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EX-31.3 - CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - ICON Equipment & Corporate Infrastructure Fund Fourteen, L.P.ex31-3.htm
EX-32.2 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - ICON Equipment & Corporate Infrastructure Fund Fourteen, L.P.ex32-2.htm
EX-31.2 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - ICON Equipment & Corporate Infrastructure Fund Fourteen, L.P.ex31-2.htm
EX-31.1 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - ICON Equipment & Corporate Infrastructure Fund Fourteen, L.P.ex31-1.htm
EX-32.1 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - ICON Equipment & Corporate Infrastructure Fund Fourteen, L.P.ex32-1.htm
EX-32.3 - CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - ICON Equipment & Corporate Infrastructure Fund Fourteen, L.P.ex32-3.htm
 



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
March 31, 2010
 
 
or
[  ]         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_
000-53919
 

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(Exact name of registrant as specified in its charter)

Delaware
26-3215092
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

100 Fifth Avenue, 4th Floor, New York, New York
10011
(Address of principal executive offices)
(Zip code)

(212) 418-4700
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [x]   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 a 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 limited partnership interests of the registrant on May 10, 2010 is 114,399.
 
 


 
Table of Contents
   
Page
     
 
     
 
     
1
     
2
     
3
     
4
     
5
     
15
     
21
     
21
     
 
     
 
22
     
 
22
     
22
     
22
     
22
     
 
22
     
 
23
     
 
24
 




 
(A Delaware Limited Partnership)
 
Consolidated Balance Sheets
 
   
Assets
 
   
   
March 31,
       
   
2010
   
December 31,
 
   
(unaudited)
   
2009
 
 Cash and cash equivalents
  $ 36,423,766     $ 27,074,324  
 Net investment in finance lease
    4,304,684       -  
 Leased equipment at cost (less accumulated depreciation of
               
 $1,345,561 and $649,453, respectively)
    17,449,711       13,530,536  
 Note receivable
    9,857,589       -  
 Investments in joint ventures
    17,483,193       17,742,829  
 Deferred charges, net
    1,154,085       1,186,369  
 Other assets, net
    756,537       33,006  
                 
 Total Assets
  $ 87,429,565     $ 59,567,064  
                 
Liabilities and Partners' Equity
 
                 
 Liabilities
               
 Deferred revenue
  $ 731,382     $ 227,161  
 Due to General Partner and affiliates
    924,387       566,964  
 Accrued expenses and other liabilities
    1,052,295       157,889  
                 
 Total Liabilities
    2,708,064       952,014  
                 
                 
 Commitments and contingencies (Note 10)
               
                 
 Partners' (Deficit) Equity
               
Limited Partners
    84,761,809       58,640,528  
General Partner
    (40,308 )     (25,478 )
                 
 Total Partners' Equity
    84,721,501       58,615,050  
                 
 Total Liabilities and Partners' Equity
  $ 87,429,565     $ 59,567,064  


See accompanying notes to consolidated financial statements.

 
(A Delaware Limited Partnership)
 
Consolidated Statement of Operations
 
(unaudited)
 
   
   
   
   
Three Months Ended
 
   
March 31, 2010
 
       
 Revenue:
     
 Rental income
  $ 1,075,749  
 Finance income
    64,381  
 Income from investments in joint ventures
    667,496  
 Interest and other income
    168,953  
         
 Total revenue
    1,976,579  
         
 Expenses:
       
 Management fees
    78,611  
 Administrative expense reimbursements
    940,577  
 General and administrative
    241,007  
 Depreciation and amortization
    705,843  
         
 Total expenses
    1,966,038  
         
 Net income
  $ 10,541  
         
 Net income allocable to:
       
 Limited Partners
  $ 10,436  
 General Partner
    105  
         
    $ 10,541  
         
 Weighted average number of limited
       
 partnership interests outstanding
    84,756  
         
 Net income per weighted average
       
 limited partnership interest outstanding
  $ 0.12  

 
See accompanying notes to consolidated financial statements.


 
(A Delaware Limited Partnership)
 
Consolidated Statement of Changes in Partners' Equity
 
   
   
   
Limited
               
Total
 
   
Partnership
   
Limited
         
Partners'
 
   
Interests
   
Partners
   
General Partner
   
Equity
 
Balance, December 31, 2009
    68,411     $ 58,640,528     $ (25,478 )   $ 58,615,050  
                                 
 Net income
    -       10,436       105       10,541  
 Proceeds from sale of limited partnership interests
    30,916       30,798,446       -       30,798,446  
 Sales and offering expenses
    -       (3,209,025 )     -       (3,209,025 )
 Cash distributions
    -       (1,478,576 )     (14,935 )     (1,493,511 )
                                 
Balance, March 31, 2010 (unaudited)
    99,327     $ 84,761,809     $ (40,308 )   $ 84,721,501  

 
See accompanying notes to consolidated financial statements.
 

 
(A Delaware Limited Partnership)
 
Consolidated Statement of Cash Flows
 
(unaudited)
 
   
   
Three Months Ended
 
   
March 31, 2010
 
       
 Cash flows from operating activities:
     
 Net income
  $ 10,541  
 Adjustments to reconcile net income to net cash provided by
       
 operating activities:
       
 Finance income
    (64,381 )
 Income from investments in joint ventures
    (667,496 )
 Depreciation and amortization
    705,843  
 Changes in operating assets and liabilities:
       
 Collection of finance leases
    140,920  
 Other assets, net
    (348,745 )
 Accrued expenses and other liabilities
    832,791  
 Deferred revenue
    504,221  
 Due to/from General Partner and affiliates, net
    234,076  
 Distributions from joint ventures
    585,996  
         
 Net cash provided by operating activities
    1,933,766  
         
 Cash flows from investing activities:
       
 Purchase of equipment
    (9,001,888 )
 Investment in joint venture
    (111,987 )
 Distributions from joint ventures in excess of profits
    453,123  
 Investment in notes receivable
    (10,236,727 )
         
 Net cash used in investing activities
    (18,897,479 )
         
 Cash flows from financing activities:
       
 Sale of limited partnership interests
    30,798,446  
 Sales and offering expenses paid
    (2,911,714 )
 Deferred charges
    (80,066 )
 Cash distributions
    (1,493,511 )
         
