derivative (Effective
Portion)
|
Location
of Gain (Loss) Reclassified from AOCI into Income (Effective
Portion)
|
Amount
of Gain (Loss) Reclassified from AOCI into Income (Effective
Portion)
|
Location
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
Gain
(Loss) Recognized in Income on Derivative (Ineffective Portion and Amount
Excluded from Effectiveness Testing)
|
|||||||||
Interest
rate swaps
|
$ | (356,830 | ) |
Interest
expense
|
$ | (470,919 | ) |
Gain
(loss) on financial instruments
|
$ | - |
Nine
months ended September 30, 2009
|
||||||||||||||
Derivatives
|
Amount
of Gain (Loss) Recognized in AOCI on Derivative (Effective
Portion)
|
Location
of Gain (Loss) Reclassified from AOCI into Income (Effective
Portion)
|
Amount
of Gain (Loss) Reclassified from AOCI into Income (Effective
Portion)
|
Location
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
Gain
(Loss) Recognized in Income on Derivative (Ineffective Portion and Amount
Excluded from Effectiveness Testing)
|
|||||||||
Interest
rate swaps
|
$ | (353,370 | ) |
Interest
expense
|
$ | (1,387,186 | ) |
Gain
(loss) on financial instruments
|
$ | - |
Derivative
Risks
The LLC manages exposure to possible
defaults on derivative financial instruments by monitoring the concentration of
risk that the LLC has with any individual bank and through the use of minimum
credit quality standards for all counterparties. The LLC does not require
collateral or other security in relation to derivative financial instruments.
Since it is the LLC’s policy to enter into derivative contracts with banks of
internationally acknowledged standing only, the LLC considers the counterparty
risk to be remote.
As of
September 30, 2009, the fair value of the derivatives in a liability position
was $2,477,787. In the event that the LLC would be required to settle its
obligations under the agreements as of September 30, 2009, the termination
value would be $2,595,947.
16
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(11)
|
Fair
Value of Financial
Instruments
|
The LLC
accounts for the fair value of financial instruments in accordance with the
accounting pronouncements, which require assets and liabilities carried at fair
value to be classified and disclosed in one of the following three
categories:
·
|
Level
1: Quoted market prices available in active markets for identical assets
or liabilities as of the reporting
date.
|
·
|
Level
2: Pricing inputs other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the
reporting date.
|
·
|
Level
3: Pricing inputs that are generally unobservable and cannot be
corroborated by market data.
|
Financial
assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement. The Manager’s
assessment, on the LLC’s behalf, of the significance of a particular input to
the fair value measurement requires judgment and may affect the valuation of the
assets and liabilities being measured and their placement within the fair value
hierarchy.
The
following table summarizes the valuation of the LLC’s material financial assets
and liabilities measured at fair value on a recurring basis as of September 30,
2009:
Level 1 (1)
|
Level 2 (2)
|
Level 3 (3)
|
Total
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Derivative
liabilities
|
$ | - | $ | 2,477,787 | $ | - | $ | 2,477,787 | ||||||||
(1)
Quoted prices in active markets for identical assets or
liabilities.
|
||||||||||||||||
(2)
Observable inputs other than quoted prices in active markets for identical
assets and liabilities.
|
||||||||||||||||
(3)
No observable pricing inputs in the market.
|
The LLC’s
derivative contracts, including interest rate swaps, are valued using models
based on readily observable market parameters for all substantial terms of the
LLC’s derivative contracts and are classified within Level 2. As permitted by
the accounting pronouncements, the LLC uses market prices and pricing models for
fair value measurements of its derivative instruments. The fair value of
the derivative liabilities was recorded in derivative instruments within the
consolidated balance sheets.
Fair
value information with respect to the LLC’s leased assets and liabilities is not
separately provided since (i) the current accounting pronouncements do not
require fair value disclosures of lease arrangements and (ii) the carrying value
of financial assets, other than lease-related investments, and the recorded
value of recourse debt approximate fair value due to their short-term maturities
and variable interest rates. The estimated fair value of the LLC’s
non-recourse long-term debt was based on the discounted value of future cash
flows expected to be received from the loan based on terms consistent with the
range of the LLC’s internal pricing strategies for transactions of this
type.
