Attached files
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| 8-K - ICON INCOME FUND NINE LLC | body.htm |
ICON Income Fund Nine, LLC
Portfolio Overview
Q3 2012
ICON Income Fund Nine, LLC
| Table of Contents | |||
| Letter from the CEOs | 1 | ||
| Introduction to Portfolio Overview | 2 | ||
| Recent Disposition | 2 | ||
| Portfolio Overview | 2 | ||
| Transactions with Related Parties | 3 | ||
| Financial Statements | 4 | ||
| Forward Looking Information | 8 |
ICON Income Fund Nine, LLC
Letter from the CEOs
Dear investor in ICON Income Fund Nine, LLC:
We wanted to take this time to summarize Fund Nine’s current portfolio and let you know what activity took place during the third quarter ended September 30, 2012. As you know, Fund Nine was in its liquidation period during the quarter. During the liquidation period, distributions generated from net rental income and proceeds from equipment sales generally fluctuate as remaining leases come to maturity or equipment is sold. During the third quarter of 2012, we made distributions to our investors in the amount of $707,469.
On September 27, 2012, Fund Nine sold the remaining Great Dane refrigeration trailers that were previously subject to lease with Conwell Corporation. Fund Nine initially purchased the refrigeration trailers for approximately $1,943,000 and, during the tenure of this investment, we collected approximately $2,834,000 in rental and sale proceeds.
A more detailed analysis of Fund Nine’s investments, which we encourage you to read, is contained in our Form 10-Q. Our Form 10-Q and our other quarterly, annual and current reports are available in the Investor Relations section of our website, www.iconinvestments.com.
As always, thank you for entrusting ICON with your investment assets.
Sincerely,
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Michael A. Reisner
Co-President and Co-Chief Executive Officer
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Mark Gatto
Co-President and Co-Chief Executive Officer
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1
ICON Income Fund Nine, LLC
Introduction to Portfolio Overview
We are pleased to present ICON Income Fund Nine, LLC’s (the “Fund”) Portfolio Overview for the third quarter of 2012. 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, LLC.
The Fund raised approximately $100,000,000 commencing with our initial offering on November 26, 2001 through the closing of the offering on April 30, 2003. In May 2008, we entered our liquidation period, which is expected to continue for several more years. During the liquidation period, we began the gradual, orderly termination of the Fund’s operations and affairs, and liquidation or disposition of its equipment, leases and financing transactions. Additionally, during the liquidation period, you will receive distributions that are generated from net rental income or equipment sales when realized. In some months, the distribution may be larger, in some months the distribution may be smaller, and in some months there may not be any distribution.
Recent Disposition
The Fund recently disposed of the following investment:
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Subsidiary of Frozen Foods Express, Inc.
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Structure:
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Lease
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Collateral:
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Great Dane refrigeration trailers.
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Disposition Date:
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9/27/2012
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Equity Invested:
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$1,943,000
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Total Proceeds Received:
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$2,834,000
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Portfolio Overview
As of September 30, 2012, our portfolio consisted primarily of the following investments:
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Wilhelmsen Lines Shipowning AS
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Structure:
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Lease
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Collateral:
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Roll-on-roll-off vehicle transportation vessels.
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Expiration Date:
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12/21/2013
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Aerolineas Argentinas S.A.
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Structure:
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Lease
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Collateral:
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Two Airbus A340-313X aircraft.
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Expiration Date:
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2/28/2018
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|||
2
ICON Income Fund Nine, LLC
Transactions with Related Parties
Our Manager performs certain services relating to the management of our equipment leasing and financing activities. Such services include, but are not limited to, the collection of lease payments from the lessees of the equipment, re-leasing services in connection with equipment which is off-lease, inspections of the equipment, liaising with and general supervision of lessees to ensure that the equipment is being properly operated and maintained, monitoring performance by the lessees of their obligations under the leases and the payment of operating expenses.
Administrative expense reimbursements were costs incurred by our Manager or its affiliates that were necessary to our operations. These costs included our Manager’s and its affiliates’ legal, accounting, investor relations and operations personnel, as well as professional fees and other costs that were charged to us based upon the percentage of time such personnel dedicated to us. Excluded were 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 2008, our Manager waived its right to future management fees and administrative expense reimbursements.
Our Manager also has a 1% interest in our profits, losses, cash distributions and liquidation proceeds. We paid distributions to our Manager in the amount of $7,074 and $22,732 for the three and nine months ended September 30, 2012, respectively. Additionally, our Manager’s interest in our net loss was $6,261 and $18,821 for the three and nine months ended September 30, 2012, respectively.
Your participation in the Fund is greatly appreciated.
We are committed to protecting the privacy of our investors in compliance with all applicable laws. Please be advised that, unless required by a regulatory authority such as FINRA or ordered by a court of competent jurisdiction, we will not share any of your personally identifiable information with any third party.