 Net cash provided by financing activities
    26,313,155  
         
 Net increase in cash and cash equivalents
    9,349,442  
         
 Cash and cash equivalents, beginning of the period
    27,074,324  
         
 Cash and cash equivalents, end of the period
  $ 36,423,766  
         
         
 Supplemental disclosure of non-cash investing and financing activities:
       
 Organizational and offering expenses due to Investment Manager
  $ 123,347  
 Sales commissions due to third parties
  $ 61,615  
 Organizational and offering expenses charged to equity
  $ 235,696  
 
 
See accompanying notes to consolidated financial statements.
4

(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)


(1)
Organization
 
ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P. (the “Partnership”) was formed on August 20, 2008 as a Delaware limited partnership.  The Partnership is engaged in one business segment, the business of investing in business-essential equipment and corporate infrastructure (collectively, “Capital Assets”), including, but not limited to, Capital Assets that are already subject to lease, Capital Assets that the Partnership purchases and leases to domestic and global businesses, loans that are secured by Capital Assets, and ownership rights to leased Capital Assets at lease expiration.  The Partnership will continue until December 31, 2020, unless terminated sooner.

The Partnership’s principal investment objective is to obtain the maximum economic return from its investments for the benefit of its partners.  To achieve this objective, the Partnership: (i) acquires a diversified portfolio by making investments in Capital Assets; (ii) makes monthly cash distributions, at the Partnership’s general partner’s discretion, to its partners commencing the month following each partner’s admission to the Partnership, continuing until the end of the operating period; (iii) will reinvest substantially all undistributed cash from operations and cash from sales of investments in Capital Assets during the operating period; and (iv) will dispose of its investments and distribute the excess cash from such dispositions to its partners beginning with the commencement of the liquidation period.

The general partner of the Partnership is ICON GP 14, LLC, a Delaware limited liability company (the “General Partner”), which is a wholly-owned subsidiary of ICON Capital Corp., a Delaware corporation (“ICON Capital”).  The General Partner manages and controls the business affairs of the Partnership, including, but not limited to, the Capital Assets the Partnership invests in pursuant to the terms of the Partnership’s limited partnership agreement (the “Partnership Agreement”).  Pursuant to the terms of an investment management agreement, the General Partner has engaged ICON Capital as an investment manager (the “Investment Manager”) to, among other things, facilitate the acquisition and servicing of the Partnership’s investments.  Additionally, the General Partner has a 1% interest in the profits, losses, cash distributions and liquidation proceeds of the Partnership.

The Partnership is currently in its offering period, which commenced on May 18, 2009 and is anticipated to end no later than May 2011.  With the proceeds from the sale of the limited partnership interests (“Interests”), the Partnership intends to invest in a diverse pool of Capital Assets and establish a cash reserve in the amount of 0.50% of the gross offering proceeds.  The initial capitalization of the Partnership was $1,001, which consisted of $1 from the General Partner and $1,000 from ICON Capital.  The Partnership is offering Interests on a “best efforts” basis with the intention of raising up to $418,000,000 of capital, consisting of 420,000 Interests, of which 20,000 have been reserved for the Partnership’s distribution reinvestment plan (the “DRIP Plan”).  The DRIP Plan allows limited partners to purchase Interests with distributions received from the Partnership and/or certain affiliates of the Partnership.  At any time prior to May 18, 2011, the Partnership may, at its sole discretion, increase the offering to a maximum of up to $618,000,000 of capital, consisting of 600,000 Interests, provided that the offering period is not extended in connection with such change.


5

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)


(1)
Organization - continued

The Partnership’s initial closing date was June 19, 2009 (the “Commencement of Operations”), the date at which the Partnership had raised $1,200,000 and limited partners were admitted.  Upon the Commencement of Operations, the Partnership returned the initial capital contribution of $1,000 to ICON Capital.  During the period from May 18, 2009 to March 31, 2010, the Partnership sold 99,327 Interests to 2,969 limited partners, representing $99,098,585 of capital contributions.  Investors from the Commonwealth of Pennsylvania and the State of Tennessee were not admitted until the Partnership raised total equity in the amount of $20,000,000, which the Partnership achieved on August 27, 2009.  Beginning with the Commencement of Operations, the Partnership has paid or accrued sales commissions to third parties.  The Partnership has also paid or accrued various fees to the General Partner and its affiliates.  For the period from the Commencement of Operations through March 31, 2010, the Partnership paid or accrued the following fees in connection with its offering of its Interests:  (i) sales commissions to third parties in the amount of $6,788,331 and (ii) underwriting fees in the amount of $2,920,718 to ICON Securities Corp., an affiliate of the General Partner and the dealer-manager of the Partnership’s offering (“ICON Securities”).  In addition, the General Partner and its affiliates, on behalf of the Partnership, incurred organizational and offering expenses in the amount of $1,780,983. For the period from the Commencement of Operations through March 31, 2010, organizational and offering expenses in the amount of $626,899 were recorded as a reduction of partners’ equity.

Partners’ 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 limited partners and 1% to the General Partner until the aggregate amount of cash distributions paid to limited partners equals the sum of the limited partners’ aggregate capital contributions plus an 8% cumulative annual return on their aggregate unreturned capital contributions, compounded daily.  After such time, distributions will be allocated 90% to the limited partners and 10% to the General Partner.
 
(2)
Basis of Presentation and Consolidation
 
The accompanying consolidated financial statements of the Partnership 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 General Partner, 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 Partnership’s Annual Report on Form 10-K for the period from the Commencement of Operations through December 31, 2009.  As operations commenced on June 19, 2009, no statements of operations and cash flows are presented for the three months ended March 31, 2009.  The results for the interim period are not necessarily indicative of the results for the full year.

The consolidated financial statements include the accounts of the Partnership and its majority-owned subsidiaries and other controlled entities.  All intercompany accounts and transactions have been eliminated in consolidation.  In joint ventures where the Partnership 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 Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)

 
(2)
Basis of Presentation and Consolidation - continued

The Partnership accounts for its noncontrolling interests in joint ventures where the Partnership has influence over financial and operational matters, generally 50% or less ownership interest, under the equity method of accounting.  In such cases, the Partnership’s original investments are recorded at cost and adjusted for its share of earnings, losses and distributions.  The Partnership accounts for investments in joint ventures where the Partnership has virtually no influence over financial and operational matters using the cost method of accounting.  In such cases, the Partnership’s original investments are recorded at cost and any distributions received are recorded as revenue.  All of the Partnership’s investments in joint ventures are subject to its impairment review policy.
 
