Attached files
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| 8-K - ICON LEASING FUND ELEVEN, LLC | body.htm |
Exhibit 99.1
1 Pursuant to the Fund’s financials, prepared in accordance with US GAAP. Leverage ratio is defined as total liabilities divided by total equity.
ICON LEASING FUND
ELEVEN, LLC
ANNUAL
PORTFOLIO OVERVIEW
2011
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Letter from the CEOs
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As of May 16, 2012 |
Dear investor in ICON Leasing Fund Eleven, LLC:
We write to briefly summarize our activity for the year ended December 31, 2011. A more detailed analysis, which we encourage you to read, is contained in our Form 10-K. Our Form 10-K and our other annual, quarterly and current reports are available in the Investor Relations section of our website, www.iconinvestments.com.
As of December 31, 2011, Fund Eleven was in its operating period. On March 26, 2012, Fund Eleven’s operating period was extended for three years, with the intention of having a very limited liquidation period thereafter, if any. As of December 31st, Fund Eleven had invested $429,842,267 of equity in $796,316,9731 worth of business-essential equipment and corporate infrastructure. Fund Eleven is fully invested; therefore, we did not make any new investments during the fourth quarter of 2011.
On November 4, 2011, we sold the crude oil tanker, the Sebarok Spirit, to an unaffiliated third party for approximately $7,517,000 and used the proceeds to satisfy the loan balance associated with the vessel.
On December 31, 2011 and January 4, 2012, we, through a joint venture owned 6.33% by us, sold part of the machining and metal working equipment on lease to subsidiaries of MW Universal, Inc. (“MWU”), which satisfied all of their lease obligations. We initially invested $24,300,000 to purchase the equipment. In September 2010, we received an interest in additional equipment in connection with the formation of a joint venture, which you can read about in further detail in the portfolio overview that follows this letter. Through December 31, 2011, we collected approximately $30,839,000 in rental and sale proceeds. The remaining equipment is currently subject to
lease with a subsidiary of MWU.
We invite you to read through our portfolio overview on the pages that follow for a more detailed explanation of the investments noted above as well as more information regarding Fund Eleven’s operations to date. As always, thank you for entrusting ICON with your investment assets.
Sincerely,
 |
 |
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Michael A. Reisner
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Mark Gatto
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Co-President and Co-Chief Executive Officer
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Co-President and Co-Chief Executive Officer
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1 Pursuant to Fund Eleven’s financials, prepared in accordance with US GAAP.
1
ICON Leasing Fund Eleven, LLC
2011 Annual Portfolio Overview
We are pleased to present ICON Leasing Fund Eleven, LLC’s (the “Fund”) Annual Portfolio Overview for 2011. References to “we,” “us,” and “our” are references to the Fund, and references to the “Manager” are references to the manager of the Fund, ICON Capital Corp.
The Fund
We raised $365,198,690 commencing with our initial offering on April 21, 2005 through the closing of the offering on April 21, 2007.
Our operating period commenced in May 2007, during which time we will continue to seek to finance equipment subject to lease or to structure financings secured primarily by equipment. Cash generated from these investments is used to make distributions to our members. Availability of cash to be used for reinvestment depends on the requirements for expenses, reserves and distributions to members.
On March 26, 2012, our operating period was extended for three years, with the intention of having a very limited liquidation period thereafter, if any.
Recent Transactions
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·
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In 2007, we entered into various lease financing arrangements with subsidiaries of MW Universal, Inc. (“MWU”). We invested $24,300,000 to purchase machining and metal working equipment subject to leases with MW Scott, Inc. (“Scott”), AMI Manchester, LLC (“AMI”), MW General, Inc. (“General”), MW Gilco, LLC, and W Forge Holdings, Inc. In September 2010, a joint venture was formed to, among other reasons, manage the remaining MWU investments and we assigned our interest in Scott, AMI, and General to the joint venture in exchange for a 6.33% interest. Our joint venture partner assigned its interest in, among other things, equipment that was subject to
lease with MW Crow, Inc. (“Crow”) and LC Manufacturing, LLC (“LCM”). On December 31, 2011 and January 4, 2012, the joint venture sold part of the equipment on lease to Crow, Scott, AMI, and General, which satisfied all of their lease obligations. Through December 31, 2011, we collected approximately $30,839,000 in rental and sale proceeds. The remaining equipment is currently subject to lease with LCM.
