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
June 30, 2009




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_
000-50654





ICON Income Fund Ten, LLC(Exact name of registrant as specified in its charter)





Delaware
35-2193184(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)





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





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








Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.


[X] Yes     [ ] No




Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).
 [ ] Yes     [  ] No





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company. See the definitions of “large accelerated filer,’’ “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.




Large accelerated filer [  ]  Accelerated filer [  ]  Non-accelerated filer [X]  Smaller
reporting company [   ]





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


[  ] Yes   [X] No





Number of outstanding shares of limited liability company interests of the registrant on July 31, 2009 is 148,211.












ICON Income Fund Ten, LLC
Table of ContentsPART I - FINANCIAL INFORMATION
PageItem 1. Consolidated Financial StatementsConsolidated Balance Sheets
1Consolidated Statements of Operations
2Consolidated Statements of Changes in Equity
3Consolidated Statements of Cash Flows
4Notes to Consolidated Financial Statements
6Item 2. Manager’s Discussion and Analysis of Financial Condition and Results of Operations
23Item 3. Quantitative and Qualitative Disclosures About Market Risk
31Item 4. Controls and Procedures
32PART II – OTHER INFORMATIONItem 1. Legal Proceedings

33Item 1A. Risk Factors

33Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
33Item 3. Defaults Upon Senior Securities
33Item 4. Submission of Matters to a Vote of Security Holders
33Item 5. Other Information

33Item 6. Exhibits

34Signatures

35








Table of Contents





PART I – FINANCIAL INFORMATION





Item 1.  Consolidated Financial Statements





ICON Income Fund Ten, LLC(A Delaware Limited Liability Company)Consolidated Balance Sheets(unaudited)AssetsJune 30,


December 31,2009


2008Current assets:Cash and cash equivalents

$
3,128,163


$
3,784,794Current portion of net investment in finance lease


-



725,220Equipment held for sale or lease, net


23,350



98,350Restricted cash


161,142



226,882Accounts receivable, net


1,152,138



-Other current assets


345,105



282,062Total current assets


4,809,898



5,117,308Non-current assets:Net investment in finance lease, less current portion


-



6,916,347Leased equipment at cost (less accumulated depreciation of$50,927,554 and $47,649,844, respectively)


42,280,462



45,553,277Equipment (less accumulated depreciation of $1,041,459)


8,297,403



-Investments in joint ventures


29,631,669



30,591,890Investments in unguaranteed residual values


400,027



754,090Other non-current assets, net


55,953



66,285Total non-current assets


80,665,514



83,881,889Total Assets

$
85,475,412


$
88,999,197Liabilities and EquityCurrent liabilities:Current portion of non-recourse long-term debt

$
1,346,242


$
7,076,252Revolving line of credit, recourse


2,185,000



-Interest rate swap contracts


3,982



88,214Deferred revenue


22,830



48,699Due to Manager and affiliates


880,972



1,048,301Accrued expenses and other current liabilities


2,774,929



256,595Total Liabilities


7,213,955



8,518,061Commitments and contingencies (Note 13)Equity:Members' Equity:Additional Members


78,887,562



81,937,867Manager


(515,736
)


(484,924
)Accumulated other comprehensive loss


(1,899,174
)


(3,145,791
)Total Members' Equity


76,472,652



78,307,152Noncontrolling Interests


1,788,805



2,173,984Total Equity


78,261,457



80,481,136Total Liabilities and Equity

$
85,475,412


$
88,999,197










1
 Table of Contents








ICON Income Fund Ten, LLC(A Delaware Limited Liability Company)Consolidated Statements of Operations(unaudited)Three Months Ended


Six Months EndedJune 30,


June 30,2009


2008


2009


2008Revenue:Rental income

$
3,893,042


$
5,291,905


$
7,714,872


$
11,901,320Finance income


-



637,169



-



1,312,893Servicing income


1,594,485



-



2,566,220



-Income from investments in joint ventures


1,106,149



1,849,108



2,112,730



2,529,510Net (loss) gain on sales of equipment and unguaranteed residual values


(53,688
)


(26,001
)


74,855



6,781,517Interest and other income


9,446



140,535



14,578



240,217Total revenue


6,549,434



7,892,716



12,483,255



22,765,457Expenses:Management fees - Manager


330,798



413,976



679,448



947,563Administrative expense reimbursements - Manager


420,985



354,877



711,774



708,435General and administrative


1,689,043



340,179



3,158,519



755,608Interest


34,446



195,646



212,839



740,146Depreciation and amortization


2,234,502



3,810,281



4,205,976



9,262,738Total expenses


4,709,774



5,114,959



8,968,556



12,414,490Net income


1,839,660



2,777,757



3,514,699



10,350,967Less: Net income attributable to noncontrolling interests


75,258



65,811



157,482



160,281Net income attributable to Fund Ten

$
1,764,402


$
2,711,946


$
3,357,217


$
10,190,686Net income attributable to Fund Ten allocable to:Additional Members

$
1,746,758


$
2,684,827


$
3,323,645


$
10,088,779Manager


17,644



27,119



33,572



101,907$
1,764,402


$
2,711,946


$
3,357,217


$
10,190,686Weighted average number of additionalshares of limited liability company interests outstanding


148,231



148,275



148,231



148,306Net income attributable to Fund Ten per weightedaverage additional share of limited liability company interests

$
11.78


$
18.11


$
22.42


$
68.03











2
 Table of Contents








ICON Income Fund Ten, LLC(A Delaware Limited Liability Company)Consolidated Statements of Changes in Equity(unaudited)Members' EquityAdditional Shares








AccumulatedOther


Totalof Limited LiabilityCompany Interests


AdditionalMembers


Manager


ComprehensiveLoss


Members'Equity


NoncontrollingInterests


TotalEquityBalance, December 31, 2008


148,231


$
81,937,867


$
(484,924
)

$
(3,145,791
)

$
78,307,152


$
2,173,984


$
80,481,136Comprehensive income:Net income






1,576,887



15,928



-



1,592,815



82,224



1,675,039Change in valuation of interestrate swap contracts






-



-



8,863



8,863



-



8,863Currency translation adjustments






-



-



(129,926
)


(129,926
)


-



(129,926
)Total comprehensive income














(121,063
)


1,471,752



82,224



1,553,976Cash distributions to members andnoncontrolling interests


-



(3,186,975
)


(32,192
)


-



(3,219,167
)


(271,330
)


(3,490,497
)Balance, March 31, 2009


148,231



80,327,779



(501,188
)


(3,266,854
)


76,559,737



1,984,878



78,544,615Comprehensive income:Net income






1,746,758



17,644



-



1,764,402



75,258



1,839,660Change in valuation of interestrate swap contracts






-



-



267,768



267,768



-



267,768Currency translation adjustments






-



-



1,099,912



1,099,912



-



1,099,912Total comprehensive income














1,367,680



3,132,082



75,258



3,207,340Cash distributions to membersand noncontrolling interests


-



(3,186,975
)


(32,192
)


-



(3,219,167
)


(271,331
)


(3,490,498
)Balance, June 30, 2009


148,231


$
78,887,562


$
(515,736
)

$
(1,899,174
)

$
76,472,652


$
1,788,805


$
78,261,457











3
 Table of Contents











ICON Income Fund Ten, LLC(A Delaware Limited Liability Company)Consolidated Statements of Cash Flows(unaudited)Six Months EndedJune 30,2009


2008Cash flows from operating activities:Net income

$
3,514,699


$
10,350,967Adjustments to reconcile net income to net cashprovided by operating activities:Rental income paid directly to lenders by lessees


(4,386,105
)


(7,325,407
)Finance income


-



(1,312,893
)Income from investments in joint ventures


(2,112,730
)


(2,529,510
)Net gain on sales of equipment and unguaranteed residual values


(74,855
)


(6,781,517
)Depreciation and amortization


4,205,976



9,262,738Interest expense on non-recourse financing paid directlyto lenders by lessees


210,873



697,897Changes in operating assets and liabilities:Collection of finance leases


695,943



1,721,640Restricted cash


65,740



38,446Accounts receivable


(1,152,138
)


-Equipment


(1,154,418
)


-Other assets, net


(25,873
)


159,445Deferred revenue


(25,869
)


(33,970
)Due to Manager and affiliates, net


(167,329
)


108,863Accrued expenses and other current liabilities


2,436,121



(188,801
)Distributions from joint ventures


2,119,337



608,400Net cash provided by operating activities


4,149,372



4,776,298Cash flows from investing activities:Proceeds from sales of equipment and unguaranteed residual values


299,273



17,341,511Investment in financing facility


-



(164,822
)Distributions received from joint ventures in excess of profits


1,162,249



1,454,963Net cash provided by investing activities


1,461,522



18,631,652Cash flows from financing activities:Proceeds from revolving line of credit


2,185,000



-Repayment of revolving line of credit


-



(5,000,000
)Repayments of non-recourse long-term debt


(1,471,530
)


-Cash distributions to members


(6,438,334
)


