UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K





þ
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934For
      the fiscal year ended December 31,
    2009ORo
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934For
      the transitional period from _____ to
_____





Commission
file number:  333-37504




ICON
Income Fund Eight B L.P.


(Exact
name of registrant as specified in its charter)




Delaware
            
            13-4101114(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)100
      Fifth Avenue, 4th
      Floor
              New York,
      New York
            
            10011(Address
      of principal executive offices)
            
            (Zip
      Code)





(212)
418-4700


(Registrant’s
telephone number, including area code)


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 if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
 Yes
    No þ
  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
 Yes
    No þ
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
 Yes þ    No

  Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
 Yes
    No 
  Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) 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.
 þ
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
 Large
accelerated filer       Accelerated filer
      Non-accelerated filer  þ      Smaller
reporting company  
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).
 Yes
    No þ
  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 business day of the registrant’s most recently completed second fiscal
quarter:  Not
applicable.  There is no established market for
units of  limited partnership interests of the
registrant.
  Number of
outstanding units of limited partnership interests of the registrant on March
19,
2010 is 740,380.
 
 DOCUMENTS
INCORPORATED BY REFERENCE
 None.










Table of
      ContentsPagesPART
      I
            1Item 1.
      Business
            1Item 1A.
      Risk Factors
            4Item 1B.
      Unresolved Staff Comments
            17Item 2.
      Properties
            17Item 3.
      Legal Proceedings
            17Item 4.
      (Removed and
      Reserved)
            17PART
      II
            18Item 5.
      Market for Registrant's Securities, Related Security Holder Matters and
      Issuer Purchases of Equity Securities
            18Item 6.
      Selected Financial Data
            20Item 7.
      General Partner's Discussion and Analysis of Financial Condition and
      Results of Operations
            21Item 7A.  Quantitative and Qualitative
      Disclosures About Market Risk
            34Item 8. Consolidated Financial Statements and Supplementary
      Data
            35Item 9. Changes in and Disagreements With
      Accountants on Accounting and Financial
      Disclosure
            60Item 9A(T). Controls and
      Procedures
            60Item 9B.
      Other Information
            60PART
      III
            61Item 10.
      Directors, Executive Officers of the Registrant's General Partner and
      Corporate Governance
            61Item 11.
      Executive Compensation
            63Item 12.
      Security Ownership of Certain Beneficial Owners and the General Partner
      and Related Security Holder Matters
            63Item 13.
      Certain Relationships and Related Transactions, and Director
      Independence
            63Item 14.
      Principal Accounting Fees and Services
            63PART
      IV
            64Item 15.
      Exhibits, Financial Statement Schedules
            64SIGNATURES
            77







Table of Contents







PART I








Forward-Looking
Statements





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





Item 1. Business





Our
History





ICON
Income Fund Eight B L.P. (the “Partnership” or “Fund Eight B”) was formed on
February 7, 2000 as a Delaware limited partnership.  The Partnership
will continue until December 31, 2017, unless terminated sooner.  When
used in this Annual Report on Form 10-K, the terms “we,” “us,” “our” or similar
terms refer to the Partnership and its consolidated subsidiaries.





Our
general partner is ICON Capital Corp., a Delaware corporation (our “General
Partner”). Our General Partner manages and controls our business affairs,
including, but not limited to, our equipment leases and other financing
transactions that we entered into pursuant to the terms of our amended and
restated limited partnership agreement (our “LP Agreement”).





We are
currently in our liquidation period. Our maximum offering was $75,000,000 and we
commenced business operations on our initial closing date, June 14, 2000, when
we issued 15,816 units of limited partnership interests (“Units”), representing
$1,581,551 of capital contributions.  Between June 15, 2000 and
October 17, 2001, the date of our final closing, 734,184 additional Units were
sold representing $73,418,449 of capital contributions, bringing the total sale
of Units to 750,000, representing $75,000,000 of capital contributions. Through
December 31, 2009, we redeemed 9,620 Units, bringing the total number of
outstanding Units to 740,380.







1
 Table of Contents








Our
Business





We
operate as an equipment leasing program in which the capital our partners
invested was pooled together to make investments, pay fees and establish a small
reserve. We primarily acquired equipment subject to lease, purchased equipment
and leased it to third-party end users or financed equipment for third parties
and, to a lesser degree, acquired ownership rights to leased equipment at lease
expiration. Some of our equipment leases were acquired for cash and provided
current cash flow, which we refer to as “income” leases. For our other equipment
leases, we financed the majority of the purchase price through borrowings from
third parties. We refer to these leases as “growth” leases. These growth leases
generated little or no current cash flow because substantially all rental
payments received from the lessee were used to service the indebtedness
associated with acquiring or financing the lease. For these leases, we
anticipated that the future value of the leased equipment would exceed the cash
portion of the purchase price.




We divide
the life of the program into three distinct phases:





(1)   
      Offering Period:
      We invested most of the net proceeds from the sale of Units in equipment
      leases  and other financing
  transactions.





(2)   
      Reinvestment
      Period: After the close of the offering period, we reinvested and
      continued to reinvest the cash generated from our initial investments to
      the extent that cash was not needed for our expenses, reserves and
      distributions to partners.  The reinvestment period was
      anticipated to end on or about October 16, 2006.  However, on
      October 5, 2006, our General Partner determined that it was in the best
      interests of our partners to extend the reinvestment period until April
      16, 2007 and subsequently further extended the reinvestment period for an
      additional two months to June 16,
2007.





(3)   
      Liquidation
      Period: We began our liquidation period on June 17, 2007. Since the
      beginning of the liquidation period, we have sold and will continue to
      sell our assets in the ordinary course of business. Our goal is to
      complete the liquidation period within three years from the end of the
      reinvestment period, but it may take longer to do
  so.





As we
sell our assets during the liquidation period, both rental income and finance
income will decrease over time as will expenses related to our assets, such as
depreciation and amortization expense. Additionally, interest expense should
decrease as we reach the expiration of leases that were financed and the debt is
repaid to the lender.  As leased equipment is sold, we will incur
gains or losses on these sales.





At
December 31, 2009 and 2008, we had total assets of $47,232,271 and $53,205,647,
respectively.  For the year ended December 31, 2009, two lessees
accounted for 100% of our total rental and finance income of
$6,908,328.  Net income attributable to us for the year ended
December 31, 2009 was $14,579.  For the year ended December 31, 2008,
two lessees accounted for 100% of our total rental and finance income of
$7,166,618.  Net loss attributable to us for the year ended
December 31, 2008 was $6,453,564.  For the year ended December 31,
2007, two lessees accounted for approximately 85.8% of our total rental and
finance income of $9,322,816. Net income attributable to us for the year
ended December 31, 2007 was $1,146,979.






2
 Table of Contents







At
December 31, 2009, our portfolio, which we hold either directly or through joint
ventures, consisted primarily of the following investments:





Telecommunications
Equipment





·
            We
      own telecommunications equipment subject to a lease with Global
      Crossing Telecommunications, Inc. (“Global
  Crossing”).





Air
Transportation Equipment





·
            We
      own one Airbus A340-313X aircraft (“Aircraft 123”) and have a 50% interest
      through a joint venture with ICON Income Fund Nine, LLC (“Fund Nine”), an
      entity also managed by our General Partner, in a second Airbus A340-313X
      aircraft (“Aircraft 126”).  Both aircraft are on lease to Cathay
      Pacific Airways Limited (“Cathay”). The leases are scheduled to expire on
      October 1, 2011 and July 1, 2011,
respectively.





Energy
Equipment





·
            We
      have a 5.93% interest in the rights to the profits, losses and cash flows
      from an entity that owns a 50% interest in a mobile offshore drilling rig
      subject to a lease with Rowan Companies,
Inc.





For a
discussion of the significant transactions that we engaged in
during the years ended December 31, 2009, 2008 and 2007, please refer to
“Item 7. General Partner’s Discussion and Analysis of Financial Condition and
Results of Operations.”





Segment
Information




We are
engaged in one business segment, the business of purchasing equipment and
leasing it to third parties, providing equipment financing and, to a lesser
degree, acquiring ownership rights to items of leased equipment at lease
expiration.





Competition





The commercial leasing and financing
industry is highly competitive and is characterized by competitive factors that
vary based upon product and geographic region. When we made our investments, we
competed, and as we seek to liquidate our portfolio, we compete with a variety
of competitors including other equipment leasing and finance funds, hedge funds,
captive and independent finance companies, commercial and industrial banks,
manufacturers and vendors. Competition from both traditional competitors and new
market entrants has intensified in recent years due to growing marketplace
liquidity and increasing recognition of the attractiveness of the commercial
leasing and finance industry.  Our competitors may have been and/or
may be in a position to offer equipment to prospective customers on financial
terms that were or are more favorable than those that we could offer or that we
can offer in liquidating our portfolio, which may have affected our ability to
make investments and may affect our ability to liquidate our portfolio, in each
case, in a manner that would enable us to achieve our investment
objectives.  For additional information about our competition and
other risks related to our operations, please see “Item 1A. Risk
Factors.”





Employees





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






3
 Table of Contents





Available
Information





Our
Annual Report on Form 10-K, our most recent Quarterly Reports on Form 10-Q and
any amendments to those reports and our Current Reports on Form 8-K and any
amendments to those reports are available free of charge on our General
Partner’s 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 (the “SEC”). The information contained on our
General Partner’s website is not deemed part of this Annual Report on Form 10-K.
Our reports are also available on the SEC’s website at http://www.sec.gov.





Financial
Information Regarding Geographic Areas





We have
long-lived assets, which include finance leases and operating leases and
investments in joint ventures, in geographic areas outside of the United States.
For additional information, see Note 13 to our consolidated financial
statements.





Item 1A. Risk Factors





We are
subject to a number of risks.  Careful consideration should be given
to the following risk factors, in addition to the other information included in
this Annual Report.  The risks and uncertainties described below are
not the only ones we may face.  Each of these risk factors could
adversely affect our business operating results and/or financial condition, as
well as adversely affect the value of an investment in our Units.  In
addition to the following disclosures, please refer to the other information
contained in this Annual Report including the consolidated financial statements
and the related notes.





General
Investment Risks





All
or a substantial portion of your distributions may be a return of capital and
not a return on capital, which will not necessarily be indicative of our
performance.





The
portion of total distributions that is a return of capital and the portion that
is economic return will depend upon a number of factors that cannot be
determined until all of our investments have been sold or otherwise matured. At
that time, you will be able to compare the total amount of all cash
distributions you receive to your total capital invested in order to determine
your economic return.





The
Internal Revenue Service (the “IRS”) may deem the majority of your distributions
to be a return of capital for tax purposes during our early years. Distributions
would be deemed to be a return of capital for tax purposes to the extent that we
are distributing cash in an amount greater than our taxable income. The fact
that the IRS deems distributions to be a return of capital in part and we report
an adjusted tax basis to you on Form K-1 is not an indication that we are
performing greater than or less than expectations and cannot be utilized to
forecast what your final return might be.





Your
ability to resell your Units is limited by the absence of a public trading
market and, therefore, you should be prepared to hold your Units for the life of
the Partnership.





A public
market does not exist for our Units and we do not anticipate that a public
market will develop for our Units, our Units are not currently and will not be
listed on any national securities exchange at any time, and we will take steps
to assure that no public trading market develops for our Units. In addition, our
LP Agreement imposes significant restrictions on your right to transfer your
Units.  We have established these restrictions to comply with federal
and State securities laws and so that we will not be considered to be a publicly
traded partnership that is taxed as a corporation for federal income tax
purposes. Your ability to sell or otherwise transfer your Units is extremely
limited and will depend on your ability to identify a buyer. Thus, you will
probably not be able to sell or otherwise liquidate your Units in the event of
an emergency and if you were able to arrange a sale, the price you receive would
likely be at a substantial discount to the price you paid for your
Units.  As a result, you must view your investment in our Units as a
long-term, illiquid investment.








4
 Table of Contents





If
you choose to request that we repurchase your Units, you may receive
significantly less than you would receive if you were to hold your Units for the
life of the Partnership.





You may
request that we repurchase up to all of your Units. We are under no obligation
to do so, however, and will have only limited cash available for this purpose.
If we repurchase your Units, the repurchase price has been unilaterally set and,
depending upon when you request repurchase, the repurchase price may be less
than the unreturned amount of your investment. If your Units are repurchased,
the repurchase price may provide you a significantly lower value than the value
you would realize by retaining your Units for the duration of the
Partnership.





You
should not rely on any income from your Units because cash distributions are
expected only from time to time as significant assets are sold.





You
should not rely on the cash distributions from your Units as a source of income.
During the liquidation period, although we expect that lump sums will be
distributed from time to time if and when financially significant assets are
sold, regularly scheduled distributions will decrease because there will be
fewer investments available to generate cash flow.





Our
assets may be plan assets for ERISA purposes, which could subject our General
Partner to additional restrictions on its ability to operate our
business.





The
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the
Internal Revenue Code of 1986, as amended (the “Code”) may apply what is known
as the look-through rule to an investment in our Units. Under that rule, the
assets of an entity in which a qualified plan or IRA has made an equity
investment may constitute assets of the qualified plan or IRA. If you are a
fiduciary of a qualified plan or IRA, you should consult with your advisors and
carefully consider the effect of that treatment if that were to occur. If the
look-through rule were to apply, our General Partner may be viewed as an
additional fiduciary with respect to the qualified plan or IRA to the extent of
any decisions relating to the undivided interest in our assets represented by
the Units held by such qualified plan or IRA. This could result in some
restriction on our General Partner’s willingness to engage in transactions that
might otherwise be in the best interest of all Unit holders due to the strict
rules of ERISA regarding fiduciary actions.





The
statements of value that we include in this Annual Report on Form 10-K and
future Annual Reports on Form 10-K and that we will send to
fiduciaries of plans subject to ERISA and to certain other parties is only an
estimate and may not reflect the actual value of our Units.





The
statements of estimated value are based on the estimated value of each Unit (i)
as of the close of our fiscal year, for the annual statements included
in this and future Annual Reports on Form 10-K and (ii) as of
September 30 of each fiscal year, for annual statements sent to fiduciaries of
plans subject to ERISA and certain other parties. Management, in part, will rely
upon third-party sources and advice in arriving at this estimated value. No
independent appraisals on the particular value of our Units will be obtained and
the value will be based upon an estimated fair market value as of the referenced
date for such value. Because this is only an estimate, we may subsequently
revise any valuation that is provided. We cannot assure that:





·
            this
      estimate of value could actually be realized by us or by our limited
      partners upon liquidation;


·
            limited
      partners could realize this estimate of value if they were to attempt to
      sell their Units;


·
            this
      estimate of value reflects the price or prices that our Units would or
      could trade at if they were listed on a national stock exchange or
      included for quotation on a national market system, because no such market
      exists or is likely to develop; or


·
            the
      statement of value, or the method used to establish value, complies with
      any reporting and disclosure or valuation requirements under ERISA, Code
      requirements or other applicable
law.






5
 Table of Contents





You
have limited voting rights and are required to rely on our General Partner to
make all of our investment decisions and achieve our investment
objectives.





Our
General Partner makes all of our investment decisions, including determining the
investments we have made and the dispositions we will make. Our success will
depend upon the quality of the investment decisions our General Partner made
relating to our investments in equipment and makes regarding the realization of
such investments. You are not permitted to take part in managing, establishing
or changing our investment objectives or policies.





The
decisions of our General Partner may be subject to conflicts of
interest.





The
decisions of our General Partner may be subject to various conflicts of interest
arising out of its relationship to us and our affiliates. Our General Partner
could be confronted with decisions in which it will, directly or indirectly,
have an economic incentive to place its respective interests or the interests of
our affiliates above ours. As of December 31, 2009, our General Partner is
managing seven other equipment leasing and finance funds. See “Item
13.  Certain Relationships and Related Transactions, and Director
Independence.”  These conflicts may include, but are not limited
to:





·
            our
      General Partner may have received more fees for making investments in
      which we incurred indebtedness to fund these investments than if
      indebtedness was not incurred;


·
            our
      LP Agreement does not prohibit our General Partner or any of our
      affiliates from competing with us for investments and engaging in other
      types of business;


·
            our
      General Partner may have had opportunities to earn fees for referring a
      prospective investment opportunity to
others;


·
            the
      lack of separate legal representation for us and our General Partner and
      lack of arm’s-length negotiations regarding compensation payable to our
      General Partner;


·
            our
      General Partner is our tax matters partner and is able to negotiate with
      the IRS to settle tax disputes that would bind us and our limited partners
      that might not be in your best interest given your individual tax
      situation; and


·
            our
      General Partner can make decisions as to when and whether to sell a
      jointly-owned asset when the co-owner is another business it
      manages.





The
Investment Committee of our General Partner is not independent.





Any
conflicts in determining and allocating investments between us and our General
Partner, or between us and another fund managed by our General Partner, were
resolved by our General Partner’s investment committee, which also serves as the
investment committee for other funds managed by our General Partner. Since all
of the members of our General Partner’s investment committee are officers of our
General Partner and are not independent, matters determined by such investment
committee, including conflicts of interest between us and our General Partner
and our affiliates involving investment opportunities, may not have been as
favorable to you and our other investors as they would be if independent members
were on the committee. Generally, if an investment was appropriate for more than
one fund, our General Partner’s investment committee allocated the investment to
a fund (which includes us) after taking into consideration at least the
following factors:





·
            whether
      the fund had the cash required for the
  investment;


·
            whether
      the amount of debt to be incurred with respect to the investment was
      acceptable for the fund;


·
            the
      effect the investment would have on the fund’s cash
  flow;


·
            whether
      the investment would further diversify, or unduly concentrate, the fund’s
      investments in a particular lessee/borrower, class or type of equipment,
      location, industry, etc.;


·
            whether
      the term of the investment was within the term of the fund;
      and


·
            which
      fund had been seeking investments for the longest period of
      time.






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Notwithstanding
the foregoing, our General Partner’s investment committee may have made
exceptions to these general policies when, in our General Partner’s judgment,
other circumstances made application of these policies inequitable or
economically undesirable. In addition, our LP Agreement permits our General
Partner and our affiliates to engage in equipment acquisitions, financing
secured loans, refinancing, leasing and releasing opportunities on their own
behalf or on behalf of other funds even if they compete with us.





Our
General Partner’s officers and employees manage other businesses and did not and
will not devote their time exclusively to managing us and our
business.





We do not
and will not employ our own full-time officers, managers or employees. Instead,
our General Partner supervises and controls our business affairs. Our General
Partner’s officers and employees will also be spending time supervising the
affairs of other equipment leasing and finance funds it manages. Therefore, such
officers and employees devoted and will devote the amount of time that they
think is necessary to conduct our business, which may not be the same amount of
time that would be devoted to us if we had separate officers and
employees.





Our
General Partner may have difficulty managing its growth, which may divert its
resources and limit its ability to expand its operations
successfully.





The
amount of assets that our General Partner manages has grown substantially since
our General Partner was formed in 1985 and our General Partner and its
affiliates intend to continue to sponsor and manage, as applicable, funds
similar to us that may be concurrent with us and they expect to experience
further growth in their respective assets under management. Our General
Partner’s future success will depend on the ability of its and its affiliates’
officers and key employees to implement and improve their operational, financial
and management controls, reporting systems and procedures, and manage a growing
number of assets and investment funds. They, however, may not implement
improvements to their management information and control systems in an efficient
or timely manner and they may discover deficiencies in their existing systems
and controls. Thus, our General Partner’s anticipated growth may place a strain
on its administrative and operations infrastructure, which could increase its
costs and reduce its efficiency and could negatively impact our operations,
business and financial condition.





Operational
risks may disrupt our business and result in losses.





We may
face operational risk from errors made in the execution, confirmation or
settlement of transactions. We may also face operational risk from our
transactions not being properly recorded, evaluated or accounted for. We rely
heavily on our General Partner’s financial, accounting, and other software
systems. If any of these systems fail to operate properly or become disabled, we
could suffer financial loss and a disruption of our business.  In
addition, we are highly dependent on our General Partner’s information systems
and technology. There can be no assurance that these information systems and
technology will be able to accommodate our General Partner’s growth or that the
cost of maintaining such systems will not increase from its current level. Such
a failure to accommodate growth, or an increase in costs related to such
information systems, could also negatively affect our liquidity and cash flows,
and could negatively affect our profitability.  Furthermore, we depend
on the headquarters of our General Partner, which are located in New York City,
for the operation of our business. A disaster or a disruption in the
infrastructure that supports our businesses, including a disruption involving
electronic communications or other services used by us or third parties with
whom we conduct business, or directly affecting our headquarters, may have an
adverse impact on our ability to continue to operate our business without
interruption that could have a material adverse effect on us. Although we have
disaster recovery programs in place, there can be no assurance that these will
be sufficient to mitigate the harm that may result from such a disaster or
disruption. In addition, insurance and other safeguards might only partially
reimburse us for any losses.  Finally, we rely on third-party service
providers for certain aspects of our business, including certain accounting and
financial services. Any interruption or deterioration in the performance of
these third parties could impair the quality of our operations and could
adversely affect our business and result in losses.






7
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Our
internal controls over financial reporting may not be effective or our
independent registered public accounting firm may not be able to certify as to
their effectiveness, which could have a significant and adverse effect on our
business.





Our
General Partner is required to evaluate our internal controls over financial
reporting in order to allow management to report on, and if and when required,
our independent registered public accounting firm to attest to, our internal
controls over financial reporting, as required by Section 404 of the
Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations of the SEC
thereunder, which we refer to as “Section 404.” During the course of testing,
our General Partner may identify deficiencies that it may not be able to
remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for
compliance with the requirements of Section 404. In addition, if we fail to
achieve and maintain the adequacy of our internal controls, as such standards
are modified, supplemented or amended from time to time, we may not be able to
ensure that we can conclude on an ongoing basis that we have effective internal
controls over financial reporting in accordance with Section 404. We cannot be
certain as to the timing of completion of our evaluation, testing and any
remediation actions or the impact of the same on our operations. If we are not
able to complete our annual evaluations required by Section 404 in a
timely manner or with adequate compliance, we may be subject to sanctions or
investigation by regulatory authorities, such as the SEC. As a result, we may be
required to incur costs in improving our internal control system and the hiring
of additional personnel. Any such action could negatively affect our results of
operations and the achievement of our investment objectives.





We
are subject to certain reporting requirements and are required to file certain
periodic reports with the SEC.





We are
subject to reporting requirements under the Securities Exchange Act of 1934, as
amended, including the filing of quarterly and annual reports. Prior public
funds sponsored by our General Partner have been and are subject to the same
requirements. Some of these funds have been required to amend previously filed
reports to, among other things, restate the audited or unaudited financial
statements filed in such reports. As a result, the prior funds have been
delinquent in filing subsequent quarterly and annual reports when they became
due. If we experience delays in the filing of our reports, our limited
partners may not have access to timely information concerning us, our
operations, and our financial results.





Your
ability to institute a cause of action against our General Partner and its
affiliates is limited by our LP Agreement.





Our LP
Agreement provides that neither our General Partner nor any of its affiliates
will have any liability to us for any loss we suffer arising out of any action
or inaction of our General Partner or an affiliate if the General Partner or
affiliate determined, in good faith, that the course of conduct was in our best
interests and did not constitute negligence or misconduct. As a result of these
provisions in our LP Agreement, your right to institute a cause of action
against our General Partner may be more limited than it would be without these
provisions.





Business
Risks





Our
business could be hurt by economic downturns.





Our
business is affected by a number of economic factors, including the level of
economic activity in the markets in which we operate. A decline in economic
activity in the United States or internationally could materially affect our
financial condition and results of operations. The equipment leasing and
financing industry is influenced by factors such as interest rates, inflation,
employment rates and other macroeconomic factors over which we have no control.
Any decline in economic activity as a result of these factors typically results
in a decrease in the number of transactions in which we participate and in our
profitability.






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Uncertainties
associated with the equipment leasing and financing industry may have an adverse
effect on our business and may adversely affect our ability to give you any
economic return from our Units or a complete return of your
capital.





There are
a number of uncertainties associated with the equipment leasing and financing
industry that may have an adverse effect on our business and may adversely
affect our ability to make cash distributions to you that will, in total, be
equal to a return of all of your capital, or provide for any economic return
from our Units. These include:





·
            fluctuations
      in demand for equipment and fluctuations in interest rates and inflation
      rates;




·
            the
      continuing economic life and value of equipment at the time our
      investments mature;


·
            the
      technological and economic obsolescence of
  equipment;


·
            potential
      defaults by lessees, borrowers or other
  counterparties;


·
            supervision
      and regulation by governmental authorities;
and


·
            increases
      in our expenses, including taxes and insurance
  expenses.





