UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

     [ X ] Annual  Report  Pursuant  to  Section  13 or 15(d) of the  Securities
Exchange Act of 1934

For the fiscal year ended                      December 31, 2004
                          ------------------------------------------------------
                                                     or

     [ ]  Transition  Report  Pursuant to Section 13 or 15(d) of the  Securities
Exchange Act of 1934 [Fee Required]

Commission File Number                            33-94458
                       ---------------------------------------------------------

                       ICON Cash Flow Partners L.P. Seven
             (Exact name of registrant as specified in its charter)

                  Delaware                                   13-3835387
--------------------------------------------         ---------------------------
         (State or other jurisdiction of                   (I.R.S. Employer
         incorporation or organization)               Identification Number)

                100 Fifth Avenue, 10th floor, New York, New York  10011
--------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:        None

Securities registered pursuant to
  Section 12(g) of the Act:               Units of limited partnership interests

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 if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X] Yes [ ] No

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2) [ ] Yes [X] No

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common  equity,  as of
the last day of the registrant's most recently  completed second fiscal quarter:
Not applicable. There is no established market for units of the registrant.

<PAGE>
                                Table of Contents

Item

<TABLE>
<CAPTION>


PART I

<S>                                                                             <C>
1. Business                                                                     3-6

2. Properties                                                                   7

3. Legal Proceedings                                                            7

4. Submission of Matters to a Vote of Security Holders                          7

PART II

5.   Market for the Registrant's Securities and Related Security Holder Matters 8

6.   Selected Consolidated Financial Data                                       9

7.   General Partner's Discussion and Analysis of Financial Condition and
     Results of Operations                                                      10

7A.  Qualitative and Quantitative Disclosures About Market Risk                 22

8.   Consolidated Financial Statements                                          23

9.   Changes in and Disagreements with Accountants on Accounting and Financial
     Disclosure                                                                 50

9A.  Controls and Procedures                                                    50

9B.  Other Information                                                          50

PART III

10. Directors and Executive Officers of the Registrant's General Partner        50

11. Executive Compensation                                                      51

12. Security Ownership of Certain Beneficial Owners and Management              52

13. Certain Relationships and Related Transactions                              52

14. Principal Accountant Fees and Services                                      52

PART IV

15.  Exhibits, Financial Statement Schedules                                    53

SIGNATURES                                                                      54

         Certifications                                                         55-58

</TABLE>

                                       2
<PAGE>

                                     PART I

Item 1. Business

     General Development of Business

     ICON Cash Flow Partners L.P.  Seven (the  "Partnership")  was formed on May
23, 1995 as a Delaware limited partnership.  When used in this report, the terms
"we" "us" and "our" refers to the Partnership.

     Our maximum offering was $100,000,000 and we commenced business  operations
on our initial  closing  date,  January 19, 1996 with the admission of 26,367.95
limited  partnership units at $100 per unit  representing  $2,636,795 of capital
contributions.  Between  January  20,  1996 and  September  16,  1998 (the final
closing date) 973,628.86 additional units were admitted representing $97,362,886
of capital  contributions  bringing the total  admission to  999,996.81  limited
partnership units aggregating  $99,999,681 in capital  contributions.  From 1997
through 2004, we redeemed 12,449.00 limited partnership units leaving 987,547.81
limited partnership units outstanding at December 31, 2004.

     Our General  Partner is ICON  Capital  Corp.  (the  "General  Partner"),  a
Connecticut  corporation.  The General Partner manages and controls the business
affairs of our equipment leases and financing  transactions under the terms of a
management agreement with us.

     Segment Information

     We have only one  operating  segment:  the business of acquiring  equipment
subject to leases with companies that we believe to be creditworthy.

     Narrative Description of Business

     We are an equipment leasing income fund. Our principal investment objective
is to obtain the maximum economic return from our investments for the benefit of
our  partners.  To achieve this  objective we have:  (i) acquired a  diversified
portfolio of equipment leases and financing transactions; (ii) made monthly cash
distributions to our partners  commencing with each partner's  admission,  (iii)
re-invested  substantially all undistributed  cash from operations and cash from
sales of equipment and financing  transactions  during the reinvestment  period;
and (iv) commenced the disposition  period and begun to sell our investments and
distribute the cash from sales of such investments to our partners.

     Our reinvestment  period ended on November 9, 2002.  During the disposition
period, we have and will continue to distribute  substantially all distributable
cash from  operations  and  equipment  sales to the  partners  and  continue the
orderly  termination of our  operations  and affairs.  We will not invest in any
additional finance or lease transactions during the disposition period.

     At  December  31, 2004 and 2003,  we had total  assets of  $13,849,239  and
$52,063,556,  respectively.  During the year ended  December 31, 2004, our total
revenue was  $2,677,226,  which was derived  principally  from two leases  which
accounted for  approximately  48% of our rental revenue.  We incurred a net loss
for the year ended December 31, 2004 of $10,242,220. For the year ended December
31, 2003, our total revenue was $1,576,532,  which was derived  principally from
three leases which accounted for  approximately  41% of our rental  revenue.  We
incurred a net loss for the year ended December 31, 2003 of $17,300,236. For the
year ended  December  31,  2002,  our total  revenue was  $8,326,025,  which was
derived  principally from three leases which accounted for  approximately 61% of
our rental revenue.  We incurred a net loss for the year ended December 31, 2002
of $3,661,408.

     We have no direct  employees.  The General  Partner has full and  exclusive
control over our management and operations.

                                       3
<PAGE>

     Our Competition

     The equipment leasing industry is highly competitive.  When seeking leasing
transactions  for  acquisition  or sale,  we  compete  with  leasing  companies,
manufacturers that lease their products directly,  equipment brokers and dealers
and financial institutions,  including commercial banks and insurance companies.
Many competitors are larger than us and have greater financial resources than we
do.

     Lease Transactions

     During the years ended  December  31, 2004 and 2003 we did not purchase any
additional  equipment.  We  entered  into  the  following  lease  modifications,
assignments  and  sales for the  years  ended  December  31,  2004 and 2003,  as
follows:

     Sale of CSK Auto Lease

     During June 2004,  we sold  equipment  which had been on lease to CSK Auto,
Inc.  CSK Auto,  Inc.  had made 60  scheduled  payments  totaling  approximately
$138,000. We recognized a gain of approximately $10,000 on this sale.

     Sale of 1979 McDonnell Douglas DC-10-30 Aircraft

     We had an ownership interest in a DC-10-30 aircraft subject to a lease with
Federal  Express  Corporation  which  expired on July 2, 2004.  The aircraft was
subject  to  non-recourse  debt  which had a balloon  payment  of  approximately
$9,600,000 due at lease end. As required by the loan agreement,  we entered into
a residual value insurance agreement (the "Residual  Insurance  Agreement") with
an unrelated third party. Under the terms of the Residual  Insurance  Agreement,
the  insurer  was  required  to pay the  insured  amount  to the  lender  at the
expiration of the lease if the balloon  payment was not made by us at lease end.
We were unable to make the required balloon payment when due nor were we able to
successfully refinance the debt. As a result, the insurer, pursuant to the terms
of the Residual Insurance  Agreement,  notified us of their intention to pay the
insured amount of  $10,200,000 at lease end,  resulting in title of the aircraft
transferring to the insurer. As a result, we received proceeds of $520,293,  net
of the $9,679,707 paid to the non-recourse lender at lease end.

     Sale of Boeing 767-300ER Aircraft

     During July 2004, one of our joint ventures,  ICON Aircraft 24846 LLC, sold
its only asset,  a Boeing  767-300ER,  which  resulted in a realized net loss of
approximately  $601,800,  of which  our  share was  approximately  $12,000.  The
General Partner had determined that it was in the best interest of ICON Aircraft
24846 LLC and its members to sell the Boeing  767-300ER  aircraft to BTM Capital
Corp., the lender, for an amount equal to the then outstanding debt balance. The
decision to sell the aircraft was based, in part, on the following factors:  (i)
the aircraft's current fair market value was estimated to be between $24,000,000
and $27,000,000 and the balance of the outstanding  debt was  $34,500,000;  (ii)
any new lease for the aircraft  would have  required an  additional  $850,000 in
equity (at a minimum)  in order to  reconfigure  the  aircraft  and  upgrade the
engines;  and (iii) if we were to continue to remarket the aircraft,  the lender
would have required  interest only payments of approximately  $100,000 per month
until the aircraft was re-leased.

     Lease Modification of 1976 McDonnell Douglas DC-10-30

     We have an ownership  interest in a 1976  McDonnell  Douglas  DC-10-30 (the
"Aircraft")   on  lease  with   World   Airways,   Inc.   The  lease  was  on  a
"power-by-the-hour" basis until December 2004. Effective September 1, 2004, this
lease was  modified  to a fixed  rental of $50,000  per month  plus  maintenance
reserves and the term was extended through September 2006.  Aviation  Investors,
Inc.  ("Aviation"),  an  unrelated  third  party,  who  was  the  seller  in the
acquisition of the Aircraft,  has a Residual Sharing Agreement (the "Agreement")
in which  Aviation is entitled  to receive 50% of all  residual  proceeds of the
aircraft.  Residual  proceeds includes gross proceeds from any of the following;
sale,  lease,  renewal  lease or extension or  financing or  refinancing  of the
Aircraft  and casualty  payments.  Such gross  proceeds may be reduced,  but not
below  zero,  for  recovery  expenses,   remarketing  expenses,  any  reasonable
out-of-pocket costs incurred by us and an amount calculated to provide us with a
consistent rate of return, as defined in the Agreement.  Additionally,  Aviation
has a management  agreement  with us to manage the operations of and to remarket
the Aircraft for sale or lease.  For this  service  Aviation  receives a monthly
management fee of $10,667.

     There is a maintenance reserve of approximately  $1,843,000 at December 31,
2004. If the  maintenance  reserves are not fully utilized any remaining  monies
will be divided between the us and Aviation as stipulated in the Agreement.

                                       4
<PAGE>

     Sale of Supply Vessels

     We were the sole owner of five marine supply vessels  originally on charter
to affiliates of Seacor Marine, Inc. (the "Vessels"). These Vessels were subject
to  outstanding  non-recourse  debt with Fleet Capital Corp.  ("Fleet").  During
September  2003,  Fleet took  control of the Vessels and  commenced  remarketing
efforts under the terms of their  financing  agreement with us. On May 12, 2004,
Fleet sold the Vessels, which resulted in aggregate sale proceeds of $3,580,000.
At the time of sale, the outstanding  non-recourse  debt relating to the Vessels
was  $7,138,369;  therefore  all  proceeds  from the sale  were  used  repay the
outstanding  non-recourse  notes.  As a result  of the sale of the  Vessels,  we
recorded  a  loss  on  lease  termination  of  approximately   $623,000,   which
represented the Vessels net book value at that time.

     We were the sole  owner of two  marine  vessels  originally  on  charter to
affiliates  of  Seacor  Smit,  Inc.  These  vessels  were  not  subject  to  any
outstanding  debt.  On  September  20,  2004 and  again  on  October  10,  2004,
respectively, we sold the Gulf Pearl and Gulf Wind supply vessels, respectively,
to Gulf Ocean Marine Services, Inc. The sale price for each vessel was $500,000.
We realized a net loss of $790,420 from the sale of the vessel sold on September
20,  2004,  which is  included in gain (loss) on disposal of assets for the year
ended  December  31,  2004 and we  realized a net loss of $790,420 on the vessel
sold on October 10, 2004. We recorded as impairment  loss for this amount in the
third quarter of 2004.

     Sale of AZ3 Lease

     During October 2004, title passed on material  handling  equipment on lease
to AZ3 after they made their final renewal lease payment in  conjunction  with a
lease  which  expired in July,  2002.  We  realized a net loss of  approximately
$25,000.

     Assignment of Interest in ICON Cheyenne

     On September 23, 2004,  we assigned  9.04% of our interest in ICON Cheyenne
LLC ("ICON  Cheyenne")  to ICON  Income Fund Eight B L.P.  ("Fund  Eight B") for
$204,384,  thereby  decreasing  our  ownership in ICON  Cheyenne to 1.27%.  This
assignment was made in order for us to repay our outstanding  debt obligation to
Fund Eight B as  required  by the  Contribution  Agreement,  which is more fully
explained  elsewhere in this document (See Financing and  Borrowings  located in
the  Liquidity  and Capital  Resources  section).  This amount  represented  our
proportionate fair value of our interest in ICON Cheyenne at September 23, 2004.
The fair value was determined  using  discounted cash flow  projections for ICON
Cheyenne's portfolio.

     Assignment of Interest in ICON/Boardman Facility

     On September 24, 2004, we assigned our entire .5025% ownership  interest in
ICON BF to ICON Income Fund Eight A L.P.  ("Fund Eight A") for $65,325,  thereby
increasing Fund Eight A's ownership in ICON BF to 99.4975%.  This assignment was
made in order for us to repay our outstanding debt obligation to Fund Eight A as
required by the Contribution Agreement,  which is more fully explained elsewhere
in this  document  (Refer to Financing and  Borrowings  located in Liquidity and
Capital  Resources  section).  This  amount  represented  our fair value of L.P.
Seven's interest in ICON BF at September 24, 2004. This amount was determined to
represent  the fair value of ICON BF based upon the expected  net proceeds  from
the sale of the coal handling facility.

     Assignments of Rowan Cash Flow

     On November  24,  2004,  we assigned  .8% of our  interest in the  profits,
losses and future cash flows of a mobile  offshore  drilling  rig,  subject to a
lease with Rowan Companies,  Inc. to Fund Eight A for $200,000.  This assignment
was made in order for us to repay our outstanding  debt obligation to Fund Eight
A as  required  by the  Contribution  Agreement,  which is more fully  explained
elsewhere  in  this  document  (See  Financing  and  Borrowings  located  in the
Liquidity  and  Capital  Resources   section).   This  amount   represented  our
proportionate  fair value of our interest in the mobile offshore drilling rig at
November  24,  2004.  The fair value of the  mobile  offshore  drilling  rig was
determined using an independent third party appraisal and cash flow analysis.

     On November  24,  2004,  we assigned  3.24% of our interest in the profits,
losses and future cash flows of a mobile  offshore  drilling  rig,  subject to a
lease with Rowan  Companies,  Inc. to ICON Income Fund Eight B L.P. ("Fund Eight
B") for  $810,000.  This  assignment  was  made in  order  for us to  repay  our
outstanding debt obligation as required by the Contribution Agreement,  which is
more fully  explained  elsewhere in this document (See  Financing and Borrowings
located in the Liquidity and Capital Resources section). This amount represented
our proportionate fair value of our interest in the mobile offshore drilling rig
at November 24,  2004.  The fair value of the mobile  offshore  drilling rig was
determined using an independent third party appraisal and cash flow analysis.

                                       5
<PAGE>

     On February  23,  2005,  we assigned  2.69% of our interest in the profits,
losses and future cash flows of a mobile  offshore  drilling  rig,  subject to a
lease with Rowan Companies,  Inc. to Fund Eight B for $672,992,  increasing Fund
Eight B's ownership  interest to 5.93%. This assignment was made in order for us
to repay our  outstanding  debt  obligation  to Fund Eight B as  required by the
Contribution Agreement, which is more fully explained elsewhere in this document
(See  Financing and  Borrowings  located in the Liquidity and Capital  Resources
section).  This amount  represented our proportionate fair value of our interest
in the mobile offshore  drilling rig at February 23, 2005. The fair value of the
mobile  offshore  drilling rig was determined  using an independent  third party
appraisal and cash flow analysis.

     On November  24,  2004,  we assigned  2.6% of our  interest in the profits,
losses and future cash flows of a mobile  offshore  drilling  rig,  subject to a
lease with Rowan  Companies,  Inc. to ICON  Income  Fund Nine ("Fund  Nine") for
$650,000. This assignment was made in order for us to repay our outstanding debt
obligation to Fund Nine as required by the Contribution Agreement, which is more
fully explained elsewhere in this document (See Financing and Borrowings located
in the Liquidity and Capital  Resources  section).  This amount  represented our
proportionate  fair value of our interest in the mobile offshore drilling rig at
November  24,  2004.  The fair value of the  mobile  offshore  drilling  rig was
determined using an independent third party appraisal and cash flow analysis.

     On February  23,  2005,  we assigned  3.02% of our interest in the profits,
losses and future cash flows of a mobile  offshore  drilling  rig,  subject to a
lease with Rowan  Companies,  Inc. to Fund Nine for  $755,000,  increasing  Fund
Nine's ownership  interest to 5.62%. This assignment was made in order for us to
repay  our  outstanding  debt  obligation  to  Fund  Nine  as  required  by  the
Contribution Agreement, which is more fully explained elsewhere in this document
(See  Financing and  Borrowings  located in the Liquidity and Capital  Resources
section).  This amount  represented our proportionate fair value of our interest
in the mobile offshore  drilling rig at February 23, 2005. The fair value of the
mobile  offshore  drilling rig was determined  using an independent  third party
appraisal and cash flow analysis.

     Assignment of Sodium Chlorate Production Facility

     On March 28,  2005,  we assigned our entire 50%  ownership  interest in EKA
Chemicals, Inc. to Fund Nine for $745,000. This assignment was made in order for
us to repay our  outstanding  debt  obligation  to Fund Nine as  required by the
Contribution Agreement, which is more fully explained elsewhere in this document
(Refer to Financing and Borrowings located in Liquidity and Capital  Resources).
This amount represented our fair value of our interest in EKA Chemicals, Inc. on
March 28, 2005.  This amount was  determined  to represent the fair value of EKA
Chemicals, Inc. based upon the expected future cash flows.

     We disposed of equipment that was on lease after lease  expiration in 2003,
for a net gain of $120,524.

     Available Information

     Our Annual  Reports on Form 10-K and our most recent  Quarterly  Reports on
Form 10-Q and amendments to those reports,  if any, are available free of charge
on our  internet  website at  http://www.iconcapital.com  as soon as  reasonably
practicable after such reports are electronically filed with or furnished to the
Securities and Exchange  Commission.  This  information is also available on the
Securities and Exchange Commission's website, at http://www.sec.gov.

                                       6
<PAGE>

Item 2. Properties

     We neither  own nor lease  office  space or any other real  property in our
business at the present time.

Item 3. 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.

     Fleet Capital Corp Litigation

     In August 2004, Fleet Capital Corp.  ("Fleet")  commenced an action against
us for unspecified  damages,  alleging that we breached our obligations  owed to
Fleet under certain  Performance  Guaranties we entered into in connection  with
non-recourse  loans  made by  Fleet.  The loans  were  made to our  wholly-owned
subsidiaries  when these  entities  entered into a transaction to acquire supply
tug  vessels  on  charter  with  affiliates  of  SEACOR  Smit  Inc.  We and  our
subsidiaries have counterclaimed,  alleging,  among other things, that Fleet has
breached  its covenant of good faith and fair  dealing.  The action is currently
pending in the Supreme  Court of the State of New York,  New York County and the
parties are  currently in the process of  discovery.  It is not possible at this
early stage to determine the likelihood of the outcome,  but management  intends
to vigorously defend this claim.

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

         No matters were submitted to a vote of security holders during the
fourth quarter 2004.

                                       7
<PAGE>

                                     PART II

Item 5.  Market for the  Registrant's  Securities  and Related  Security  Holder
Matters

     Our limited  partnership  interests  are not  publicly  traded nor is there
currently a market for our limited  partnership  interests.  It is unlikely that
any such market will develop.

                                   Number of Equity Security Holders
      Title of Class                     as of March 18, 2005
---------------------------    ---------------------------------------
      General Partner                              1
      Limited Partner                            4,584

     We do not, in the normal course of business,  pay  dividends.  For the year
ended  December  31,  2004,  we did  not  pay  distributions  to  our  partners.
Historically, we paid monthly distributions to our partners beginning with their
admission through the termination of the reinvestment period, which was November
9, 2002. For the years ended  December 31, 2003 and 2002, we paid  distributions
of $1,645,916 and $10,129,308,  respectively,  to our limited partners.  For the
years ended  December 31, 2003 and 2002,  we paid  distributions  of $16,627 and
$102,316, respectively, to our General Partner.

     Our reinvestment  period ended on November 9, 2002.  During the disposition
period, we have and will continue to distribute  substantially all distributable
cash from  operations and equipment  sales to the partners and begin the orderly
termination of its  operations  and affairs.  We have not and will not invest in
any additional new finance or lease transactions during the disposition period.

     In order for National  Association of Securities  Dealers  ("NASD") members
and their  associated  persons to have  participated in the offering and sale of
interests  in limited  partnership  units (the  "Units")  pursuant to the fourth
offering or to participate in any future  offering of our Units, we are required
pursuant to NASD Rule  2710(c)(6) to disclose in each annual report  distributed
to our limited  partners a per unit estimated value of our Units,  the method by
which we  developed  the  estimated  value  and the  date  used to  develop  the
estimated value. In addition, our General Partner must prepare annual statements
our estimated Unit values to assist  fiduciaries of retirement  plans subject to
the annual  reporting  requirements of Employee  Retirement  Income Security Act
("ERISA") in the  preparation of their reports  relating to an investment in our
Units.  For these purposes,  the estimated value of our Units shall be deemed to
be $15.08 per Unit at September 30, 2004.