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

In June 2009, the Financial Accounting Standards Board (“FASB”) issued an update to Accounting Standard Codification 810 – Consolidation (“ASC 810”). The update amends the consolidation guidance applicable to variable interest entities (“VIEs”) and changes how a reporting entity evaluates whether an entity is considered the primary beneficiary of a VIE and is therefore required to consolidate such VIE. ASC 810 will also require assessments at each reporting period of which party within the VIE is considered the primary beneficiary and will require a number of new disclosures related to VIEs. ASC 810 is effective for fiscal years beginning after November 15, 2009. The adoption of this guidance, effective January 1, 2010, did not have a material impact on the Partnership’s consolidated financial statements as of and for the three months ended March 31, 2010.
 
In January 2010, the FASB issued Accounting Standards Update 2010-06, Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements (“ASU 2010-06”), amending Accounting Standards Codification 820. ASU 2010-06 requires new disclosures and clarifies existing disclosures on fair value measurements.  It requires new disclosures including (i) separate disclosure of the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and a description of the reasons for the transfers and (ii) separate presentation of information about purchases, sales, issuances and settlements in the reconciliation of Level 3 fair value measurements. This update also clarifies existing disclosures requiring the Partnership to (i) determine each class of assets and liabilities based on the nature and risks of the investments rather than by major security type and (ii) for each class of assets and liabilities, disclose the valuation techniques and inputs used to measure fair value for both Level 2 and Level 3 fair value measurements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010. The adoption of ASU 2010-06 did not have a material effect on the Partnership’s consolidated financial statements as of and for the three months ended March 31, 2010.
 

7

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)

 
(3)
Net Investment in Finance Lease
 
Net investment in finance lease consisted of the following at March 31, 2010:

   
March 31,
 
   
2010
 
 Minimum rents receivable
  $ 4,674,297  
 Estimated residual value
    641,942  
 Initial direct costs, net
    101,608  
 Unearned income
    (1,113,163 )
         
 Net investment in finance lease
  $ 4,304,684  

On February 25, 2010, the Partnership, through its wholly-owned subsidiary, ICON Global Crossing VI, LLC (“ICON Global Crossing VI”), purchased and simultaneously leased back telecommunications equipment to Global Crossing Telecommunications, Inc. (“Global Crossing”).  The purchase price for the equipment was approximately $4,300,000.  The lease is for a period of thirty-six months and expires in February of 2013.  The Partnership paid an acquisition fee to the Investment Manager of approximately $107,000 relating to this transaction.

Non-cancelable minimum annual amounts due on investment in finance lease over the remaining term of the lease were as follows at March 31, 2010:

For the period April 1 to December 31, 2010
  $ 1,201,962  
For the year ending December 31, 2011
    1,602,616  
For the year ending December 31, 2012
    1,602,616  
For the year ending December 31, 2013
    267,103  
    $ 4,674,297  
 
(4)
Leased Equipment at Cost
 
Leased equipment at cost consisted of the following:

   
March 31,
   
December 31,
 
   
2010
   
2009
 
Packaging equipment 
  $ 6,535,061     $ 6,535,061  
Telecommunications equipment
    7,644,928       7,644,928  
Motor coaches 
    4,615,283       -  
      18,795,272       14,179,989  
Less: Accumulated depreciation
    (1,345,561 )     (649,453 )
                 
    $ 17,449,711     $ 13,530,536  
 
Depreciation expense was $696,108 for the three months ended March 31, 2010.
 
 
8

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)

 
(4)
Leased Equipment at Cost - continued

On March 9, 2010, the Partnership, through its wholly-owned subsidiary, ICON Coach II, LLC (“ICON Coach II”), agreed to purchase and lease back twenty-six 2010 MCI J4500 motor coach buses from Motor Coach Industries, Inc. (“MCI”) for the aggregate purchase price of approximately $10,370,000.  ICON Coach II entered into a sixty-month lease with Dillon's Bus Service, Inc. (“DBS”) and Lakefront Lines, Inc. (“Lakefront”) that will commence on June 1, 2010.  Simultaneously with the execution of the lease, ICON Coach II purchased eleven 2010 MCI J4500 motor coach buses from MCI for the purchase price of $4,502,715 and leased the buses to DBS.  DBS paid interim rent for the period from March 9, 2010 through March 31, 2010.  Subsequent to March 31, 2010, DBS paid interim rent for the period from April 1, 2010 through May 31, 2010.  On May 13, 2010, ICON Coach II purchased fifteen 2010 MCI J4500 motor coach buses from MCI for the purchase price of $5,865,450 and simultaneously leased the buses to Lakefront.  Lakefront paid interim rent for the period from May 13, 2010 through May 31, 2010.  The obligations of DBS and Lakefront are guaranteed by Coach America Holdings, Inc. and CUSA, LLC.  The Partnership paid an acquisition fee to its Investment Manager of approximately $259,000 relating to this transaction.
 
Aggregate annual minimum future rentals receivable from the Partnership’s non-cancelable operating leases over the next five years consisted of the following at March 31, 2010:

For the period April 1 to December 31, 2010
  $ 3,698,311  
For the year ending December 31, 2011
    5,017,553  
For the year ending December 31, 2012
    4,473,391  
For the year ending December 31, 2013
    2,143,729  
For the year ending December 31, 2014
    1,283,365  
Thereafter
    67,090  
    $ 16,683,439  
 
(5)
Note Receivable
 
On March 3, 2010, the Partnership, through its wholly-owned subsidiary, ICON Northern Leasing III, LLC (“ICON NL III”), provided a senior secured term loan in the aggregate amount of $9,857,589 to Northern Capital Associates XVIII, L.P. (“NCA XVIII”), Northern Capital Associates XV, L.P. (“NCA XV”) and Northern Capital Associates XIV, L.P. (“NCA XIV”) (collectively “NL III”).  The loan is secured by (i) an underlying pool of leases for credit card machines of NCA XVIII; (ii) an underlying pool of leases for credit card machines of NCA XV (subject only to the first priority security interest of ICON Northern Leasing II, LLC (“ICON NL II”)), and (iii) an underlying pool of leases for credit card machines of NCA XIV (subject only to the first priority security interest of ICON Northern Leasing, LLC and second priority security interest of ICON NL II).  Interest on the secured term loan accrues at a rate of 18% per year.  The loan is payable monthly in arrears for a period of 48 months.  The obligations of NL III are guaranteed by Northern Leasing Systems, Inc.  The Partnership paid an acquisition fee to the Investment Manager of approximately $379,000 relating to this transaction.
 