The
risks and uncertainties associated with the industries of our lessees,
borrowers, and other counterparties may indirectly affect our business,
operating results and financial condition.





We are
indirectly subject to a number of uncertainties associated with the industries
of our lessees, borrowers, and other counterparties. We invested in a pool of
equipment by, among other things, acquiring equipment subject to lease,
purchasing equipment and leasing equipment to third-party end users, financing
equipment for third-party end users, acquiring ownership rights to items of
leased equipment at lease expiration, and acquiring interests or options to
purchase interests in the residual value of equipment. The lessees, borrowers,
and other counterparties to these transactions operate in a variety of
industries. As such, we are indirectly subject to the various risks and
uncertainties that affect our lessees’, borrowers’, and other counterparties’
businesses and operations. If such risks or uncertainties were to affect our
lessees, borrowers, or other counterparties, we may indirectly suffer a loss on
our investment, lose future revenues or experience adverse consequences to our
business, operating results and financial condition.





Because
we borrowed money to make our investments, losses as a result of lessee,
borrower or other counterparty defaults may be greater than if such borrowings
were not incurred.





Although
we acquired some of our investments for cash, we borrowed a substantial portion
of the purchase price of certain of our investments. While we believe the use of
leverage resulted in our ability to make more investments with less risk than if
leverage was not utilized, there can be no assurance that the benefits of
greater size and diversification of our portfolio will offset the heightened
risk of loss in an individual investment using leverage.  With respect
to non-recourse borrowings, if we are unable to pay our debt service obligations
because a lessee, borrower or other counterparty defaults, a lender could
foreclose on the investment securing the non-recourse indebtedness. This could
cause us to lose all or part of our investment or could force us to meet debt
service payment obligations so as to protect our investment subject to such
indebtedness and prevent it from being subject to
repossession.  Additionally, while the majority of our borrowings were
non-recourse, we are jointly and severally liable for recourse indebtedness
incurred under a revolving line of credit facility with California Bank &
Trust (“CB&T”) that is secured by certain of our assets that are not
otherwise pledged to other lenders. CB&T has a security interest in such
assets and the right to sell those assets to pay off the indebtedness if we
default on our payment obligations.  This recourse indebtedness may
increase our risk of loss because we must meet the debt service payment
obligations regardless of the revenue we receive from the investment that is
subject to such secured indebtedness.






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Restrictions
imposed by the terms of our indebtedness may limit our financial
flexibility.




We,
together with certain of our affiliates (entities managed by our General
Partner), Fund Nine, ICON Income Fund Ten, LLC (“Fund Ten”), ICON Leasing Fund
Eleven, LLC (“Fund Eleven”), ICON Leasing Fund Twelve, LLC (“Fund Twelve”) and
ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P. (“Fund
Fourteen”), are party to the revolving line of credit agreement with CB&T,
as amended. The terms of that agreement could restrict us from paying
distributions to our partners if such payments would cause us not to be in
compliance with our financial covenants in that agreement. For additional
information on the terms of our credit agreement, see “Item 7. General Partner’s
Discussion and Analysis of Financial Condition and Results of Operations –
Liquidity and Capital Resources.”





Guarantees
made by the guarantors of some of our lessees, borrowers and other
counterparties may be voided under certain circumstances and we may be required
to return payments received from such guarantors.





Under
federal bankruptcy law and comparable provisions of State fraudulent transfer
laws, a guarantee could be voided, or claims in respect of a guarantee could be
subordinated to all other debts of that guarantor if, among other things, the
guarantor, at the time it incurred the indebtedness evidenced by its
guarantee:





·
            received
      less than reasonably equivalent value or fair consideration for the
      incurrence of such guarantee; and


·
            was
      insolvent or rendered insolvent by reason of such incurrence;
      or


·
            was
      engaged in a business or transaction for which the guarantor’s remaining
      assets constituted unreasonably small capital;
  or


·
            intended
      to incur, or believed that it would incur, debts beyond its ability to pay
      such debts as they mature.





In
addition, any payment by that guarantor pursuant to its guarantee could be
voided and required to be returned to the guarantor, or to a fund for the
benefit of the creditors of the guarantor.





The
measures of insolvency for purposes of these fraudulent transfer laws will vary
depending upon the law applied in any proceeding to determine whether a
fraudulent transfer has occurred. Generally, however, a guarantor would be
considered insolvent if:





·
            the
      sum of its debts, including contingent liabilities, was greater than the
      fair saleable value of all of its
assets;


·
            the
      present fair saleable value of its assets was less than the amount that
      would be required to pay its probable liability on its existing debts,
      including contingent liabilities, as they become absolute and mature;
      or


·
            it
      could not pay its debts as they become
due.





We cannot
assure you as to what standard a court would apply in making these
determinations or that a court would agree with our conclusions in this regard.
We also cannot make any assurances as to the standards that courts in foreign
jurisdictions may use or that courts in foreign jurisdictions will take a
position similar to that taken in the United States.





If
the value of our investments declines more rapidly than we anticipate, our
financial performance may be adversely affected.





A
significant part of the value of a significant portion of the equipment that we
invested in is expected to be the potential value of the equipment once the
lease term expires (with respect to leased equipment) or when our interests in
or options to purchase interests in the residual value of equipment mature.
Generally, equipment is expected to decline in value over its useful life. In
making these types of investments, we assumed a residual value for the equipment
at the end of the lease or other investment that, at maturity, was expected to
be enough to return the cost of our investment in the equipment and provide a
rate of return despite the expected decline in the value of the equipment over
the term of the investment.






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However,
the actual residual value of the equipment at maturity and whether that value
meets our expectations will depend to a significant extent upon the following
factors, many of which are beyond our control:





·
            our
      ability to acquire or enter into agreements that preserved or enhanced the
      relative value of the equipment;


·
            our
      ability to maximize the value of the equipment at maturity of our
      investment;


·
            market
      conditions prevailing at maturity;


·
            the
      cost of new equipment at the time we are remarketing used
      equipment;


·
            the
      extent to which technological or regulatory developments reduce the market
      for such used equipment;


·
            the
      strength of the economy; and


·
            the
      condition of the equipment at
maturity.





We cannot
assure you that our assumptions with respect to value will be accurate or that
the equipment will not lose value more rapidly than we anticipate.





If
equipment is not properly maintained, its residual value may be less than
expected.





If a
lessee or other counterparty fails to maintain equipment in accordance with the
terms of our agreements, we may have to make unanticipated expenditures to
repair the equipment in order to protect our investment. In addition, some of
the equipment we invested in was used equipment. While we planned to inspect
most used equipment prior to making an investment, there is no assurance that an
inspection of used equipment prior to purchasing it revealed any or all defects
and problems with the equipment that may occur after it was acquired by
us.




We
typically obtained representations from the sellers and lessees of used
equipment that:





·
            the
      equipment has been maintained in compliance with the terms of applicable
      agreements;


·
            that
      neither the seller nor the lessee was in violation of any material terms
      of such agreements; and


·
            the
      equipment was in good operating condition and repair and that, with
      respect to leases, the lessee had no defenses to the payment of rent for
      the equipment as a result of the condition of such
    equipment.





We have
rights against the seller of equipment for any losses arising from a breach of
representations made to us and against the lessee for a default under the lease.
However, we cannot assure you that these rights will make us whole with respect
to our entire investment in the equipment or our expected returns on the
equipment, including legal costs, costs of repair and lost revenue from the
delay in being able to sell or re-lease the equipment due to undetected problems
or issues. These costs and lost revenue could negatively affect our liquidity
and cash flows, and could negatively affect our profitability if we are unable
to recoup such costs from the lessee or other third parties.






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If
a lessee, borrower or other counterparty defaults on its obligations to us, we
could incur losses.





We
entered into transactions with parties that had senior debt rated below
investment grade. We did not require such parties to have a minimum credit
rating. Lessees, borrowers, and other counterparties with lower credit ratings
may default on payments to us more frequently than lessees, borrowers or other
counterparties with higher credit ratings. For example, if a lessee does not
make lease payments to us or to a lender on our behalf or a borrower does not
make loan payments to us when due, or violates the terms of its contract in
another important way, we may be forced to terminate our agreements with such
parties and attempt to recover the equipment. We may do this at a time when we
may not be able to arrange for a new lease or to sell our investment right away,
if at all. We would then lose the expected revenues and might not be able to
recover the entire amount or any of our original investment. The costs of
recovering equipment upon a lessee’s or borrower’s default, enforcing the
obligations under the contract, and transporting, storing, repairing, and
finding a new lessee or purchaser for the equipment may be high and may
negatively affect the value of our investment in the equipment. These costs
could also negatively affect our liquidity and cash flows, and could negatively
affect our profitability.





If
a lessee, borrower or other counterparty files for bankruptcy, we may have
difficulty enforcing the terms of the contract and may incur
losses.





If a
lessee, borrower or other counterparty files for protection under the bankruptcy
laws, the remaining term of the lease, loan or other financing contract could be
shortened or the contract could be rejected by the bankruptcy court, which could
result in, among other things, any unpaid pre-bankruptcy lease, loan or other
contractual payments being cancelled as part of the bankruptcy proceeding. We
may also experience difficulties and delays in recovering equipment from a
bankrupt lessee or borrower that is involved in a bankruptcy proceeding or has
been declared bankrupt by a bankruptcy court. If a contract is rejected in a
bankruptcy, we would bear the cost of retrieving and storing the equipment and
then have to remarket such equipment. In addition, the bankruptcy court would
treat us as an unsecured creditor for any amounts due under the lease, loan or
other contract. These costs and lost revenues could also negatively affect our
liquidity and cash flows and could negatively affect our
profitability.





Investing
in equipment in foreign countries may be riskier than domestic investments and
may result in losses.





We made
investments in equipment for use by domestic or foreign parties outside of the
United States. We may have difficulty enforcing our rights under foreign
transaction documents. In addition, we may have difficulty repossessing
equipment if a foreign party defaults and enforcement of our rights outside the
United States could be more expensive. Moreover, foreign jurisdictions may
confiscate our equipment. Use of equipment in a foreign country will be subject
to that country’s tax laws, which may impose unanticipated taxes. While we
sought to require lessees, borrowers, and other counterparties to reimburse us
for all taxes imposed on the use of the equipment and require them to maintain
insurance covering the risks of confiscation of the equipment, we cannot assure
you that we will be successful in doing so or that insurance reimbursements will
be adequate to allow for recovery of and a return on foreign
investments.





In
addition, we invested in equipment that may travel to or between locations
outside of the United States. Regulations in foreign countries may adversely
affect our interest in equipment in those countries. Foreign courts may not
recognize judgments obtained in U.S. courts and different accounting or
financial reporting practices may make it difficult to judge the financial
viability of a lessee, borrower or other counterparty, heightening the risk of
default and the loss of our investment in such equipment, which could have a
material adverse effect on our results of operations and financial
condition.





In
addition to business uncertainties, our investments may be affected by
political, social, and economic uncertainty affecting a country or region. Many
financial markets are not as developed or as efficient as those in the U.S. and,
as a result, liquidity may be reduced and price volatility may be higher. The
legal and regulatory environment may also be different, particularly with
respect to bankruptcy and reorganization. Financial accounting standards and
practices may also differ and there may be less publicly available information
with respect to such companies. While our General Partner considered these
factors when making investment decisions, no assurance can be given that we will
be able to fully avoid these risks or generate sufficient risk-adjusted
returns.






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Sellers
of leased equipment could use their knowledge of the lease terms for gain at our
expense.





We have
acquired equipment subject to lease from leasing companies that have an ongoing
relationship with the lessees. A seller could use its knowledge of the terms of
the lease, particularly the end of lease options and date the lease ends, to
compete with us. In particular, a seller may approach a lessee with an offer to
substitute similar equipment at lease end for lower rental amounts. This may
adversely affect our opportunity to maximize the residual value of the equipment
and potentially negatively affect our profitability.





Investment
in joint ventures may subject us to risks relating to our co-investors that
could adversely impact the financial results of such joint
ventures.





We
invested in joint ventures with other businesses our General Partner manages, as
well as with unrelated third parties. Investing in joint ventures involves
additional risks not present when acquiring leased equipment that will be wholly
owned by us. These risks include the possibility that our co-investors might
become bankrupt or otherwise fail to meet financial commitments, thereby
obligating us to pay all of the debt associated with the joint venture, as each
party to a joint venture may be required to guarantee all of the joint venture’s
obligations. Alternatively, the co-investors may have economic or business
interests or goals that are inconsistent with our investment objectives and want
to manage the joint venture in ways that do not maximize our return. Among other
things, actions by a co-investor might subject leases that are owned by the
joint venture to liabilities greater than those contemplated by the joint
venture agreement. Also, when none of the joint owners control a joint venture,
there might be a stalemate on decisions, including when to sell the equipment or
the prices or terms of a lease. Finally, while we typically have the right to
buy out the other joint owner’s interest in the equipment in the event of the
sale, we may not have the resources available to do so. These risks could
negatively affect our profitability and could result in legal and other costs,
which would negatively affect our liquidity and cash flows.





We
may not be able to obtain insurance for certain risks and would have to bear the
cost of losses from non-insurable risks.





Equipment
may be damaged or lost. Fire, weather, accidents, theft or other events can
cause damage or loss of equipment. While our transaction documents generally
require lessees and borrowers to have comprehensive insurance and assume the
risk of loss, some losses, such as from acts of war, terrorism or earthquakes,
may be either uninsurable or not economically feasible to insure. Furthermore,
not all possible liability claims or contingencies affecting equipment can be
anticipated or insured against, and, if insured, the insurance proceeds may not
be sufficient to cover a loss. If such a disaster occurs to the equipment, we
could suffer a total loss of any investment in the affected equipment. In
investing in some types of equipment, we may have been exposed to environmental
tort liability. Although we used our best efforts to minimize the possibility
and exposure of such liability including by means of attempting to obtain
insurance, we cannot assure you that our assets will be protected against any
such claims. These risks could negatively affect our profitability and could
result in legal and other costs, which would negatively affect our liquidity and
cash flows.





We
could suffer losses from failure to maintain our equipment registration and from
unexpected regulatory compliance costs.





Many
types of transportation assets are subject to registration requirements by U.S.
governmental agencies, as well as foreign governments if such equipment is to be
used outside of the United States. Failing to register the equipment, or losing
such registration, could result in substantial penalties, forced liquidation of
the equipment and/or the inability to operate and lease the equipment.
Governmental agencies may also require changes or improvements to equipment and
we may have to spend our own funds to comply if the lessee, borrower or other
counterparty is not required to do so under the transaction documents. These
changes could force the equipment to be removed from service for a period of
time. The terms of the transaction documents may provide for payment reductions
if the equipment must remain out of service for an extended period of time or is
removed from service. We may then have reduced income from our investment for
this equipment. If we do not have the funds to make a required change, we might
be required to sell the affected equipment. If so, we could suffer a loss on our
investment, lose future revenues and experience adverse tax
consequences.






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If
any of our investments become subject to usury laws, we could have reduced
revenues or possibly a loss on such investments.





In
addition to credit risks, we may be subject to other risks in equipment
financing transactions in which we are deemed to be a lender. For example,
equipment leases have sometimes been held by U.S. courts to be loan transactions
subject to State usury laws, which limit the interest rate that can be charged.
Uncertainties in the application of some laws may result in inadvertent
violations that could result in reduced investment returns or, possibly, loss on
our investment in the affected equipment. Although part of our business strategy
was to enter into or acquire leases that we believe were structured so that they
avoid being deemed loans, and would therefore not be subject to usury laws, we
cannot assure you that we were successful in doing so. If an equipment lease is
held to be a loan with a usurious rate of interest, the amount of the lease
payment could be reduced and adversely affect our revenue.





State
laws determine what rates of interest are deemed usurious, when the applicable
rate of interest is determined, and how it is calculated. In addition, some U.S.
courts have also held that certain lease features, such as equity interests,
constitute additional interest. Although we generally sought assurances and/or
opinions to the effect that our transactions do not violate applicable usury
laws, a finding that our transactions violate usury laws could result in the
interest obligation to us being declared void and we could be liable for damages
and penalties under applicable law. We cannot assure you as to what standard a
court would apply in making these determinations or that a court would agree
with our conclusions in this regard. We also cannot make any assurances as to
the standards that courts in foreign jurisdictions may use or that courts in
foreign jurisdictions will take a position similar to that taken in the United
States.





We
competed with a variety of financing sources for our investments, which may
affect our ability to achieve our investment objectives.





The
commercial leasing and financing industry is highly competitive and is
characterized by competitive factors that vary based upon product and geographic
region. Our competitors are varied and include other equipment leasing and
finance funds, hedge funds, captive and independent finance companies,
commercial and industrial banks, manufacturers and vendors. Competition from
both traditional competitors and new market entrants has intensified in recent
years due to growing marketplace liquidity and increasing recognition of the
attractiveness of the commercial leasing and finance industry.





When we
made our investments, we competed primarily on the basis of pricing, terms and
structure. To the extent that our ability to make favorable investments was
adversely affected by any combination of those factors, we could fail to achieve
our investment objectives.  In addition, our competitors may have been
and/or may be in a position to offer equipment to prospective customers on
financial terms that were or are more favorable than those that we could offer
or that we can offer in liquidating our portfolio, which may have affected our
ability to make favorable investments and may affect our ability to
liquidate our portfolio, in each case, in a manner that would enable us to
achieve our investment objectives.






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General
Tax Risks





If
the IRS classifies us as a corporation rather than a partnership, your
distributions would be reduced under current tax law.





We did
not and will not apply for an IRS ruling that we will be classified as a
partnership for federal income tax purposes. Although counsel rendered an
opinion to us at the time of our offering that we will be taxed as a
partnership and not as a corporation, that opinion is not binding on the IRS and
the IRS has not ruled on any federal income tax issue relating to us. If the IRS
successfully contends that we should be treated as a corporation for federal
income tax purposes rather than as a partnership, then:





·
            our
      realized losses would not be passed through to
  you;


·
            our
      income would be taxed at tax rates applicable to corporations, thereby
      reducing our cash available to distribute to you;
  and


·
            your
      distributions would be taxed as dividend income to the extent of current
      and accumulated earnings and
profits.





In
addition, we could be taxed as a corporation if we are treated as a publicly
traded partnership by the IRS. To minimize this possibility, our LP Agreement
places significant restrictions on your ability to transfer our
Units.





We
could lose cost recovery or depreciation deductions if the IRS treats our leases
as sales or financings.





We expect
that, for federal income tax purposes, we will be treated as the owner and
lessor of the equipment that we leased. However, the IRS may challenge the
leases and instead assert that they are sales or financings. If the IRS
determines that we are not the owner of our leased equipment, we would not be
entitled to cost recovery, depreciation or amortization deductions, and our
leasing income might be deemed to be portfolio income instead of passive
activity income. The denial of such cost recovery or amortization deductions
could cause your tax liabilities to increase.





You
may incur tax liability in excess of the cash distributions you receive in a
particular year.





In any
particular year, your tax liability from owning our Units may exceed the cash
distributions you receive from this investment. While we expect that your net
taxable income from owning our Units for most years will be less than your cash
distributions in those years, to the extent any of our debt is repaid with
income or proceeds from equipment sales, taxable income could exceed the amount
of cash distributions you receive in those years. Additionally, a sale of our
investments may result in taxes in any year that are greater than the amount of
cash from the sale, resulting in a tax liability in excess of cash
distributions. Further, due to the operation of the various loss disallowance
rules, in a given tax year you may have taxable income when, on a net basis, we
have a loss, or you may recognize a greater amount of taxable income than our
net income because, due to a loss disallowance, income from some of our
activities cannot be offset by losses from some of our other
activities.





You
may be subject to greater income tax obligations than originally anticipated due
to special depreciation rules.





We may
have acquired equipment subject to lease that the Code requires us to depreciate
over a longer period than the standard depreciation period. Similarly, some of
the equipment that we purchased was not be eligible for accelerated depreciation
under the Modified Accelerated Costs Recovery System, which was established by
the Tax Reform Act of 1986 to set forth the guidelines for accelerated
depreciation under the Code. Further, if we acquired equipment that the Code
deems to be tax-exempt use property and the leases did not satisfy certain
requirements, losses attributable to such equipment are suspended and may be
deducted only against income we receive from such equipment or when we dispose
of such equipment. Depending on the equipment that we acquired and its
eligibility for accelerated depreciation under the Code, we may have less
depreciation deductions to offset gross lease revenue, thereby increasing our
taxable income.






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There
are limitations on your ability to deduct our losses.





Your
ability to deduct your share of our losses is limited to the amounts that you
have at risk from owning our Units. This is generally the amount of your
investment, plus any profit allocations and minus any loss allocation and
distributions. This determination is further limited by a tax rule that applies
the at-risk rules on an activity by activity basis, further limiting losses from
a specific activity to the amount at risk in that activity. Additionally, your
ability to deduct losses attributable to passive activities is restricted. Some
of our operations will constitute passive activities and you can only use our
losses from such activities to offset passive activity income in calculating tax
liability. Furthermore, passive activity losses may not be used to offset
portfolio income.





The
IRS may allocate more taxable income to you than our LP Agreement
provides.





The IRS
might successfully challenge our allocations of taxable income or losses. If so,
the IRS would require reallocation of our taxable income and loss, resulting in
an allocation of more taxable income or less loss to you than our LP Agreement
allocates.





If
you are a tax-exempt organization, you will have unrelated business taxable
income from this investment.





Tax-exempt
organizations are subject to income tax on unrelated business taxable income
(“UBTI”). Such organizations are required to file federal income tax returns if
they have UBTI from all sources in excess of $1,000 per year. Our leasing income
will constitute UBTI. Furthermore, tax-exempt organizations in the form of
charitable remainder trusts will be subject to an excise tax equal to 100% of
their UBTI.





This
investment may cause you to pay additional taxes.





You may
be required to pay alternative minimum tax in connection with owning our Units,
since you will be allocated a proportionate share of our tax preference items.
Our General Partner’s operation of our business affairs may lead to other
adjustments that could also increase your alternative minimum tax. Alternative
minimum tax is treated in the same manner as the regular income tax for purposes
of making estimated tax payments.





You
may incur State tax and foreign tax liabilities and have an obligation to file
State or foreign tax returns.





You may
be required to file tax returns and pay foreign, State or local taxes, such as
income, franchise or personal property taxes, as a result of an investment in
our Units, depending upon the laws of the jurisdictions in which the equipment
that we own is located.





Any
adjustment to our tax return as a result of an audit by the IRS may result in
adjustment to your tax return.





If we
adjust our tax return as a result of an IRS audit, such adjustment may result in
an examination of other items in your returns unrelated to us, or an examination
of your tax returns for prior years. You could incur substantial legal and
accounting costs in contesting any challenge by the IRS, regardless of the
outcome. Further, because you will be treated for federal income tax purposes as
a partner in a partnership by investing in our Units, an audit of our tax return
could potentially lead to an audit of your individual tax return. Finally, under
certain circumstances, the IRS may automatically adjust your personal return
without the opportunity for a hearing if it adjusts our tax return.






16
 Table of Contents





Some
of the distributions on our Units will be a return of capital, in whole or in
part, which will complicate your tax reporting and could cause unexpected tax
consequences at liquidation.





As we
depreciated our investments in leased equipment over the term of our existence,
a portion of each distribution to you was likely considered a return of capital,
rather than income. Therefore, the dollar amount of each distribution should not
be considered as necessarily being all income to you. As your capital in our
Units is reduced for tax purposes over the life of your investment, you will not
receive a lump sum distribution upon liquidation that equals the purchase price
you paid for our Units, such as you might expect if you had purchased a bond.
Also, payments made upon our liquidation will be taxable to the extent that such
payments are not a return of capital.





As you
receive distributions throughout the life of your investment, you will not know
at the time of the distribution what portion of the distribution represents a
return of capital and what portion represents income. The Schedule K-1 statement
you received and continue to receive from us each year will specify the amounts
of capital and income you received throughout the prior year.





Item 1B. Unresolved Staff Comments





None.





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, we may be subject to certain claims,
suits, and complaints filed against us.  In our General Partner’s
opinion, the outcome of such matters, if any, will not have a material impact on
our consolidated financial position or results of operations. We are not aware
of any material legal proceedings that are currently pending against us or
against any of our assets.





Item 4. (Removed and Reserved)





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 Table of Contents





PART II





Item 5. Market for Registrant's Securities, Related Security Holder
Matters and Issuer Purchases of Equity Securities





Our Units
are not publicly traded and there is no established public trading market for
our Units. It is unlikely that any such market will develop.