17
ICON
Income Fund Nine, LLC
(A
Delaware Limited Liability Company)
Notes to
Consolidated Financial Statements
September
30, 2009
(unaudited)
(11)
|
Fair
Value of Financial Instruments -
continued
|
September 30, 2009 | ||||||||
Carrying Amount
|
Fair Value
|
|||||||
Fixed
rate non-recourse long-term debt
|
$ | 31,407,463 | $ | 33,167,750 |
(12)
|
Commitments
and Contingencies
|
The LLC
has entered into certain residual sharing and remarketing agreements with
various third parties. In connection with these agreements, residual
proceeds received in excess of specific amounts may be shared with these third
parties based on specific formulas. The obligation related to these agreements
is recorded at fair value.
ICON
Aircraft 128, LLC, a wholly-owned subsidiary of the LLC (“ICON 128”), is a party
to a residual sharing agreement with Airfleet Credit Corporation (“Airfleet”)
and HXO Leasing Limited. Pursuant to the terms of the Airfleet
Residual Sharing Agreement, all proceeds received in connection with the sale or
lease extension of the Airbus A340-313X MSN 128 (“Aircraft 128”) on lease to
Cathay in excess of $4,250,000 of the loan balance associated with the aircraft
will be allocated 55% to ICON 128 and 45% to Airfleet.
On
February 23, 2005, ICON Cash Flow Partners L.P. Seven, an affiliate of the LLC
(“L.P. Seven”), assigned to the LLC 3.02% of its rights to the profits, losses,
and cash flows from its limited partnership interest in an entity that owns a
100% interest in a mobile offshore drilling rig. L.P. Seven assigned
the rights to the LLC as repayment of its $755,000 outstanding debt obligation
pursuant to a contribution agreement that the LLC entered into with some of its
affiliates in connection with the line of credit agreement the LLC had with
Comerica Bank. This assignment increased the LLC’s rights to the
profits, losses and cash flows from L.P. Seven’s limited partnership interest
from 2.60%, which was assigned to the LLC in November 2004 as repayment of L.P.
Seven’s $650,000 outstanding debt obligation, to 5.62%. The repayment
amount represented the Manager’s estimated fair value of L.P. Seven's interest
in the mobile offshore drilling rig at February 23, 2005. The fair value of this
interest was determined using an appraisal and cash flow
analysis. During the year ended December 31, 2006, the LLC received
approximately $253,000 in cash distributions related to this
assignment.
At the
time the LLC acquires or divests of its interest in an equipment lease or other
financing transaction, the LLC may, under very limited circumstances, agree to
indemnify the seller or buyer for specific contingent liabilities. The Manager
believes that any liability of the LLC that may arise as a result of any such
indemnification obligation will not have a material adverse effect on the
consolidated financial condition of the LLC taken as a whole.
The
following is a discussion of our current financial position and results of
operations. This discussion should be read together with our unaudited
consolidated financial statements and related notes included elsewhere in this
Quarterly Report on Form 10-Q and the audited consolidated financial statements
and related notes included in our Annual Report on Form 10-K for the year ended
December 31, 2008. This discussion should also be read in conjunction
with the disclosures below regarding “Forward-Looking Statements” and the “Risk
Factors” set forth in Item 1A of Part II of this Quarterly Report on Form
10-Q.
As used
in this Quarterly Report on Form 10-Q, references to “we,” “us,” “our” or
similar terms include ICON Income Fund Nine, LLC and its consolidated
subsidiaries.