(6,442,608
)Shares of limited liability company interests redeemed


-



(98,523
)Cash distributions to noncontrolling interests


(542,661
)


(420,081
)Net cash used in financing activities


(6,267,525
)


(11,961,212
)Net (decrease) increase in cash and cash equivalents


(656,631
)


11,446,738Cash and cash equivalents, beginning of the period


3,784,794



4,448,826Cash and cash equivalents, end of the period

$
3,128,163


$
15,895,564









4
 Table of Contents





ICON Income Fund Ten, LLC(A Delaware Limited Liability Company)Consolidated Statements of Cash Flows(unaudited)Six Months Ended June 30,2009


2008Supplemental disclosure of non-cash investing and financing activities:Principal and interest paid on non-recourse long-term debtdirectly to lenders by lessees

$
4,386,105


$
7,325,407Transfer from net investment in finance lease to equipment

$
6,829,746


$
-Transfer of non-recourse long-term debt in connection withsale of a subsidiary

$
-


$
10,906,321








5
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)





(1)
Organization





ICON Income Fund Ten, LLC (the “LLC”) was formed on January 2, 2003 as a Delaware limited liability company.  The LLC is engaged in one business segment, the business of purchasing equipment and leasing or servicing it to third parties, providing equipment and other financing, acquiring equipment subject to lease
and, to a lesser degree, acquiring ownership rights to items of leased equipment at lease expiration.  The LLC will continue until December 31, 2023, unless terminated sooner.





The LLC’s principal investment objective is to obtain the maximum economic return from its investments for the benefit of its members.  To achieve this objective, the LLC: (i) acquires a diversified portfolio by making investments in leases and other financing transactions; (ii) makes monthly cash distributions, at the
LLC’s manager’s discretion, to its members commencing with each member’s admission to the LLC, continuing until the end of the operating period; (iii) reinvests substantially all undistributed cash from operations and cash from sales of equipment and other financing transactions during the operating period; and (iv) will dispose of its investments and distribute the excess cash from such dispositions to its members beginning with the commencement of the liquidation period.  The LLC
is currently in its operating period, which commenced in April 2005.





The manager of the LLC is ICON Capital Corp., a Delaware corporation (the “Manager”).  The Manager manages and controls the business affairs of the LLC, including, but not limited to, the equipment leases and other financing transactions that the LLC enters into pursuant to the terms of the LLC’s amended and
restated operating agreement (the “LLC Agreement”).  Additionally, the Manager has a 1% interest in the profits, losses, cash distributions and liquidation proceeds of the LLC.





Members’ capital accounts are increased for their initial capital contribution plus their proportionate share of earnings and decreased by their proportionate share of losses and distributions. Profits, losses, cash distributions and liquidation proceeds are allocated 99% to the additional members and 1% to the Manager until each
additional member has (a) received cash distributions and liquidation proceeds sufficient to reduce their adjusted capital account to zero and (b) received, in addition, other distributions and allocations that would provide an 8% per year cumulative return, compounded daily, on their outstanding adjusted capital account.  After such time, distributions will be allocated 90% to the additional members and 10% to the Manager.





(2)
Summary of Significant Accounting Policies








Basis of Presentation and Consolidation


The accompanying consolidated financial statements of the LLC have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for the interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for Quarterly Reports on Form 10-Q.  In
the opinion of the Manager, all adjustments considered necessary for a fair presentation have been included.  These consolidated financial statements should be read together with the consolidated financial statements and notes included in the LLC’s Annual Report on Form 10-K for the year ended December 31, 2008.  The results for the interim period are not necessarily indicative of the results for the full year.  The Manager has evaluated all subsequent events through August
13, 2009, the date the consolidated financial statements were issued.






6
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)
 
 (2)
Summary of Significant Accounting Policies - continued


The consolidated financial statements include the accounts of the LLC and its majority-owned subsidiaries and other controlled entities.  All intercompany accounts and transactions have been eliminated in consolidation.  In joint ventures where the LLC has majority ownership, the financial condition and results of
operations of the joint venture are consolidated.  Noncontrolling interest represents the minority owner’s proportionate share of its equity in the joint venture.  The noncontrolling interest is adjusted for its share of the earnings, losses, investments and distributions of the joint venture.





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





Effective January 1, 2009, the LLC adopted and, for presentation and disclosure purposes, retrospectively applied Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”.  As a result, noncontrolling
interests are reported as a separate component of consolidated equity and income attributable to the noncontrolling interest is included in consolidated net income.  The attribution of income between controlling and noncontrolling interests is disclosed on the accompanying consolidated statements of operations. Accordingly, the prior year consolidated financial statements have been revised to conform to the current year presentation.





Risks and Uncertainties





In the normal course of business, the LLC is exposed to two significant types of economic risk: credit and market.   Credit risk is the risk of a lessee, borrower or other counterparty’s inability or unwillingness to make contractually required payments.  Concentrations
of credit risk with respect to lessees, borrowers or other counterparties are dispersed across different industry segments within the United States of America and throughout the world.  Although the LLC does not currently foresee a  concentrated credit risk associated with these customers, contractual payments are dependent upon the financial stability of the industry segments in which they operate.  Market risk reflects the change in the value of debt instruments, derivatives and
credit facilities due to changes in interest rate spreads or other market factors.  The LLC believes that the carrying value of its investments and derivative obligations are reasonable, taking into consideration these risks, along with estimated collateral values, payment history and other relevant information.





Revenue Recognition





The LLC provides financing to third parties, generally in the form of leases and loans.  Additionally, the LLC may make loans to borrowers secured by various capital.  With respect to leases of equipment, each lease is classified as either a finance lease or an operating lease, which is based upon the terms of the
lease. Loans are typically classified as notes receivable.




7
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)
 
 (2)
Summary of Significant Accounting Policies - continued


For finance leases and notes receivable, the LLC records finance and interest income, respectively, on the consolidated statement of operations using the effective interest rate method, which results in a constant rate of return over the term of the lease.  For operating leases, rental income is recognized on a straight-line
basis over the lease term.  Billed operating lease receivables are included in accounts receivable until collected.  Deferred revenue is the difference between the timing of the receivables billed and the income recognized on a straight-line basis.





The recognition of revenue may be suspended when deemed appropriate by the Manager, in accordance with the LLC’s policy on doubtful accounts.





Goodwill and Intangible Assets




Business combinations are accounted for under the purchase method of accounting.  Goodwill resulting from a business combination represents the difference between the cost of an acquisition and the LLC’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognized
at the date of acquisition.  Intangible assets generally represent customer and technology relationships and intellectual property.




In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets”, the LLC tests goodwill and intangible assets for impairment on an annual basis, or more frequently if events or circumstances indicate that it might be impaired.  An impairment loss will be recognized
to the extent that the carrying amount exceeds the fair value of the asset.




Goodwill is initially recorded as an asset at cost and is subsequently measured at cost less accumulated impairment losses.  Intangible assets are depreciated on a straight-line basis over the estimated useful lives and stated at cost less accumulated amortization and impairment losses.




Income Taxes





The LLC is taxed as a partnership for federal and State income tax purposes.  No provision for income taxes has been recorded since the liability for such taxes is that of each of the members rather than the LLC.  The LLC's income tax returns are subject to examination
by the federal and State taxing authorities, and changes, if any, could adjust the individual income tax of the members.





Some of the LLC’s wholly-owned foreign subsidiaries are taxed as corporations in their local tax jurisdictions.  For these entities, the LLC uses the liability method of accounting for income taxes as required by SFAS No. 109, “Accounting for Income Taxes.”  Under
this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities.  Deferred tax assets and liabilities are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse.  Valuation allowances are established when it is determined that it is more likely than not that the deferred tax assets will not be realized.





In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”), the LLC records a liability for unrecognized tax benefits resulting from uncertain tax
positions taken or expected to be taken in a tax return.  The LLC recognizes interest and penalties, if any, related to unrecognized tax benefit in income tax expense.  The provisions of FIN 48 did not have any impact on the LLC’s consolidated financial statements for the periods presented.




8
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)
 
 (2)
Summary of Significant Accounting Policies - continued


Use of Estimates





The preparation of financial statements in conformity with US GAAP requires the Manager to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses
during the reporting period.  Significant estimates primarily include the determination of allowance for doubtful accounts, depreciation and amortization, impairment losses, estimated useful lives and residual values.  Actual results could differ from those estimates.





Reclassifications





Certain reclassifications have been made to the accompanying consolidated financial statements in prior periods to conform to the current presentation.





Recent Accounting Pronouncements





In September 2006, the FASB issued SFAS No. 157, “Accounting for Fair Value Measurements” (“SFAS No. 157”).  SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure and is effective for fiscal
years beginning after November 15, 2007 and interim periods within those fiscal years.  In February 2008, the FASB issued FASB Staff Position (“FSP”) No. 157-2, “Effective Date of FASB Statement No. 157” (“FSP 157-2”). FSP 157-2 delayed the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis
(at least annually), for fiscal years beginning after November 15, 2008. The measurement and disclosure requirements related to financial assets and financial liabilities were adopted by the LLC on January 1, 2008.  The LLC adopted FSP 157-2 on January 1, 2009. The adoption of SFAS No. 157 and FSP 157-2 for financial and non-financial assets and financial and non-financial liabilities did not have a significant impact on the LLC’s consolidated financial statements.





