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,
      2007ORo
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934





Commission
file number: 000-50217




ICON
Income Fund Nine, LLC


(Exact
name of registrant as specified in its charter)




Delaware
            
            13-4183234(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:  Limited Liability Company
Shares




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




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 definition of “accelerated filer”, “large 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 Exchange 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 day of the registrant’s most recently completed second fiscal
quarter:  Not
applicable.




There is
no established market for shares of the registrant.




Number of
outstanding limited liability company shares of the Registrant on February 29,
2008 is 97,955.





DOCUMENTS
INCORPORATED BY REFERENCE


None.
















Table of ContentsPagePART
      I
            1Item 1.
      Business
            1Item 1A. Risk
      Factors
            4Item 1B.
      Unresolved Staff Comments
            10Item 2.
      Properties
            11Item 3. Legal
      Proceedings
            11Item 4.
      Submission of Matters to a Vote of Security
    Holders
            11PART
      II
            12Item 5. Market
      for the Registrant's Securities, Related Security Holder Matters and
      Issuer Purchases of Equity Securities
            12Item 6.
      Selected Financial Data
            13Item
      7. Manager's Discussion and Analysis of Financial Condition and
      Results of Operations
            14Item 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
            68Item
      9A(T). Controls and
      Procedures
            69Item 9B. Other
      Information
            69PART
      III
            70Item 10.
      Directors, Executive Officers of the Registrant's Manager and Corporate
      Governance
            70Item 11.
      Executive Compensation
            72Item 12.
      Security Ownership of Certain Beneficial Owners and Manager and Related
      Security Holder Matters
            72Item 13.
      Certain Relationships and Related Transactions, and Director
      Independence
            72Item 14.
      Principal Accounting Fees and Services
            73PART
      IV
            74Item 15.
      Exhibits, Financial Statement Schedules
            74SIGNATURES
            75




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,”
“intend,” “plan,” “seek,”  “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 Nine, LLC (the “LLC”) was formed on July 11, 2001 as a Delaware
limited liability company.  The LLC will continue until December 31,
2020, unless terminated sooner.  When used in this report, the terms
“we,” “us” and “our” refer to the LLC (and its consolidated
subsidiaries).




Our
manager is ICON Capital Corp. (our “Manager”), which was originally a
Connecticut corporation. Effective June 1, 2007, our Manager was re-incorporated
as a Delaware corporation. Our Manager manages and controls our business
affairs, including, but not limited to, our equipment leases and financing
transactions, under the terms of our amended and restated limited liability
company agreement (our “LLC Agreement”).




We are
currently in our operating period, which is expected to end on April 30, 2008.
Our initial capitalization was $1,000, which was contributed by our
Manager.  We offered member shares with the intent to raise up to
$100,000,000 of capital and we commenced business operations on our initial
closing date, December 18, 2001, when we issued 1,250 member shares,
representing $1,249,910 of capital contributions.  Between December
19, 2001 and April 30, 2003, our final closing date, we sold an additional
98,416 member shares, representing $98,403,564 of capital contributions bringing
the total member shares and capital contributions to 99,666 and $99,653,474,
respectively.  Through December 31, 2007, we redeemed 1,711 member
shares, bringing the total number of outstanding number shares to 97,955
outstanding as of such date.




Our
Business




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




1
 Table of Contents





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 member shares in
      items of equipment subject to a
lease.





(2)
      OperatingPeriod: After the
      close of the offering period, we reinvested and continue to reinvest the
      cash generated from our initial investments to the extent that cash
      is not needed for our expenses, reserves and distributions to
      members. Our operating period is expected to end on April 30, 2008 and we
      intend to commence our liquidation period on May 1,
  2008.





(3)
      Liquidation
      Period: After the operating period, we will sell our assets in the
      ordinary course of business. If our Manager believes it would benefit
      our members to reinvest the proceeds received from our investments in
      additional investments during the liquidation period, we may do so, but
      our Manager will not receive any additional acquisition fees in
      connection with such reinvestments. Our goal is to complete the
      liquidation period in three years from the end of the operating period,
      but it may take longer to do so.





At
December 31, 2007 and 2006, we had total assets of $139,570,167 and
$137,187,658, respectively.  For the year ended December 31, 2007, our
total rental and finance income was $20,579,263, which included three lessees
that accounted for approximately 77% of our total rental and finance
income.  We had net income for the year ended December 31, 2007 of
$7,940,018. For the year ended December 31, 2006, our total rental and
finance income was $24,325,355, which included three lessees that accounted for
approximately 88% of our total rental and finance income.  We had a
net loss for the year ended December 31, 2006 of $667,903.  For the
year ended December 31, 2005, our total rental and finance income was
$30,253,218, which included three lessees that accounted for approximately 86%
of our total rental and finance income.  We had a net loss for
the year ended December 31, 2005 of $2,777,128.




At
December 31, 2007, our portfolio, which we hold either directly or through joint
venture investments with affiliates, consisted primarily of the following
equipment subject to lease:




Air
Transportation Industry





·
            We
      own one Airbus A340-313X aircraft and have a 50% interest through a joint
      venture with ICON Income Fund Eight B L.P. (“Fund Eight B”), an entity
      also managed by our Manager, in a second Airbus A340-313X aircraft. Both
      aircraft are on lease to Cathay Pacific Airways Limited
      (“Cathay”).  The purchase price of the first aircraft was
      approximately $69,069,000, comprised of approximately $4,278,000 in cash
      and approximately $64,791,000 of non-recourse debt. The total purchase
      price of the second aircraft was approximately $74,527,000. Our portion of
      the purchase price of the second aircraft was approximately $37,264,000,
      comprised of approximately $2,125,000 in cash and approximately
      $35,139,000 of non-recourse debt.





Shipping





·
            We
      have a 100% interest in three car and truck carrying vessels (the
      “Vessels”) on bareboat charter to Wilhelmsen Lines Shipowning AS
      (“Wilhelmsen”). Effective May 18, 2006, the terms of the bareboat charters
      were extended through December 22, 2013. The purchase price was
      approximately $74,020,000, consisting of approximately $9,690,000 in cash
      and approximately $64,330,000 of non-recourse
  debt.





·
            We
      own Samar Spirit (“Samar”), a product tanker, which is subject to bareboat
      charter with an affiliate of the Teekay Corporation (“Teekay”) that
      expires in July 2011. We made a total capital contribution of
      approximately $16,922,000, of which approximately $54,000 relates to legal
      fees we paid on behalf of ICON Samar, LLC (“ICON Samar”), our wholly-owned
      subsidiary. ICON Samar purchased Samar for $40,250,000, comprised of
      approximately $16,868,000 of cash and approximately $23,382,000 of
      non-recourse long-term debt.






2
 Table of Contents




Manufacturing
Industry





·
            We
      have a 100% interest in several leases relating to microprocessor
      manufacturing devices and semi-conductor memory testing equipment on lease
      with Advanced Micro Devices, Inc. (“AMD”) with expiration dates of June
      30, 2007 and July 31, 2007, respectively.  The purchase prices
      were approximately $6,391,000 in cash for the lease that expired on June
      30, 2007 and $4,561,000 in cash for the leases that expired on July 31,
      2007. The lease that expired on June 30, 2007 has been extended for an
      additional twelve months, and the leases that expired on July 31, 2007
      have been extended on a month-to-month renewal
  basis.





·
            We
      have a 100% interest in several leases for various manufacturing equipment
      on lease to Wildwood Industries, Inc.  (“Wildwood”). The leases
      expire on various dates between February 2007 and September 2008. The
      purchase price for these leases was approximately $3,472,000 in cash.
      Pursuant to the terms of the lease, the lease that was scheduled to expire
      on February 1, 2007 has been extended for an additional twelve
      months.





Information
Technology Equipment





·
            We
      have a 26% interest in ICON GeicJV, which purchased information technology
      equipment, such as Sun servers, HP servers, Dell desktop computers and
      Panasonic laptop computers, subject to a 36 month lease with Government
      Employees Insurance Company (“GEICO”). As of March 31, 2007, the lease
      with GEICO expired and the equipment has either been returned or renewed
      on a month-to-month basis.





Digital
Mini-Labs





·
            During
      December 2004, we acquired four Noritsu QSS 3011 digital mini-labs subject
      to lease with Rite Aid Corporation. The leases expired during November
      2007 and were extended on a month-to-month renewal basis. The purchase
      price of this equipment was approximately $399,000 in cash.  Our
      Manager was paid an acquisition fee of approximately $12,000 relating to
      this transaction.





Telecommunications
Equipment





·
            We
      have a 14.4% interest in ICON Global Crossing II, LLC (“Global Crossing
      II”), which purchased certain telecommunications equipment for
      approximately $12,044,000 from various vendors and which it then leased to
      Global Crossing Telecommunications, Inc. (“Global
      Crossing”).  The lease expires on October 31,
    2010.





For a
discussion of our lease and other significant transactions for the years ended
December 31, 2007, 2006 and 2005, please refer to “Item 7.  Manager’s
Discussion and Analysis of Financial Condition and Results of
Operations.”





Segment
Information





We have
only one operating segment: the business of leasing and financing equipment to
companies that we believe to be creditworthy.





Competition





The
equipment leasing and financing industry is highly competitive. When seeking
leasing and financing transactions for acquisition, we compete with leasing
companies, manufacturers that lease their products directly, equipment brokers
and dealers and financial institutions, including commercial banks and insurance
companies.  Many competitors are larger than us and have greater financial
resources than we do. For additional information about our competition and other
risks relating to our operations, please see “Risk Factors” in Item
1A.






3
 Table of Contents





Employees





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





Available
Information





Our
Annual Report on Form 10-K and our most recent Quarterly Reports on Form 10-Q
and amendments to those reports, if any, and our Current Reports on Form
8-K and any amendments to those reports are available free of charge on our
Manager’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 Manager’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 operating leases and revenues in geographic areas outside of the United
States. For additional information, see Note 15 to our consolidated financial
statements.





Item 1A. Risk Factors





Our
operations are subject to a number of risks.  You should carefully
read and consider these risks, together with all other information in this
Annual Report on Form 10-K.  The risks and uncertainties described
below are not the only ones we may face. If any of the following risks actually
occur, our business, operating results and financial condition could be
adversely affected.





Uncertainties
associated with the equipment leasing and financing business may affect our
business, operating results and financial condition.





We are
subject to a number of uncertainties associated with the equipment leasing and
financing business that may affect our business, operating results and financial
condition. These include, but are not limited to:





·
            changes
      in economic conditions, including fluctuations in demand for equipment and
      interest rates;


·
            the
      technological and economic obsolescence of
  equipment;


·
            potential
      defaults by lessees or borrowers;


·
            the
      existence of leverage increases the risk of foreclosure;
    and


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








4
 Table of Contents







Our
Manager’s decisions are subject to conflicts of interest with us.




Our
Manager’s decisions could be subject to various conflicts of interest arising
out of its relationship to us and our affiliates. Our Manager could be
confronted with decisions in which it will have an economic incentive to place
its interests above ours. Our Manager sponsors and currently manages six other
equipment leasing businesses. See “Item 13. Certain Relationships and Related
Transactions, and Director Independence.”  These conflicts may
include, but are not limited to:





·
            Our
      Manager will receive more fees for making investments if we incur
      indebtedness to fund these acquisitions than it would if we did not incur
      such indebtedness;


·
            Our
      LLC Agreement does not prohibit our Manager from competing with us for
      equipment acquisitions and engaging in other types of
      business;


·
            Our
      Manager will have opportunities to earn fees for referring a prospective
      acquisition opportunity to purchasers other than
  us;


·
            Our
      Manager may receive fees in connection with the turnover of our equipment
      portfolio;


·
            The
      lack of separate legal representation for us and our Manager and lack of
      arm’s-length transactions could affect negotiations regarding compensation
      payable to our Manager;


·
            Our
      Manager is our tax matters partner and is able to negotiate with the IRS
      to settle tax disputes that would bind us and our members that might not
      be in the best interest of our members given a member’s individual tax
      situation; and


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





Because
we borrowed, and may in the future borrow, funds to purchase equipment, losses
as a result of lessee defaults may be greater than if debt were not
incurred.





Although
we have acquired, and may in the future acquire, some of our investments for
cash, we borrowed and may in the future borrow a substantial portion of the
purchase price of our equipment investments and there is no limit to the amount
of debt that we may incur when purchasing equipment. While we believe the use of
leverage results in us being able to make more acquisitions and that each
acquisition will have fewer dollars at risk than if leverage were not utilized,
there can be no assurance that the benefits of greater size and diversification
of the portfolio will offset the heightened risk of loss in an individual lease
transaction using leverage.  With respect to our non-recourse
borrowings, a lessee default could force us to make the debt service payments
that would otherwise be paid by the lessee so as to protect our investment in
equipment and prevent the equipment owned by us from being subject to
repossession.





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





We,
together with certain of our affiliates (entities sponsored and organized by our
Manager), specifically Fund Eight B, ICON Income Fund Ten, LLC (“Fund Ten”),
ICON Leasing Fund Eleven, LLC (“Fund Eleven”) and ICON Leasing Fund Twelve, LLC
(“Fund Twelve”) are party to a revolving line of credit agreement with
California Bank & Trust.  The terms of that agreement could
restrict us from paying distributions to our members 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. Manager’s Discussion and Analysis of Financial Condition
and Results of Operations – Liquidity and Capital Resources.”







5
 Table of Contents








The
risks and uncertainties associated with the industries of our lessees 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. We primarily acquire equipment subject to lease, purchase
equipment and lease it to third party end users or finance equipment for third
party end users, and, to a lesser degree, acquire ownership rights to items of
leased equipment at lease expiration in a variety of industries with a number of
lessees. As such, we are indirectly subject to the various risks and
uncertainties that affect our lessees’ businesses and operations.  If
such risks or uncertainties were to affect our lessees, we may indirectly suffer
a loss on our investment, lose future revenues or experience adverse
consequences to our business, operating results and financial
condition.





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





A
significant part of the value of some of the equipment that we purchase is the
potential value of the equipment once the lease term expires (“residual value”).
Generally, leased equipment is expected to decline in value over its useful
life. In acquiring equipment, we calculate a residual value for the equipment at
the end of the lease based on available information including, depending on the
equipment, historical residual value rates. The expected residual value, when
combined with lease payments, is expected 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 lease term. However, the residual value of
the equipment at the end of a lease, and whether that value meets our
expectations, depends to a significant extent upon many factors, including the
following, many of which are beyond our control:





·
            our
      ability to acquire or, to a lesser degree, enter into lease agreements
      that preserve or enhance the relative value of the
    equipment;


·
            our
      ability to maximize the value of the equipment upon the sale or re-lease
      when the lease expires;


·
            the
      technological and economic obsolescence of
  equipment;


·
            market
      conditions prevailing at the time the lease
  expires;


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


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


·
            the
      strength of the economy at the time the lease expires;
  and


·
            the
      condition of the equipment when the lease
  expires.





We cannot
assure you that our assumptions with respect to value are accurate or that the
equipment will not lose value more rapidly than we anticipate.  If our
residual value estimates are incorrect, the total proceeds of the lease plus the
proceeds received from realizing the residual value of the equipment may be
insufficient to achieve our anticipated rate of return, or even in growth leases
to recover the principal invested.







6
 Table of Contents







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





If a
lessee fails to maintain equipment in accordance with the terms of its lease, we
may have to make unanticipated expenditures to repair the equipment in order to
protect our investment. In addition, some of the equipment we purchase is used
equipment. While we plan to inspect most used equipment prior to purchase, there
is no assurance that an inspection of used equipment prior to purchasing it will
reveal any or all defects and problems with the equipment that may occur after
it is acquired by us.





We seek
to obtain representations from the sellers and lessees of used equipment
that:





·
            the
      equipment has been maintained in compliance with the terms of their
      leases;


·
            that
      neither the seller, as lessor, nor the lessee, is in violation of any
      material terms of such leases; and


·
            the
      equipment is in good operating condition and repair and that the lessee
      has no defenses to the payment of rent for the equipment as a result of
      its condition.