     This  estimate  was based on the  amount of  remaining  undiscounted  lease
payments on our existing  leases,  the booked  estimated  residual values of the
equipment held by us upon the  termination of those leases and our cash on hand.
From this amount we then subtracted our total debt  outstanding and then divided
that sum by the total  number of Units  outstanding.  This  valuation  was based
solely on the General  Partner's  perception of market  conditions and the types
and amounts of our assets. No independent valuation was sought.  However, as set
forth below, there is no significant public trading market for our Units at this
time, and there can be no assurance  that limited  partners could receive $15.08
per Unit if such a market did exist and they sold their  Units or that they will
be able to receive  such  amount for their Units in the  future.  The  foregoing
valuation was performed solely for the ERISA and NASD purposes  described above.
There  is no  market  for our  Units,  and,  accordingly,  this  value  does not
represent an estimate of the amount a limited  partner  would receive if he were
to seek to sell his  Units.  Furthermore,  there can be no  assurance  as to the
amount we may actually  receive if and when we seek to  liquidate  our assets or
the amount of lease payments and equipment disposition proceeds we will actually
receive over our remaining term.

                                       8
<PAGE>

Item 6. Selected Consolidated Financial Data

     The  selected  financial  data  should  be read  in  conjunction  with  the
consolidated  financial  statements  and  related  notes  included  in  Item  8,
Financial Statements and Supplemental Data contained elsewhere in this report.

<TABLE>
<CAPTION>

                                                              Year Ended December 31,
                                                     2004            2003         2002         2001       2000
                                                     ----            ----         ----         ----       ----

<S>                                             <C>              <C>            <C>           <C>           <C>
 Total revenue                                  $    2,677,226   $  1,576,532   $ 8,326,025   $ 9,159,492   $14,713,736
                                                ==============   ============   ===========   ===========   ===========
 Net (loss) income (a)                          $  (10,242,221)  $(17,300,236)  $(3,661,408)  $(1,477,016)  $ 1,293,261
                                                ==============   ============   ===========   ===========   ===========

 Net (loss) income allocable
   to limited partners                          $  (10,139,799)  $(17,127,234)  $(3,624,794)  $(1,462,246)  $1,280,328
                                                ==============   ============   ===========   ===========   ==========

 Net (loss) income allocable to general partner $     (102,422)  $  (173,002)   $   (36,614)  $   (14,770)  $    12,933
                                                ==============   ============   ===========   ===========   ===========

 Weighted average number of limited
    partnership units outstanding                      987,548        987,548       988,099       989,112       989,929
                                                ==============   ============   ===========   ===========   ===========
 Net (loss) income per weighted average
    limited partnership unit                    $       (10.27)  $     (17.34)  $     (3.67)  $     (1.48)  $      1.29
                                                ==============   ============   ===========   ===========   ===========

 Distributions to limited partners              $           -    $  1,645,916   $10,129,308   $10,632,716   $10,641,411
                                                ==============   ============   ============  ===========   ===========

 Distributions per weighted average
    limited partner unit                        $           -    $       1.67   $     10.25   $     10.75   $     10.75
                                                ==============   ============   ===========   ===========   ===========
 Distributions to the general partner           $           -    $     16,627   $   102,316   $   100,023   $   107,493
                                                ==============   ============   ===========   ===========   ===========

</TABLE>


<TABLE>
<CAPTION>
                                        December 31,
                               2004              2003              2002             2001              2000
                               ----              ----              ----             ----              ----

<S>                         <C>              <C>               <C>               <C>              <C>
 Total assets               $13,849,239      $52,063,556       $74,009,003       $104,334,907     $130,936,301
                            ===========      ===========       ===========       ============     ============
 Notes payable              $8,174,001       $36,156,703       $38,769,665       $50,984,856      $81,889,191
                            ==========       ===========       ===========       ===========      ============
 Partners' equity           $5,161,112       $15,403,333       $34,366,112      $48,294,920       $60,551,684
                            ==========       ===========       ============     ===========       ===========

</TABLE>

(a)  During  the  years  ended  December  31,  2004,  2003 and 2002 we  recorded
impairment loss provisions of $7,861,680 $7,850,000 and $350,000 or $7.96, $7.95
and $0.35 per weighted average limited partnership unit, respectively.

                                       9
<PAGE>

Item 7. Manager's  Discussion and Analysis of Financial Condition and Results of
Operations

Forward-Looking  Information  - Certain  statements  within  this  document  may
constitute   forward-looking  statements  within  the  meaning  of  the  Private
Securities  Litigation  Reform Act of 1995.  These  statements are identified by
words  such  as  "anticipate,"   "believe,"   "estimate,"  "expects,"  "intend,"
"predict" or "project" and similar  expressions.  This  information  may involve
risks and  uncertainties  that could cause actual  results to differ  materially
from the forward-looking  statements. We believe that the expectations reflected
in such  forward-looking  statements are based on reasonable  assumptions.  Such
statements  are  subject  to risks and  uncertainties  that could  cause  actual
results to differ  materially  from those  projected.  Any such  forward-looking
statements  are  subject to risks and  uncertainties  and our future  results of
operations   could  differ   materially  from  historical   results  or  current
expectations.  Some of these risks are  discussed in this  report,  and include,
without limitation, fluctuations in oil and gas prices; level of fleet additions
by  competitors  and  industry  overcapacity;   changing  customer  demands  for
aircraft; acts of terrorism;  unsettled political conditions,  war, civil unrest
and governmental  actions,  and environmental and labor laws. Our actual results
could  differ  materially  from  those   anticipated  by  such   forward-looking
statements due to a number of factors,  some of which may be beyond our control,
including, without limitation:

o changes in our industry, interest rates or the general economy;

o the degree and nature of our competition;

o availability of qualified personnel;

o cash flows from  operating  activities  may be less than our current  level of
expenses and debt  obligations;  o the  financial  condition  of lessees;  and o
lessee defaults.

     a.  Overview

     We are an  equipment  leasing  business  formed on May 23, 1995 which began
active operations on January 19, 1996. We were primarily engaged in the business
of  acquiring  equipment  subject to lease and,  to a lesser  degree,  acquiring
ownership rights to items of leased equipment at lease  expiration.  Some of our
equipment  leases were  acquired  for cash and are  provided  current cash flow,
which we refer to as "income" leases.  The majority of the purchase price of our
other  equipment  leases was borrowed,  so these leases  generated  little or no
current cash flow because substantially all of the rental payments received from
a lessee were paid to a lender.  For these "growth"  leases,  we anticipate that
the future  value of the leased  equipment  will exceed the cash  portion of the
purchase  price paid for the  equipment.  We are  currently  in our  disposition
period,  wherein we are  seeking to sell our  assets in the  ordinary  course of
business.

     Capital Resources and Liquidity

     We  invested  most of the net  proceeds  from  our  offering  in  items  of
equipment  subject to a lease.  After the net offering  proceeds were  invested,
additional  investments  were  made  with the cash  generated  from our  initial
investments  to the extent that the cash was not needed for  expenses,  reserves
and distributions to investors.  The investment in additional  equipment in this
manner  is called  "reinvestment."  After the  "reinvestment  period,"  we began
selling our assets in the ordinary course of business during a time frame called
the "disposition  period." If we believe it would benefit  investors to reinvest
our cash flow in equipment during the disposition  period,  we may do so, but we
will not receive any additional fees in connection with such reinvestments.  Our
goal is to complete the  disposition  period in three years after the end of the
reinvestment period, but it may take longer to do so.

     Our reinvestment  period ended on November 9, 2002.  During the disposition
period, we have and will continue to distribute  substantially all distributable
cash from  operations and equipment  sales to the partners and begin the orderly
termination of its  operations  and affairs.  We have not and will not invest in
any additional finance or lease transactions during the disposition period.

     Our  current  portfolio,  which we hold either  directly  or through  joint
venture  investments  with  affiliates  and others,  consists  primarily  of the
following equipment subject to lease:

                                       10
<PAGE>

     Energy Industry:

o    We have a 43.36%  interest  in a mobile  offshore  drilling  rig subject to
     lease with Rowan  Companies,  Inc. The lease will expire on March 15, 2008.
     The  purchase   price  was   approximately   $14,726,000,   consisting   of
     approximately   $12,325,000  in  cash  and   approximately   $2,401,000  of
     non-recourse debt.

     During 2004, we entered into the following assignments regarding the mobile
     offshore  drilling rig to repay certain of our  affiliates for amounts paid
     on our behalf under the Contribution  Agreement;  (i) during November 2004,
     we  assigned  .8% of our  interest  in the  profits,  losses and cash flows
     valued at $200,000 to Fund Eight A, (ii) during  November 2004, we assigned
     3.24% of our  interest  in the  profits,  losses and cash  flows  valued at
     $810,000 to Fund Eight B and (iii) during  November  2004, we assigned 2.6%
     of our interest in the profits, losses and cash flows valued at $650,000 to
     Fund Nine.

     During  2005,  we  entered  into two  additional  assignments  relating  to
     repayment of payments made on our behalf under the Contribution  Agreement;
     (i) during February 2005, we assigned 2.69% of our interest in the profits,
     losses and cash flows  valued at  $672,992  to Fund Eight B and (ii) during
     February 2005, we assigned 3.02% of our interest in the profits, losses and
     cash flows valued at $755,000 to Fund Nine.

     Chemical Industry:

o    We had a 50% interest in a sodium chlorate  production  facility subject to
     lease with EKA  Chemicals,  Inc which was accounted for as a finance lease.
     The lease  will  expire in July 2006,  at which time title in the  facility
     will pass to EKA  Chemicals,  Inc.  The  purchase  price was  approximately
     $3,859,000,   consisting   of   approximately   $2,806,000   in  cash   and
     approximately $1,053,000 of non-recourse debt.

     During March 2005, in order to repay our affiliates for amounts paid on our
     behalf  under the  Contribution  Agreement;  we  assigned  our  entire  50%
     interest  in EKA  Chemicals,  Inc.'s  facility  valued at  $745,000 to ICON
     Income Fund Nine LLC.

     Air Transportation Industry:

o    We have a 99%  interest  in a 1976  McDonnell  Douglas  DC-10-30F  aircraft
     subject   to  lease  with  World   Airways,   Inc.   The  lease  was  on  a
     "power-by-the-hour" basis until December 2004. Effective September 1, 2004,
     this  lease was  modified  to a fixed  rental  of  $50,000  per month  plus
     maintenance  reserves and the term was extended through September 2006. The
     purchase price was  approximately  $11,430,000  consisting of approximately
     $2,120,000 in cash and  approximately  $9,310,000 of non-recourse  debt. We
     have since fully repaid the non-recourse  debt.  Aviation  Investors,  Inc.
     ("Aviation"),  an unrelated third party, who was a party to the acquisition
     of the Aircraft,  has a Residual  Sharing  Agreement (the  "Agreement")  in
     which  Aviation is entitled to receive 50% of all residual  proceeds of the
     aircraft.  Residual  proceeds  includes  gross  proceeds  from  any  of the
     following;  sale,  lease,  renewal  lease  or  extension  or  financing  or
     refinancing of the Aircraft and casualty payments.  Such gross proceeds may
     be  reduced,  but  not  below  zero,  for  recovery  expenses,  remarketing
     expenses,   and  any  reasonable   out-of-pocket   costs  incurred  by  us.
     Additionally,  Aviation  has a management  agreement  with us to manage the
     operations  of and to remarket  the  Aircraft  for sale or lease.  For this
     service Aviation receives a monthly management fee of $10,667.

     There is a maintenance reserve of approximately  $1,843,000 at December 31,
     2004.  If the  maintenance  reserves are not fully  utilized any  remaining
     monies will be divided  between the us and  Aviation as  stipulated  in the
     Agreement.

o    We have an investment in the  unguaranteed  residual values of three Boeing
     737-300 aircraft currently on lease to Continental  Airlines,  Inc. On July
     31,  1997,  we  acquired  an option to  purchase  these  aircraft  and paid
     $412,500 per aircraft for an aggregate  purchase  price of  $1,237,500.  In
     addition,  we  assumed  recourse  debt in the  amount  of  $3,612,092  with
     interest  accruing at 8.5% per year which matured on November 27, 2003. The
     strike  price for each  aircraft at maturity was  $5,375,000.  Prior to the
     aircraft leases expiring,  Continental expressed a desire to extend each of
     the  leases  for two  years.  Due to  market  conditions  and in  order  to
     accommodate the lease extensions,  it was in our best interest to terminate
     the option agreement. We agreed to restructure the recourse debt with a new
     maturity  date of November 27, 2006. As a result of the  restructuring,  we
     were  required to prepay  $500,000 of interest that would accrue on the new
     recourse  debt and the option to purchase the  aircraft  would be converted
     into an interest in the unguaranteed residual values of the three aircraft.

                                       11
<PAGE>

     Substantially  all of our recurring  operating  revenues are generated from
the  operations of the  single-investor  leases in our  portfolio.  On a monthly
basis,  we deduct  the  expenses  related  to the  recurring  operations  of the
portfolio  from such revenues and assess the amount of the remaining  cash flows
that  will be  required  to fund  known  or  anticipated  re-leasing  costs  and
equipment  management costs.  Below is a review of our portfolio activity during
the twelve months ended December 31, 2004.

     Portfolio Activity

     Sale of Boeing 767-300ER Aircraft

     During July 2004, one of our joint ventures,  ICON Aircraft 24846 LLC, sold
its only asset,  a Boeing  767-300ER,  which  resulted in a realized net loss of
approximately  $601,800,  of which  our  share was  approximately  $12,000.  The
General Partner had determined that it was in the best interest of ICON Aircraft
24846 LLC and its members to sell the Boeing  767-300ER  aircraft to BTM Capital
Corp., the lender, for an amount equal to the then outstanding debt balance. The
decision to sell the aircraft was based, in part, on the following factors:  (i)
the aircraft's current fair market value was estimated to be between $24,000,000
and $27,000,000 and the balance of the outstanding  debt was  $34,500,000;  (ii)
any new lease for the aircraft  would have  required an  additional  $850,000 in
equity (at a minimum)  in order to  reconfigure  the  aircraft  and  upgrade the
engines;  and (iii) if we were to continue to remarket the aircraft,  the lender
would have required  interest only payments of approximately  $100,000 per month
until the aircraft was re-leased.

     Sale of Federal Express DC-10-30 Aircraft

     We had an ownership interest in a DC-10-30 aircraft subject to a lease with
Federal  Express  Corporation  which  expired on July 2, 2004.  The aircraft was
subject  to  non-recourse  debt  which had a balloon  payment  of  approximately
$9,600,000 due at lease end. As required by the loan agreement,  we entered into
a residual value insurance agreement (the "Residual  Insurance  Agreement") with
an unrelated third party.  Under the Residual Insurance  Agreement,  the insurer
was required to pay the insured  amount to the lender at the  expiration  of the
lease if the  balloon  payment  was not made by us. Due to the  downturn  in the
marketplace  for this type of Aircraft,  we were unable to sell the Aircraft for
sufficient proceeds to repay the outstanding debt and therefore,  we were unable
to make the required  balloon  payment when due nor were we able to successfully
refinance the debt. As a result, pursuant to the terms of the Residual Insurance
Agreement, the insurer notified us of its intention to pay the insured amount of
$10,200,000 at lease end, resulting in title of the Aircraft transferring to the
insurer and we lost our entire ownership interest in the Aircraft.  As a result,
we  received  net  proceeds  of  $520,293,  after  $9,679,707  was  paid  to the
non-recourse lender.

     Sale of Supply Vessels

     We were the sole owner of five marine supply vessels  originally on charter
to affiliates of Seacor Marine, Inc. (the "Vessels"). These Vessels were subject
to  outstanding  non-recourse  debt with Fleet Capital Corp.  ("Fleet").  During
September  2003,  Fleet took  control of the Vessels and  commenced  remarketing
efforts under the terms of their  financing  agreement with us. On May 12, 2004,
Fleet sold the Vessels, which resulted in aggregate sale proceeds of $3,580,000.
At the time of sale, the outstanding  non-recourse  debt relating to the Vessels
was  $7,138,369;  therefore  all  proceeds  from the sale  were  used  repay the
outstanding  non-recourse  notes.  As a result  of the sale of the  Vessels,  we
recorded  a  loss  on  lease  termination  of  approximately   $623,000,   which
represented the Vessels net book value at that time.

     We were the sole owner of three  marine  vessels  originally  on charter to
affiliates of Seacor Smit,  Inc.  These vessels were not subject to  outstanding
debt. On September 20, 2004 and again on October 10, 2004, respectively, we sold
the Gulf Pearl and Gulf Wind  supply tug  vessels,  respectively,  to Gulf Ocean
Marine Services, Inc. The sale price for each vessel was $500,000. We realized a
loss of $790,420 on the vessel sold on September 20, 2004, which was included in
gain (loss) on disposal  of assets for the year ended  December  31, 2004 and we
realized a loss of  $790,420  on the vessel  sold on October  10, 2004 which was
recorded as an impairment loss for year ended December 31, 2004.

     Sales of Other Equipment.

     During June 2004,  we sold  equipment  which had been on lease to CSK Auto,
Inc.  CSK Auto,  Inc.  had made 60  scheduled  payments  totaling  approximately
$138,000. We recognized a gain of approximately $10,000 on this sale.

     During October 2004, title passed on material  handling  equipment on lease
to AZ3 after they made their final renewal lease payment in  conjunction  with a
lease  which  expired in July,  2002.  We  realized a net loss of  approximately
$25,000.

                                       12
<PAGE>

     Assignment of Sodium Chlorate Production Facility

     We had a 50% interest in a sodium chlorate  production  facility subject to
lease with EKA Chemicals, Inc. The lease will expire in July 2006, at which time
title in the equipment will pass to EKA Chemicals,  Inc. There are two remaining
semi-annual  rent payments during July 2005 and January 2006 totaling  $745,000.
We received a rental payment during January 2005 in the amount of $372,500.

     During March 2005,  in order to repay ICON Income Fund Nine LLC for amounts
paid on our behalf under the terms of the  Contribution  Agreement;  we assigned
our entire 50% interest in the facility on lease to EKA Chemicals,  Inc.  valued
at $745,000 to ICON Income Fund Nine LLC.

     Status of Current Portfolio

     Mobile Off-Shore Drilling Rig

     We have a 43.36%  ownership  interest in a mobile  off-shore  drilling  rig
referred to as a jack-up oil rig. Currently these jack-up oil rigs are in demand
which is  evidenced  by their  utilization  rate  which  currently  is over 90%.
Together with the current high price of oil (which is anticipated to continue in
the  near  future),  and the high  day  rates  that  these  rigs  are  currently
commanding, we continue to be optimistic that we will be able to find a buyer at
a  satisfactory  price for this piece of equipment or negotiate a lease  renewal
with Rowan Company's Inc.

     McDonnell Douglas DC-10-30F aircraft

     We currently own a 1976 McDonnell  Douglas  DC-10-30F  aircraft  subject to
lease with World  Airways,  Inc. The original  lease  expired on April 30, 2003.
Effective  May 1, 2003,  the  Aircraft  was leased to World  Airways,  Inc. on a
"power-by-the-hour"  until December 31, 2004.  Effective September 1, 2004, this
lease was  modified  to a fixed  rental of $50,000  per month  plus  maintenance
reserves and the term was extended through September 2006.  Aviation  Investors,
Inc. ("Aviation"),  an unrelated third party, who was a party to the acquisition
of the Aircraft,  has a Residual  Sharing  Agreement (the  "Agreement") in which
Aviation is entitled to receive 50% of all residual  proceeds from the Aircraft.
Residual proceeds include gross proceeds from any of the following: sale, lease,
renewal  lease or  extension or  financing  or  refinancing  of the Aircraft and
casualty  payments.  The gross proceeds may be reduced,  but not below zero, for
recovery expenses,  remarketing expenses, and any reasonable out-of-pocket costs
incurred us. Additionally, Aviation has a management agreement with us to manage
the  operations  of and to remarket  the  Aircraft  for sale or lease.  For this
service Aviation receives a monthly management fee of $10,667.

     There is a maintenance reserve of approximately  $1,843,000 at December 31,
2004. If the  maintenance  reserves are not fully utilized any remaining  monies
will be divided between the us and Aviation as stipulated in the Agreement.

     Supply Vessel

     We are still  working  to sell or  remarket  the third,  and final,  of our
supply vessels that were formerly on charter to SEACOR Smit, Inc. The ability to
sell at a  favorable  price  is  largely  contingent  on  industry  factors,  as
discussed  below.  During  December 2004, we recorded an impairment loss on this
asset based upon the current market.

     Boeing 737 and Airbus A310 rotables

     We currently own 65 Boeing 737 rotables and 58 Airbus A310 rotables,  which
were formerly on lease to Sabena  Technics.  Aircraft  rotables are  replacement
spare parts that are held in inventory by an airline. In aggregate, the sales of
these parts should  generate  between  $2,000,000  and  $3,000,000 of additional
proceeds for us. Subject to other risk factors  described herein, we believe the
values to be relatively  steady. The Boeing 737-300 is the most popular aircraft
ever built. The A310 rotables can be used on either A310-200s or A310-300s which
are being used by over 60 operators world-wide.

                                       13
<PAGE>

     Three 737-300 aircraft residuals

     We have an investment in the unguaranteed residual values of three aircraft
which are currently on lease to Continental Airlines,  Inc. On July 31, 1997, we
acquired an option to purchase these aircraft and paid $412,500 per aircraft for
an aggregate purchase price of $1,237,500. In addition, we assumed recourse debt
in the  amount of  $3,612,092  with  interest  accruing  at 8.5% per year  which
matured on November 27, 2003. The strike price for each aircraft at maturity was
$5,375,000.  Prior to the  aircraft  leases  expiring,  Continental  expressed a
desire to extend each of the leases for two years. Due to market  conditions and
in order to  accommodate  the lease  extensions,  it was in our best interest to
terminate the option agreement.  We agreed to restructure the recourse debt with
a new maturity date of November 27, 2006. As a result of the  restructuring,  we
were  required  to prepay  $500,000  of  interest  that would  accrue on the new
recourse debt and the option to purchase the aircraft would be converted into an
interest in the unguaranteed residual value.