(6)
Investments in Joint Ventures
 
On June 26, 2009, the Partnership and ICON Leasing Fund Twelve, LLC, an entity managed by the Investment Manager (“Fund Twelve”), entered into a joint venture, ICON Atlas, LLC (“ICON Atlas”), for the purpose of investing in eight new Ariel natural gas compressors (the “Gas Compressors”) from AG Equipment Co. (“AG”).  On June 26, 2009, ICON Atlas purchased four of the Gas Compressors from AG for approximately $4,270,000. Simultaneously with the purchase, ICON Atlas entered into a lease with Atlas Pipeline Mid-Continent, LLC (“APMC”), an affiliate of Atlas Pipeline Partners, L.P. (“APP”).
    
 
9

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)

 
(6)
Investments in Joint Ventures - continued
 
On August 17, 2009, ICON Atlas purchased the four additional Gas Compressors from AG for approximately $7,028,000.  Simultaneously with that purchase, ICON Atlas entered into a second schedule to the lease with APMC.  Each schedule is for a period of 48 months and expires on August 31, 2013.  The obligations of APMC are guaranteed by its parent company, APP.  The Partnership contributed approximately $5,084,000 to ICON Atlas and the Partnership’s and Fund Twelve’s ownership interests in ICON Atlas are 45% and 55%, respectively.  The Partnership paid an acquisition fee to the Investment Manager in the amount of approximately $127,000 in connection with this transaction.

The results of operations of ICON Atlas are summarized below:

   
Three Months Ended
 
   
March 31, 2010
 
Revenue
  $ 613,955  
Net income
  $ 379,403  
Partnership's share of net income
  $ 170,732  

On June 29, 2009, the Partnership and Fund Twelve entered into a joint venture, ICON ION, LLC (“ICON ION”), for the purpose of making secured term loans (the “ION Loans”) in the aggregate amount of $20,000,000 to ARAM Rentals Corporation, a Canadian bankruptcy remote Nova Scotia unlimited liability company (“ARC”) and ARAM Seismic Rentals Inc., a U.S. bankruptcy remote Texas corporation (“ASR,” together with ARC, collectively referred to as the “ARAM Borrowers”).  On that date, ICON ION funded the first tranche of the ION Loans in the amounts of $8,825,000 and $3,675,000 to ARC and ASR, respectively.  On July 20, 2009, ICON ION funded the second tranche of the ION Loans to ARC in the amount of $7,500,000.

The ARAM Borrowers are wholly-owned subsidiaries of ION Geophysical Corporation, a Delaware corporation (“ION”).  The ION Loans are secured by (i) a first priority security interest in all of the ARAM analog seismic system equipment owned by the ARAM Borrowers and (ii) a pledge of all of the equity interests in the ARAM Borrowers.  In addition, ION guaranteed all obligations of the ARAM Borrowers under the ION Loans.  Interest accrues at the rate of 15% per year and the ION Loans are payable monthly in arrears for a period of 60 months beginning on August 1, 2009.  The Partnership contributed $9,000,000 to ICON ION and the Partnership’s and Fund Twelve’s ownership interests in ICON ION are 45% and 55%, respectively.  The Partnership paid an acquisition fee to the Investment Manager in the amount of $225,000 in connection with this transaction.

The results of operations of ICON ION are summarized below:

   
Three Months Ended
 
   
March 31, 2010
 
Revenue
  $ 753,324  
Net income
  $ 647,756  
Partnership's share of net income
  $ 291,490  


10

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)

 
(6)
Investments in Joint Ventures - continued
 
On December 23, 2009, ICON Quattro, LLC (“ICON Quattro”), a joint venture owned 45% by the Partnership and 55% by Fund Twelve, participated in a £24,800,000 loan facility by making a second priority secured term loan to Quattro Plant Limited (“Quattro Plant”) in the amount of £5,800,000.  Quattro Plant is a wholly-owned subsidiary of Quattro Group Limited (“Quattro Group”).  The loan is secured by (i) all of Quattro Plant’s rail support construction equipment, which consists of railcars, attachments to railcars, bulldozers, excavators, tractors, lowboy trailers, street sweepers, service trucks, forklifts (collectively, the “Construction Equipment”) and any other existing or future asset owned by Quattro Plant, (ii) all of Quattro Plant’s accounts receivable, and (iii) a mortgage over certain real estate in London, England owned by the majority shareholder of Quattro Plant.  In addition, ICON Quattro will receive a key man insurance policy insuring the life of the majority shareholder of ICON Quattro in an amount not less than £5,500,000 and not more than £5,800,000.  All of Quattro Plant’s obligations under the loan are guaranteed by Quattro Group and its subsidiaries, Quattro Hire Limited and Quattro Occupational Academy Limited (collectively, the "Quattro Companies"). 

Interest on the secured term loan accrues at a rate of 20% per year and the loan will be amortized to a balloon payment of 15% of the principal at the end of the term.  The loan is payable monthly in arrears for a period of 33 months, which began on January 1, 2010.  Quattro Plant has the option to prepay the entire outstanding amount of the loan beginning January 1, 2012 in consideration for a fee of 5% of the amount being prepaid.

Simultaneously with ICON Quattro's loan, KBC Bank N.V. (“KBC”), an entity not affiliated with the Partnership, participated in the £24,800,000 loan facility by making a loan of £19,000,000 to Quattro Plant (the “KBC Loan”).  The KBC Loan is secured by (i) a first priority security interest in all of Quattro Plant’s Construction Equipment and any other existing or future asset owned by Quattro Plant and (ii) a first priority security interest in all of Quattro Plant’s accounts receivable.

Simultaneously with the consummation of ICON Quattro’s loan and the KBC Loan, ICON Quattro, KBC, Quattro Plant, Quattro Group and the Quattro Companies entered into an intercreditor deed governing the relationship between ICON Quattro and KBC.  In the event either ICON Quattro or KBC seeks to enforce its security interest under its respective loan, the proceeds from the enforcement of any security interest shall be applied (i) first, to pay all costs and expenses incurred by or on behalf of ICON Quattro or KBC, (ii) second, to KBC in an amount that would allow KBC to receive its return on its investment, and (iii) third, to ICON Quattro in an amount that would allow ICON Quattro to receive its return on its investment.  The Partnership paid an acquisition fee to the Investment Manager of approximately $327,000 relating to this transaction.