Number of PartnersTitle of
      Class
            as of
      March 19,
      2010General
      Partner
            1Limited
      partners
            2,817




We, at
our General Partner’s discretion, paid monthly distributions to each of our
partners beginning the first month after each partner was admitted to the
Partnership through the end of our reinvestment period, which occurred on June
16, 2007. We paid distributions to our limited partners totaling $799,612,
$1,827,002, and $4,308,340 for the years ended December 31, 2009, 2008 and 2007,
respectively. Additionally, our General Partner was paid distributions of
$8,077, $18,455 and $43,519 for the years ended December 31, 2009, 2008 and
2007, respectively. The terms of our loan agreement with CB&T, as amended,
could restrict us from paying cash distributions to our partners if such payment
would cause us to not be in compliance with our financial covenants. See “Item
7. General Partner’s Discussion and Analysis of Financial Condition and Results
of Operations – Liquidity and Capital Resources.”





In order
for Financial Industry Regulatory Authority, Inc. (“FINRA”) members and their
associated persons to have participated in the offering and sale of Units
pursuant to the offering or to participate in any future offering of our Units,
we are required pursuant to FINRA Rule 2310(b)(5) 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 prepares
statements of our estimated Unit values to assist fiduciaries of retirement
plans subject to the annual reporting requirements of ERISA in the preparation
of their reports relating to an investment in our Units.  For these
purposes, the estimated value of our Units is deemed to be $12.32 per Unit as of
December 31, 2009.  This estimated value is provided to assist plan
fiduciaries in fulfilling their annual valuation and reporting responsibilities
and should not be used for any other purpose.  Because this is only an
estimate, we may subsequently revise this valuation.





The
estimated value of our Units is based on the estimated amount that a holder of a
Unit would receive if all of our assets were sold in an orderly liquidation as
of the close of our fiscal year and all proceeds from such sales, without
reduction for transaction costs and expenses, together with any cash held by us,
were distributed to the partners upon liquidation.  To estimate the
amount that our partners would receive upon such liquidation, we calculated the
sum of:  (i) the unpaid finance lease and note receivable payments on
our existing finance leases and notes receivable, discounted at the implicit
yield for each such transaction, (ii) the fair market value of our operating
leases, equipment held for sale or lease, and other assets, as determined by the
most recent third-party appraisals we have obtained for certain assets or our
General Partner’s  estimated values of certain other assets, as
applicable, and (iii) 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.





The
foregoing valuation is an estimate only. The appraisals that we obtained and the
methodology utilized by our management in estimating our per Unit value were
subject to various limitations and were based on a number of assumptions and
estimates that may or may not be accurate or complete. No liquidity discounts or
discounts relating to the fact that we are currently externally managed were
applied to our estimated per Unit valuation, and no attempt was made to value us
as an enterprise.






18
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As noted
above, the foregoing valuation was performed solely for the ERISA and FINRA
purposes described above and was based solely on our General Partner’s
perception of market conditions and the types and amounts of our assets as of
the reference date for such valuation and should not be viewed as an accurate
reflection of the value of our Units or our assets. Except for independent
third-party appraisals of certain assets, no independent valuation was sought.
In addition, as stated above, as there is no significant public trading market
for our Units at this time and none is expected to develop, there can be no
assurance that limited partners could receive $12.32 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. Furthermore, there can be no
assurance:





·
            as
      to the amount limited partners may actually receive if and when we seek to
      liquidate our assets or the amount of lease and note receivable payments
      and asset disposition proceeds we will actually receive over our remaining
      term; the total amount of distributions our limited partners may receive
      may be less than $1,000 per Unit primarily due to the fact that the funds
      initially available for investment were reduced from the gross offering
      proceeds in order to pay selling commissions, underwriting fees,
      organizational and offering expenses, and acquisition or formation
      fees;


·
            that
      the foregoing valuation, or the method used to establish value, will
      satisfy the technical requirements imposed on plan fiduciaries under
      ERISA; or


·
            that
      the foregoing valuation, or the method used to establish value, will not
      be subject to challenge by the IRS if used for any tax (income, estate,
      gift or otherwise) valuation purposes as an indicator of the current value
      of the Units.





The
redemption price we offer in our repurchase plan utilizes a different
methodology than that which we use to determine the current value of our Units
for the ERISA and FINRA purposes described above and, therefore, the $12.32 per
Unit does not reflect the amount that a limited partner would currently receive
under our repurchase plan.  In addition, there can be no assurance
that you will be able to redeem your Units under our repurchase
plan.







19
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Item 6. Selected Financial Data


The
selected financial data should be read in conjunction with the consolidated
financial statements and related notes included in “Item 8. Consolidated
Financial Statements and Supplementary Data” contained elsewhere in this Annual
Report on Form 10-K.





Years Ended December 31,2009
            
            
            2008
            
            
            2007
            
            
            2006
            
            
            2005Total
      revenue  (a)
            
            $
            6,841,922
            
            
            $
            4,998,410
            
            
            $
            9,606,325
            
            
            $
            16,252,505
            
            
            $
            25,926,526Net
      income (loss) attributable to Fund Eight B (b)
            
            $
            14,579
            
            
            $
            (6,453,564
            )
            
            $
            1,146,979
            
            
            $
            (614,426
            )
            
            $
            3,368,585Net
      income (loss) attributable to Fund Eight B allocable to limited
      partners
            
            $
            14,433
            
            
            $
            (6,389,028
            )
            
            $
            1,135,509
            
            
            $
            (608,282
            )
            
            $
            3,334,899Net
      income (loss) attributable to Fund Eight B allocable to the General
      Partner
            
            $
            146
            
            
            $
            (64,536
            )
            
            $
            11,470
            
            
            $
            (6,144
            )
            
            $
            33,686Weighted
      average number of units oflimited
      partnership interests outstanding
            
            
            740,380
            
            
            
            740,411
            
            
            
            740,985
            
            
            
            741,752
            
            
            
            743,161Net
      income (loss) attributable to Fund Eight B per weighted
      averageunit
      of limited partnership interests outstanding
            
            $
            0.02
            
            
            $
            (8.63
            )
            
            $
            1.53
            
            
            $
            (0.82
            )
            
            $
            4.49Distributions
      to limited partners
            
            $
            799,612
            
            
            $
            1,827,002
            
            
            $
            4,308,340
            
            
            $
            5,934,486
            
            
            $
            5,945,540Distributions
      per weighted average unit oflimited
      partnership interests outstanding
            
            $
            1.08
            
            
            $
            2.47
            
            
            $
            5.81
            
            
            $
            8.00
            
            
            $
            8.00Distributions
      to the General Partner
            
            $
            8,077
            
            
            $
            18,455
            
            
            $
            43,519
            
            
            $
            59,944
            
            
            $
            60,056December 31,2009
            
            
            2008
            
            
            2007
            
            
            2006
            
            
            2005Total
      assets
            
            $
            47,232,271
            
            
            $
            53,205,647
            
            
            $
            65,113,221
            
            
            $
            78,651,672
            
            
            $
            91,960,247Recourse
      and non-recourse long-term debt
            
            $
            38,317,033
            
            
            $
            43,531,303
            
            
            $
            47,397,220
            
            
            $
            55,697,875
            
            
            $
            63,746,059Equity
            
            $
            7,951,368
            
            
            $
            8,744,478
            
            
            $
            17,046,972
            
            
            $
            20,277,150
            
            
            $
            26,937,141(a)
            In
      2009, the increase in total revenue was primarily attributable to a
      decrease of $1,950,000 in the loss from investments in joint ventures from
      our 50% ownership interest in ICON Aircraft 126 LLC (“ICON 126”), which
      recognized an impairment loss of $3,900,000 in 2008. The decline in
      revenue between 2007 and 2008 is due to the winding down of our operations
      and the beginning of our liquidation period as of June 17,
      2007. During our liquidation period, we are selling and will continue
      to sell our assets in the ordinary course of business. As we sell our
      assets, both rental income and finance income will continue to decrease
      over time.(b)
            In
      2009, the increase in net income attributable to Fund Eight B was
      primarily attributable to a decrease of $1,950,000 in the loss from joint
      ventures from our 50% ownership interest in ICON 126, which recognized an
      impairment loss of $3,900,000, and an impairment loss of approximately
      $3,900,000 on our investment in ICON Aircraft 123 LLC (“ICON 123”) during
      2008. In 2007, we sold several of our assets, resulting in a decrease of
      approximately $3,000,000 in depreciation and amortization expense as
      compared to 2006. In 2006, we recorded an impairment loss of
      $2,100,000 related to an option to purchase certain aircraft. In
      2005, we sold one of our leases, resulting in a gain of approximately
      $4,527,000.







20
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Item 7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations





Our General Partner’s Discussion and
Analysis of Financial Condition and Results of Operations relates to our
consolidated financial statements and should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this Annual Report
on Form 10-K. Statements made in this section may be considered
forward-looking.  These statements are not guarantees of future
performance and are based on current expectations and assumptions that are
subject to risks and uncertainties. Actual results could differ materially
because of these risks and assumptions, including, among other things, factors
discussed in “Part I. Forward-Looking Statements” and “Item 1A. Risk Factors”
located elsewhere in this Annual Report on Form
10-K.





Overview





We
operate as an equipment leasing program in which the capital our partners
invested was pooled together to make investments, pay fees and establish a small
reserve. We primarily acquired equipment subject to lease, purchased equipment
and leased it to third-party end users or financed equipment for third parties
and, to a lesser degree, acquired ownership rights to leased equipment at lease
expiration. Some of our equipment leases were acquired for cash and provided
current cash flow, which we refer to as “income” leases. For the other equipment
leases, we financed the majority of the purchase price through borrowings from
third parties. We refer to these leases as “growth” leases. These growth leases
generated little or no current cash flow because substantially all rental
payments received from the lessee were used to service the indebtedness
associated with acquiring or financing the lease. For these leases, we
anticipated that the future value of the leased equipment would exceed our cash
portion of the purchase price.





Our
General Partner manages and controls our business affairs, including, but not
limited to, our equipment leases and other financing transactions, under the
terms of our LP Agreement. We entered our liquidation period on June 17,
2007.  During our liquidation period, we are selling and will continue
to sell our assets in the ordinary course of business. As we sell our assets,
both rental income and finance income will decrease over time, as will expenses
related to our assets, such as depreciation and amortization expense.
Additionally, interest expense should decrease as we reach the expiration of
leases that were financed and the debt is repaid to lenders. As leased equipment
is sold, we will incur gains or losses on these sales. We will continue to
liquidate our assets during this period and we expect to see a reduction in
revenue and expenses accordingly.




Current
Business Environment and Outlook




Recent
trends indicate that domestic and global equipment leasing and financing volume
is correlated to overall business investments in equipment. According to
information provided by Global Insight, Inc., a global forecasting company, and
the Equipment Leasing and Finance Foundation, a non-profit foundation dedicated
to providing research regarding the equipment leasing and finance industry
(“ELFF”), total domestic business investment in equipment and software increased
annually from approximately $922 billion in 2002 to approximately $1,205 billion
in 2006 and 2007. Similarly, during the same period, total domestic equipment
leasing and financing volume increased from approximately $515 billion in 2002
to approximately $684 billion in 2007.




According
to the World Leasing Yearbook
2010, which was published by Euromoney Institutional Investor PLC, global
equipment leasing volume increased annually from approximately $462 billion in
2002 to approximately $760 billion in 2007.  The most significant
source of that increase was due to increased volume in Europe, Asia, and South
America.  For example, during the same period, total equipment leasing
volume in Europe increased from approximately $162 billion in 2002 to
approximately $367 billion in 2007, total equipment leasing volume in Asia
increased from approximately $71 billion in 2002 to approximately $119 billion
in 2007, and total equipment leasing volume in South America increased from
approximately $3 billion in 2002 to approximately $41 billion in
2007.  It is believed that global business investment in equipment and
global equipment financing volume increased as well during the same
period.






21
 Table of Contents




The
volume of equipment financing typically reflects general economic conditions. As
the economy slows or builds momentum, the demand for productive equipment
generally slows or builds and equipment financing volume generally decreases or
increases. The U.S. economy experienced a downturn from 2001 through 2003,
resulting in a decrease in equipment leasing and financing volume during that
period. From 2004 through most of 2007, however, the economy in the United
States and the global economy in general experienced significant growth,
including growth in business investment in equipment and equipment leasing and
financing volume.




In
general, the U.S. and global credit markets have deteriorated significantly over
the past two years.  The U.S. economy entered into a recession in
December 2007 and global credit markets continue to experience dislocation and
tightening.  Many financial institutions and other financing providers
have failed or significantly reduced financing operations, creating both
uncertainty and opportunity in the finance
industry.





According
to information provided by the Equipment Leasing and Finance Association, an
equipment finance trade association and affiliate of ELFF (“ELFA”), total
domestic business investment in equipment and software decreased to $1,187
billion in 2008.  Similarly, during the same period, total domestic
equipment financing volume decreased to $671 billion in 2008. Global business
investment in equipment, and global equipment financing volume, decreased as
well during the same period.  According to the World Leasing Yearbook
2010, global equipment leasing volume
decreased to approximately $644 billion in 2008.  For 2009,
domestic business investment in equipment and software is forecasted to drop to
an estimated $1,011 billion with a corresponding decrease in equipment financing
volume to an estimated $518 billion.  Nevertheless, ELFA projects that
domestic investment in equipment and software and equipment financing volume
will begin to recover in 2010, with domestic business investment in equipment
and software projected to increase to an estimated $1,108 billion in 2010 and
$1,255 billion in 2011 and corresponding increases in equipment financing volume
to an estimated $583 billion in 2010 and $668 billion in 2011. As we are
currently liquidating our portfolio, however, the recent performance of the
equipment leasing and financing market is not expected to be correlated to our
performance and our General Partner does not expect that there will be any
long-term material adverse impact on the demand for equipment that we
own.




Lease
and Other Significant Transactions





We engaged
in the following significant transactions during the years ended December 31,
2009, 2008 and 2007:





Acquisition
of Telecommunications Equipment





On March
30, 2007, we, through our wholly-owned subsidiary, ICON Global Crossing III, LLC
(“ICON Global Crossing III”), purchased telecommunications equipment subject to
a lease with Global Crossing. The purchase price of the equipment was
approximately $7,755,000 and we also incurred initial direct costs of
approximately $124,000. The lease is scheduled to expire on March 31, 2011.




Sale
of two McDonnell Douglas DC10-30F Aircraft and Engines





During
March 2003, we and Fund Nine formed a joint venture, ICON Aircraft 47820 LLC
(“Aircraft 47820”), in which we and Fund Nine had ownership interests of 90% and
10%, respectively. Aircraft 47820 was formed for the purpose of acquiring an
investment in a McDonnell Douglas DC10-30F aircraft and two spare engines (the
“McDonnell Douglas Aircraft and Engines”) on lease to Federal Express
Corporation (“FedEx”). On March 11, 2003, Aircraft 47820 acquired the McDonnell
Douglas Aircraft and Engines for approximately $27,288,000, including
approximately $24,211,000 of non-recourse debt. Our portion of the cash purchase
price was approximately $2,769,000. On March 30, 2007, Aircraft 47820 sold the
McDonnell Douglas Aircraft and Engines to FedEx for $5,475,000 and recognized a
loss on the sale of approximately $1,025,000, of which our portion was
approximately $922,500.






22
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During
December 2002, we and Fund Nine formed a joint venture, ICON Aircraft 46835 LLC
(“Aircraft 46835”), in which we and Fund Nine had ownership interests of 15% and
85%, respectively. Aircraft 46835 was formed for the purpose of acquiring a
McDonnell Douglas DC10-30F aircraft on lease to FedEx. On December 27, 2002, the
joint venture acquired the aircraft for approximately $25,292,000, including
approximately $22,292,000 of non-recourse debt. Our portion of the cash purchase
price was approximately $450,000. On March 30, 2007, Aircraft 46835 sold the
aircraft to FedEx for $4,260,000 and recognized a loss on the sale of
approximately $640,000, of which our portion was approximately
$96,000.





Investment
in Option





At
December 31, 2006, our General Partner determined that our investment in an
option to purchase a 1994 Boeing 737-524 aircraft, together with two engines
(the “Boeing Aircraft and Engines”), was impaired and, accordingly, we recorded
an impairment loss of $2,100,000. Our General Partner’s decision was based upon
the fact that the option was currently out of the money and the probability that
we would not exercise the option, which expires on May 5, 2012.





Sale
of Digital Mini-Labs





At
January 1, 2006, we held four lease schedules consisting of 128 Noritsu
Optical/Digital photo processing mini-labs that were subject to lease with
K-Mart Corporation (“K-Mart”). On April 30, 2006 and May 31, 2006, two of the
four lease schedules expired and, pursuant to the terms of the schedules, the
schedules were extended for an additional 90 days. These extensions ended on or
before September 30, 2006, and we reclassified the net book value of the
equipment of approximately $269,000 to equipment held for sale. The remaining
two lease schedules with K-Mart expired during 2006 and we reclassified the net
book value of this equipment of $37,120 and $67,295, respectively, to equipment
held for sale.  We also sold equipment for proceeds of $9,360 during
the fourth quarter of 2006. Our General Partner determined, based upon
negotiations with potential buyers, that the Noritsu Optical/Digital equipment
held by K-Mart was impaired.  Accordingly, for the year ended December
31, 2006, we recorded an impairment loss of approximately $393,000, net of
estimated selling costs. At December 31, 2006, the four K-Mart lease schedules
represented equipment held for sale totaling $140,400. On February 9, 2007, we
sold all of the remaining equipment previously on lease to K-Mart for
approximately $254,100 and recognized a gain on the sale of this equipment of
approximately $111,000.





Lease
Extensions and Non-Recourse Debt Refinancing of Two Airbus Aircraft





During
February 2002, we formed a wholly-owned subsidiary, ICON 123, for the purpose of
acquiring Aircraft 123, which was subject to a lease with Cathay. Aircraft 123
was purchased for approximately $75,000,000, including the assumption of
approximately $70,500,000 of non-recourse debt. On March 14, 2006, we entered
into a lease extension with Cathay with respect to Aircraft 123, which extended
the lease to October 1, 2011. Effective March 14, 2006, in connection with the
Cathay lease extension, the outstanding non-recourse debt of approximately
$52,850,000 was refinanced after applying $282,000 from a reserve account
established in connection with the original lease with Cathay. The non-recourse
debt matures on October 1, 2011 and has a balloon payment of approximately
$32,000,000. The interest rate of the refinanced non-recourse debt was fixed at
6.1095% under the terms of the debt agreement, effective October 3, 2006. At
December 31, 2009, the fair market value of the non-recourse debt was
approximately $39,502,000.





ICON 123
had a commitment with respect to Aircraft 123 to pay certain maintenance costs,
which were incurred on or prior to March 14, 2006. ICON 123 established,
under the original lease, a maintenance reserve cash account to pay for its
portion of these costs. This account was funded by free cash from the lease
payments in accordance with the terms of the original lease. For the year ended
December 31, 2006, ICON 123 accrued approximately $1,157,000 relating to the
maintenance costs. In January 2007, ICON 123 repaid outstanding maintenance
costs of approximately $1,546,000.  The balance in its maintenance
reserve cash account was approximately $1,403,000. As discussed below,
approximately $143,000 of the remaining costs were borrowed and will be repaid
when Aircraft 123 is sold at the end of the lease.






23
 Table of Contents





During
February 2002, we and Fund Nine formed ICON 126 for the purpose of acquiring all
of the outstanding shares of Delta Aircraft Leasing Limited (“D.A.L.”), a Cayman
Islands registered company that owns, through an owner trust, Aircraft 126.
Aircraft 126 was subject to a lease with Cathay at the time of purchase, which
was consummated during March 2002. The lease was initially scheduled to expire
in March 2006, but has been extended until July 1, 2011. We and Fund Nine each
have a 50% ownership interest in ICON 126. ICON 126 consolidates the financial
position and operations of D.A.L. in its consolidated financial
statements.





Effective
March 27, 2006, in connection with the lease extension, approximately
$52,850,000 of non-recourse debt associated with Aircraft 126 was refinanced
after applying $583,000 from a reserve account established in connection with
the original lease with Cathay. The refinanced non-recourse debt matures on July
1, 2011 and requires a balloon payment of approximately $33,000,000 at maturity.
The interest rate of the refinanced debt was fixed at 6.104% under the terms of
the debt agreement, effective October 3, 2006.





ICON 126
had a commitment with respect to Aircraft 126 to pay certain maintenance costs,
which were incurred on or prior to March 27, 2006. ICON 126 established a
maintenance reserve cash account under the original lease to pay for its portion
of these costs. This account was funded by free cash from the lease payments in
accordance with the terms of the original lease. During 2006, ICON 126 received
$182,021 of capital contributions from both of its members, of which $50,000 was
for amounts relating to the maintenance reserve cash account and $132,021 was
related to costs paid by its members relating to the refinancing of ICON
126's non-recourse debt. During September 2006, approximately $1,153,000
was paid for maintenance costs. The maintenance account for Aircraft 126 was
cross-collateralized with the maintenance account for ICON 123 pursuant to two
first priority charge on cash deposit agreements entered into in connection with
the purchase of Aircraft 123. Under the terms of these agreements, ICON 126 was
required to pay on behalf of ICON 123 any maintenance cost shortfalls incurred
by the affiliate. On January 30, 2007, ICON 126 paid approximately $143,000 in
maintenance costs from its maintenance account on behalf of ICON
123.  The maintenance account and related security interests were then
terminated. ICON 123 will reimburse ICON 126 when Aircraft 123 is sold. The
excess cash remaining in ICON 126’s account of approximately $97,000 includes
interest accreted in the amount of approximately $38,000 through December 31,
2009.





Each of
ICON 123 and ICON 126 is a party to a residual sharing agreement with
respect to its aircraft (See Notes 5 and 12 to our consolidated
financial statements).





In light
of unprecedented high fuel prices during 2008 and the related impact on the
airline industry, our General Partner reviewed our investments in Aircraft 123
and Aircraft 126 as of June 30, 2008.  In accordance with the
accounting pronouncement that accounts for the impairment or disposal of
long-lived assets and based upon changes in the airline industry, our General
Partner determined that Aircraft 123 and Aircraft 126 were
impaired.





Based on
our General Partner’s review, the carrying values of Aircraft 123 and Aircraft
126 exceeded the expected undiscounted future cash flows of Aircraft 123 and
Aircraft 126 and, as a result, we recorded an impairment charge representing the
difference between the carrying value and the expected discounted future cash
flows of Aircraft 123 and Aircraft 126.  The expected discounted
future cash flows of Aircraft 123 and Aircraft 126 were determined using a
market approach, a recent appraisal for Aircraft 123 and Aircraft 126 and recent
sales of similar aircraft, as well as other factors, including those discussed
below.  As a result, we recorded an impairment loss on Aircraft 123 of
$3,888,367 as of June 30, 2008. In addition, as of June 30, 2008, ICON 126
recorded an impairment loss on Aircraft 126 of approximately $3,900,000, of
which our share was approximately $1,950,000.






24
 Table of Contents





The
following factors in 2008, among others, indicated that the full carrying values
of Aircraft 123 and Aircraft 126 might not be recoverable: (i) indications that
lenders were willing to finance less of the acquisition cost of four-engine
aircraft, which increased with each dollar rise of the price of fuel, thereby
undermining the carrying value expectations of such aircraft; (ii) the rising
cost of fuel was increasing the operating costs of four-engine aircraft and
similar capacity twin-engine aircraft, thereby making such aircraft less
attractive investments at the time and thereby depressing the market for
Aircraft 123 and Aircraft 126; and (iii) the likelihood of aircraft operators
switching to more efficient aircraft, thereby depressing the market for Aircraft
123 and Aircraft 126.





Sale
of five Pratt and Whitney 2037 Aircraft Engine Modules





We owned
five Pratt and Whitney 2037 aircraft engine modules (the “Engine Modules”) on
lease to American Airlines, Inc., formerly TWA Airlines, LLC
(“TWA”).  On August 8, 2007, we sold all the Engine Modules to an
unaffiliated third party for a gross sales price of $6,050,000. In connection
with the sale, we recorded net proceeds of approximately $5,547,000 and a gain
on the sale of approximately $1,042,000.





Sale
of Over the Road Rolling Stock, Manufacturing and Materials Handling
Equipment





On
September 1, 2000, we, along with ICON Cash Flow Partners L.P. Six (“L.P. Six”),
ICON Cash Flow Partners L.P. Seven (“L.P. Seven”), and ICON Income Fund Eight A
L.P. (“Fund Eight A”), entities also managed by our General Partner, formed ICON
Cheyenne LLC (“ICON Cheyenne”) for the purpose of acquiring and managing a
portfolio of equipment leases consisting of, among other things, over the road
rolling stock, manufacturing equipment and materials handling equipment. The
original transaction involved acquiring from Cheyenne Leasing Company a
portfolio of 119 leases with various expiration dates through September
2007.