In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141(R)”).  Under SFAS No. 141(R), an entity is required to recognize the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at
their fair value on the acquisition date.  It further requires that acquisition-related costs be recognized separately from the acquisition and expensed as incurred; that restructuring costs generally be expensed in periods subsequent to the acquisition date; and that changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period be recognized as a component of the provision for taxes.  The adoption of SFAS No. 141(R) changed
the LLC’s accounting treatment for business combinations on a prospective basis beginning January 1, 2009.







9
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)
 
 (2)
Summary of Significant Accounting Policies - continued
  On March 19, 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of SFAS No. 133” (“SFAS No. 161”).  SFAS No. 161 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how:
(a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”); and (c) derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.  SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008 and, therefore, the LLC was
required to provide such disclosures beginning with the interim period ended March 31, 2009.


In April 2009, the FASB issued FSP No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability have Significantly Decreased and Identifying Transactions that are Not Orderly” (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with
SFAS No. 157 when the volume and level of activity for the asset or liability have significantly decreased. Additionally, FSP 157-4 provides guidance on identifying circumstances that indicate a transaction is not orderly.   The FASB expanded the scope of FSP 157-4 to all assets and liabilities measured at fair value.  The LLC adopted FSP 157-4 during the quarter ended June 30, 2009. The adoption of FSP 157-4 did not have a significant impact on the LLC’s consolidated financial statements.





In April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (“APB”) 28-1, “Interim Disclosure about Fair Value of Financial Instruments” (“FSP 107-1/APB 28-1”). FSP 107-1/APB 28-1 requires interim disclosures regarding the fair values
of financial instruments that are within the scope of SFAS No. 107, “Disclosures about the Fair Value of Financial Instruments” (“SFAS No. 107”). Additionally, FSP 107-1/APB 28-1 requires disclosure of the methods and significant assumptions used to estimate the fair value of financial instruments on an interim basis as well as changes of the methods and significant assumptions from prior periods. FSP 107-1/APB 28-1 does not change the accounting treatment for these financial instruments. 
The LLC adopted FSP 107-1/APB 28-1 during the quarter ended June 30, 2009. The adoption of FSP 107-1/APB 28-1 did not have a significant impact on the LLC’s consolidated financial statements.





In May 2009, the FASB issued SFAS No. 165, “Subsequent Events (“SFAS No. 165”).  SFAS No. 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be
issued.  It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date; that is, whether that date represents the date the financial statements were issued or were available to be issued.  The LLC adopted SFAS No. 165 during the quarter ended June 30, 2009.  The adoption of SFAS No. 165 did not have a significant impact on the LLC’s consolidated financial statements.







10
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)


(3)
Net Investment in Finance Lease





There was no net investment in finance lease as of June 30, 2009.  Net investment in finance lease consisted of the following at December 31, 2008:





Minimum rents receivable, net

$
10,650,349Estimated residual values


1,596,832Initial direct costs, net


72,269Unearned income


(4,677,883
)Net investment in finance lease


7,641,567Less: Current portion of net investment in finance lease


725,220Net investment in finance lease, less current portion

$
6,916,347








On June 30, 2005, the LLC, through its wholly-owned subsidiary, ICON Premier, LLC (“ICON Premier”), executed a sales and purchase agreement, a master lease agreement and related documents (collectively, the “Lease”) with Premier Telecom Contracts Limited (“Premier Telecom”), a licensee providing bedside entertainment services to hospitals
in the United Kingdom, in connection with the purchase of approximately 5,000 bedside entertainment and communication terminals installed in several National Health Service hospitals in the United Kingdom.  The base term of the Lease, which commenced on January 1, 2006, was for a period of 84 months.  ICON Premier purchased approximately $13,944,600 (£8,091,000) of bedside entertainment and communication terminals, inclusive of initial direct costs, on lease to Premier Telecom.  In
January 2009, ICON Premier reached an agreement with the equity holders of Pretel Group Limited (“Pretel”), the ultimate parent company of Premier Telecom, in which ICON Premier acquired a 51% ownership interest in Pretel in consideration of restructuring the lease financing between ICON Premier and Premier Telecom.  The company now consolidates Pretel in its financial statements.  As a result, the company reclassified its investment from a finance lease to equipment on a consolidated
basis.  See Note 5 for further discussion.


11
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)
 
 (4)
Leased Equipment at Cost


Leased equipment at cost consisted of the following:





June 30,2009


December 31,(unaudited)


2008Marine vessels

$
70,987,238


$
70,987,238Telecommunications equipment


13,884,669



13,884,669Manufacturing equipment


8,255,258



8,278,522Information technology equipment


80,851



52,69293,208,016



93,203,121Less: Accumulated depreciation


(50,927,554
)


(47,649,844
)$
42,280,462


$
45,553,277





Depreciation expense on leased equipment was $1,658,391 and $3,795,011 for the three months ended June 30, 2009 and 2008, respectively.  Depreciation expense was $3,314,324 and $9,231,887 for the six months ended June 30, 2009 and 2008, respectively.





Manufacturing Equipment





On December 10, 2007, the LLC completed the acquisition of and simultaneously leased back substantially all of the machining and metal working equipment (the “Equipment”) of MW Monroe Plastics, Inc. (“Monroe”), a wholly-owned subsidiary of MW Universal, Inc. (“MWU”), for a purchase price of $2,000,000.  On
July 28, 2009, the LLC and Monroe agreed to terminate the lease of the Equipment.  Simultaneously with the termination of the lease with Monroe, the LLC transferred title to the Equipment to Cerion MPI, LLC (“MPI”), an affiliate of Monroe, in consideration for MPI transferring title to equipment of greater fair market value to the LLC.  Beginning on August 1, 2009, the LLC entered into a master lease agreement with MPI for such equipment for a term of 41 months.  The obligations
of MPI under the master lease are guaranteed by its parent company, Cerion, LLC.





(5)
Business Acquisition





On January 30, 2009, ICON Premier acquired 51% of the outstanding stock of Pretel for a purchase price of $1 in consideration for restructuring its pre-existing lease transaction with Pretel.  The estimated fair value of the net assets acquired of approximately $116,500 exceeded the total purchase price.  Accordingly,
the LLC reduced the estimated fair value of the non-financial long-term assets acquired to the adjusted purchase price.





The acquisition was accounted for as a business combination, and the results of operations for this acquisition have been included in the consolidated financial statements of the LLC from the date of acquisition.  Had the acquisition occurred as of January 1, 2009, the impact on the LLC’s consolidated results would have
been immaterial.  The purpose of this acquisition was to protect the LLC’s interest in a direct finance lease in connection with a first priority security interest in the Lease.  Accordingly, the LLC became the majority shareholder of Pretel until such time that such amounts due to the LLC under the Lease will be paid in full.  At such time, the control of the business will revert back to the original shareholders.








12
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)
 
 (5)
Business Acquisition - continued


The purchase price was allocated based upon the fair values of the assets and liabilities acquired.  The preliminary purchase price allocation is subject to adjustment for changes in additional information, including final asset valuations. The preliminary allocation of the purchase price to the fair value of the assets
acquired and liabilities assumed at the date of acquisition was as follows (unaudited):





AmountCurrent assets:Cash

$
354,332Other receivables, net


715,551Other current assets


122,309Non-current assets:Equipment


1,218,985Total assets acquired


2,411,177Current liabilities:Accrued expenses and other current liabilities


2,411,176Total liabilities assumed


2,411,176Total purchase price

$
1




(6)
Investments in Joint Ventures


ICON Global Crossing, LLC





On November 17, 2005, the LLC, along with ICON Leasing Fund Eleven, LLC (“Fund Eleven”) and ICON Income Fund Eight A L.P. (“Fund Eight A”), entities also managed by the Manager, formed ICON Global Crossing, LLC (“ICON Global Crossing”), with original ownership interests of 44%, 44% and 12%, respectively,
to purchase telecommunications equipment.  On March 31, 2006, Fund Eleven made an additional capital contribution of approximately $7,734,000 to ICON Global Crossing, which changed the ownership interests for the LLC, Fund Eleven and Fund Eight A to 30.62%, 61.39% and 7.99%, respectively.  The total capital contributions made to ICON Global Crossing were approximately $25,131,000, of which the LLC’s share was approximately $7,695,000.  During February and April 2006, ICON Global
Crossing purchased telecommunications equipment that is subject to a lease with Global Crossing Telecommunications, Inc.  The purchase price, inclusive of initial direct costs, was approximately $25,278,000.  The equipment is subject to a 48-month lease that commenced on April 1, 2006.