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·
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On May 2, 2012, the term loan to affiliates of Northern Leasing Systems, Inc. (“Northern Leasing”) was satisfied in full prior to its maturity date. Our initial investment was approximately $11,051,000 and, during the term of this investment, we collected approximately $14,497,000 in loan proceeds.
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·
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In 2007, we purchased the crude oil tanker, the Senang Spirit, for approximately $44,995,000, consisting of a cash investment in the amount of approximately $11,667,000 and a non-recourse loan of approximately $33,328,000. On May 3, 2012, we satisfied the outstanding non-recourse loan obligations of $9,400,000 in connection with the Senang Spirit with a discounted payment of approximately $7,347,000. Upon satisfaction of the loan, we sold the Senang Spirit to an unaffiliated third party for approximately $7,173,000.
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Portfolio Overview
Our portfolio consists of investments that we have made directly, as well as those that we have made with our affiliates. As of December 31, 2011, our portfolio consisted primarily of the following investments.
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·
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Equipment, plant, and machinery used by The Teal Jones Group and Teal Jones Lumber Services, Inc. (collectively, “Teal Jones”) in their lumber processing operations in Canada and the United States. We entered into an eighty-four month lease financing arrangement with Teal Jones totaling approximately $35,442,000 that is scheduled to expire in November 2013.
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·
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We made a term loan to affiliates of Northern Leasing in the amount of approximately $11,051,000. The loan was secured by various pools of leases for point of sale equipment and a limited guaranty from Northern Leasing of up to 10% of the loan amount. The loan accrued interest at rates ranging from 9.47% to 9.90% per year, was scheduled to mature at various dates through February 2013, and, as discussed above, was satisfied prior to its maturity date.
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·
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A 55% interest in a joint venture that owns plastic films and flexible packaging manufacturing equipment for consumer products. The equipment was purchased for $12,115,000 and is subject to a lease with Pliant Corporation that expires on September 30, 2013.
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2
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·
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A 6.33% interest in a joint venture that owns machining and metal working equipment subject to lease with LCM. Prior to forming the joint venture, our joint venture partner purchased the equipment subject to lease with LCM for $14,890,000. The lease expires on December 31, 2012.
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·
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Auto parts manufacturing equipment leased to Heuliez SA and Heuliez Investissements SNC (collectively referred to as “Heuliez”). We purchased the equipment for approximately $11,944,000. On June 30, 2010, the administrator for the “Redressement Judiciaire,” a proceeding under French law similar to Chapter 11 reorganization under the U.S. Bankruptcy Code, sold Heuliez to Baelen Gaillard Industries (“BGI”). We agreed with BGI to restructure the leases, and, effective October 5, 2010, amended our lease with Heuliez to restructure the lease payment obligations and extend the base terms of the leases through December 31, 2014.
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·
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A crude oil tanker, the Senang Spirit, which was purchased, along with the Sebarok Spirit, for the aggregate amount of approximately $88,000,000. The purchase price was comprised of approximately $21,300,000 in cash and a non-recourse loan in the amount of approximately $66,700,000. The Sebarok Spirit was sold on November 4, 2011 and, as discussed above, the Senang Spirit was sold on May 3, 2012.
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·
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A 45% interest in a joint venture that owns semiconductor manufacturing equipment. The total purchase price for the equipment was approximately $15,729,000, of which we paid approximately $7,078,000. The equipment was subject to a sixty month lease with Equipment Acquisition Resources, Inc. (“EAR”). EAR’s obligations under the lease were secured by the owner’s real estate located in Jackson Hole, Wyoming, as well as personal guarantees from the owners of EAR. In addition, we own semiconductor manufacturing equipment that was purchased for approximately $6,348,000 that was also leased to EAR. In October 2009, certain facts came to light that led our Manager to
believe that EAR was perpetrating a fraud against EAR’s lenders, including us. On October 23, 2009, EAR filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. On June 2, 2010, we sold a parcel of real property in Jackson Hole, Wyoming for $800,000. On June 7, 2010, we received judgments in New York State Supreme Court against two principals of EAR who had guaranteed EAR’s lease obligations. We have had the New York State Supreme Court judgments recognized in Illinois, where the principals live, but do not currently anticipate being able to collect on such judgments. On March 16, 2011 and July 8, 2011, we sold certain parcels of real property that were located in Jackson Hole, Wyoming for a net sale price of approximately $1,183,000 and $220,000,
respectively. On March 7, 2012, one of the creditors in the Illinois State Court proceedings won a summary judgment motion filed against us which dismissed our claim to the proceeds resulting from the sale of the EAR equipment. The basis of the court’s decision centered on the fact that we were made whole from the foreclosure of the property in Wyoming. We are currently appealing this decision. At this time, it is not possible to determine the likelihood of success on the appeal.