The results of operations of ICON Quattro are summarized below:

   
Three Months Ended
 
   
March 31, 2010
 
Revenue
  $ 584,537  
Net income
  $ 456,164  
Partnership's share of net income
  $ 205,274  


11

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)

 
(7)
Revolving Line of Credit, Recourse

The Partnership and certain entities managed by the Investment Manager, ICON Income Fund Eight B L.P. (“Fund Eight B”), ICON Income Fund Nine, LLC (“Fund Nine”), ICON Income Fund Ten, LLC (“Fund Ten”), ICON Leasing Fund Eleven, LLC (“Fund Eleven”) and Fund Twelve (together with the Partnership, Fund Eight B, Fund Nine, Fund Ten, and Fund Eleven, the “ICON 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 ICON Borrowers not subject to a first priority lien, as defined in the Loan Agreement. Each of the ICON Borrowers is jointly and severally liable for all amounts borrowed under the Facility. At March 31, 2010, no amounts were accrued related to the Partnership’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 ICON Borrowers have a beneficial interest.

The Facility expires on June 30, 2011 and the ICON 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 non-prime rate 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 March 31, 2010 was 4.0%.  In addition, the ICON Borrowers are obligated to pay a quarterly commitment fee of 0.50% on unused commitments under the Facility.

Aggregate borrowings by all ICON Borrowers under the Facility amounted to $700,000 at March 31, 2010, all of which was borrowed by Fund Ten.  Subsequent to March 31, 2010, Fund Ten borrowed an additional $650,000 under the Facility, which increased Fund Ten’s outstanding loan balance to $1,350,000.
 
Pursuant to the Loan Agreement, the ICON Borrowers are required to comply with certain covenants.  At March 31, 2010, the ICON Borrowers were in compliance with all covenants.
 
(8)
Transactions with Related Parties
 
The Partnership has entered into certain agreements with the General Partner, the Investment Manager and ICON Securities, whereby the Partnership pays certain fees and reimbursements to these parties.  ICON Securities is entitled to receive a 3% underwriting fee out of the gross proceeds from sales of the Partnership’s Interests.

The Partnership pays the Investment Manager (i) an annual management fee, payable monthly, equal to 3.50% of the gross periodic payments due and paid from the Partnership’s investments and (ii) acquisition fees, through the end of the operating period, equal to 2.50% of the Purchase Price of each investment the Partnership makes in Capital Assets.


12

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)

 
(8)
Transactions with Related Parties - continued

In addition, the Partnership reimburses the General Partner and its affiliates for organizational and offering expenses incurred in connection with the Partnership’s organization and offering.  The reimbursement of these expenses will be capped at the lesser of 1.44% of the gross offering proceeds (assuming all of the Interests are sold in the offering) and the actual costs and expenses incurred by the General Partner and its affiliates.  Accordingly, the General Partner and its affiliates may ultimately be reimbursed for less than the actual costs and expenses incurred.  These costs may include, but are not limited to, legal, accounting, printing, advertising, administrative, investor relations and promotional expenses for registering, offering and distributing the Partnership’s Interests to the public.  The General Partner also has a 1% interest in the Partnership’s profits, losses, cash distributions and liquidation proceeds.

In addition, the General Partner and its affiliates are reimbursed for administrative expenses incurred in connection with the Partnership’s operations.  Administrative expense reimbursements are costs incurred by the General Partner or its affiliates that are necessary to the Partnership’s operations.  These costs include the General Partner’s and its affiliates’ legal, accounting, investor relations and operations personnel costs, as well as professional fees and other costs that are charged to the Partnership based upon the percentage of time such personnel dedicate to the Partnership.  Excluded are salaries and related costs, office rent, travel expenses and other administrative costs incurred by individuals with a controlling interest in the General Partner.

Fees and other expenses paid or accrued by the Partnership to the General Partner or its affiliates were as follows:

           
Three Months Ended
 
 Entity
 
 Capacity
 
 Description
 
March 31, 2010
 
 ICON Capital Corp.
 
 Investment Manager
 
 Organizational and offering
     
       
    expense reimbursements (1)
  $ 203,413  
 ICON Securities Corp.
 
 Dealer-Manager
 
 Underwriting fees (2)
    894,330  
 ICON Capital Corp.
 
 Investment Manager
 
 Acquisition fees (3)
    745,332  
 ICON Capital Corp.
 
 Investment Manager
 
 Management fees (4)
    78,611  
 ICON Capital Corp.
 
 Investment Manager
 
 Administrative expense
       
       
    reimbursements (4)
    940,577  
             2,862,263  
   
(1) Amount capitalized and charged to partners' equity.
 
(2) Amount charged directly to partners' equity.
 
(3) Amount capitalized and amortized to operations over the estimated service period in accordance with the Partnership's accounting policies.
 
(4) Amount charged directly to operations.
 

At March 31, 2010, the Partnership had a net payable of $924,387 due to the General Partner and its affiliates that primarily consisted of administrative expense reimbursements in the amount of approximately $690,577.

From April 1, 2010 to May 10, 2010, the Partnership raised an additional $14,979,360 in capital contributions and has paid or accrued underwriting fees to ICON Securities in the amount of $425,013.


13

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(A Delaware Limited Partnership)
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)

 
(9)
Fair Value Measurements
 
Fair value information with respect to the Partnership’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 Partnership’s note receivable was based on the discounted value of future cash flows expected to be received from the loan based on recent transactions of this type.

   
March 31, 2010
 
   
Carrying Amount
   
Fair Value
 
 Fixed rate note receivable
  $ 9,857,589     $ 10,357,363  
 
(10)
Commitments and Contingencies
 
At the time the Partnership acquires or divests of its interest in a Capital Asset, the Partnership may, under very limited circumstances, agree to indemnify the seller or buyer for specific contingent liabilities.  The General Partner believes that any liability that may arise as a result of any such indemnification obligations will not have a material adverse effect on the consolidated financial condition of the Partnership taken as a whole.
 
(11)
Subsequent Events
 
On April 1, 2010, the Partnership sold to an unaffiliated third party, Hardwood Partners, LLC: (i) 4.805% of its interest in ICON Quattro for the purchase price of $450,000, (ii) 4.467% of its interest in ICON Atlas for the purchase price of $450,000, (iii) 2.384% of its interest in ICON ION for the purchase price of $450,000 and (iv) 9.084% of its interest in ICON Global Crossing VI for the purchase price of $1,000,000.