We would
have rights against the seller of the 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 would 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.





If
a lessee defaults on its lease, we could incur losses.





We may
lease equipment to lessees that have senior debt rated below investment grade.
We do not require our lessees to have a minimum credit rating. Lessees with such
lower credit ratings may default on lease payments more frequently than lessees
with higher credit ratings. If a lessee does not make lease payments to us when
due, or violates the terms of its lease in another important way, we may be
forced to terminate the lease 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 the
equipment right away, if at all. If that were to happen, we would lose the
expected lease revenues and might not be able to recover the entire amount or
any of our original investment in the equipment. The costs of recovering
equipment upon a lessee’s default, enforcing the lessee’s obligations under the
lease, and transporting, storing, repairing and finding a new lessee 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 files for bankruptcy, we may have difficulty enforcing the terms of the
lease and may incur losses.





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








7
 Table of Contents







Leasing
or financing equipment in foreign countries may be riskier than domestic leasing
and may result in losses.





We lease
equipment for use by domestic or foreign lessees outside of the United States.
We may have difficulty enforcing our rights under a foreign lease. In addition,
we may have difficulty repossessing our equipment if a foreign lessee defaults,
and lease enforcement outside the United States could be more expensive.
Moreover, foreign jurisdictions may confiscate equipment. Use of equipment in a
foreign country will be subject to that country’s tax laws, which may impose
unanticipated taxes. While we seek to require lessees 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 or that insurance reimbursements will be adequate to allow
for recovery of and a return on foreign investments.





In
addition, we lease equipment that may travel to or between locations outside of
the United States. Regulations in foreign countries may adversely affect our
title to 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 lessees’ financial viability,
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.





We
may be subject to greater income tax obligations than originally
anticipated.





We may
acquire or have acquired equipment subject to lease that the Internal Revenue
Code requires us to depreciate over a longer period than the depreciation period
for most of the equipment that our Manager’s prior equipment leasing funds
purchased.  Similarly, some of the equipment that we may purchase may 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 Internal Revenue
Code or we may enter into financing that do not provide any tax shelter.
Depending on the equipment that we acquire and its eligibility for accelerated
depreciation under the Internal Revenue Code, we may have less depreciation
deductions to offset gross lease revenue, thereby increasing our taxable
income.





We
could incur losses as a result of foreign currency fluctuations.





We have
the ability to lease equipment where the rental payments are not made in U.S.
dollars. In these cases, we may then enter into a contract to protect the lease
from fluctuations in the currency exchange rate. These contracts, known as hedge
contracts, would allow us to receive a fixed number of U.S. dollars for the rent
and any other fixed, periodic payments due under the lease even if the exchange
rate between the U.S. dollar and the currency of the lease changes over the
lease term. If the lease payments were disrupted due to default by the lessee,
we would try to continue to meet our obligations under the hedge contract by
acquiring the foreign currency equivalent of the missed payments, which may be
available at unfavorable exchange rates. If a lease is denominated in a major
foreign currency such as the pound sterling, which historically has had a stable
relationship with the U.S. dollar, we may consider hedging to be unnecessary to
protect the value of the rental payments, but our assumptions concerning
currency stability may turn out to be incorrect. Our investment returns could be
reduced in the event of unfavorable currency fluctuation when lease payments are
not made in U.S. dollars.





Furthermore,
when we acquire a residual interest in foreign equipment, we may not be able to
hedge our foreign currency exposure with respect to those residual values
because the terms and conditions of such hedge contracts might not be in the
best interest of our members. Even with leases requiring rental payments in U.S.
dollars, the equipment may be sold at lease expiration for an amount that cannot
be pre-determined to a buyer paying in a foreign currency. This could positively
or negatively affect our income from such a transaction when the proceeds are
converted into U.S. dollars.








8
 Table of Contents





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





We have
acquired and may in the future acquire 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 the 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.





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 that our Manager sponsors and
manages, as well as with unrelated third parties. Investing in joint ventures
involved additional risks not present when acquiring leased equipment that is
wholly owned by us. These risks included 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 typically must 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 may 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 could
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.





Leased
equipment may be damaged or lost. Fire, weather, accidents, theft or other
events can cause damage or loss of leased equipment. While our leases generally
require lessees to have comprehensive insurance and assume the risk of loss,
some losses, such as from acts of war, terrorism or earthquakes may either be
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 loss occurs to the equipment, we could
suffer a total loss of any investment in the affected equipment. In leasing some
types of equipment, we may be exposed to environmental tort liability. Although
we use 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 could negatively affect our liquidity and cash flows.







9
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We
could suffer losses from failure to maintain equipment registration and from
unexpected regulatory compliance costs.





Many
types of transportation equipment are subject to registration requirements by
U.S. governmental agencies, as well as foreign governments if the equipment is
to be used outside of the United States. Failing to register the equipment, or
losing the 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 of the
equipment is not required to do so under the lease. These changes could force
the equipment to be removed from service for a period of time. The terms of our
leases may provide for rent 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 rental income from the lease for this item of 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.





If
a lease is determined to be a loan, it could be subject to usury laws, which
could lower our lease revenue.





Equipment
leases have sometimes been held by the courts to be loan transactions subject to
State usury laws, which limit the interest rate that can be charged. Although we
anticipate entering into or acquiring leases that we believe are structured so
that they avoid being deemed loans, and would therefore not be subject to usury
laws, we cannot assure you that we will be successful in doing so. Loans at
usurious interest rates are subject to a reduction in the amount of interest due
under such loans and, 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 lease revenue.





Our
Manager’s officers and employees manage other businesses and do not devote their
time exclusively to managing us and our business.





We do not
employ our own full-time officers, managers or employees. Instead, our Manager
supervises and controls our business affairs. Our Manager’s officers and
employees also spend time supervising the affairs of other equipment leasing
programs it manages, so they devote the amount of time 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.





We
compete with a variety of financing sources for our lessees, 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 programs,
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 a strong economy, growing
marketplace liquidity and increasing recognition of the attractiveness of the
commercial leasing and financing industry.





We
compete primarily on the basis of pricing, terms and structure. To the extent
that our competitors compete aggressively on any combination of those factors,
we could fail to meet our investment objectives.





Item 1B. Unresolved Staff Comments





None.








10
 Table of Contents





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 Manager’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. Submission of Matters to a Vote of Security
Holders





No
matters were submitted to a vote of security holders during the fourth quarter
of 2007.







11
 Table of Contents








PART II







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


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





Number
      of MembersTitle of
      Class
            as ofFebruary
      29, 2008Manager
      (as a member)
            1Additional
      members
            3,228




We pay
monthly distributions to each of our members beginning the first month after
each member was admitted to the LLC through the termination of the
operating period, which we currently anticipate will be on April 30,
2008.  We paid distributions to additional members totaling
$8,825,274, $8,831,229 and $8,840,105, respectively, for the years ended
December 31, 2007, 2006 and 2005.  Additionally, our Manager was paid
distributions of $89,144, $89,204 and $89,294, for the years ended December 31,
2007, 2006 and 2005, respectively.  The terms of our loan agreement
with California Bank & Trust could restrict us from paying cash
distributions to our members if such payment would cause us to not be in
compliance with our financial covenants. See “Item 7. Manager’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 member
shares (the “Shares”) pursuant to the offering or to participate in any future
offering of our Shares, we are required pursuant to FINRA Rule 2810(b)(5) to
disclose in each annual report distributed to our members a per share estimated
value of our Shares, the method by which we developed the estimated value and
the date used to develop the estimated value.  In addition, our
Manager must prepare annual statements of our estimated share values to assist
fiduciaries of retirement plans subject to the annual reporting requirements of
Employee Retirement Income Security Act (“ERISA”) in the preparation of their
reports relating to an investment in our Shares.  For these purposes,
the estimated value of our Shares is deemed to be $751.49 per share at December
31, 2007.





This
estimate was based on the amount of remaining undiscounted lease payments on our
existing leases, the booked estimated residual values of the equipment held by
us upon the termination of those leases and our cash on hand.  From
this amount, we then subtracted our total debt outstanding and then divided that
sum by the total number of shares outstanding.  To the extent that
this abstract yields a value in excess of the offering price per share, the
offering price per share is used for these purposes. This valuation was based
solely on our Manager’s perception of market conditions and the types and
amounts of our assets. No independent valuation was sought.  However,
as set forth below, there is no significant public trading market for our Shares
at this time, and there can be no assurance that additional members could
receive $751.49 per share if such a market did exist and they sold their Shares
or that they will be able to receive such amount for their Shares in the future.
The foregoing valuation was performed solely for the ERISA and FINRA purposes
described above. Furthermore, there can be no assurance as to the amount we may
actually receive if and when we seek to liquidate our assets or the amount of
lease payments and equipment disposition proceeds we will actually receive over
our remaining term.  Our Shares are not publicly traded and there is
currently no public market for our Shares.  It is unlikely that any
such market will develop.




12
 Table of Contents







Item 6. Selected Consolidated Financial Data





The
selected consolidated 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.





Year Ended December 31,2007
            
            
            2006
            
            
            2005
            
            
            2004
            
            
            2003Total
      revenue (a)
            
            $
            23,460,086
            
            
            $
            24,885,153
            
            
            $
            30,349,467
            
            
            $
            33,240,316
            
            
            $
            34,982,056Net
      income (loss) (b)
            
            $
            7,940,018
            
            
            $
            (667,903
            )
            
            $
            (2,777,128
            )
            
            $
            (17,768
            )
            
            $
            (793,837
            )Net
      income (loss) allocable to additional members
            
            $
            7,860,618
            
            
            $
            (661,224
            )
            
            $
            (2,749,357
            )
            
            $
            (17,590
            )
            
            $
            (785,899
            )Net
      income (loss) allocable to Manager
            
            $
            79,400
            
            
            $
            (6,679
            )
            
            $
            (27,771
            )
            
            $
            (178
            )
            
            $
            (7,938
            )Weighted
      average number of additionalmember
      shares outstanding
            
            
            98,052
            
            
            
            98,123
            
            
            
            98,215
            
            
            
            98,695
            
            
            
            90,813Net
      income (loss) per weighted averageadditional
      member share outstanding
            
            $
            80.17
            
            
            $
            (6.74
            )
            
            $
            (27.99
            )
            
            $
            (0.18
            )
            
            $
            (8.65
            )Distributions
      to additional members
            
            $
            8,825,274
            
            
            $
            8,831,229
            
            
            $
            8,840,105
            
            
            $
            8,758,942
            
            
            $
            7,955,313Distributions
      per weighted averageadditional
      member share outstanding
            
            $
            90.01
            
            
            $
            90.00
            
            
            $
            90.01
            
            
            $
            88.75
            
            
            $
            87.60Distributions
      to the Manager
            
            $
            89,144
            
            
            $
            89,204
            
            
            $
            89,294
            
            
            $
            89,744
            
            
            $
            80,356December 31,2007
            
            
            2006
            
            
            2005
            
            
            2004
            
            
            2003Total
      assets
            
            $
            139,570,167
            
            
            $
            137,187,658
            
            
            $
            151,635,559
            
            
            $
            184,100,455
            
            
            $
            212,717,298Notes
      payable
            
            $
            96,122,281
            
            
            $
            92,480,648
            
            
            $
            97,782,942
            
            
            $
            117,261,455
            
            
            $
            134,463,196Members'
      equity
            
            $
            39,909,465
            
            
            $
            42,333,349
            
            
            $
            52,543,253
            
            
            $
            64,455,803
            
            
            $
            73,842,948(a)
            The
      decrease in total revenue between 2007 and 2006 relates to the sale and
      termination of two of our leases during 2007.The
      decrease in total revenue between 2005 and 2006 relates to the
      renegotiated lease terms of two of our leases and the
      terminationof
      several leases during 2006. The decrease in total revenue between 2004 and
      2005 relates to the renegotiated lease terms of one
ofour
      leases and the transfer of a consolidating interest in ICON SPK to Fund
      Eight B. The increase in total revenue between 2002 and
    2003relates
      to our initial acquisition of equipment for lease with third
      parties.(b)
            During
      2007, we sold the assets that were previously on lease to FedEx and Texas
      Genco, which resulted in an overall net gain of
    approximately$2,429,000.
      The termination of these leases also resulted in a total decrease in
      depreciation and amortization expense of approximately$2,406,000.
      During 2006, we reclassified the three Wilhelmsen bareboat charters from
      investments in operating leases to investments in financeleases,
      resulting in a decrease in depreciation expense of approximately
      50%. During 2006, 2005 and 2004, we recorded impairment losses
      ofapproximately
      $3,005,000, $3,182,000 and $236,000, respectively.







13
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Item 7. Manager's Discussion and Analysis of Financial Condition
and Results of Operations





Our Manager’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 members
invested was pooled together to make investments, pay fees and establish a
small reserve. We primarily engage in the business of purchasing equipment and
leasing it to third-party end users, or financing equipment for third parties
and, to a lesser extent, acquiring ownership rights to items of leased equipment
at lease expiration. Some of our equipment leases are acquired for cash and
are expected to provide current cash flow, which we refer to as “income”
leases. For the other equipment leases, we finance the majority of the purchase
price. We refer to these leases as “growth” leases. These growth leases
generate little or no current cash flow because substantially all of the
rental payments received from the lessee is used to service the indebtedness
associated with acquiring or financing the lease. We anticipate that the
future value of the leased equipment will exceed our cash portion of the
purchase price.




Our
manager is ICON Capital Corp. (our “Manager”), which was originally a
Connecticut corporation. Effective June 1, 2007, our Manager was re-incorporated
as a Delaware corporation. Our Manager manages and controls our business
affairs, including, but not limited to, our equipment leases and financing
transactions, under the terms of our amended and restated limited liability
company agreement (our “LLC Agreement”).





Current
Business Environment and Outlook





We believe that domestic equipment
leasing and financing volume is correlated to overall business investments in
equipment. According to information published by the Equipment Leasing and
Finance Association, domestic business investment in equipment in 2008 is
forecasted to be an estimated $1,159 billion as compared to a low of $868
billion in 2002, and estimated investment of $1,106 billion in 2007, while the
corresponding forecast for equipment finance volume in 2008 is estimated to be
$657 billion as compared to a low of $476 billion in 2003 and estimated value of
$625 billion in 2007. In addition, we believe that a similar correlation exists
in the international markets in which we operate. Increased capital spending may
increase the number of available leases thereby creating more opportunities in
the leasing market. While lower interest rates will remain a key obstacle for
the equipment leasing and financing industry because of the increased likelihood
of customers choosing to purchase rather than lease business investments in
equipment, we believe the leasing and financing industry’s outlook for the
foreseeable future is encouraging.





Other factors that may negatively
affect the leasing and financing industry are: (i) the proposed legal and
regulatory changes that may affect tax benefits of leasing, and (ii) the
continued misperception by potential lessees, stemming from published issues at
Enron, WorldCom and others, that leasing should not play a central role as a
financing alternative. However, as overall business investment in equipment
increases, and as companies tend to preserve cash and lease (rather than
purchase) equipment in pre-recessionary and recessionary economies, we are
optimistic that equipment leasing volume will increase as more lessees return to
the marketplace.








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 Table of Contents








Lease
and Other Significant Transactions





We
entered into the following leases and other significant transactions during the
years ended December 31, 2007, 2006 and 2005:





Sale
of two McDonnell Douglas DC10-30F Aircraft





During
December 2002, we and ICON Income Fund Eight B L.P. (“Fund Eight B”) formed a
joint venture, ICON Aircraft 46835 LLC (“Aircraft 46835”), for the purpose of
acquiring an investment in a McDonnell Douglas DC10-30F aircraft on lease with
Federal Express Corporation (“FedEx”). The lease expired on March 31,
2007.  We had an 85% interest in this joint venture. On December 27,
2002, the joint venture acquired the aircraft for approximately $25,292,000,
which consisted of approximately $3,000,000 in cash and approximately
$22,292,000 of non-recourse debt. Our portion of the purchase price was
approximately $2,550,000.  The non-recourse debt accrued interest at
4.04% per year and matured in March 2007. The lender had a security
interest in the aircraft and an assignment of the rental payments under the
lease. Our Manager was paid an acquisition fee of approximately $759,000
relating to this transaction, of which we paid approximately
$645,000.