Forward-Looking
Statements
Certain
statements within this Quarterly Report on Form 10-Q may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (“PSLRA”). These statements are being
made pursuant to the PSLRA, with the intention of obtaining the benefits of the
“safe harbor” provisions of the PSLRA and, other than as required by law, we
assume no obligation to update or supplement such
statements. Forward-looking statements are those that do not relate
solely to historical fact. They include, but are not limited to, any statement
that may predict, forecast, indicate or imply future results, performance,
achievements or events. You can identify these statements by the use of words
such as “may,” “will,” “could,” “anticipate,” “believe,” “estimate,” “expect,”
“continue,” “further,” “plan,” “seek,” “intend,” “predict” or “project” and
variations of these words or comparable words or phrases of similar meaning.
These forward-looking statements reflect our current beliefs and expectations
with respect to future events and are based on assumptions and are subject to
risks and uncertainties and other factors outside our control that may cause
actual results to differ materially from those projected. We undertake no
obligation to update publicly or review any forward-looking statement, whether
as a result of new information, future developments or otherwise.
Overview
We
operate as an equipment leasing program in which the capital our members
invested was pooled together to make investments, pay fees and establish a small
reserve. We primarily acquired equipment subject to lease, purchased equipment
and leased it to third-party end users or financed equipment for third parties,
provided equipment and other financing and, to a lesser degree, acquired
ownership rights to items of leased equipment at lease expiration.
Our
Manager manages and controls our business affairs, including, but not limited
to, our equipment leases and other financing transactions, under the terms of
our LLC Agreement. We entered our liquidation period on May 1, 2008. During our
liquidation period, we are selling and will continue to sell our assets in the
ordinary course of business. As we sell our assets, both rental income and
finance income will decrease over time, as will expenses related to our assets,
such as depreciation and amortization expense. Additionally, interest expense
should decrease as we reach the expiration of leases that were financed and the
debt is repaid to the lender. As leased equipment is sold, we will incur gains
or losses on these sales. We will continue to liquidate our assets during this
period and we expect to see a reduction in revenue and expenses
accordingly.
Lease
and Other Significant Transactions
Wildwood Manufacturing
Equipment
On
January 21, 2009, we filed a lawsuit in the U.S. District Court for the Southern
District of New York against Wildwood Industries, Inc. (“Wildwood”) and its
owners who guaranteed Wildwood’s obligations to us. Our claims are
for breaches of the leases and guarantees for Wildwood’s failure to pay rents.
On March 5, 2009, an involuntary petition under Chapter 11 of the United States
Bankruptcy Code was filed against Wildwood by three of Wildwood’s creditors in
United States Bankruptcy Court. On September 18, 2009, the involuntary petition
under Chapter 11 of the United States Bankruptcy Code was converted to a Chapter
7 case by the United States Bankruptcy Court Trustee. We do not expect to
receive any further recovery from Wildwood.
Spansion Manufacturing
Equipment
On June
20, 2003 and August 1, 2003, we acquired the equipment subject to the AMD Lease
and the FASL Leases, respectively. The FASL Leases were each renewed for a
15-month period commencing on April 1, 2008.
On March
1, 2009, Spansion filed a petition for reorganization under Chapter 11 in United
States Bankruptcy Court. On March 12, 2009, Spansion rejected the
FASL Leases and affirmed the AMD Lease. On June 3, 2009, Spansion
returned the equipment subject to the FASL Leases, which has been classified on
our consolidated balance sheets as assets held for sale and has been recorded at
the lower of its carrying value or fair market value less estimated costs to
sell. Based on our Manager’s assessment of the equipment and
knowledge of the market for such equipment, the lease rejections are not
expected to have a material adverse effect on our consolidated financial
statements.
Effective
July 1, 2009, the AMD Lease was extended on a month-to-month basis. On July 29,
2009, the equipment subject to the AMD Lease was sold for approximately $585,000
and we recognized a gain of approximately $432,000.
Other
Recent Accounting Pronouncements
There are
no recent accounting pronouncements that are expected to have a significant
impact on our consolidated financial statements as of September 30, 2009. See
Note 2 to our consolidated financial statements for a discussion of accounting
pronouncements that we have recently adopted.