At
December 31, 2006, we, L.P. Seven and Fund Eight A had ownership interests of
97.73%, 1.27%, and 1.00%, respectively, in ICON Cheyenne.  The
outstanding balance of the non-recourse debt secured by these assets was paid in
full during 2006. During 2006, ICON Cheyenne sold various pieces of its
equipment portfolio for approximately $583,000 in cash and recognized a gain of
approximately $582,000 on these sales, of which our portion was approximately
$568,789. During the second quarter of 2007, ICON Cheyenne sold all of its
remaining equipment to a third party for total sales proceeds of approximately
$111,000.  ICON Cheyenne recognized a total gain on the sale of
approximately $110,000, of which our portion was approximately
$107,503.





On
December 1, 2004, we transferred our entire 5.00% interest in ICON/Kenilworth
LLC (“Kenilworth”), which owned a 25 MW co-generation facility on lease to
Schering-Plough Corporation, to Fund Nine, in exchange for a 25.87% interest in
ICON SPK 2023-A LLC (“ICON SPK”).  Following the exchange, we had no
interest in Kenilworth and we and Fund Nine had ownership interests of 74.87%
and 25.13%, respectively, in ICON SPK.





The ICON
SPK portfolio consisted of various equipment leases, including materials
handling, telecommunications and computer equipment. During 2006, ICON SPK sold
various pieces of its portfolio for approximately $460,000 in cash and
recognized a loss of approximately $106,000, of which our portion was
approximately $79,362, on those sales. During the second quarter of 2007, ICON
SPK sold all of its remaining equipment to a third party for sales proceeds of
approximately $348,000.  A gain on the sale of approximately $264,000
was recognized by ICON SPK, of which our portion was approximately
$197,657.




Assignment
of Rowan Cash Flow
 
 On February 23, 2005, L.P. Seven
assigned to us 2.69% of its rights to the profits, losses, and cash flows from
its limited partnership interest in an entity that owns a 100% interest in a
mobile offshore drilling rig that is subject to lease with Rowan Companies, Inc.
L.P. Seven assigned the rights to us as repayment of its approximately $673,000
outstanding debt obligation to us pursuant to a contribution agreement that we
had with Comerica Bank. This assignment increased our rights to the profits,
losses, and cash flows from L.P. Seven’s limited partnership interest from
3.24%, which was assigned to us in November 2004, to 5.93%. The repayment amount
represented our General Partner’s estimated fair value of L.P. Seven's interest
in the mobile offshore drilling rig at February 23, 2005. No cash distributions were received
from these rights in the three years ended December 31,
2009.


25
 Table of Contents


Recently
Adopted Accounting Pronouncements
 
 In 2009,
we adopted and, for presentation and disclosure purposes, retrospectively
applied the accounting pronouncement relating to noncontrolling interests in
consolidated financial statements.  As a result, noncontrolling
interests are reported as a separate component of consolidated equity and net
income attributable to the noncontrolling interest is included in consolidated
net income (loss). The attribution of income (loss) between controlling and
noncontrolling interests is disclosed on the accompanying consolidated
statements of operations. Accordingly, the prior year consolidated financial
statements have been revised to conform to the current year presentation. See
Note 2 to our consolidated financial statements.


In 2009,
we adopted the accounting pronouncement relating to accounting for fair value
measurements, which establishes a framework for measuring fair value and
enhances fair value measurement disclosure for non-financial assets and
liabilities.  See Note 2 to our consolidated financial
statements.





In 2009,
we adopted the accounting pronouncement that provides additional guidance for
estimating fair value in accordance with the accounting standard for fair value
measurements when the volume and level of activity for the asset or liability
have significantly decreased. This pronouncement also provides guidance for
identifying transactions that are not orderly. This pronouncement was effective
prospectively for all interim and annual reporting periods ending after June 15,
2009.  See Note 2 to our consolidated financial
statements.




In 2009,
we adopted the accounting pronouncement that amends the requirements for
disclosures about fair value of financial instruments, regarding the fair value
of financial instruments for annual, as well as interim, reporting periods. This
pronouncement was effective prospectively for all interim and annual reporting
periods ending after June 15, 2009.  See Note 2 to our consolidated
financial statements.





In 2009,
we adopted the accounting pronouncement regarding the general standards of
accounting for, and disclosure of, events that occur after the balance sheet
date, but before the financial statements are issued. This pronouncement was
effective prospectively for interim and annual reporting periods ending after
June 15, 2009.  See Note 2 to our consolidated financial
statements.




In 2009,
we adopted Accounting Standards Codification 105, “Generally Accepted Accounting
Principles,” which establishes the Financial Accounting Standards Board
Accounting Standards Codification (the “Codification”), which supersedes all
existing accounting standard documents and is the single source of authoritative
non-governmental U.S. Generally Accepted Accounting Principles (“US
GAAP”).  All other accounting literature not included in the
Codification is considered non-authoritative. This accounting standard
is effective for interim and annual periods ending after September 15, 2009. The
Codification did not change or alter existing US GAAP and it did not result in a
change in accounting practices for us upon adoption. We have conformed our
consolidated financial statements and related notes to the new Codification for
the year ended December 31, 2009.  See Note 2 to our consolidated
financial statements.





Critical
Accounting Policies





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





·
            Lease
      classification and revenue
recognition;


·
            Asset
      impairments;


·
            Depreciation;
      and


·
            Initial
      direct costs.






26
 Table of Contents





Lease
Classification and Revenue Recognition





Each
equipment lease we entered into is classified as either a finance lease or an
operating lease, which is determined based upon the terms of each
lease. For a finance lease, the initial direct costs were capitalized and
amortized over the lease term.  For an operating lease, the initial direct
costs were included as a component of the cost of the equipment and depreciated
over the lease term.





For
finance leases, we recorded, 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 value, minus the cost of the leased equipment.
 Unearned income is recognized as finance income over the term of the lease
using the effective interest rate method.





For
operating leases, rental income is recognized on a straight-line basis over the
lease term.  Billed operating lease receivables are included in
accounts receivable until collected. Accounts receivable are stated at their
estimated net realizable value. Deferred revenue is the difference between the
timing of the cash payments and the income recognized on a straight-line
basis.





Our
General Partner has an investment committee that approved each new equipment
lease and  other financing transaction. As part of its process, the
investment committee determined the residual value, if any, to be used once the
investment was approved.  The factors considered in determining the
residual value included, but were not limited to, the creditworthiness of the
potential lessee, the type of equipment considered, how the equipment was
integrated into the potential lessee’s business, the length of the lease and the
industry in which the potential lessee operated. Residual values are reviewed
for impairment in accordance with our impairment review policy.





The
residual value assumed, among other things, that the asset would be utilized
normally in an open, unrestricted and stable market. Short-term fluctuations in
the market place were disregarded and it was assumed that there was no necessity
either to dispose of a significant number of the assets, if held in quantity,
simultaneously or to dispose of the asset quickly.  The residual value
was calculated using information from various external sources, such as trade
publications, auction data, equipment dealers, wholesalers and industry experts,
as well as inspection of the physical asset and other economic
indicators.





Asset
Impairments





The
significant assets in our portfolio are periodically reviewed, no less
frequently than 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 only if the carrying value of
a long-lived asset is not recoverable and exceeds its fair market
value.  If there is an indication of impairment, we will estimate the
future cash flows (undiscounted and without interest charges) expected 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.  If an impairment is
determined to exist, the impairment loss will be measured as the amount by which
the carrying value of a long-lived asset exceeds its fair value and recorded in
the consolidated statement of operations in the period the determination is
made.





The
events or changes in circumstances that 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 residual position in
the asset and, if applicable, the remaining obligation to the non-recourse
lender. Generally in the latter situation, the residual position relates to
equipment subject to third-party non-recourse debt where the lessee remits its
rental payments directly to the lender and we do not recover our residual
position until the non-recourse debt is repaid in full. The preparation of the
undiscounted cash flows requires the use of assumptions and estimates, including
the level of future rents, the residual value expected to be realized upon
disposition of the asset, estimated downtime between re-leasing events and the
amount of re-leasing costs. Our General Partner’s review for impairment includes
a consideration of the existence of impairment indicators including third-party
appraisals, published values for similar assets, recent transactions for similar
assets, adverse changes in market conditions for specific asset types and the
occurrence of significant adverse changes in general industry and market
conditions that could affect the fair value of the asset.






27
 Table of Contents





Depreciation





We record
depreciation expense on equipment when the lease is classified as an operating
lease.  In order to calculate depreciation, we first determined the
depreciable equipment cost, which is the cost less the estimated residual
value.  The estimated residual value is our estimate of the value of the
equipment at lease termination.  Depreciation expense is recorded by
applying the straight-line method of depreciation to the depreciable equipment
cost over the lease term.





Initial
Direct Costs





We
capitalized initial direct costs associated with the origination and funding of
leased assets and other financing transactions in accordance with the accounting
pronouncement that accounts for nonrefundable fees and costs associated
with originating or acquiring loans and initial direct costs of leases. The
costs were amortized on a lease by lease basis based on actual lease term using
a straight-line method for operating leases and the effective interest rate
method for finance leases. Costs related to leases or other financing
transactions that were not consummated were expensed as an acquisition
expense.





Results
of Operations for the Years Ended December 31, 2009 (“2009”) and 2008
(“2008”)





We are
currently in our liquidation period, which began on June 17, 2007. During our
liquidation period, we are selling and will continue to sell our assets in the
ordinary course of business.  As we sell our assets, both rental
income and finance income will decrease over time, as will expenses related to
our assets, such as depreciation and amortization expense. Additionally,
interest expense should decrease as we reach the expiration of leases that were
financed and as the debt is repaid to the lender.  As leased equipment
is sold, we will incur gains or losses on these sales.





Revenue
for 2009 and 2008 is summarized as follows:





Years ended December 31,2009
            
            
            2008
            
            
            ChangeRental
      income
            
            $
            6,376,364
            
            
            $
            6,376,364
            
            
            $
            -Finance
      income
            
            
            531,964
            
            
            
            790,254
            
            
            
            (258,290
            )Loss
      from investments in joint ventures
            
            
            (66,406
            )
            
            
            (2,168,613
            )
            
            
            2,102,207Interest
      and other income
            
            
            -
            
            
            
            405
            
            
            
            (405
            )Total
      revenue
            
            $
            6,841,922
            
            
            $
            4,998,410
            
            
            $
            1,843,512





Total
revenue for 2009 increased $1,843,512, or 36.9%, as compared to 2008. The
increase in total revenue was primarily attributable to a decrease of $1,950,000
in the loss from investments in joint ventures from our 50% ownership interest
in ICON 126, which recognized an impairment loss of $3,900,000 in
2008.  ICON 126 did not record a similar impairment charge in
2009.  The increase in total revenue was offset by a decrease in
finance income, which will continue as the Global Crossing lease
matures.








28
 Table of Contents







Expenses
for 2009 and 2008 are summarized as follows:





Years ended December 31,2009
            
            
            2008
            
            
            ChangeDepreciation
      and amortization
            
            $
            3,846,784
            
            
            $
            3,860,671
            
            
            $
            (13,887
            )Impairment
      loss
            
            
            -
            
            
            
            3,888,367
            
            
            
            (3,888,367
            )Interest
            
            
            2,565,646
            
            
            
            2,881,300
            
            
            
            (315,654
            )General
      and administrative
            
            
            414,913
            
            
            
            821,636
            
            
            
            (406,723
            )Total
      expenses
            
            $
            6,827,343
            
            
            $
            11,451,974
            
            
            $
            (4,624,631
            )





Total
expenses for 2009 decreased $4,624,631, or 40.4%, as compared to
2008.  The decrease in total expenses was primarily attributable to
the impairment charge of approximately $3,900,000 recognized by ICON 123 in
2008.  ICON 123 did not record a similar impairment charge in 2009.
The decrease in general and administrative expense was primarily due to a
reduction in professional fees and other operating expenses.  The
decrease in interest expense was attributable to a reduction in our outstanding
debt balance during 2009.





Net
Income (Loss) Attributable to Fund Eight B





As a
result of the foregoing changes from 2008 to 2009, net income attributable to
Fund Eight B for 2009 was $14,579, as compared to net loss attributable to Fund
Eight B for 2008 of $6,453,564. The net income attributable to Fund Eight B per
weighted average Unit for 2009 was $0.02 as compared to net loss attributable to
Fund Eight B per weighted average Unit for 2008 of $8.63.





Results
of Operations for the Years Ended December 31, 2008 (“2008”) and 2007
(“2007”)





Revenue
for 2008 and 2007 is summarized as follows:





Years ended December 31,2008
            
            
            2007
            
            
            ChangeRental
      income
            
            $
            6,376,364
            
            
            $
            8,580,752
            
            
            $
            (2,204,388
            )Finance
      income
            
            
            790,254
            
            
            
            742,064
            
            
            
            48,190Loss
      from investments in joint ventures
            
            
            (2,168,613
            )
            
            
            (282,582
            )
            
            
            (1,886,031
            )Net
      gain on sales of equipment
            
            
            -
            
            
            
            493,196
            
            
            
            (493,196
            )Interest
      and other income
            
            
            405
            
            
            
            72,895
            
            
            
            (72,490
            )Total
      revenue
            
            $
            4,998,410
            
            
            $
            9,606,325
            
            
            $
            (4,607,915
            )





Total
revenue for 2008 decreased $4,607,915, or 48.0%, as compared to
2007.  The decrease in rental income was primarily due to (i) the sale
of the McDonnell Douglas Aircraft and Engines on March 30, 2007, (ii) the sale
of the Engine Modules on August 8, 2007, and (iii) the sale of assets by ICON
SPK and ICON Cheyenne during the second quarter of 2007.  The sale of
the McDonnell Douglas Aircraft and Engines in March 2007 resulted in a reduction
of total rental income of approximately $1,624,000 in 2008. The sale of the
Engine Modules accounted for approximately $424,000 of the reduction in rental
income.  The sale of all the remaining equipment in the ICON SPK and
ICON Cheyenne portfolios resulted in a reduction of the total rental income of
approximately $128,000 and $23,000, respectively.  The increase in
loss from investments in joint ventures was primarily due to the impairment loss
of approximately $1,950,000 recorded as of June 30, 2008 on our investment in
Aircraft 126. There was no impairment loss recorded in 2007.







29
 Table of Contents








Expenses for 2008 and 2007 are
summarized as follows:





Years ended December 31,2008
            
            
            2007
            
            
            ChangeDepreciation
      and amortization
            
            $
            3,860,671
            
            
            
            4,557,064
            
            
            
            (696,393
            )Impairment
      loss
            
            
            3,888,367
            
            
            
            -
            
            
            
            3,888,367Interest
            
            
            2,881,300
            
            
            
            3,326,807
            
            
            
            (445,507
            )General
      and administrative
            
            
            821,636
            
            
            
            405,470
            
            
            
            416,166Total
      expenses
            
            $
            11,451,974
            
            
            $
            8,289,341
            
            
            $
            3,162,633





Total
expenses for 2008 increased $3,162,633, or 38.2%, as compared to 2007. The
increase in impairment loss was due to the impairment loss recorded on Aircraft
123 as of June 30, 2008. The decrease in depreciation and amortization expense
was due to: (i) the sale of the McDonnell Douglas Aircraft and Engines on March
30, 2007, (ii) the sale of the Engine Modules on August 8, 2007 and (iii) the
sales of the remaining assets in the ICON SPK portfolio. The sale of the
McDonnell Douglas Aircraft and Engines resulted in a total decrease in
depreciation and amortization expense of approximately $540,000 in 2008. The
sale of the Engine Modules resulted in a total decrease in depreciation and
amortization expense of approximately $123,000 in 2008. The sale of the
remaining assets in the ICON SPK portfolio resulted in a decrease of
approximately $21,000 in depreciation and amortization expense in 2008. The
decrease in interest expense is due to the pay down of the non-recourse debt in
2008. The increase in general and administrative expense was primarily due to
professional fees.





Noncontrolling
Interests





Net
income attributable to noncontrolling interests for 2008 decreased $170,005, or
100%, as compared to 2007. The decrease in net income attributable to
noncontrolling interests was due to the sale of all remaining assets in the ICON
SPK and ICON Cheyenne portfolios and the McDonnell Douglas Aircraft and
Engines.





Net
(Loss) Income Attributable to Fund Eight B





As a
result of the foregoing changes from 2007 to 2008, net loss attributable to Fund
Eight B for 2008 was $6,453,564 as compared to net income attributable to Fund
Eight B for 2007 of $1,146,979.  The net loss attributable to Fund Eight B
per weighted average Unit for 2008 was $8.63 as compared to net income
attributable to Fund Eight B per weighted average Unit for 2007 of
$1.53.







Financial
Condition


This
section discusses the major balance sheet variances from 2009 compared to
2008.







Total
Assets


Total
assets decreased $5,973,376, from $53,205,647 at December 31, 2008 to
$47,232,271 at December 31, 2009.  The decrease was primarily due to
the depreciation of our leased equipment of $3,818,182 and the decrease in our
net investment in finance lease of $2,009,175 as a result of the collection of
rents receivable from our finance lease with Global Crossing in the amount of
$2,512,537 during 2009.







Current
Assets


Current
assets increased $231,560, from $2,245,054 at December 31, 2008 to $2,476,614 at
December 31, 2009. The increase was primarily due to an increase in the current
portion of our finance lease with Global Crossing during 2009, which was
partially offset by a decrease in cash and cash equivalents and other current
assets.






30
 Table of Contents





Total
Liabilities





Total
liabilities decreased $5,180,266, from $44,461,169 at December 31, 2008 to
$39,280,903 at December 31, 2009.  The decrease was primarily due to
the repayment of a portion of the outstanding balance on the non-recourse debt
obligation related to ICON 123, and the repayment of the outstanding balance on
our revolving line of credit.





Current
Liabilities





Current
liabilities decreased $1,353,469, from $6,144,136 at December 31, 2008 to
$4,790,667 at December 31, 2009. The decrease was primarily due to the repayment
of the outstanding balance on our revolving line of credit and a reduction in
accrued expenses and other current liabilities.  This decrease was
offset by an increase in deferred revenue related to ICON 123, as a result of
declining monthly rental payments over the remaining lease term.





Equity





Total equity decreased $793,110 from
$8,744,478 at December 31, 2008 to $7,951,368 at December 31,
2009.  During our liquidation period, we have distributed
substantially all of the distributable cash from operations and equipment sales
to our partners.







Liquidity
and Capital Resources


Sources and Uses of
Cash





At
December 31, 2009 and 2008, we had cash and cash equivalents of $149,843 and
$167,128, respectively. During our liquidation period, our main source of cash
is expected to be from operating and investing activities from the sale or
disposal of our assets. Our main use of cash during the liquidation period is
expected to be in financing activities, in the form of debt repayments and cash
distributions to our partners.





Operating
Activities





Sources
of Cash





Sources
of cash from operating activities increased $303,502, from $1,671,902 in 2008 to
$1,975,404 in 2009. The increase was primarily due to the collection of our
finance lease with Global Crossing.





Financing
Activities





Uses of Cash





Uses of
cash in financing activities increased $73,759, from $1,918,930 in 2008 to
$1,992,689 in 2009.  The increase was primarily due to the repayment
of $1,185,000 on our revolving line of credit during 2009, partially offset by
the reduction in the amount of distributions paid to our
partners.  During 2009 and 2008, we paid distributions to our partners
of $807,689 and $1,845,457, respectively.





Financings
and Borrowings





Non-Recourse
Debt





At
December 31, 2009 and 2008, we had a non-recourse debt obligation that was being
paid directly to the lender by the lessee and was accruing interest at 6.1095%
per year. The outstanding balance of our non-recourse debt was $38,317,033 at
December 31, 2009.






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 Table of Contents





Effective
March 14, 2006, in connection with the Cathay lease extension for Aircraft 123,
the outstanding non-recourse debt of approximately $52,568,000 was refinanced.
The debt matures on October 1, 2011, has a balloon payment of approximately
$32,000,000 and has an interest rate that is fixed at 6.1095%.





Revolving
Line of Credit, Recourse




We and certain entities managed by our
General Partner, Fund Nine, Fund Ten, Fund Eleven, Fund Twelve and Fund Fourteen
(collectively, the “Borrowers”), are parties to a Commercial Loan Agreement, as
amended (the “Loan Agreement”), with CB&T. The Loan Agreement provides for a
revolving line of credit of up to $30,000,000 pursuant to a senior secured
revolving loan facility (the “Facility”), which is secured by all assets of the
Borrowers not subject to a first priority lien, as defined in the Loan
Agreement. Each of the Borrowers is jointly and severally liable for all amounts
borrowed under the Facility. At December 31, 2009, no amounts were accrued
related to our joint and several obligations under the Facility. Amounts
available under the Facility are subject to a borrowing base that is determined,
subject to certain limitations, on the present value of the future receivables
under certain lease agreements and loans in which the Borrowers have a
beneficial interest.




The Facility expires on June 30, 2011
and the Borrowers may request a one year extension to the revolving line of
credit within 390 days of the then-current expiration date, but CB&T has no
obligation to extend. The interest rate for general advances under the Facility
is CB&T’s prime rate and the interest rate on up to five separate non-prime
rate advances that are permitted to be made under the Facility is the rate
at which U.S. dollar deposits can be acquired by CB&T in the London
Interbank Eurocurrency Market plus 2.5% per year, provided that neither interest
rate is permitted to be less than 4.0% per year. The interest rate at December
31, 2009 was 4.0%. In addition, the Borrowers are obligated to pay a quarterly
commitment fee of 0.50% on unused commitments under the Facility.





Aggregate
borrowings by all Borrowers under the Facility amounted to $2,360,000 at
December 31, 2009. We had no borrowings outstanding under the Facility as of
such date. The balances of $100,000 and $2,260,000 were borrowed by Fund Ten and
Fund Eleven, respectively.  As of March 24, 2010, Fund Ten and Fund
Eleven had outstanding borrowings under the Facility of $700,000 and $0,
respectively.





Pursuant
to the Loan Agreement, the Borrowers are required to comply with certain
covenants.  At December 31, 2009, the Borrowers were in compliance
with all covenants. For additional information, see Note 8 to our consolidated
financial statements.





Our
General Partner believes that the cash we currently have available, the cash
being generated from our remaining leases, and the proceeds we expect to receive
from equipment and asset sales will be sufficient to continue our operations
into the foreseeable future. However, our ability to generate cash in the
future is subject to general economic, financial, competitive, regulatory and
other factors that affect us and our lessees’ businesses that are beyond our
control.  See “Item 1A.  Risk Factors.” At December 31,
2009, we had current assets of $2,476,614 and current liabilities of $4,790,667,
which results in a $2,314,053 working capital deficit. Of the $4,790,667 of
current liabilities, $3,826,797 consisted of direct payments to a lender made by
our lessee. These direct payments are for a debt that had no corresponding
current asset due to the classification of these transactions as operating
leases. Therefore, when considering our overall working capital, direct payments
should be excluded. The exclusion of these payments yields a positive working
capital of $1,512,744 at December 31, 2009.





Distributions





We, at
our General Partner’s discretion, paid monthly distributions to each of our
partners beginning the first month after each such partner was admitted through
the end of our reinvestment period, which was on June 16, 2007. During the
liquidation period, we plan to make distributions in accordance with the terms
of our LP Agreement. We expect that distributions made during the liquidation
period will vary, depending on the timing of the sale of our assets, our receipt
of rental income, and income from our investments. We paid distributions to our
limited partners for the years ended December 31, 2009, 2008 and 2007 of
$799,612, $1,827,002 and $4,308,340, respectively. We paid distributions to our
General Partner for the years ended December 31, 2009, 2008 and 2007 of $8,077,
$18,455 and $43,519, respectively.






32
 Table of Contents





Commitments
and Contingencies and Off-Balance Sheet Transactions





Commitments
and Contingencies





At
December 31, 2009, we had non-recourse debt obligations outstanding. The lender
has a security interest in the equipment related to each non-recourse debt
instrument and an assignment of the rental payments under the lease associated
with the equipment. In such cases, the lender is being paid directly by the
lessee. If the lessee defaults on the lease, the equipment would be returned to
the lender in extinguishment of the non-recourse debt. At December 31, 2009, our
outstanding non-recourse debt obligations were $38,317,033.





We are a
party to the Facility, as discussed in “Financings and Borrowings” above. We had
no borrowings under the Facility at December 31, 2009.