At
December 31, 2005, our Manager determined that the aircraft was impaired, based
upon an appraisal that indicated a slower than expected recovery in the air
transportation industry, and we recorded an impairment loss of approximately
$3,182,000.




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. The final lease payment
was paid to the lender, satisfying all remaining debt obligations.





During
March 2003, we and Fund Eight B formed a joint venture, ICON Aircraft 47820 LLC
(“Aircraft 47820”), for the purpose of acquiring an investment in another
McDonnell Douglas DC10-30F aircraft and two spare engines (the “Aircraft and
engines”) on lease to FedEx. The lease expired on March 31, 2007. We had a 10%
interest in this joint venture. On March 11, 2003, Aircraft 47820 acquired the
Aircraft and engines for approximately $27,288,000, which consisted of
approximately $3,077,000 in cash and approximately $24,211,000 of non-recourse
debt. Our portion of the purchase price was approximately $308,000. The
non-recourse debt accrued interest at 4.035% per year and matured in March
2007. The lender had a security interest in the Aircraft and engines and an
assignment of the rental payments under the lease with FedEx. Our Manager
was paid an acquisition fee of approximately $819,000 relating to this
transaction, of which we paid approximately $82,000.





At
December 31, 2005, our Manager determined that the Aircraft and engines were
impaired based upon an appraisal that indicated a slower than expected recovery
in the air transportation industry, and Aircraft 47820 recorded an impairment
loss of approximately $3,626,000.





On March
30, 2007, Aircraft 47820 sold the Aircraft and engines to FedEx for $5,475,000
and recognized a loss on the sale of approximately $1,025,000. The final lease
payment was paid to the lender, satisfying all remaining debt
obligations.





Sale
of Railcars





During
November 2002, we acquired 324 railcars on lease to Texas Genco LP (“Texas
Genco”).  On May 7, 2007, we sold the equipment to an unrelated
third party for $4,960,000, of which approximately $1,500,000 was used to repay
the related long-term debt.  We recognized a gain on sale of
approximately $3,074,000.








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 Table of Contents




Sale
and Return of Information Technology Equipment




During
March 2004, we acquired from Insight Investments Corporation a lease for
computer equipment and corresponding parts.  The lease expired on
December 1, 2006.  The purchase price was approximately $3,036,000,
consisting of approximately $74,000 in cash and the assumption of approximately
$2,962,000 of non-recourse debt.  The non-recourse debt accrued
interest at 4.5% per year and matured in December 2006.  The lender
had a security interest in the computer equipment and an assignment of the
rental payments under the lease. The equipment was uninstalled during December
2006 and returned to us during January 2007.  The associated estimated
residual value of the equipment was subsequently reclassified to equipment held
for sale as of December 31, 2006.  At December 31, 2006, we recorded
an impairment loss of approximately $98,000 based on sales estimates. The
remaining assets’ value of an immaterial amount was written off at September 30,
2007.





During
March 2004, we acquired from Insight Investments Corporation an additional lease
for computer equipment and corresponding parts.  The lease expired on
December 1, 2006.  The purchase price was approximately $1,751,000,
consisting of approximately $43,000 in cash and the assumption of approximately
$1,708,000 of non-recourse debt.  The non-recourse debt accrued
interest at 5.36% per year and matured in December 2006. The lender had a
security interest in the computer equipment and an assignment of the rental
payments under the lease.  The equipment was uninstalled during
December 2006 and returned to us during January 2007. The associated estimated
residual value of the equipment was subsequently reclassified to equipment held
for sale as of December 31, 2006.  At December 31, 2006, we recorded
an impairment of approximately $56,000 based on sales estimates. The remaining
assets’ value of an immaterial amount was written off at September 30,
2007.





During
March 2004, we acquired from Insight Investments Corporation various computer
equipment, consisting of DMX hard drives, Brocade 12000 Directors with 128
usable ports and associated hardware. The lease was scheduled to expire on
December 1, 2007.  The purchase price was approximately $3,392,000,
consisting of approximately $83,000 in cash and the assumption of approximately
$3,309,000 of non-recourse debt. The non-recourse debt accrued interest at 5.87%
per year and was scheduled to mature in December 2007. The lender had a security
interest in the computer equipment and an assignment of the rental payments
under the lease.  During October 2006, the lessee purchased the leased
equipment by prepaying the remaining outstanding non-recourse debt balance of
approximately $1,100,000 and paying us approximately $30,000.  We
recognized a loss of approximately $87,000 on the sale of this
equipment.





Sale of
Manufacturing Equipment





On May
30, 2003, we acquired lathes, presses and robotic manufacturing equipment on
lease to Metaldyne Corporation (“Metaldyne”) through December 2009 for
approximately $2,412,000 in cash.  Our Manager was paid an acquisition
fee of approximately $72,000 relating to this transaction.  During
March 2006, the equipment on lease to Metaldyne was sold for approximately
$1,931,000 in cash and we recognized a gain of approximately
$302,000.





Sale
of Co-generation Facility





We and
Fund Eight B formed a joint venture, ICON/Kenilworth LLC (“Kenilworth”), to
acquire a natural gas-fired 25MW co-generation facility on lease to
Schering-Plough Corporation through July 2004, which was subsequently extended
through June 19, 2009.  We had a 95% interest in this joint venture.
Our portion of the purchase price of the co-generation facility was
approximately $14,562,000, consisting of approximately $7,990,000 in cash and
approximately $6,572,000 of non-recourse debt.  The non-recourse debt
included both senior and junior non-recourse debt, accrued interest at 10.61%
per year and 9.86% per year, respectively, and both matured on July 1,
2004.  The outstanding balances of both the senior and junior
non-recourse debt were fully repaid at the end of the base lease
term.  Our Manager was paid an acquisition fee of approximately
$460,000 relating to this transaction, of which we paid approximately
$437,000.






16
 Table of Contents





During
December 2004, we transferred a 25.87% interest in ICON SPK 2023-A, LLC (“ICON
SPK”), a joint venture with Fund Eight B, to Fund Eight B in exchange for its
entire 5% interest in the co-generation facility.  After the exchange,
we had a 100% interest in the co-generation facility and a 25.13% interest in
ICON SPK.  The fair value of the co-generation facility was determined
using an appraisal and our Manager determined that fair value for ICON SPK was
its net book value, based upon our Manager’s knowledge of the equipment leases
held by ICON SPK.





On April
20, 2006, we sold this co-generation facility to a third party for $4,800,000 in
cash. We incurred a loss of approximately $2,770,000 on the sale of this
co-generation facility, which was recorded as an impairment loss at the end of
March 2006.





Information
Technology Equipment on lease with GEICO





On March
31, 2004, we and ICON Income Fund Ten, LLC (“Fund Ten”) formed a joint
venture, ICON GeicJV, for the purpose of purchasing information technology
equipment subject to a 36 month lease with Government Employees Insurance
Company (“GEICO”). We along with Fund Ten have interests of 26% and 74%,
respectively in ICON GeicJV.  On April 30, 2004, ICON GeicJV acquired
the technology equipment subject to lease for a total cost of approximately
$5,853,000 in cash. Our portion of purchase price was approximately
$1,522,000 in cash. Our Manager was paid an acquisition fee of approximately
$46,000 relating to this transaction.





During
2007, GEICO returned equipment with a cost basis of approximately $5,798,000 and
extended on a month-to-month basis equipment with a cost basis of approximately
$55,000. Of the equipment that was returned, our Manager has sold equipment with
a net book value of approximately $781,000. We realized proceeds of
approximately $775,000 and recognized a loss of approximately $6,000 on the sale
of that equipment. The remaining returned equipment has a net book value of
approximately $58,000, is currently being remarketed by our Manager and was
reclassified to equipment held for sale.





Lease
Renewal of Manufacturing Equipment





On April
30, 2003, we acquired a Double Kraft Paper Forming Tubing Unit on lease to
Wildwood Industries, Inc. (“Wildwood”) through February 2007 for approximately
$1,350,000 in cash.  Our Manager was paid acquisition fees of
approximately $41,000 relating to this transaction.  Effective March
1, 2007, pursuant to the terms of the lease, the lease has been extended for an
additional twelve months. Subject to the terms of the lease renewal, there is a
residual interest sharing agreement with a third party broker that was payable
when a minimum return on investment was attained, whereby all proceeds received
above $150,000, will be shared equally with the third party.  As of
December 31, 2007, approximately $71,000 was distributed to the third party in
accordance with the terms of the residual interest sharing
agreement.





On June
20, 2003, we acquired microprocessor manufacturing devices on lease through June
2007 to Advanced Micro Devices, Inc. (“AMD”) for approximately $6,391,000 in
cash.  Effective July 1, 2007, this modified lease was extended for an
additional 12 months and was reclassified upon extension of the lease from a
direct finance lease to leased equipment at cost.





On
August 1, 2003, we acquired semi-conductor memory testing equipment subject
to two leases through July 2007 with AMD for approximately $4,561,000 in
cash.  These leases were extended on a month-to-month basis. Effective
August 1, 2007, these modified leases were reclassified upon the extensions of
the leases from direct finance leases to leased equipment at cost.





Our
Manager was paid acquisition fees of approximately $329,000 relating to the
initial purchase of the assets leased to AMD.







17
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For all
three AMD leases, there is a residual interest sharing agreement with a third
party broker that is payable when a minimum return on investment was attained.
Subject to the original terms, all proceeds received above approximately
$633,000 will be shared 35% with the third party.  As of December 31,
2007, approximately $56,000 was distributed to the third party in accordance
with the terms of the residual interest sharing agreements.





Impairment
of Noritsu QSS 3011 Digital Mini-Labs





During
December 2004, we acquired four Noritsu QSS 3011 digital mini-labs subject to
leases with Rite Aid Corporation. The leases expired during November 2007
and were extended on a month-to-month renewal basis. The purchase price of
this equipment was approximately $399,000 in cash.  Our Manager was
paid an acquisition fee of approximately $12,000 relating to this
transaction. At December 31, 2006, the Manager determined, based upon an
appraisal, to record an impairment loss of approximately $80,000.





Investment
in ICON Global Crossing II, LLC




On
September 28, 2006, we along with Fund Ten, formed ICON Global Crossing II, LLC
(“Global Crossing II”) with original interests of approximately 17% and 83%,
respectively. The total capital contributions made to Global Crossing II as of
December 31, 2006 were approximately $12,044,000, of which our share was
approximately $2,000,000.




On
September 28, 2006, Global Crossing II purchased telecommunications equipment
for approximately $12,044,000. We collected interim rent until the commencement
of the lease term. This equipment is subject to a 48 month lease, with
Global Crossing Telecommunications, Inc. (“Global Crossing”) that commenced on
November 1, 2006.  We incurred acquisition fees, payable to our
Manager, in the amount of $60,000, related to this transaction.





On
October 31, 2006, ICON Leasing Fund Eleven, LLC (“Fund Eleven”) made a
capital contribution of approximately $1,841,000 to Global Crossing II. The
contribution changed our interests in Global Crossing II and the interests of
Fund Ten and Fund Eleven at October 31, 2006 to 14.40%, 72.34% and 13.26%,
respectively. The additional contribution was used to purchase
telecommunications equipment subject to a 48 month lease with Global Crossing
that commenced on November 1, 2006.




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





Effective
June 7, 2006, the owner trustee, in connection with the Cathay Pacific
Airways Limited (“Cathay”) lease extension, refinanced the
non-recourse debt (the “Initial Refinancing”) related to the Cathay aircraft
which we own through an investment in ICON Aircraft 128 LLC (“ICON 128”). The
Initial Refinancing was entered into because the original non-recourse debt of
approximately $44,250,000 was due to be repaid on June 12, 2006. We were
required by the lender to pay down approximately $6,754,000 of the balloon
payment on the original loan as part of the Initial Refinancing. The principal
balance of the Initial Refinancing was approximately $37,495,000, was scheduled
to mature on December 1, 2011, required a balloon payment of approximately
$11,550,000 and accrued interest at the London Interbank Eurocurrency Market
Rate (“LIBOR”) plus 0.80% per year. The Initial Refinancing required monthly
payments of approximately $545,000 through May 2010 and approximately $495,000
through December 2011. We incurred approximately $197,000 of costs in connection
with the Initial Refinancing. We expensed these costs to interest expense during
the third quarter of 2006.





On August
1, 2006, the owner trustee was able to negotiate more favorable terms with a new
lender and refinanced the Initial Refinancing (the “Second Refinancing”). In
connection with the Second Refinancing, we were able to borrow approximately
$6,242,000 of non-recourse debt. The principal balance of the Second Refinancing
is approximately $43,800,000, and matures on December 1, 2011, requires a
balloon payment of approximately $22,750,000 and accrues interest at 6.85% per
year. The Second Refinancing requires monthly payments of approximately $545,000
through May 2010 and approximately $495,000 through December 2011. We paid
approximately $749,000 of costs in connection with the Second
Refinancing.






18
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We had a
commitment with respect to the Cathay aircraft to pay certain
maintenance costs, which were paid during 2006.




During
February 2002, we and Fund Eight B 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 that is on lease to Cathay. ICON 126
completed the transaction during March 2002. The lease was initially scheduled
to expire in March 2006, but has been extended until July 1, 2011. We and Fund
Eight B each have interests of 50.0% in ICON 126. ICON 126 consolidates the
financial position and operations of D.A.L. in its consolidated financial
statements.




Effective
March 27, 2006, the owner trustee, in connection with the lease extensions,
refinanced the non-recourse debt associated with the Cathay aircraft owned by
ICON 126.  The refinancing was entered into because the original
non-recourse debt of approximately $52,850,000 was due to be repaid on March 27,
2006. ICON 126 established, under the original lease, a reserve account totaling
approximately $583,000, which was used to reduce the balloon payment to
approximately $52,267,000. The refinanced non-recourse debt initially accrued
interest at LIBOR plus 1.165%, and matures on July 1, 2011 and requires a
balloon payment of approximately $32,000,000 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.





During
2006, ICON 126 received $182,020 of capital contribution from both of its
members, of which $50,000 was for amounts relating to the maintenance reserve
account and $132,020 related to costs paid by its members relating to the
refinancing of the non-recourse debt.





ICON 126
had a commitment to pay certain maintenance costs, which were incurred on or
prior to March 27, 2006. ICON 126 had established a maintenance account, which
totaled approximately $1,385,000 at September 30, 2006 (including interest
accreted in the amount of approximately $31,000 through December 31, 2006) 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 September 2006, approximately $1,153,000 was paid for the maintenance
costs. The excess cash remaining of approximately $95,000, which includes
interest accreted in the amount of approximately $36,000 through December 31,
2007, is being held in the maintenance account and will be used to pay down the
principal balance of the related non-recourse debt.





In
connection with the original purchase of the aircraft owned by ICON 126, the
owner trustee entered into two first priority charge on cash deposit agreements
pursuant to which the maintenance account for the Cathay aircraft owned by ICON
126 was cross-collateralized with the maintenance account for the Cathay
aircraft owned by ICON Aircraft 123 LLC (“ICON 123”), a wholly owned subsidiary
of Fund Eight B.  Under the terms of this agreement, 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 the remaining balance in its maintenance account on
behalf of ICON 123.  The maintenance account and related security
interest were then terminated.   ICON 126 will be reimbursed by
ICON 123 for the maintenance shortfall when the aircraft is sold.





ICON 128
and ICON 126 are parties to a residual sharing agreement with respect to the
aircraft. (See Note 13 in “Part II, Item 8. Consolidated Financial Statements
and Supplementary Information”).