3
ICON Income Fund Nine, LLC
Financial Statements (A Delaware Limited Liability Company)
Consolidated Balance Sheets
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September 30, 2012
(unaudited)
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December 31, 2011
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 3,739,048 | $ | 1,715,911 | ||||
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Current portion of net investment in finance leases
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7,522,093 | 6,619,888 | ||||||
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Other current assets
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418,847 | 400,981 | ||||||
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Total current assets
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11,679,988 | 8,736,780 | ||||||
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Non-current assets:
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||||||||
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Net investment in finance leases, less current portion
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- | 5,759,946 | ||||||
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Leased equipment at cost (less accumulated depreciation of $16,951,702 and $15,807,492, respectively)
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31,501,478 | 34,491,282 | ||||||
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Other non-current assets
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18,405 | 66,667 | ||||||
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Total non-current assets
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31,519,883 | 40,317,895 | ||||||
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Total assets
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$ | 43,199,871 | $ | 49,054,675 | ||||
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Liabilities and Members' Equity
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Current liabilities:
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||||||||
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Current portion of non-recourse long-term debt
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$ | 30,839,827 | $ | 28,279,720 | ||||
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Derivative financial instruments
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224,739 | 548,169 | ||||||
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Maintenance reserves
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1,274,721 | - | ||||||
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Security deposit
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790,000 | 790,000 | ||||||
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Accrued expenses and other current liabilities
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308,060 | 434,223 | ||||||
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Total current liabilities
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33,437,347 | 30,052,112 | ||||||
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Non-current liabilities:
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Non-recourse long-term debt, less current portion
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- | 5,400,000 | ||||||
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Total liabilities
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33,437,347 | 35,452,112 | ||||||
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Commitments and contingencies
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Members' equity:
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Additional members
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10,741,610 | 14,855,432 | ||||||
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Manager
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(761,102 | ) | (719,549 | ) | ||||
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Accumulated other comprehensive loss
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(217,984 | ) | (533,320 | ) | ||||
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Total members' equity
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9,762,524 | 13,602,563 | ||||||
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Total liabilities and members' equity
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$ | 43,199,871 | $ | 49,054,675 | ||||
4
ICON Income Fund Nine, LLC
Financial Statements (A Delaware Limited Liability Company)
Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2012
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2011
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2012
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2011
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Revenue:
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Rental income
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$ | 575,518 | $ | 2,380,408 | $ | 2,637,174 | $ | 8,163,028 | ||||||||
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Finance income
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391,822 | 656,326 | 1,383,759 | 2,144,647 | ||||||||||||
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Loss from investments in joint ventures
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- | (405,898 | ) | - | (337,990 | ) | ||||||||||
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Net gain on sales of equipment
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11,419 | - | 60,615 | - | ||||||||||||
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Interest and other income
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322 | 156 | 1,405 | 33,596 | ||||||||||||
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Total revenue
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979,081 | 2,630,992 | 4,082,953 | 10,003,281 | ||||||||||||
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Expenses:
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General and administrative
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163,063 | 258,163 | 619,655 | 609,928 | ||||||||||||
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Repairs and maintenance
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(17,879 | ) | - | 800,697 | - | |||||||||||
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Vessel operating expenses
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- | 1,125,193 | - | 1,212,735 | ||||||||||||
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Interest
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557,108 | 801,951 | 1,721,115 | 2,396,125 | ||||||||||||
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Depreciation and amortization
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902,889 | 898,832 | 2,696,696 | 3,412,303 | ||||||||||||
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Impairment loss
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- | - | - | 22,314,396 | ||||||||||||
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Other operating expenses
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- | - | 126,887 | - | ||||||||||||
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Total expenses
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1,605,181 | 3,084,139 | 5,965,050 | 29,945,487 | ||||||||||||
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Net loss
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$ | (626,100 | ) | $ | (453,147 | ) | $ | (1,882,097 | ) | $ | (19,942,206 | ) | ||||
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Net loss allocable to:
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||||||||||||||||
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Additional members
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$ | (619,839 | ) | $ | (448,616 | ) | $ | (1,863,276 | ) | $ | (19,742,785 | ) | ||||
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Manager
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(6,261 | ) | (4,531 | ) | (18,821 | ) | (199,421 | ) | ||||||||
| $ | (626,100 | ) | $ | (453,147 | ) | $ | (1,882,097 | ) | $ | (19,942,206 | ) | |||||
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Comprehensive loss:
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Net loss
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$ | (626,100 | ) | $ | (453,147 | ) | $ | (1,882,097 | ) | $ | (19,942,206 | ) | ||||
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Change in fair value of derivative financial instruments
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93,042 | 165,374 | 315,336 | 559,363 | ||||||||||||
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Total comprehensive loss
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$ | (533,058 | ) | $ | (287,773 | ) | $ | (1,566,761 | ) | $ | (19,382,843 | ) | ||||
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Weighted average number of additional shares of limited liability company interests outstanding
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97,955 | 97,955 | 97,955 | 97,955 | ||||||||||||
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Net loss per weighted average additional share of limited liability company interests outstanding
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$ | (6.33 | ) | $ | (4.58 | ) | $ | (19.02 | ) | $ | (201.55 | ) | ||||