 


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, 2009.  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 Equipment and Corporate Infrastructure Fund Fourteen, L.P. 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 and finance fund in which the capital our partners invest is pooled together to make investments in Capital Assets, pay fees and establish a small reserve.  We commenced operations on June 19, 2009.  We will use a substantial portion of the proceeds from the sale of our Interests to invest in Capital Assets, including, but not limited to, Capital Assets that are already subject to lease, Capital Assets that we purchase and lease to domestic and global businesses, loans that are secured by Capital Assets, and ownership rights to leased Capital Assets at lease expiration.  After these proceeds have been invested, it is anticipated that additional investments will be made with the cash generated from our initial investments to the extent that cash is not used for our expenses, reserves and distributions to limited partners.  The investment in additional Capital Assets in this manner is called “reinvestment.”  We anticipate investing and reinvesting in Capital Assets from time to time for five years from the date we complete the offering.  This time frame is called the “operating period” and may be extended, at our General Partner’s discretion, for up to an additional three years.  After the operating period, we will then sell our assets in the ordinary course of business, during a time frame called the “liquidation period.”

We seek to make investments in Capital Assets that we believe will provide our investors with a satisfactory rate of return on their investment from (a) current cash flow generated by the payment of rent in the case of leases and principal and/or interest in the case of secured loans, (b) deferred cash flow from the realization of the value of the Capital Assets or interests therein at the maturity of the investment or the exercise of an option to purchase Capital Assets or (c) a combination of both.
 
 

 
With respect to (a) above, we seek to make investments in Capital Assets subject to lease and in secured loans with lessees and borrowers, respectively, that we believe to be creditworthy based on such lessees’ and borrowers’ financial position, business, industry, and the underlying value of the Capital Assets.  In our opinion, this increases the probability that all of the scheduled rental or loan payments, as applicable, will be paid when due.  In the case of leases where there is significant current cash flow generated during the primary term of the lease and the value of the Capital Assets at the end of the term will be minimal or is not considered a primary reason for making the investment, the rental payments due under the lease are expected to be, in the aggregate, sufficient to provide a return of and a return on the purchase price of the leased Capital Assets.  In the case of secured loans, the principal and interest payments due under the loan are expected to provide a return of and a return on the amount we lend to borrowers.

With respect to (b) above, we seek to make investments in Capital Assets subject to operating leases and leveraged leases, interests or options to purchase interests in the residual value of Capital Assets, and other investments in Capital Assets that we expect will generate enough net proceeds from either the sale or re-lease of such Capital Assets, as applicable, to provide a satisfactory rate of return.  In the case of these types of investments, we seek to make investments in Capital Assets that decline in value at a slow rate due to the long economic life of such assets.  In the case of operating leases (leases where there is limited cash flow during the primary term of the lease and the value of the Capital Assets at the end of the term was the primary reason for making the investment), most, if not all, of the return of and return on that investment will generally be realized upon the sale or re-lease of the Capital Assets.  In the case of leveraged leases (leases where a substantial portion of the cash flow and potentially a portion of the residual value has been pledged to a lender on a non-recourse basis and the value will be realized upon the sale or re-lease of the Capital Assets), the rental income received in cash will be less than the purchase price of the Capital Assets because we will structure these transactions to utilize some or all of the lease rental payments to reduce the amount of non-recourse indebtedness used to acquire such assets. In our Investment Manager’s experience, the residual value may provide a return of and a return on the purchase price of the equipment even if all rental payments received during the initial term were paid to a lender.

In some cases with respect to the above investments, we may acquire equity interests, as well as warrants or other rights to acquire equity interests in the borrower or lessee, which may increase our expected return on our investment.
 
Our General Partner manages and controls our business affairs, including, but not limited to, our investments in Capital Assets, under the terms of our Partnership Agreement.  Our Investment Manager, an affiliate of our General Partner, will originate and service our investments.  Our Investment Manager also sponsored and manages seven other equipment leasing and finance funds.

Recent Significant Transactions

We engaged in the following significant transactions since December 31, 2009:

·  
On February 25, 2010, we, through our wholly-owned subsidiary, ICON Global Crossing VI, purchased and simultaneously leased back telecommunications equipment to Global Crossing.  The purchase price for the equipment was approximately $4,300,000.  The lease is for a period of thirty-six months and expires in February of 2013.  We paid an acquisition fee to the Investment Manager of approximately $107,000 relating to this transaction.

·  
On March 3, 2010, we, through our wholly-owned subsidiary, ICON NL III, provided a senior secured term loan in the aggregate amount of $9,857,589 to NCA XVIII, NCA XV and NCA XIV.  The loan is secured by (i) an underlying pool of leases for credit card machines of NCA XVIII; (ii) an underlying pool of leases for credit card machines of NCA XV (subject only to the first priority security interest of ICON NL II), and (iii) an underlying pool of leases for credit card machines of NCA XIV (subject only to the first priority security interest of ICON Northern Leasing, LLC and second priority security interest of ICON NL II).  Interest on the secured term loan accrues at a rate of 18% per year.  The loan is payable monthly in arrears for a period of 48 months.  The obligations of NCA XVIII, NCA XV and NCA XIV are guaranteed by Northern Leasing Systems, Inc.  We paid an acquisition fee to the Investment Manager of approximately $379,000 relating to this transaction.
 
 

 
·  
On March 9, 2010, we, through our wholly-owned subsidiary, ICON Coach II, agreed to purchase and lease back twenty-six 2010 MCI J4500 motor coach buses from MCI for the aggregate purchase price of approximately $10,370,000.  ICON Coach II entered into a sixty-month lease with DBS and Lakefront that will commence on June 1, 2010.  Simultaneously with the execution of the lease, ICON Coach II purchased eleven 2010 MCI J4500 motor coach buses from MCI for the purchase price of $4,502,715 and leased the buses to DBS.  DBS paid interim rent for the period from March 9, 2010 through March 31, 2010.  Subsequent to March 31, 2010, DBS paid interim rent for the period from April 1, 2010 through May 31, 2010.  On May 13, 2010, ICON Coach II purchased fifteen 2010 MCI J4500 motor coach buses from MCI for the purchase price of $5,865,450 and simultaneously leased the buses to Lakefront.  Lakefront paid interim rent for the period from May 13, 2010 through May 31, 2010.  The obligations of DBS and Lakefront are guaranteed by Coach America Holdings, Inc. and CUSA, LLC.  We paid an acquisition fee to the Investment Manager of approximately $259,000 relating to this transaction.