Lease
Extension and Non-Recourse Debt Refinancing of Vessels





Effective
December 6, 2005, we extended the term of our bareboat charters with Wilhelmsen
through December 22, 2013. The charter extension provides Wilhelmsen with the
option to own the three car and truck carrying vessels (“Vessels”) at
the expiration of the charter extension for a nominal amount.





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On May
18, 2006, we refinanced the non-recourse debt related to the Vessels and
borrowed approximately an additional $22,043,000. The principal amount of the
refinanced non-recourse debt is $51,000,000, which debt matures on December 22,
2013 and accrues interest at LIBOR plus 1.50% per year. The refinanced
non-recourse debt requires quarterly payments ranging from $450,000 to $800,000.
The lender has a security interest in the Vessels and an assignment of the
rental payments under the charter. We paid approximately $630,000 in costs
associated with the non-recourse debt refinancing. We expensed approximately
$417,000 of loan origination costs associated with the original non-recourse
debt to interest expense.





Simultaneously
with the execution of the refinanced non-recourse debt, we entered into three
interest rate swap contracts with Fortis Bank NV/SA, New York Branch in the
aggregate amount of $51,000,000 in order to fix the variable interest rate on
the non-recourse debt and minimize our risk of interest rate fluctuation. The
interest rate swap contracts fixed the interest rate at 7.02% per year. On May
22, 2006, we terminated the original three interest rate swap contracts that
applied to the original financing of the Vessels. We recognized a gain on
settlement of the swaps of approximately $26,000.





Assignment
of Sodium Chlorate Production Facility





On March
28, 2005, ICON Cash Flow Partners L.P. Seven (“L.P. Seven”), an entity also
managed by our Manager, assigned its entire 50% interest in a lease with EKA
Chemicals, Inc. (“EKA”) to us for $745,000.  This assignment was made
in order for L.P. Seven to repay its outstanding debt obligation to us pursuant
to the contribution agreement that we entered into with some of our affiliates
in connection with the line of credit agreement we had with Comerica Bank, which
was fully satisfied in 2005.  This amount represented the fair value
of L.P. Seven’s interest in EKA on March 28, 2005.  This amount was
determined to represent the fair value of the lease with EKA based upon the
expected future cash flows from such lease.  At December 31, 2005, we
received the full payment of $745,000 from EKA.





Assignment
of Rowan Cash Flow





On
February 23, 2005, L.P. Seven assigned to us 3.02% of its rights in 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 subject to a lease with
Rowan Companies, Inc.  L.P. Seven assigned the rights to us as
repayment of its approximately $755,000 outstanding debt obligation to us
pursuant to a contribution agreement that we had with Comerica Bank, which was
fully satisfied in 2005. This assignment increased our rights to the profits,
losses and cash flows from L.P. Seven’s limited partnership interest which were
assigned to us in November 2004, from 2.60%, to 5.62%.  This amount
represented L.P. Seven’s proportionate fair value of its rights in the mobile
offshore drilling rig at February 23, 2005. The fair value of the mobile
offshore drilling rig was determined using an appraisal.





Acquisition
of Mitel Networks 3340 Global Branch Office Solution Phone Systems





During
December 2004, we acquired a Mitel Networks 3340 Global Branch Office Solution
Phone System subject to lease with CompUSA, Inc.  The lease term was
set to expire during December 2008. The purchase price was approximately
$173,000 in cash. During December 2007, we sold the phone system for total
proceeds of approximately $45,000 and recognized a gain on sale of approximately
$6,000.





Acquisition
of Medical Equipment





During
December 2004, we acquired from Varilease Technology Finance Group, Inc. a
portfolio of medical equipment consisting of two leases. These leases expire on
December 31, 2008. The purchase price was approximately $2,046,000 in
cash.  Our Manager waived its acquisition fee relating to this
transaction.








20
 Table of Contents





Acquisition
of Vessel





On July
24, 2007, ICON Samar, LLC (“ICON Samar”) purchased one Aframax 98,640 DWT
product tanker - the Samar Spirit – from an affiliate of the Teekay Corporation
(“Teekay”). The purchase price for the Samar Spirit was $40,250,000, comprised
of (i) the capital contribution to ICON Samar of approximately $16,868,000 and
(ii) borrowings of approximately $23,382,000 of long-term debt under a secured
loan agreement with Fortis Capital Corp. In addition, ICON Samar paid an
arrangement fee to Fortis Capital Corp. of approximately $175,000 and has a
payable to our Manager for approximately $54,000 related to legal fees incurred.
Simultaneously with the closing of the purchase of the Samar Spirit, a
bareboat charter was entered into with Teekay for a term of 48 months. The
charter commenced on July 24, 2007 and is scheduled to expire on July 24, 2011.
Our Manager waived the acquisition fees in connection with the
purchase.





Recent
Accounting Pronouncements





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 157, “Accounting
for Fair Value Measurement” (“SFAS No. 157”).  SFAS No. 157
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and establishes a hierarchy that
categorizes and prioritizes the sources to be used to estimate fair value. SFAS
No. 157 also expands financial statement disclosures about fair value
measurements. On February 14, 2008, the FASB issued FASB Staff Position SFAS No.
157-1, which amends SFAS No. 157 to exclude SFAS No. 13, “Accounting for
Leases” and other accounting pronouncements that address fair value measurements
of leases from the provisions of SFAS No. 157.  SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007. Our Manager has not yet determined whether SFAS No. 157
will have a material impact on our financial condition, results of operations,
or cash flow. However, our Manager believes we will likely be required to
provide additional disclosures as part of our future financial statements,
beginning with the first quarter of 2008.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities—Including an Amendment of SFAS
No. 115” (“SFAS No. 159”), which permits but does not require us to measure
financial instruments and certain other items at fair value. Unrealized gains
and losses on items for which the fair value option has been elected are
reported in earnings.  This statement is effective for financial
statements issued for fiscal years beginning after November 15,
2007.  Our Manager is currently evaluating the impact of adopting SFAS
No. 159 on our consolidated financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an Amendment of ARB No. 51” (“SFAS No.
160”). SFAS No. 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the retained interest and gain
or loss when a subsidiary is deconsolidated. This statement is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 with earlier adoption prohibited. Our Manager is
currently evaluating the impact of SFAS No. 160 on our consolidated financial
statements.







21
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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
U.S. generally accepted accounting principles (“US GAAP”) requires our 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. 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,


·
            Initial
      direct costs,


·
            Acquisition
      fees,


·
            Foreign
      currency translation, and


·
            Derivative
      financial instruments





Lease
Classification and Revenue Recognition





Each
lease with regard to the equipment we lease to third parties will be classified
either as a finance or an operating lease, which will be determined based
upon the terms of each lease. For a finance lease, the initial direct costs
are capitalized and amortized over the term of the lease.  For an operating
lease, the initial direct costs are included as a component of the cost of the
equipment and depreciated over the estimated useful life of the
equipment.





For
finance leases, we record, at lease inception, the total minimum lease payments
receivable from the lessee, the estimated unguaranteed residual value of the
equipment at lease termination, the initial direct costs related to the lease
and the related unearned income.  Unearned income represents the difference
between the sum of the minimum lease payments receivable plus the estimated
unguaranteed residual 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 and uncollected operating lease receivables are
included in rents receivable.  Deferred income is the difference
between the timing of the cash payments and the income recognized on a straight
line basis.





Our
Manager has an investment committee that approves each new equipment and
financing transaction and lease acquisition.  As part of its process
it determines the residual value, if any, to be used once the acquisition has
been approved.  The factors considered in determining the residual
value include, but are not limited to, the creditworthiness of the potential
lessee, the type of equipment being considered, how the equipment is integrated
into the potential lessees business, the length of the lease and the industry in
which the potential lessee operates.





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.






22
 Table of Contents





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 amount
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 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. Our 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.





Depreciation





We record
depreciation expense on equipment classified as an operating lease.  In
order to calculate depreciation, we first determine the depreciable equipment
cost, which is the cost less 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
capitalize initial direct costs associated with the origination and funding of
lease assets and investment in financing facility in accordance with SFAS
No. 91 “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 actual lease term using a
straight-line method for operating leases and the effective interest rate method
for direct finance leases. Costs related to leases that are not consummated are
expensed as an acquisition expense.





Acquisition
fees





Pursuant
to our LLC Agreement, acquisition fees paid to our Manager are based on 3% of
the equipment purchase price. These fees are capitalized and included in the
cost of the acquired asset.








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 Table of Contents







Foreign
Currency Translation





Assets
and liabilities of investments having non-United States dollar functional
currencies are translated at year-end rates of exchange. Contributed capital
accounts are translated at the historical rate of exchange when the capital was
contributed or distributed.  Revenues and expenses are translated at
weighted average rates of exchange for the period. Resulting translation
adjustments, if material, are recorded as a separate component of accumulated
other comprehensive income or loss.





Derivative
Financial Instruments





We
account for derivative financial instruments in accordance with SFAS No. 133,
“Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”),
which established accounting and reporting standards for derivative
instruments.





SFAS No.
133, as amended, requires us to recognize all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at fair value. It
further provides criteria for derivative instruments to be designated as fair
value or cash flow hedges, and establishes accounting standards for reporting
changes in the fair value of the derivative instruments.





We
designate derivative financial instruments as either a hedge or a derivative
instrument.  For hedging instruments, at the trade date, these
instruments and their hedging relationship are identified, designated and
documented.  For derivative financial instruments designated as hedge
instruments, we evaluate the effectiveness of these hedges, at least quarterly,
to ensure that there remains a highly effective correlation in the hedge
relationship. Once the hedge relationship is established the effective portion
of the hedge is recorded on the consolidated balance sheet as a component of
members’ equity, accumulated other comprehensive income, while the ineffective
portion, if any, is recognized as an expense in our consolidated statements of
operations.





For
derivative financial instruments not designated as hedge instruments, realized
and unrealized changes in fair value are recognized into our earnings in the
period in which the changes occur or when such instruments are
settled.





Results
of Operations for the Years Ended December 31, 2007 (“2007”) and 2006
(“2006”)





We are
currently in our operating period and expect to enter our liquidation period on
May 1, 2008.  During our operating period, we will continue to look to
purchase equipment subject to leases, either with cash or with a combination of
cash and financing.  As such, we expect our revenue will fluctuate due
to our selling some equipment while purchasing other equipment subject to
leases.  We also expect to have gains and losses from the sales of
equipment during this time period.  As for our expenses, we anticipate
interest expense to decrease as our outstanding debt decreases.  If we
enter into an equipment lease where we finance a portion of the purchase price,
then interest expense will increase.





Once we
enter our liquidation period, we will sell our assets in the ordinary course of
business. As we begin to 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 the lender. As leased equipment is sold, we will experience
both gains and losses on these sales.







24
 Table of Contents








Revenue
for 2007 and 2006 are summarized as follows:





Years Ended December
    31,2007
            
            
            2006
            
            
            ChangeRental
      income
            
            $
            13,832,058
            
            
            $
            17,863,494
            
            
            $
            (4,031,436
            )Finance
      income
            
            
            6,747,205
            
            
            
            6,461,861
            
            
            
            285,344Income
      (loss) from investments in joint ventures
            
            
            2,305
            
            
            
            (279,072
            )
            
            
            281,377Net
      gain on sales of equipment
            
            
            2,291,397
            
            
            
            128,181
            
            
            
            2,163,216Interest
      and other income
            
            
            587,121
            
            
            
            710,689
            
            
            
            (123,568
            )Total
      revenue
            
            $
            23,460,086
            
            
            $
            24,885,153
            
            
            $
            (1,425,067
            )





Total
revenue for 2007 decreased by $1,425,067, or 5.7%, as compared to 2006. This
decrease was primarily due to a decrease in rental income partly offset by an
increase in net gain on sales of equipment. On March 14, 2006, we renegotiated
our charters with Wilhelmsen, and in connection with the charter extensions, we
reclassified the charters from operating leases to direct finance leases. This
change in lease classification caused our rental income to decrease by
approximately $2,471,000, while increasing our finance income. On March 31,
2007, we sold our aircraft on lease with FedEx, which resulted in a decrease in
rental income of approximately $4,308,000. In addition, the lease extension with
Cathay during March 2006 included a reduction in the monthly rents receivable
and resulted in a total reduction of approximately $1,077,000 for 2007. The
total reduction in the rental income of approximately $4,031,000 was partly
offset by an increase in rental income during 2007 due to the addition of ICON
Samar and the reclassification of the modified leases with AMD from direct
finance leases to operating leases. The increase in rental income for both ICON
Samar and AMD were approximately $2,722,000 and $936,000, respectively. The
increase in net gain on sales of equipment was due to the sale of railcars that
were previously on lease to Texas Genco during the second quarter of 2007. The
net gain on the sale of the railcars was approximately $3,074,000, which was
partly offset by the net loss on sale of the aircraft that was previously on
lease to FedEx of approximately $640,000.





Expenses
for 2007 and 2006 are summarized as follows:





Years Ended December 31,2007
            
            
            2006
            
            
            ChangeManagement
      fees - Manager
            
            $
            1,780,581
            
            
            $
            2,114,283
            
            
            $
            (333,702
            )Administrative
      expense reimbursements - Manager
            
            
            677,965
            
            
            
            596,881
            
            
            
            81,084General
      and administrative
            
            
            751,566
            
            
            
            607,142
            
            
            
            144,424Interest
            
            
            6,657,968
            
            
            
            6,897,802
            
            
            
            (239,834
            )Depreciation
      and amortization
            
            
            5,628,072
            
            
            
            10,579,026
            
            
            
            (4,950,954
            )Impairment
      loss
            
            
            10,000
            
            
            
            3,005,403
            
            
            
            (2,995,403
            )Maintenance
      expense
            
            
            -
            
            
            
            1,317,361
            
            
            
            (1,317,361
            )Total
      expenses
            
            $
            15,506,152
            
            
            $
            25,117,898
            
            
            $
            (9,611,746
            )







25
 Table of Contents








Total
expenses for 2007 decreased by $9,611,746, or 38.3%, as compared to 2006. This
decrease was primarily the result of the decrease in depreciation and
amortization, impairment loss and maintenance expense. The decrease in
depreciation and amortization expense was due to the change in the lease
classification of our charters with Wilhelmsen on March 14, 2006, that resulted
in a total decrease of approximately $1,800,000, the extension of our lease with
Cathay for ICON 128 that resulted in a reduction of approximately $1,863,000,
and the sales of the aircraft and railcars that were previously on lease to
FedEx and Texas Genco, that resulted in a total reduction of approximately
$1,958,000 and $448,000, respectively. The total decrease in depreciation and
amortization expense was partly offset by the increase due to the addition of
the Samar charter in July 2007, which resulted in approximately $1,162,000 of
additional expense for the year. The impairment loss in 2006 was due to the loss
recognized on the sale of the co-generation facility. The decrease in
maintenance expense was due to a one time charge for maintenance costs for ICON
128 of $1,371,361 in 2006.





Minority
Interest





Minority
interest expense for 2007 decreased by $421,242, or 96.8%, as compared to 2006.
The decrease in minority interest expense was due to the sale of the aircraft
previously on lease to FedEx by Aircraft 46835 on March 30, 2007.





Net
Income (Loss)





As a
result of the foregoing factors, net income for 2007 was $7,940,018 as compared
to a net loss of $(667,903) for 2006. The net income per weighted average number
of additional members’ shares outstanding for 2007 was $80.17 as compared to net
loss per weighted average number of additional members’ shares outstanding for
2006, which was $(6.74).