13
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)





(6)
Investments in Joint Ventures - continued





Information as to the results of operations of ICON Global Crossing is summarized below:





Three Months Ended June 30,


Six Months Ended June 30,(unaudited)


(unaudited)2009


2008


2009


2008Revenue

$
1,846,437


$
1,846,437


$
3,692,874


$
3,692,874Net income

$
659,194


$
659,625


$
1,342,219


$
1,348,769LLC's share of net income

$
201,845


$
201,977


$
410,987


$
412,993





ICON Mayon, LLC





On June 26, 2007, the LLC and ICON Leasing Fund Twelve, LLC (“Fund Twelve”), an entity also managed by the Manager, formed ICON Mayon, LLC (“ICON Mayon”), with ownership interests of 49% and 51%, respectively.  On July 24, 2007, ICON Mayon purchased a 98,507 DWT Aframax product tanker, the Mayon Spirit,
from an affiliate of Teekay Corporation (“Teekay”).  The purchase price for the Mayon Spirit was approximately $40,250,000, with approximately $15,312,000 funded in the form of a capital contribution to ICON Mayon and borrowings of approximately $24,938,000 of non-recourse debt borrowed from Fortis Capital Corp.  Simultaneously with the closing of the purchase of the Mayon Spirit, the Mayon Spirit was bareboat chartered back to Teekay for a term of 48 months.  The charter
commenced on July 24, 2007.  The total capital contributions made to ICON Mayon were approximately $16,020,000, of which the LLC’s share was approximately $7,548,000.





Information as to the results of operations of ICON Mayon is summarized below:





Three Months Ended June 30,


Six Months Ended June 30,(unaudited)


(unaudited)2009


2008


2009


2008Revenue

$
1,551,702


$
1,551,702


$
3,103,404


$
3,103,404Net income

$
604,555


$
498,647


$
1,157,407


$
1,092,414LLC's share of net income

$
314,991


$
263,095


$
604,647


$
572,800








ICON Carina Holdings, LLC





On December 3, 2008, ICON Eagle Carina Pte. Ltd. (“ICON Eagle Carina”), a Singapore corporation wholly-owned by ICON Eagle Carina Holdings, LLC (“ICON Carina Holdings”), a Marshall Islands limited liability company, owned 35.7% by the LLC and 64.3% by Fund Twelve, executed a Memorandum of Agreement to purchase
a 95,639 DWT Aframax product tanker, the M/V Eagle Carina (the “Eagle Carina”), from Aframax Tanker II AS.  On December 18, 2008, the Eagle Carina was purchased for $39,010,000, of which $27,000,000 of non-recourse debt was borrowed from Fortis Bank NV/SA (“Fortis”) and DVB Bank SE (“DVB”).  The Eagle Carina is subject to an 84-month bareboat charter with AET, Inc. Limited (“AET”) that expires on November 14, 2013.  ICON Carina Holdings
paid an acquisition fee to the Manager of approximately $1,170,000 in connection with this transaction, of which the LLC’s share was approximately $418,000.




14
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)


(6)
Investments in Joint Ventures - continued





Information as to the results of operations of ICON Carina Holdings is summarized below:





Three Months Ended June 30,


Six Months Ended June 30,(unaudited)


(unaudited)2009


2008


2009


2008Revenue

$
1,486,616


$
-


$
2,972,977


$
-Net income

$
344,536


$
-


$
582,923


$
-LLC's share of net income

$
122,999


$
-


$
208,104


$
-





ICON Corona Holdings, LLC





On December 3, 2008, ICON Eagle Corona Pte. Ltd. (“ICON Eagle Corona”), a Singapore corporation wholly-owned by ICON Eagle Corona Holdings, LLC (“ICON Corona Holdings”), a Marshall Islands limited liability company owned, 35.7% by the LLC and 64.3% by Fund Twelve, executed a Memorandum of Agreement to purchase
a 95,634 DWT Aframax product tanker, the M/V Eagle Corona (the “Eagle Corona”), from Aframax Tanker II AS.  On December 31, 2008, the Eagle Corona was purchased for $41,270,000, of which $28,000,000 of non-recourse debt was borrowed from Fortis and DVB.  The Eagle Corona is subject to an 84-month bareboat charter with AET that expires on November 14, 2013.  ICON Corona Holdings paid an acquisition fee to the Manager of approximately $1,238,000 in connection with this
transaction, of which the LLC’s share was approximately $442,000.





Information as to the results of operations of ICON Corona Holdings is summarized below:





Three Months Ended June 30,


Six Months Ended June 30,(unaudited)


(unaudited)2009


2008


2009


2008Revenue

$
1,522,555


$
-


$
3,044,927


$
-Net income

$
316,370


$
-


$
588,252


$
-LLC's share of net income

$
112,944


$
-


$
210,006


$
--





(7)
Non-Recourse Long-Term Debt





On June 24, 2004, ICON Containership I, LLC (“ICON Containership I”) and ICON Containership II, LLC (“ICON Containership II”), two wholly-owned subsidiaries of the LLC, each borrowed $26,150,000 from Fortis Capital Corp. in connection with the acquisitions of the M/V ZIM
Canada (the “ZIM Canada”) and the M/V ZIM Korea (the “ZIM Korea”) from ZIM Israel Navigation Co. Ltd. (“ZIM”).  The non-recourse long-term debt obligations accrued interest at the London Interbank Offered Rate plus 1.50% per year.  The non-recourse long-term debt obligations required 60 monthly payments ranging from approximately $372,000 to $483,000.  The lender had a security interest in the ZIM Canada and the ZIM Korea and an assignment of the
charter hire with ZIM.  The LLC paid and capitalized approximately $523,000 in debt financing costs.  At June 30, 2009 and December 31, 2008, the outstanding balance of the non-recourse long-term debt obligations was $1,346,242 and $7,076,252, respectively.




15
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)


(7)
Non-Recourse Long-Term Debt – continued





On July 1, 2009, the LLC, through ICON Containership I and ICON Containership II, repaid the outstanding balance of the non-recourse long-term debt obligations.  The payment of $1,350,695, which consisted of principal and interest outstanding as of such date, satisfied all of the LLC’s non-recourse long-term debt obligations.





(8)
Revolving Line of Credit, Recourse





The LLC and certain entities sponsored and organized by the Manager, ICON Income Fund Eight B L.P. (“Fund Eight B”), ICON Income Fund Nine, LLC, Fund Eleven and Fund Twelve (collectively, the “Borrowers”), are parties to a Commercial Loan Agreement, as amended (the “Loan Agreement”), with California
Bank & Trust (“CB&T”).  The Loan Agreement provides for a revolving line of credit of up to $30,000,000 pursuant to a senior secured revolving loan facility (the “Facility”), which is secured by all assets of the Borrowers not subject to a first priority lien, as defined in the Loan Agreement.  Each of the Borrowers is jointly and severally liable for all amounts borrowed under the Facility.  At June 30, 2009, no amounts were accrued related to the
LLC’s joint and several obligations under the Facility.  Amounts available under the Facility are subject to a borrowing base that is determined, subject to certain limitations, on the present value of the future receivables under certain lease agreements and loans in which the Borrowers have a beneficial interest.





The interest rate for general advances under the Facility is CB&T’s prime rate and the interest rate on up to five separate advances that are permitted to be made under the Facility is the rate at which U.S. dollar deposits can be acquired by CB&T in the London Interbank Eurocurrency Market plus 2.5% per year.  The
interest rate at June 30, 2009 was 3.25%.  In addition, the Borrowers are obligated to pay a quarterly commitment fee of 0.25% on unused commitments under the Facility.





Aggregate borrowings by all Borrowers under the Facility amounted to $10,330,000 at June 30, 2009.  The balances of $2,185,000, $885,000 and $7,260,000 were borrowed by the LLC, Fund Eight B and Fund Eleven, respectively.  Subsequent to June 30, 2009, the LLC and Fund Eight B repaid $350,000 and $120,000, which reduced
the LLC’s and Fund Eight B’s outstanding loan balances to $1,835,000 and $765,000, respectively.





Pursuant to the Loan Agreement, the Borrowers are required to comply with certain covenants.  At June 30, 2009, the Borrowers were in compliance with all covenants.





On August 12, 2009, the Borrowers entered into a Loan Modification Agreement to the Loan Agreement. The changes to the Loan Agreement are (i) an extension  of the Facility from April 30, 2010 to June 30, 2011, (ii) an increase of the quarterly commitment fee from 0.25% to 0.50% on unused commitments under the Facility, (iii)
the interest rate on all current and future borrowings under the Facility will be at a rate not less than 4.0% per year, and (iv) the addition of ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P., an affiliate of the Manager, as a permitted borrower under the Facility. The Borrowers may request a one year extension to the revolving line of credit within 390 days of the current expiration date, but the Lender has no obligation to extend.





16
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)





(9)
Transactions with Related Parties





In accordance with the terms of the LLC Agreement, the LLC pays or paid the Manager (i) management fees ranging from 1% to 7% based on a percentage of the rentals and other contractual payments recognized either directly by the LLC or through its joint ventures and (ii) acquisition fees, through the end of the operating period, of 3%
of the purchase price of the LLC’s investments.  In addition, the Manager is reimbursed for certain administrative expenses incurred in connection with the LLC’s operations.  The Manager also has a 1% interest in the LLC’s profits, losses, cash distributions and liquidation proceeds.