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Revolving Line of Credit
On May 10, 2011, the Fund entered into a loan agreement with California Bank & Trust (“CB&T”) for a revolving line of credit of up to $5,000,000 (the “Facility”), which is secured by all of the Fund’s assets not subject to a first priority lien. 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 loans and lease agreements in which the Fund has a beneficial interest.
The Facility expires on March 31, 2013 and the Fund 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 90-day 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 all interest rates on advances under the Facility are subject to an interest rate floor of 4.0% per year. In addition, the Fund is obligated to pay
a commitment fee based on an annual rate of 0.50% on unused commitments under the Facility. At December 31, 2011, there were no obligations outstanding under the Facility. Subsequent to December 31, 2011, the Fund borrowed and fully repaid $5,000,000 under the Facility.
10% Status Report
As of December 31, 2011, the Senang Spirit and the equipment subject to lease with Teal Jones were the investments that individually constituted at least 10% of the aggregate purchase price of our investment portfolio. The bareboat charter for the Senang Spirit expired in March 2012 and, as discussed above, was sold on May 3, 2012. The Teal Jones equipment is scheduled to remain on lease during the 2012 calendar year.
3
As of December 31, 2011, the bareboat charter for the Senang Spirit had three monthly payments remaining. To the best of our Manager’s knowledge, the vessel remained seaworthy, was maintained in accordance with commercial marine standards and applicable laws and regulations of the governing shipping registry as required under the bareboat charter.
As of December 31, 2011, the Teal Jones equipment had eight quarterly payments remaining. To the best of our Manager’s knowledge, the equipment is maintained in accordance with applicable laws and regulations as required under the lease agreement.
Distribution Analysis
During the year ended December 31, 2011, we made monthly distributions at a rate of 4% per year. From the inception of the offering period, we have made 81 cash distributions to our members. During the year ended December 31, 2011, we paid our members $14,652,759 in cash distributions. As of December 31, 2011, a $10,000 investment made at the initial closing would have received $5,780 in cumulative distributions.
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Source of Distributions
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Cash from current period operations
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Cash accumulated
from operations
of prior periods
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Cash from current period disposition
of assets
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Capital contributions used to establish the initial reserve
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Total distributions
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For the year ended
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December 31, 2011
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$ | 12,854,351 | $ | - | $ | 1,798,408 | $ | - | $ | 14,652,759 | ||||||||||
Additional Disclosure
As of December 31, 2011, the Fund maintained a leverage ratio of 0.21:11. We collected 99.29%2 of all scheduled receivables due for the fourth quarter of 2011, with the uncollected receivables relating to our investments with affiliates of Northern Leasing all of which were subsequently collected.
Transactions with Related Parties
We entered into certain agreements with our Manager and with ICON Securities Corp. (“ICON Securities”), a wholly-owned subsidiary of our Manager, whereby we pay certain fees and reimbursements to those parties. Our Manager was entitled to receive an organizational and offering expense allowance of 3.5% on capital raised up to $50,000,000, 2.5% of capital raised between $50,000,001 and $100,000,000 and 1.5% of capital raised over $100,000,000. ICON Securities was entitled to receive a 2% underwriting fee from the gross proceeds from sales of shares to additional members.
In accordance with the terms of our amended and restated limited liability company agreement, we pay or paid our Manager (i) management fees ranging from 1% to 7% based on the type of transaction, and (ii) acquisition fees, through the end of the operating period, of 3% of the purchase price of our investments. The purchase price includes the cash paid, indebtedness incurred, assumed or to which our gross revenues from the investment are subject, or the value of the equipment secured by or subject to such investment, and the amount of the related acquisition fees on such investment, plus that portion of the expenses incurred by our Manager or any of its affiliates in making investments on an
arm’s length basis with a view to transferring such investments to us, which is allocated to the investments in question in accordance with allocation procedures employed by our Manager or such affiliate from time to time and within generally accepted accounting principles. In addition, our Manager is reimbursed for administrative expenses incurred in connection with our operations.