Results
of Operations for the Three Months Ended September 30, 2009 (the “2009 Quarter”)
and 2008 (the “2008 Quarter”)
Revenue
for the 2009 Quarter and the 2008 Quarter are summarized as
follows:
Three
Months Ended
|
||||||||||||
September 30,
|
||||||||||||
2009
|
2008
|
Change
|
||||||||||
Rental
income
|
$ | 3,284,630 | $ | 3,816,454 | $ | (531,824 | ) | |||||
Finance
income
|
1,138,811 | 1,410,454 | (271,643 | ) | ||||||||
Income
(loss) from investments in joint ventures
|
29,561 | (8,269 | ) | 37,830 | ||||||||
Net
gain on sales of equipment and unguaranteed residual
values
|
522,113 | 46,439 | 475,674 | |||||||||
Interest
and other (loss) income
|
(8,075 | ) | (86,180 | ) | 78,105 | |||||||
Total
revenue
|
$ | 4,967,040 | $ | 5,178,898 | $ | (211,858 | ) |
Total
revenue for the 2009 Quarter decreased $211,858, or 4.1%, as compared to the
2008 Quarter. The decrease in revenue was primarily due to the decrease in
rental income and finance income. The decrease in rental income was primarily
attributable to the sale of digital mini-labs previously on lease to Rite Aid
Corporation (“Rite Aid”), the sale of medical equipment previously on lease to
Hudson Crossing Surgery Center (“Hudson Crossing”) and the sale of the equipment
subject to the AMD Lease. In addition, no rental income was recognized from the
Wildwood lease and the FASL Leases following the impairment of those assets in
December 2008 and March 2009, respectively, after which we ceased recognizing
revenue. The decrease in finance income was due to the normal lifecycle of our
bareboat charters with Wilhelmsen, which experience scheduled, declining revenue
over the course of the bareboat charters. The decrease in total revenue is
offset by the net gain on sales of equipment and unguaranteed residual values
composed primarily of the gain on sale of the equipment subject to the AMD Lease
in July of 2009. The decrease in total revenue was also offset by a reduction in
the loss recognized on our foreign currency transactions. During the 2008
Quarter, we recognized a loss on foreign currency transactions of approximately
$103,000 compared to a gain of approximately $8,000 during the 2009
Quarter.
Expenses
for the 2009 Quarter and the 2008 Quarter are summarized as
follows:
Three
Months Ended
|
||||||||||||
September 30,
|
||||||||||||
2009
|
2008
|
Change
|
||||||||||
General
and administrative
|
$ | 136,338 | $ | 244,049 | $ | (107,711 | ) | |||||
Interest
|
1,250,488 | 1,528,193 | (277,705 | ) | ||||||||
Depreciation
and amortization
|
1,344,756 | 1,418,008 | (73,252 | ) | ||||||||
Total
expenses
|
$ | 2,731,582 | $ | 3,190,250 | $ | (458,668 | ) |
Total
expenses for the 2009 Quarter decreased $458,668, or 14.4%, as compared to the
2008 Quarter. The decrease in interest expense was primarily due to a reduction
in the principal balance of debt outstanding related to our leases with Cathay
in the amount of approximately $72,000 and our bareboat charters with Teekay and
Wilhelmsen in the amount of approximately $88,000 and $116,000, respectively.
The decrease in general and administrative expense was primarily due to the
impairment of the Wildwood asset and the equipment subject to the FASL Leases in
December 2008 and March 2009, respectively. The decrease in depreciation and
amortization expense was primarily due to the sale of digital mini-labs
previously on lease to Rite Aid, the sale of medical equipment previously on
lease to Hudson Crossing and the sale of the equipment subject to the AMD
Lease.
Net
Income
As a
result of the foregoing factors, net income for the 2009 Quarter and the 2008
Quarter was $2,235,458 and $1,988,648, respectively. Net income per weighted
average additional share of limited liability company interests for the 2009
Quarter and the 2008 Quarter was $22.59 and $20.10, respectively.