The Manager performs certain services relating to the management of the LLC’s equipment leasing and other 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 assure 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 are costs incurred by the Manager or its affiliates that are necessary to the LLC’s operations.  These costs include the Manager’s and its affiliates’ legal, accounting, investor relations and operations personnel costs, as well as professional fees and other costs that are
charged to the LLC based upon the percentage of time such personnel dedicate to the LLC.  Excluded are salaries and related costs, travel expenses and other administrative costs incurred by individuals with a controlling interest in the Manager.





Fees and other expenses paid or accrued by the LLC to the Manager were as follows (unaudited):





Three Months Ended


Six Months EndedJune 30,


June 30,Entity

Capacity

Description

2009


2008


2009


2008ICON Capital Corp.

Manager

Management fees (1)

$
330,798


$
413,976


$
679,448


$
947,563ICON Capital Corp.

Manager

Administrative expense reimbursements (1)

$
420,985


$
354,877


$
711,774


$
708,435(1)  Amount charged directly to operations.





At June 30, 2009, the LLC had a net payable of $880,972 due to the Manager and its affiliates that primarily consisted of administrative expense reimbursements and amounts owed in connection with the investments in ICON Carina Holdings and ICON Corona Holdings.





(10)
Derivative Financial Instruments





The LLC may enter into derivative transactions for purposes of hedging specific financial exposures, including movements in foreign currency exchange rates and changes in interest rates on its non-recourse long-term debt. The LLC enters into these instruments only for hedging underlying exposures.  The LLC does not hold or issue
derivative financial instruments for purposes other than hedging, except for warrants, which are not hedges.  Certain derivatives may not meet the established criteria to be designated as qualifying accounting hedges, even though the LLC believes that these are effective economic hedges.





17
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)





(10)
Derivative Financial Instruments - continued





The LLC accounts for derivative financial instruments in accordance with SFAS No. 133, which established accounting and reporting standards for derivative financial instruments, and SFAS No. 161, which the LLC adopted on January 1, 2009.  SFAS No. 133 requires the LLC to recognize all derivatives as either assets or liabilities
in the consolidated balance sheets and measure those instruments at fair value.  The LLC recognizes the fair value of all derivatives as either assets or liabilities in the consolidated balance sheets and changes in the fair value of such instruments are recognized immediately in earnings unless certain accounting criteria established by SFAS No. 133 re met.  These criteria demonstrate that the derivative is expected to be highly effective at offsetting changes in the fair value or expected
cash flows of the underlying exposure at both the inception of the hedging relationship and on an ongoing basis and include an evaluation of the counterparty risk and the impact, if any, on the effectiveness of the derivative.  If these criteria are met, which the LLC must document and assess at inception and on an ongoing basis, the LLC recognizes the changes in fair value of such instruments in accumulated other comprehensive income (loss) (“AOCI”), a component of equity in the consolidated
balance sheets.  Changes in the fair value of the ineffective portion of all derivatives are recognized immediately in earnings.





Interest Rate Risk








The objectives of these interest rate derivatives are to add stability to interest expense and to manage exposure to interest rate movements. The hedging strategy to accomplish this objective is to match the projected future cash flows with the underlying debt service. Interest rate swaps designated as cash flow hedges involve the
receipt of floating-rate interest payments from a counterparty in exchange for making fixed interest rate payments over the life of the agreements without exchange of the underlying notional amount.




For these derivatives, the LLC reports its interest in the gain or loss from the effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings and is recorded as a component
of income (loss) from investments in joint ventures. During the six months ended June 30, 2009, the LLC recorded no hedge ineffectiveness in earnings. At June 30, 2009, the total unrealized loss recorded to AOCI related to the LLC’s interest in the change in fair value of these interest rate swaps was approximately $419,000.





During the twelve months ended June 30, 2010, the LLC estimates that an additional $497,349 will be transferred from AOCI to income (loss) from investments in joint venture.




18
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)





(10)
Derivative Financial Instruments - continued





Non-designated Derivatives





The LLC holds interest rate swaps that are not speculative and are used to meet the LLC’s objectives to use interest rate derivatives to add stability to interest expense and to manage its exposure to interest rate movements.  The LLC’s hedging strategy to accomplish this objective is to match the projected
future business cash flows with the underlying debt service.  Interest rate swaps involve the receipt of floating-rate interest payments from a counterparty in exchange for the LLC making fixed interest rate payments over the life of the agreements without exchange of the underlying notional amount.  Additionally, the LLC holds warrants that are held for purposes other than hedging.  All changes in the fair value of the interest rate swaps and the warrants are recorded directly in earnings.  As
of June 30, 2009, the LLC had the following outstanding derivatives that were not designated as hedges in qualifying hedging relationships (unaudited):





Product

Number of Instruments


Notional AmountInterest rate swaps

2


$
1,346,242Warrants

3



N/A








The table below presents the fair value of the LLC’s derivative financial instruments as well as their classification within the LLC’s consolidated balance sheet as of June 30, 2009 (unaudited):





Asset Derivatives

Liability DerivativesBalance Sheet Location

Fair Value

Balance Sheet Location

Fair ValueDerivatives not designated as hedginginstruments under SFAS 133:Interest rate swaps


$
-

Interest rate swap contracts

$
3,982Warrants
Other non-current assets

$
58,308



$
-




The LLC’s derivative financial instruments not designated as hedging instruments under SFAS No. 133 generated a netgain on the statements of operations for the three and six months ended June 30, 2009 of $39,918 and $80,960, respectively. These
gains wererecorded as a component of general and administrative expenses. The netgain recorded for the three months ended June 30, 2009, was comprised of realized gains of$37,408 relating to interest rate swap contracts and $2,510 relating to warrants. The gain recorded for the six months ended June
30, 2009, was comprised of $84,232 in realized gains relating to interest rate swap contracts and a realized loss of $3,272 relating to warrants.


19
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)
 
 (10)
Derivative Financial Instruments - continued


Derivative Risks





The LLC manages exposure to possible defaults on derivative financial instruments by monitoring the concentration of risk that the LLC has with any individual bank and through the use of minimum credit quality standards for all counterparties.  The LLC does not require collateral or other
security in relation to derivative financial instruments.  Since it is the LLC’s policy to only enter into derivative contracts with banks of internationally acknowledged standing, the LLC considers the counterparty risk to be remote.





As of June 30, 2009, the fair value of the derivatives in a liability position related to these agreements was $3,982.  In the event that the LLC breaches any of these provisions, it would be required to settle its obligations under the agreements at their termination value of $3,982.





(11)
Accumulated Other Comprehensive Loss








AOCI includes unrealized losses on derivative financial instruments and currency translation adjustments of $419,283 and $1,479,891, respectively, at June 30, 2009, and accumulated losses on derivative financial instruments and currency translation adjustments of $695,914 and $2,449,877, respectively, at December 31, 2008.


(12)
Fair Value of Financial Instruments





SFAS No. 157





Effective January 1, 2008, the LLC adopted SFAS No. 157.  SFAS No. 157 requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:





·
Level 1:  Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.


·
Level 2:  Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.


·
Level 3:  Pricing inputs that are generally unobservable and cannot be corroborated by market data.





20
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)
 
 (12)
Fair Value of Financial Instruments – continued


Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.  The Manager’s assessment, on the LLC’s behalf, of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation
of the assets and liabilities being measured and their placement within the fair value hierarchy.




The following table summarizes the valuation of the LLC’s material financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2009 (unaudited):








Level 1(1)


Level 2(2)


Level 3(3)


TotalAssets:Warrants

$
-


$
58,308


$
-


$
58,308Liabilities:Derivative Liabilities

$
-


$
3,982


$
-


$
3,982(1) Quoted prices in active markets for identical assets or liabilities.(2) Observable inputs other than quoted prices in active markets for identical assets and liabilities.(3) No observable pricing inputs in the market.





The LLC’s derivative contracts, including interest rate swaps and warrants, are valued using models based on readily observable market parameters for all substantial terms of the LLC’s derivative contracts and are classified within Level 2.  As permitted by SFAS No. 157, the LLC uses market prices and pricing models
for fair value measurements of its derivative instruments.  The fair value of the warrants was recorded in other non-current assets and the derivative liabilities were recorded in interest rate swap contracts within the consolidated balance sheets.





SFAS No. 107





Fair value information with respect to the LLC's leased assets and liabilities is not separately provided since (i) SFAS No. 107 does 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, if any, approximates
fair value due to their short-term maturities and variable interest rates.











21
 Table of Contents
 ICON Income Fund Ten, LLC
 (A Delaware Limited Liability Company)
 Notes to Consolidated Financial Statements
 June 30, 2009
 (unaudited)
 
 (13)
Commitments and Contingencies and Off-Balance Sheet Transactions


At the time the LLC acquires or divests of its interest in an equipment lease or other financing transaction, the LLC may, under very limited circumstances, agree to indemnify the seller or buyer for specific contingent liabilities.  The Manager believes that any liability of the LLC that may arise as a result of any such indemnification
obligations will not have a material adverse effect on the consolidated financial condition of the LLC taken as a whole.