Results
of Operations for the Years Ended December 31, 2006 (“2006”) and 2005
(“2005”)





Revenue
for 2006 and 2005 are summarized as follows:





Years Ended December
    31,2006
            
            
            2005
            
            
            ChangeRental
      income
            
            $
            17,863,494
            
            
            $
            28,934,363
            
            
            $
            (11,070,869
            )Finance
      income
            
            
            6,461,861
            
            
            
            1,318,855
            
            
            
            5,143,006(Loss)
      income from investments in joint ventures
            
            
            (279,072
            )
            
            
            345,661
            
            
            
            (624,733
            )Net
      gain (loss) on sales of equipment
            
            
            128,181
            
            
            
            (301,052
            )
            
            
            429,233Interest
      and other income
            
            
            710,689
            
            
            
            51,640
            
            
            
            659,049Total
      revenue
            
            $
            24,885,153
            
            
            $
            30,349,467
            
            
            $
            (5,464,314
            )








Total
revenue for 2006 decreased by $5,464,314, or 18.0%, as compared to 2005. This
decrease was due to a decrease in rental income and a loss from investments in
joint ventures during 2006. On March 14, 2006, we renegotiated our charters with
Wilhelmsen, and, in connection with the charter extensions, we reclassified the
charters from operating leases to direct finance leases. This change in lease
classification caused our rental income to decrease while increasing our finance
income. The loss from our investments in joint ventures was primarily due to the
lease extension completed with Cathay during March 2006, which reduced the
rental income of our joint venture, ICON 126, whose sole asset is an Airbus
A340-313X aircraft.  The increase in interest and other income was
primarily due to the foreign exchange gain recognized on our sales of
investments in unguaranteed residual values during 2006, interest on the cash
received with regard to the Wilhelmsen refinancing discussed above and to cash
received for the sales of equipment in 2006.








26
 Table of Contents








Expenses
for 2006 and 2005 are summarized as follows:





Years Ended December
    31,2006
            
            
            2005
            
            
            ChangeManagement
      fees - Manager
            
            $
            2,114,283
            
            
            $
            2,131,445
            
            
            $
            (17,162
            )Administrative
      expense reimbursements - Manager
            
            
            596,881
            
            
            
            647,534
            
            
            
            (50,653
            )General
      and administrative
            
            
            607,142
            
            
            
            596,519
            
            
            
            10,623Interest
            
            
            6,897,802
            
            
            
            5,653,467
            
            
            
            1,244,335Depreciation
      and amortization
            
            
            10,579,026
            
            
            
            21,328,939
            
            
            
            (10,749,913
            )Impairment
      loss
            
            
            3,005,403
            
            
            
            3,182,485
            
            
            
            (177,082
            )Maintenance
      expense
            
            
            1,317,361
            
            
            
            -
            
            
            
            1,317,361Total
      expenses
            
            $
            25,117,898
            
            
            $
            33,540,389
            
            
            $
            (8,422,491
            )








Total
expenses for 2006 decreased by $8,422,491, or 25.1%, as compared to 2005. This
decrease was primarily the result of the decrease in depreciation and
amortization expense resulting from the change in the lease classification of
our charters with Wilhelmsen discussed above, and to a lesser extent the
decrease in depreciation on FedEx discussed in conjunction with minority
interest below. The increase in interest expense was related to our net increase
in non-recourse debt, during 2006 of approximately
21,855,000.  Additionally, the interest rate on our refinanced debt
related to Wilhelmsen increased from 4.67% to 7.02% per year.  The
increase in maintenance expense was due to maintenance costs not incurred in
2005.





Minority
Interest





Minority
interest expense for 2006 increased by $848,952, or 205.2%, as compared to 2005.
The increase in minority interest expense was due to the increase in net income
on our consolidating interest in Aircraft 46835 resulting from the impairment
loss charge at December 31, 2005, which decreased 2006 depreciation
expense.





Net
Loss





As a
result of the foregoing factors, net loss for 2006 and 2005 was $667,903 and
$2,777,128, respectively.  The net loss per weighted average number of
additional members’ shares outstanding for 2006 and 2005 was $6.74 and
$27.99, respectively.





Financial
Condition





This
section discusses the major balance sheet variances from 2007 compared to
2006.





Total
Assets





Total
assets increased $2,382,509 from $137,187,658 in 2006 to $139,570,167 in 2007.
The increase was primarily due to the addition of the Samar Spirit on bareboat
charter with Teekay during 2007, which was partly offset by the sales of the
aircraft and the railcars previously on lease to FedEx and Texas Genco,
respectively.





Current Assets





Current
assets decreased by $16,747,618 from $28,435,971 in 2006 to $11,688,353 in
2007.  The decrease was primarily due to the decrease in cash and cash
equivalents. We paid approximately $16,922,000 to acquire Samar in 2007. This
was partly offset by approximately $3,430,000 of proceeds received from the sale
of Texas Genco. In addition, the reclassification of one Wildwood lease and all
three AMD leases from finance leases to operating leases, due to lease
modifications during 2007, contributed to the total decrease in current
assets.






27
 Table of Contents





Total
Liabilities





Total
liabilities increased $5,431,477 from $94,229,225 in 2006 to $99,660,702 in
2007. The increase was primarily due to additional long-term debt borrowings to
finance the acquisition of the asset on bareboat charter with Teekay during
2007.





Current
Liabilities





Current
liabilities increased $2,629,445 from $19,025,333 in 2006 to $21,654,778 in
2007. The increase was primarily due to the increase in the value of the
interest rate swap contracts we have for the Wilhelmsen and Teekay bareboat
charters. The bareboat charter with Teekay is leveraged and newly acquired in
2007, which also contributed to the increase in current
liabilities.





Total Members’Equity





Total members’ equity decreased
$2,423,884 from $42,333,349 in 2006 to $39,909,465 in 2007. The decrease was due
to cash distributions to the members, partially offset by net income and the
larger accumulated other comprehensive loss for the interest rate swap recorded
during 2007.





Liquidity
and Capital Resources





Sources and Uses of
Cash





At
December 31, 2007 and 2006, we had cash and cash equivalents of $5,571,481 and
$19,730,600, respectively. During our offering period, our main source of cash
was from financing activities and during our operating period, our main source
of cash was from investing activities, which we expect to continue during the
liquidation period. During our offering period, our main use of cash was from
investing activities and during our operating period our main use of cash was
from financing activities, which we anticipate will continue during the
liquidation period.





Operating
Activities




Sources
of Cash




Sources
of cash from operating activities increased $1,874,968 from $2,966,397 in 2006
to $1,091,429 in 2007. The decrease was primarily due to the collection of
non-financed receivables from finance leases of approximately $2,499,000 and
$3,965,000 for 2007 and 2006, respectively. The decrease was due to a reduction
in AMD and Wildwood of approximately $1,360,000 and $328,000, respectively, in
accordance to the reclassifications of the leases from finance to operating
leases during 2007. The decrease was partly offset by an increase in Wilhelmsen
due to the reclassification of the lease from operating to finance
lease.




Our main
source of cash from operating activities in 2006 was primarily from the
collection of non-financed receivables from direct finance leases of
approximately $3,965,000, which were received from our finance leases with
Wildwood of approximately $902,000, Metaldyne of approximately $87,000, and AMD
of approximately $2,928,000. During March 2006, the equipment on lease to
Metaldyne was sold. Our main source of cash from operating activities in 2005
was primarily from the collection of non-financed receivables from direct
finance leases of approximately $5,186,000, which were received from our finance
leases with Wildwood of approximately $932,000, Metaldyne of approximately
$417,000, and with AMD of $3,089,000. Additionally, we received approximately
$745,000 from EKA Chemicals, Inc.






28
 Table of Contents




Investing
Activities




Sources
of Cash




Sources
of cash increased $1,943,739 from $8,677,307 in 2006 to $10,621,046 in 2007. The
increase was primarily due to the proceeds from the sales of equipment and
distributions received from our joint ventures. Proceeds from the sales of
equipment for 2007 were $9,356,762, which consisted primarily of the proceeds
received from the sale of the aircraft for Aircraft 46835 of approximately
$3,621,000, the  sale of railcars for Texas Genco of approximately
$4,960,000 and the amount received through our investment in unguaranteed
residual values of approximately $710,000. During 2006, our proceeds from the
sales of equipment were $7,864,799, which consisted of the proceeds received
from the sale of the Kenilworth facility for approximately $4,800,000, the sale
of the manufacturing equipment from Metaldyne for approximately $1,931,000 and
the sale of the investment in unguaranteed residual values. Distributions
received from our joint ventures of $1,264,284 for 2007 consisted primarily of
distributions from Global Crossing II of approximately $406,000, approximately
$548,000 from Aircraft 47820, approximately $290,000 from GeicJV and
approximately $21,000 from ICON SPK. Distributions received from our joint
ventures in 2006 were $812,508, of which we received approximately $471,000 from
ICON GeicJV, approximately $237,000 from ICON SPK and approximately $105,000
from Global Crossing II.





Our
sources of cash from investing activities in 2006 consisted of proceeds from the
sales of equipment of approximately $7,865,000, which consisted of the proceeds
received from the sale of the Kenilworth facility for approximately $4,800,000,
the sale of manufacturing equipment from Metaldyne for approximately $1,931,000,
the sale of the investment in unguaranteed residual values, and to distributions
received from our joint ventures of approximately $813,000, of which we received
approximately $105,000 from Global Crossing II, approximately $471,000 from ICON
GeicJV, and approximately $237,000 from ICON SPK. Our sources of cash from
investing activities in 2005 consisted of proceeds from the sales of equipment
of approximately $801,000, which consisted of the proceeds we received from the
sales of our investment in unguaranteed residual values, and distributions
received from joint ventures of approximately $657,000, of which we received
approximately $360,000 from ICON GeicJV and approximately $298,000 from ICON
SPK.





Uses
of Cash





Use of
cash increased $14,788,072 from $2,091,010 in 2006 to $16,879,082 in 2007. The
increase was primarily for purchases of equipment and investments in joint
ventures. Our use of cash in 2007 was in connection with our acquisition of
Samar on bareboat charter with Teekay for $16,867,667.





Our use
of cash from investing activities in 2006 was approximately $2,091,000, for
investments in joint ventures, of which approximately $2,000,000 was for our
investment in Global Crossing II, and $91,000 was for our investment in ICON
126. Our uses of cash from investing activities in 2005 were for loans and
advances to affiliates of $1,500,000, which were repaid with investments, and
approximately $575,000, for amounts paid to Fund Ten for our Comp USA and
Rite-Aid operating leases acquired in 2004.







29
 Table of Contents








Financing
Activities





Sources
of Cash





We had no
sources of cash in 2007. Our sources of cash in 2006 consisted of proceeds from
non-recourse borrowings of approximately $28,723,000, from our refinancing of
our Wilhelmsen charters and Cathay leases proceeds from our recourse borrowings
of $875,000 and one-time proceeds from the termination of our interest rate swap
contracts relating to our Wilhelmsen charters of $705,000. We do not anticipate
future proceeds from non-recourse borrowings. Our source of cash from financing
activities in 2005 was from proceeds we received from our recourse debt in the
amount of $4,535,000.





Uses
of Cash





Uses of
cash decreased $13,415,198 from $22,407,710 in 2006 to $8,992,512 in 2007. The
decrease was primarily due to the repayment of non-recourse borrowings, the
repayment of recourse borrowings and financing costs paid. We repaid our
non-recourse borrowings of $6,867,630 in 2006. The decrease in the repayment was
due to our sale of the Aircraft and engines and the railcars, whose debt was
fully paid off upon the sales. In 2006 we repaid recourse borrowings of
$5,410,000 and paid approximately $1,200,000 relating to costs
incurred for various non-recourse debt refinancings.





Our uses
of cash from financing activities in 2006 were cash distributions paid to our
members of approximately $8,920,000, the repayment of non-recourse borrowings of
approximately $6,868,000, repayment of recourse borrowings of $5,410,000, and
approximately $1,200,000 relating to costs incurred for various non-recourse
debt refinancings.  Our uses of cash from financing activities in 2005
were primarily cash distributions to our members of approximately $8,929,000 and
the redemption of additional member shares of approximately
$161,000.





Financings
and Borrowings





Non-Recourse
Long-Term Debt





On May
18, 2006, we refinanced the non-recourse debt related to the Vessels and
borrowed an additional amount of approximately $22,043,000. The principal amount
of refinanced non-recourse debt of $51,000,000 matures on December 22, 2013 and
accrues interest at LIBOR plus 1.50% per year. The refinanced non-recourse debt
requires quarterly payments ranging from $450,000 to $800,000. The lender has a
security interest in the Vessels and an assignment of the rental payments under
the charter. We paid approximately $630,000 in costs associated with the
non-recourse debt refinancing. We expensed approximately $417,000 of loan
origination costs associated with the original non-recourse debt to interest
expense.





On July
24, 2007, we, through our wholly-owned subsidiary, ICON Samar, borrowed
approximately $23,382,000 in connection with a bareboat charter with
Teekay. The long-term debt matures on July 25, 2011 and accrues interest at
LIBOR plus 1.00% per year.  The long-term debt requires monthly
payments ranging from $480,000 to $530,000. The lender has a security interest
in the vessel and an assignment of the rental payments under the bareboat
charter. We paid approximately $175,000 in costs associated with the debt, which
was capitalized as deferred financing costs.





Simultaneously
with the execution of the refinanced non-recourse debt, we entered into three
interest rate swap contracts with Fortis Bank NV/SA, New York Branch in the
aggregate amount of $51,000,000 in order to fix the variable interest rate on
the non-recourse debt and minimize our risk of interest rate fluctuation. The
interest rate swap contracts fixed the interest rate at 7.02% per year. On May
22, 2006, we terminated the original three interest rate swap contracts that
applied to the original financing of the Vessels. We recognized a gain on
settlement of the swaps of approximately $26,000.






30
 Table of Contents





Effective
June 7, 2006, the owner trustee, in connection with the Cathay lease extension,
refinanced the non-recourse debt related to ICON 128 (the “Initial
Refinancing”). The Initial Refinancing was entered into because the original
non-recourse debt of approximately $44,250,000 was due to be repaid on June 12,
2006.  We were required by the lender to pay down approximately
$6,754,000 of the balloon payment as part of the Initial Refinancing. The
principal balance of the Initial Refinancing was approximately $37,495,000, was
scheduled to mature on December 1, 2011, required a balloon payment on the
original loan of approximately $11,550,000 and accrued interest at LIBOR plus
0.80% per year. The Initial Refinancing required monthly payments of
approximately $545,000 through May 2010 and approximately $495,000 through
December 2011. We incurred approximately $197,000 of costs in connection with
the Initial Refinancing. We expensed these costs to interest expense during the
third quarter of 2006.





On August
1, 2006, the owner trustee was able to negotiate more favorable terms with a new
lender and refinanced the Initial Refinancing (the “Second Refinancing”). In
connection with the Second Refinancing, we were able to borrow approximately
$6,242,000 of non-recourse debt. The principal balance of the Second Refinancing
is approximately $43,800,000, matures on December 1, 2011, requires a balloon
payment of approximately $22,750,000 and accrues interest at 6.85% per year. The
Second Refinancing requires monthly payments of approximately $545,000 through
May 2010 and approximately $495,000 through December 2011. We paid approximately
$749,000 of costs in connection with the Second Refinancing.




As of
December 31, 2007 and 2006, we had deferred financing costs of $665,443 and
$563,306, respectively. For the year ended December 31, 2007 and 2006 we
recognized amortization expense of $73,231 and $44,354,
respectively.




Revolving
Line of Credit, Recourse





On August
31, 2005, we, together with certain of our affiliates (entities sponsored and
organized by our Manager), Fund Eight B, Fund Ten and Fund Eleven (collectively,
the "Borrowers") entered into a Commercial Loan Agreement (the "Loan
Agreement"), with California Bank & Trust (the “Lender”). The Loan Agreement
provides for a revolving line of credit of up to $17,000,000 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. 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 in
which the Borrowers have a beneficial interest.





As part
of the Loan Agreement, the Borrowers are required to comply with certain
financial covenants, including a minimum debt coverage ratio, a tangible
net worth covenant, a leverage ratio and a minimum liquidity covenant. The Loan
Agreement prohibits any Borrower from declaring or paying any distribution to
investors if such a payment would cause such Borrower to become non-compliant
with the financial covenants in the Loan Agreement. The Borrowers are obligated
to pay a quarterly commitment fee of 0.5% on unused commitments under the
Facility.