2 Collections as of January 25, 2012. Excluded are rental amounts owed in connection with our financing arrangement with Equipment Acquisition Resources, Inc., which you can read about in further detail above.
4
Our Manager performs certain services relating to the management of our equipment leasing and other financing activities. Such services include, but are not limited to, the collection of lease payments from the lessees of the equipment or loan payments from borrowers, re-leasing services in connection with equipment which is off-lease, inspections of the equipment, liaising with and general supervision of lessees and borrowers to ensure that the equipment is being properly operated and maintained, monitoring performance by the lessees and borrowers of their obligations under the leases and loans, and the payment of operating expenses.
Administrative expense reimbursements are costs incurred by our Manager or its affiliates that are necessary to our operations. These costs include our Manager’s and its affiliates’ legal, accounting, investor relations and operations personnel, as well as professional fees and other costs that are charged to us based upon the percentage of time such personnel dedicate to us. Excluded are salaries and related costs, office rent, travel expenses, and other administrative costs incurred by individuals with a controlling interest in our Manager.
Although our Manager continues to provide the services described above, in May 2010, our Manager suspended its collection of management fees.
Our Manager also has a 1% interest in our profits, losses, cash distributions and liquidation proceeds. We paid distributions to our Manager in the amounts of of $146,527, $333,391 and $333,811 for the years ended December 31, 2011, 2010 and 2009, respectively. Additionally, our Manager’s interest in our net loss was $255,634, $66,965 and $450,959 for the years ended December 31, 2011, 2010 and 2009, respectively.
Fees and other expenses paid or accrued by us to our Manager or its affiliates were as follows:
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Entity
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Capacity
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Description
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2011
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2010
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2009
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ICON Capital Corp.
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Manager
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Management fees (1) (2)
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$ | - | $ | 541,090 | $ | 2,185,858 | ||||||||
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ICON Capital Corp.
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Manager
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Administrative expense reimbursements (1)
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1,005,815 | 1,417,858 | 1,951,850 | |||||||||||
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Total fees paid to related parties
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$ | 1,005,815 | $ | 1,958,948 | $ | 4,137,708 | ||||||||||
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(1) Charged directly to operations.
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(2) The Manager suspended the collection of a portion of its management fees in the amount of $ 1,213,912 and $1,440,269 during the years ended December 31, 2011 and 2010, respectively.
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At December 31, 2011 and 2010, we had a net payable of $79,794 and $286,590 due to our Manager and its affiliates that consisted primarily of administrative expense reimbursements. Members may obtain a summary of administrative expense reimbursements upon request.
Your participation in the Fund is greatly appreciated.
We are committed to protecting the privacy of our investors in compliance with all applicable laws. Please be advised that, unless required by a regulatory authority such as FINRA or ordered by a court of competent jurisdiction, we will not share any of your personally identifiable information with any third party.
5
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(A Delaware Limited Liability Company)
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Consolidated Balance Sheets
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Assets
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December 31,
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2011
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2010
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Current assets:
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Cash and cash equivalents
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$ | 6,824,356 | $ | 4,621,512 | ||||
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Current portion of note receivable
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6,079,348 | 1,520,408 | ||||||
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Current portion of net investment in finance leases
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4,469,552 | 4,795,901 | ||||||
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Assets held for sale, net
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117,145 | 15,509,830 | ||||||
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Other current assets
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257,785 | 2,235,302 | ||||||
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Total current assets