Principal
maturities of our debt and related interest consisted of the following at
December 31, 2009:





Payments Due by PeriodLess
      Than 1
            
            
            1 -
      3Total
            
            
            Year
            
            
            YearsNon-recourse
      debt
            
            $
            38,317,033
            
            
            $
            3,826,797
            
            
            $
            34,490,236Non-recourse
      interest
            
            
            3,979,183
            
            
            
            2,263,203
            
            
            
            1,715,980$
            42,296,216
            
            
            $
            6,090,000
            
            
            $
            36,206,216





We had a
commitment with regards to Aircraft 123 to pay certain maintenance
costs, which were incurred on or prior to March 14, 2006. We had
established, under the original lease, a maintenance reserve cash account to pay
for our portion of these costs. In January 2007, the outstanding maintenance
cost of approximately $1,546,000 was repaid with the balance in the reserve cash
account of approximately $1,403,000. The remaining balance of approximately
$143,000 was borrowed from ICON 126 and will be reimbursed when Aircraft 123 is
sold.




We
entered into residual sharing agreements with various third parties. In
connection with these agreements, residual proceeds received in excess of
specific amounts will be shared with these third parties based on specific
formulas. The obligation related to these agreements is recorded at fair value.
See Note 12 to our consolidated financial statements for a discussion of the
residual sharing agreements.





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





Off-Balance
Sheet Transactions





None.






33
 Table of Contents






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 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 termination (and thus the
overall cash flow from our leases) may increase with inflation as the cost of
similar new and used equipment increases.  We are currently in our
liquidation period and, therefore, we do not currently intend to obtain
additional external financing or refinance our existing
indebtedness.





If
interest rates increase significantly, leases already in place would generally
not be affected.





Item 7A.  Quantitative and Qualitative Disclosures About
Market Risk





We, like
most other companies, are exposed to certain market risks, which include changes
in interest rates and the demand for equipment owned by us.  We
believe 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.





We
currently have one outstanding note payable, which is our non-recourse debt
obligation.  Due to the fixed nature of the non-recourse debt, the
conditions in the credit markets as of December 31, 2009 have not had any impact
on us.  With respect to our revolving line of credit, which is subject
to a variable interest rate, we have no outstanding amounts as of December 31,
2009.  Accordingly, the condition of the credit markets will not have
any material impact on us.  Furthermore, we are currently in our
liquidation period and, therefore, as we do not currently intend to obtain
additional external financing or refinance our existing indebtedness, we do not
expect any adverse impact on our cash flows should credit conditions in general
remain the same or deteriorate further.





In
general, we managed our exposure to interest rate risk by obtaining fixed rate
debt. The fixed rate debt was 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 each lease are assigned to the lender in satisfaction of the
debt.





We manage
our exposure to equipment and residual risk by monitoring the markets our leased
equipment is in and maximizing remarketing proceeds through the re-lease or sale
of equipment.







34
 Table of Contents








Item 8. Consolidated Financial Statements and Supplementary
Data
 
 PageReport of Independent Registered Public Accounting
      Firm
                36Consolidated Balance Sheets
                37Consolidated Statements of Operations
                38Consolidated Statements of Changes
      in Equity
                39Consolidated Statements of Cash Flows
                40Notes to Consolidated Financial Statements
                42





35
 Table of Contents







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM





The
Partners


ICON
Income Fund Eight B L.P.








We have
audited the accompanying consolidated balance sheets of ICON Income Fund Eight B
L.P. (the “Company”) as of December 31, 2009 and 2008, and the related
consolidated statements of operations, changes in equity, and cash flows
for each of the three years in the period ended December 31, 2009. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these 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. We were not engaged to perform an
audit of the Company’s internal control over financial reporting. Our audits
included 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
Company'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, assessing
the accounting principles used and significant estimates made by management, and
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 consolidated financial position of ICON Income Fund Eight
B L.P. at December 31, 2009 and 2008, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2009, in conformity with U.S. generally accepted accounting
principles.





As
discussed in Note 2 to the accompanying consolidated financial statements, on
January 1, 2009 the Company adopted and, for presentation and disclosure
purposes, retrospectively applied the new accounting pronouncement for
noncontrolling interests.








/s/ Ernst & Young,
LLP





March
25, 2010


New York,
New York










36
 Table of Contents







ICON Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Consolidated
      Balance SheetsAssetsDecember 31,2009
            
            
            2008Current
      assets:Cash
      and cash equivalents
            
            $
            149,843
            
            
            $
            167,128Current
      portion of net investment in finance lease
            
            
            2,290,231
            
            
            
            2,009,175Other
      current assets
            
            
            36,540
            
            
            
            68,751Total current assets
            
            
            2,476,614
            
            
            
            2,245,054Non-current
      assets:Net
      investment in finance lease, less current portion
            
            
            621,280
            
            
            
            2,911,511Leased
      equipment at cost (less accumulated depreciationof
      $33,739,596 and $29,921,414, respectively)
            
            
            41,677,124
            
            
            
            45,495,306Investments
      in joint ventures
            
            
            1,200,986
            
            
            
            1,267,392Other
      non-current assets, net
            
            
            1,256,267
            
            
            
            1,286,384Total non-current assets
            
            
            44,755,657
            
            
            
            50,960,593Total
      Assets
            
            $
            47,232,271
            
            
            $
            53,205,647Liabilities
      and EquityCurrent
      liabilities:Current
      portion of non-recourse long-term debt
            
            $
            3,826,797
            
            
            $
            4,029,270Revolving
      line of credit, recourse
            
            
            -
            
            
            
            1,185,000Deferred
      revenue
            
            
            613,636
            
            
            
            450,000Due
      to affiliates
            
            
            143,070
            
            
            
            143,070Accrued
      expenses and other current liabilities
            
            
            207,164
            
            
            
            336,796Total current liabilities
            
            
            4,790,667
            
            
            
            6,144,136Non-current
      liabilities:Non-recourse
      long-term debt, less current portion
            
            
            34,490,236
            
            
            
            38,317,033Total
      Liabilities
            
            
            39,280,903
            
            
            
            44,461,169Commitments
      and contingencies (Note 12)Equity:Limited
      Partners
            
            
            8,520,914
            
            
            
            9,306,093General
      Partner
            
            
            (569,546
            )
            
            
            (561,615
            )Total
      Equity
            
            
            7,951,368
            
            
            
            8,744,478Total
      Liabilities and Equity
            
            $
            47,232,271
            
            
            $
            53,205,647








37
 Table of Contents





ICON Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Consolidated
      Statements of OperationsYears Ended December 31,2009
            
            
            2008
            
            
            2007Revenue:Rental
      income
            
            $
            6,376,364
            
            
            $
            6,376,364
            
            
            $
            8,580,752Finance
      income
            
            
            531,964
            
            
            
            790,254
            
            
            
            742,064Loss
      from investments in joint ventures
            
            
            (66,406
            )
            
            
            (2,168,613
            )
            
            
            (282,582
            )Net
      gain on sales of equipment
            
            
            -
            
            
            
            -
            
            
            
            493,196Interest
      and other income
            
            
            -
            
            
            
            405
            
            
            
            72,895Total
      revenue
            
            
            6,841,922
            
            
            
            4,998,410
            
            
            
            9,606,325Expenses:Depreciation
      and amortization
            
            
            3,846,784
            
            
            
            3,860,671
            
            
            
            4,557,064Impairment
      loss
            
            
            -
            
            
            
            3,888,367
            
            
            
            -Interest
            
            
            2,565,646
            
            
            
            2,881,300
            
            
            
            3,326,807General
      and administrative
            
            
            414,913
            
            
            
            821,636
            
            
            
            405,470Total
      expenses
            
            
            6,827,343
            
            
            
            11,451,974
            
            
            
            8,289,341Net
      income (loss)
            
            
            14,579
            
            
            
            (6,453,564
            )
            
            
            1,316,984Less:
      Net income attributable to noncontrolling interest
            
            
            -
            
            
            
            -
            
            
            
            (170,005
            )Net
      income (loss) attributable to Fund Eight B
            
            $
            14,579
            
            
            $
            (6,453,564
            )
            
            $
            1,146,979Net
      income (loss) attributable to Fund Eight B allocable to:Limited
      Partners
            
            $
            14,433
            
            
            $
            (6,389,028
            )
            
            $
            1,135,509General
      Partner
            
            
            146
            
            
            
            (64,536
            )
            
            
            11,470$
            14,579
            
            
            $
            (6,453,564
            )
            
            $
            1,146,979Weighted
      average number of units of limitedpartnership
      interests outstanding
            
            
            740,380
            
            
            
            740,411
            
            
            
            740,985Net
      income (loss) attributable to Fund Eight B per weighted
      averageunit
      of limited partnership interests outstanding
            
            $
            0.02
            
            
            $
            (8.63
            )
            
            $
            1.53









38
 Table of Contents







ICON Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Consolidated
      Statements of Changes in EquityPartners' EquityUnits
      of Limited
            
            
            
            
            
            
            
            
            TotalPartnership
            
            
            Limited
            
            
            General
            
            
            Partners'
            
            
            Noncontrolling
            
            
            TotalInterests
            
            
            Partners
            
            
            Partner
            
            
            Equity
            
            
            Interest
            
            
            EquityBalance,
      December 31, 2006
            
            
            741,530
            
            
            $
            20,723,725
            
            
            $
            (446,575
            )
            
            $
            20,277,150
            
            
            $
            498,287
            
            
            $
            20,775,437Units
      of limited partnership interests redeemed
            
            
            (1,000
            )
            
            
            (25,298
            )
            
            
            -
            
            
            
            (25,298
            )
            
            
            -
            
            
            
            (25,298
            )Cash
      distributions
            
            
            -
            
            
            
            (4,308,340
            )
            
            
            (43,519
            )
            
            
            (4,351,859
            )
            
            
            (668,292
            )
            
            
            (5,020,151
            )Net
      income
            
            
            -
            
            
            
            1,135,509
            
            
            
            11,470
            
            
            
            1,146,979
            
            
            
            170,005
            
            
            
            1,316,984Balance,
      December 31, 2007
            
            
            740,530
            
            
            
            17,525,596
            
            
            
            (478,624
            )
            
            
            17,046,972
            
            
            
            -
            
            
            
            17,046,972Units
      of limited partnership interests redeemed
            
            
            (150
            )
            
            
            (3,473
            )
            
            
            -
            
            
            
            (3,473
            )
            
            
            -
            
            
            
            (3,473
            )Cash
      distributions
            
            
            -
            
            
            
            (1,827,002
            )
            
            
            (18,455
            )
            
            
            (1,845,457
            )
            
            
            -
            
            
            
            (1,845,457
            )Net
      loss
            
            
            -
            
            
            
            (6,389,028
            )
            
            
            (64,536
            )
            
            
            (6,453,564
            )
            
            
            -
            
            
            
            (6,453,564
            )Balance,
      December 31, 2008
            
            
            740,380
            
            
            
            9,306,093
            
            
            
            (561,615
            )
            
            
            8,744,478
            
            
            
            -
            
            
            
            8,744,478Cash
      distributions
            
            
            -
            
            
            
            (799,612
            )
            
            
            (8,077
            )
            
            
            (807,689
            )
            
            
            -
            
            
            
            (807,689
            )Net
      income
            
            
            -
            
            
            
            14,433
            
            
            
            146
            
            
            
            14,579
            
            
            
            -
            
            
            
            14,579Balance,
      December 31, 2009
            
            
            740,380
            
            
            $
            8,520,914
            
            
            $
            (569,546
            )
            
            $
            7,951,368
            
            
            $
            -
            
            
            $
            7,951,368










39
 Table of Contents





ICON Income Fund Eight B L.P.(A
      Delaware Limited Partnership)Consolidated
      Statements of Cash FlowsYears Ended December 31,2009
            
            
            2008
            
            
            2007Cash
      flows from operating activities:Net
      income (loss)
            
            $
            14,579
            
            
            $
            (6,453,564
            )
            
            $
            1,316,984Adjustments
      to reconcile net income (loss) to net cash provided byoperating
      activities:Rental
      income paid directly to lenders by lessees
            
            
            (6,540,000
            )
            
            
            (6,540,000
            )
            
            
            (8,129,490
            )Finance
      income
            
            
            (531,964
            )
            
            
            (790,254
            )
            
            
            (742,064
            )Net
      gain on sales of equipment
            
            
            -
            
            
            
            -
            
            
            
            (493,196
            )Loss
      from investments in joint ventures
            
            
            66,406
            
            
            
            2,168,613
            
            
            
            282,582Depreciation
      and amortization
            
            
            3,846,784
            
            
            
            3,860,671
            
            
            
            4,557,064Impairment
      loss
            
            
            -
            
            
            
            3,888,367
            
            
            
            -Interest
      expense on non-recourse financing paid directly to lenders by
      lessees
            
            
            2,501,854
            
            
            
            2,739,131
            
            
            
            3,021,752Interest
      expense from amortization of debt financing costs
            
            
            33,411
            
            
            
            73,665
            
            
            
            4,299Changes
      in operating assets and liabilities:Collection
      of finance leases
            
            
            2,512,537
            
            
            
            2,512,538
            
            
            
            1,952,376Accounts
      receivable
            
            
            -
            
            
            
            -
            
            
            
            293,255Due
      to General Partner and affiliates, net
            
            
            -
            
            
            
            -
            
            
            
            143,070Other
      assets, net
            
            
            28,918
            
            
            
            (53,052
            )
            
            
            1,388,587Deferred
      revenue
            
            
            163,636
            
            
            
            163,636
            
            
            
            148,343Accrued
      expenses and other current liabilities
            
            
            (120,757
            )
            
            
            102,151
            
            
            
            (1,844,599
            )Distributions
      to/from noncontrolling interests and joint ventures
            
            
            -
            
            
            
            -
            
            
            
            (99,800
            )Net
      cash provided by operating activities
            
            
            1,975,404
            
            
            
            1,671,902
            
            
            
            1,799,163Cash
      flows from investing activities:Distributions
      received from joint ventures
            
            
            -
            
            
            
            -
            
            
            
            639,000Proceeds
      from sales of equipment
            
            
            -
            
            
            
            -
            
            
            
            11,783,785Purchase
      of leased equipment
            
            
            -
            
            
            
            -
            
            
            
            (7,754,746
            )Net
      cash provided by investing activities
            
            
            -
            
            
            
            -
            
            
            
            4,668,039Cash
      flows from financing activities:Cash
      distributions to partners
            
            
            (807,689
            )
            
            
            (1,845,457
            )
            
            
            (4,351,859
            )Proceeds
      from revolving line of credit
            
            
            -
            
            
            
            -
            
            
            
            3,630,000Repayment
      of revolving line of credit
            
            
            (1,185,000
            )
            
            
            (70,000
            )
            
            
            (5,500,000
            )Distributions
      to noncontrolling interests in joint ventures
            
            
            -
            
            
            
            -
            
            
            
            (568,490
            )Units
      of limited partnership interests redeemed
            
            
            -
            
            
            
            (3,473
            )
            
            
            (25,298
            )Net
      cash used in financing activities
            
            
            (1,992,689
            )
            
            
            (1,918,930
            )
            
            
            (6,815,647
            )Net
      decrease in cash and cash equivalents
            
            
            (17,285
            )
            
            
            (247,028
            )
            
            
            (348,445
            )Cash
      and cash equivalents, beginning of the year
            
            
            167,128
            
            
            
            414,156
            
            
            
            762,601Cash
      and cash equivalents, end of the year
            
            $
            149,843
            
            
            $
            167,128
            
            
            $
            414,156









40
 Table of Contents




ICON Income Fund Eight B
      L.P.(A
      Delaware Limited Partnership)Consolidated
      Statements of Cash FlowsYears Ended December 31,2009
              
              
              2008
              
              
              2007Supplemental
      disclosure of cash flow information:Cash
      paid during the period for interest
              
              $
              30,381
              
              
              $
              68,504
              
              
              $
              380,594Supplemental
      disclosure of non-cash investing and financing activities:Principal
      and interest paid on non-recourse long-term debt directly
    tolenders
      by lessees
              
              $
              6,540,000
              
              
              $
              6,540,000
              
              
              $
              9,421,608Transfer
      of leased equipment to direct finance lease
              
              $
              -
              
              
              $
              -
              
              
              $
              7,743,990Payment
      of maintenance costs
              
              $
              -
              
              
              $
              -
              
              
              $
              1,546,000








41
 Table of Contents
 ICON Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009





(1)
            Organization





ICON
Income Fund Eight B L.P. (the “Partnership”) was formed on February 7, 2000 as a
Delaware limited partnership. The Partnership is engaged in one business
segment, the business of purchasing equipment and leasing it to third parties,
providing equipment and other financing and, to a lesser degree, acquiring
ownership rights to items of leased equipment at lease expiration. The
Partnership will continue until December 31, 2017, unless terminated
sooner.





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





Effective
June 16, 2007, the Partnership completed its reinvestment period.  On
June 17, 2007, the Partnership entered its liquidation period, during which the
Partnership has sold and will continue to sell its assets in the normal course
of business.





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





(2)
            Summary
      of Significant Accounting Policies





Basis of
Presentation and Consolidation





The
accompanying consolidated financial statements of the Partnership have been
prepared in accordance with U.S. generally accepted accounting principles (“US
GAAP”).  In the opinion of the General Partner, all adjustments
considered necessary for a fair presentation have been included.





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





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





42
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009




(2)
              Summary
      of Significant Accounting Policies –
continued


Effective
January 1, 2009, the Partnership adopted and, for presentation and disclosure
purposes, retrospectively applied the accounting pronouncement relating to
noncontrolling interests in consolidated financial statements.  As a
result, noncontrolling interests are reported as a separate component of
consolidated equity and net income attributable to the noncontrolling interest
is included in consolidated net income (loss). The attribution of income (loss)
between controlling and noncontrolling interests is disclosed on the
accompanying consolidated statements of operations. Accordingly, the prior year
consolidated financial statements have been revised to conform to the current
year presentation.





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.





The
Partnership's cash and cash equivalents are held principally at two financial
institutions and at times may exceed insured limits. The Partnership has placed
these funds in high quality institutions in order to minimize risk relating to
exceeding insured limits.





Risks and
Uncertainties





In the normal course of business, the
Partnership is exposed to two significant types of economic risk: credit and
market.  Credit risk is the risk of a lessee, borrower or other
counterparty’s inability or unwillingness to make contractually required
payments. See Note 11 for a discussion of concentrations of risk.





Market
risk reflects the change in the value of debt instruments and credit facilities
due to changes in interest rate spreads or other market factors.  The
Partnership believes that the carrying value of its investments is reasonable,
taking into consideration these risks, along with estimated collateral values,
payment history and other relevant information.





Allowance
for Doubtful Accounts





When
evaluating the adequacy of the allowance for doubtful accounts, the Partnership
estimates the uncollectibility of receivables by analyzing lessee, borrower and
other counterparty concentrations, creditworthiness and current economic trends.
The Partnership records an allowance for doubtful accounts when the analysis
indicates that the probability of full collection is unlikely.  No
allowance was deemed necessary at December 31, 2009 and 2008.





Debt
Financing Costs





Expenses
associated with the incurrence of debt are capitalized and amortized over the
term of the debt instrument using the effective interest rate
method.  These costs are included in other current assets and other
non-current assets.








43
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (2)
                Summary
      of Significant Accounting Policies –
continued


Leased
Equipment at Cost





Investments
in leased equipment are stated at cost less accumulated
depreciation.  Leased equipment is depreciated on a straight-line
basis over the lease term, which typically ranges from 4 to 5 years, to the
asset’s residual value.





The
General Partner has an investment committee that approved each new equipment
lease and other financing transaction.  As part of its process, the
investment committee determined the residual value, if any, to be used once the
investment was approved.  The factors considered in determining the
residual value included, but were not limited to, the creditworthiness of the
potential lessee, the type of equipment considered, how the equipment was
integrated into the potential lessee’s business, the length of the lease and the
industry in which the potential lessee operated.  Residual values are
reviewed for impairment in accordance with the Partnership’s impairment review
policy.





The
residual value assumes, among other things, that the asset is utilized normally
in an open, unrestricted and stable market. Short-term fluctuations in the
market place are disregarded and it is assumed that there is no necessity either
to dispose of a significant number of the assets, if held in quantity,
simultaneously or to dispose of the asset quickly.  The residual value
is calculated using information from various external sources, such as trade
publications, auction data, equipment dealers, wholesalers and industry experts,
as well as inspection of the physical asset and other economic
indicators.





Asset
Impairments





The
significant assets in the Partnership’s portfolio are periodically reviewed, no
less frequently than 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 only if the carrying value of
a long-lived asset is not recoverable and exceeds its fair market
value.  If there is an indication of impairment, the Partnership will
estimate the future cash flows (undiscounted and without interest charges)
expected 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 outflowsexpected to be necessary
to obtain those inflows.





If an impairment is determined to
exist, the impairment loss will be measured as the amount by which the carrying
value of a long-lived asset exceeds its fair value and recorded in the
consolidated statement of operations in the period the determination is
made.





The
events or changes in circumstances that 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 residual position in
the asset and, if applicable, the remaining obligation to the non-recourse
lender. Generally in the latter situation, the residual position relates to
equipment subject to third-party non-recourse debt where the lessee remits its
rental payments directly to the lender and the Partnership does not recover its
residual position until the non-recourse debt is repaid in full. The preparation
of the undiscounted cash flows requires the use of assumptions and estimates,
including the level of future rents, the residual value expected to be realized
upon disposition of the asset, estimated downtime between re-leasing events and
the amount of re-leasing costs. The General Partner’s review for impairment
includes a consideration of the existence of impairment indicators including
third-party appraisals, published values for similar assets, recent transactions
for similar assets, adverse changes in market conditions for specific asset
types and the occurrence of significant adverse changes in general industry and
market conditions that could affect the fair value of the asset.




44
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (2)
                Summary
      of Significant Accounting Policies –
continued


Revenue
Recognition





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





For
finance leases, the Partnership recorded, 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 value, minus the cost of the leased
equipment.  Unearned income is recognized as finance income over the
term of the lease using the effective interest rate method.





For
operating leases, rental income is recognized on a straight-line basis over the
lease term.  Billed operating lease receivables are included in
accounts receivable until collected.  Accounts receivable are stated
at their estimated net realizable value.  Deferred revenue is the
difference between the timing of the cash payments and the income recognized on
a straight-line basis.





Initial
Direct Costs





The
Partnership capitalized initial direct costs associated with the origination and
funding of leased assets and other financing transactions in accordance with the
accounting pronouncement for accounting for nonrefundable fees and costs
associated with originating or acquiring loans and initial direct costs of
leases. The costs were amortized on a lease by lease basis based on actual lease
term using a straight-line method for operating leases and the effective
interest rate method for finance leases. Costs related to leases or other
financing transactions that were not consummated were expensed as an acquisition
expense.





Income
Taxes





The
Partnership is taxed as a partnership for federal and State income tax
purposes.  No provision for income taxes has been recorded since the
liability for such taxes is that of each of the 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.





Per Unit
Data





Net
income (loss) attributable to the Partnership per weighted average unit of
limited partnership interests (a “Unit”) is based upon the weighted average
number of Units outstanding during the year.





Unit
Redemptions





The
Partnership may, at its discretion, redeem Units from a limited number of its
limited partners, as provided for in its LP Agreement. The redemption price for
any Units approved for redemption is based upon a formula, as provided in the LP
Agreement.  Limited partners are required to hold their Units for at
least one year before redemptions will be permitted.






45
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (2)
                Summary
      of Significant Accounting Policies –
continued


Use of
Estimates





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





Reclassifications





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





Recently
Adopted Accounting Pronouncements





In 2009,
the Partnership adopted the accounting pronouncement relating to accounting for
fair value measurements, which establishes a framework for measuring fair value
and enhances fair value measurement disclosure for non-financial assets and
liabilities. The adoption of this accounting pronouncement for non-financial
assets and liabilities did not have a significant impact on the
Partnership's consolidated financial statements.





In 2009, the Partnership adopted the
accounting pronouncement that provides additional guidance for estimating fair
value in accordance with the accounting standard for fair value measurements
when the volume and level of activity for the asset or liability have
significantly decreased. This pronouncement also provides guidance for
identifying transactions that are not orderly. This pronouncement was effective
prospectively for all interim and annual reporting periods ending after June 15,
2009. The adoption of this accounting pronouncement did not have a significant
impact on the Partnership's consolidated financial statements.





In 2009,
the Partnership adopted the accounting pronouncement that amends the
requirements for disclosures about fair value of financial instruments,
regarding the fair value of financial instruments for annual, as well as
interim, reporting periods. This pronouncement was effective prospectively for
all interim and annual reporting periods ending after June 15, 2009. The
adoption of this accounting pronouncement did not have a significant impact on
the Partnership's consolidated financial statements.