The LLC has entered into certain residual sharing and remarketing agreements with various third parties.  In connection with these agreements, residual proceeds received in excess of specific amounts may be shared with these third parties based on specific formulas.  The obligation related to these agreements is recorded
at fair value.





Fund Eleven and Fund Twelve (together, with the LLC, the “Participating Funds”) have entered into a credit support agreement, pursuant to which losses incurred by a Participating Fund with respect to any MWU subsidiary are shared among the Participating Funds in proportion to
their respective capital investment. The term of each credit support agreement matches that of the lease agreement.  No amounts were accrued at June 30, 2009 and the Manager cannot reasonably estimate at this time the maximum potential amounts that may become payable under the credit support agreement, if any.










22
 Table of Contents





Item 2. Manager's Discussion and Analysis of Financial Condition and Results of Operations





The following is a discussion of our current financial position and results of operations. This discussion should be read together with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes included
in our Annual Report on Form 10-K for the year ended December 31, 2008.  This discussion should also be read in conjunction with the disclosures below regarding “Forward-Looking Statements” and the “Risk Factors” set forth in Item 1A of Part II of this Quarterly Report on Form 10-Q.





As used in this Quarterly Report on Form 10-Q, references to “we,” “us,” “our” or similar terms include ICON Income Fund Ten, LLC and its consolidated subsidiaries (“Fund Ten”).





Forward-Looking Statements





Certain statements within this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”).  These statements are being made pursuant to the PSLRA, with the intention of obtaining the benefits of the “safe harbor”
provisions of the PSLRA, and, other than as required by law, we assume no obligation to update or supplement such statements.  Forward-looking statements are those that do not relate solely to historical fact.  They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events.  You can identify these statements by the use of words such as “may,” “will,” “could,”
“anticipate,” “believe,” “estimate,” “expect,” “continue,” “further,” “plan,” “seek,” “intend,” “predict” or “project” and variations of these words or comparable words or phrases of similar meaning.  These forward-looking statements reflect our current beliefs and expectations with respect to future events and are based on assumptions and are subject to risks and uncertainties
and other factors outside our control that may cause actual results to differ materially from those projected. We undertake no obligation to update publicly or review any forward-looking statement, whether as a result of new information, future developments or otherwise.





Overview





We operate as an equipment leasing program in which the capital our members invested is pooled together to make investments, pay fees and establish a small reserve.  We primarily engage in the business of purchasing equipment and leasing or servicing it to third parties, equipment financing, acquiring equipment subject to lease
and, to a lesser degree, acquiring ownership rights to items of leased equipment at lease expiration.




Our Manager manages and controls our business affairs, including, but not limited to, our equipment leases and other financing transactions, under the terms of our LLC Agreement.





We are currently in our operating period.  During our operating period, additional investments will continue to be made with the cash generated from our initial investments and our additional investments to the extent that the cash is not needed for expenses, reserves and distributions to members.  The investment in
additional equipment leases and other financing transactions in this manner is called “reinvestment.”  We anticipate investing in equipment leases, other financing transactions and residual ownership rights in items of leased equipment from time to time until April 2010, unless that date is extended, at our Manager’s sole discretion, for up to an additional three years.








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 Table of Contents








Recent Significant Transactions





We entered into the following recent significant transaction during the six months ended June 30, 2009:





·
On January 30, 2009, we, through ICON Premier, acquired 51% of the outstanding stock of Pretel for a purchase price of $1 (the “Pretel Acquisition”) in consideration for restructuring our pre-existing lease transaction with Pretel.  The estimated fair value of the net assets acquired of approximately $116,500 exceeded the total purchase
price.  Accordingly, we reduced the estimated fair value of the non-financial long-term assets acquired to the adjusted purchase price.  The acquisition was accounted for as a business combination and the results of operations for this acquisition have been included in our consolidated financial statements from the date of acquisition.  Had the acquisition occurred as of January 1, 2009, the impact on our consolidated results would have been immaterial.  The purpose of
this acquisition was to protect our interest in a direct finance lease in connection with a first priority security interest in the Lease.  Accordingly, we became the majority shareholder of Pretel until such time that such amounts due to us under the Lease will be paid in full.  At such time, the control of the business will revert back to the original shareholders.








·
On December 10, 2007, we completed the acquisition of and simultaneously leased back substantially all of the Equipment of Monroe, a wholly-owned subsidiary of MWU, for a purchase price of $2,000,000.  On July 28, 2009, we and Monroe agreed to terminate the lease of the Equipment.  Simultaneously with the termination of the lease with Monroe,
we transferred title to MPI, an affiliate of Monroe, in consideration for MPI transferring title to equipment of greater fair market value to us.  Beginning on August 1, 2009, we entered into a master lease agreement with MPI for such equipment for a term of 41 months.  The obligations of MPI under the master lease are guaranteed by its parent company, Cerion, LLC.





Recent Accounting Pronouncements





In September 2006, the FASB issued SFAS No. 157.  SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure and is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. In February 2008, the FASB
issued FSP 157-2. FSP 157-2 delayed the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), for fiscal years beginning after November 15, 2008. The measurement and disclosure requirements related to financial assets and financial liabilities were adopted by us on January 1, 2008. We adopted FSP 157-2 on January 1, 2009. The
adoption of SFAS No. 157 and FSP 157-2 for financial and non-financial assets and financial and non-financial liabilities did not have a significant impact on our consolidated financial statements.





In December 2007, the FASB issued SFAS No. 141(R).  Under SFAS No. 141(R), an entity is required to recognize the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair value on the acquisition date.  It further requires that acquisition-related costs be recognized
separately from the acquisition and expensed as incurred; that restructuring costs generally be expensed in periods subsequent to the acquisition date; and that changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period be recognized as a component of the provision for taxes.  The adoption of SFAS No. 141(R) changed our accounting treatment for business combinations on a prospective basis beginning January 1, 2009.








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On March 19, 2008, the FASB issued SFAS No. 161.  SFAS No. 161 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS No. 133; and (c)
derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.  SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008 and, therefore, we were required to provide such disclosures beginning with the interim period ended March 31, 2009.





In April 2009, the FASB issued FSP No. 157-4. FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS No. 157 when the volume and level of activity for the asset or liability have significantly decreased. Additionally, FSP 157-4 provides guidance on identifying circumstances that indicate a transaction
is not orderly.   The FASB expanded the scope of FSP 157-4 to all assets and liabilities measured at fair value.  We adopted FSP 157-4 during the quarter ended June 30, 2009.  The adoption of FSP 157-4 did not have a significant impact on our consolidated financial statements.





In April 2009, the FASB issued FSP 107-1/APB 28-1. FSP 107-1/APB 28-1 requires interim disclosures regarding the fair values of financial instruments that are within the scope of SFAS No. 107. Additionally, FSP 107-1/APB 28-1 requires disclosure of the methods and significant assumptions used to estimate the fair value of financial
instruments on an interim basis as well as changes of the methods and significant assumptions from prior periods. FSP 107-1/APB 28-1 does not change the accounting treatment for these financial instruments.  We adopted FSP 107-1/APB 28-1 during the quarter ended June 30, 2009.  The adoption of FSP 107-1/APB 28-1 did not have a significant impact on our consolidated financial statements.





In May 2009, the FASB issued SFAS No. 165.  SFAS No. 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued.  It requires the disclosure of the date through which an entity has evaluated subsequent
events and the basis for that date; that is, whether that date represents the date the financial statements were issued or were available to be issued.  We adopted SFAS No. 165 during the quarter ended June 30, 2009.  The adoption of SFAS No. 165 did not have a significant impact on our consolidated financial statements.





Results of Operations for the Three Months Ended June 30, 2009 (the “2009 Quarter”) and 2008 (the “2008 Quarter”)





Revenue for the 2009 Quarter and the 2008 Quarter are summarized as follows:





Three Months EndedJune 30,2009


2008


ChangeRental income

$
3,893,042


$
5,291,905


$
(1,398,863
)Finance income


-



637,169



(637,169
)Servicing income


1,594,485



-



1,594,485Income from investments in joint ventures


1,106,149



1,849,108



(742,959
)Net loss on sales of equipment and unguaranteed residual values


(53,688
)


(26,001
)


(27,687
)Interest and other income


9,446



140,535



(131,089
)Total revenue

$
6,549,434


$
7,892,716


$
(1,343,282
)





Total revenue for the 2009 Quarter decreased $1,343,282, or 17.0%, as compared to the 2008 Quarter.  Rental income decreased primarily due to (i) the bareboat charter extensions entered into in connection with the ZIM Canada and the ZIM Korea on July 1, 2008 (the “ZIM Charter Extensions”), which resulted in a decrease
in rental income of approximately $744,000 as monthly rental income per vessel decreased from approximately $487,000 to $363,000 and (ii) the sale of equipment previously on lease to Rite Aid Corporation (“Rite Aid”) during the third and fourth quarters of 2008, which accounted for approximately $724,000 of the decrease in rental income.  The decrease in finance income was due to the expiration of our lease with P.W. Supermarkets, Inc. in July 2008 and the restructuring of the lease financing
between ICON Premier and Pretel in January 2009.  Income from investments in joint ventures decreased primarily due to the recognition of a gain on foreign currency translation of approximately $1,232,000 during the 2008 Quarter, which was partially offset by approximately $486,000 of income we recognized from our investments in ICON Northern Leasing, ICON Carina Holdings and ICON Corona Holdings during the 2009 Quarter.  The decrease in total revenue was partially offset by the servicing
income generated by the bedside entertainment and communication terminals operated by Pretel, which we acquired on January 30, 2009.