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17,748,186 | 28,682,953 | ||||||
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Non-current assets:
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Note receivable, less current portion
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11,009,979 | 6,691,681 | ||||||
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Mortgage note receivable
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12,722,006 | 12,722,006 | ||||||
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Net investment in finance leases, less current portion
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8,985,464 | 14,705,170 | ||||||
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Leased equipment at cost (less accumulated depreciation of
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$19,249,518 and $29,762,549, respectively)
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16,300,588 | 79,587,412 | ||||||
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Investments in joint ventures
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1,038,678 | 5,749,598 | ||||||
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Deferred income taxes, net
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894,439 | 1,026,931 | ||||||
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Other non-current assets, net
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3,533,027 | 9,048,190 | ||||||
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Total non-current assets
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54,484,181 | 129,530,988 | ||||||
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Total Assets
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$ | 72,232,367 | $ | 158,213,941 | ||||
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Liabilities and Equity
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Current liabilities:
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Current portion of long-term debt
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$ | 3,544,240 | $ | 14,371,257 | ||||
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Revolving line of credit, recourse
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- | 1,450,000 | ||||||
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Derivative instruments
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176,956 | 1,694,776 | ||||||
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Due to Manager and affiliates
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79,794 | 286,590 | ||||||
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Deferred revenue, accrued expenses and other liabilities
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1,394,684 | 2,038,100 | ||||||
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Total current liabilities
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5,195,674 | 19,840,723 | ||||||
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Non-current liabilities:
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Long-term debt, less current portion
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7,311,110 | 38,163,700 | ||||||
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Total Liabilities
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12,506,784 | 58,004,423 | ||||||
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Commitments and contingencies
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Equity:
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Members' Equity:
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Additional members
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59,901,721 | 99,715,745 | ||||||
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Manager
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(2,622,895 | ) | (2,220,734 | ) | ||||
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Accumulated other comprehensive loss
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(656,141 | ) | (1,739,624 | ) | ||||
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Total Members' Equity
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56,622,685 | 95,755,387 | ||||||
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Noncontrolling Interests
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3,102,898 | 4,454,131 | ||||||
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Total Equity
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59,725,583 | 100,209,518 | ||||||
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Total Liabilities and Equity
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$ | 72,232,367 | $ | 158,213,941 | ||||
6
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(A Delaware Limited Liability Company)
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Consolidated Statements of Operations
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Years Ended December 31,
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2011
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2010
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2009
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Revenue:
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Finance income
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$ | 7,265,677 | $ | 5,890,586 | $ | 5,996,422 | ||||||
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Rental income
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16,286,884 | 35,387,167 | 64,099,850 | |||||||||
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Time charter revenue
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- | 8,677,496 | 5,559,524 | |||||||||