     These  so-called  "Current  Generation"  Boeing  narrowbody  aircraft  were
amongst  those whose values were  initially  hardest hit by the tragic events of
September 11, 2001.  The current market  remains  volatile,  and the industry is
currently  on the  downside  of a business  cycle.  We are  optimistic  that the
industry will rebound within the next two to three years. The three 1985 vintage
Boeing aircraft each have  approximately 15 years of useful life remaining,  are
Stage III  compliant,  and are widely  used in the  marketplace.  We  anticipate
Continental Airlines,  Inc. will either renew the current leases, as they did in
2003, or agree to a favorable buyout when the current leases expire.  As for the
related  recourse  debt, we are not required to commence  interest only payments
until  December 31, 2005. We remain  hopeful that when these  aircraft are sold,
all or substantially  all of our recourse debt will be repaid from the proceeds,
but there can be no assurance that this will be the case. A sale of the aircraft
before November 2006 for a low sales price would result in our being required to
repay the remaining balance of the recourse debt in November 2006.  However,  we
have no control over when a potential sale would occur or the potential  selling
price.

     Economic and Industry Factors

     Our results continue to be impacted by a number of factors  influencing the
United States of America's  economy,  as well as, the equipment leasing industry
some of which are discussed below.

     United States Economy

     The economy of the United States of America  appears to be recovering,  and
the leasing  industry's  outlook for the foreseeable  future is encouraging.  We
foresee an  increase  in capital  spending by  corporations  through  2007 which
should increase the pool of available leases,  and to that end, we believe there
will be more  opportunities  in this market.  Nonetheless,  a key obstacle still
facing the leasing  industry is the  continued  low interest  rate  environment,
which reduces  leasing  volume  inasmuch as customers are more prone to purchase
than lease.  Other factors which may negatively  affect the leasing industry are
the  proposed  legal and  regulatory  changes  that may affect tax  benefits  of
leasing and the  continued  misperception  by potential  lessees,  stemming from
Enron,  WorldCom and others,  that  leasing  should not play a central role as a
financing alternative.  However, as economic growth continues and interest rates
inevitably  begin to rise over time,  we are  optimistic  that more lessees will
return to the marketplace.

     Energy Industry

     The energy  industry,  which  affects our mobile shore oil drilling rig and
supply vessel, is highly cyclical and dependent on numerous  factors,  including
the current level of exploration and development of offshore oil areas.  Despite
the current high prices of oil, oil  companies are reluctant to make the capital
investment necessary in shelf drilling,  as the high energy prices are perceived
as being  temporary by oil  companies.  This will affect the resale value of our
remaining supply vessel.

     Exploration and drilling  activities are influenced by a number of factors,
including the current and anticipated  future prices of oil and natural gas, the
expenditures  by oil and gas companies for  exploration  and development and the
availability of drilling rigs. In addition, demand for drilling services remains
dependent  on a variety of political  and economic  factors that are also beyond
our  control,  including  worldwide  demand  for oil and  natural  gas driven by
economic  activity,  the  ability of the  Organization  of  Petroleum  Exporting
Countries ("OPEC") to set and maintain production levels and pricing,  the level
of  production  of non-OPEC  countries  and the policies of various  governments
regarding exploration and development of their oil and natural gas reserves.

     The  current  market for mobile  off-shore  drilling  rigs  referred  to as
jack-up oil rigs appears to in be  improving.  Currently  these jack-up oil rigs
are in demand which is evidenced by their  utilization  rate which  currently is
over 90%.  Together with the current high price of oil (which is  anticipated to
continue  in the near  future),  and the  high day  rates  that  these  rigs are
currently commanding,  we continue to be optimistic that we will be able to find
a buyer at a satisfactory price for this piece of equipment or negotiate a lease
renewal with Rowan Company's Inc.

                                       14
<PAGE>

     Domestic Air Transportation Industry

     The  domestic  aircraft  leasing  industry  has been on the  downside  of a
business  cycle and  continues to remain  there.  This has resulted in depressed
sales prices for assets such as our aircraft interests.  It does not appear that
the industry will recover  significantly in the very near future with the recent
increases  in the price of gasoline  and the fare wars within the  domestic  air
transportation  industry,  although we are optimistic that a recovery will occur
within two to three years time.  However,  a further  weakening  of the industry
could cause the proceeds  realized  from the future sale of our aircraft and its
rotables to be even less than suggested by recent appraisals.

     Inability to Remarket Assets

     The market for some of our assets, such as the mobile off-shore oil rig, is
not very liquid.  If current  equipment lessees choose not to renew their leases
or  purchase  other  equipment  upon  expiration  of the lease,  we will need to
remarket the  equipment.  There is no assurance that we will be able to locate a
willing buyer or lessee for our assets, or if one is located,  that the buyer or
lessee will pay a price for the asset at least equal to the appraised value.

     Critical Accounting Policies

     An  appreciation  of our  critical  accounting  policies  is  necessary  to
understand our financial results. These policies may require the General Partner
to make difficult and subjective  judgments  regarding  uncertainties,  and as a
result,  such  estimates may  significantly  impact our financial  results.  The
precision of these  estimates and the  likelihood of future  changes depend on a
number of underlying variables and a range of possible outcomes.  We applied our
critical accounting policies and estimation methods  consistently in all periods
presented.  We consider the following  accounting policies to be critical to our
business:

o        Lease classification and revenue recognition
o        Asset impairments
o        Depreciation

     Lease Classification and Revenue Recognition

     The equipment we lease to third  parties is classified  either as a finance
lease, a leveraged lease, or an operating lease,  which is determined based upon
the terms of each lease. Initial direct costs are capitalized and amortized over
the term of the related  lease for both a finance  lease and a leveraged  lease.
For an operating  lease, the initial direct costs are included as a component of
the cost of the equipment and depreciated.

     For finance leases, we record, at lease inception,  the total minimum lease
payments receivable from the lessee, the estimated  unguaranteed  residual value
of the equipment at lease  termination,  the initial direct costs related to the
lease and the related unearned income. Unearned income represents the difference
between the sum of the minimum  lease  payments  receivable  plus the  estimated
unguaranteed residual minus the cost of the leased equipment. Unearned income is
recognized as finance income ratably over the term of the lease.

     For leveraged leases, we record, at lease inception,  our net investment in
the equipment  which  consists of the minimum  lease  payments  receivable,  the
estimated  unguaranteed residual value of the equipment at lease termination and
the initial  direct costs related to the lease,  net of the unearned  income and
principal  and interest on the related  non-recourse  debt.  Unearned  income is
recognized  as income over the life of the lease at a constant rate of return on
the positive net investment.

     For operating leases, income is recorded as rental income and is recognized
on the straight line method over the lease term.

     Our General  Partner has an  Investment  Committee  that  approves each new
equipment  acquisition.  As part of  their  process,  the  Investment  Committee
determines the residual value to be used once the acquisition has been approved.
The factors  considered in determining  the residual value include,  but are not
limited to, the  creditworthiness of the potential lessee, the type of equipment
being  considered,  how the equipment is integrated  into the potential  lessees
business,  the length of the lease and  industry in which the  potential  lessee
operates.  Residual  values are reviewed in accordance with our policy to review
all significant assets in our portfolio.

                                       15
<PAGE>
     Asset Impairments

     The significant assets in our asset portfolio are periodically reviewed, at
least  annually,  by  management,  to  determine  whether  events or  changes in
circumstances  indicate  that  the  carrying  value  of  an  asset  may  not  be
recoverable.  Management uses qualified third party  appraisers to assist in the
review process.  An impairment loss will be recognized if the carrying amount of
a  long-lived  asset is not  recoverable  and exceeds  its fair  value.  In such
circumstances,  we will estimate the future cash flows (undiscounted and without
interest  charges) expected to result from the use of the asset and its eventual
disposition.  Future cash flows are the cash inflows expected to be generated by
an asset  less the cash  outflows  expected  to be  necessary  to  obtain  those
inflows. An impairment loss will be measured as the amount by which the carrying
amount of a long-lived asset exceeds its fair value.

     The events or changes in  circumstances  which  generally  indicate that an
asset  may be  impaired  are (i) the  estimated  fair  value  of the  underlying
equipment  is less than our  carrying  value or (ii) the lessee is  experiencing
financial difficulties and it does not appear likely that the estimated proceeds
from the  disposition  of the asset will be  sufficient to satisfy the remaining
obligation  to the lender and our residual  position in the asset.  Generally in
the latter  situation,  the residual  position  relates to equipment  subject to
third party notes payable where the lessee remits their rental payments directly
to the lender and we do not recover our residual position until the note payable
is repaid in full.

     Depreciation

     We record  depreciation  expense on  equipment  classified  as an operating
lease.  In order to calculate  depreciation,  we first determine the depreciable
equipment cost,  which is the cost less estimated  residual value. The estimated
residual  value  is  our  estimate  of  the  value  of the  equipment  at  lease
termination.  The estimated residual value is reviewed annually,  by management,
to  determine  whether an  impairment  charge may be required.  Management  uses
qualified third party  appraisers to assist in the review process.  Depreciation
expense is recorded ratably over the term of the related lease.

       New Accounting Pronouncements

     During   December  2004,  the  FASB  issued  SFAS  No.  153  "Exchanges  of
Nonmonetary  Assets--an  amendment of APB Opinion No. 29" ("SFAS 153"). SFAS 153
is based on the  principle  that  exchanges  of  nonmonetary  assets  should  be
measured  based on the fair  value of the  assets  exchanged.  The  guidance  in
Opinion  29,  however,  included  certain  exceptions  to that  principle.  This
Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges
of  similar  productive  assets and  replaces  it with a general  exception  for
exchanges of nonmonetary assets that do not have commercial substance.  SFAS 153
is effective for  nonmonetary  exchanges  occurring in fiscal periods  beginning
after June 15, 2005. We do not expect the adoption of SFAS 153 to have an impact
on our financial position or results of operations.

     Management does not believe that any recently issued, but not yet effective
accounting pronouncements, if currently adopted, would have a material effect on
the accompanying consolidated financial statements.

     b. Results of Operations for the Years Ended December 31, 2004 ("2004") and
2003 ("2003")

Revenue for 2004 and 2003 are summarized as follows:

<TABLE>
<CAPTION>
                                                             Years Ended December 31,
                                                          2004                  2003                 Change
                                                          -----                 ----                 ------

<S>                                               <C>                   <C>                   <C>
 Total revenue                                    $         2,677,226   $        1,576,532    $      1,100,694
                                                  ===================   ==================    ================

 Rental income                                    $           439,685   $        1,365,201    $       (925,516)
 Finance income                                   $            13,467   $           82,070    $        (68,603)
 Net income from leveraged leases                 $         1,078,481   $       (1,488,462)   $      2,566,943
 Income from investments in joint ventures        $         2,840,420   $        1,241,857    $      1,598,563
 Net gain (loss) on sales of equipmemt            $        (1,738,180)  $          120,524    $     (1,858,704)
 Interest and other income                        $            43,353   $          255,342    $       (211,989)
</TABLE>

                                       16
<PAGE>

     Our total revenue in 2004 increased by $1,100,694 or 69.8%,  as compared to
2003. The increase in net income from the leveraged  lease was due an impairment
loss of  $3,400,000  in 2003 which was netted  against net income from  leverage
lease  as  compared  to an  impairment  loss  of  $4,700,000  in 2004  which  is
classified as an expense for reporting  purposes.  The decrease in rental income
is due to the fact that we are in our  disposition  period.  As leases expire we
remove the  underlying  equipment  from  operating to equipment held for sale or
lease  and  locate  buyer  for  the  equipment.  The  increase  in  income  from
investments in joint  ventures was due primarily to increased  gains incurred by
the ICON  Receivables  1997-B  L.L.C.  ("1997-B")  joint  venture  and North Sea
Limited  Partnership which had a gain of approximately  $1,397,000 and offset by
losses  incurred by the ICON  Cheyenne  joint  venture.  The increase in loss on
disposal of assets in 2004 was due to the disposal of the two leases  during the
year for which there were minimal disposals during the 2003.

Expenses for 2004 and 2003 are summarized as follows:

<TABLE>
<CAPTION>


                                                            Years Ended December 31,
                                                            2004             2003             Change
                                                           -----            -----            ------

<S>                                               <C>                   <C>                <C>
 Total expenses                                   $       12,919,447    $     18,876,768   $ (5,957,321)
                                                  ===================   ================   =============

 Provision for impairment loss                    $        7,861,680    $      7,850,000   $     11,680
 Depreciation                                     $        2,675,064    $      5,795,265   $ (3,120,201)
 Interest                                         $        1,104,016    $      2,682,524   $ (1,578,508)
 Vessel maintenance                               $           49,641    $        763,485   $   (713,844)
 General and administrative                       $          705,550    $        790,717   $    (85,167)
 Management fees - general partner                $          387,287    $        595,157   $   (207,870)
 Administrative expense reimburesement -
  General Partner                                 $          154,958    $        242,909   $    (87,951)
 Reversal of provision for bad debts              $         (134,391)   $             -    $   (134,391)
 Amortization of initial direct costs             $          117,781    $        184,089   $    (66,308)
 Minority interest                                $           (2,139)   $        (27,378)  $     25,239

</TABLE>


     Our total  expenses for 2004  decreased by $5,957,322 or 31.6%,  over 2003.
The  decrease  in  provision  for  impairment  loss  was  due to  our  recording
impairment on five supply  vessels during 2003 as compared to two vessels during
2004. The decrease in depreciation  expense was due primarily to the termination
of the five marine  supply  vessel  leases  during  2004.  We had a full year of
depreciation in 2003 while in 2004 we had six months of depreciation relating to
these  leases.  The  decrease in  interest  expense was due to a decrease in the
average  debt  outstanding  from 2004 to 2003.  This  decrease is primarily as a
result of several  factors;  the  extinguishment  of debt  associated with lease
terminations and debt extinguishment  related to the sale of the Federal Express
Corporation equipment. The decrease in vessel maintenance in 2004 was due to the
storage and remarketing  costs associated with the off-lease vessels during 2003
for which  there  were  minimal  costs in 2004.  The  decrease  in  general  and
administrative  expenses was due to  reductions in storage and  maintenance  and
insurance  expense during 2004 versus 2003 as a result of reduced payments under
the supply vessel leases.  Effective July 1, 2004, the General Partner agreed to
no longer charge us management fees and administrative  expense  reimbursements.
These fees were charged in prior quarters.

     Net Loss

     As a result of the factors  discussed above, the net loss for 2004 and 2003
was $10,242,221 and $17,300,236, respectively. The net loss per weighted average
limited  partnership  unit  outstanding was $10.27 and $17.34 for 2004 and 2003,
respectively

                                       17
<PAGE>
     c. Results of Operations for the Years Ended December 31, 2003 ("2003") and
2002 ("2002")

Revenue for 2003 and 2002 are summarized as follows:

<TABLE>
<CAPTION>
                                                             Years Ended December 31,
                                                           2003                2002             Change
                                                           ----                ----             -------

<S>                                              <C>                   <C>                 <C>
 Total revenue                                   $         1,576,532   $       8,326,025   $     (6,749,493)
                                                 ===================   =================   =================

 Rental income                                   $         1,365,201   $       2,528,092   $     (1,162,891)
 Finance income                                  $            82,070   $         906,012   $       (823,942)
 Net income from leveraged leases                $        (1,488,462)  $       1,986,808   $     (3,475,270)
 Income from investments in joint ventures       $         1,241,857   $       1,453,617   $       (211,760)
 Net gain on sales of equipment                  $           120,524   $       1,311,735   $     (1,191,211)
 Interest and other income                       $           255,342   $         139,761   $        115,581

</TABLE>

     Our total revenue 2003  decreased  $6,749,493 or 81.1% as compared to 2002.
The  decrease in net income from the  leveraged  lease was due to an  impairment
loss of  $3,400,000,  taken on the aircraft  under the leveraged  lease,  due to
reduction  in  the  original  estimated  salvage  value  based  upon  a  current
appraisal.  The decrease in rental income was due to equipment  coming off lease
during 2003 as earning no rental income while there is a full years of income in
2002. The decrease in finance income  resulted  primarily from a decrease in the
average size of our lease  portfolio  from 2002 to 2003.  The decrease in income
from  investment  in joint  ventures was due to net losses in the  operations of
several of the joint  ventures in 2003 which we had an interest in. The decrease
in gain on  sales  of  equipment  was due to a sale of  equipment  in the  third
quarter of 2002 whereas no similar sale occurred in 2003.

         Expenses for 2003 and 2002 are summarized as follows:

<TABLE>
<CAPTION>
                                                          Years Ended December 31,
                                                         2003               2002           Change
                                                         ----               ----           ------

<S>                                              <C>                   <C>              <C>
Total expenses                                   $       18,876,768    $   11,987,433   $    6,889,335
                                                 ===================   ==============   ==============

Provision for impairment loss                    $        7,850,000    $      350,000   $    7,500,000
Depreciation                                     $        5,795,265    $    4,769,652   $    1,025,613
Interest                                         $        2,682,524    $    3,515,642   $     (833,118)
Vessel maintenance                               $          763,485    $      351,386   $      412,099
General and administrative                       $          790,717    $    1,215,877   $     (425,160)
Management fees - general partner                $          595,157    $      975,642   $     (380,485)
Administrative expense reimburesement -
 General Partner                                 $          242,909    $      419,784   $     (176,875)
Amortization of initial direct costs             $          184,089    $      384,612   $     (200,523)
Minority interest                                $          (27,378)   $        4,838   $      (32,216)

</TABLE>

     Total  expenses 2003  increased by $6,889,335 or 57.5% as compared to 2002.
The provision for  impairment  loss  increased due to a decrease in the value of
our  equipment  held for sale or lease  thereby  requiring an  impairment  to be
recorded during 2003. The impairment loss was much smaller in 2002. The increase
in depreciation  expense was due primarily due to the  reclassification  in 2003
from  equipment  from  finance  leases  or  investment  in  leveraged  leases to
operating leases.  The decrease in interest expense was due to a decrease in the
average debt outstanding  from 2002 to 2003. The increase in vessel  maintenance
was due to the storage  and  remarketing  costs  associated  with the  off-lease
vessels  during 2003.  The  decreases in management  fees - General  Partner and
administrative expense reimbursement - General Partner resulted from the overall
decrease in the average size of our lease  portfolio  during 2003 and  therefore
our costs were reduced.  The decrease in  amortization  of initial  direct costs
resulted  from the decrease in the average size of our finance  lease  portfolio
during 2003.

     Net Loss

     As a result of the foregoing factors, net loss for the years ended December
31, 2003 and 2002 was $17,300,236 and $3,661,408, respectively. The net loss per
weighted  average number of limited  partnership unit outstanding was $17.34 and
$3.67, for the years ended December 31, 2003 and 2002, respectively.

                                       18
<PAGE>

     d.  Liquidity and Capital Resources

     Sources of Cash

     We  believe  that with the cash we have  currently  available,  cash  being
generated from our remaining  leases and the proceeds from our equipment  sales,
we have sufficient cash to continue our limited operations while we continue our
disposition period.

     Our  main  sources  of cash  during  2004  and  2003,  was  from  investing
activities.  Our primary  sources of cash during 2004,  was  generated  from the
sales of equipment of  approximately  $3,542,000,  cash  distributions  from our
joint ventures of approximately $959,000 and proceeds from the sale of interests
in joint ventures of approximately  $500,000. Our primary sources of cash during
2003, was generated from the sales of equipment of approximately  $1,051,000 and
cash distributions from our joint ventures of approximately $671,000.

     Our  primary  cash  outflows  during  2004 and  2003,  was  from  financing
activities.  Our primary  cash  outflow  for 2004 was  principal  repayments  on
recourse debt of approximately $5,446,000.  Our primary cash outflow in 2003 was
cash  distributions  to  partners  of  approximately  $1,663,000  and  principal
repayments on recourse debt of $454,000.

      Reduction in Note Payable

     At December 31, 2003 we owed  $1,750,000 to ICON Cash Flow Partners,  L.P.,
Series D ("Series D")  relating to a leveraged  lease  transaction  entered into
during  1997.  During  2004 we  repaid  a  total  of  $1,253,625  to  Series  D.
Additionally,  we recorded  forgiveness  of debt income of $496,375 for the year
ended December 31, 2004.

     Financings and Borrowings

     We  have  one  recourse   notes  payable  at  December  31,  2004  totaling
$5,751,009.  This  recourse  note payable is due on November  27, 2006,  accrues
interest at 5.0% per year and requires monthly interest only payments  beginning
December  31, 2005.  We were  required to prepay  $500,000 of interest  which is
being  amortized into  operations as interest  expense  through the date monthly
interest payments begin in 2005.