In 2009,
the Partnership adopted the accounting pronouncement regarding the general
standards of accounting for, and disclosure of, events that occur after the
balance sheet date, but before the financial statements are issued. This
pronouncement was effective prospectively for interim and annual reporting
periods ending after June 15, 2009. The adoption of this accounting
pronouncement  did not have a significant impact on the Partnership's
consolidated financial statements.




46
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (2)
                Summary
      of Significant Accounting Policies –
continued


In 2009,
the Partnership adopted Accounting Standards Codification 105, “Generally
Accepted Accounting Principles,” which establishes the Financial Accounting
Standards Board Accounting   Standards Codification (the
“Codification”), which supersedes all existing accounting standard documents
and is the single source of authoritative non-governmental US
GAAP.  All other accounting literature not included in the
Codification is considered non-authoritative.  This accounting
standard is effective for interim and annual periods ending after September 15,
2009.  The Codification did not change or alter existing US GAAP and
it did not result in a change in accounting practices for the Partnership upon
adoption. The Partnership has conformed its consolidated financial statements
and related notes to the new Codification for the year ended December 31,
2009.





(3)
            Net
      Investment in Finance Lease





Net
investment in finance lease consisted of the following at December 31, 2009 and
2008:





2009
            
            
            2008Minimum
      rents receivable
            
            $
            3,140,672
            
            
            $
            5,653,209Estimated
      residual value
            
            
            1
            
            
            
            1Initial
      direct costs, net
            
            
            13,022
            
            
            
            41,624Unearned
      income
            
            
            (242,184
            )
            
            
            (774,148
            )Net
      investment in finance lease
            
            
            2,911,511
            
            
            
            4,920,686Less:  Current
      portion of net  investment in finance lease
            
            
            2,290,231
            
            
            
            2,009,175Net
      investment in finance lease, less current portion
            
            $
            621,280
            
            
            $
            2,911,511





Non-cancelable minimum annual amounts
due on investment in finance lease for the next two years consisted of the
following as of December 31, 2009.  There will be no amounts due after
2011.





Years
      EndingDecember 31,2010
            
            $
            2,512,5382011
            
            
            628,134$
            3,140,672





47
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (3)
                Net
      Investment in Finance Lease –
continued


Digital
Mini-Labs





At January 1, 2006, the Partnership
held four lease schedules consisting of 128 Noritsu Optical/Digital photo
processing mini-labs that were subject to lease with K-Mart Corporation
(“K- Mart”).
On April 30, 2006 and May 31, 2006, two of the four lease schedules expired and,
pursuant to the terms of the schedules, the schedules were extended for an
additional 90 days. These extensions ended on or before September 30, 2006, and
the Partnership reclassified the net book value of the equipment of
approximately $269,000 to equipment held for sale. The remaining two lease
schedules with K-Mart expired during 2006 and the Partnership reclassified the
net book value of this equipment of $37,120 and $67,295, respectively, to
equipment held for sale.  The Partnership also sold equipment for
proceeds of $9,360 during the fourth quarter of 2006. The General Partner
determined, based upon negotiations with potential buyers, that the equipment
held by K-Mart was impaired. Accordingly, for the year ended December 31, 2006,
the Partnership recorded an impairment loss of approximately $393,000, net of
estimated selling costs. At December 31, 2006, the four K-Mart lease schedules
represented equipment held for sale totaling $140,400. On February 9, 2007, the
Partnership sold all of the remaining equipment previously on lease to K-Mart
for approximately $254,100 and recognized a gain on the sale of this equipment
of approximately $111,000.





Office,
Telecommunications and Computer Equipment





The
Partnership had an investment in a finance lease with Regus Business Centre
Corp. ("Regus"), which leased office, telecommunications and computer equipment
from the Partnership under the terms of a finance lease entered into in August
2000. Regus filed for bankruptcy protection under Chapter 11 of the United
States Bankruptcy Code on January 14, 2003. The Partnership negotiated an
amended lease with Regus, which was approved when Regus emerged from bankruptcy
protection.  Under the amended lease, Regus commenced making payments
at a reduced rental rate, with an extension for 48 months, effective March 15,
2003.  At December 31, 2006, Regus was current on its payments under
the amended lease. At December 31, 2006, Regus had one remaining rental payment
that was received in January 2007. On February 28, 2007, the lease expired and
Regus purchased the equipment for $1, as provided for in the lease.




On
March 30, 2007, the Partnership, through its wholly-owned subsidiary, ICON
Global Crossing III, LLC (“ICON Global Crossing III”), purchased
telecommunications equipment subject to a lease with Global Crossing
Telecommunications, Inc. (“Global Crossing”).  The purchase price of
the equipment was approximately $7,755,000 and the Partnership also incurred
initial direct costs of approximately $124,000. The lease is scheduled to expire
on March 31, 2011. The General Partner did not receive any acquisition fees in
connection with this transaction.






(4)
                Leased
      Equipment at Cost


Leased
equipment at cost consisted of the following at December 31, 2009 and
2008:





2009
            
            
            2008Aircraft
      and aircraft related equipment
            
            $
            75,416,720
            
            
            $
            75,416,720Less:
      Accumulated depreciation
            
            
            (33,739,596
            )
            
            
            (29,921,414
            )$
            41,677,124
            
            
            $
            45,495,306







48
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (4)
                Leased
      Equipment at Cost - continued


Depreciation
expense was $3,818,182 for the years ended December 31, 2009 and 2008,
and  $4,512,816 for the year ended December 31, 2007.





Aircraft
and Aircraft Related Equipment





McDonnell
Douglas DC 10-30F Aircraft and Engines





During March 2003, the Partnership and
ICON Income Fund Nine, LLC (“Fund Nine”), an entity also managed by the General
Partner, formed a joint venture, ICON Aircraft 47820 LLC (“Aircraft 47820”), in
which the Partnership and Fund Nine had ownership interests of 90% and 10%,
respectively. Aircraft 47820 was formed for the purpose of acquiring an
investment in a McDonnell Douglas DC10-30F aircraft and two spare engines (the
“McDonnell Douglas Aircraft and Engines”) on lease to Federal Express
Corporation (“FedEx”). On March 11, 2003, Aircraft 47820 acquired the McDonnell
Douglas Aircraft and Engines for approximately $27,288,000, including
approximately $24,211,000 of non-recourse debt. The Partnership’s portion of the
cash purchase price was approximately $2,769,000. On March 30, 2007, Aircraft
47820 sold the McDonnell Douglas Aircraft and Engines to FedEx for $5,475,000
and recognized a loss on the sale of approximately $1,025,000, of which the
Partnership’s portion was approximately $922,500.





Airbus
A340-313X Aircraft





During
February 2002, the Partnership formed a wholly-owned subsidiary, ICON Aircraft
123 LLC (“ICON 123”), for the purpose of acquiring an Airbus A340-313X aircraft
(“Aircraft 123”), which was subject to a lease with Cathay Pacific Airways
Limited (“Cathay”). Aircraft 123 was purchased for approximately $75,000,000,
including the assumption of approximately $70,500,000 of non-recourse debt. On
March 14, 2006, the Partnership entered into a lease extension with Cathay with
respect to Aircraft 123, which extended the lease to October 1, 2011. Effective
March 14, 2006, in connection with the Cathay lease extension, the outstanding
non-recourse debt of approximately $52,850,000 was refinanced after applying
$282,000 from a reserve account established in connection with the original
lease with Cathay. The non-recourse debt matures on October 1, 2011 and has a
balloon payment of approximately $32,000,000. The interest rate of the
refinanced non-recourse debt is fixed at 6.1095%.





In light
of unprecedented high fuel prices during 2008 and the related impact on the
airline industry, the General Partner reviewed the Partnership’s investment in
Aircraft 123 as of June 30, 2008.  In accordance with the accounting
pronouncement that accounts for the impairment or disposal of long-lived
assets and based upon changes in the airline industry, the General Partner
determined that Aircraft 123 was impaired.





Based on the General Partner’s review,
the carrying value of Aircraft 123 exceeded the expected undiscounted future
cash flows of Aircraft 123 and, as a result, the Partnership recorded an
impairment charge representing the difference between the carrying value and the
expected discounted future cash flows of Aircraft 123.  The expected
discounted future cash flows of Aircraft 123 were determined using a market
approach, a recent appraisal for Aircraft 123 and recent sales of similar
aircraft, as well as other factors, including those discussed
below.  As a result, the Partnership recorded an impairment loss on
Aircraft 123 of $3,888,367 as of June 30, 2008.





49
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (4)
                  Leased
      Equipment at Cost - continued


The
following factors in 2008, among others, indicated that the full carrying value
of Aircraft 123 might not be recoverable: (i) indications that lenders were
willing to finance less of the acquisition cost of four-engine aircraft, which
increased with each dollar rise of the price of fuel, thereby undermining the
carrying value expectations of such aircraft; (ii) the rising cost of fuel was
increasing the operating costs of four-engine aircraft and similar capacity
twin-engine aircraft, thereby making such aircraft less attractive investments
at the time and thereby depressing the market for Aircraft 123; and (iii) the
likelihood of aircraft operators switching to more efficient aircraft, thereby
depressing the market for Aircraft 123.





Five
Pratt and Whitney 2037 Aircraft Engine Modules





ThePartnership owned five Pratt
and Whitney 2037 aircraft engine modules (the “Engine Modules”) on lease to
American Airlines, Inc., formerly TWA Airlines, LLC (“TWA”).  On
August 8, 2007, the Partnership sold all the Engine Modules  to an
unaffiliated third party for a gross sales price of $6,050,000. In connection
with the sale, the Partnership recorded net proceeds of approximately $5,547,000
and a gain on sale of approximately $1,042,000.





Over
the Road Rolling Stock, Manufacturing and Materials Handling
Equipment





On
September 1, 2000, the Partnership, along with ICON Cash Flow Partners L.P. Six
(“L.P. Six”), ICON Cash Flow Partners L.P. Seven (“L.P. Seven”), and ICON Income
Fund Eight A L.P. (“Fund Eight A”), entities also managed by the General
Partner, formed ICON Cheyenne LLC (“ICON Cheyenne”) for the purpose of acquiring
and managing a portfolio of equipment leases consisting of, among other things,
over the road rolling stock, manufacturing equipment and materials handling
equipment. The original transaction involved acquiring from Cheyenne Leasing
Company a portfolio of 119 leases with various expiration dates through
September 2007.





At
December 31, 2006, the Partnership, L.P. Seven and Fund Eight A had ownership
interests of 97.73%, 1.27%, and 1.00%, respectively, in ICON
Cheyenne.  The outstanding balance of the non-recourse debt secured by
these assets was paid in full during 2006. During 2006, ICON Cheyenne sold
various pieces of its equipment portfolio for approximately $583,000 in cash and
recognized a gain of approximately $582,000 on these sales, of which the
Partnership’s portion was approximately $568,789. During the second quarter of
2007, ICON Cheyenne sold all of its remaining equipment to a third party for
total sales proceeds of approximately $111,000.  ICON Cheyenne
recognized a total gain on the sale of approximately $110,000, of which the
Partnership’s portion was approximately $107,503.




On
December 31, 2001, the Partnership, along with Fund Nine, formed ICON SPK 2023-A
LLC (“ICON SPK”) for the purpose of acquiring and managing a portfolio of
equipment leases consisting of materials handling, telecommunications and
computer equipment.  The original transaction involved acquiring a
portfolio of 32 leases with various lease expiration dates through April 2008.
On December 1, 2004, the Partnership transferred its entire 5.00% interest
in ICON/Kenilworth LLC (“Kenilworth”), which owned a 25 MW co-generation
facility on lease to Schering-Plough Corporation, to Fund Nine, in exchange for
a 25.87% interest in ICON SPK.  Following the exchange, the
Partnership had no interest in Kenilworth and the Partnership and Fund Nine had
ownership interests of 74.87% and 25.13%, respectively, in ICON SPK. During
2006, ICON SPK sold various pieces of its equipment portfolio for approximately
$460,000 in cash
and recognized a loss of approximately $106,000 on these sales, of which the
Partnership’s portion was approximately $79,362. During the second quarter of
2007, ICON SPK sold all of its remaining equipment to a third party for total
sales proceeds of approximately $348,000.  ICON SPK recognized a gain
on the sale of approximately $264,000, of which the Partnership’s portion was
approximately $197,657.




50
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (4)
                  Leased
      Equipment at Cost - continued


Aggregate
annual minimum future rentals receivable from the Partnership’s non-cancelable
leases for the next two years consisted of the following as of December 31,
2009.  There will be no additional rentals receivable after
2011.





Years
      EndingDecember 31,2010
            
            $
            6,090,0002011
            
            $
            4,455,000


(5)
                Investments
      in Joint Ventures


The Partnership and certain of its
affiliates, entities also managed and controlled by the General Partner, formed
two 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 members have a right of
first refusal to purchase the equipment, on a pro-rata basis, if any of the
other members desires to sell its interest in the equipment or joint
venture.





ICON
Aircraft 126 LLC





During February 2002, the Partnership
and Fund Nine formed ICON Aircraft 126 LLC (“ICON 126”) for the purpose of
acquiring all of the outstanding shares of Delta Aircraft Leasing Limited
(“D.A.L.”), a Cayman Islands registered company that owns, through an owner
trust, an Airbus A340-313X aircraft (“Aircraft 126”). Aircraft 126 was subject
to a lease with Cathay at the time of purchase, which was consummated during
March 2002. The lease was initially scheduled to expire in March 2006, but has
been extended to July 1, 2011. The Partnership and Fund Nine each have a 50%
ownership interest in ICON 126. ICON 126 consolidates the financial position and
operations of D.A.L. in its consolidated financial statements.





Effective
March 27, 2006, in connection with the lease extension, approximately
$52,850,000 of non-recourse debt associated with Aircraft 126 was refinanced
after applying $583,000 from a reserve account established in connection with
the original lease with Cathay. The refinanced non-recourse debt matures on July
1, 2011 and requires a balloon payment of approximately $33,000,000 at maturity.
The interest rate of the debt is fixed at 6.104%.





ICON 126 had a commitment with respect
to Aircraft 126 to pay certain maintenance costs, which were incurred on or
prior to March 27, 2006. ICON 126 established a maintenance reserve cash account
under the original lease to pay for its portion of these costs. This account was
funded by free cash from the lease payments in accordance with the terms of the
original lease. During 2006, ICON 126 received $182,021 of capital contributions
from both of its members, of which $50,000 was for amounts relating to the
maintenance reserve cash account and $132,021 was related to costs paid by its
members relating to the refinancing of the non-recourse debt. During September
2006, approximately $1,153,000 was paid for maintenance costs. The maintenance
account for Aircraft 126 was
cross-collateralized with the maintenance account for ICON 123 pursuant to two
first priority charge on cash deposit agreements entered into in connection with
the purchase of Aircraft 123. Under the terms of these agreements, ICON 126 was
required to pay on behalf of ICON 123 any maintenance cost shortfalls incurred
by ICON 123. On January 30, 2007, ICON 126 paid approximately $143,000 in
maintenance costs from its maintenance account on behalf of ICON
123.  The maintenance account and related security interests were then
terminated.   ICON 123 will reimburse ICON 126 when the aircraft
is sold. The excess cash remaining in ICON 126’s account ofapproximately
$97,000 includes interest accreted in the amount of approximately $38,000
through December 31, 2009.





51
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (5)
                  Investments
      in Joint Ventures – continued


Each of
ICON 123 and ICON 126 is a party to a residual sharing agreement with
respect to its aircraft. See Note 12 – Commitments and Contingencies and
Off-Balance Sheet Transactions.





In light of unprecedented high fuel
prices during 2008 and the related impact on the airline industry, the General
Partner reviewed the investment in Aircraft 126 as of June 30, 2008. In
accordance with the accounting pronouncement that accounts for the
impairment or disposal of long-lived assets and based upon changes in the
airline industry, the General Partner determined that Aircraft 126 was
impaired.





Based on the General Partner’s review,
the carrying value of Aircraft 126 exceeded the expected undiscounted future
cash flows of Aircraft 126 and, as a result, the Partnership recorded an
impairment charge representing the difference between the carrying value and the
expected discounted future cash flows of Aircraft 126.  The expected
discounted future cash flows of Aircraft 126 were determined using a market
approach, a recent appraisal for Aircraft 126 and recent sales of similar
aircraft, as well as other factors, including those discussed below. As a
result, as of June 30, 2008, ICON 126 recorded an impairment loss on Aircraft
126 of approximately $3,900,000, of which the Partnership’s share was
approximately $1,950,000.





The following factors in 2008, among
others, indicated that the full carrying value of Aircraft 126 might not be
recoverable: (i) indications that lenders were willing to finance less of the
acquisition cost of four-engine aircraft, which increased with each dollar rise
of the price of fuel, thereby undermining the carrying value expectations of
such aircraft; (ii) the rising cost of fuel was increasing the operating costs
of four-engine aircraft and similar capacity twin-engine aircraft, thereby
making such aircraft less attractive investments at the time and thereby
depressing the market for Aircraft 126; and (iii) the likelihood of aircraft
operators switching to more efficient aircraft, thereby depressing the market
for Aircraft 126.





ICON
Aircraft 46835 LLC





During
December 2002, the Partnership and Fund Nine formed a joint venture, ICON
Aircraft 46835 LLC (“Aircraft 46835”), in which the Partnership and Fund Nine
had ownership interests of 15% and 85%, respectively. Aircraft 46835 was formed
for the purpose of acquiring a McDonnell Douglas DC10-30F aircraft on lease to
FedEx. On December 27, 2002, the joint venture acquired the aircraft for
approximately $25,292,000, including approximately $22,292,000 of non-recourse
debt. The Partnership’s portion of the cash purchase price was approximately
$450,000. On March 30, 2007, Aircraft 46835 sold the aircraft to FedEx for
$4,260,000 and recognized a loss on the sale of approximately $640,000, of which
the Partnership’s portion was approximately $96,000.





52
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (6)
                    Investment
      in Option


During the fourth quarter of 2001, the
Partnership invested $2,100,000 in an option to purchase a 1994 Boeing 737-524
aircraft, together with two engines (the “Boeing Aircraft and Engines”), on
lease to a United States based commercial airline.  The purchase price
of the option included a $400,000 promissory note, which was to mature in May
2012. On August 29, 2003, the promissory note and all accrued interest were paid
in full. At December 31, 2006, the General Partner determined that the
Partnership’s investment in the option to purchase the Boeing Aircraft and
Engines was impaired and, accordingly, the Partnership recognized an impairment
loss of $2,100,000, which reduced the carrying value of the option to zero. The
General Partner’s decision was based upon the fact that the option was currently
out of the money and the probability that the Partnership would not exercise the
option, which expires May 5, 2012.





(7)
            Non-Recourse
      Long-Term Debt





On March
14, 2006, the Partnership entered into a lease extension with Cathay with
respect to Aircraft 123, which extended the lease to October 1, 2011. Effective
March 14, 2006, in connection with the Cathay lease extension, the outstanding
non-recourse debt of approximately $52,850,000 was refinanced after applying
$282,000 from a reserve account established in connection with the original lease
with Cathay. The interest rate of the refinanced non-recourse long-term debt is
fixed at 6.1095%.





The Partnership had another
non-recourse long-term debt obligation in connection with Aircraft 47820. The
debt accrued interest at 4.035% per year. The final lease payment of
approximately $2,900,000 was paid to the lender of the non-recourse long-term
debt upon the sale of the McDonnell Douglas Aircraft and Engines on March 30,
2007, satisfying all remaining debt obligations.





As of
December 31, 2009 and 2008, the Partnership had net debt financing costs of
$52,954 and $86,364, respectively.  For the years ended December 31,
2009, 2008 and 2007, the Partnership recognized amortization expense of $33,411,
$69,112 and $11,948, respectively.





The
aggregate maturities of non-recourse long-term debt, including the effects of
refinancing discussed above, consisted of the following at December 31,
2009:





For
      the year ending December 31, 2010
            
            $
            3,826,797For
      the year ending December 31, 2011
            
            
            34,490,236$
            38,317,033




(8)
                Revolving
      Line of Credit, Recourse


The Partnership and certain entities
managed by the General Partner, Fund Nine, ICON Income Fund Ten, LLC (“Fund
Ten”), ICON Leasing Fund Eleven, LLC (“Fund Eleven”), ICON Leasing Fund Twelve,
LLC (“Fund Twelve”) and ICON Equipment and Corporate Infrastructure Fund
Fourteen, L.P. (“Fund Fourteen” and, together with the Partnership, Fund Nine,
Fund Ten, Fund Eleven and Fund Twelve, the “Borrowers”), are parties to a
Commercial Loan Agreement, as amended (the “Loan Agreement”), with California
Bank & Trust (“CB&T”). The Loan Agreement provides for a revolving line
of credit of up to $30,000,000 pursuant to a senior secured revolving loan
facility (the “Facility”), which is secured by all assets of the Borrowers not
subject to a first priority lien, as defined in the Loan Agreement. Each of the
Borrowers is jointly and severally liable for all amounts borrowed under the
Facility. At December 31, 2009, no amounts were accrued related to the
Partnership’s joint and several obligations under the Facility. Amounts
available under the Facility are subject to a borrowing base that is determined,
subject to certain limitations, on the present value of the future receivables
under certain lease agreements and loans in which the Borrowers have a
beneficial interest.







53
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (8)
                      Revolving
      Line of Credit, Recourse -
continued


The Facility expires on June 30, 2011
and the Borrowers may request a one year extension to the revolving line of
credit within 390 days of the then-current expiration date, but CB&T has no
obligation to extend. The interest rate for general advances under the Facility
is CB&T’s prime rate and the interest rate on up to five separate non-prime
rate advances that are permitted to be made under the Facility is the rate
at which U.S. dollar deposits can be acquired by CB&T in the London
Interbank Eurocurrency Market plus 2.5% per year, provided that neither interest
rate is permitted to be less than 4.0% per year. The interest rate at December
31, 2009 was 4.0%.  In addition, the Borrowers are obligated to pay a
quarterly commitment fee of 0.50% on unused commitments under the
Facility.





The Borrowers are also parties to a
Contribution Agreement (the “Contribution Agreement”) that provides that,
in the event that a Borrower pays an amount in excess of its share of total
obligations under the Facility, the other Borrowers will contribute to such
Borrower so that the aggregate amount paid by each Borrower reflects its
allocable share of the aggregate obligations under the Facility.





Aggregate borrowings by all Borrowers
under the Facility amounted to $2,360,000 at December 31, 2009. The Partnership
had no borrowings outstanding under the Facility as of such date.  The
balances of $100,000 and $2,260,000 were borrowed by Fund Ten and Fund Eleven,
respectively.  As of March 24, 2010, Fund Ten and Fund Eleven had
outstanding borrowings under the Facility of $700,000 and $0,
respectively.




The
Borrowers were in compliance with all covenants under the Loan Agreement at
December 31, 2009.  As of such date, no amounts were due to or
payable by the Partnership under the Contribution Agreement.


(9)
                Transactions
      with Related Parties


In
accordance with the terms of the LP Agreement, the Partnership paid the General
Partner (i) management fees ranging from 1% to 5% based on a percentage of the
rentals recognized either directly
by the Partnership or through its joint ventures and (ii) acquisition fees,
through the end of the reinvestment period, of 3% of the purchase price of the
Partnership’s investments.  In addition, the General
Partner was reimbursed for administrative expenses incurred in connection with
the Partnership’s operations.  The General Partner also has a 1%
interest in the Partnership’s profits, losses, cash distributions and
liquidation proceeds.





The General Partner performs certain
services relating to the management of the Partnership’s equipment leasing and
other financing activities.  Such services include, but are not
limited to, the collection of lease payments from the lessees of the equipment,
re-leasing services in connection with equipment which is off-lease, inspections
of the equipment, liaising with and general supervision of lessees to ensure
that the equipment is being properly operated and maintained, monitoring
performance by the lessees of their obligations under the leases and the payment
of operating expenses.





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




54
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
  (9)
                        Transactions
      with Related Parties -
continued





Although
the General Partner continues to provide these services, effective May 1, 2006,
the General Partner waived its rights to all future management fees and
administrative expense reimbursements.





There
were no charges during the years ended December 31, 2009, 2008 and 2007 since
the fees were waived effective May 1, 2006. However, if the charges had
been made the total management fees for the years ended December 31, 2009,
2008 and 2007 would have been approximately $345,000, $358,000 and $466,000,
respectively. If the charges had been made the total administrative
expense reimbursements for the years ended December 31, 2009, 2008 and 2007
would have been approximately $285,000, $315,000 and $401,000,
respectively.





The
Partnership paid distributions to the General Partner of $8,077, $18,455 and
$43,519 for the years ended December 31, 2009, 2008 and 2007, respectively.
Additionally, the General Partner’s interest in the Partnership’s net income
(loss) was $146, $(64,536) and $11,470 for the years ended December 31, 2009,
2008 and 2007, respectively.