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(Loss) income from investments in joint ventures
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(435,755 | ) | (1,751,045 | ) | 345,938 | |||||||
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Loss on settlement of interfund agreement
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- | (214,524 | ) | - | ||||||||
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Net (loss) gain on lease termination
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- | (218,890 | ) | 25,141,909 | ||||||||
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Net gain on sales of equipment
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11,411,941 | 17,593,002 | 2,050,594 | |||||||||
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Total revenue
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34,528,747 | 65,363,792 | 103,194,237 | |||||||||
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Expenses:
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Management fees - Manager
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- | 541,090 | 2,185,858 | |||||||||
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Administrative expense reimbursements - Manager
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1,005,815 | 1,417,858 | 1,951,850 | |||||||||
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General and administrative
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2,983,374 | 4,950,740 | 3,683,435 | |||||||||
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Vessel operating expense
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- | 10,771,786 | 13,926,255 | |||||||||
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Depreciation and amortization
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8,479,535 | 35,137,176 | 73,052,380 | |||||||||
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Impairment loss
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44,264,878 | 13,827,241 | 42,208,124 | |||||||||
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Interest
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2,134,272 | 7,959,504 | 9,937,136 | |||||||||
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Gain on financial instruments
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(410,662 | ) | (3,918,539 | ) | (346,739 | ) | ||||||
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Total expenses
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58,457,212 | 70,686,856 | 146,598,299 | |||||||||
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Loss before income taxes
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(23,928,465 | ) | (5,323,064 | ) | (43,404,062 | ) | ||||||
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(Provision) benefit for income taxes
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(716,397 | ) | (563,836 | ) | 153,480 | |||||||
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Net loss
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(24,644,862 | ) | (5,886,900 | ) | (43,250,582 | ) | ||||||
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Less: Net income attributable to noncontrolling interests
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918,564 | 809,593 | 1,845,334 | |||||||||
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Net loss attributable to Fund Eleven
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$ | (25,563,426 | ) | $ | (6,696,493 | ) | $ | (45,095,916 | ) | |||
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Net loss attributable to Fund Eleven allocable to:
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Additional members
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$ | (25,307,792 | ) | $ | (6,629,528 | ) | $ | (44,644,957 | ) | |||
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Manager
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(255,634 | ) | (66,965 | ) | (450,959 | ) | ||||||
| $ | (25,563,426 | ) | $ | (6,696,493 | ) | $ | (45,095,916 | ) | ||||
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Weighted average number of additional shares of
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||||||||||||
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limited liability company interests outstanding
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362,656 | 362,674 | 363,139 | |||||||||
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Net loss attributable to Fund Eleven per weighted
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||||||||||||
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average additional share of limited liability company interests outstanding
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$ | (69.78 | ) | $ | (18.28 | ) | $ | (122.94 | ) | |||
7
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(A Delaware Limited Liability Company)
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Consolidated Statements of Changes in Equity
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Members' Equity
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Additional
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Shares of
Limited Liability
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Accumulated Other
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Total
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Company Interests
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Additional
Members |
Manager
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Comprehensive Income (Loss)
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Members'
Equity