Results
of Operations for the Nine Months Ended September 30, 2009 (the “2009 Period”)
and 2008 (the “2008 Period”)
Revenue
for the 2009 Period and the 2008 Period are summarized as follows:
Nine
Months Ended
|
||||||||||||
September 30,
|
||||||||||||
2009
|
2008
|
Change
|
||||||||||
Rental
income
|
$ | 10,183,333 | $ | 12,224,104 | $ | (2,040,771 | ) | |||||
Finance
income
|
3,586,908 | 4,333,654 | (746,746 | ) | ||||||||
Income
(loss) from investments in joint ventures
|
70,843 | (1,973,774 | ) | 2,044,617 | ||||||||
Net
gain on sales of equipment and unguaranteed residual
values
|
539,437 | 498,293 | 41,144 | |||||||||
Interest
and other income
|
25,259 | 53,057 | (27,798 | ) | ||||||||
Total
revenue
|
$ | 14,405,780 | $ | 15,135,334 | $ | (729,554 | ) |
Total
revenue for the 2009 Period decreased $729,554, or 4.8%, as compared to the 2008
Period. The
decrease in rental income during the 2009 Period was primarily due to the sale
of railcars (the “Railcars”) owned by our wholly-owned subsidiary, ICON Rail I,
LLC, the sale of digital mini-labs previously on lease to Rite Aid, the sale of
medical equipment previously on lease to Hudson Crossing and the sale of the
equipment subject to the AMD Lease. We reclassified the lease with Short Hills
Surgical Center (“Short Hills”) from an operating lease to a direct finance
lease in 2008. As such, no rental income was recognized during the 2009 Period
for that lease. In addition, no rental income was recognized from the Wildwood
lease and the FASL Leases following the impairment of those assets in December
2008 and March 2009, respectively, after which we ceased recognizing revenue.
The decrease in finance income was primarily due to the normal lifecycle of our
bareboat charters with Wilhelmsen, which experience scheduled, declining revenue
over the course of the bareboat charters. The decrease in revenue was offset by
an approximately $1,950,000 decrease in the loss from investment in joint
ventures from our 50% ownership interest in ICON 126, which recognized an
impairment loss of $3,900,000 in the 2008 Period. ICON 126 did not record a
similar impairment charge in the 2009 Period.
Expenses
for the 2009 Period and the 2008 Period are summarized as follows:
Nine
Months Ended
|
||||||||||||
September 30,
|
||||||||||||
2009
|
2008
|
Change
|
||||||||||
Management
fees - Manager
|
$ | - | $ | 526,469 | $ | (526,469 | ) | |||||
Administrative
expense reimbursements - Manager
|
- | 149,844 | (149,844 | ) | ||||||||
General
and administrative
|
1,306,719 | 1,366,544 | (59,825 | ) | ||||||||
Interest
|
3,924,033 | 4,767,277 | (843,244 | ) | ||||||||
Depreciation
and amortization
|
4,072,795 | 4,338,548 | (265,753 | ) | ||||||||
Impairment
loss
|
- | 3,866,551 | (3,866,551 | ) | ||||||||
Total
expenses
|
$ | 9,303,547 | $ | 15,015,233 | $ | (5,711,686 | ) |
Total
expenses for the 2009 Period decreased $5,711,686, or 38.0%, as compared to the
2008 Period. The decrease in total expenses was primarily attributable to the
impairment charge of approximately $3,900,000 recognized by ICON 128 in the 2008
Period. We did not record a similar impairment charge in the 2009 Period. The
decrease in interest expense was due to a reduction in the principal balance of
debt outstanding related to our leases with Cathay and our bareboat charters
with Teekay and Wilhelmsen. The decrease in both management fees and
administrative expense reimbursements-Manager was due to our Manager’s decision
to waive all future administrative expense reimbursements and management fees
effective April 1, 2008 and May 1, 2008, respectively, following the
commencement of our liquidation period. The decrease in depreciation and
amortization expense was due to the sale of digital mini-labs previously on
lease to Rite Aid, the sale of medical equipment previously on lease to Hudson
Crossing and the sale of the equipment subject to the AMD Lease. In addition, no
depreciation expense was recognized on the equipment subject to the Wildwood
lease and the FASL Leases following the impairment of those assets in December
2008 and March 2009, respectively.