In January 2007, ICON 123 repaid
outstanding maintenance costs of approximately $1,546,000 with the balance in
its maintenance reserve cash account of approximately $1,403,000. The remaining
balance of approximately $143,000 was borrowed from ICON 126 and will be
reimbursed when Aircraft 123 is sold. At December 31, 2009, ICON 126’s balance
in its reserve account was approximately $97,000 inclusive of accreted
interest.


(10)
                Fair
      Value Measurements


Fair value information with respect to
the Partnership's leased assets and liabilities is not separately provided since
(i) the current accounting pronouncements do not require fair value disclosures
of lease arrangements and (ii) the carrying value of financial assets, other
than lease-related investments, and the recorded value of recourse debt
approximate fair value due to their short-term maturities and variable interest
rates. The fair value of the Partnership's fixed rate note payable is estimated
using a discounted cash flow analysis, based on the current incremental
borrowing rate of the most recent borrowings by the Partnership and the other
programs sponsored by the General Partner.




Carrying Amount
            
            
            Fair ValueFixed
      rate non-recourse long-term debt
            
            $
            38,317,033
            
            
            $
            39,502,264





(11)
            Concentrations
      of Risk





The
Partnership's cash and cash equivalents are held principally at two financial
institutions and at times may exceed insured limits. The Partnership has placed
these funds in high quality institutions in order to minimize the risk of loss
relating to exceeding insured limits.




55
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009


(11)
            Concentrations
      of Risk - continued





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 may be exposed to business and economic risk.
Although the Partnership does not currently foresee a concentrated
credit risk associated with these lessees, lease payments are dependent upon the
financial stability of the lessees.





The
Partnership has approximately 88.2% of its assets and approximately 97.5% of its
liabilities concentrated in the airline industry at December 31, 2009 and had
approximately 85.5% of its assets and approximately 95.2% of its liabilities
concentrated in the airline industry at December 31, 2008.





As
of December 31, 2009, 2008 and 2007, the Partnership had two lessees that
accounted for approximately 100%, 100% and 85.8%, respectively, of its rental
income and finance income.





(12)
            Commitments
      and Contingencies and Off-Balance Sheet
  Transactions




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





ICON 123
had a commitment with respect to Aircraft 123 to pay certain maintenance costs,
which were incurred on or prior to March 14, 2006. ICON 123 had
established, under the original lease, a maintenance
reserve cash account to pay for its portion of these costs. For the year ended
December 31, 2006, the Partnership accrued approximately $1,157,000 relating to
the maintenance costs. In January
2007, ICON 123 repaid outstanding maintenance costs of approximately
$1,546,000.  The balance in its maintenance reserve cash account was
approximately $1,403,000. As discussed in Note 9 above, approximately $143,000
of the remaining costs were borrowed and will be repaid when Aircraft 123 is
sold at the end of the lease.





Each of
ICON 123 and ICON 126 is a party to a residual sharing agreement (the
“Airtrade Residual Sharing Agreement”) with Airtrade Capital Corp. (“Airtrade”).
Pursuant to the terms of the Airtrade Residual Sharing Agreement, all proceeds
received in connection with the sale or lease renewal of Aircraft 123 or
Aircraft 126 in excess of $8,500,000 of the applicable loan balance associated
with each aircraft will be allocated 55% to ICON 123 or 126, as applicable, and
45% to Airtrade.




No cash
distributions were received from these rights in the three years ended December
31, 2009.




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




At
December 31, 2009, the Partnership had non-recourse debt obligations
outstanding. The lender has a security interest in the equipment related to each
non-recourse debt instrument and an assignment of the rental payments under the
lease associated with the equipment. In such cases, the lender is being paid
directly by the lessee. If the lessee defaults on the lease, the equipment would
be returned to the lender in extinguishment of the non-recourse debt. At
December 31, 2009, the Partnership’s outstanding non-recourse debt obligations
were $38,317,033. The Partnership is a party to the Facility, as discussed in
Note 8 above. The Partnership had no borrowings under this Facility at December
31, 2009.




56
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009




(13)
            Geographic
      Information





Geographic
information for revenue, based on the country of origin, and long-lived assets,
which includes finance leases, operating leases (net of accumulated
depreciation) and investments in joint ventures, were as follows:





Year Ended December 31,
2009UnitedStates
            
            
            Asia
            
            
            TotalRevenue:Rental
      income
            
            $
            -
            
            
            $
            6,376,364
            
            
            $
            6,376,364Finance
      income
            
            $
            531,964
            
            
            $
            -
            
            
            $
            531,964Loss
      from investments in joint ventures
            
            $
            -
            
            
            $
            (66,406
            )
            
            $
            (66,406
            )At December 31, 2009UnitedStates
            
            
            Asia
            
            
            TotalLong-lived
      assets:Net
      investment in finance leases
            
            $
            2,911,511
            
            
            $
            -
            
            
            $
            2,911,511Equipment
      on operating leases, net
            
            $
            -
            
            
            $
            41,677,124
            
            
            $
            41,677,124Investments
      in joint ventures
            
            $
            -
            
            
            $
            1,200,986
            
            
            $
            1,200,986Year Ended December 31,
2008UnitedStates
            
            
            Asia
            
            
            TotalRevenue:Rental
      income
            
            $
            -
            
            
            $
            6,376,364
            
            
            $
            6,376,364Finance
      income
            
            $
            790,254
            
            
            $
            -
            
            
            $
            790,254Loss
      from investments in joint ventures
            
            $
            -
            
            
            $
            (2,168,613
            )
            
            $
            (2,168,613
            )At December 31, 2008UnitedStates
            
            
            Asia
            
            
            TotalLong-lived
      assets:Net
      investment in finance leases
            
            $
            4,920,686
            
            
            $
            -
            
            
            $
            4,920,686Equipment
      on operating leases, net
            
            $
            -
            
            
            $
            45,495,306
            
            
            $
            45,495,306Investments
      in joint ventures
            
            $
            -
            
            
            $
            1,267,392
            
            
            $
            1,267,392




(14)
            Unit
      Redemptions





The
Partnership did not redeem any Units during the year ended December 31, 2009.
The Partnership redeemed 150 and 1,000 Units during the years ended December 31,
2008 and 2007, respectively. The redemption amounts are calculated according to
a specified redemption formula pursuant to the LP Agreement. Redeemed Units have
no voting rights and do not share in distributions. The LP Agreement limits the
number of Units that can be redeemed in any one year and redeemed Units may not
be reissued. Redeemed Units are accounted for as a reduction of partners'
equity.





57
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009


(15)
            Selected
      Quarterly Financial Data





The
following table is a summary of selected financial data, by
quarter:





(unaudited)Quarters Ended in 2009
            
            
            Year
      EndedMarch 31,
            
            
            June 30,
            
            
            September 30,
            
            
            December 31,
            
            
            December 31, 2009Total
      revenue
            
            $
            1,733,718
            
            
            $
            1,714,350
            
            
            $
            1,705,015
            
            
            $
            1,688,839
            
            
            $
            6,841,922Net
      (loss) income attributable to Fund Eight B allocable to limited
      partners
            
            $
            (11,306
            )
            
            $
            (55,900
            )
            
            $
            39,845
            
            
            $
            41,794
            
            
            $
            14,433Weighted
      average number of units oflimited
      partnership interests outstanding
            
            
            740,380
            
            
            
            740,380
            
            
            
            740,380
            
            
            
            740,380
            
            
            $
            740,380Net
      (loss) income attributable to Fund Eight B per weighted
      averageunit
      of limited partnership interests outstanding
            
            $
            (0.02
            )
            
            $
            (0.08
            )
            
            $
            0.05
            
            
            $
            0.07
            
            
            $
            0.02(unaudited)Quarters Ended in 2008
            
            
            Year
      EndedMarch 31,
            
            
            June 30,
            
            
            September 30,
            
            
            December 31,
            
            
            December 31, 2008Total
      revenue
            
            $
            1,772,581
            
            
            $
            (209,709
            )
            
            $
            1,732,941
            
            
            $
            1,702,597
            
            
            $
            4,998,410Net
      loss attributable to Fund Eight B allocable to limited
      partners
            
            $
            (256,691
            )
            
            $
            (5,817,161
            )
            
            $
            (166,661
            )
            
            $
            (148,515
            )
            
            $
            (6,389,028
            )Weighted
      average number of units oflimited
      partnership interests outstanding
            
            
            740,503
            
            
            
            740,380
            
            
            
            740,380
            
            
            
            740,380
            
            
            
            740,411Net
      loss attributable to Fund Eight B per weighted averageunit
      of limited partnership interests outstanding
            
            $
            (0.35
            )
            
            $
            (7.86
            )
            
            $
            (0.23
            )
            
            $
            (0.19
            )
            
            $
            (8.63
            )


(16)
              Income
      Tax Reconciliation
(unaudited)





No
provision for income taxes has been recorded by the Partnership since the
liability for such taxes is the responsibility 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 taxes of the partners.





At
December 31, 2009 and 2008, the partners’ equity included in the consolidated
financial statements totaled $7,951,368 and $8,744,478, respectively, compared
to the partners’ equity for federal income tax purposes of $21,649,736 and
$22,237,949, respectively. The difference arises primarily from sales and
offering expenses reported as a reduction in the limited partners’ capital
accounts for financial reporting purposes, but not for federal income tax
reporting purposes, and differences in depreciation and amortization between
financial reporting purposes and federal income tax purposes.




58
 Table of Contents
 ICON
Income Fund Eight B L.P.
 (A
Delaware Limited Partnership)
 Notes to
Consolidated Financial Statements
 December
31, 2009
 (16)
              Income
      Tax Reconciliation (unaudited) –
  continued




The
following table reconciles net income (loss) attributable to Fund Eight B for
financial statement reporting purposes to the net income (loss) attributable to
Fund Eight B for federal income tax purposes, for the years ended December 31,
2009, 2008 and 2007:





2009
            
            
            2008
            
            
            2007Net
      income (loss) attributable to Fund Eight B per consolidated financial
      statements
            
            $
            14,579
            
            
            $
            (6,453,564
            )
            
            $
            1,146,979Adjustments
      for direct finance lease
            
            
            -
            
            
            
            -
            
            
            
            1,470,400Deferred
      income (loss)
            
            
            163,636
            
            
            
            (7,473,035
            )
            
            
            -Depreciation
      and impairments
            
            
            -
            
            
            
            8,386,304
            
            
            
            6,249,533Tax
      income (loss) from consolidated joint venture
            
            
            70,836
            
            
            
            (2,591,796
            )
            
            
            (8,122,961
            )(Loss)
      gain on sale of equipment
            
            
            -
            
            
            
            (73,810
            )
            
            
            5,456,803Other
      items
            
            
            (29,574
            )
            
            
            3,075,985
            
            
            
            (954,177
            )Net
      income (loss) attributable to Fund Eight B for federal income tax
      purposes
            
            $
            219,477
            
            
            $
            (5,129,916
            )
            
            $
            5,246,577






59
 Table of Contents


Item 9.   Changes in and Disagreements With
Accountants on Accounting and Financial Disclosure





None.





Item 9A(T).  Controls and Procedures





Evaluation of disclosure controls
and procedures





In
connection with the preparation of this Annual Report on Form 10-K for the
period ended December 31, 2009, as well as the financial statements for our
General Partner, our General Partner carried out an evaluation, under the
supervision and with the participation of the management of our General Partner,
including its Co-Chief Executive Officers and Chief Financial Officer, of the
effectiveness of the design and operation of our General Partner’s disclosure
controls and procedures as of the end of the period covered by this report
pursuant to the Securities Exchange Act of 1934, as amended. Based on the
foregoing evaluation, the Co-Chief Executive Officers and the Chief Financial
Officer concluded that our General Partner’s disclosure controls and procedures
were effective.





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





Our
General Partner’s Co-Chief Executive Officers and Chief Financial Officer have
determined that no weakness in disclosure controls and procedures had any
material effect on the accuracy and completeness of our financial reporting and
disclosure included in this Annual Report on Form 10-K.





Evaluation
of internal control over financial reporting





Our
General Partner is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities
Exchange Act of 1934, as amended, as a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles and includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of
the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of the company's assets that could have a material effect on the financial
statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risks that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.





Our
General Partner assessed the effectiveness of its internal control over
financial reporting as of December 31, 2009. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in "Internal Control —
Integrated Framework."





Based on
its assessment, our General Partner believes that, as of December 31, 2009, its
internal control over financial reporting is effective.





This
Annual Report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting. Our General
Partner’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only our General Partner’s report in this
Annual Report.





Item 9B. Other Information





Not
applicable.







60
 Table of Contents


PART III





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





Our
General Partner, ICON Capital Corp., a Delaware corporation (“ICON”), was formed
in 1985.  Our General Partner's principal offices are located at 100
Fifth Avenue, 4th Floor, New York, New York 10011, and its telephone number is
(212) 418-4700.





In
addition to the primary services related to our making and disposing of
investments, our General Partner provides services relating to the day-to-day
management of our equipment. These services include collecting payments due from
lessees, remarketing equipment that is off-lease, inspecting equipment, serving
as a liaison with lessees, supervising equipment maintenance, and monitoring
performance by lessees of their obligations, including payment of rent and all
operating expenses.




Name
            
            Age
            
            TitleMichael
      A. Reisner
            
            39
            
            Co-Chairman,
      Co-Chief Executive Officer and Co-PresidentMark
      Gatto
            
            37
            
            Co-Chairman,
      Co-Chief Executive Officer and Co-PresidentJoel
      S. Kress
            
            37
            
            Executive
      Vice President — Business and Legal AffairsAnthony
      J. Branca
            
            41
            
            Senior
      Vice President and Chief Financial OfficerH.
      Daniel Kramer
            
            58
            
            Senior
      Vice President and Chief Marketing OfficerDavid
      J. Verlizzo
            
            37
            
            Senior
      Vice President — Business and Legal AffairsCraig
      A. Jackson
            
            51
            
            Senior
      Vice President — Remarketing and Asset ManagementHarry
      Giovani
            
            35
            
            Senior
      Vice President — Credit




Michael A.
Reisner, Co-Chairman, Co-Chief Executive Officer and Co-President, joined
ICON in 2001. Mr. Reisner has been a Director since May 2007.  Mr.
Reisner was formerly Chief Financial Officer from January 2007 through April
2008.  Mr. Reisner was also formerly Executive Vice President –
Acquisitions from February 2006 through January 2007.  Mr. Reisner was
Senior Vice President and General Counsel from January 2004 through January
2006.  Mr. Reisner was 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.




Mark Gatto, Co-Chairman,
Co-Chief Executive Officer and Co-President, has been a Director since May
2007.  Mr. Gatto originally joined ICON in 1999 and was previously
Executive Vice President and Chief Acquisitions Officer from May 2007 to January
2008.  Mr. Gatto was formerly Executive Vice President – Business
Development from February 2006 to May 2007 and Associate General Counsel from
November 1999 through October 2000.  Before serving as Associate
General Counsel, Mr. Gatto was an attorney with Cella & Goldstein in New
Jersey, concentrating on commercial transactions and general litigation matters.
From November 2000 to June 2003, Mr. Gatto was Director of Player Licensing for
the Topps Company and, in July 2003, he co-founded ForSport Enterprises, LLC, a
specialty business consulting firm in New York City, and served as its managing
partner before re-joining ICON in April 2005.  Mr. Gatto received an
M.B.A. from the W. Paul Stillman School of Business at Seton Hall University, a
J.D. from Seton Hall University School of Law, and a B.S. from Montclair State
University.


Joel S.
Kress, Executive Vice President – Business and Legal Affairs, started his
tenure with ICON in August 2005 as Vice President and Associate General
Counsel.  In February 2006, he was promoted to Senior Vice President
and General Counsel, and in May 2007, he was promoted to his current
position.  Previously, from September 2001 to July 2005, Mr. Kress was
an attorney with Fried, Frank, Harris, Shriver & Jacobson LLP in New York
and London, England, concentrating on mergers and acquisitions, corporate
finance and financing transactions (including debt and equity issuances) and
private equity investments.  Mr. Kress received a J.D. from Boston
University School of Law and a B.A. from Connecticut College.






61
 Table of Contents





Anthony J.
Brancahas
beenChief
Financial Officer since May 2008.  Mr. Branca was formerly Senior Vice
President – Accounting and Finance from January 2007 through April 2008.
Mr. Branca was Director of Corporate Reporting & Analysis for The
Nielsen Company (formerly VNU) from March 2004 until January 2007, was
International Controller of an internet affiliate from May 2002 to March 2004
and held various other management positions with The Nielsen Company from July
1997 through May 2002.  Previously, from 1995 through 1997,
Mr. Branca was employed at Fortune Brands.  Mr. Branca started
his career as an auditor with KPMG Peat Marwick in
1991.  Mr. Branca received a B.B.A. from Pace
University.





H. Daniel
Kramer, Senior Vice President and Chief Marketing Officer, joined ICON in
February 2008.  Mr. Kramer has more than 30 years of equipment leasing
and structured finance experience. Most recently, from October 2006 to February
2008, Mr. Kramer was part of CIT Commercial Finance, Equipment Finance Division,
offering equipment leasing and financing solutions to complement public and
private companies’ capital structure.  Prior to that role, from
February 2003 to October 2006, Mr. Kramer was Senior Vice President, National
Sales Manager with GMAC Commercial Equipment Finance, leading a direct sales
organizational team; from 2001 to 2003, Senior Vice President and National Sales
Manager for ORIX Commercial Structured Equipment Finance division; and President
of Kramer, Clark & Company for 12 years, providing financial consulting
services to private and public companies, including structuring and syndicating
private placements, equipment leasing and recapitalizations.  Mr.
Kramer received a B.S. from Glassboro State College.





David J.
Verlizzo has been Senior Vice President – Business and Legal Affairs
since July 2007.  Mr. Verlizzo was formerly Vice President and Deputy
General Counsel from February 2006 to July 2007 and was Assistant Vice President
and Associate General Counsel from May 2005 until January
2006.  Previously, from May 2001 to May 2005, Mr. Verlizzo was an
attorney with Cohen Tauber Spievack & Wagner LLP in New York,
concentrating on public and private securities offerings, securities law
compliance and corporate and commercial
transactions.  Mr. Verlizzo received a J.D. from Hofstra
University School of Law and a B.S. from The University of
Scranton.





Craig A.
Jackson has been Senior Vice President – Remarketing and Asset Management
since March 2008. Mr. Jackson was previously Vice President – Remarketing and
Portfolio Management from February 2006 through March 2008. Previously, from
October 2001 to February 2006, Mr. Jackson was President and founder of
Remarketing Services, Inc., a transportation equipment remarketing company.
Prior to 2001, Mr. Jackson served as Vice President of Remarketing and Vice
President of Operations for Chancellor Fleet Corporation (an equipment leasing
company).  Mr. Jackson received a B.A. from Wilkes
University.





Harry
Giovani, Senior Vice President – Credit, joined ICON in April 2008. Most
recently, from March 2007 to January 2008, Mr. Giovani was Vice President for
FirstLight Financial Corporation, responsible for underwriting and syndicating
middle market leveraged loan transactions. Previously, from April 2004 to March
2007, he worked at GE Commercial Finance, initially as an Assistant Vice
President in the Intermediary Group, where he was responsible for executing
middle market transactions in a number of industries including manufacturing,
steel, paper, pharmaceutical, technology, chemicals and automotive, and later as
a Vice President in the Industrial Project Finance Group, where he originated
highly structured project finance transactions. Mr. Giovani started his career
in 1997 at Citigroup’s Citicorp Securities and CitiCapital divisions, where he
spent six years in a variety of roles of increasing responsibility including
underwriting, origination and strategic marketing/business development. Mr.
Giovani graduated from Cornell University in 1996 with a B.S. in
Finance.







62
 Table of Contents





Code
of Ethics




Our
General Partner, on our behalf, has adopted a code of ethics for its Co-Chief
Executive Officers and Chief Financial Officer. The Code of Ethics is available
free of charge by requesting it in writing from our General Partner. Our General
Partner's address is 100 Fifth Avenue, 4th
Floor, New York, New York 10011.





Item 11. Executive Compensation





We have
no directors or officers.





Effective
May 1, 2006, our General Partner waived its rights to all future management fees
and administrative expense reimbursements.  Our General Partner and
its affiliates were not paid or accrued any compensation or reimbursement for
costs and expenses for the years ended December 31, 2009, 2008 and
2007.





Our General Partner also
has a 1% interest in our profits, losses, cash distributions and liquidation
proceeds. We paid distributions to our General Partner of $8,077, $18,455 and
$­­­­43,519 for the years ended December 31, 2009, 2008 and
2007, respectively. Our General Partner’s interest in our net income (loss) was
$146, $(64,536) and $11,470 for the years ended December 31, 2009, 2008 and
2007, respectively.







Item 12. Security Ownership of Certain Beneficial Owners and the
General Partner and Related Security Holder Matters


(a)
            We
      do not have any securities authorized for issuance under any equity
      compensation plan. 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 19, 2010, no directors or officers of our General Partner own any
      of our equity securities.





(c)
            Neither
      we nor our General Partner are aware of any arrangements with respect to
      our securities, the operation of which may at a subsequent date result in
      a change of control of us.





Item 13. Certain Relationships and Related Transactions, and
Director Independence





See “Item
11. Executive Compensation” for a discussion of our related party transactions.
See Notes 5, 9 and 12 to our consolidated financial statements for a discussion
of our investments in joint ventures and transactions with related
parties.





Because
we are not listed on any national securities exchange or inter-dealer quotation
system, we have elected to use the Nasdaq Stock Market’s definition of
“independent director” in evaluating whether any of our General Partner’s
directors are independent.  Under this definition, the board of
directors of our General Partner has determined that our General Partner does
not have any independent directors, nor are we required to have
any.





Item 14. Principal Accounting Fees and Services




During
the years ended December 31, 2009 and 2008, 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.





The
following table presents the fees for both audit and non-audit services rendered
by Ernst & Young LLP for the years ended December 31, 2009 and
2008:





Principal
      Audit Firm - Ernst & Young LLP2009
            
            
            2008Audit
      fees
            
            $
            187,000
            
            
            $
            191,038Tax
      fees
            
            
            62,863
            
            
            
            56,750$
            249,863
            
            
            $
            247,788







63
 Table of Contents








PART IV




Item 15. Exhibits, Financial Statement Schedules





(a)
                            1.
      Financial StatementsSee
      index to financial statements included as Item 8 to this Annual Report on
      Form 10-K hereof.2. Financial
      Statement SchedulesSchedules not listed above have been omitted because they are not
      applicable or the information required to be set forth therein is included
      in the financial statements or notes
  thereto.3.
      Exhibits:3.1    Amended
      and Restated Agreement of Limited Partnership of Registrant (Incorporated
      by reference to Exhibit 4.1 to Registrant’s Post-Effective Amendment No. 6
      to Form S-1 Registration Statement No. 333-54011 dated May 19,
      2000).4.1    Certificate
      of Limited Partnership of Registrant (Incorporated by reference to Exhibit
      4.3 to Registrant’s Post-Effective Amendment No. 6 to Form S-1
      Registration Statement No. 333-54011 dated May 19,
      2000).10.1Commercial
      Loan Agreement, by and between California Bank & Trust, ICON Income
      Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC
      and ICON Leasing Fund Eleven, LLC, dated August 31, 2005 (Incorporated by
      reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated
      August 31, 2005).10.2Loan
      Modification Agreement, by and between California Bank & Trust and
      ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income
      Fund Ten, LLC and ICON Leasing Fund Eleven, LLC, dated December 26, 2006
      (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report
      on Form 8-K dated December 26, 2006).10.3  
      Loan
      Modification Agreement, by and between California Bank & Trust and
      ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON
      Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC and ICON Leasing Fund
      Twelve, LLC, dated June 20, 2007 (Incorporated by reference to Exhibit
      10.3 to Registrant’s Quarterly Report on Form 10-Q for the quarterly
      period ended September 30, 2009, filed November 5,
      2009).10.4  
      Third
      Loan Modification Agreement, by and between California Bank & Trust
      and ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income
      Fund Ten, LLC, ICON Leasing Fund Eleven, LLC and ICON Leasing Fund Twelve,
      LLC, dated as of May 1, 2008 (Incorporated by reference to Exhibit 10.4 to
      Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended
      March 31, 2008, filed May 15,
  2008).10.5  
      Fourth
      Loan Modification Agreement, by and between California Bank & Trust
      and ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income
      Fund Ten, LLC, ICON Leasing Fund Eleven, LLC, ICON Leasing Fund Twelve,
      LLC and ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P.,
      dated August 12, 2009 (Incorporated by reference to Exhibit 10.1 to
      Registrant’s Current Report on Form 8-K dated August 12,
      2009).31.1  Rule
      13a-14(a)/15d-14(a) Certification of Co-Chief Executive
      Officer.31.2  Rule
      13a-14(a)/15d-14(a) Certification of Co-Chief Executive
      Officer.31.3  Rule
      13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer.32.1  Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. §
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2  Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. §
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.3  Certification
      of Chief Financial Officer pursuant to 18 U.S.C. §
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.(b)
                            1.
      Consolidated Financial Statements of ICON Aircraft 126
  LLC.