In
addition, on August 31, 2005, the Borrowers entered into a Contribution
Agreement (the "Contribution Agreement") pursuant to which the Borrowers agreed
to certain restrictions on the amounts and terms of their respective borrowings
under the Facility in order to minimize the risk that a Borrower would be unable
to repay its portion of the outstanding obligations under the Facility at any
time. These restrictions include, but are not limited to, borrowing in excess of
the lesser of (a) an amount each Borrower could reasonably expect to repay in
one year from its projected free cash flow, or (b) the greater of (i) the
borrowing base, as defined in the Agreement, as applied to such and (ii) 50% of
the net worth of such Borrower. The Contribution Agreement also provides that,
in the event a Borrower pays an amount under the Contribution Agreement in
excess of its share of the total obligations under the Facility, whether by
reason of an event of default or otherwise, the other Borrowers will immediately
make a contribution payment to such Borrower and in such amount that the
aggregate amount paid by each Borrower reflects its allocable share of the
aggregate obligations under the Facility. The Borrowers' obligations to each
other under the Contribution Agreement are collateralized by a subordinate lien
on the assets of each Borrower.






31





On
December 26, 2006, the Borrowers entered into a Loan Modification Agreement (the
“Loan Modification”) to the Loan Agreement. The Loan Modification extended the
Facility from August 31, 2007 to September 30, 2008 and lowered (i) the interest
rate for advances under the Facility from the Lender’s prime rate plus 0.25% to
the Lender’s prime rate and (ii) the interest rate on the five separate advances
that are permitted to be made under the Facility to the rate at which United
States dollar deposits can be acquired by LIBOR plus 2.75% per year to LIBOR
plus 2.5% per year. In addition, pursuant to the terms of the Loan Modification,
the Borrowers no longer have to maintain a cash reserve. The interest rate at
December 31, 2007 was 7.25%.





At
December 31, 2006, there was $3,125,000 outstanding under the Facility, which
represented the entire amount outstanding for all Borrowers. We had no
borrowings outstanding under the Facility as of such date.





On June
20, 2007, the Loan Agreement, the Contribution Agreement and the Loan
Modification were modified to admit ICON Leasing Fund Twelve,
LLC  (“Fund Twelve”) as a permitted borrower.





The
Borrowers were in compliance with the covenants at December 31, 2007. The
Borrowers were also in compliance with the Contribution Agreement at December
31, 2007 and no amounts were due to or payable by us under the Contribution
Agreement.





Aggregate
borrowings by all Borrowers under the Facility amounted to $6,255,000 at
December 31, 2007. We had no borrowings outstanding under the Facility as of
such date. The balance of $6,255,000 relates to borrowings of $1,255,000 by Fund
Eight B and $5,000,000 by Fund Ten. Subsequent to December 31, 2007, Fund Ten
made repayments on various dates totaling $5,000,000.





Our
Manager believes that with the cash we currently have available, the cash being
generated from our leases and the proceeds from equipment and asset sales, we
have sufficient cash to continue our operations into the foreseeable future. We
have the ability to borrow funds under the Facility, if necessary. However, our
ability to generate cash in the future is subject to general economic,
financial, competitive, regulatory and other factors that affect our lessees’
businesses that are beyond our control.  See “Part I, Item
1A.  Risk Factors.”




Distributions





We, at
our Manager’s discretion, paid monthly distributions to each of our members
beginning the first month after each such member was admitted through the
termination of our operating period, which is expected to be April 30,
2008. We paid distributions to additional members for the years ended December
31, 2007, 2006 and 2005 in the amount of $8,825,274, $8,831,229 and $8,840,105,
respectively. We paid distributions to our Manager for the year ended December
31, 2007, 2006 and 2005 in the amount of $89,144, $89,204 and $89,294,
respectively.





Contractual
Obligations and Commitments





At
December 31, 2007, we had non-recourse debt obligations. The lenders have
security interests in equipment relating to each non-recourse debt instrument
and an assignment of the rental payments under the leases associated with the
equipment.  If the lessee were to default on the lease, the equipment
would be returned to the lender in order to satisfy the non-recourse
debt.  At December 31, 2007, our outstanding non-recourse indebtedness
was $96,122,281. We are a party to the Facility, as discussed in the financing
and borrowings section above, although we had no borrowings under the Facility
at December 31, 2007.






32




Principal
maturities of our non-recourse debt and related interest consisted of the
following at December 31, 2007:





Payments Due by PeriodLess
      Than 1
            
            
            1 -
      3
            
            
            3 -
      5
            
            
            More
      Than 5Total
            
            
            Year
            
            
            Years
            
            
            Years
            
            
            YearsNon-recourse
      debt
            
            $
            96,122,280
            
            
            $
            18,116,356
            
            
            $
            30,831,737
            
            
            $
            41,774,187
            
            
            $
            5,400,000Non-recourse
      interest
            
            
            18,947,096
            
            
            
            6,245,386
            
            
            
            8,988,356
            
            
            
            3,441,857
            
            
            
            271,497$
            115,069,376
            
            
            $
            24,361,742
            
            
            $
            39,820,093
            
            
            $
            45,216,044
            
            
            $
            5,671,497





We have
refinanced and extended our commitments with regard to our Wilhelmsen charters
and our 100% owned Cathay aircraft lease. On May 18, 2006, we extended the
maturity of the loan related to the Vessels to December 22, 2013, from the
original maturity of September 22, 2008. The quarterly payments range from
$450,000 to $800,000. Simultaneously with the refinancing, we entered into three
interest rate swap contracts to convert the variable interest rate debt to
a fixed rate of 7.02% per year.





On June
7, 2006, we refinanced the non-recourse debt related to our Cathay aircraft
which we own, which extended the maturity of the debt to December 1, 2011 from
the original maturity of July 1, 2006. The monthly payments were approximately
$545,000 through May 2010 and approximately $495,000 through December 2011 and
required a balloon payment of $11,550,000. On August 1, 2006, we were able to
negotiate more favorable terms with a new lender and refinanced the earlier
financing.  The existing non-recourse debt matures on December 1,
2011.  It requires monthly payments of approximately $545,000 through
May 2010 and approximately $495,000 through December 1, 2011 and a balloon
payment of approximately $22,750,000.  Interest accrues on the debt at
6.85% per year.





We had a
commitment with respect to our Cathay aircraft to pay certain maintenance costs,
which were paid during 2006.




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.





Off-Balance
Sheet Transactions





None.





Inflation
and Interest Rates





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





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









33
 Table of Contents







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 (and the related residuals) 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.





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





To hedge
our variable interest rate risk, we may enter into interest rate swap contracts
that will effectively convert the underlying floating interest rates to a fixed
interest rate. In general, these swap agreements will reduce our interest rate
risk associated with variable interest rate borrowings.  However, we
will be exposed to and manage credit risk associated with our counterparties to
our swap agreement by dealing only with institutions our Manager considers
financially sound.





Effective
March 14, 2006, we refinanced the non-recourse debt obligations related to the
three car and truck carrying vessels that are subject to bareboat charters with
Wilhelmsen. The non-recourse debt accrues interest at LIBOR plus 1.50% per
year.  Simultaneously with the refinancing, we entered into three
identical interest rate swap contracts, each having a notional amount of
$17,000,000, with Fortis Bank NV/SA, New York Branch.  We entered into
these agreements in order to effectively fix the variable interest rate on the
non-recourse debt.  The interest rate swap contracts fixed the
interest rate with respect to the non-recourse debt at 7.02% per
year.





On July
24, 2007, we, through our wholly-owned subsidiary, ICON Samar, borrowed
approximately $23,382,000 in connection with a bareboat charter with
Teekay. The long-term debt matures on July 25, 2011 and accrues interest at
LIBOR plus 1.00% per year.  Simultaneously with the borrowing, we
entered into an interest rate swap contract with Fortis Bank NV/SA, New York
Branch in order to fix the debt interest rate at 6.35% per year.





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






34
 Table of Contents






Item 8. Consolidated Financial Statements








PageReports of Independent Registered Public Accounting
      Firms
            36Consolidated Balance Sheets
            38Consolidated Statements of Operations
            39Consolidated Statements of Changes in Members’
      Equity
            40Consolidated Statements of Cash Flows
            41Notes to Consolidated Financial Statements
            43







35
 Table of Contents








REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM





The
Members


ICON
Income Fund Nine, LLC




We have
audited the accompanying consolidated balance sheet of ICON Income Fund Nine,
LLC and subsidiaries (the “Company”) as of December 31, 2007, and the related
consolidated statements of operations, changes in members’ equity, and cash
flows for the year ended December 31, 2007.  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 audit.






We
conducted our audit 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 audit 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 audit provides
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 Nine,
LLC and subsidiaries at December 31, 2007, and the consolidated
results of their operations and their cash flows for the year ended December 31,
2007, in conformity with U.S. generally accepted accounting
principles.











/s/ Ernst
& Young, LLP





April 12,
2008


New York,
New York








36
 Table of Contents




The
Members
 ICON
Income Fund Nine, LLC
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 We have
audited the accompanying consolidated balance sheet of ICON Income Fund Nine,
LLC. (a Delaware limited liability company) and subsidiaries as of
December 31, 2006 and the related consolidated statements of
operations, changes in members’ equity, and cash flows for the years ended
December 31, 2006 and 2005.  These consolidated financial
statements are the responsibility of the Company’s management.  Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit 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, as well as evaluating the
overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of ICON Income Fund Nine, LLC
and subsidiaries as of December 31, 2006, and the results of their
operations and their cash flows for the years ended December 31, 2006
and 2005, in conformity with accounting principles generally accepted in the
United States of America.
 
 /s/ Hays
& Company LLP
 
 April 2,
2007
 New York,
New York




37
 Table of Contents





ICON Income Fund Nine, LLC(A
      Delaware Limited Liability Company)Consolidated
      Balance SheetsAssetsDecember
      31,2007
            
            
            2006Current
      assetsCash
      and cash equivalents
            
            $
            5,571,481
            
            
            $
            19,730,600Current
      portion of net investments in finance leases
            
            
            6,116,872
            
            
            
            7,351,394Other
      current assets
            
            
            -
            
            
            
            1,353,977Total
      current assets
            
            
            11,688,353
            
            
            
            28,435,971Non-current
      assetsNet
      investments in finance leases, less current portion
            
            
            28,572,690
            
            
            
            36,078,114Leased
      equipment at cost, (less accumulated depreciation of $8,305,473 and
      $42,657,483, respectively)
            
            
            90,457,467
            
            
            
            61,448,994Investments
      in joint ventures
            
            
            4,966,239
            
            
            
            6,472,600Investments
      in unguaranteed residual values
            
            
            1,312,364
            
            
            
            2,147,793Other
      non-current assets, net
            
            
            2,573,054
            
            
            
            2,604,186Total
      non-current assets
            
            
            127,881,814
            
            
            
            108,751,687Total
      Assets
            
            $
            139,570,167
            
            
            $
            137,187,658Liabilities
      and Members' EquityCurrent
      liabilitiesCurrent
      portion of non-recourse long-term debt
            
            $
            18,116,357
            
            
            $
            17,276,756Interest
      rate swap contracts
            
            
            2,016,033
            
            
            
            639,304Deferred
      rental income
            
            
            997,116
            
            
            
            -Due
      to Manager and affiliates
            
            
            87,475
            
            
            
            193,480Accrued
      expenses and other liabilities
            
            
            437,797
            
            
            
            915,793Total
      current liabilities
            
            
            21,654,778
            
            
            
            19,025,333Non-current
      liabilitiesNon-recourse
      long-term debt, net of current portion
            
            
            78,005,924
            
            
            
            75,203,892Total
      Liabilities
            
            
            99,660,702
            
            
            
            94,229,225Minority
      Interest
            
            
            -
            
            
            
            625,084Commitments
      and contingencies (Note 13)Members'
      EquityManager
            
            
            (441,708
            )
            
            
            (431,964
            )Additional
      Members
            
            
            42,361,867
            
            
            
            43,404,617Accumulated
      other comprehensive loss
            
            
            (2,010,694
            )
            
            
            (639,304
            )Total
      Members' Equity
            
            
            39,909,465
            
            
            
            42,333,349Total
      Liabilities and Members' Equity
            
            $
            139,570,167
            
            
            $
            137,187,658







See accompanying notes to consolidated financial statements.


38
 Table of Contents





ICON Income Fund Nine, LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of OperationsYears
      Ended December 31,2007
            
            
            2006
            
            
            2005Revenue:Rental
      income
            
            $
            13,832,058
            
            
            $
            17,863,494
            
            
            $
            28,934,363Finance
      income
            
            
            6,747,205
            
            
            
            6,461,861
            
            
            
            1,318,855Income
      (loss) from investments in joint ventures
            
            
            2,305
            
            
            
            (279,072
            )
            
            
            345,661Net
      gain (loss) on sales of equipment
            
            
            2,291,397
            
            
            
            128,181
            
            
            
            (301,052
            )Interest
      and other income
            
            
            587,121
            
            
            
            710,689
            
            
            
            51,640Total
      revenue
            
            
            23,460,086
            
            
            
            24,885,153
            
            
            
            30,349,467Expenses:Management
      fees - Manager
            
            
            1,780,581
            
            
            
            2,114,283
            
            
            
            2,131,445Administrative
      expense reimbursements - Manager
            
            
            677,965
            
            
            
            596,881
            
            
            
            647,534General
      and administrative
            
            
            751,566
            
            
            
            607,142
            
            
            
            596,519Interest
            
            
            6,657,968
            
            
            
            6,897,802
            
            
            
            5,653,467Depreciation
      and amortization
            
            
            5,628,072
            
            
            
            10,579,026
            
            
            
            21,328,939Impairment
      loss
            
            
            10,000
            
            
            
            3,005,403
            
            
            
            3,182,485Maintenance
      expense
            
            
            -
            
            
            
            1,317,361
            
            
            
            -Total
      expenses
            
            
            15,506,152
            
            
            
            25,117,898
            
            
            
            33,540,389Income
      (loss) before Minority Interest
            
            
            7,953,934
            
            
            
            (232,745
            )
            
            
            (3,190,922
            )Minority
      interest
            
            
            (13,916
            )
            
            
            (435,158
            )
            
            
            413,794Net
      income (loss)
            
            $
            7,940,018
            
            
            $
            (667,903
            )
            
            $
            (2,777,128
            )Net
      income (loss) allocable to:Additional
      Members
            
            $
            7,860,618
            
            
            $
            (661,224
            )
            
            $
            (2,749,357
            )Manager
            
            
            79,400
            
            
            
            (6,679
            )
            
            
            (27,771
            )$
            7,940,018
            
            
            $
            (667,903
            )
            
            $
            (2,777,128
            )Weighted
      average number of additionalmember
      shares outstanding
            
            
            98,052
            
            
            
            98,123
            
            
            
            98,215Net
      income (loss) per weighted averageadditional
      member share
            
            $
            80.17
            
            
            $
            (6.74
            )
            
            $
            (27.99
            )







See accompanying notes to consolidated financial statements.