5
ICON Income Fund Nine, LLC
Financial Statements (A Delaware Limited Liability Company)
Consolidated Statements of Changes in Members' Equity
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Additional Shares
of Limited
Liability Company
Interests
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Additional Members
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Manager
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Accumulated Other Comprehensive Loss
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Total Members' Equity
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Balance, December 31, 2011
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97,955 | $ | 14,855,432 | $ | (719,549 | ) | $ | (533,320 | ) | $ | 13,602,563 | |||||||||
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Net loss
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- | (706,294 | ) | (7,134 | ) | - | (713,428 | ) | ||||||||||||
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Change in fair value of derivative financial instruments
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- | - | - | 108,636 | 108,636 | |||||||||||||||
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Cash distributions
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- | (700,385 | ) | (7,075 | ) | - | (707,460 | ) | ||||||||||||
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Balance, March 31, 2012 (unaudited)
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97,955 | 13,448,753 | (733,758 | ) | (424,684 | ) | 12,290,311 | |||||||||||||
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Net loss
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- | (537,143 | ) | (5,426 | ) | - | (542,569 | ) | ||||||||||||
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Change in fair value of derivative financial instruments
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- | - | - | 113,658 | 113,658 | |||||||||||||||
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Cash distributions
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- | (849,766 | ) | (8,583 | ) | - | (858,349 | ) | ||||||||||||
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Balance, June 30, 2012 (unaudited)
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97,955 | 12,061,844 | (747,767 | ) | (311,026 | ) | 11,003,051 | |||||||||||||
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Net loss
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- | (619,839 | ) | (6,261 | ) | - | (626,100 | ) | ||||||||||||
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Change in fair value of derivative financial instruments
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- | - | - | 93,042 | 93,042 | |||||||||||||||
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Cash distributions
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- | (700,395 | ) | (7,074 | ) | - | (707,469 | ) | ||||||||||||
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Balance, September 30, 2012 (unaudited)
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97,955 | $ | 10,741,610 | $ | (761,102 | ) | $ | (217,984 | ) | $ | 9,762,524 | |||||||||
6
ICON Income Fund Nine, LLC
Financial Statements (A Delaware Limited Liability Company)
Consolidated Statements of Cash Flows
(unaudited)
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Nine Months Ended
September 30,
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2012
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2011
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Cash flows from operating activities:
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Net loss
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$ | (1,882,097 | ) | $ | (19,942,206 | ) | ||
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Adjustments to reconcile net loss to net cash provided by operating activities:
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Rental income paid directly to lenders by lessees
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- | (6,510,000 | ) | |||||
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Finance income
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(1,383,759 | ) | (2,144,647 | ) | ||||
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Loss from investments in joint ventures
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- | 337,990 | ||||||
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Net gain on sales of equipment
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(60,615 | ) | - | |||||
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Depreciation and amortization
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2,696,696 | 3,412,303 | ||||||
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Interest expense on non-recourse financing paid directly to lenders by lessees
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501,558 | 2,036,155 | ||||||
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Interest expense from amortization of debt financing costs
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20,563 | 200,103 | ||||||
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Impairment loss
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- | 22,314,396 | ||||||
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Paid-in-kind interest
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1,210,108 | - | ||||||
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Changes in operating assets and liabilities:
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Collection of finance leases
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1,681,848 | 1,398,591 | ||||||
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Other assets
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(5,833 | ) | (9,990 | ) | ||||
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Deferred revenue
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- | (833,647 | ) | |||||
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Accrued expenses and other current liabilities
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(75,724 | ) | 168,289 | |||||
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Net cash provided by operating activities
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2,702,745 | 427,337 | ||||||
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Cash flows from investing activities:
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Proceeds from sales of equipment
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318,949 | 8,461,003 | ||||||
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Distributions received from joint ventures in excess of profits
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- | 754,592 | ||||||
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Net cash provided by investing activities
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318,949 | 9,215,595 | ||||||
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Cash flows from financing activities:
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||||||||
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Cash distributions to members
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(2,273,278 | ) | (1,364,632 | ) | ||||
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Repayment of non-recourse long-term debt
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- | (2,500,000 | ) | |||||
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Maintenance reserves receipts
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1,274,721 | - | ||||||
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Net cash used in financing activities
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(998,557 | ) | (3,864,632 | ) | ||||
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Net increase in cash and cash equivalents
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2,023,137 | 5,778,300 | ||||||
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Cash and cash equivalents, beginning of period
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1,715,911 | 929,220 | ||||||
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Cash and cash equivalents, end of period
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$ | 3,739,048 | $ | 6,707,520 | ||||
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Supplemental disclosure of non-cash investing and financing activities:
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Principal and interest on non-recourse long-term debt paid directly to lenders by lessees
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$ | 4,559,652 | $ | 11,352,909 | ||||
7
ICON Income Fund Nine, LLC
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:
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·
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Visiting www.iconinvestments.com, or
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|
·
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Visiting www.sec.gov, or
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|
·
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Writing us at: Angie Seenauth c/o ICON Investments, 3 Park Avenue, 36th Floor, New York, NY 10016
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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.
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