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Expenses for the 2009 Quarter and the 2008 Quarter are summarized as follows:





Three Months EndedJune 30,2009


2008


ChangeManagement fees - Manager

$
330,798


$
413,976


$
(83,178
)Administrative expense reimbursements - Manager


420,985



354,877



66,108General and administrative


1,689,043



340,179



1,348,864Interest


34,446



195,646



(161,200
)Depreciation and amortization


2,234,502



3,810,281



(1,575,779
)Total expenses

$
4,709,774


$
5,114,959


$
(405,185
)





Total expenses for the 2009 Quarter decreased $405,185, or 7.9%, as compared to the 2008 Quarter.  The decrease in total expenses was primarily due to decreases in depreciation and amortization expense and interest expense, which were mostly offset by an increase in general and administrative expense.   The decrease
in depreciation and amortization expense was primarily due to the ZIM Charter Extensions, which resulted in a decrease in depreciation expense of approximately $1,704,000 as monthly depreciation expense per vessel decreased from approximately $380,000 to $96,000.  Interest expense decreased primarily due to the scheduled repayment of the outstanding balance of our non-recourse debt obligations, which matured in June 2009.  The increase in general and administrative expenses was largely due
to the operating expenses incurred by Pretel during the 2009 Quarter.





Noncontrolling Interests





Noncontrolling interests for the 2009 Quarter were consistent with that reported for the 2008 Quarter.





Net Income Attributable to Fund Ten





As a result of the foregoing factors, net income attributable to Fund Ten for the 2009 Quarter and the 2008 Quarter was $1,764,402 and $2,711,946, respectively.  Net income attributable to Fund Ten per weighted average additional share of limited liability company interests for the 2009 Quarter and the 2008 Quarter was $11.78
and $18.11, respectively.







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Results of Operations for the Six Months Ended June 30, 2009 (the “2009 Period”) and 2008 (the “2008 Period”)




Revenue for the 2009 Period and 2008 Period are summarized as follows:





Six Months Ended June 30,2009


2008


ChangeRental income

$
7,714,872


$
11,901,320


$
(4,186,448
)Finance income


-



1,312,893



(1,312,893
)Servicing income


2,566,220



-



2,566,220Income from investments in joint ventures


2,112,730



2,529,510



(416,780
)Net gain on sales of equipment and unguaranteed residual values


74,855



6,781,517



(6,706,662
)Interest and other income


14,578



240,217



(225,639
)Total revenue

$
12,483,255


$
22,765,457


$
(10,282,202
)





Total revenue for the 2009 Period decreased by $10,282,202, or 45.2%, as compared to the 2008 Period.  The decrease was primarily attributable to decreases in net gain on sales of equipment and unguaranteed residual values, rental income and finance income, which were partially offset by an increase in servicing income.  During
the 2008 Period, we reported a net gain on the sale of equipment of approximately $6,741,000 resulting from the sale of ICON Containership III, LLC (“ICON Containership III”).  The decrease in rental income was primarily due to (i) the sale of ICON Containership III on March 31, 2008, which represented approximately $1,464,000 of the decrease in rental income, (ii) the ZIM Charter Extensions, which resulted in a decrease in rental income of approximately $1,488,000 as monthly rental income
per vessel decreased from approximately $487,000 to $363,000 and (iii) the sale of equipment previously on lease to Rite Aid during the third and fourth quarters of 2008, which accounted for approximately $1,340,000 of the decrease in rental income.  Finance income decreased as a result of the expiration of our lease with P.W. Supermarkets, Inc. in July 2008 and the restructuring of the lease financing between ICON Premier and Pretel in January 2009.  Servicing income was generated by the
bedside entertainment and communication terminals operated by Pretel, which we acquired on January 30, 2009.





Expenses for the 2009 Period and 2008 Period are summarized as follows:





Six Months Ended June 30,2009


2008


ChangeManagement fees - Manager

$
679,448


$
947,563


$
(268,115
)Administrative expense reimbursements - Manager


711,774



708,435



3,339General and administrative


3,158,519



755,608



2,402,911Interest


212,839



740,146



(527,307
)Depreciation and amortization


4,205,976



9,262,738



(5,056,762
)Total expenses

$
8,968,556


$
12,414,490


$
(3,445,934
)





Total expenses for the 2009 Period decreased by $3,445,934, or 27.8%, as compared to the 2008 Period.  The decrease was primarily due to decreases in depreciation and amortization expense and interest expense, which were partially offset by an increase in general and administrative expenses.  The decrease in depreciation
and amortization expense was primarily due to (i) the sale of ICON Containership III on March 31, 2008, which represented approximately $1,200,000 of the decrease, (ii) the ZIM Charter Extensions, which resulted in a decrease in depreciation expense of approximately $3,408,000 as monthly depreciation expense per vessel decreased from approximately $380,000 to $96,000 and (iii) the sale of equipment previously on lease to Rite Aid, which accounted for approximately $1,345,000 of the decrease in depreciation expense.  Interest
expense decreased primarily due to the sale of ICON Containership III, which resulted in the buyer’s assumption of the related outstanding non-recourse long-term debt.  The increase in general and administrative expenses was largely due to the operating expenses of approximately $2,444,000 incurred by Pretel during the 2009 Period.






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Noncontrolling Interests





Noncontrolling interests for the 2009 Period were consistent with that reported for the 2008 Period.





Net Income Attributable to Fund Ten





As a result of the foregoing factors, net income attributable to Fund Ten for the 2009 Period and the 2008 Period was $3,357,217 and $10,190,686, respectively.  Net income attributable to Fund Ten per weighted average additional share of limited liability company interests for the 2009 Period and the 2008 Period was $22.42 and
$68.03, respectively.





Financial Condition





This section discusses the major balance sheet variances at June 30, 2009 compared to December 31, 2008.





Total Assets





Total assets decreased $3,523,785, from $88,999,197 at December 31, 2008 to $85,475,412 at June 30, 2009.  The decrease was primarily due to distributions made to our members of approximately $6,374,000 and the depreciation of our leased equipment in the amount of approximately $3,314,000.  The
decrease in total assets was partially offset by the increase in equipment and receivables resulting from the Pretel Acquisition and cash collected from rental payments with respect to our leases.





Current Assets





Current assets decreased $307,410, from $5,117,308 at December 31, 2008 to $4,809,898 at June 30, 2009.  The decrease was primarily due to a lower cash position resulting from payments of our non-recourse debt outstanding related to the ZIM Canada and the ZIM Korea.  The decrease was partially offset by an increase
in current assets due to the receivables acquired in connection with the Pretel Acquisition.  Pretel’s accounts receivable were primarily related to the sale of rental equipment during the 2009 Period and recurring service fees due from a third party in connection with terminal usage.





Total Liabilities





Total liabilities decreased $1,304,106, from $8,518,061 at December 31, 2008 to $7,213,955 at June 30, 2009.  The decrease was primarily due to the scheduled repayments of our non-recourse debt outstanding related to the ZIM Canada and the ZIM Korea, which was partially offset by an increase in total liabilities due to
the liabilities assumed in connection with the Pretel Acquisition.  In addition, we borrowed $2,185,000 under our revolving line of credit during the 2009 Period.







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 Table of Contents







Current Liabilities





Current liabilities decreased $1,304,106, from $8,518,061 at December 31, 2008 to $7,213,955 at June 30, 2009.  The decrease was primarily due to the scheduled repayment of our non-recourse debt as discussed above, which was partially offset by an increase in current liabilities due to the liabilities assumed in connection
with the Pretel Acquisition and our borrowings under our revolving line of credit.





Equity





Equity decreased $2,219,679, from $80,481,136 at December 31, 2008 to $78,261,457 at June 30, 2009.  The decrease was primarily due to distributions paid to our members and noncontrolling interests, which exceeded net income reported in the 2009 Period.








Liquidity and Capital Resources


Cash Flows Summary





At June 30, 2009 and December 31, 2008, we had cash and cash equivalents of $3,128,163 and $3,784,794, respectively.  During our operating period, our main source of cash has been and will continue to be from operating activities and our main use of cash has been and will continue to be in investing and financing activities.