39
 Table of Contents







ICON Income Fund Nine, LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of Changes in Members' EquityAccumulatedAdditional
      Member
            
            
            Additional
            
            
            
            
            
            Other
              Comprehensive
            
            
            Total
                Members'Shares
            
            
            Members
            
            
            Manager
            
            
            Loss
            
            
            EquityBalance,
      January 1, 2005
            
            
            98,348
            
            
            $
            64,674,819
            
            
            $
            (219,016
            )
            
            $
            -
            
            
            $
            64,455,803Net
      loss
            
            
            -
            
            
            
            (2,749,357
            )
            
            
            (27,771
            )
            
            
            -
            
            
            
            (2,777,128
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (45,185
            )
            
            
            (45,185
            )Comprehensive
      (loss)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,822,313
            )Additional
      members' shares redeemed
            
            
            (204
            )
            
            
            (160,838
            )
            
            
            -
            
            
            
            -
            
            
            
            (160,838
            )Cash
      distributions to members
            
            
            -
            
            
            
            (8,840,105
            )
            
            
            (89,294
            )
            
            
            -
            
            
            
            (8,929,399
            )Balance,
      December 31, 2005
            
            
            98,144
            
            
            
            52,924,519
            
            
            
            (336,081
            )
            
            
            (45,185
            )
            
            
            52,543,253Net
      loss
            
            
            -
            
            
            
            (661,224
            )
            
            
            (6,679
            )
            
            
            -
            
            
            
            (667,903
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            45,185
            
            
            
            45,185Change
      in valuation of interest rateswap
      contracts
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (639,304
            )
            
            
            (639,304
            )Comprehensive
      (loss)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,262,022
            )Additional
      members' shares redeemed
            
            
            (42
            )
            
            
            (27,449
            )
            
            
            
            
            
            
            
            
            
            
            (27,449
            )Cash
      distributions to members
            
            
            -
            
            
            
            (8,831,229
            )
            
            
            (89,204
            )
            
            
            -
            
            
            
            (8,920,433
            )Balance,
      December 31, 2006
            
            
            98,102
            
            
            
            43,404,617
            
            
            
            (431,964
            )
            
            
            (639,304
            )
            
            
            42,333,349Net
      income
            
            
            -
            
            
            
            7,860,618
            
            
            
            79,400
            
            
            
            -
            
            
            
            7,940,018Change
      in valuation of interest rateswap
      contracts
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (1,371,390
            )
            
            
            (1,371,390
            )Comprehensive
      income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            6,568,628Additional
      members' shares redeemed
            
            
            (147
            )
            
            
            (78,094
            )
            
            
            -
            
            
            
            -
            
            
            
            (78,094
            )Cash
      distributions to members
            
            
            -
            
            
            
            (8,825,274
            )
            
            
            (89,144
            )
            
            
            -
            
            
            
            (8,914,418
            )Balance,
      December 31, 2007
            
            
            97,955
            
            
            $
            42,361,867
            
            
            $
            (441,708
            )
            
            $
            (2,010,694
            )
            
            $
            39,909,465







See accompanying notes to consolidated financial statements.


40
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ICON Income Fund Nine, LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of Cash FlowsYears
      Ended December 31,2007
            
            
            2006
            
            
            2005Cash
      flows from operating activitiesNet
      income (loss)
            
            $
            7,940,018
            
            
            $
            (667,903
            )
            
            $
            (2,777,128
            )Adjustments
      to reconcile net income (loss) to net cashprovided
      by operating activities:Rental
      income paid directly to lenders by lessees
            
            
            (11,756,059
            )
            
            
            (13,470,826
            )
            
            
            (26,690,121
            )Finance
      income
            
            
            (6,747,205
            )
            
            
            (6,461,861
            )
            
            
            (1,318,854
            )(Income)
      loss from investments in joint ventures
            
            
            (2,305
            )
            
            
            279,072
            
            
            
            (345,662
            )Net
      (gain) loss on sale of equipment
            
            
            (2,291,397
            )
            
            
            (128,181
            )
            
            
            301,052Net
      gain on sale of interest rate swap contracts
            
            
            -
            
            
            
            (25,656
            )
            
            
            -Depreciation
      and amortization
            
            
            5,628,072
            
            
            
            10,579,026
            
            
            
            21,328,939Interest
      expense on non-recourse financing paid directlyto
      lenders by lessees
            
            
            6,500,557
            
            
            
            5,850,979
            
            
            
            5,918,949Change
      in fair value of interest rate swap contracts
            
            
            5,336
            
            
            
            41,114
            
            
            
            (451,962
            )Impairment
      loss
            
            
            10,000
            
            
            
            3,005,403
            
            
            
            3,182,485Minority
      interest
            
            
            13,916
            
            
            
            435,158
            
            
            
            (413,794
            )Changes
      in operating assets and liabilities:Collection
      of principal - non-financed receivables
            
            
            2,498,952
            
            
            
            3,965,426
            
            
            
            5,185,643Other
      assets, net
            
            
            (1,385,109
            )
            
            
            697,010
            
            
            
            (258,520
            )Deferred
      rental income
            
            
            997,116
            
            
            
            (1,613,143
            )
            
            
            44,119Due
      to/from Manager and affiliates
            
            
            (106,005
            )
            
            
            133,567
            
            
            
            208,151Accrued
      expenses and other liabilities
            
            
            (477,995
            )
            
            
            347,212
            
            
            
            199,218Distributions
      to / from joint ventures and minority interest
            
            
            263,537
            
            
            
            -
            
            
            
            -Net
      cash provided by operating activities
            
            
            1,091,429
            
            
            
            2,966,397
            
            
            
            4,112,515Cash
      flows from investing activities:Proceeds
      from sales of equipment and unguaranteed residual values
            
            
            9,356,762
            
            
            
            7,864,799
            
            
            
            800,845Investments
      in operating leases and direct finance leases
            
            
            -
            
            
            
            -
            
            
            
            (574,727
            )Purchase
      of equipment
            
            
            (16,867,667
            )
            
            
            -
            
            
            
            -Investments
      in joint ventures
            
            
            (11,415
            )
            
            
            (2,091,010
            )
            
            
            -Loans
      and advances to affiliate
            
            
            -
            
            
            
            -
            
            
            
            (1,500,000
            )Distributions
      received from joint ventures
            
            
            1,264,284
            
            
            
            812,508
            
            
            
            657,446Net
      cash (used in) provided by investing activities
            
            
            (6,258,036
            )
            
            
            6,586,297
            
            
            
            (616,436
            )Cash
      flows from financing activities:Cash
      distributions to members
            
            
            (8,914,418
            )
            
            
            (8,920,433
            )
            
            
            (8,929,399
            )Proceeds
      from long-term debt
            
            
            -
            
            
            
            28,722,634
            
            
            
            -Financing
      costs
            
            
            -
            
            
            
            (1,182,198
            )
            
            
            (107,628
            )Repayment
      of long-term debt
            
            
            -
            
            
            
            (6,867,630
            )
            
            
            -Proceeds
      from revolving line of credit
            
            
            -
            
            
            
            875,000
            
            
            
            4,535,000Repayment
      of revolving line of credit
            
            
            -
            
            
            
            (5,410,000
            )
            
            
            -Proceeds
      from sale of interest rate swap contracts
            
            
            -
            
            
            
            705,000
            
            
            
            -Cash
      paid for additional members' shares redeemed
            
            
            (78,094
            )
            
            
            (27,449
            )
            
            
            (160,838
            )Net
      cash (used in) provided by financing activities
            
            
            (8,992,512
            )
            
            
            7,894,924
            
            
            
            (4,662,865
            )Effects
      of exchange rates on cash and cash equivalents
            
            
            -
            
            
            
            45,185
            
            
            
            (45,185
            )Net
      (decrease) increase in cash and cash equivalents
            
            
            (14,159,119
            )
            
            
            17,492,803
            
            
            
            (1,211,971
            )Cash
      and cash equivalents, beginning of the year
            
            
            19,730,600
            
            
            
            2,237,797
            
            
            
            3,449,768Cash
      and cash equivalents, end of the year
            
            $
            5,571,481
            
            
            $
            19,730,600
            
            
            $
            2,237,797







See accompanying notes to consolidated financial statements.


41
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ICON
      Income Fund Nine, LLC(A
      Delaware Limited Liability Company)Consolidated
      Statements of Cash FlowsYears
      Ended December 31,2007
            
            
            2006
            
            
            2005Supplemental
      disclosure of cash flow information:Cash
      paid during the period for interest
            
            $
            -
            
            
            $
            164,267
            
            
            $
            159,800Supplemental
      disclosure of non-cash investing and financing activities:Principal
      and interest paid on non-recourse long-term debtpaid
      directly to lenders by lessees
            
            $
            22,243,188
            
            
            $
            28,473,277
            
            
            $
            29,655,779Borrowings
      assumed on acquisition of leased equipment
            
            $
            23,382,333
            
            
            $
            -
            
            
            $
            -Reclassification
      of net assets from investments in leased equipmentto
      investments in finance leases
            
            $
            -
            
            
            $
            45,399,576
            
            
            $
            -Reclassification
      of net assets from investments in finance leasesto
      leased equipment
            
            $
            848,166
            
            
            $
            -
            
            
            $
            -Other
      assets acquired from affiliate in exchangefor
      amounts owed
            
            $
            -
            
            
            $
            -
            
            
            $
            755,000Interest
      in finance lease acquired from affiliate inexchange
      for amounts owed
            
            $
            -
            
            
            $
            -
            
            
            $
            745,000Sale
      proceeds paid directly to minority interest holder from
    lessee
            
            $
            639,000
            
            
            $
            -
            
            
            $
            -







42
 Table of Contents
 ICON Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(1)
            Organization





ICON
Income Fund Nine, LLC (the “LLC”) was formed on July 11, 2001 as a Delaware
limited liability company. The LLC is engaged in one business segment, the
business of purchasing equipment and leasing it to third party end users,
providing equipment and other financing, acquiring equipment subject to lease
and, to a lesser degree, acquiring ownership rights to items of leased equipment
at lease expiration. The LLC will continue until December 31, 2020, unless
terminated sooner.





The LLC’s
principal investment objective is to obtain the maximum economic return from its
investments for the benefit of its members. To achieve this objective, the LLC:
(i) acquires a diversified portfolio of leases and financing transactions; (ii)
makes monthly cash distributions, at the Manager’s discretion, to its members
commencing with each member's admission to the LLC, continuing through the
operating period, which period the LLC expects will end on April 30, 2008;
(iii) re-invests substantially all undistributed cash from operations and cash
from sales of equipment and financing transactions during the operating period;
and (iv) will dispose of its investments and distribute the excess cash from
sales of such investments to its members after the end of the operating period,
which is the liquidation period.





The
manager of the LLC is ICON Capital Corp. (the “Manager”), which was originally a
Connecticut corporation.  Effective June 1, 2007, the Manager was
re-incorporated as a Delaware corporation. The Manager manages and controls
the business affairs of the LLC, including, but not limited to, the equipment
leases and financing transactions that the LLC enters into pursuant to the terms
of the limited liability company agreement (the “LLC
Agreement”).  Additionally, the Manager has a 1% interest in the
profits, losses, cash distributions and liquidation proceeds of the
LLC.





The
initial capitalization of the LLC was $1,000 contributed by the
Manager.  The LLC offered membership interests with the intention of
raising up to $100,000,000 of capital from additional members.  The
LLC commenced business operations on its initial closing date, December 18,
2001, when it sold 1,250 membership interests, representing $1,249,910 of
capital contributions. Between December 19, 2001 and April 30, 2003, the final
closing date, the LLC admitted additional members owning 98,416 membership
interests, representing $98,403,564 of capital contributions and bringing the
total membership interests to 99,666 representing $99,653,474 of capital
contributions.  Through December 31, 2007, the LLC redeemed 1,711
additional membership interests, leaving 97,955 additional member shares
outstanding as of such date.





The LLC
invested most of the net proceeds from its offering in equipment subject to
leases, equipment financing transactions and residual ownership rights in leased
equipment. After the net offering proceeds were invested, additional investments
were and are continuing to be made with the cash generated from the LLC’s
initial investments to the extent that cash is not needed for expenses, reserves
and distributions to members. The investment in additional equipment in this
manner is called "reinvestment." The LLC currently anticipates purchasing
equipment from time to time until approximately April 30, 2008. After the
operating period, the LLC will then sell its assets in the ordinary course of
business during a time frame called the "liquidation period."





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






43
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(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 all
subsidiaries and other controlled entities. All intercompany accounts and
transactions have been eliminated in consolidation.





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





In joint
ventures where the LLC’s interest is majority owned, the financial condition and
results of operations of the joint venture are consolidated.  Minority
interest represents the minority owner’s proportionate share of its equity in
the joint venture. The minority interest is adjusted for the minority owner’s
share of the earnings, losses and distributions of the joint
venture.





Cash and
cash equivalents





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





The LLC's
cash and cash equivalents are held principally at two financial institutions and
at times may exceed insured limits. The LLC 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 LLC is exposed to two significant types of
economic risk: credit and market.  Credit risk is the risk of a
lessee’s inability or unwillingness to make contractually required
payments.  Concentrations of credit risk with respect to lessees are
dispersed across different industry segments within the United States of America
and throughout the world.  Although the LLC does not currently foresee
a concentrated credit risk associated with these customers, lease payments are
dependent upon the financial stability of the industry segments in which they
operate.  See Note 12 for concentration of risk.





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






44
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(2)
            Summary
      of Significant Accounting Policies -
continued





Debt
Financing Costs





Expenses
associated with the issuance of long-term 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 range from 4 to 5 years to the asset’s residual
value.





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 LLC’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 amount
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 it
will be 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.






45
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(2)
            Summary
      of Significant Accounting Policies -
continued





Equipment
Held for Sale





Equipment
held for sale is recorded at the lower of cost or estimated fair value,
less anticipated costs to sell and consists of equipment previously leased to
end users which has been returned to the LLC following lease
expiration.





Equipment
held for sale is not depreciated and related deferred costs are not amortized.
Subsequent changes to the asset’s fair value, either increases or decreases, are
recorded as adjustments to the carrying value of the equipment; however, any
such adjustment would not exceed the original carrying value of the equipment
held for sale.





Unguaranteed
Residual Values





The LLC
carries its investments in estimated unguaranteed residual values at cost. The
net book value is equal to or less than fair value at each reporting period and
is subject to the LLC's policy relating to impairment review.





Revenue
Recognition





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





For
finance leases, the LLC records, at lease inception, the total minimum lease
payments receivable from the lessee, the estimated unguaranteed residual value
of the equipment upon 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 and uncollected operating lease receivables are
included in accounts receivable.  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.





The
Manager has an investment committee that approves each new equipment and
financing transaction and lease acquisition.  As part of its process
it determines the residual value, if any, to be used once the acquisition has
been approved.  The factors considered in determining the residual
value include, but are not limited to, the creditworthiness of the potential
lessee, the type of equipment being considered, how the equipment is integrated
into the potential lessees business, the length of the lease and the industry in
which the potential lessee operates.  Residual values are reviewed for
impairment in accordance with the LLC’s policy relating to impairment
review.







46
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(2)
              Summary
      of Significant Accounting Policies -
continued







Allowance
for Doubtful Accounts





When
evaluating the adequacy of the allowance for doubtful accounts, the LLC
estimates the uncollectibility of receivables by analyzing lessee
concentrations, creditworthiness and current economic trends. The LLC
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, 2007 and 2006.





Initial
direct costs





The LLC
capitalizes initial direct costs associated with the origination and funding of
lease assets in accordance with Statement of Financial Accounting Standards
(“SFAS”) No. 91 “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 actual lease term using a
straight-line method for operating leases and the effective interest rate method
for direct finance leases. Costs related to leases that are not consummated are
expensed as an acquisition expense.





Acquisition
fees





Pursuant
to the LLC Agreement, acquisition fees paid to the Manager are based on 3% of
the equipment purchase price. These fees are capitalized and included in the
cost of the rental equipment.





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 individual 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.





Per Share
Data





Net
income (loss) per share is based upon the weighted average number of additional
member shares outstanding during the year.





Share
Redemption





The LLC
may, at its discretion, redeem shares from a limited number of its additional
members, as provided for in its LLC Agreement. The redemption price for any
shares approved for redemption is based upon a formula, as provided in the LLC
Agreement.  Additional Members are required to hold their shares for
at least one year before redemptions will be permitted.





Comprehensive
Income (Loss)





Comprehensive
income (loss) is reported in the accompanying Consolidated Statements of Changes
in Members’ Equity and Accumulated Other Comprehensive Loss and consists of net
income (loss) and other gains and losses affecting members’ equity that are
excluded from net income.






47
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(2)
              Summary
      of Significant Accounting Policies -
continued




Foreign
Currency Translation





Assets
and liabilities of consolidated subsidiaries and equity method investments
having non-United States dollar functional currencies are translated at year-end
rates of exchange. Contributed capital accounts are translated at the historical
rate of exchange when the capital was contributed or
distributed.  Revenues and expenses are translated at weighted average
rates of exchange for the period. Resulting translation adjustments, if
material, are recorded as a separate component of accumulated other
comprehensive income (loss).