Net
Income
As a
result of the foregoing factors, the net income for the 2009 Period and the 2008
Period was $5,102,233 and $120,101, respectively. The net income per weighted
average additional share of limited liability company interests for the 2009
Period and the 2008 Period was $51.57 and $1.21, respectively.
Financial
Condition
This
section discusses the major balance sheet variances at September 30, 2009,
compared to December 31, 2008.
Total
Assets
Total
assets decreased $8,258,123 from $114,231,144 at December 31, 2008 to
$105,973,021 at September 30, 2009. The decrease was primarily due to the
reduction in our net investment in finance leases through collections in the
ordinary course of business and depreciation of our leased
equipment.
Current Assets
Current
assets increased $1,124,102, from $6,021,430 at December 31, 2008 to $7,145,532
at September 30, 2009. This increase was primarily due to Wilhelmsen charter
payments received during the 2009 Period in excess of the corresponding
non-recourse debt payments due and paid. The increase in cash was also due to
the proceeds received in January 2009 and July 2009 from the sale of medical
equipment on lease to Hudson Crossing and the sale of the equipment subject to
the AMD Lease, respectively. Also, during the 2009 Period, we reclassified the
equipment returned by Spansion from an operating lease to assets held for sale.
The increase in current assets was offset by distributions paid to our Manager
and additional members during the 2009 Period.
Total
Liabilities
Total
liabilities decreased $12,374,073, from $82,447,892 at December 31, 2008 to
$70,073,819 at September 30, 2009. The decrease was primarily due to the
scheduled repayments of our non-recourse debt in the ordinary course of
business, a decrease in the fair value of our interest rate swap contracts
related to the debt associated with the Samar Spirit and the Wilhelmsen Vessels,
as well as a decrease in deferred revenue resulting from the difference in
timing between cash receipts and revenue recognition.
Current
Liabilities
Current
liabilities decreased $1,438,031, from $20,010,794 at December 31, 2008 to
$18,572,763 at September 30, 2009. The decrease was primarily due to a decrease
in the fair value of our interest rate swap contracts related to the debt
associated with the Samar Spirit and the Wilhelmsen Vessels, as well as a
decrease in deferred revenue due to the difference in timing between cash
receipts and revenue recognition.
Members’
Equity
Members’ equity increased $4,115,950,
from $31,783,252 at December 31, 2008 to $35,899,202 at September 30, 2009. The
increase was due to the results of our operations and the change in valuation of
our interest rate swap contracts partially offset by distributions to our
members.
Liquidity
and Capital Resources
Cash Flow
Summary
At
September 30, 2009 and December 31, 2008, we had cash and cash equivalents of
$1,176,504 and $779,544, respectively. During our operating period, our main
sources of cash were proceeds from sales of equipment as well as from
collections on non-leveraged operating and direct finance leases. These have
continued to be our main sources of cash during our liquidation period. During
our operating period, which ended on April 30, 2008, our main use of cash was
principally for distributions to our members, which we anticipate will continue
during our liquidation period.
Operating
Activities
Sources
of Cash
Sources
of cash from operating activities increased $349,975, from $1,018,168 in the
2008 Period to $1,368,143 in the 2009 Period. The increase was primarily due to
our Manager’s decision to waive management fees and administrative expense
reimbursements following the commencement of our liquidation
period.
Our net
cash provided by operating activities in the 2008 Period was $1,018,168,
primarily from the collection of finance lease receivables relating to the
Wildwood and Spansion leases as well as from operating lease receivables related
to the Short Hills, Hudson Crossing and Rite Aid leases.
Investing
Activities
Sources
of Cash
Sources
of cash from investing activities decreased $122,817, from $1,171,733 in the
2008 Period to $1,048,916 in the 2009 Period. The decrease was primarily due to
a reduction in proceeds from sales of equipment and distributions received from
our joint ventures in excess of profits. During the 2009 Period, we received
proceeds from sales of equipment of approximately $754,000, which consisted of
proceeds received from the sale of our investments in certain unguaranteed
residual values of approximately $18,000, the sale of medical equipment on lease
to Hudson Crossing for $152,000 and the sale of the equipment subject to the AMD
Lease for approximately $585,000. During the 2009 Period, we received
approximately $295,000 in distributions from joint ventures in excess of
profits.