     We and  certain of our  affiliates,  specifically  ICON Income Fund Eight A
L.P.;   ICON  Income  Fund  Eight  B  L.P.  and  ICON  Income  Fund  Nine,   LLC
(collectively,  the  "Initial  Funds"),  are  parties  to a  Loan  and  Security
Agreement dated as of May 30, 2002, as amended (the "Loan Agreement"). Under the
terms of the Loan  Agreement,  the Initial  Funds may borrow money from Comerica
Bank with all borrowings to be jointly and severally  collateralized by (i) cash
and (ii) the present values of certain rents  receivable and equipment  owned by
the Initial Funds. Such Loan Agreement, effective August 5, 2004, was amended to
add ICON Income Fund Ten LLC ("Fund  Ten") as a borrower to the Loan  Agreement.
On  December  6,  2004,  the  Initial  Funds and Fund Ten  entered  into a Sixth
Amendment  to the Loan and Security  Agreement  with  Comerica  Bank wherein the
maturity  date of the loan was extended  from  December 31, 2004 to December 30,
2005. The Loan and Security  Agreement  provides for a joint and several line of
credit  of up to  $17,500,000  collateralized  by the  present  value  of  rents
receivable and equipment owned by the borrowers.

     In connection with the Loan Agreement, the Initial Funds previously entered
into a  Contribution  Agreement  dated  as of May  30,  2002,  as  amended  (the
"Contribution  Agreement").  Pursuant to the Contribution Agreement, the Initial
Funds  agreed to  restrictions  on the amount and the terms of their  respective
borrowings  under the Loan Agreement in order to minimize the unlikely risk that
a Fund  would  not be able to repay its  allocable  portion  of the  outstanding
revolving  loan  obligation  at any  time,  including  restrictions  on any Fund
borrowing  in excess of the lesser of (A) an amount  each Fund could  reasonably
expect  to repay in one year out of its  projected  free cash  flow,  or (B) the
greater of (i) the Borrowing  Base (as defined in the line of credit  agreement)
as  applied  to such  Fund,  and (ii) 50% of the net  worth  of such  Fund.  The
Contribution  Agreement  provides that, in the event a Fund pays an amount under
the  agreement  in excess of its  allocable  share of the  obligation  under the
agreement whether by reason of an Event of Default or otherwise, the other Funds
will promptly make a  contribution  payment to such Fund in such amount that the
aggregate amount paid by each Fund reflects its allocable share of the aggregate
obligations  under the agreement.  The Initial Funds'  obligations to each other
under the Contribution Agreement are collateralized by a subordinate lien on the
assets  of each  Fund.  In  order  to  facilitate  Fund  Ten's  addition  to the
Contribution  Agreement,  the Funds  entered into a Second  Amended and Restated
Contribution  Agreement  effective as of August 5, 2004.  The Second Amended and
Restated  Contribution  Agreement  contained  substantially  identical terms and
limitations as did the original Contribution Agreement.

     Effective  March 8, 2005,  the  Initial  Funds and the LLC  entered  into a
Seventh  Amendment to the Loan and Security  Agreement with Comerica Bank.  This
Agreement  releases  ICON  Cash  Flow  Partners  L.P.  Seven  from  all  of  its
obligations  under the Loan and Security  Agreement dated as of May 30, 2002. As
such, ICON Cash Flow Partners L.P. Seven is no longer a party to the $17,500,000
line of credit.

                                       19
<PAGE>

     During 2004 and 2005, certain of the Borrowers paid Comerica Bank a portion
of our outstanding obligations.  As required under the terms of the Contribution
Agreement,  we were required to promptly repay these  Borrowers the amounts paid
on our  behalf.  Since  we did not have  sufficient  liquidity  to  repay  these
Borrowers,  we  assigned  to them  interests  in  certain  of our joint  venture
investments as full repayment of monies due to them.

     During  September  2004, we assigned our entire .5025%  interest in ICON BF
valued at $65,325 to Fund Eight A L.P and we assigned  9.04% of our  interest in
ICON  Cheyenne  valued at $204,384 to Fund Eight B L.P.,  (iii) during  November
2004,  the  assignment of 3.24% of our interest in the profits,  losses and cash
flows of North Sea (Connecticut)  Limited Partnership valued at $810,000 to ICON
Income Fund Eight B L.P.,  (iv) during  November 2004, the assignment of 2.6% of
our  interest in the profits,  losses and cash flows of North Sea  (Connecticut)
Limited  Partnership  valued at  $650,000  to ICON  Income Fund Nine LLC and (v)
during  November  2004,  the  assignment  of .8% of our interest in the profits,
losses and cash flows of North Sea (Connecticut)  Limited  Partnership valued at
$200,000 to ICON Income Fund Eight A L.P.

     During 2005,  we entered  into three  additional  transactions  relating to
repayment of advances made on our behalf under the Contribution  Agreement;  (i)
during  February  2005,  the assignment of 2.69% of our interest in the profits,
losses and cash flows of North Sea (Connecticut)  Limited  Partnership valued at
$672,992  to ICON  Income  Fund Eight B L.P.;  (ii)  during  February  2005,  an
assignment  of 3.02% of our  interest in the  profits,  losses and cash flows of
North Sea (Connecticut)  Limited  Partnership  valued at $755,000 to ICON Income
Fund Nine LLC;  and (iii) an  assignment  of our entire 50% interest in a sodium
chloride plant valued at $745,000 to ICON Income Fund Nine LLC.

     Aggregate  borrowings by the Borrowers under the Loan Agreement amounted to
$10,272,992  at December 31, 2004.  At December 31, 2004,  we had  $2,422,992 of
borrowings under this line. During March 2005 we repaid all amounts  outstanding
on our behalf under this line of credit.

     Distributions

     Our  reinvestment  period  ended on November 9, 2002,  and the  disposition
period  commenced.  During the disposition  period, we have and will continue to
distribute  substantially all  distributable  cash from operations and equipment
sales to the partners and continue the orderly termination of our operations and
affairs.  We have not and will not  invest in any  additional  finance  or lease
transactions during the disposition period.

     We do not, in the normal course of business,  pay  dividends.  For the year
ended  December  31,  2004,  we did  not  pay  distributions  to  our  partners.
Historically, we paid monthly distributions to our partners beginning with their
admission through the termination of the reinvestment period, which was November
9, 2002. For the years ended  December 31, 2003 and 2002, we paid  distributions
of $1,645,916 and $10,129,308,  respectively,  to our limited partners.  For the
years ended  December 31, 2003 and 2002,  we paid  distributions  of $16,627 and
$102,316, respectively, to our General Partner.

     Commitments

     At December 31, 2004,  we have total  recourse  debt  outstanding  totaling
$8,174,001, of which $5,751,009 relates to a note payable and $2,422,992 relates
to the Comerica Bank line of credit.  Principal  maturities of our notes payable
consisted of the following at December 31, 2004:

                          Year Ending
                          December 31,
                             2005                           $   2,422,992
                             2006                               5,751,009
                                                            -------------

                               Total                        $   8,174,001
                                                            =============

                                       20
<PAGE>

     Risks and Uncertainties

     At December  31, 2004,  except as noted above in the  Overview  section and
listed  below in the Risk  Factors  section,  and to the best of our  knowledge,
there were no known  trends or  demands,  commitments,  events or  uncertainties
which are likely to have a material effect on our liquidity.

     Set forth below and elsewhere in this report and in other documents we file
with the Securities and Exchange  Commission  are risks and  uncertainties  that
could  cause  our  actual  results  to  differ   materially   from  the  results
contemplated  by the  forward-looking  statements  contained  in this report and
other periodic statements we make, including but not limited to, the following:

o    There is a  depressed  market  for  supply  vessels  of the  type,  age and
     condition which have affected the value of our remaining supply vessel.  We
     believe  this will  continue to  negatively  impact our ability to remarket
     this vessel.

o    We may face difficulty remarketing the aircraft rotables. Aircraft rotables
     are  replacement  spare parts that are held in inventory by an airline.  We
     own rotables for both the Boeing 737-300  aircraft and the Airbus aircraft.
     We believe that over time we will be able to remarket these  rotables,  but
     the  aircraft  industry  has been in an overall  down cycle and we may face
     difficulty in remarketing these assets.

o    The market for Boeing  737-300  aircraft is currently  depressed  due to an
     overabundance of aircraft on the market resulting from the overall downturn
     in the aviation industry following the tragic events of September 11, 2001.
     While the market for these aircraft is cyclical,  there can be no assurance
     that  market  will  recover  by  November,  2006.  Failure of the market to
     recover significantly may result in our inability to realize our investment
     in the residuals of the three  aircraft  currently on lease to  Continental
     Airlines, Inc.

o    Our  operations  are  subject  to the  jurisdiction  of a number of federal
     agencies,  including the Federal  Aviation  Administration.  New regulatory
     rulings may negatively  impact our financial results and the economic value
     of our assets.

o    The  litigation  involving  Fleet  may  require  us to spend a  potentially
     significant  amount of money on professional  fees which may in turn affect
     our ability to make distributions.

o    The equipment leasing industry is highly competitive.  When seeking leasing
     transactions  for  acquisition or sale, we compete with leasing  companies,
     manufacturers  that lease their products  directly,  equipment  brokers and
     dealers  and  financial   institutions,   including  commercial  banks  and
     insurance  companies.  Many of our  competitors are larger than us and have
     greater financial recourse than we do.

d. Inflation and Interest Rates

     The potential  effects of inflation on us are difficult to predict.  If the
general economy  experiences  significant rates of inflation,  however, it could
affect us in a number of ways. We do not  currently  have or expect to have rent
escalation  clauses tied to inflation in our leases.  The  anticipated  residual
values  to be  realized  upon the  sale or  re-lease  of  equipment  upon  lease
terminations (and thus the overall cash flow from our leases) may be expected to
increase with inflation as the cost of similar new and used equipment increases.

     If  interest  rates  increase  significantly,  the lease  rates that we can
obtain on future  leases may be expected to increase as the cost of capital is a
significant  factor in the pricing of lease financing.  Leases already in place,
for the most part, would not be affected by changes in interest rates.

                                       21
<PAGE>

Item 7A. Qualitative and Quantitative Disclosures About Market Risk

     We, like most other companies,  are exposed to certain market risks,  which
includes changes in interest rates and the demand for equipment (and the related
residuals)  owned  by us.  We  believe  to the  best of our  knowledge  that our
exposure to other market risks,  including  foreign currency exchange rate risk,
commodity risk and equity price risk, are  insignificant,  at this time, to both
our financial position and our results of operations.

     In general, we manage our exposure to interest rate risk by obtaining fixed
rate  debt.  The fixed  rate debt is  structured  so as to match the cash  flows
required  to service  the debt to the  payment  streams  under  fixed rate lease
receivables.  The  payments  under the leases  are  assigned  to the  lenders in
satisfaction  of the debt. We may finance  leases with a floating  interest rate
and we are therefore exposed to interest rate risk until fixed rate financing is
arranged.

                                       22
<PAGE>

Item 8.  Financial Statements and Supplementary Information

Report of Independent Registered Public Accounting Firm                      24

Consolidated Balance Sheets at December 31, 2004 and 2003                  25-26

Consolidated Statements of Operations for the Years Ended
  December 31, 2004, 2003 and 2002                                           27

Consolidated Statement of Changes in Partners' Equity for the Years Ended
  December 31, 2002, 2003 and 2004                                           28

Consolidated Statements of Cash Flows for the Years Ended
  December 31, 2004, 2003 and 2002                                         29-30

Notes to Consolidated Financial Statements                                 31-49

                                       23
<PAGE>

The Partners
ICON Cash Flow Partners L.P. Seven

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying  consolidated  balance sheets of ICON Cash Flow
Partners L.P. Seven (a Delaware  limited  partnership)  and  subsidiaries  as of
December  31,  2004  and  2003  and  the  related  consolidated   statements  of
operations,  changes  in  partners'  equity and cash flows for each of the three
years in the period  ended  December  31,  2004.  These  consolidated  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position of ICON Cash Flow
Partners L.P.  Seven and  subsidiaries  as of December 31, 2004 and 2003 and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 2004, in conformity  with  accounting  principles
generally accepted in the United States of America.

As discussed in Note 1, the Partnership's  reinvestment period ended November 9,
2002  and  its  disposition   commenced.   During  the  disposition  period  the
Partnership will distribute substantially all distributable cash from operations
and  equipment  sales to the partners and begin the orderly  termination  of its
operations and affairs.

/s/ Hays & Company LLP

March 16, 2005
New York, New York

                                       24
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                           Consolidated Balance Sheets
                                  December 31,

                                     ASSETS


<TABLE>
<CAPTION>


                                                                   2004          2003
                                                                   ----          ----


<S>                                                            <C>            <C>
 Cash and cash equivalents                                     $     96,364   $     301,256
                                                               ------------   -------------

 Investments in finance leases:
    Minimum rents receivable                                      1,117,499       2,022,310
    Estimated unguaranteed residual values                               -           70,903
    Initial direct costs, net                                            -            1,299
    Unearned income                                                  (5,934)        (55,036)
    Allowance for doubtful accounts                                      -         (239,516)
                                                              ------------   ---------------

      Net investments in finance leases                           1,111,565       1,799,960
                                                              -------------  --------------

 Investments in operating leases:
Equipment, at cost                                                2,565,000       6,352,370
    Accumulated depreciation                                       (833,310)     (1,614,224)
                                                              --------------  --------------

      Net investments in operating leases                         1,731,690       4,738,146
                                                              -------------  --------------

 Equipment held for sale                                          1,776,131      15,569,831
 Net investment in leveraged lease                                       -       19,631,879
 Investment in estimated unguaranteed residual values             4,686,758       4,686,758
 Investments in joint ventures                                    3,813,458       4,000,169
 Due from affiliates                                                190,301         369,071
 Other assets, net                                                  442,972         966,486
                                                              -------------  --------------

      Total assets                                             $ 13,849,239   $  52,063,556
                                                              =============   =============

</TABLE>

See accompanying notes to consolidated financial statements

                                       25
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                     Consolidated Balance Sheets (continued)
                                  December 31,

                        LIABILITIES AND PARTNERS' EQUITY


<TABLE>
<CAPTION>

                                                                         2004             2003
                                                                         ----             ----


<S>                                                                <C>             <C>
Notes payable - non-recourse                                       $     -         $    22,129,648
Notes and accrued interest payable - recourse                           8,174,001       14,027,055
Due to affiliates                                                         341,323           51,522
Security deposits, deferred credits and other payables                    155,487          429,127
Minority interest                                                          17,316           22,871
                                                                   --------------  ---------------

  Total liabilities                                                     8,688,127       36,660,223
                                                                   --------------  ---------------

Commitments and contigencies

Partners' equity:
  General partner                                                        (797,295)        (694,873)
  Limited partners;  987,547.81 units outstanding, $100 per
  unit original issue price                                             5,958,407       16,098,206
                                                                   --------------   --------------

  Total partners' equity                                                5,161,112       15,403,333
                                                                   --------------   --------------

  Total liabilities and partners' equity                            $  13,849,239   $   52,063,556
                                                                    =============   ==============
</TABLE>

See accompanying notes to consolidated financial statements

                                       26
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                      Consolidated Statements of Operations
                            Years Ended December 31,


<TABLE>
<CAPTION>



                                                                     2004                 2003                  2002
                                                                     ----                 ----                  -----

 Revenue:
<S>                                                        <C>                     <C>                <C>
    Rental income                                          $             439,685   $      1,365,201   $         2,528,092
    Finance income                                                        13,467             82,070               906,012
    Net income (loss) from leveraged leases                            1,078,481         (1,488,462)            1,986,808
    Income from investments in joint ventures                          2,840,420          1,241,857             1,453,617
    (Loss) gain on disposal of assets                                 (1,738,180)           120,524             1,311,735
    Interest and other income                                             43,353            255,342               139,761
                                                           ---------------------   ----------------   -------------------

      Total revenue                                                    2,677,226          1,576,532             8,326,025
                                                           ---------------------   ----------------   -------------------

 Expenses:
 Impairment loss                                                       7,861,680          7,850,000               350,000
    Depreciation                                                       2,675,064          5,795,265             4,769,652
    Interest                                                           1,104,016          2,682,524             3,515,642
    Vessel maintenance                                                    49,641            763,485               351,386
    General and administrative                                           705,550            790,717             1,215,877
    Management fees - general partner                                    387,287            595,157               975,642
    Administrative expense reimbursement -
      General Partner                                                    154,958            242,909               419,784
    Reversal of provision for bad debts                                 (134,391)                -                     -
    Amortization of initial direct costs                                 117,781            184,089               384,612
    Minority interest                                                     (2,139)           (27,378)                4,838
                                                           ---------------------   ----------------   -------------------

      Total expenses                                                  12,919,447         18,876,768            11,987,433
                                                           ---------------------    ---------------   -------------------

 Net loss                                                  $         (10,242,221)  $    (17,300,236)  $        (3,661,408)
                                                           =====================   ================   ===================

 Net loss allocable to:
     Limited Partners                                      $         (10,139,799)  $    (17,127,234)  $        (3,624,794)
    General Partners                                                    (102,422)          (173,002)              (36,614)
                                                           ---------------------   ----------------   -------------------

                                                           $         (10,242,221)  $    (17,300,236)  $        (3,661,408)
                                                           =====================   ================   ===================

 Weighted average number of limited partnership
    units outstanding                                                    987,548            987,548               988,099
                                                           ======================= ================   ===================

 Net loss per weighted average limited
    partnership unit                                       $              (10.27)   $        (17.34)  $             (3.67)
                                                           ======================   ===============   ===================

</TABLE>


See accompanying notes to consolidated financial statements

                                       27
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
              Consolidated Statement of Changes in Partners' Equity
                  Years Ended December 31, 2002, 2003 and 2004


<TABLE>
<CAPTION>


                                  Limited Partner Distributions
                                      (Per weighted average unit)                                    Total
                                   Return of         Investment       Limited           General     Partners'
                                     Capital           Income         Partners          Partner      Equity
                                     -------           ------         --------          -------      ------

<S>              <C>                                             <C>               <C>              <C>
Balance, January 1, 2002                                         $ 48,661,234      $   (366,314)    $48,294,920

Limited partnership units redeemed
   (1,101 units)                                                      (35,776)              -           (35,776)
 Cash distributions to partners       $10.25           $  -       (10,129,308)         (102,316)    (10,231,624)
 Net loss                                                          (3,624,794)          (36,614)     (3,661,408)
                                                                  ------------     ------------     -----------

Balance, December 31, 2002                                         34,871,356          (505,244)     34,366,112

 Cash distributions to partners       $1.67            $  -        (1,645,916)          (16,627)     (1,662,543)
 Net loss                                                         (17,127,234)         (173,002)    (17,300,236)
                                                                 -------------     ------------     -----------

Balance, December 31, 2003                                         16,098,206          (694,873)     15,403,333

 Net loss                                                         (10,139,799)         (102,422)    (10,242,221)
                                                                 -------------     ------------     -----------

Balance, December 31, 2004                                       $  5,958,407      $   (797,295)    $ 5,161,112
                                                                 ============      =============    ===========

</TABLE>



See accompanying notes to consolidated financial statements

                                       28
<PAGE>

                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                      Consolidated Statements of Cash Flows
                            Years Ended December 31,


<TABLE>
<CAPTION>

                                                                        2004              2003                   2002
                                                                        -----             ----                   ----
  Cash flows from operating activities
<S>                                                                 <C>            <C>              <C>
    Net loss                                                        $(10,242,221)  $  (17,300,236)  $          (3,661,408)
    Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
        Rental income paid directly to lenders by lessees                     -          (674,894)             (2,528,092)
        Reversal of provision for doubtful accounts                     (134,391)              -                       -
        Interest expense on non-recourse financing paid directly
        to lenders by lessees                                            484,264        1,676,212               2,536,757
        Finance income portion of receivable paid directly
        to lenders by lessees                                                 -                -                 (568,035)
        Loss (gain) on disposal of assets                              1,738,180         (120,524)             (2,711,735)
        Amortization of initial direct costs                             117,781          184,089                 384,612
        Provision for impairment loss                                  7,861,680        7,850,000               1,750,000
        Depreciation                                                   2,675,064        5,795,265               4,769,652
        Net (income) loss from leveraged leases                       (1,078,481)       1,488,462              (1,986,808)
        Income from investments in joint ventures                     (2,840,420)      (1,241,857)             (1,453,617)
        Minority interest                                                 (2,139)         (27,378)                  4,838
      Changes in operating assets and liabilities:
        Collection of principal - non-financed receivables               688,395        1,385,804               3,449,559
        Other assets                                                     523,514          283,049                 650,162
        Security deposits, deferred credits and other payables          (273,640)        (235,565)               (446,136)
        Due from/to General Partner and affiliates, net                1,095,881        (311,633)             (3,901,765)
                                                           ---------------------- ----------------  ----------------------

 Net cash provided by (used in) operating activities                     613,467      (1,249,206)             (3,712,016)
                                                           ---------------------- ----------------  ----------------------

 Cash flows from investing activities:
    Contributions to investments in joint venture                        (11,540)              -                       -
    Proceeds from sales of equipment                                   1,548,754        1,050,865               6,184,106
    Distributions received from joint ventures                           958,915          671,137               1,288,983
                                                           ---------------------  ---------------              ----------

 Net cash provided by investing activities                             2,496,129        1,722,002               7,473,089
                                                           ---------------------   --------------               ---------

 Cash flows from financing activities:
 Cash distributions to partners                                               -        (1,662,543)            (10,231,624)
    Proceeds from notes payable - recourse                                    -           690,000              10,800,439
    Principal payments on notes payable - recourse                    (5,446,072)        (453,901)             (5,120,036)
    Loans and advances from affiliates                                 2,135,000               -                       -
    Principal payments on notes payable - non-recourse                        -                -                 (250,000)
    Redemption of limited partnership units                                   -                -                  (35,776)
    Distribution to minority interest in joint venture                    (3,416)          (3,043)                     -
                                                           ---------------------- ----------------  --------------------

 Net cash used in financing activities                                (3,314,488)      (1,429,487)             (4,836,997)
                                                           ---------------------- ----------------  ---------------------

 Net decrease in cash and cash equivalents                              (204,892)        (956,691)             (1,075,924)
 Cash and cash equivalents, beginning of the year                        301,256        1,257,947               2,333,871
                                                           ---------------------  ---------------   ---------------------

 Cash and cash equivalents, end of the year                $              96,364   $      301,256   $           1,257,947
                                                           =====================   ==============   =====================

</TABLE>

See accompanying notes to consolidated financial statements

                                       29
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                      Consolidated Statements of Cash Flows
                            Years Ended December 31,



<TABLE>
<CAPTION>


                                                                        2004                2003              2002
                                                                        ----                ----              ----

 Supplemental disclosure of cash flow information:
<S>                                                            <C>                     <C>               <C>
    Cash paid during the period for interest                   $             319,541   $    1,006,312    $      978,885
                                                               =====================   ==============    ==============

 Supplemental disclosure of non-cash investing and financing activities:
    Principal and interest on finance lease paid directly
     to lenders by lessees                                     $           5,766,418   $    4,397,927    $    2,269,884
                                                               =====================   ==============    ==============
    Notes payable - non-recourse relinquished
      with sale of equipment                                   $          16,847,494   $         -       $         -
                                                               =====================   ==============    ==============
    Transfer of investment in operating leases,
   net of accumulated  depreciation ,
     to equipment held for sale or lease                       $           2,450,916   $   10,389,766    $    3,258,314
                                                               =====================   ==============    ==============
    Transfer of investment in finance leases
      to investment in operating leases                        $                -      $    2,565,000    $    9,647,253
                                                               =====================   ==============    ==============
    Transfer of investment in operating leases
     to equipment held for sale                                $           2,327,558   $         -       $         -
                                                               =====================   ==============    ==============
    Joint venture interests assigned to affiliates in exchange
      for amounts owed                                         $           1,876,000   $         -       $         -
                                                               =====================   ==============    ==============
    Recourse debt paid by affiliates                           $           1,253,625   $         -       $         -
                                                               =====================   ==============    ==============

</TABLE>


See accompanying notes to consolidated financial statements

                                       30
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003


(1)    Organization

     ICON Cash Flow  Partners  L.P.  Seven (the  "Partnership")  is an equipment
leasing  business  formed  in the  State  of  Delaware  on  May  23,  1995.  The
Partnership  is engaged in one  business  segment,  the  business  of  acquiring
equipment subject to leases.