Subsequent Events

On April 1, 2010, we sold to an unaffiliated third party, Hardwood Partners, LLC: (i) 4.805% of our interest in ICON Quattro for the purchase price of $450,000, (ii) 4.467% of our interest in ICON Atlas for the purchase price of $450,000, (iii) 2.384% of our interest in ICON ION for the purchase price of $450,000 and (iv) 9.084% of our interest in ICON Global Crossing VI for the purchase price of $1,000,000.

Recently Adopted Accounting Pronouncements

There are no recent accounting pronouncements that are expected to have a significant impact on our consolidated financial statements as of March 31, 2010.  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 March 31, 2010 (the “2010 Quarter”)

We are currently in our offering period.  The minimum offering of $1,200,000 was achieved on June 19, 2009, the Commencement of Operations, and from the Commencement of Operations through March 31, 2010, we raised total equity of $99,098,585.  Investors from the Commonwealth of Pennsylvania and the State of Tennessee were not admitted until we raised total equity in the amount of $20,000,000, which we achieved on August 27, 2009.  With the net proceeds from our offering, we will invest in Capital Assets.  As our investments mature, we may sell the Capital Assets and reinvest the proceeds in additional Capital Assets.

Revenue for the 2010 Quarter is summarized as follows:

   
Three Months Ended
 
   
March 31, 2010
 
 Rental income
  $ 1,075,749  
 Finance income
    64,381  
 Income from investments in joint ventures
    667,496  
 Interest and other income
    168,953  
         
 Total revenue
  $ 1,976,579  

 

 
Total revenue for the 2010 Quarter was $1,976,579, which was primarily generated by rental income from our leases with Exopack, Global Crossing and DBS and income from our investments in the ICON Atlas, ICON ION and ICON Quattro joint ventures.

Expenses for the 2010 Quarter are summarized as follows:

   
Three Months Ended
 
   
March 31, 2010
 
       
 Management fees
  $ 78,611  
 Administrative expense reimbursements
    940,577  
 General and administrative
    241,007  
 Depreciation and amortization
    705,843  
         
 Total expenses
  $ 1,966,038  

Total expenses for the 2010 Quarter were $1,966,038, which were comprised primarily of administrative expense reimbursements to our Investment Manager in the amount of approximately $941,000.  During the 2010 Quarter, we recorded depreciation expense of approximately $696,000 related to equipment on lease to Exopack, Global Crossing and DBS. General and administrative expense was composed primarily of professional fees of approximately $220,000.

Net Income

As a result of the foregoing factors, the net income for the 2010 Quarter was $10,541.  The net income per weighted average limited partnership interest outstanding for the 2010 Quarter was $0.12.

Financial Condition

This section discusses the major balance sheet variances at March 31, 2010 compared to December 31, 2009.

Total Assets

Total assets increased $27,862,501 from $59,567,064 at December 31, 2009 to $87,429,565 at March 31, 2010.  The increase in total assets was primarily the result of cash proceeds received from the sale of our Interests, which were then used to make investments in the NL III senior secured term loan, telecommunications equipment on lease to Global Crossing and motor coach buses on lease to DBS.

Total Liabilities

Total liabilities increased $1,756,050 from $952,014 at December 31, 2009 to $2,708,064 at March 31, 2010. The increase related primarily to the accrual of the administrative expense reimbursement due to our General Partner as well as additional deferred revenue generated by our leases with Global Crossing and DBS and our note receivable with NL III.
 
 

 
Partners’ Equity

Partners’ equity increased $26,106,451 from $58,615,050 at December 31, 2009 to $84,721,501 at March 31, 2010.  The increase related to the proceeds from the sale of our Interests and our net income from the 2010 Quarter, which was offset by the distributions paid to our partners, the amortization of organizational and offering expenses, sales commissions to third parties and underwriting fees paid to ICON Securities.

Liquidity and Capital Resources

Summary

At March 31, 2010 and December 31, 2009, we had cash and cash equivalents of $36,423,766 and $27,074,324, respectively.  In addition, pursuant to the terms of our offering, we have established a reserve in the amount of 0.50% of the gross offering proceeds from the sale of our Interests.  During our offering period, our main source of cash has been from financing activities and our main use of cash has been in investing activities.

We are offering our Interests on a “best efforts” basis with the current intention of raising up to $418,000,000.  As additional Interests are sold, we will experience a relative increase in liquidity as cash is received and then a relative decrease in liquidity as cash is expended to make investments.  We are using the net proceeds of the offering to invest in Capital Assets located in North America, Europe and other developed markets, including those in Asia, South America and elsewhere.  We seek to acquire a portfolio of Capital Assets that is comprised of both (a) transactions that provide current cash flow in the form of rental payments (in the case of leases) and payments of principal and/or interest (in the case of secured loans) and (b) transactions that generate deferred cash flow from realizing the value of the Capital Assets or interests therein at the maturity of the investment or exercise of an option to purchase Capital Assets, or (c) a combination of both.

For the period from the Commencement of Operations through March 31, 2010, we sold 99,327 Interests, representing $99,098,585 of capital contributions.  We admitted 2,969 limited partners.  For the period from the Commencement of Operations through March 31, 2010, we have paid or accrued sales commissions to third parties of $6,788,331 and underwriting commissions to ICON Securities of $2,920,718.  In addition, organization and offering expenses of $1,780,983 were paid or incurred by us, our General Partner or its affiliates during this period.

Cash Flows

The following table sets forth summary cash flow data:
 
   
Three Months Ended
 
   
March 31, 2010
 
Net cash provided by (used in)
     
       
 Operating activities
  $ 1,933,766  
 Investing activities
    (18,897,479 )
 Financing activities
    26,313,155  
         
Net increase in cash and cash equivalents
  $ 9,349,442  

Note: See the Consolidated Statement of Cash Flows included in “Item 1. Consolidated Financial Statements” of this Quarterly Report on Form 10-Q for additional information.
 
 

 
Operating Activities
 
Cash provided by operating activities of $1,933,766 primarily relates to rental income of approximately $1,075,000, finance income of approximately $64,000, deferred revenue of approximately $504,000 and income from investments in joint ventures of approximately $667,000, partially offset by payment of administrative expenses of $250,000.
 