Our
primary source of cash from investing activities in the 2008 Period was the net
proceeds from the sales of equipment of approximately $223,000 from the sale of
the Railcars, and approximately $608,000 on the sale of investments in
unguaranteed residual values. We also received distributions representing the
return of capital from joint ventures of approximately $341,000.
Uses
of Cash
There
have been no new investment activities during the 2008 Period and the 2009
Period, as we are in our liquidation period.
Financing
Activities
Uses
of Cash
Uses of
cash in financing activities decreased $4,219,965, from $6,240,064 in the 2008
Period to $2,020,099 in the 2009 Period. The decrease was due to cash
distributions of $2,020,099 paid to our members during the 2009 Period as
compared to cash distributions of $6,240,064 paid to our members during the 2008
Period.
Sources of
Liquidity
We have
non-recourse long-term debt obligations consisting of notes payable in which the
lender has a security interest in our equipment and an assignment of the rental
payments under the lease. In such cases, the lender is being paid directly by
the lessee. The outstanding balance of our non-recourse long-term debt was
$66,720,541 and $77,448,699 at September 30, 2009 and December 31, 2008,
respectively. Our revolving line of credit had $22,375,000 available
as of September 30, 2009 for additional working capital. Our existing
leases have funded, and we anticipate will continue to fund, these
obligations.
During
our liquidation period, our primary use of cash has been, and we expect will
continue to be, distributions to our members. We, at our Manager’s
discretion, paid monthly distributions to each of our additional members
beginning the first month after each such member was admitted through the end of
our operating period, which was on April 30, 2008. During the liquidation
period, we plan to make distributions in accordance with the terms of our LLC
Agreement. We expect that distributions made during our liquidation period will
vary, depending on the timing of the sale of our assets, and our receipt of
rental and other income from our investments. We paid distributions to
additional members and our Manager of $1,999,900 and $20,199, respectively, for
the 2009 Period.
Our
Manager believes that the cash we currently have available, the cash being
generated from our leases and the proceeds from equipment and asset sales will
be sufficient to continue our operations into the foreseeable future. However,
our ability to generate cash in the future is subject to general economic,
financial, competitive, regulatory and other factors that affect us and our
lessees’ businesses that are beyond our control.
There are
no material changes to the disclosure related to these items since the filing of
our Annual Report on Form 10-K for the year ended December 31,
2008.
Evaluation of disclosure controls
and procedures
In
connection with the preparation of this Quarterly Report on Form 10-Q for the
three months ended September 30, 2009, as well as the financial statements for
our Manager, our Manager carried out an evaluation, under the supervision and
with the participation of the management of our Manager, including its Co-Chief
Executive Officers and the Chief Financial Officer, of the effectiveness of the
design and operation of our Manager’s disclosure controls and procedures as of
the end of the period covered by this Report pursuant to the Securities Exchange
Act of 1934. Based on the foregoing evaluation, the Co-Chief Executive Officers
and the Chief Financial Officer concluded that our Manager’s disclosure controls
and procedures were effective.
In
designing and evaluating our Manager’s disclosure controls and procedures, our
Manager recognized that disclosure controls and procedures, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the disclosure controls and procedures are met. Our
Manager’s disclosure controls and procedures have been designed to meet
reasonable assurance standards. Disclosure controls and procedures cannot detect
or prevent all error and fraud. Some inherent limitations in disclosure controls
and procedures include costs of implementation, faulty decision-making, simple
error and mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the controls. The design of any system of controls is based, in
part, upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all anticipated and unanticipated future conditions. Over time, controls
may become inadequate because of changes in conditions, or the degree of
compliance with established policies or procedures.