     The  principal  objective  of the  Partnership  is to  obtain  the  maximum
economic return from its investments for the benefit of its partners. To achieve
this objective, the Partnership:  (i) acquired a diversified portfolio of leases
and financing transactions; (ii) made monthly cash distributions to its partners
commencing with each partner's admission to the Partnership,  continuing through
the  reinvestment  period,  which ended on November 9, 2002;  (iii)  re-invested
substantially  all  undistributed  cash from  operations  and cash from sales of
equipment and financing transactions during the reinvestment period; and (iv) is
selling the Partnership's investments and is distributing the cash from sales of
such investments to its partners during the disposition period.

     The  Partnership's  reinvestment  period  ended  November  9,  2000 and the
Partnership  commenced its disposition period. During the disposition period the
Partnership is distributing substantially all distributable cash from operations
and equipment sales to the partners and will continue the orderly termination of
its operations and affairs.  The  Partnership  will not invest in any additional
finance or lease transactions during the disposition period.

     The Partnership's  maximum offering was $100,000,000.  Operations commenced
on the Partnership's  initial closing date,  January 19, 1996 with the admission
of 26,367.95 limited partnership units at $100 per unit representing  $2,636,795
of capital contributions.  From January 20, 1996 through September 16, 1998 (the
final  closing date)  973,628.86  additional  units were  admitted  representing
$97,362,886 of capital contributions  bringing the total admission to 999,996.81
units aggregating $99,999,681 in capital contributions. The Partnership redeemed
12,449.00 limited  partnership units during the years 1997 through 2004, leaving
987,547.81 limited partnership units outstanding at December 31, 2004.

     The General  Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut  corporation.  The General Partner manages and controls
the  business  affairs  of the  Partnership's  equipment  leases  and  financing
transactions  under the terms of a management  agreement  with the  Partnership.
Additionally,   the  General  Partner  has  a  1%  ownership   interest  in  the
Partnership.

     Profits,  losses, cash distributions and disposition proceeds are allocated
99% to the limited  partners  and 1% to the General  Partner  until each limited
partner has received cash distributions and disposition  proceeds  sufficient to
reduce  its  adjusted  capital  contribution  account  to zero and  receive,  in
addition,  other  distributions  and  allocations  which would provide a 10% per
annum cumulative return,  compounded daily, on its outstanding  adjusted capital
contribution  account.  After such time, the distributions will be allocated 90%
to the limited partners and 10% to the General Partner.

                                       31
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(2)    Summary of Significant Accounting Policies

     Consolidation and Minority Interest

     The  consolidated   financial   statements  include  the  accounts  of  the
Partnership  and its majority owned  subsidiary.  All  significant  intercompany
accounts and transactions have been eliminated in consolidation. The Partnership
accounts for its  interests in minority  owned joint  ventures  under the equity
method of accounting.  In such cases, the Partnership's  original  investment is
recorded  at  cost  and  adjusted   for  its  share  of  earnings,   losses  and
distributions.  In joint ventures where the Partnership's  ownership interest is
majority   owned,   minority   interest   represents  the  minority   venturer's
proportionate share of their equity in the joint venture.  The minority interest
is adjusted  for the  minority  venturer's  share of the earnings or loss of the
joint venture.

     Cash and Cash Equivalents

     Cash  and  cash  equivalents  include  cash  in  banks  and  highly  liquid
investments with original maturity dates of three months or less.

     Concentration of Credit Risk

     Concentrations  of credit risk with respect to lessees are dispersed across
different  industry  segments within the United States of America and throughout
the world;  accordingly,  the  Partnership  is exposed to business  and economic
risk.  Although the Partnership does not currently foresee a concentrated credit
risk  associated  with  its  lessees,  lease  payments  are  dependent  upon the
financial stability of the segments in which they operate.

     Allowance for Doubtful Accounts

     The Partnership  estimates  collectibility  of minimum rents  receivable by
analyzing historical bad debts, lessee  concentrations and credit worthiness and
current  economic  trends when  evaluating  the  adequacy of the  allowance  for
doubtful  accounts.  The Partnership  records an allowance for doubtful accounts
when the analysis indicates that the probability of full collection is unlikely.

     Investments in Operating Leases

     Operating  leases  are  stated  at  cost  less  accumulated   depreciation.
Depreciation is being provided for using the straight-line  method over the term
of the related  equipment  lease to its estimated  residual  value at lease end.
Upon  final  disposition  of the  equipment,  the cost and  related  accumulated
depreciation  will be removed from the accounts and the resulting profit or loss
will be reflected in the  consolidated  statement of  operations.  Revenues from
operating  leases are  recognized on a straight line basis over the lives of the
related leases.

     Equipment Held for Sale

     Equipment  held for sale is  recorded  at the  lower of cost or fair  value
expected to be realized upon sale and consists of equipment previously leased to
end users which has been returned to the Partnership following lease expiration.

                                       32
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003


(2)    Summary of Significant Accounting Policies - continued

     Investment in Estimated Unguaranteed Residual Values

     The Partnership carries its investment in estimated  unguaranteed  residual
values  at  cost.  The   Partnership   reviews  its   investments  in  estimated
unguaranteed residual values in accordance with its policy on asset impairments.

     Asset Impairments

     The  Partnership's  asset  portfolio  is  periodically  reviewed,  at least
annually, to determine whether events or changes in circumstances  indicate that
the carrying value of an asset may not be  recoverable.  An impairment loss will
be recognized if the carrying  amount of a long-lived  asset is not  recoverable
and exceeds its fair value. In such circumstances, the Partnership will estimate
the future cash flows  (undiscounted  and without interest  charges) expected to
result from the use of the asset and its eventual disposition. Future cash flows
are the cash inflows expected to be generated by an asset less the cash outflows
expected to be necessary to obtain those  inflows.  An  impairment  loss will be
measured  as the  amount by which the  carrying  amount  of a  long-lived  asset
exceeds its fair value.

     The events or changes in  circumstances  which  generally  indicate that an
asset  may be  impaired  are (i) the  estimated  fair  value  of the  underlying
equipment  is less than its  carrying  value or (ii) the lessee is  experiencing
financial difficulties and it does not appear likely that the estimated proceeds
from the  disposition  of the asset will be  sufficient to satisfy the remaining
obligation  to the lender and our residual  position in the asset.  Generally in
the latter  situation,  the residual  position  relates to equipment  subject to
third party notes payable where the lessee remits their rental payments directly
to the lender and the  Partnership  did not recover its residual  position until
the note payable is repaid in full.

     Redemption of Limited Partnership Units

     The Partnership may, at its discretion,  redeem units from a limited number
of its  limited  partners,  in any  one  year,  as  defined  in the  partnership
agreement.  The  redemption  amounts  are  calculated  following  the  specified
redemption formula in accordance with the partnership agreement.  Redeemed units
have no  voting  rights  and do not  share in  distributions.  Redeemed  limited
partnership units are accounted for as a reduction from partners' equity.

     Per Unit Data

     Net income  (loss) and  distributions  per unit are based upon the weighted
average number of units outstanding during the period.

     Revenue Recognition

     The partnership  leases  equipment to third parties which may be classified
as either a finance lease or an operating lease,  which is determined based upon
the terms of each lease. Initial direct costs are capitalized and amortized over
the term of the related lease for a finance lease.  For an operating  lease, the
initial  direct costs are  included as a component of the cost of the  equipment
and depreciated.

                                       33
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(2)    Summary of Significant Accounting Policies - continued

     For finance leases, the Partnership records, at lease inception,  the total
minimum lease payments  receivable from the lessee,  the estimated  unguaranteed
residual value of the equipment at lease  termination,  the initial direct costs
related to the lease and the related unearned income. Unearned income represents
the difference between the sum of the minimum lease payments receivable plus the
estimated unguaranteed residual minus the cost of the leased equipment. Unearned
income is recognized as finance income ratably over the term of the lease.

     For  operating  leases,  rental  income is  recognized on the straight line
method over the lease term.  Billed and uncollected  operating lease receivables
are included in other  assets.  Deferred  income is the  difference  between the
timing of the cash payments and the income recognized on a straight line basis.

     Fair Value of Financial Instruments

     Statement of Financial Accounting Standards ("SFAS") No. 107,  "Disclosures
About Fair Values of Financial Instruments," requires disclosures about the fair
value of financial instruments, except for lease related assets and liabilities.
Separate disclosure of fair value information at December 31, 2004 and 2003 with
respect to the Partnership's  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 payables  approximates  market
value. The estimated fair value of the  Partnership's  recourse notes payable at
December 31, 2004 is approximately $7,529,000.

     Use of Estimates

     The  preparation of the financial  statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial  statements and revenues and
expenses during the reporting period.  Significant  estimates  primarily include
the  allowance  for  doubtful  accounts and  unguaranteed  residual  values.  In
addition,  management is required to disclose  contingent  assets and contingent
liabilities. Actual results could differ from those estimates.

     Recent Accounting Pronouncements

     In  December  2004,  SFAS  Statement  No.  153  "Exchanges  of  Nonmonetary
Assets--an amendment of APB Opinion No. 29" was issued. SFAS 153 is based on the
principle that  exchanges of nonmonetary  assets should be measured based on the
fair  value of the assets  exchanged.  The  guidance  in  Opinion  29,  however,
included  certain  exceptions to that  principle.  SFAS 153 amends Opinion 29 to
eliminate the exception for nonmonetary  exchanges of similar  productive assets
and replaces it with a general  exception  for exchanges of  nonmonetary  assets
that do not have  commercial  substance.  SFAS 153 is effective for  nonmonetary
exchanges  occurring  in fiscal  periods  beginning  after  June 15,  2005.  The
Partnership has not entered into any nonmonetary  transactions:  therefore, SFAS
153 did not have an impact on our financial  position,  results of operations or
cash flows.

                                       34
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(2)    Summary of Significant Accounting Policies - continued

     Management does not believe that any recently issued, but not yet effective
accounting pronouncements, if currently adopted, would have a material effect on
the accompanying consolidated financial statements.

     Reclassifications

     Certain  reclassifications have been made to the accompanying  consolidated
financial  statements  for prior years in order to conform to the  current  year
presentation.

(3)    Joint Ventures

     The Partnership and its affiliates,  entities managed and controlled by the
General Partner,  formed eight joint ventures,  discussed below, for the purpose
of acquiring and managing  various assets.  The Partnership and these affiliates
have substantially  identical investment  objectives and participate on the same
terms and conditions. The Partnership and the other joint venturers have a right
of first refusal to purchase the equipment,  on a pro-rata  basis, if any of the
other joint  venturers  desire to sell their interests in the equipment or joint
venture.

     The joint venture  described below is majority owned and consolidated  with
the Partnership.

     ICON Cash Flow Partners L.L.C. III

     The Partnership and an affiliate,  ICON Cash Flow Partners,  L.P., Series E
("Series E") formed,  ICON Cash Flow Partners  L.L.C.  III,  ("LLC III") for the
purpose  of  acquiring  and  managing a 1976  McDonnell  Douglas  DC-10-30  (the
"Aircraft").  The original  lease  expired on April 30, 2003.  Effective  May 1,
2003,  the Aircraft was leased to World Airways,  Inc. on a  "power-by-the-hour"
until December 31, 2004. Effective September 1, 2004, this lease was modified to
a fixed rental of $50,000 per month plus  maintenance  reserves and the term was
extended through  September 2006.  Aviation  Investors,  Inc.  ("Aviation"),  an
unrelated  third party,  who was the seller in the  acquisition of the Aircraft,
has a Residual Sharing Agreement (the "Agreement") in which Aviation is entitled
to receive 50% of all excess  residual  proceeds  from the  Aircraft as defined.
Residual proceeds include gross proceeds from any of the following: sale, lease,
renewal  lease or  extension or  financing  or  refinancing  of the Aircraft and
casualty  payments.  The gross proceeds may be reduced,  but not below zero, for
recovery expenses,  remarketing  expenses,  any reasonable  out-of-pocket  costs
incurred by the Partnership and an amount  calculated to provide the Partnership
with a consistent  rate of return,  as defined in the  Agreement.  Additionally,
Aviation  has  a  management  agreement  with  the  Partnership  to  manage  the
operations  of and to remarket the Aircraft for sale or lease.  For this service
Aviation  receives a monthly  management  fee of $10,667.  LLC III  acquired the
Aircraft,  assuming non-recourse debt and utilizing  contributions received from
the  Partnership  and Series E. The Partnership and Series E contributed 99% and
1% of the cash required for such  acquisition,  respectively.  LLC III has since
fully repaid the non-recourse debt secured by the Aircraft.

     There is a maintenance reserve of approximately  $1,843,000 at December 31,
2004. If the  maintenance  reserves are not fully utilized any remaining  monies
will be divided  between  the  Partnership  and  Aviation as  stipulated  in the
Agreement.

                                       35
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(3)    Joint Ventures - continued

     The  seven  joint  ventures  described  below  are  minority  owned  by the
Partnership  and  are  accounted  for  under  the  equity  method,  whereby  the
Partnership's  original  investment  was recorded at cost and is adjusted by its
share of earnings, losses and distributions of the joint ventures.

     ICON Receivables 1997-A L.L.C.

     The Partnership and three affiliates, ICON Cash Flow Partners, L.P., Series
D ("Series  D"),  Series E and ICON Cash Flow  Partners  L.P.  Six ("L.P.  Six")
contributed and assigned  equipment  leases,  finance  receivables and equipment
residuals  to  ICON  Receivables  1997-A  LLC  ("1997-A")  for  the  purpose  of
securitizing their cash flow collections. At December 31, 2004, the Partnership,
Series D, Series E and L.P. Six own  interests of 19.97%,  17.81%,  31.19%,  and
31.03%, respectively, in 1997-A.

     At December 31, 2004,  1997-A's operations have been liquidated as the note
holders have been fully repaid for their  investment in 1997-A and the remaining
receivables  relating  to the  securitizations  totaling  $345,152,  due from an
affiliate of the General Partner relating to lease receivables, were written-off
as  uncollectible.  The  remaining  cash is being  reserved to pay for potential
property tax; sales tax and other liabilities, if any.

     Information  as to the  financial  position  and results of  operations  of
1997-A at December  31, 2004 and 2003 and for the years ended  December 31, 2004
and 2003 are summarized below:

                                                        December 31,
                                                   2004              2003
                                               -------------    -------------
         Assets                                $     107,229    $     810,802
                                               =============    =============
         Liabilities                           $      62,005    $     595,106
                                               =============    =============
         Equity                                $      45,224    $     215,696
                                               =============    =============
         Partnership's share of equity         $       9,045    $      43,080
                                               =============    =============

                                                  Years Ended December 31,
                                                   2004              2003
                                               -------------    -------------
         Net loss                              $   (170,469)    $     (88,676)
                                               ============     =============
         Partnership's share of net loss       $     (34,035)   $     (17,704)
                                               =============    =============

     ICON Receivables 1997-B L.L.C.

     The  Partnership  and two  affiliates,  Series E and L.P. Six,  formed ICON
Receivables 1997-B L.L.C.  ("1997-B") contributed and assigned equipment leases,
finance  receivables  and  equipment  residuals  to 1997-B  for the  purpose  of
securitizing their cash flow collections. The Partnership, Series E and L.P. Six
each contributed cash,  equipment leases and residuals to 1997-B and own 16.67%,
75.00% and 8.33% interests, respectively, in 1997-B.

     At December 31, 2004,  1997-B's operations have been liquidated as the note
holders have been repaid for most of their  investment in 1997-B.  The remaining
cash is being  reserved to pay for potential  property tax;  sales tax and other
liabilities, if any.

                                       36

<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003
(3)    Joint Ventures - continued

     Information  as to the  financial  position  and results of  operations  of
1997-B at December  31, 2004 and 2003 and for the years ended  December 31, 2004
and 2003 are summarized below:

                                                          December 31,
                                                     2004              2003
                                                 -------------    -------------
         Assets                                  $      38,558    $   1,756,597
                                                 =============    =============
         Liabilities                             $      38,558    $   1,681,931
                                                 =============    =============
         Equity                                  $         -      $      74,666
                                                 =============    =============
         Partnership's share of equity           $         -      $      12,448
                                                 =============    =============

                                                     Years Ended December 31,
                                                     2004              2003
                                                 -------------    -------------
         Net income (loss)                       $     131,462    $    (341,507)
                                                 =============    =============
         Partnership's share of net loss         $      21,915    $     (56,929)
                                                 =============    =============
         Distributions                           $     206,128    $        -
                                                 =============    =============
         Partnership's share of distributions    $      34,362    $        -
                                                 =============    =============

     ICON/Boardman Facility LLC

     The Partnership  and two affiliates,  L.P. Six and ICON Income Fund Eight A
L.P.  ("Fund Eight A"),  formed  ICON/Boardman  Facility LLC ("ICON BF") for the
purpose of acquiring a coal  handling  facility on lease with  Portland  General
Electric  ("PGE"),  a  utility  company.   Prior  to  September  24,  2004,  the
Partnership,  L.P. Six and Fund Eight A owned  interests  of .5025%,  .5025% and
98.995%, respectively, in ICON BF.

     As discussed  in Note 10, in  connection  with the  Comerica  Bank Loan and
Security Agreement,  the Partnership entered into a Contribution  Agreement with
Fund Eight A, ICON Income Fund Eight B L.P.  ("Fund Eight B"),  ICON Income Fund
Nine,  LLC ("Fund  Nine") and ICON  Income  Fund Ten,  LLC ("Fund  Ten") (each a
"Borrower" and collectively, "the Borrowers") which requires a Borrower to repay
another Borrowers obligations to Comerica Bank as long as the repaid amounts are
promptly  reimbursed to the paying Borrower.  Effective  September 24, 2004, the
Partnership  assigned its entire .5025%  interest in ICON BF to Fund Eight A for
$65,325  to  partially  satisfy  its  obligations  to Fund  Eight  A  under  the
Contribution  Agreement.  This amount was determined to represent the fair value
of the  Partnership's  interest in ICON BF based upon the  expected net proceeds
from the sale of the coal handling facility.

     The  General  Partner  is  currently  in  negotiations  with PGE for  their
purchase of the coal handling  facility from ICON BF. The sale is expected to be
completed  during  2005  with  PGE  acquiring  ownership  of the  coal  handling
facility.