Cash and cash equivalents include cash in banks and highly liquid investments with original maturity dates of three months or less.  Our cash and cash equivalents are held principally at two financial institutions and at times may exceed insured limits.  We have placed these funds in high quality institutions in order
to minimize risk relating to exceeding insured limits.





In addition, pursuant to the terms of our offering, we established a reserve in the amount of 1.0% of the gross offering proceeds, or $1,499,945.





Cash Flows





The following table sets forth summary cash flow data:





Six Months Ended June 30,2009


2008Net cash provided by (used in):Operating activities

$
4,149,372


$
4,776,298Investing activities


1,461,522



18,631,652Financing activities


(6,267,525
)


(11,961,212
)Net (decrease) increase in cash and cash equivalents

$
(656,631
)

$
11,446,738





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







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Operating Activities





Sources of cash




Sources of cash from operating activities decreased $626,926, from $4,776,298 in the 2008 Period to $4,149,372 in the 2009 Period.  The decrease was primarily due to a decrease in rental income due to the sale of the equipment previously on lease to Rite Aid, a decrease in finance income related to the expiration of our lease
with P.W. Supermarkets, Inc. in July 2008 and the restructuring of the lease financing between ICON Premier and Pretel in January 2009. The decrease was partially offset by an increase in the distributions received from our investments in joint ventures.





Investing Activities





Sources of cash




Sources of cash from investing activities decreased $17,334,952, from $18,796,474 in the 2008 Period to $1,461,522 in the 2009 Period.  The decrease was primarily due to net proceeds of approximately $16,930,000 we received during the 2008 Period in connection with the sale of ICON Containership III, and we did not sell any
comparable assets during the 2009 Period.  The decrease was also due to a reduction in the proceeds received from the sales of equipment and unguaranteed residual values.





Uses of cash




Our use of cash in investing activities decreased from $164,822 in the 2008 Period to $0 in the 2009 Period because we did not make any new investments during the 2009 Period.





Financing Activities





Sources of cash




Sources of cash from financing activities increased $2,185,000 in the 2009 Period from $0 in the 2008 Period.  The increase was due to borrowings under our revolving line of credit.




Uses of cash




Uses of cash in financing activities decreased $3,508,687, from $11,961,212 in the 2008 Period to $8,452,525 in the 2009 Period.  The decrease was primarily due to the repayment of our $5,000,000 borrowing under the revolving line of credit during the 2008 Period, which was partially offset by repayments totaling approximately
$1,472,000 of the non-recourse debt outstanding related to the ZIM Canada and the ZIM Korea during the 2009 Period paid directly by us.




Sources of Liquidity





Cash generated by our operating activities continues to be our most significant source of liquidity during our operating period.  We believe that cash generated from the expected results of our operations will be sufficient to finance our liquidity requirements for the year ending December 31, 2009, including distributions to
our members, the repayment of principal and interest on our non-recourse debt obligations, general and administrative expenses, management fees and administrative expense reimbursements.  We anticipate that our liquidity requirements for the years ending December 31, 2010 through December 31, 2013 will be financed by the expected results of operations, as well as cash received from our investments at maturity.  In addition, our revolving line of credit has $19,670,000 available as of June
30, 2009 (see Note 8 to our consolidated financial statements) for additional working capital needs or new investment opportunities.






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As discussed above, we anticipate being able to meet our liquidity requirements into the foreseeable future.  On August 12, 2009, this line of credit was modified to, among other things, extend the expiration date to June 30, 2011 and add Fund Fourteen
as a permitted borrower.  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.




Non-Recourse Long-Term Debt





We had non-recourse long-term debt obligations at June 30, 2009 of $1,346,242.  All of our non-recourse obligations were repaid on July 1, 2009.





Distributions





We, at our Manager’s discretion, pay monthly distributions to our members and noncontrolling interests starting with the first month after each member’s admission and the commencement of our joint venture operations, respectively, and we expect to continue to pay such distributions until the end of our operating period.  We
paid distributions to our Manager, additional members and noncontrolling interests of $64,384, $6,373,950 and $542,661, respectively, for the 2009 Period.





Commitments and Contingencies and Off-Balance Sheet Transactions





Commitments and Contingencies





At June 30, 2009, we had non-recourse debt obligations.  At June 30, 2009, our outstanding non-recourse long-term indebtedness was $1,346,242, which was repaid on July 1, 2009.  We had $2,185,000 of borrowings under our revolving line of credit at June 30, 2009.





Each of the Participating Funds has entered into a credit support agreement, pursuant to which losses incurred by a Participating Fund with respect to any MWU subsidiary are shared among the Participating Funds in proportion to their respective capital investment. The term of each credit support agreement matches that of the lease agreement.
No amounts were accrued at June 30, 2009 and our Manager cannot reasonably estimate at this time the maximum potential amounts that may become payable under the credit support agreement, if any.





Off-Balance Sheet Transactions





None.





Item 3. Quantitative and Qualitative Disclosures About Market Risk





There are no material changes to the disclosures related to these items since the filing of our Annual Report on Form 10-K for the year ended December 31, 2008.







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Item 4. Controls and Procedures





Evaluation of disclosure controls and procedures





In connection with the preparation of this Quarterly Report on Form 10-Q for the three months ended June 30, 2009, as well as the financial statements for our Manager, our Manager carried out an evaluation, under the supervision and with the participation of the management of our Manager, including its Co-Chief Executive Officers and
Chief Financial Officer, of the effectiveness of the design and operation of our Manager’s disclosure controls and procedures as of the end of the period covered by this Report pursuant to the Securities Exchange Act of 1934.  Based on the foregoing evaluation, the Co-Chief Executive Officers and the Chief Financial Officer concluded that our Manager’s disclosure controls and procedures were effective.





In designing and evaluating our Manager’s disclosure controls and procedures, our Manager recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.  Our Manager’s
disclosure controls and procedures have been designed to meet reasonable assurance standards. Disclosure controls and procedures cannot detect or prevent all error and fraud. Some inherent limitations in disclosure controls and procedures include costs of implementation, faulty decision-making, simple error and mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls
is based, in part, upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all anticipated and unanticipated future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with established policies or procedures.





Evaluation of internal control over financial reporting





There have been no changes in our internal control over financial reporting during the three months ended June 30, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.







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 Table of Contents





PART II - OTHER INFORMATION





Item 1.  Legal Proceedings





In the ordinary course of conducting our business, there may be certain claims, suits and complaints filed against us.  In the opinion of management, the outcome of such matters, if any, will not have a material impact on our consolidated financial position or results of operations.  We are not aware of any material
legal proceedings that are currently pending against us or against any of our assets.





Item 1A. Risk Factors





There have been no material changes from the risk factors disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2008.





Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds





There were no shares of limited liability company interests redeemed during the three months ended June 30, 2009.





Item 3.  Defaults Upon Senior Securities





Not applicable.





Item 4.  Submission of Matters to a Vote of Security Holders





No matters were submitted to a vote of security holders during the three months ended June 30, 2009.





Item 5.  Other Information





Not applicable.






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 Table of Contents




Item 6. Exhibits




3.1
Certificate of Limited Liability Company of Registrant (Incorporated by reference to Exhibit 4.3 to Amendment No. 2 to Registrant’s Registration Statement on Form S-1 filed with the SEC on February 28, 2003 (File No. 333-103503)).4.1
Amended and Restated Operating Agreement of Registrant (Incorporated by reference to Exhibit A to post-effective Amendment No. 2 to Registrant’s Registration Statement on Form S-1 filed with the SEC on June 2, 2003 (File No. 333-103503)).10.1
Commercial Loan Agreement, dated as of August 31, 2005, by and between California Bank & Trust, ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC and ICON Leasing Fund Eleven, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated September 7,
2005).10.2
Loan Modification Agreement, dated as of December 26, 2006, by and between California Bank & Trust and ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC and ICON Leasing Fund Eleven, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated December
29, 2006).10.3
Loan Modification Agreement, dated as of May 1, 2008, by and between California Bank & Trust, ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC and ICON Leasing Fund Twelve, LLC (Incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly
Report on Form 10-Q dated May 19, 2008).10.4
Loan Modification Agreement, by and between California Bank & Trust and ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC, ICON Leasing Fund Twelve, LLC and ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P, dated August 12, 2009.31.1
Rule 13a-14(a)/15d-14(a). Certification of Co-Chief Executive Officer.31.2
Rule 13a-14(a)/15d-14(a). Certification of Co-Chief Executive Officer.31.3
Rule 13a-14(a)/15d-14(a). Certification of Chief Financial Officer.32.1
Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.3
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




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 Table of Contents







SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated.





File No. 000-50654


ICON Capital Corp.


Manager of the Registrant





August 13, 2009





/s/Mark Gatto


Mark Gatto


Co-Chief Executive Officer and Co-President


(Co-Principal Executive Officer)




August 13, 2009





/s/Michael A. Reisner


Michael A. Reisner


Co-Chief Executive Officer and Co-President


(Co-Principal Executive Officer)




August 13, 2009





/s/Anthony J. Branca


Anthony J. Branca


Chief Financial Officer


(Principal Accounting and Financial Officer)




35