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Noncontrolling
Interests |
Total
Equity |
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Balance, December 31, 2008
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363,256 | $ | 217,496,668 | $ | (1,035,608 | ) | $ | (6,275,279 | ) | $ | 210,185,781 | $ | 14,460,646 | $ | 224,646,427 | |||||||||||||
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Comprehensive (loss) income:
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Net (loss) income
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- | (44,644,957 | ) | (450,959 | ) | - | (45,095,916 | ) | 1,845,334 | (43,250,582 | ) | |||||||||||||||||
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Change in valuation of derivative instruments
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- | - | - | 4,570,879 | 4,570,879 | - | 4,570,879 | |||||||||||||||||||||
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Currency translation adjustments
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- | - | - | 218,760 | 218,760 | - | 218,760 | |||||||||||||||||||||
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Total comprehensive income (loss)
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4,789,639 | (40,306,277 | ) | 1,845,334 | (38,460,943 | ) | ||||||||||||||||||||||
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Shares of limited liability company interests repurchased
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(163 | ) | (120,354 | ) | - | - | (120,354 | ) | - | (120,354 | ) | |||||||||||||||||
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Deconsolidation of a noncontrolling interest
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- | - | - | - | - | (3,442,066 | ) | (3,442,066 | ) | |||||||||||||||||||
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Cash distributions
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- | (33,047,095 | ) | (333,811 | ) | - | (33,380,906 | ) | (5,659,651 | ) | (39,040,557 | ) | ||||||||||||||||
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Balance, December 31, 2009
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363,093 | 139,684,262 | (1,820,378 | ) | (1,485,640 | ) | 136,378,244 | 7,204,263 | 143,582,507 | |||||||||||||||||||
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Comprehensive (loss) income:
|
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Net (loss) income
|
- | (6,629,528 | ) | (66,965 | ) | - | (6,696,493 | ) | 809,593 | (5,886,900 | ) | |||||||||||||||||
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Change in valuation of derivative instruments
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- | - | - | 430,344 | 430,344 | - | 430,344 | |||||||||||||||||||||
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Currency translation adjustments
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- | - | - | (684,328 | ) | (684,328 | ) | - | (684,328 | ) | ||||||||||||||||||
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Total comprehensive (loss) income
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- | - | - | (253,984 | ) | (6,950,477 | ) | 809,593 | (6,140,884 | ) | ||||||||||||||||||
|
Shares of limited liability company interests repurchased
|
(437 | ) | (333,216 | ) | - | - | (333,216 | ) | - | (333,216 | ) | |||||||||||||||||
|
Cash distributions
|
- | (33,005,773 | ) | (333,391 | ) | - | (33,339,164 | ) | (3,559,725 | ) | (36,898,889 | ) | ||||||||||||||||
|
Balance, December 31, 2010
|
362,656 | 99,715,745 | (2,220,734 | ) | (1,739,624 | ) | 95,755,387 | 4,454,131 | 100,209,518 | |||||||||||||||||||
|
Comprehensive (loss) income:
|
||||||||||||||||||||||||||||
|
Net (loss) income
|
- | (25,307,792 | ) | (255,634 | ) | - | (25,563,426 | ) | 918,564 | (24,644,862 | ) | |||||||||||||||||
|
Change in valuation of derivative instruments
|
- | - | - | 1,287,259 | 1,287,259 | - | 1,287,259 | |||||||||||||||||||||
|
Currency translation adjustments
|
- | - | - | (203,776 | ) | (203,776 | ) | - | (203,776 | ) | ||||||||||||||||||
|
Total comprehensive income (loss)
|
- | - | - | 1,083,483 | (24,479,943 | ) | 918,564 | (23,561,379 | ) | |||||||||||||||||||
|
Shares of limited liability company interests repurchased
|
- | - | - | - | - | |||||||||||||||||||||||
|
Cash distributions
|
- | (14,506,232 | ) | (146,527 | ) | - | (14,652,759 | ) | (2,269,797 | ) | (16,922,556 | ) | ||||||||||||||||
|
Balance, December 31, 2011
|
362,656 | $ | 59,901,721 | $ | (2,622,895 | ) | $ | (656,141 | ) | $ | 56,622,685 | $ | 3,102,898 | $ | 59,725,583 | |||||||||||||
8
|
(A Delaware Limited Liability Company)
|
||||||||||||
|
Consolidated Statements of Cash Flows
|
||||||||||||
|
Years Ended December 31,
|
||||||||||||
|
2011
|
2010
|
2009
|
||||||||||
|
Cash flows from operating activities:
|
||||||||||||
|
Net loss
|
$ | (24,644,862 | ) | $ | (5,886,900 | ) | $ | (43,250,582 | ) | |||
|
Adjustments to reconcile net loss to net cash
|
||||||||||||
|
provided by operating activities:
|
||||||||||||
|
Finance income
|
(1,433,638 | ) | (1,834,316 | ) | (2,548,139 | ) | ||||||
|
Rental income paid directly to lenders by lessees
|
(11,305,000 | ) | (12,410,000 | ) | (12,478,000 | ) | ||||||
|
Loss (income) from investments in joint ventures
|
435,755 | 1,751,045 | (345,938 | ) | ||||||||
|
Net gain on sales of equipment
|
(11,411,941 | ) | (17,593,002 | ) | (2,050,594 | ) | ||||||
|
Net loss (gain) on lease termination
|
- | 218,890 | (12,468,659 | ) | ||||||||
|
Loss on settlement of interfund agreement
|
- | 214,524 | - | |||||||||
|
Depreciation and amortization
|
8,479,535 | 35,137,176 | 73,052,376 | |||||||||
|
Amortization of deferred time charter expense