     Information as to the financial  position and results of operations of ICON
BF at December  31, 2004 and 2003 and for the years ended  December 31, 2004 and
2003 are summarized below:

                                       37
<PAGE>

                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(3)    Joint Ventures - continued
                                                    December 31,
                                             2004              2003
                                         -------------    -------------
 Assets                                  $  19,193,175    $  21,366,282
                                         =============    =============
 Liabilities                             $  10,904,912    $   7,314,376
                                         =============    =============
 Equity                                  $   8,288,263    $  14,051,906
                                         =============    =============
 Partnership's share of
   equity/assigned on 9/24/04            $           -    $      70,611
                                         =============    =============

                                            Years Ended December 31,
                                             2004              2003
                                         -------------    -------------
 Net income                              $   1,481,386    $   1,442,100
                                         =============    =============
 Partnership's share of net income       $       5,804    $       7,247
                                         =============    =============
 Distributions                           $   7,245,027    $           -
                                         =============    =============
 Partnership's share of distributions    $      36,406    $           -
                                         =============    =============
 Assignment of ownership interest        $      40,009    $           -
                                         =============    =============

     ICON/AIC Trust

     The  Partnership  and two  affiliates,  L.P.  Six and Fund Eight A,  formed
ICON/AIC  Trust ("AIC Trust") for the purpose of owning and managing a portfolio
of leases for equipment located in England. On December 28, 2001, AIC Trust sold
its  remaining  leases,  subject to the related  debt,  in  exchange  for a note
receivable  of  (pound)2,575,000  ($3,744,822  converted at the exchange rate in
effect at December 31, 2001) which was payable in six installments  through June
2004. In July 2004, the final installment on the note was collected by AIC Trust
and  distributed  to its  beneficiaries.  On September  30, 2004,  AIC Trust was
dissolved. The Partnership, L.P. Six and Fund Eight A owned a 30.76%, 25.51% and
43.73% interest, respectively, in AIC Trust.

     The  Partnership  recognized  an  additional  $129,646 of foreign  currency
translation  gains  from this  transaction  which is  included  in  income  from
investments in joint  ventures in the  accompanying  consolidated  statements of
operations.

     Information  as to the financial  position and results of operations of AIC
Trust at December 31, 2004 and 2003 and for the years ended  September  30, 2004
and 2003 are summarized below:

                                                         December 31,
                                                    2004              2003
                                                -------------    -------------
         Assets                                 $           -    $   1,330,632
                                                =============    =============
         Liabilities                            $           -    $           -
                                                =============    =============
         Equity                                 $           -    $   1,330,632
                                                =============    =============
         Partnership's share of equity          $           -    $     409,303
                                                =============    =============

                                                    Years Ended December 31,
                                                    2004              2003
                                                -------------    -------------
         Net income                             $       7,700    $      37,009
                                                =============    =============
         Partnership's share of net income      $       2,369    $      11,384
                                                =============    =============
         Distributions                          $   1,378,141    $   1,396,948
                                                =============    =============
         Partnership's share of distributions   $     423,916    $     429,701
                                                =============    =============

                                       38
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(3)    Joint Ventures - continued

     ICON Aircraft 24846 LLC

     The Partnership and two affiliates,  Fund Eight A and Fund Eight B, formed,
ICON Aircraft 24846 LLC ("ICON Aircraft  24846") for the purpose of acquiring an
investment  in a Boeing  767-300ER  aircraft  on lease to  Scandinavian  Airline
Systems. The Partnership,  Fund Eight A and Fund Eight B had ownership interests
of 2.0%, 2.0% and 96.0%, respectively in ICON Aircraft 24846.

     The aircraft was sold on July 29, 2004 and ICON Aircraft  24846  realized a
net  loss on the  sale  of  approximately  $601,800,  of  which  our  share  was
approximately  $12,000.  The General  Partner had determined  that it was in the
best  interest  of ICON  Aircraft  24846  and its  members  to sell  the  Boeing
767-300ER  aircraft to BTM Capital Corp., the lender, for an amount equal to the
then outstanding  debt balance.  The decision to sell the aircraft was based, in
part,  on the  following  factors:  (i) the  aircraft's  fair  market  value was
estimated  to be between  $24,000,000  and  $27,000,000  and the  balance of the
outstanding debt was $34,500,000; (ii) any new lease for the aircraft would have
required an additional $850,000 in equity (at a minimum) in order to reconfigure
the  aircraft  and upgrade the  engines;  and (iii) if the  Partnership  were to
continue to remarket the aircraft,  the lender would have required interest only
payments of approximately $100,000 per month until the aircraft was re-leased.

     Information as to the financial  position and results of operations of ICON
Aircraft  24846 at  December  31, 2004 and 2003 and for the years ended July 29,
2004 and 2003 are summarized below:

                                                   December 31,
                                              2004              2003
                                          -------------    -------------
 Assets                                   $           -    $  36,430,187
                                          =============    =============
 Liabilities                              $           -    $  34,493,632
                                          =============    =============
 Equity                                   $           -    $   1,938,555
                                          =============    =============
 Partnership's share of equity            $           -    $      38,771
                                          =============    =============

                                             Years Ended December 31,
                                              2004              2003
                                          -------------    -------------
 Net loss                                 $ (2,515,576)    $ (3,467,329)
                                          ============     ============
 Partnership's share of net loss          $     (50,311)   $     (69,347)
                                          =============    =============
 Contributions                            $     577,021    $   1,649,551
                                          =============    =============
 Partnership's share of contributions     $      11,540    $      32,992
                                          =============    =============

     ICON Cheyenne LLC

     The Partnership and three affiliates, L.P. Six, Fund Eight A and Fund Eight
B formed ICON Cheyenne LLC ("ICON  Cheyenne"),  for the purpose of acquiring and
managing a  portfolio  of  equipment  leases.  Prior to  September  30, 2004 the
Partnership,  L.P. Six, Fund Eight A and Fund Eight B had ownership interests of
10.31%, 1.0%, 1.0% and 87.69%, respectively, in ICON Cheyenne.

                                       39
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(3)    Joint Ventures - continued

     As discussed  in Note 10, in  connection  with the  Comerica  Bank Loan and
Security Agreement,  the Partnership entered into a Contribution  Agreement with
the Borrowers which require a Borrower to repay other  Borrowers  obligations to
Comerica  Bank as long as the repaid  amounts  are  promptly  reimbursed  to the
paying Borrower.  As repayment to Fund Eight B for amounts paid to Comerica Bank
under the terms of the Contribution Agreement, effective September 30, 2004, the
Partnership  assigned a 9.04% interest in ICON Cheyenne (while retaining a 1.27%
interest) to Fund Eight B for $204,384.  This amount was determined to represent
the fair  value of the  9.04%  interest  in ICON  Cheyenne.  The fair  value was
determined  using  discounted cash flow  projections  for ICON Cheyenne's  lease
portfolio and the fair value  approximated book value.  Accordingly,  no gain or
loss was recognized by the Partnership from this transaction.

     The outstanding  balance of the non-recourse  debt secured by these assets,
at December 31, 2004 was  $397,850.  The leases  expire on various dates through
September 2006.

     Information as to the financial  position and results of operations of ICON
Cheyenne at December 31, 2004 and 2003 and for the years ended December 31, 2004
and 2003 are summarized below:

                                                         December 31,
                                                    2004              2003
                                                -------------    -------------
         Assets                                 $   1,241,215    $  10,440,643
                                                =============    =============
         Liabilities                            $     656,923    $   3,204,090
                                                =============    =============
         Equity                                 $     584,292    $   7,236,553
                                                =============    =============
         Partnership's share of equity          $       7,420    $     746,088
                                                =============    =============

                                                   Years Ended December 31,
                                                    2004              2003
                                                -------------    -------------
         Net loss                               $ (1,952,262)    $     (45,540)
                                                ============     =============
         Partnership's share of net loss        $     (77,419)   $       (4,695)
                                                =============    ==============
         Distributions                          $   4,700,001    $   2,341,759
                                                =============    =============
         Partnership's share of distributions   $     464,231    $     241,436
                                                =============    =============
         Transfer of ownership interest         $     197,018    $          -
                                                =============    ============

     North Sea (Connecticut) Limited Partnership

     The  Partnership  entered  into a joint  venture  agreement  with North Sea
(Connecticut)  Limited  Partnership  ("North  Sea"),  in which  the  Partnership
acquired a 50% Class C limited partner interest.  North Sea exercised its option
to  acquire a  drilling  rig from the  operator  and  simultaneously  leased the
drilling rig back to the operator. The lease was then financed on a non-recourse
basis with a bank,  and a portion of the loan  proceeds were used to pay for the
exercise  price of the  option;  with the excess loan  proceeds  of  $20,002,567
distributed to the joint venturers  ($10,001,284  represented the  Partnership's
50% share).  The other parties to this joint  venture are not  affiliates of the
Partnership or its General Partner.

                                       40
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(3)    Joint Ventures - continued

     As discussed  in Note 10, in  connection  with the  Comerica  Bank Loan and
Security Agreement,  the Partnership entered into a Contribution  Agreement with
the Borrowers which require a Borrower to repay other  Borrowers  obligations to
Comerica  Bank as long as the repaid  amounts  are  promptly  reimbursed  to the
paying  Borrower.  The  Partnership  entered into the following  transactions as
repayment  to Fund  Eight A,  Fund  Eight B and Fund  Nine for  amounts  paid to
Comerica Bank under the terms of the  Contribution  Agreement (See Note 10). The
Partnership  realized a gain from these assignments of approximately  $1,397,000
which  is  included  in  income  from  investments  in  joint  ventures  in  the
accompanying consolidated statements of operations.

     During November 2004, the  Partnership  assigned .8% of its interest in the
profits, losses and cash flows of North Sea valued at $200,000 to Fund Eight A.

     During November 2004, the Partnership assigned 3.24% of its interest in the
profits,  losses and cash flows of North Sea valued at  $810,000  to ICON Income
Fund Eight B. During February 2005, the Partnership assigned an additional 2.69%
of its  interest  in the  profits,  losses and cash flows of North Sea valued at
$672,992 to ICON Income Fund Eight B.

     During November 2004, the Partnership  assigned 2.6% of its interest in the
profits,  losses and cash flows of North Sea  valued at  $650,000  to Fund Nine.
During  February  2005,  the  Partnership  assigned an  additional  3.02% of its
interest in the  profits,  losses and cash flows of North Sea valued at $755,000
to Fund Nine.

     The  Partnership  has guaranteed an amount equal to the difference  between
the  stipulated  loss  value  provided  for in the North Sea  financing  and the
outstanding  loan  balance.  The  maximum  amount for which the  Partnership  is
contingently  liable at December 31, 2004 under this guarantee was approximately
$58,000.

     Information as to the financial position and results of operations of North
Sea at December 31, 2004 and 2003 and for the years ended  December 31, 2004 and
2003 are summarized below:

                                                        December 31,
                                                    2004             2003
                                               -------------    -------------
         Assets                                $   9,174,080    $   9,839,209
                                               =============    =============
         Liabilities                           $  15,838,485    $  19,574,474
                                               =============    =============
         Equity                                $ (6,664,405)    $ (9,735,265)
                                               ============     ============
         Partnership's share of equity (a)     $   3,935,402    $   2,679,868
                                               =============    =============

                                                  Years Ended December 31,
                                                   2004              2003
                                               -------------    -------------
         Net income                            $   3,070,860    $   2,743,802
                                               =============    =============
         Partnership's share of net income     $   1,526,933    $   1,371,901
                                               =============    =============
         Transfer of ownership interest        $     271,400    $          -
                                               =============    ============

     (a) During the year ended December 31, 2002, all equity distributions were
allocated to the co-venturer.

                                       41
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(4)    Investment in Estimated Unguaranteed Residual Values

     During July 1997,  the  Partnership  entered  into an option to acquire the
residual  interests in three Boeing 737-300 aircraft (the "Boeing  Aircraft") on
lease to Continental Airlines. In conjunction with re-negotiations during August
2003 the option  agreement was  terminated.  On August 29, 2003 the  Partnership
re-negotiated  its investment in the  unguaranteed  residual values of the three
Boeing  Aircraft  valued at  $4,686,758  at December  31,  2004.  As part of the
re-negotiation,  three recourse promissory notes payable by the Partnership were
converted into a single recourse promissory note payable aggregating $5,751,009.
This  single  recourse  promissory  note  payable is due on November  27,  2006,
accrues  interest at 5.0% per annum and requires  monthly interest only payments
beginning  December 31, 2005. The  Partnership  was required to prepay  $500,000
which is being  amortized into  operations as interest  expense through the date
monthly interest payments begin in 2005.

     If any, or all, of the Boeing  Aircraft are sold prior to the maturity date
of the recourse  promissory  note payable on November 27, 2006, the  Partnership
may have all or a portion of the outstanding  balance of the recourse promissory
note payable  forgiven,  depending upon the total sales proceeds.  If the Boeing
Aircraft is sold after the maturity date of the recourse  promissory  note,  the
Partnership would be entitled to receive one-third of the net proceeds in excess
of the net book  value of Boeing  Aircraft,  as  defined  in the  agreement.  In
addition,  the  Partnership  is  required  to repay a  portion  of the  recourse
promissory  note with 50% of the sales proceeds from any of its assets which are
not subject to senior  secured debt.  The  Partnership  has not been required to
make any  principal  payments  to the  lender  under the  terms of the  recourse
promissory note through December 31, 2004.

(5)  Net Investment in Leveraged Leases

     The Partnership had an ownership  interest in a McDonnell Douglas DC-10-30F
aircraft  (the  "Aircraft")  subject to a leveraged  lease with Federal  Express
Corporation  which  expired  on  July 2,  2004.  The  Aircraft  was  subject  to
non-recourse debt which had a balloon payment of approximately $9,600,000 due at
lease end.  As  required  by the terms of the loan  agreement,  the  Partnership
entered into a residual  value  insurance  agreement  (the  "Residual  Insurance
Agreement")  with  an  unrelated  third  party.  Under  the  Residual  Insurance
Agreement,  the insurer was required to pay the insured  amount to the lender at
the  expiration  of the  lease  if the  balloon  payment  was  not  made  by the
Partnership.  Due to the downturn in the  marketplace for this type of Aircraft,
the Partnership was unable to sell the Aircraft for sufficient proceeds to repay
the  outstanding  debt and  therefore,  the  Partnership  was unable to make the
required balloon payment when due nor was it able to successfully  refinance the
debt. As a result,  pursuant to the terms of the Residual  Insurance  Agreement,
the insurer  notified the Partnership of its intention to pay the insured amount
of $10,200,000 at lease end, resulting in title of the Aircraft  transferring to
the  insurer and the  Partnership  losing its entire  ownership  interest in the
Aircraft. As a result, the Partnership received net proceeds of $520,293,  after
$9,679,707  was  paid  to the  non-recourse  lender.  The  Partnership  recorded
impairment  losses of $4,700,000 and $3,400,000 for the years ended December 31,
2004 and 2003 and  recorded a loss on the  disposal of the  Aircraft of $106,900
for the year ended December 31, 2004.

                                       42
<PAGE>

                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(5)  Net Investment in Leveraged Leases - continued


                                                             December 31,
                                                          2004         2003
                                                          ----         ----


 Non-cancelable minimum rents receivable (net of
   principal and interest on non-recourse debt)        $     -    $   5,810,360
 Estimated unguaranteed residual value                       -       14,900,000
 Initial direct costs, net                                   -           29,411
 Unearned income                                             -      (1,107,892)
                                                       -------    ------------

                                                       $     -    $  19,631,879
                                                       =======    =============

(6)    Investments in Finance Leases

     At December  31, 2004,  the  Partnership  is the lessor of a finance  lease
transaction in a sodium chlorate  production  facility with EKA Chemicals,  Inc.
The lease expires  during July 2006,  at which time title to the equipment  will
pass to EKA  Chemicals,  Inc. At  December  31,  2004 the  Partnership's  entire
minimum  rents  receivable  relates  to this  lease.  The  Partnership  received
$372,500 during January 2005.

     During March 2005 the  Partnership  assigned its entire 50% interest in EKA
Chemicals,  Inc.  valued  at  $745,000  to Fund  Nine  for  amounts  paid on the
Partnership's behalf under the terms of the Contribution Agreement (Note 10).

         The allowance for doubtful accounts relating to finance lease
receivables and financings consists of the following:

<TABLE>
<CAPTION>

                                                          2004             2003              2002
                                                     -------------     -------------    -------------
<S>                                                  <C>               <C>              <C>
Balance, beginning of year                           $   (239,516)     $   (289,301)    $   (915,985)

Reversal of allowance for doubtful accounts                134,391                 -                -
Write offs                                                 105,125            49,785          626,684
                                                     -------------     -------------    -------------

Balance, end of year                                 $           -     $   (239,516)    $   (289,301)
                                                     =============     ============     ============

</TABLE>

(7)    Investments in Operating Leases

     As  discussed  in Note 3, the  Partnership  and Series E share an ownership
interest  in a  McDonnell  Douglas  DC-10-30  aircraft  subject  to a lease with
Continental  Airlines,  Inc.  which expired in March 2003. The aircraft was then
leased to World Airways, Inc. on April 1, 2003 and the asset was reclassified as
an investment in operating leases at its then book value of $2,565,000.

                                       43
<PAGE>

                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(7)    Investments in Operating Leases - continued

     Investments in operating leases are summarized as follows at December 31:



<TABLE>
<CAPTION>

                                                         2004             2003              2002
                                                     -------------     -------------    -------------
<S>                                                  <C>               <C>              <C>
Equipment at cost, beginning of year                 $   6,352,370     $  14,195,791    $   9,678,415

Transfer of investment in leverage leases
  and equipment held for sale or lease to
  operating leases                                               -         6,352,370        9,647,253
Transfer of operating leases to equipment
  held for sale or lease                               (3,787,370)      (14,195,791)      (5,129,877)
                                                     ------------      ------------     ------------

Equipment at cost, end of year                           2,565,000         6,352,370       14,195,791
                                                     -------------     -------------    -------------

Accumulated depreciation, beginning of year            (1,614,224)        (1,703,583)        (895,169)
Accumulated depreciation on transferred
  equipment held for sale of lease                       1,459,812         5,884,624        3,961,238
Depreciation expense                                      (678,898)      (5,795,265)      (4,769,652)
                                                     -------------     ------------     ------------
Accumulated depreciation, end of year                     (833,310)      (1,614,224)      (1,703,583)
                                                     -------------     ------------     ------------  -

Net investment in operating leases, end of year      $   1,731,690     $   4,738,146    $  12,492,208
                                                     =============     =============    =============


</TABLE>

     Aggregate minimum future rentals  receivable from each of the Partnership's
non-cancelable  leases  discussed above consist of the following at December 31,
2004:

               Year Ending
              December 31,
                  2005                        $        600,000
                  2006                        $        450,000

(8)  Equipment Held for Sale

     The  Partnership  was the sole owner of two joint  ventures that owned five
(5) marine vessels  originally on charter to affiliates of Seacor  Marine,  Inc.
(the  "Vessels").  These Vessels were subject to outstanding  non-recourse  debt
with Fleet Capital Corp. ("Fleet"). In September 2003, Fleet took control of the
Vessels and commenced  remarketing  efforts  under the terms of their  financing
agreement with the Partnership.  On May 12, 2004, Fleet sold the Vessels,  which
resulted in aggregate  sale  proceeds of  $3,580,000.  At the time of sale,  the
outstanding non-recourse debt relating to the Vessels was $7,138,369;  therefore
all proceeds from the sale were used repay the outstanding  non-recourse  notes.
As a result of the sale of the Vessels, the Partnership recorded a loss on lease
termination of $622,872, which represented their net book value at that time.

                                       44
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(8)  Equipment Held for Sale - continued

     In August 2004,  Fleet filed an action in New York State Supreme Court, New
York County,  seeking to recover  damages it alleges that the  Partnership  owes
under  certain  Performance  Guaranties  entered  into in  connection  with  the
non-recourse loans made by Fleet. The General Partner believes Fleet's action is
without merit and is vigorously  defending this action.  The General Partner has
filed a  Counterclaim  against Fleet  seeking to recover  damages as a result of
Fleet's breach of its duty of good faith and fair dealing regarding the sales of
the vessels. The Partnership has not accrued any potential loss from this action
as the  action  is in its  early  stage  of  discovery  and it is not  currently
possible to determine a range or possible range of potential  loss, if any, that
may result from the outcome of this uncertainty.

     The  Partnership  is the sole  owner  of  three  (3)  marine  vessels  also
originally on charter to affiliates of Seacor Marine, Inc. These vessels are not
subject to  outstanding  debt with a lender.  On September 20, 2004 and again on
October 10, 2004,  the  Partnership  entered into two separate  Memorandum's  of
Agreement  (the  "Agreements")  with  Gulf  Ocean  Marine  Services,   Inc.,  an
unaffiliated  third  party,  for the sale of the Gulf Pearl and Gulf Wind supply
vessels,  respectively.  The sales occurred simultaneously with the execution of
the Agreements.  The sale price for each vessel was $500,000 and the Partnership
recognized a loss on each sale of $790,420. The $790,420 loss on the vessel sold
on September  20, 2004,  is included in gain (loss) on disposal of assets in the
accompanying  consolidated  statements of operations for the year ended December
31,  2004 and  $790,420  loss on the vessel  sold on October  10,  2004 has been
recorded as an impairment charge in the accompanying  consolidated statements of
operations  for year ended  December 31,  2004.  Additionally,  the  Partnership
recorded an impairment charge of $7,850,000 relating to these vessels during the
year ended December 31, 2003.

(9)    Notes Payable

     Notes  payable at  December  31,  2004  consists  of  recourse  obligations
totaling  $8,174,001.  The Partnership has no outstanding  non-recourse  debt at
December 31, 2004.  $5,751,009  of the recourse  debt relates to the  promissory
note payable to AAR described in Note 4 to the consolidated financial statements
and $2,422,992  relates to the Comerica Bank line of credit described in Note 10
to the consolidated financial statements.