Evaluation
of internal control over financial reporting
There
have been no changes in our internal control over financial reporting during the
three months ended September 30, 2009 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
In the
ordinary course of conducting our business, there may be certain claims, suits
and complaints filed against us. In the opinion of management, the
outcome of such matters, if any, will not have a material impact on our
consolidated financial position or results of operations. We are not
aware of any material legal proceedings that are currently pending against us or
against any of our assets.
There
have been no material changes from the risk factors disclosed in “Item 1A. Risk
Factors” of our Annual Report on Form 10-K for the year ended December 31,
2008.
There
were no shares of limited liability company interests sold or redeemed during
the three months ended September 30, 2009.
Not
applicable.
No
matters were submitted to a vote of security holders during the three months
ended September 30, 2009.
Not
applicable.
3.1
|
Certificate
of Limited Liability Company of Registrant (Incorporated by reference
to Exhibit 4.3 to Pre-Effective Amendment No. 1 to Registrant’s
Registration Statement on Form S-1 filed with the SEC on October 12, 2001
(File No. 333-67638)).
|
4.1
|
Amended
and Restated Operating Agreement of Registrant (Incorporated by
reference to Exhibit 4.1 to Pre-Effective Amendment No. 2 to Registrant’s
Registration Statement on Form S-1 filed with the SEC on November 20, 2001
(File No. 333-67638)).
|
4.2
|
Amendment
to the Registrant’s Amended and Restated Operating Agreement (Incorporated
by reference to Exhibit 4.1.1 to Post-Effective Amendment No.1 to
Registrant’s Registration Statement on Form S-1 filed with the SEC on
August 19, 2002 (File No. 333-67638)).
|
10.1
|
Commercial
Loan Agreement, by and between California Bank & Trust, ICON Income
Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten,
LLC and ICON Leasing Fund Eleven, LLC, dated August 31, 2005 (Incorporated
by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K
dated August 31, 2005).
|
10.2
|
Loan
Modification Agreement, by and between California Bank & Trust and
ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON
Income Fund Ten, LLC and ICON Leasing Fund Eleven, LLC, dated December 26,
2006 (Incorporated by reference to Exhibit 10.1 to Registrant’s Current
Report on Form 8-K dated December 26, 2006).
|
10.3
|
Loan
Modification Agreement, by and between California Bank & Trust and
ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON
Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC, and ICON Income Fund
Twelve, LLC, dated June 20, 2007.
|
10.4 |
Third
Loan Modification Agreement, by and between California Bank &
Trust, ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC,
ICON Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC and ICON Leasing
Fund Twelve, LLC, dated as of May 1, 2008 (Incorporated by reference to
Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2008, filed May 20,
2008).
|
10.5 |
Fourth
Loan Modification Agreement, by and between California Bank & Trust
and ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income
Fund Ten, LLC, ICON Leasing Fund Eleven, LLC, ICON Leasing Fund Twelve,
LLC and ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.,
dated August 12, 2009 (Incorporated by reference to Exhibit 10.4 to
Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2009, filed August 13, 2009).
|
31.1
|
Rule
13a-14(a)/15d-14(a). Certification of Co-Chief Executive
Officer.
|
31.2
|
Rule
13a-14(a)/15d-14(a). Certification of Co-Chief Executive
Officer.
|
31.3
|
Rule
13a-14(a)/15d-14(a). Certification of Chief Financial
Officer.
|
32.1
|
Certification
of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.2
|
Certification
of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.3
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacity and on the dates indicated.
ICON
Income Fund Nine, LLC
(Registrant)
By: ICON
Capital Corp.
(Manager
of the Registrant)
November
6, 2009
By: /s/ Mark Gatto
Mark
Gatto
Co-Chief
Executive Officer and Co-President
(Co-Principal
Executive Officer)
November
6, 2009
By: /s/ Michael A. Reisner
Michael
A. Reisner
Co-Chief
Executive Officer and Co-President
(Co-Principal
Executive Officer)
November
6, 2009
By: /s/ Anthony J. Branca
Anthony
J. Branca
Chief
Financial Officer
(Principal
Accounting and Financial Officer)
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