Investing Activities
 
Cash used in investing activities of $18,897,479 primarily relates to the purchase or financing of equipment in the amount of approximately $9,000,000, our investment in a note receivable in the amount of approximately $10,237,000 and our additional investment in ICON Quattro in the amount of approximately $112,000. These uses of cash were partially offset by distributions from joint ventures in excess of profits in the amount of approximately $453,000.

Financing Activities
 
Cash provided by financing activities of $26,313,155 primarily relates to the sale of our Interests in the amount of approximately $30,798,000, which was partially offset by sales and offering expenses paid in the amount of approximately $2,912,000, deferred charges in the amount of approximately $80,000 and distributions to partners in the amount of approximately $1,494,000.
 
Sources of Liquidity

Cash generated from the sale of Interests pursuant to our offering will be our most significant source of liquidity during our offering period.  We believe that cash generated from the sale of Interests pursuant to our offering and other financing activities, as well as the expected results of our operations, will be sufficient to finance our liquidity requirements for the foreseeable future, including distributions to our partners, general and administrative expenses, new investment opportunities, management fees and administrative expense reimbursements.  In addition, our revolving line of credit had $29,300,000 available as of March 31, 2010 (see Note 7 to our consolidated financial statements) for additional working capital needs or new investment opportunities.

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’ and borrowers’ businesses that are beyond our control.

Distributions

We, at our General Partner’s discretion, pay monthly distributions to each of our limited partners beginning with the first month after each such limited partner’s admission and expect to continue to pay such distributions until the termination of our operating period.  We paid distributions to our General Partner and limited partners in the amount of $14,935 and $1,478,576, respectively, during the 2010 Quarter.
 
 

 
Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At the time we acquire or divest of an interest in Capital Assets, we may, under very limited circumstances, agree to indemnify the seller or buyer for specific contingent liabilities.  Our General Partner believes that any liability that may arise as a result of any such indemnification obligations will not have a material adverse effect on our consolidated financial condition taken as a whole.

Off-Balance Sheet Transactions

None.


There are no material changes to the disclosures related to this item since the filing of our Annual Report on Form 10-K for the year ended December 31, 2009.


Evaluation of disclosure controls and procedures

In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, as well as the financial statements for our General Partner, our General Partner carried out an evaluation, under the supervision and with the participation of the management of our General Partner, including its Co-Chief Executive Officers and the Chief Financial Officer, of the effectiveness of the design and operation of our General Partner’s disclosure controls and procedures as of the end of the period covered by this report pursuant to the Securities Exchange Act of 1934, as amended.  Based on the foregoing evaluation, the Co-Chief Executive Officers and the Chief Financial Officer concluded that our General Partner’s disclosure controls and procedures were effective.

In designing and evaluating our General Partner’s disclosure controls and procedures, our General Partner 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 General Partner’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 March 31, 2010 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, we may be subject to certain claims, suits and complaints filed against us.  In our General Partner’s opinion, the outcome of such matters, if any, will not have a material impact on our consolidated financial position, cash flows 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, 2009.


Our Registration Statement on Form S-1, as amended, was declared effective by the Securities and Exchange Commission on May 18, 2009 (SEC File No. 333-153849).  Our offering period commenced on May 18, 2009 and is anticipated to end no later than May 2011.  From May 18, 2009 through March 31, 2010, we received capital contributions in the amount of $99,098,585.  For the period from the Commencement of Operations through March 31, 2010, we have paid or accrued sales commissions to unrelated third parties of $6,788,331 and underwriting commissions to ICON Securities of $2,920,718.  In addition, organizational and offering expenses in the amount of $1,780,983 were paid or incurred by us, our General Partner or its affiliates during this period.  Net offering proceeds to us after deducting the expenses described were $87,608,553.

From April 1, 2010 through May 10, 2010, we received additional capital contributions in the amount of $14,979,360.  For the period from April 1, 2010 through May 10, 2010, we have paid or accrued sales commissions to unrelated third parties of $989,808 and underwriting commissions to ICON Securities of $425,013.  In addition, organizational and offering expenses in the amount of $67,806 were paid or incurred by us, our General Partner or its affiliates during this period.  Net offering proceeds to us after deducting the expenses described were $13,496,733.

See the disclosure under “Recent Significant Transactions” in Item 2 of Part I for a discussion of the investments that we have made with our net offering proceeds.


Not applicable.



Not applicable.


 

3.1
Certificate of Limited Partnership of Registrant (Incorporated by reference to Exhibit 3.1 to Registrant’s Registration Statement on Form S-1 filed with the SEC on October 3, 2008 (File No. 333-153849)).
   
4.1
Limited Partnership Agreement of Registrant (Incorporated by reference to Exhibit A to Registrant’s Prospectus filed with the SEC on May 18, 2009 (File No. 333- 153849)).
   
10.1
Investment Management Agreement, by and between ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P. and ICON Capital Corp., dated as of May 18, 2009 (Incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, filed August 13, 2009).
   
10.2
Commercial Loan Agreement, dated as of August 31, 2005, by and among 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 (Incorporated by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, filed August 13, 2009).
   
10.3 
Loan Modification Agreement, dated as of December 26, 2006, 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 (Incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, filed August 13, 2009).
   
10.4
Loan Modification Agreement, dated as of June 20, 2007, 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 (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).
   
10.5
Third Loan Modification Agreement, dated as of May 1, 2008, 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 (Incorporated by reference to Exhibit 10.5 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, filed August 13, 2009).
   
       10.6
Fourth Loan Modification Agreement, dated as of August 12, 2009, 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, ICON Leasing Fund Twelve, LLC and ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P. (Incorporated by reference to Exhibit 10.6 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. §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. §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. §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, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.
(Registrant)

By: ICON GP 14, LLC
      (General Partner of the Registrant)

May 14, 2010

By: /s/ Michael A. Reisner
Michael A. Reisner
Co-Chief Executive Officer and Co-President
(Co-Principal Executive Officer)
 
May 14, 2010
 
By: /s/ Mark Gatto
Mark Gatto
Co-Chief Executive Officer and Co-President
(Co-Principal Executive Officer)
 
May 14, 2010

By: /s/ Anthony J. Branca
Anthony J. Branca
Chief Financial Officer
(Principal Accounting and Financial Officer)

 
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