         Principal maturities of the Partnership's notes payable consist of
following at December 31, 2004:

                      Year Ending
                     December 31,
                         2005              $   2,422,992
                         2006                  5,751,009
                                           -------------

                                           $   8,174,001

                                       45
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(10)   Note Payable - Recourse

     On May 30, 2002 the Partnership, along with certain of its affiliates; Fund
Eight A, Fund  Eight B, and Fund  Nine,  (collectively,  the  "Initial  Funds"),
entered into a $17,500,000  line of credit  agreement  with Comerica  Bank.  The
Initial Funds accrue  interest on all  outstanding  balances at an interest rate
equal to the  Comerica  Bank  base  interest  rate plus 1%  (together,  6.25% at
December 31, 2004). Under the terms of the line of credit agreement, the Initial
Funds may borrow from  Comerica Bank with all  borrowings  jointly and severally
collateralized  by (i) cash  and  (ii)  the  present  values  of  certain  rents
receivable and equipment owned by the Initial Funds.  Effective  August 5, 2004,
the line of credit  agreement,  was  amended to add ICON  Income  Fund Ten,  LLC
("Fund  Ten") as an  additional  borrower.  The  Initial  Funds and Fund Ten are
collectively  referred to as the  Borrowers.  On  December 6, 2004,  the line of
credit with Comerica Bank was extended to December 30, 2005.

     The Initial  Funds  entered into a  Contribution  Agreement,  dated May 30,
2002,  as  subsequently  amended  to  include  Fund Ten,  pursuant  to which the
Borrowers have agreed to certain  restrictions on the amounts and terms of their
respective  borrowings  under the line of credit  agreement in order to minimize
the risk that a  Borrower  would be unable to repay  its  allocable  portion  of
outstanding line of credit obligations at any time. These  restrictions  include
borrowing  in  excess  of the  lesser  of  (a) an  amount  each  Borrower  could
reasonably  expect to repay in one year from its projected cash flow, or (b) the
greater of (i) the borrowing  base, as defined in the line of credit  agreement,
as applied to such Borrower, and (ii) 50% of the net worth of such Borrower. The
Contribution  Agreement  provides  that,  in the event a Borrower pays an amount
under this agreement in excess of its allocable  share of the total  obligations
under the line of credit agreement,  whether by reason of an event or default or
otherwise,  the other Borrowers will immediately make a contribution  payment to
such Borrower and in such amount that the aggregate amount paid by each Borrower
reflects its  allocable  share of the  aggregate  obligations  under the line of
credit   agreement.   The  Borrowers'   obligations  to  each  other  under  the
Contribution Agreement are collateralized by a subordinate lien on the assets of
each participating Borrower.

     During 2004 and 2005, certain of the Borrowers paid Comerica Bank a portion
of the outstanding  obligations of the Partnership.  As required under the terms
of the  Contribution  Agreement,  the Partnership was required to promptly repay
these Borrowers amounts for amounts paid on the Partnership's  behalf. Since the
Partnership  did not have  sufficient  liquidity to repay these  Borrowers,  the
Partnership  assigned  interests in certain  joint venture  investments  as full
repayment of monies due to the Borrowers (See Note 3).

     At December 31, 2004, the Partnership had $2,422,992  outstanding under the
Loan  Agreement.  The aggregate  borrowing by all Funds under the Loan Agreement
was $10,272,992 at December 31, 2004. The  Partnership  fully repaid all amounts
due to Comerica during March 2005.

     Effective March 8, 2005, the Borrowers  entered into a Seventh Amendment to
the Loan and Security Agreement with Comerica Bank. This Agreement with Comerica
Bank releases the Partnership  from all obligations  under the Loan and Security
Agreement. As such, the Partnership is no longer a party to the $17,500,000 line
of credit.

                                       46
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(11) Income Taxes (Unaudited)

     The  Partnership  is treated  as a  partnership  for  income tax  reporting
purposes and as such, no provision for income taxes has been recorded  since the
liability for such taxes is that of each of the individual  partners rather than
the Partnership. The Partnership'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 partners.

     At December  31,  2004,  the  partners'  capital  accounts  included in the
consolidated  financial  statements totaled $5,161,112 compared to the partners'
capital accounts for Federal income tax purposes of $12,001,483 (unaudited). The
differences  arise  primarily  from  commissions  reported as a reduction in the
partners' capital accounts from financial reporting purposes but not for Federal
income tax  purposes,  and  temporary  differences  relating  to direct  finance
leases, depreciation and provision for losses.

     The following  table  reconciles net (loss) income for financial  statement
reporting purposes to the loss for Federal income tax purposes as follows:


<TABLE>
<CAPTION>
                                                                  Years Ended December 31,
                                                      ------------------------------------------------
                                                           2004             2003              2002
                                                      ---------------   ---------------  -------------
<S>                                                   <C>               <C>              <C>
 Net loss per consolidated financial statements       $(10,242,221)     $(17,300,236)    $ (3,661,408)

 Differences due to:
   Direct finance leases and financings                       (838,438)       4,383,859      5,793,149
   Depreciation and impairments                             8,528,277         4,822,532    (7,892,419)
   Recovery of losses                                         (294,127)     (2,140,232)              -
   Loss (gain) on sale of equipment                        11,070,836         (122,887)      3,896,215
   Other                                                    4,802,180           996,942         (15,377)
                                                      ---------------   ---------------  --------------

 Net income (loss) for Federal income
   tax purposes                                       $    13,026,507   $   (9,360,022)  $ (1,879,840)
                                                      ===============   ==============   ============

</TABLE>


(12)   Limited Partnership Redemptions

     The General Partner  consented to the Partnership  redeeming 1,101 units in
2002.  There were no redemptions in either 2004 or 2003. The redemption  amounts
are calculated  according to a specified  redemption  formula in accordance with
the partnership agreement. Redeemed units have no voting rights and do not share
in distributions. The partnership agreement limits the number of units which can
be redeemed in any one year and  redeemed  units may not be  reissued.  Redeemed
limited  partnership  units are  accounted  for as a  reduction  from  partners'
equity.

(13)   Transactions with Related Parties

     At December 31, 2004, the Partnership had a receivable of $150,000 due from
L.P. Six which relates to  distributions  received by L.P. Six from AIC Trust on
the Partnership's  behalf.  The Partnership  received full payment from L.P. Six
during January 2005.

                                       47
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(13)   Transactions with Related Parties - continued

     The  Partnership  owed  $2,000,000 to Series D relating to the financing of
the free cash  portion,  including  the  proceeds  from the sale or  disposal of
equipment, relating to a leveraged lease transaction entered into by L.P. Seven.
L.P.  Seven  exercised its right to prepay a portion of the  financing  with the
Partnership,  and the Partnership  prepaid,  $250,000 during 2002 and $1,253,625
during 2004. The lease expired July 2004. As a result the  Partnership  recorded
forgiveness  of debt income of $496,375  which is included in interest and other
income in the  accompanying  consolidated  statements of operations for the year
ended December 31, 2004.

     The  Partnership  also had a net  payable of  $341,323  due to the  General
Partner and  affiliates at December 31, 2004. The  Partnership  owed the General
Partner $128,551 for management fees and administrative expense  reimbursements.
Additionally, the General Partner advanced $175,000 to the Partnership which the
Partnership  used to  partially  repay the  Comerica  Bank line of  credit.  The
Partnership  repaid this  advance to the General  Partner  during  January  2005
without interest.

     As discussed  in Notes 3 and 10, the  Partnership  assigned  certain of its
interests in joint ventures and finance leases during 2004 and 2005 to repay its
affiliates  for  amounts  paid  by  the  affiliates   under  the  terms  of  the
Contribution Agreement.

     In accordance with the terms of the management  agreement,  the Partnership
pays the General  Partner (i)  management  fees ranging from 1% to 7% based on a
percentage of the rentals received either directly by the Partnership or through
joint   ventures.   In  addition,   the  General   Partner  is  reimbursed   for
administrative   expenses   incurred  in  connection   with  the   Partnership's
operations.  Effective  July 1, 2004 the  General  Partner  decided to waive its
right to  management  fees and  administrative  expense  reimbursements  through
December 31, 2004.

     Fees and other  expenses  charged to operations by the  Partnership  to the
General  Partner or its affiliates  for the years ended December 31, 2004,  2003
and 2002, respectively, were as follows:


<TABLE>
<CAPTION>


                                                      Years Ended December 31,
                                          ------------------------------------------------
                                               2004             2003              2002
                                          -------------     -------------    -------------
  <S>                                     <C>               <C>              <C>
  Management fees                         $     387,287     $     595,157    $     975,642
  Administrative expense reimbursements         154,958           242,909          419,784
                                          -------------     -------------    -------------

                                          $     542,245     $     838,066    $   1,395,426
                                          =============     =============    =============

</TABLE>


(14)   Concentration Risks

     For the year ended December 31, 2004, the  Partnership had two leases which
accounted for 53% of total  revenue.  For the year ended  December 31, 2003, the
Partnership had three leases which  accounted for 41% of total revenue.  For the
year ended  December 31, 2002, the  Partnership  had three leases that accounted
for 61% of total revenue.

     The  Partnership's  cash and cash  equivalents are held  principally at one
financial institution and at times may exceed insured limits.

                                       48
<PAGE>
                       ICON Cash Flow Partners L.P. Seven
                        (A Delaware Limited Partnership)
                   Notes To Consolidated Financial Statements
                           December 31, 2004 and 2003

(15) Selected Quarterly Financial Data (Unaudited)

     The following  table is a summary of selected  financial  data, by quarter,
for the years ended December 31, 2004 and 2003:


<TABLE>
<CAPTION>


                                                             Quarters Ended in 2004
                                               --------------------------------------------------------
                                               March 31,       June 30,      September 30,  December 31,
                                               ---------       --------      -------------  ------------

  <S>                                      <C>               <C>             <C>            <C>
  Revenue                                  $  1,156,982      $    715,162    $    520,002   $    285,080
                                           ============       ===========    ============   ============
  Net loss allocable to limited partners   $ (6,175,908)     $   (928,247)   $ (2,698,974)  $   (336,670)
                                           ============      ============    ============   ============
  Net loss per weighted average
     limited partnership unit              $      (6.25)     $      (0.94)   $      (2.73)  $      (0.35)
                                           ============      ============    ============   ============

</TABLE>

<TABLE>
<CAPTION>

                                                             Quarters Ended in 2003
                                               ---------------------------------------------------------
                                               March 31,        June 30,     September 30,  December 31,
                                               ---------       --------      -------------  ------------

  <S>                                      <C>               <C>             <C>            <C>
  Revenue                                  $    985,495      $  1,033,635    $    657,964   $ (1,100,562)
                                           ============      ===========     ============   ============
  Net loss allocable to limited partners   $(2,181,095)      $(1,672,000)    $(5,737,694)   $ (7,536,445)
                                           ============      ============    ============   ============
  Net loss per weighted average
     limited partnership unit              $      (2.21)     $     (1.69)    $      (5.81)  $      (7.63)
                                           ============      ============    ============   ============
</TABLE>


                                       49
<PAGE>
Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

     During the year ended  December 31, 2004 we had no  disagreements  with our
accountants on any matters of accounting or financial reporting.

Item 9A. Controls and Procedures

     We  carried  out  an  evaluation,   under  the  supervision  and  with  the
participation  of  management  of  ICON  Capital  Corp.,  our  General  Partner,
including the Principal  Executive Officer and the Principal  Financial Officer,
of the effectiveness of the design and operation of our disclosure  controls and
procedures  as of the end of the period  covered by this report  pursuant to the
Securities  Exchange  Act of 1934.  Based  upon the  evaluation,  the  Principal
Executive  Officer  and the  Principal  Financial  Officer  concluded  that  our
disclosure controls and procedures were effective.

     There were no  significant  changes in our internal  control over financial
reporting during our fourth fiscal quarter that have materially affected, or are
likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

         Not applicable.
                                    PART III

Item 10. Directors and Executive Officers of the Registrant's General Partner

     Our General  Partner,  ICON Capital Corp., a Connecticut  corporation,  was
formed in 1985. The General Partner's principal offices are located at 100 Fifth
Avenue,  10th Floor, New York, New York 10011, and the telephone number is (212)
418-4700.  The officers of the General  Partner have extensive  experience  with
transactions  involving the acquisition,  leasing,  financing and disposition of
equipment,  including acquiring and disposing of equipment subject to leases and
full financing transactions.

     The General  Partner is engaged in a broad range of  equipment  leasing and
financing  activities.  Through its sales  representatives  and through  various
broker relationships  throughout the United States, the General Partner offers a
broad range of equipment leasing services.

     The General Partner performs certain  functions  relating to the management
of our  equipment.  Such services  include 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,  liaison  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.

    Our officers and directors are:

 Beaufort J.B. Clarke        Chairman, Chief Executive Officer and Director
 Paul B. Weiss               President and Director
 Thomas W. Martin            Executive Vice President, Chief Financial Officer
                             and  Director
 Michael A. Reisner          Senior Vice President and General Counsel
 Sean E. Hoel                Senior Vice President

     Beaufort J. B. Clarke,  58, has been our Chairman,  Chief Executive Officer
and Director  since  August of 1996.  He was our  President  from August of 1996
until December 31, 1998. Prior to his present positions, Mr. Clarke was founder,
President  and Chief  Executive  Officer of Griffin  Equity  Partners,  Inc.  (a
purchaser  of equipment  leasing  portfolios)  from October 1993 through  August
1996. Prior to that, Mr. Clarke was President of Gemini Financial Holdings, Inc.
(an  equipment   leasing  company)  from  June  1990  through   September  1993.
Previously,  Mr. Clarke was a Vice President of AT&T Systems Leasing. Mr. Clarke
formerly was an attorney with Shearman and Sterling.  Mr. Clarke received a B.A.
degree  from  the  George  Washington  University  and a J.D.  degree  from  the
University  of South  Carolina.  Mr.  Clarke has been in the  equipment  leasing
business, as a business person and lawyer, since 1979.

     Paul B. Weiss,  44, has been our  President  and Director  since January 1,
1999. Mr. Weiss was our Director and Executive Vice  President  responsible  for
lease  acquisitions  from  November of 1996 until  December 31, 1998.  Mr. Weiss
served as Executive Vice  President and  co-founder of Griffin Equity  Partners,
Inc. from October of 1993 through November of 1996. Prior to that, Mr. Weiss was
Senior Vice President of Gemini Financial  Holdings,  Inc. from 1991 to 1993 and
Vice President of Pegasus  Capital  Corporation (an equipment  leasing  company)
from 1988 through 1991. Mr. Weiss received a B.A. in Economics from  Connecticut
College. Mr. Weiss has been in the equipment leasing business since 1988.

                                        50
<PAGE>
     Thomas  W.  Martin,  51,  has  been our  Executive  Vice  President,  Chief
Financial  Officer and Director (and  Director,  President  and Chief  Financial
Officer of the  dealer-manager as well) since August of 1996. Mr. Martin was the
Executive Vice President,  Chief  Financial  Officer and a co-founder of Griffin
Equity  Partners,  Inc.  from October 1993 to August  1996.  Prior to that,  Mr.
Martin was Senior Vice President of Gemini Financial  Holdings,  Inc. from April
1992 to October  1993 and he held the position of Vice  President at  Chancellor
Corporation (an equipment  leasing  company) for 7 years.  Mr. Martin received a
B.S.  degree from the  University of New  Hampshire.  Mr. Martin has been in the
equipment leasing business since 1983.

     Michael  A.  Reisner,  Esq.,  34, has been our Senior  Vice  President  and
General  Counsel  since  January 2004.  Mr.  Reisner was our Vice  President and
Associate General Counsel from March 2001 until December 2003. Previously,  from
1996 to 2001, Mr. Reisner was an attorney with Brodsky Altman & McMahon,  LLP in
New York, concentrating on commercial transactions.  Mr. Reisner received a J.D.
from New York Law School and a B.A. from the University of Vermont.

     Sean E. Hoel, 35, has been our Senior Vice  President  since June 1999. Mr.
Hoel is responsible for the acquisition of equipment  subject to lease. Mr. Hoel
has a Masters Degree in Finance from Seattle University,  preceded by Law School
at the  University of Oslo, a B.A. in Finance at the  University of Wyoming,  as
well as three years of military service as a naval officer.

     Code of Ethics

     The General  Partner,  on our behalf,  has adopted a code of ethics for its
Chief Executive Officer,  Chief Financial Officer and Chief Accounting  Officer.
The Code of Ethics is available  free of charge by requesting it in writing from
our General Partner.  The General  Partner's  address is 100 Fifth Avenue,  10th
Floor, New York, New York 10011.

Item 11. Executive Compensation

     We have no directors or officers.  The General  Partner and its  affiliates
were paid or accrued the following  compensation and reimbursement for costs and
expenses for the years ended December 31, 2004, 2003 and 2002.

<TABLE>
<CAPTION>
             Entity               Capacity            Compensation            2004           2003       2002
     ----------------------  ------------------  ------------------------  -----------  -----------  -----------
     <S>                     <C>                 <C>                       <C>          <C>          <C>
     ICON Capital Corp.      General Partner     Management fees           $   387,287  $   595,157  $   975,642
                                                                           ===========  ===========  ===========
     ICON Capital Corp.      General Partner     Administrative fees       $   154,958  $   242,909  $   419,784
                                                                           ===========  ===========  ===========
</TABLE>

     The   General   Partner   also  has  a  1%  interest  in  our  profits  and
distributions. For the year ended December 31, 2004, we paid no distributions to
the General Partner. We paid distributions to the General Partner of $16,627 and
$102,316,  respectively,  for the  years  ended  December  31,  2003  and  2002.
Additionally,  the  General  Partner's  interest  in our net loss was  $102,422,
$173,002 and $36,614,  respectively, for the years ended December 31, 2004, 2003
and 2002.

                                       51
<PAGE>


Item 12. Security Ownership of Certain Beneficial Owners and Management

     (a)  We are a limited  partnership  and therefore do not have voting shares
          of  stock.  No  person  of  record  owns,  or is  known  by us to  own
          beneficially, more than 5% of any class of our securities.

     (b)  As of March 31, 2005, Directors and Officers of the General Partner do
          not own any of our equity securities.

     (c)  The General Partner owns our equity securities,  as follows; a General
          Partner Interest which represents initially a 1% and potentially a 10%
          interest in our income, gain and losses. The General Partner owns 100%
          of the General Partner Interest.

Item 13. Certain Relationships and Related Transactions

     See Item 11 for a discussion of our related party transactions. See Notes 3
and 12 to our consolidated  financial statements for a discussion of our related
party activity and investments in joint ventures.

Item 14. Principal Accountant Fees and Services

     During the years ended  December  31, 2004 and 2003 our  auditors  provided
audit  services  relating  to our annual  report on Form 10-K and our  quarterly
reports on Form 10-Q. Additionally,  our auditors provided other services in the
form of tax compliance work. Their fees are shown in the table below:

                                            2004              2003
                                        -------------    -------------
     Audit fees                         $      71,500    $      62,500
     Audit related fees                             -                -
     Tax fees (for compliance)                 15,500              769
                                        -------------    -------------

                                        $      87,000    $      63,269
                                        =============    =============

                                       52
<PAGE>

                                     PART IV

Item 15. Exhibits and Financial Statement Schedules

     (a) 1. Financial Statements - See Part II, Item 8 hereof.

         2. Financial Statement Schedule - None.

          Schedules  not listed  above have been  omitted  because  they are not
          applicable or are not required or the  information  required to be set
          forth therein is included in the consolidated  Financial Statements or
          Notes thereto.

         3. Exhibits - :

          (i) Form of  Dealer-Manager  Agreement  (Incorporated  by reference to
          Exhibit 1.1 to Form S-1 Registration Statement No. 33-40044 filed with
          the Securities and Exchange Commission on April 18, 1991).

          (ii) Form of Selling Dealer  Agreement  (Incorporated  by reference to
          Exhibit 1.2 to Form S-1 Registration Statement No. 33-40044 filed with
          the Securities and Exchange Commission on April 18, 1991).

          (iii)Amended   and   Restated   Agreement   of   Limited   Partnership
          (Incorporated  herein by reference to Exhibit A to Amendment  No. 4 to
          Form S-1 Registration Statement No. 33-40044 filed with the Securities
          and Exchange Commission on August 14, 1991).

          (iv) On December  31,  2004,  Jeremiah  Silkowski,  resigned  from his
          position of Senior Vice President of ICON Capital Corp., the Company's
          general   partner,   so  that  he  may  pursue   other   opportunities
          (incorporated  by  reference  to  Current  Report on Form  8-K,  dated
          January 6, 2005).

     (b) 10.1 Sixth  Amendment to the Loan and Security  Agreement dated May 30,
2002 as amended.

          31.1 Rule 13a-14(a)/15d-14(a) certifications

          31.2 Rule 13a-14(a)/15d-14(a) certifications

          32.1 Certification of Chairman and 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  Executive  Vice
          President and Principal  Financial and Accounting  Officer pursuant to
          18 U.S.C.  Section  1350,  as adopted  pursuant  to Section 906 of the
          Sarbanes-Oxley Act of 2002.

     (c) Unconsolidated Joint Venture Financial Statements, See Part II, Item 8,
Note 3.

                                       53
<PAGE>
                                   SIGNATURES

          Pursuant to the  requirements of Section 13 or 15(d) of the Securities
     Exchange  Act of 1934,  the  Partnership  has duly caused this report to be
     signed on its behalf by the undersigned, thereunto duly authorized.