64
 Table of Contents
   ICON
Aircraft 126 LLC
 (A
Delaware Limited Liability Company)
 
 
 Table of
Contents


PageReport of Independent Registered Public Accounting
      Firm
                66Consolidated Balance Sheets
                67Consolidated Statements of
Operations
                68Consolidated Statements of Changes in
      Members' Equity
                69Consolidated Statements of Cash Flows
                70Notes to Consolidated Financial
      Statements
                71


65
 Table of Contents
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
 
 The
Members
 ICON
Aircraft 126 LLC
 
 We have
audited the accompanying balance sheet of ICON Aircraft 126 LLC (the “Company”)
as of December 31, 2008, and the related statements of operations, changes in
members’ equity, and cash flows for each of the two years in the period ended
December 31, 2008. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
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. We were not engaged to perform an
audit of the Company's internal control over financial reporting. Our audits
included 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
Company'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, assessing
the accounting principles used and significant estimates made by management, and
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 ICON Aircraft 126 LLC at December
31, 2008, and the results of its operations and its cash flows for each of the
two years in the period ended December 31, 2008 in conformity with U.S.
generally accepted accounting principles.
 
 
 /s/ Ernst & Young,
LLP
 
 March 24,
2009
 New York,
New York
 
  66
 Table of Contents
  
 ICON Aircraft 126 LLC(A
      Delaware Limited Liability Company)Consolidated
      Balance SheetsAssetsDecember 31,2009
              
              
              2008(unaudited)Leased
      equipment at cost (less accumulated depreciationof
      $36,431,244 and $28,543,495, respectively)
              
              $
              41,092,340
              
              
              $
              45,080,089Other
      non-current assets, net
              
              
              278,073
              
              
              
              304,823Total
      Assets
              
              $
              41,370,413
              
              
              $
              45,384,912Liabilities
      and Members’ EquityCurrent
      liabilitiesCurrent
      portion of non-recourse long-term debt
              
              $
              3,684,449
              
              
              $
              4,044,096Deferred
      rental income
              
              
              642,857
              
              
              
              471,428Accrued
      interest
              
              
              219,676
              
              
              
              228,697Total
      current liabilities
              
              
              4,546,982
              
              
              
              4,744,221Non-current
      liabilitiesNon-recourse
      long-term debt, less current portion
              
              
              34,421,461
              
              
              
              38,105,910Total
      Liabilities
              
              
              38,968,443
              
              
              
              42,850,131Commitments
      and contingenciesMembers’
      Equity
              
              
              2,401,970
              
              
              
              2,534,781Total
      Liabilities and Members’ Equity
              
              $
              41,370,413
              
              
              $
              45,384,912
 
 
  67
 Table of Contents
 
  ICON Aircraft 126 LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of OperationsYears Ended December 31,2009
              
              
              2008
              
              
              2007(unaudited)Revenue:Rental
      income
              
              $
              6,368,571
              
              
              $
              6,368,571
              
              
              $
              6,368,571Interest
      and other income
              
              
              -
              
              
              
              2,328
              
              
              
              5,615Total
      revenue
              
              
              6,368,571
              
              
              
              6,370,899
              
              
              
              6,374,186Expenses:General
      and administrative
              
              
              -
              
              
              
              45,000
              
              
              
              22,829Interest
              
              
              2,509,861
              
              
              
              2,772,778
              
              
              
              2,924,382Depreciation
      and amortization
              
              
              3,991,521
              
              
              
              3,990,347
              
              
              
              4,003,772Impairment
      loss
              
              
              -
              
              
              
              3,900,000
              
              
              
              -Total
      expenses
              
              
              6,501,382
              
              
              
              10,708,125
              
              
              
              6,950,983Net
      loss
              
              $
              (132,811
              )
              
              $
              (4,337,226
              )
              
              $
              (576,797
              )
 
 
  68
 Table of Contents
 
  ICON Aircraft 126 LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of Changes in Members’ EquityMembers'EquityBalance,
      December 31, 2006
              
              $
              7,380,975Net
      loss
              
              
              (576,797
              )Investment
      from members
              
              
              22,829Balance,
      December 31, 2007
              
              
              6,827,007Net
      loss
              
              
              (4,337,226
              )Investment
      from members
              
              
              45,000Balance,
      December 31, 2008
              
              
              2,534,781Net
      loss (unaudited)
              
              
              (132,811
              )Balance,
      December 31, 2009 (unaudited)
              
              $
              2,401,970
 
   69
 Table of Contents
   ICON Aircraft 126 LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of Cash FlowsYears Ended December 31,2009
              
              
              2008
              
              
              2007(unaudited)Cash
      flows from operating activities:Net
      loss
              
              $
              (132,811
              )
              
              $
              (4,337,226
              )
              
              $
              (576,797
              )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Rental
      income paid directly to lender by lessee
              
              
              (6,540,000
              )
              
              
              (6,540,000
              )
              
              
              (6,540,000
              )Interest
      and other income on maintenance reserve
              
              
              -
              
              
              
              (2,328
              )
              
              
              (5,615
              )Depreciation
      and amortization
              
              
              3,991,521
              
              
              
              3,990,347
              
              
              
              4,003,772Impairment
      loss
              
              
              -
              
              
              
              3,900,000
              
              
              
              -Interest
      expense from amortization of debt financing costs
              
              
              22,978
              
              
              
              47,892
              
              
              
              (6,737
              )Interest
      expense on non-recourse financing paiddirectly
      to lender by lessee
              
              
              2,495,904
              
              
              
              2,729,973
              
              
              
              2,948,336Change
      in operating assets and liabilities:Other
      non-current assets
              
              
              -
              
              
              
              -
              
              
              
              -Deferred
      rental income
              
              
              171,429
              
              
              
              171,429
              
              
              
              171,429Accrued
      interest
              
              
              (9,021
              )
              
              
              (5,087
              )
              
              
              (17,217
              )Net
      cash used in operating activities
              
              
              -
              
              
              
              (45,000
              )
              
              
              (22,829
              )Cash
      flows from financing activities:Contributions
      received
              
              
              -
              
              
              
              45,000
              
              
              
              22,829Net
      increase in cash
              
              
              -
              
              
              
              -
              
              
              
              -Cash,
      beginning of the year
              
              
              -
              
              
              
              -
              
              
              
              -Cash,
      end of the year
              
              $
              -
              
              
              $
              -
              
              
              $
              -
   Years Ended December 31,2009
                
                
                2008
                
                
                2007(unaudited)Supplemental
      disclosure of non-cash investing and financing activities:Principal
      and interest paid on non-recourse long-term debtdirectly
      to lender by lessee
                
                $
                6,540,000
                
                
                $
                6,540,000
                
                
                $
                6,540,000
 
   70
 Table of Contents
 ICON Aircraft 126 LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 (unaudited
with regard to December 31, 2009)
 (1)
                Organization
 ICON
Aircraft 126 LLC (the “LLC”) was formed on February 15, 2002 as a Delaware
limited liability company. The LLC is a joint venture between two affiliated
entities, ICON Income Fund Eight B L.P. (“Fund Eight B”) and ICON Income Fund
Nine, LLC (“Fund Nine”) (collectively, the “LLC’s Members”). Fund Eight B and
Fund Nine each have a 50% ownership interest in the LLC’s profits, losses and
cash distributions.
 
 On March
4, 2002, the LLC acquired all of the outstanding shares of Delta Aircraft
Leasing Limited (“D.A.L.”), a Cayman Islands registered company, for
approximately $75,288,000, which was largely comprised of approximately
$4,250,000 of cash and the assumption of approximately $70,280,000 of
non-recourse debt. D.A.L. owns, through an owner trust, an Airbus A340-313X
aircraft (“Aircraft 126”) that is on lease to Cathay Pacific Airways Limited
(“Cathay”). The lender has a security interest in the aircraft and an assignment
of the rental payments under the lease. The lease was initially scheduled to
expire in March 2006, but was extended to July 1, 2011.
  The
Manager of the LLC’s Members is ICON Capital Corp., a Delaware corporation (the
“Manager”). The Manager manages and controls the business affairs of the LLC,
including, but not limited to, the equipment leases and other financing
transactions that the LLC entered into pursuant to the terms of the respective
limited partnership and limited liability company agreements with the LLC’s
Members.
 
  (2)
                Summary
      of Significant Accounting
Policies
 Basis of
Presentation and Consolidation
 
 The
accompanying consolidated financial statements of the LLC have been prepared in
accordance with U.S. generally accepted accounting principles (“US
GAAP”).
 
 The
consolidated financial statements include the accounts of the LLC and its
wholly-owned subsidiary.  All intercompany accounts and transactions
have been eliminated in consolidation.
 
 Debt
Financing Costs
 
 Expenses
associated with the issuance of debt are capitalized and amortized over the term
of the debt instrument using the effective interest rate
method.  These costs are included in other non-current
assets.
 
 Leased
Equipment at Cost
 
 Investments
in leased equipment are stated at cost less accumulated depreciation. Leased
equipment is depreciated on a straight-line basis over the lease term,
which typically ranges from 4 to 5 years, to the asset’s residual
value.
 
 The
Manager has an investment committee that approved each new equipment lease and
other financing transactions. As part of its process, the investment committee
determined the residual value, if any, to be used once the investment was
approved.  The factors considered in determining the residual value
included, but were not limited to, the creditworthiness of the potential lessee,
the type of equipment considered, how the equipment was integrated into the
potential lessee’s business, the length of the lease and the industry in which
the potential lessee operated. Residual values are reviewed for impairment in
accordance with each LLC’s Members’ impairment review policy.
  
  71
 Table of Contents
 ICON
Aircraft 126 LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 (2)
                Summary
      of Significant Accounting Policies -
  continued
 The
residual value assumes, among other things, that the asset is utilized normally
in an open, unrestricted and stable market. Short-term fluctuations in the
marketplace are disregarded and it is assumed that there is no necessity either
to dispose of a significant number of the assets, if held in quantity,
simultaneously or to dispose of the asset quickly.  The residual value
is calculated using information from various external sources, such as trade
publications, auction data, equipment dealers, wholesalers and industry experts,
as well as inspection of the physical asset and other economic
indicators.
 
 Asset
Impairments
 
 The asset
in the LLC’s portfolio is periodically reviewed, no less frequently than
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 only if the carrying value of a long-lived asset is not
recoverable and exceeds its fair market value.  If there is an
indication of impairment, the LLC will estimate the future cash flows
(undiscounted and without interest charges) expected 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.  If an impairment is determined to
exist, the impairment loss will be measured as the amount by which the carrying
value of a long-lived asset exceeds its fair value and recorded in the
consolidated statement of operations in the period the determination is
made.
 
 The
events or changes in circumstances that 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 residual position in
the asset and, if applicable, the remaining obligation to the non-recourse
lender.  Generally in the latter situation, the residual position
relates to equipment subject to third-party non-recourse debt where the lessee
remits its rental payments directly to the lender and the LLC does not recover
its residual position until the non-recourse debt is repaid in full. The
preparation of the undiscounted cash flows requires the use of assumptions and
estimates, including the level of future rents, the residual value expected to
be realized upon disposition of the asset, estimated downtime between re-leasing
events and the amount of re-leasing costs. The Manager’s review for impairment
includes a consideration of the existence of impairment indicators including
third-party appraisals, published values for similar assets, recent transactions
for similar assets, adverse changes in market conditions for specific asset
types and the occurrence of significant adverse changes in general industry and
market conditions that could affect the fair value of the asset.
 
 Revenue
Recognition
 
 Each
equipment lease the LLC enters into is classified as either a finance lease or
an operating lease, which is based upon the terms of each lease.  For
a finance lease, initial direct costs are capitalized and amortized over the
term of the related lease.  For an operating lease, initial direct
costs are included as a component of the cost of the equipment and depreciated
over the lease term. The LLC has not entered into any finance
leases.
 
  72
 Table of Contents
 ICON
Aircraft 126 LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 (unaudited
with regard to December 31, 2009)
 (2)
              Summary
      of Significant Accounting Policies -
continued
 
 For
operating leases, rental income is recognized on a straight-line basis over the
lease term.  Billed operating lease receivables are included in
accounts receivable until collected.  Accounts receivable are stated
at their estimated net realizable value.  Deferred income is the
difference between the timing of the cash payments and the income recognized on
a straight-line basis.
 
 Initial
Direct Costs
 
 The LLC
capitalized initial direct costs associated with the origination and funding of
leased assets and other financing transactions in accordance with the accounting
pronouncement relating to  accounting for nonrefundable fees and costs
associated with originating or acquiring loans and initial direct costs of
leases.  The costs are amortized on a lease by lease basis based on
the actual lease term using a straight-line method for operating leases and the
effective interest rate method for finance leases. Costs related to leases or
other financing transactions that were not consummated are expensed as an
acquisition expense.
 
 Income
Taxes
 
 The LLC
is taxed as a partnership for federal and State income tax
purposes.  No provision for income taxes has been recorded since the
liability for such taxes is that of each of the members of the LLC’s Members
rather than the LLC. The LLC’s income tax returns are subject to examination by
the federal and State taxing authorities, and changes, if any, could adjust the
individual income tax of the members of the LLC’s Members.
 
 Use of Estimates
 
 The
preparation of financial statements in conformity with US GAAP requires the
Manager to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
as of the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period. Significant estimates
primarily include the determination of allowance for doubtful accounts,
depreciation and amortization, impairment losses, estimated useful lives and
residual values.  Actual results could differ from those
estimates.
 
 Recently
Adopted Accounting Pronouncements
 
 In 2009,
the LLC adopted the accounting pronouncement relating to accounting for fair
value measurements, which establishes a framework for measuring fair value and
enhances fair value measurement disclosure for non-financial assets and
liabilities. The adoption of this accounting pronouncement for non-financial
assets and liabilities did not have a significant impact on the LLC’s
consolidated financial statements.
 
 In 2009,
the LLC adopted the accounting pronouncement that provides additional guidance
for estimating fair value in accordance with the accounting standard for fair
value measurements when the volume and level of activity for the asset or
liability have significantly decreased. This pronouncement also provides
guidance for identifying transactions that are not orderly. This pronouncement
was effective prospectively for all interim and annual reporting periods ending
after June 15, 2009. The adoption of this accounting pronouncement did not have
a significant impact on the LLC’s consolidated financial
statements.
 
 73
 Table of Contents
 ICON
Aircraft 126 LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 (unaudited
with regard to December 31, 2009)
 (2)
                Summary
      of Significant Accounting Policies -
continued
 In 2009,
the LLC adopted the accounting pronouncement that amends the requirements for
disclosures about fair value of financial instruments, regarding the fair value
of financial instruments for annual, as well as interim, reporting periods. This
pronouncement was effective prospectively for all interim and annual reporting
periods ending after June 15, 2009. The adoption of this accounting
pronouncement did not have a significant impact on the LLC's consolidated
financial statements.
 
 In 2009,
the LLC adopted the accounting pronouncement regarding the general standards of
accounting for, and disclosure of, events that occur after the balance sheet
date, but before the financial statements are issued. This pronouncement was
effective prospectively for interim and annual reporting periods ending after
June 15, 2009. The adoption of this accounting pronouncement did not have a
significant impact on the LLC’s consolidated financial statements.
 
 In
2009, the LLC adopted Accounting Standards Codification 105, “Generally Accepted
Accounting Principles,” which establishes the Financial Accounting Standards
Board Accounting Standards Codification (the “Codification”), which supersedes
all existing accounting standard documents and is the single source of
authoritative non-governmental US GAAP.  All other accounting
literature not included in the Codification is considered
non-authoritative.  This accounting standard is effective for interim
and annual periods ending after September 15, 2009.  The Codification
did not change or alter existing US GAAP and it did not result in a change in
accounting practices for the LLC upon adoption. The LLC has conformed its
consolidated financial statements and related notes to the new Codification for
the year ended December 31, 2009.
 
 (3)
              Leased
      Equipment at Cost
 
 The LLC’s
sole investment at December 31, 2009 and 2008 is Aircraft 126, which is on lease
to Cathay. The lease was initially scheduled to expire in March 2006, but was
extended to July 1, 2011.
 
 The LLC had a commitment with respect
to Aircraft 126 to pay certain maintenance costs, which were incurred on or
prior to March 27, 2006. The LLC established a maintenance reserve cash account
under the original lease to pay for its portion of these costs. This account was
funded by free cash from the lease payments in accordance with the terms of the
original lease. During 2006, the LLC received $182,021 of capital contributions
from the LLC’s Members, of which $50,000 was for amounts relating to the
maintenance reserve cash account and $132,021 was related to costs paid by its
members relating to the refinancing of the LLC's non-recourse debt. During
September 2006, approximately $1,153,000 was paid for the maintenance costs. The
maintenance account for Aircraft 126 was cross-collateralized with the
maintenance account for ICON Aircraft 123 LLC (“ICON 123”), a wholly-owned
subsidiary of Fund Eight B, pursuant to two first priority charge on cash
deposit agreements entered into in connection with the purchase of an Airbus
A340-313X aircraft on lease to Cathay (“Aircraft 123”). Under the terms of these
agreements, the LLC was required to pay on behalf of ICON 123 any maintenance
cost shortfalls incurred by ICON 123. On January 30, 2007, the LLC paid
approximately $143,000 in maintenance costs from its maintenance account on
behalf of ICON 123.  The maintenance account and related security
interests were then terminated. ICON 123 will reimburse the LLC when Aircraft
123 is sold. The excess cash remaining in the LLC’s account of approximately
$97,000 is included in other non-current assets at December 31, 2009 and
2008.
 
 Each of ICON 123 and the LLC is a
party to a residual sharing agreement with respect to its
aircraft.
  74
 Table of Contents
 ICON
Aircraft 126 LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 (unaudited
with regard to December 31, 2009)
 (3)
              Leased
      Equipment at Cost - continued
 
 In light
of unprecedented high fuel prices during 2008 and the related impact on the
airline industry, the Manager reviewed the LLC’s Members’ investments in
Aircraft 126 as of June 30, 2008. In accordance with the accounting
pronouncement that accounts for the impairment or disposal of long-lived assets
and based upon changes in the airline industry, the Manager determined that
Aircraft 126 was impaired.
 
 Based on
the Manager’s review, the carrying value of Aircraft 126 exceeded the expected
undiscounted future cash flows of Aircraft 126 and, as a result, the LLC
recorded an impairment charge representing the difference between the carrying
value and the expected discounted future cash flows of
Aircraft 126.  The expected discounted future cash flows of Aircraft
126 were determined using a market approach, a recent appraisal for Aircraft 126
and recent sales of similar aircraft, as well as
other factors, including those discussed below.  As a result, as of
June 30, 2008, the LLC recorded an impairment loss on Aircraft 126 of
approximately $3,900,000.
 
 The
following factors in 2008, among others, indicated that the full carrying value
of Aircraft 126 might not be recoverable: (i) indications that lenders were
willing to finance less of the acquisition cost of four-engine aircraft, which
increased with each dollar rise of the price of fuel, thereby undermining the
carrying value expectations of such aircraft; (ii) the rising cost of fuel was
increasing the operating costs of four-engine aircraft and similar capacity
twin-engine aircraft, thereby making such aircraft less attractive investments
at the time and thereby depressing the market for Aircraft 126; and (iii) the
likelihood of aircraft operators switching to more efficient aircraft, thereby
depressing the market for Aircraft 126.
 
 Depreciation
expense was $3,987,749, $3,986,575 and $4,000,000 for the years ended December
31, 2009, 2008, and 2007, respectively.
 
 Aggregate annual minimum future rentals
receivable from the LLC’s non-cancelable lease for the next two years consisted
of the following as of December 31, 2009.  There will be no additional
rentals receivable after 2011.
 
 Years
      EndingDecember 31,2010
              
              $
              5,940,0002011
              
              $
              2,970,000
 
 (4)
              Non-recourse
      Long-Term Debt
 
 Effective
March 27, 2006, in connection with the lease extension, approximately
$52,850,000 of non-recourse debt associated with Aircraft 126 was refinanced
after applying $583,000 from a reserve account established in connection with
the original lease with Cathay. The refinanced non-recourse debt matures on July
1, 2011 and requires a balloon payment of approximately $33,000,000 at maturity.
The interest rate of the debt is fixed at 6.104%.
   75
 Table of Contents
 ICON
Aircraft 126 LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 (unaudited
with regard to December 31, 2009)
 (4)
              Non-recourse
      Long-Term Debt – continued
 
 The aggregate maturities of
non-recourse long-term debt, including the effects of refinancing discussed
above, consisted of the following as of December 31, 2009.  There are
no amounts due after 2011.
 
 Years
      EndingDecember 31,2010
              
              $
              3,684,4492011
              
              
              34,421,461$
              38,105,910
 
 (5)
              Residual
      Sharing Agreement
 
 The LLC
is a party to a residual sharing agreement (the “Airtrade Residual Sharing
Agreement”) with ICON 123 and Airtrade Capital Corp. (“Airtrade”). Pursuant to
the terms of the Airtrade Residual Sharing Agreement, all proceeds received in
connection with the sale or lease renewal of Aircraft 123 or Aircraft
126 in excess of $8,500,000 of the applicable loan
balance associated with each aircraft will be allocated 55% to the LLC or
ICON 123, as applicable, and 45% to Airtrade.
 
 (6)
              Fair
      Value Measurements
 
 The
LLC is required, on a nonrecurring basis, to adjust the carrying value or
provide valuation allowances for certain assets and liabilities using fair value
measurements.  Fair value information with respect to the LLC’s leased
assets and liabilities is not separately provided since (i) the current
accounting pronouncements do not require fair value disclosures of lease
arrangements and (ii) the carrying value of financial assets, other than
lease-related investments, and the recorded value of recourse debt approximate
fair value due to their short-term maturities and variable interest rates. The
fair value of the LLC’s non-recourse debt is estimated using a discounted cash
flow analysis, based on the current incremental borrowing rate of the most
recent borrowings by the LLC and the other programs sponsored by the
Manager.
 
 Carrying Amount
              
              
              Fair ValueFixed
      rate non-recourse long-term debt
              
              $
              38,105,910
              
              
              $
              39,171,374
  (7)
                Transactions
      with Related Parties
 The LLC
does not maintain a separate bank account and, therefore, in the normal course
of operations, the LLC’s Members will pay certain operating and general and
administrative expenses on behalf of the LLC in proportion to their membership
interests.
 
 The financial condition and results of
operations of the LLC, as reported, are not necessarily indicative of the
results that would have been reported had the LLC operated completely
independently.
 
 (8)
              Concentrations
      of Risk
 
 For the
years ended December 31, 2009, 2008, and 2007, the LLC had one lessee that
accounted for 100% of total rental income and one lender that accounted for 98%
of total liabilities.
 
  76
 Table of Contents







SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
  ICON
Income Fund Eight B L.P.
 (Registrant)
 
 By: ICON
Capital Corp.
 (General
Partner of the Registrant)
  March 25,
2010
  By:
      /s/ Michael A.
      ReisnerMichael
      A. ReisnerCo-Chief
      Executive Officer and Co-President
                  (Co-Principal
      Executive Officer)
 By:
      /s/ Mark
      GattoMark
      GattoCo-Chief
      Executive Officer and Co-President
                  (Co-Principal
      Executive Officer)
 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
capacities and on the dates indicated.
 
 ICON
Income Fund Eight B L.P.
 (Registrant)
 
 By: ICON
Capital Corp.
 (General
Partner of the Registrant)
    By:
      /s/ Michael A.
      ReisnerMichael
      A. ReisnerCo-Chief
      Executive Officer, Co-President and Director
                (Co-Principal
      Executive Officer)
  By:
      /s/ Mark
      GattoMark
      GattoCo-Chief
      Executive Officer, Co-President and Director
                  (Co-Principal
      Executive Officer)
 By:
      /s/ Anthony J.
      BrancaAnthony
      J. BrancaChief
      Financial Officer
                (Principal
      Accounting and Financial Officer)Supplemental
      Information to be Furnished With Reports Filed Pursuant to Section 15(d)
      of the Act by Registrants Which Have Not Registered Securities Pursuant to
      Section 12 of the Act.No
      annual report or proxy material has been sent to security
      holders.






77