|
- | 466,331 | 2,235,738 | |||||||||
|
Impairment loss
|
44,264,878 | 13,827,241 | 42,208,124 | |||||||||
|
Bad debt expense
|
- | - | 1,569,221 | |||||||||
|
Interest expense paid directly to lenders by lessees
|
1,851,225 | 3,344,986 | 4,062,952 | |||||||||
|
Interest expense from amortization of debt financing costs
|
99,997 | 232,198 | 356,227 | |||||||||
|
Gain on financial instruments
|
(410,662 | ) | (3,918,539 | ) | (755,739 | ) | ||||||
|
Deferred tax (benefit) provision
|
104,552 | (35,711 | ) | (648,771 | ) | |||||||
|
Changes in operating assets and liabilities:
|
||||||||||||
|
Collection of finance leases
|
5,886,299 | 11,126,064 | 9,142,256 | |||||||||
|
Accounts receivable
|
(1,695 | ) | 577,503 | (2,756,653 | ) | |||||||
|
Other assets, net
|
(1,265,184 | ) | (14,769,044 | ) | (2,829,868 | ) | ||||||
|
Payables, deferred revenue and other current liabilities
|
(1,126,990 | ) | (819,162 | ) | (1,331,415 | ) | ||||||
|
Due to/from Manager and affiliates
|
(250,328 | ) | (49,307 | ) | 11,421 | |||||||
|
Distributions from joint ventures
|
53,492 | 972,674 | 1,850,262 | |||||||||
|
Net cash provided by operating activities
|
9,325,433 | 10,552,651 | 53,024,219 | |||||||||
|
Cash flows from investing activities:
|
||||||||||||
|
Proceeds from sales of new and leased equipment
|
36,169,311 | 28,968,068 | 23,911,312 | |||||||||
|
Principal repayments of note receivable
|
2,832,047 | 10,015,000 | - | |||||||||
|
Distributions received from joint ventures in excess of profits
|
696,871 | 4,156,570 | 5,576,318 | |||||||||
|
Other assets, net
|
(3,414 | ) | (1,279,190 | ) | (26,579 | ) | ||||||
|
Net cash provided by investing activities
|
39,694,815 | 41,860,448 | 29,461,051 | |||||||||
|
Cash flows from financing activities:
|
||||||||||||
|
Proceeds from long-term debt
|
- | 1,500,000 | - | |||||||||
|
Repayments of long-term debt
|
(28,445,304 | ) | (29,865,500 | ) | (29,572,000 | ) | ||||||
|
Proceeds from revolving line of credit, recourse
|
- | 1,450,000 | 2,260,000 | |||||||||
|
Repayments of revolving line of credit, recourse
|
(1,450,000 | ) | (2,260,000 | ) | (5,000,000 | ) | ||||||
|
Repurchase of additional shares of limited liability company interests
|
- | (333,216 | ) | (120,354 | ) | |||||||
|
Cash distributions to members
|
(14,652,759 | ) | (33,339,164 | ) | (33,380,906 | ) | ||||||
|
Distributions to noncontrolling interests
|
(2,269,797 | ) | (3,559,725 | ) | (5,659,651 | ) | ||||||
|
Net cash used in financing activities
|
(46,817,860 | ) | (66,407,605 | ) | (71,472,911 | ) | ||||||
|
Effects of exchange rates on cash and cash equivalents
|
456 | 695 | (67,965 | ) | ||||||||
|
Net increase (decrease) in cash and cash equivalents
|
2,202,844 | (13,993,811 | ) | 10,944,394 | ||||||||
|
Cash and cash equivalents, beginning of the year
|
4,621,512 | 18,615,323 | 7,670,929 | |||||||||
|
Cash and cash equivalents, end of the year
|
$ | 6,824,356 | $ | 4,621,512 | $ | 18,615,323 | ||||||
9
|
ICON Leasing Fund Eleven, LLC
|
||||||||||||
|
(A Delaware Limited Liability Company)
|
||||||||||||
|
Consolidated Statements of Cash Flows
|
||||||||||||
|
Years Ended December 31,
|
||||||||||||
|
2011
|
2010
|
2009
|
||||||||||
|
Supplemental disclosure of cash flow information:
|
||||||||||||
|
Cash paid during the year for interest
|
$ | 159,468 | $ | 3,316,652 | $ | 5,195,787 | ||||||
|
Cash paid during the year for income taxes
|
$ | 626,769 | $ | 523,132 | $ | 629,763 | ||||||
|
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||||||
|
Principal and interest paid on non-recourse long term debt
|
||||||||||||
|
directly to lenders by lessees
|
$ | 21,420,470 | $ | 12,410,000 | $ | 12,478,000 | ||||||
|
Deconsolidation of noncontrolling interest in connection with
|
||||||||||||
|
the sale of a controlling interest in ICON Global Crossing, LLC
|
$ | - | $ | - | $ | 3,442,066 | ||||||
|
Deconsolidation of the carrying value of leased equipment in connection
|
||||||||||||
|
with the sale of a controlling interest in ICON Global Crossing, LLC
|
$ | - | $ | - | $ | 3,370,458 | ||||||
|
Note receivable received in connection with the sale of manufacturing
|
||||||||||||
|
equipment to W Forge Holdings, Inc.
|
$ | - | $ | - | $ | 10,015,000 | ||||||
|
Transfer of leased equipment at cost to assets held for
|
||||||||||||
|
sale
|
$ | - | $ | 14,952,257 | $ | 3,914,775 | ||||||
|
Exchange of a noncontrolling interest in a joint venture for notes receivable
|
$ | 3,588,928 | $ | - | $ | - | ||||||
|
Investment in ICON MW, LLC
|
$ | - | $ | 1,051,201 | $ | - | ||||||
10
Forward-Looking Information – Certain statements within this
document 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.
Additional Required Disclosure
To fulfill our promises to you we are required to make the following disclosures when applicable:
A detailed financial report on SEC Form 10-Q or 10-K (whichever is applicable) is available to you. It is typically filed either 45 or 90 days after the end of a quarter or year, respectively. Usually this means a
filing will occur on or around March 31, May 15, August 15, and November 15 of each year. It contains financial statements and detailed sources and uses of cash plus explanatory notes. You are always entitled to these reports. Please access them by:
|
·
|
Visiting www.iconinvestments.com
|
or
|
·
|
Visiting www.sec.gov
|
or
|
·
|
Writing us at: Angie Seenauth c/o ICON Investments, 3 Park Avenue, 36th Floor, New York, NY 10016.
|
We do not distribute these reports to you directly in order to keep our expenses down as the cost of mailing this report to all investors is significant. Nevertheless, the reports are immediately available upon your request.
| 11 |