         ICON Cash Flow Partners L.P. Seven
         by its General Partner, ICON Capital Corp.

         Date: May 6, 2005     /s/ Beaufort J.B. Clarke
                                  ---------------------------------------
                                  Beaufort J.B. Clarke
                                  Chairman, Chief Executive Officer and Director

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

 ICON Capital Corp.
 sole General Partner of the Registrant

 Date: May 6, 2005         /s/ Beaufort J.B. Clarke
                             -----------------------------------------------
                             Beaufort J.B. Clarke
                             Chairman, Chief Executive Officer and Director



 Date: May 6, 2005         /s/ Paul B. Weiss
                             -----------------------------------------------
                             Paul B. Weiss
                             President and Director


 Date: May 6, 2005         /s/ Thomas W. Martin
                             -----------------------------------------------
                             Thomas W. Martin
                             Executive Vice President and Director
                            (Principal Financial and Accounting Officer)

     Supplemental  Information  to be furnished  with reports filed  pursuant to
Section  15(d) of the Act by  Registrant  which  has not  registered  securities
pursuant to Section 12 of the Act.

     No annual report or proxy  material has been sent to security  holders.  An
annual  report will be sent to the members and a copy will be  forwarded  to the
Commission.

                                       54
<PAGE>
         Exhibit 31.1

Principal  Executive  Officer  Certification  Pursuant  to  Section  302  of the
Sarbanes-Oxley  Act of 2002 (18 U.S.C.  1350) I, Beaufort J.B.  Clarke,  certify
that:

     1.   I have  reviewed  this  annual  report  on Form 10-K of ICON Cash Flow
          Partners L.P. Seven;

     2.   Based on my knowledge,  this annual report does not contain any untrue
          statements  of a  material  fact  or omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this annual report;

     3.   Based on my knowledge,  the financial  statements and other  financial
          information  included in this  annual  report,  fairly  present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this annual report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange Act Rules 13a-15e and 15d-15e) for the  registrant
          and we have:

          a)   designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this annual report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures  and presented in this annual report our
               conclusions  about the  effectiveness of the disclosure  controls
               and procedures as of the end of the period covered by this annual
               report based on such evaluation; and

          c)   presented  in  this  annual  report  our  conclusions  about  the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the board of directors of the General Partner
     (or persons performing the equivalent function):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation of internal  control,  are  reasonably  likely to materially
          affect the  Partnership's  ability to record,  process,  summarize and
          report financial information; and

     b)  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         controls over financial reporting.

         Dated:  May 6, 2005

         /s/ Beaufort J.B. Clarke
         -----------------------------
         Beaufort J. B. Clarke
         Chairman and Chief Executive Officer
         ICON Capital Corp.
         General Partner of ICON Cash Flow Partners L.P. Seven

                                       55
<PAGE>
     Exhibit 31.2

Principal  Executive  Officer  Certification  Pursuant  to  Section  302  of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

     I, Thomas W. Martin, certify that:

1.   I have  reviewed this annual report on Form 10-K of ICON Cash Flow Partners
     L.P. Seven;

     2.   Based on my knowledge,  this annual report does not contain any untrue
          statements  of a  material  fact  or omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this annual report;

     3.   Based on my knowledge,  the financial  statements and other  financial
          information  included in this  annual  report,  fairly  present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this annual report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange Act Rules 13a-15e and 15d-15e) for the  registrant
          and we have:

          a)   designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this annual report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures  and presented in this annual report our
               conclusions  about the  effectiveness of the disclosure  controls
               and procedures as of the end of the period covered by this annual
               report based on such evaluation; and

          c)   presented  in  this  annual  report  our  conclusions  about  the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the board of directors of the General Partner
     (or persons performing the equivalent function):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation of internal  control,  are  reasonably  likely to materially
          affect the  Partnership's  ability to record,  process,  summarize and
          report financial information and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls over financial reporting.

         Dated: May 6, 2005

         /s/ Thomas W. Martin
         ----------------------------------------
         Thomas W. Martin
         Executive Vice President
         (Principal Financial and Accounting Officer)
         ICON Capital Corp.
         General Partner of ICON Cash Flow Partners L.P. Seven


                                       56
<PAGE>

Exhibit 32.1

Principal  Executive  Officer  Certification  Pursuant  to  Section  302  of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

I, Beaufort J.B.  Clarke,  Chairman and Chief Executive  Officer of ICON Capital
Corp,  the General  Partner of the  Partnership  in  connection  with the Annual
Report of ICON Cash Flow Partners L.P.  Seven (the  "Partnership")  on Form 10-K
for the year ended  December 31, 2004, as filed with the Securities and Exchange
Commission on the date hereof (the "Annual Report") certify, pursuant to Section
906 of the  Sarbanes-Oxley  Act of 2002,  that to the best of my  knowledge  and
belief:

     (1) the Annual Report fully complies with the requirements of Section 13(a)
         or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

     (2) the information contained in the Annual Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Partnership.

         Dated: May 6, 2005

          /s/ Beaufort J.B. Clarke
          ------------------------------------------------------
         Beaufort J.B. Clarke
         Chairman and Chief Executive Officer
         ICON Capital Corp.
         General Partner of ICON Cash Flow Partners L.P. Seven

                                       57
<PAGE>

Exhibit 32.2

Principal  Executive  Officer  Certification  Pursuant  to  Section  302  of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

I,  Thomas  W.  Martin,   Executive  Vice  President  (Principal  Financial  and
Accounting Officer) of ICON Capital Corp, the General Partner of the Partnership
in connection  with the Annual Report of ICON Cash Flow Partners L.P. Seven (the
"Partnership")  on Form 10-K for the year ended December 31, 2004, as filed with
the Securities and Exchange  Commission on the date hereof (the "Annual Report")
certify,  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the
best of my knowledge and belief:

     (1)  the Annual  Report fully  complies  with the  requirements  of Section
          13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m);
          and

     (2)  the information contained in the Annual Report fairly presents, in all
          material respects,  the financial  condition and results of operations
          of the Partnership.

         Dated: May 6, 2005

     /s/ Thomas W. Martin
     -------------------------------------------------------
     Thomas W. Martin
     Executive Vice President (Principal
     Financial and Accounting Officer)
     ICON Capital Corp.
     General Partner of ICON Cash Flow Partners L.P. Seven

                                       58
<PAGE>


                   North Sea (Connecticut) Limited Partnership

                              Financial Statements

                     Years Ended December 31, 2004 and 2003

                   (With Independent Auditor's Report Thereon)


<PAGE>



                   North Sea (Connecticut) Limited Partnership

                                Table of Contents



Independent Auditor's Report                                                  1

Balance Sheets at December 31, 2004 and 2003                                  2

Statements of Income for the years ended December 31, 2004 and 2003           3

Statement of Changes in Partners' Deficit
   for the years ended December 31, 2003 and 2004                             4

Statements of Cash Flows for the years ended December 31, 2004 and 2003       5

Notes to Financial Statements                                             6 - 9

<PAGE>



                          INDEPENDENT AUDITOR'S REPORT


The Partners
North Sea (Connecticut) Limited Partnership

We have audited the balance sheet of North Sea (Connecticut) Limited Partnership
as of December 31, 2004 and 2003, and the related statements of income,  changes
in partners'  deficit,  and cash flows for the years then ended. These financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility is to express an opinion on these financial statements based upon
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement. An audit includes consideration of
internal  control  over  financial  reporting  as a basis  for  designing  audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Partnership's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of North Sea (Connecticut) Limited
Partnership  as of December 31, 2004 and 2003, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.



/s/  Hays & Company LLP
March 16, 2005
New York, New York


                                       1

<PAGE>
                   North Sea (Connecticut) Limited Partnership
                                 Balance Sheets
                                  December 31,


                                     ASSETS

                                                   2004             2003
                                              -------------    -------------

Rents receivable                              $  1,891,991     $   2,005,794
                                              -------------    -------------

Investment in operating lease:
   Equipment, at cost                            9,740,080         9,740,080
   Accumulated depreciation                     (2,457,991)       (1,906,666)
                                              ------------      ------------

                                                 7,282,089         7,833,414

Total assets                                  $  9,174,080     $   9,839,208
                                              =============    =============


                        LIABILITIES AND PARTNERS' DEFICIT

Note payable, non-recourse                    $  15,203,571    $  18,691,946
Accrued interest payable                            434,126          533,733
Deferred income                                     200,788          348,794
                                              -------------    -------------

Total liabilities                                15,838,485       19,574,473
                                              -------------    -------------

Commitments and Contingencies

Partners' deficit
   General Partner                                   48,455           17,746
   Limited Partners                             (6,712,860)      (9,753,011)
                                              -------------    -------------

Total partners' deficit                         (6,664,405)      (9,735,265)
                                              -------------    -------------

Total liabilities and partners' deficit       $   9,174,080    $   9,839,208
                                              =============    =============


See accompanying notes to financial statements.

                                       2
<PAGE>

                   North Sea (Connecticut) Limited Partnership
                              Statements of Income
                            Years Ended December 31,


                                                2004              2003
                                            -------------    -------------
Revenue
   Rental income from operating lease       $   5,121,175    $   5,121,175
   Other income                                   148,006          148,006
                                            -------------    -------------

     Total revenue                              5,269,181        5,269,181
                                            -------------    -------------

Expenses
   Interest expense                             1,646,996        1,974,054
   Depreciation expense                           551,325          551,325
                                            -------------    -------------

     Total expenses                             2,198,321        2,525,379
                                            -------------    -------------

Net income                                  $   3,070,860    $   2,743,802
                                            =============    =============

See accompanying notes to financial statements.

                                       3

<PAGE>

                   North Sea (Connecticut) Limited Partnership
                    Statement of Changes in Partners' Deficit
                     Years Ended December 31, 2003 and 2004

<TABLE>
<CAPTION>

                                                       Class A        Class B        Class C
                                         General       Limited        Limited        Limited
                                         Partner      Partners       Partners        Partner           Total
                                         -------      --------       --------        -------           ------

<S>                                   <C>          <C>            <C>             <C>            <C>
Balance at January 1, 2003            $    (9,692) $  (7,837,627) $ (5,939,715)   $   1,307,967  $   (12,479,067)

Net income                                 27,438      1,344,463         -            1,371,901        2,743,802
                                      -----------  -------------  --------------  -------------  ---------------

Balance at December 31, 2003               17,746     (6,493,164)   (5,939,715)       2,679,868      (9,735,265)

Net income                                 30,709      1,504,721         -            1,535,430        3,070,860
                                      -----------  -------------  --------------  -------------  ---------------

Balance at December 31, 2004          $    48,455  $  (4,988,443) $ (5,939,715)   $  4,215,298   $    (6,664,405)
                                      ===========  =============  ============    ============   ===============

</TABLE>

See accompanying notes to financial statements.

                                       4
<PAGE>


                   North Sea (Connecticut) Limited Partnership
                            Statements of Cash Flows
                            Years Ended December 31,

<TABLE>
<CAPTION>


                                                                2004              2003
                                                            -------------    -------------
Cash flows from operating activities:

<S>                                                         <C>              <C>
Net income                                                  $   3,070,860    $   2,743,802
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation                                               551,325          551,325
       Rental income paid directly to lender by lessee         (5,234,978)      (5,234,978)
       Interest on non-recourse financing paid directly
         to lender by lessee                                    1,746,603        2,064,581
    Change in operating assets and liabilities:
     Rents receivable                                             113,803          113,803
     Accrued interest payable                                     (99,607)         (90,527)
     Deferred rental income                                      (148,006)        (148,006)
                                                            -------------    -------------

Net cash provided by operating activities                            -               -
                                                            -------------    -------------

Net increase in cash                                                 -               -
Cash, beginning of the year                                          -               -
                                                            -------------    -------------

Cash, end of the year                                       $        -       $       -
                                                            =============    =============


Supplemental disclosure of cash flow information:
   Cash paid during the year for interest                   $        -       $       -
                                                            =============    =============

Supplemental disclosure of non-cash financing activities:
   Principal and interest on non-recourse financing
     paid directly to lender by lessee                      $   5,234,978    $   5,234,978
                                                            =============    =============
</TABLE>


See accompanying notes to financial statements.

                                       5
<PAGE>

                   North Sea (Connecticut) Limited Partnership
                          Notes To Financial Statements
                      Years Ended December 3, 2004 and 2003

(1)    Organization

     North Sea (Connecticut)  Limited Partnership (the "Partnership") was formed
in 1994 when the General Partner  contributed cash of $27,750 to the Partnership
and  the  Class  A  limited   partners   contributed  a  total  of   $2,747,250.
Subsequently,  the Partnership admitted Class B and Class C Limited Partners. In
1994, the Partnership  acquired an option for a cost of $2,905,000 to purchase a
mobile drilling rig and related property.  In 2000 the Partnership exercised its
option to purchase the mobile oil rig and related property for $6,650,000;  paid
legal fees of $185,000 and entered into an operating  lease with the user of the
rig.

     Under the terms of the partnership agreement the Partnership will terminate
on  December  31,  2015,  unless  terminated  earlier  as  allowed  for  in  the
partnership agreement.

 (2)   Summary of Significant Accounting Policies

     Investment in Operating Leases

     Operating  leases  are  stated  at  cost  less  accumulated   depreciation.
Depreciation  is  being  provided  for  using  the  straight-line   method  over
approximately 17 years.  Upon final  disposition of the equipment,  the cost and
related  accumulated  depreciation  will be removed  from the  accounts  and the
resulting profit or loss will be reflected in the statement of income.  Revenues
from operating  leases are recognized on a straight line basis over the lives of
the related leases.

     Asset Impairments

     The Partnership's only asset is periodically  reviewed,  at least annually,
to  determine  whether  events or changes  in  circumstances  indicate  that the
carrying value of an asset may not be  recoverable.  An impairment  loss will be
recognized if the carrying  amount of a long-lived  asset is not recoverable and
exceeds its fair value. In such circumstances, the Partnership will estimate the
future cash flows (undiscounted and without interest charges) expected to result
from the use of the asset and its  eventual  disposition.  Future cash flows are
the future cash  inflows  expected to be  generated  by an asset less the future
outflows  expected to be necessary to obtain those inflows.  An impairment  loss
will be  measured  as the amount by which the  carrying  amount of a  long-lived
asset exceeds its fair value.

     The events or changes in  circumstances  which  generally  indicate that an
asset  may be  impaired  are (i) the  estimated  fair  value  of the  underlying
equipment  is less than our  carrying  value or (ii) the lessee is  experiencing
financial difficulties and it does not appear likely that the estimated proceeds
from the  disposition  of the asset will be  sufficient to satisfy the remaining
obligation  to the lender and our residual  position in the asset.  Generally in
the latter  situation,  the residual  position  relates to equipment  subject to
third party notes payable where the lessee remits their rental payments directly
to the lender and we do not recover our residual position until the note payable
is repaid in full.

     Income Taxes

     No provision for income taxes has been made as the liability for such taxes
is that of each of the partners rather than the Partnership.  The  Partnership's
income tax returns are subject to  examination  by the federal and state  taxing
authorities,  and changes,  if any, could adjust the individual  income taxes of
the partners.

                                       6

<PAGE>
                   North Sea (Connecticut) Limited Partnership
                          Notes To Financial Statements
                      Years Ended December 3, 2004 and 2003

(2)    Summary of Significant Accounting Policies - continued

     Revenue Recognition

     The  Partnership  leases its  equipment to a single lessee and accounts for
this lease as an operating lease.

     Rental  income is  recognized  on the  straight  line method over the lease
term.  Billed and uncollected  operating lease receivables are included in other
assets.  Deferred  income  is the  difference  between  the  timing  of the cash
payments and the income recognized on a straight line basis.

     Fair Value of Financial Instruments

     Statement of Financial Accounting Standards ("SFAS") No. 107,  "Disclosures
About Fair Values of Financial Instruments," requires disclosures about the fair
value of financial instruments, except for lease related assets and liabilities.
Separate disclosure of fair value information at December 31, 2004 and 2003 with
respect to the Partnership's  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 other liabilities  approximates
market value.  The estimated  fair value of the  Partnership's  notes payable at
December 31, 2004 is approximately $12,488,000.

     Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial  statements and revenues and
expenses during the reporting period.  Significant  estimates  primarily include
the  allowance  for  doubtful  accounts and  unguaranteed  residual  values.  In
addition,  management is required to disclose  contingent  assets and contingent
liabilities. Actual results could differ from those estimates.

     Recent Accounting Pronouncements

     During   December  2004,  the  FASB  issued  SFAS  No.  153  "Exchanges  of
Nonmonetary  Assets--an  amendment of APB Opinion No. 29" ("SFAS 153"). SFAS 153
is based on the  principle  that  exchanges  of  nonmonetary  assets  should  be
measured  based on the fair  value of the  assets  exchanged.  The  guidance  in
Opinion  29,  however,  included  certain  exceptions  to that  principle.  This
Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges
of  similar  productive  assets and  replaces  it with a general  exception  for
exchanges of nonmonetary assets that do not have commercial substance.  SFAS 153
is effective for  nonmonetary  exchanges  occurring in fiscal periods  beginning
after June 15, 2005. We do not expect the adoption of SFAS 153 to have an impact
on our financial position or results of operations.

     Management does not believe that any recently issued, but not yet effective
accounting pronouncements, if currently adopted, would have a material effect on
the accompanying financial statements.

                                       7
<PAGE>
                   North Sea (Connecticut) Limited Partnership
                          Notes To Financial Statements
                      Years Ended December 3, 2004 and 2003

(3)    Investment in Operating Lease

     The  Partnership's  sole  asset  is its  investment  in a  mobile  offshore
drilling rig (the  "Equipment"),  subject to a lease with Rowan Companies,  Inc.
through  March  2008.  The  current  lease  provides  for  semi-annual  rents of
$2,617,489.

     The lessee may  renewal the lease of the  Equipment  by  providing  written
notice,  as defined in the lease agreement,  for a period of time between one to
five years. Rent will be paid semi-annually and in arrears based upon a formula,
as defined in the lease  agreement.  At the end of the lease term the lessee has
the option to purchase  the  Equipment  upon written  notice,  as defined in the
lease  agreement.  The  purchase  price is to equal the then  fair  value of the
mobile offshore drilling rig based upon an appraisal.

         Non-cancelable minimum annual amounts due from the operating lease are
as follows:

             Year ending
            December 31,
                2005                        $     5,234,978
                2006                              5,234,978
                2007                              5,234,978
                2008                              2,617,489
                                            ---------------

                                            $    18,322,423
                                            ===============

(4)    Note Payable

         The note payable, accrues interest at an annual rate of 9.79 % and
matures on March 15, 2008 as follows:

             Year ending
            December 31,
                2005                        $     3,838,245
                2006                              4,223,206
                2007                              4,646,778
                2008                              2,495,342
                                            ---------------

                                            $    15,203,571
                                            ===============

     The lessee pays  semi-annual  rent directly to the lender to repay the note
payable. The lender has a security interest in the lease, the mobile oil rig and
related property and the scheduled lease payments due under the lease.

                                       8
<PAGE>

                   North Sea (Connecticut) Limited Partnership
                          Notes To Financial Statements
                      Years Ended December 3, 2004 and 2003

(5)    Deferred Income

     In  December  of 2002,  the  Partnership  received  a  facilitation  fee of
$496,800 from the assignment of the outstanding  note payable.  The note payable
was assigned from the original  lender to the new lender  resulting in no change
to the existing  structure or terms of the note.  The  Partnership  recorded the
facilitation  fee as deferred  income and is recognizing the income ratably over
the remaining life of the note, as follows:

            Year ending
            December 31,
                2005                                 $        77,333
                2006                                          72,532
                2007                                          42,167
                2008                                           8,756
                                                     ---------------

                                                     $       200,788
                                                     ===============

(6)    Partners Equity and Distributions

     The Partnership allocates its net income among the partners as follows: (i)
to the extent any net loss had been  allocated to the General  Partner or to the
Class B Limited Partners in any prior year, as defined;  net income equal to the
aggregate  amount of such  unrecovered  net loss shall be allocated first to the
General Partner and then to the Class B Limited Partners; and (ii) any remaining
net  income  shall be  allocated  to the  General  Partner,  the Class A Limited
Partners  and the Class C Limited  Partner  in  proportion  to their  percentage
interests  of 1%,  49% and 50%,  respectively.  There  have  been no net  losses
allocated to the Class B Limited Partners or the General Partner prior to 2004.

     The Partnership  allocates its net loss among the partners as follows:  (i)
the net loss for each year is allocated among the General  Partner,  the Class A
Limited  Partners  and the  Class C  Limited  Partner  in  proportion  to  their
percentage  interests  of 1%, 49% and 50%,  respectively,  and (ii) the net loss
allocated  to any partner  with respect to any year shall not exceed the maximum
amount of the net loss that can be so allocated  without causing such partner to
have a capital  account deficit at the end of such fiscal year. The net loss, as
defined,  is then allocated to the Class B Limited  Partners until their capital
accounts have been reduced to zero, and thereafter to the General Partner.

     The Partnership shall make distributions to the Partners,  as follows:  (i)
distributions of available cash, as defined, shall be distributed to the General
Partner,  the Class B Limited Partners and the Class C Limited  Partner,  as and
when  determined by the General  Partner,  in accordance  with their  percentage
interests of 1%, 49% and 50% respectively.  Class A Partners are not entitled to
distributions and (ii) upon liquidation each of the aforementioned  Partners are
entitled to their percentage distribution interest respectively.

                                       9