Derivative
Financial Instruments





The LLC
accounts for derivative financial instruments in accordance with SFAS No. 133,
“Accounting for Derivative Instruments and Hedging Activities” (“SFAS No.
133”), as amended, which established accounting and reporting standards
for derivative instruments.





SFAS No.
133, as amended, requires the LLC to recognize all derivatives as either assets
or liabilities in the consolidated balance sheet and measure those instruments
at fair value. It further provides criteria for derivative instruments to
be designated as fair value or cash flow hedges and establishes accounting
standards for reporting changes in the fair value of the derivative
instruments.





The LLC
designates derivative financial instruments as either hedge or derivative
instruments. For hedging instruments, at the trade date, these instruments
and their hedging relationship are identified, designated and documented.
For derivative financial instruments designated as hedge instruments, the LLC
evaluates the effectiveness of these hedges, at least quarterly, to ensure
that there remains a highly effective correlation in the hedge
relationship. Once the hedge relationship is established the effective portion
of the hedge is recorded on the consolidated balance sheet as a component
of members' equity, accumulated other comprehensive income (loss), while
the ineffective portion, if any, is recognized as an expense in the
consolidated statements of operations.





For
derivative financial instruments not designated as hedge instruments, realized
and unrealized changes
in fair value are recognized into the earnings in the period in which the
changes occur or when such instruments are settled.





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.




48
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(2)
              Summary
      of Significant Accounting Policies -
continued







Recent
Accounting Prouncements





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157, “Accounting for Fair Value Measurement” (“SFAS No.
157”).  SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles and establishes
a hierarchy that categorizes and prioritizes the sources to be used to estimate
fair value. SFAS No. 157 also expands financial statement disclosures about fair
value measurements. On February 14, 2008, the FASB issued FASB Staff Position
SFAS No. 157-1, which amends SFAS No. 157 to exclude SFAS No. 13,
“Accounting for Leases” and other accounting pronouncements that address fair
value measurements of leases from the provisions of SFAS No.
157.  SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007. The Manager has not yet
determined whether SFAS No. 157 will have a material impact on the LLC’s
financial condition, results of operations, or cash flow. However, the Manager
believes the LLC will likely be required to provide additional disclosures as
part of future financial statements, beginning with the first quarter of
2008.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities—Including an Amendment of SFAS
No. 115” (“SFAS No. 159”), which permits but does not require us to measure
financial instruments and certain other items at fair value. Unrealized gains
and losses on items for which the fair value option has been elected are
reported in earnings.  This statement is effective for financial
statements issued for fiscal years beginning after November 15,
2007.  The Manager is currently evaluating the impact of adopting SFAS
No. 159 on the LLC’s consolidated financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an Amendment of ARB No. 51” (“SFAS No.
160”). SFAS No. 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the retained interest and gain
or loss when a subsidiary is deconsolidated. This statement is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 with earlier adoption prohibited. The Manager is
currently evaluating the impact of SFAS No. 160 on the LLC’s consolidated
financial statements.





Reclassifications





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




49
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(3)
                Net
      Investments in Finance
Leases




Net
investments in finance leases consisted of the following at December
31:








2007
            
            
            2006Minimum
      rents receivable
            
            $
            53,278,914
            
            
            $
            70,895,398Estimated
      residual values
            
            
            209,200
            
            
            
            1,207,567Initial
      direct costs, net
            
            
            3,103
            
            
            
            24,109Unearned
      income
            
            
            (18,801,655
            )
            
            
            (28,697,566
            )Net
      investments in finance leases
            
            
            34,689,562
            
            
            
            43,429,508Less:  Current
      portion of netinvestment
      in finance leases
            
            
            6,116,872
            
            
            
            7,351,394Net
      investments in finance leases,less
      current portion
            
            $
            28,572,690
            
            
            $
            36,078,114





During
March 2004, the LLC acquired from Insight Investments Corporation a lease for
computer equipment and corresponding parts. The lease expired on December 1,
2006. The purchase price was approximately $3,036,000, consisting of
approximately $74,000 in cash and the assumption of approximately $2,962,000 of
non-recourse debt. The equipment was uninstalled during December 2006 and
returned to the LLC during January 2007. The associated estimated residual value
of the equipment was reclassified to equipment held for sale at December 31,
2006.  At December 31, 2006, based on sales estimates, the LLC
recorded an impairment of approximately $98,000. The remaining assets’ value of
an immaterial amount was written off in 2007.





During
March 2004, the LLC acquired from Insight Investments Corporation an additional
lease for computer equipment and corresponding parts. The purchase price was
approximately $1,751,000, consisting of approximately $43,000 in cash and the
assumption of approximately $1,708,000 of non-recourse debt. The lease expired
on December 1, 2006. The equipment was uninstalled during December 2006 and
returned to the LLC during January 2007. The associated estimated residual value
of the equipment was reclassified to equipment held for sale at December 31,
2006.  At December 31, 2006, based on sales estimates, the LLC
recorded an impairment of approximately $56,000. The remaining assets’ value of
an immaterial amount was written off in 2007.





During
March 2004, the LLC acquired various pieces of computer equipment consisting of
DMX hard drives, Brocade 12000 Directors with 128 usable ports and associated
hardware from Insight Investments Corporation for approximately $3,392,000,
consisting of approximately $83,000 in cash and the assumption of approximately
$3,309,000 of non-recourse debt.  The equipment was leased to an
unrelated third-party lessee under a lease which was scheduled to expire in
December 2007. During October 2006, the lessee purchased the leased equipment by
prepaying the remaining outstanding non-recourse debt balance of approximately
$1,100,000 and paying the LLC approximately $30,000.  The LLC
recognized a loss of approximately $87,000 on this sale during the year ended
December 31, 2006.







50
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(3)
            Net
      Investments in Finance Leases -
continued





During
May 2003, the LLC acquired lathes, presses and robotic manufacturing equipment
on lease to Metaldyne Corporation through December 2009 for approximately
$2,412,000 in cash. The Manager was paid an acquisition fee of approximately
$72,000 relating to this transaction.  During March 2006, the
equipment on lease to Metaldyne Corporation was sold for approximately
$1,931,000 in cash and the LLC recognized a gain of approximately
$302,000.





On April
30, 2003, the LLC acquired a Double Kraft Paper Forming Tubing Unit on lease to
Wildwood Industries, Inc., through February 2007 for approximately $1,350,000 in
cash. Effective February 1, 2007, the lease with Wildwood was, pursuant to the
terms of the lease, extended for an additional twelve months under the same
terms as the original lease. Subject to the terms of the lease renewal, there is
a residual interest sharing agreement with a third party broker that was payable
when a minimum return on investment was attained, whereby all sales proceeds
received above $150,000 will be shared equally with the third
party.  As of December 31, 2007, approximately $71,000 was distributed
to the third party in accordance with the terms of the residual interest sharing
agreement.





During
September 2002, the LLC acquired three car and truck carrying vessels (the
“Vessels”) on bareboat charter to Wilhelmsen Lines Shipowning AS (“Wilhelmsen”)
through December 22, 2008. Effective March 14, 2006, the LLC extended the terms
of its bareboat charters with Wilhelmsen through December 22, 2013. The charter
extension includes a provision that provides Wilhelmsen to own the Vessels at
the expiration of the charter extension for a nominal amount. Accordingly, the
LLC reclassified the net book value of the Vessels of approximately $45,399,000
from leased equipment at cost to investments in finance leases as of March 14,
2006 after the refinancing occurred. The non-recourse debt associated with the
Vessels was refinanced on May 18, 2006 (See Note 7).





Non-cancelable
minimum annual amounts due on investments in finance leases over the next five
years were as follows at December 31, 2007:





Years
      EndingDecember 31,2008
            
            $
            12,024,7892009
            
            $
            9,307,5002010
            
            $
            9,061,1252011
            
            $
            8,322,0002012
            
            $
            8,322,000Thereafter
            
            $
            6,241,500





51
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(4)
            Leased
      Equipment at Cost





Leased
equipment at cost consisted of the following at December 31:





2007
            
            
            2006Aircraft
            
            $
            51,965,258
            
            
            $
            93,978,544Vessel
            
            
            40,250,000
            
            
            
            -Railcars
            
            
            1,265,660
            
            
            
            5,631,436Material
      handling, telecommunicationand
      computer equipment
            
            
            5,282,022
            
            
            
            4,496,49798,762,940
            
            
            
            104,106,477Accumulated
      depreciation
            
            
            (8,305,473
            )
            
            
            (42,657,483
            )$
            90,457,467
            
            
            $
            61,448,994





Depreciation expense was $5,435,083,
$10,356,731 and $21,017,983 for the years ended December 31, 2007, 2006 and
2005, respectively.





Aircraft





During
December 2002, the LLC and ICON Income Fund Eight B L.P. (“Fund Eight B”), an
entity also managed by the Manager, formed a joint venture, ICON Aircraft 46835
LLC (“Aircraft 46835”), for the purpose of acquiring an investment in a
McDonnell Douglas DC10-30F aircraft on lease with Federal Express Corporation
(“FedEx”), which expired on March 31, 2007. The LLC and Fund Eight B had
interests in the joint venture of 85% and 15%, respectively. On December 27,
2002, Aircraft 46835 acquired the aircraft for approximately $25,292,000,
consisting of approximately $3,000,000, in cash and the assumption of
approximately $22,292,000 of non-recourse debt. The LLC’s cash portion of the
purchase price was approximately $2,550,000. The non-recourse debt accrued
interest at 4.04% per year and matured in March 2007. The lender had a
security interest in the aircraft and an assignment of the rental payments under
the lease. The Manager was paid an acquisition fee of approximately $759,000
relating to this transaction, of which the LLC paid approximately
$645,000.





At
December 31, 2005, the Manager determined that the aircraft was impaired based
upon an appraisal that indicated a slower than expected recovery in the air
transportation industry, and recorded an impairment loss of approximately
$3,182,000.




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. The final lease payment
was paid to the lender, satisfying all remaining debt obligations.





During
December 2002, the LLC acquired, through its wholly owned subsidiary ICON
Aircraft 128 LLC (“ICON 128”), a 100% interest in an Airbus A340-313X aircraft
(the “Aircraft”) on lease to Cathay Pacific Airways Limited (“Cathay”) for
approximately $4,278,000 in cash and the assumption of approximately $64,791,000
of non-recourse debt.  Effective June 7, 2006, the LLC entered into a
lease extension with Cathay through December 1, 2011.





Simultaneously
with the lease extension of the aircraft, the LLC refinanced the non-recourse
debt associated with the aircraft (See Note 7).





52
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(4)
            Leased
      Equipment at Cost - continued





Vessel





On July
24, 2007, the LLC, through its wholly-owned subsidiary, ICON Samar, LLC (“ICON
Samar”) purchased one Aframax 98,640 DWT product tanker - the Samar Spirit –
from an affiliate of the Teekay Corporation (“Teekay”). The purchase price for
the Samar Spirit was $40,250,000, comprised of (i) the capital contribution to
ICON Samar of approximately $16,868,000 and (ii) borrowings of approximately
$23,382,000 of long-term debt under a secured loan agreement with Fortis Capital
Corp. In addition, ICON Samar paid an arrangement fee to Fortis Capital Corp. of
approximately $175,000 and has a payable to the Manager for approximately
$54,000 related to legal fees incurred. Simultaneously with the closing of the
purchase of the Samar Spirit, a bareboat charter was entered into with
Teekay for a term of 48 months. The charter commenced on July 24, 2007 and is
scheduled to expire on July 24, 2011. The Manager waived the acquisition fees in
connection with the purchase.





Railcars





During
November 2002, the LLC acquired 324 railcars on lease to Texas Genco
LP.  On May 7, 2007, the LLC sold the equipment to an unrelated third
party for $4,960,000, of which approximately $1,500,000 was used to repay the
related long-term debt and legal fees of $5,000.  The
LLC recognized a gain on the sale of approximately $3,100,000.





Manufacturing





On June
20, 2003, the LLC acquired microprocessor manufacturing devices on lease through
June 2007 to Advanced Micro Devices, Inc. (“AMD”) for approximately $6,391,000
in cash.  Effective July 1, 2007, this modified lease was extended for
an additional 12 months and was reclassified upon extension of the lease from a
direct finance lease to leased equipment at cost.





On
August 1, 2003, the LLC acquired semi-conductor memory testing equipment
subject to two leases through July 2007 with AMD for approximately $4,561,000 in
cash.  These leases were extended on a month-to-month basis. Effective
August 1, 2007, these modified leases were reclassified upon the extensions of
the leases from direct finance leases to leased equipment at cost.





The
Manager was paid acquisition fees of approximately $329,000 relating to the
initial purchase of the assets leased to AMD.





For all
three AMD leases, there is a residual interest sharing agreement with a third
party broker that is payable when a minimum return on investment was attained.
Subject to the original terms, all sales proceeds received above approximately
$633,000 will be shared 35% with the third party.  As of December 31,
2007, approximately $56,000 was distributed to the third party in accordance
with the terms of the residual interest sharing agreements.





Co-generation
Facility





During
May 2002, the LLC and Fund Eight B formed ICON/Kenilworth LLC (“Kenilworth”) for
the purpose of acquiring a natural gas-fired 25MW co-generation facility (the
“Kenilworth Facility”) on lease to Schering-Plough Corporation until June 19,
2004, which was subsequently extended through July 1, 2009. The LLC paid
approximately $7,990,000 in cash for its investment in Kenilworth. The LLC and
Fund Eight B had interests of 95% and 5%, respectively. The Manager was paid an
acquisition fee totaling approximately $460,000 relating to this transaction, of
which the LLC paid approximately $437,000.




53
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(4)
            Leased
      Equipment at Cost - continued





Kenilworth
acquired the Kenilworth Facility subject to the lease for a total cost of
approximately $15,328,000, consisting of approximately $8,410,000 in cash and
non-recourse debt of approximately $6,918,000, which matured on July 1,
2004.





On
December 1, 2004, Fund Eight B transferred its entire 5% interest in Kenilworth
to the LLC in exchange for a 25.87% interest in ICON SPK 2023-A LLC (“ICON
SPK”).  The Manager determined the fair value of the Kenilworth
interest and the ICON SPK interest was approximately $488,000 and was based upon
the Manager’s knowledge of current market conditions and a concurrent appraisal
received with the transaction.





On April
20, 2006, the Kenilworth Facility was sold to a third party for approximately
$4,800,000 in cash.  The LLC incurred a loss of approximately
$2,770,000 on the sale of this equipment, which was recorded as an impairment
loss at the end of March 2006.  The Manager determined that it was in
the best interest of the LLC to sell the co-generation facility for the cash
received.  The decision to sell the asset was based on the outlook of
pricing in the natural gas industry.





Material
Handling, Telecommunications and Computer Equipment





During
December 2004, the LLC acquired four Noritsu QSS 3011 digital mini-labs on lease
to Rite Aid Corporation (“Rite Aid”) through November 2007 for approximately
$399,000 in cash.  The Manager was paid acquisition fees of
approximately $12,000 relating to this transaction. At December 31, 2006, the
Manager determined, based upon an appraisal, to record an impairment of
approximately $80,000. As of December 31, 2007, the lease was extended on a
month-to-month basis. Subsequent to December 31, 2007, Rite Aid notified the
Manager of its intent to return to the LLC all the digital mini-labs that were
subject to lease with Rite Aid. At December 31, 2007, no impairment was recorded
on the equipment.





During
December 2004, the LLC acquired from Varilease Technology Finance Group, Inc. a
portfolio of medical equipment subject to two leases that expire in December
2008 for approximately $2,046,000 in cash.  The Manager waived its
acquisition fees on this transaction.





Phone
System





During
December 2004, the LLC acquired a Mitel Networks 3340 Global Branch Office
Solution Phone System subject to lease with CompUSA, Inc.  The lease
term was to expire during December 2008. The purchase price was approximately
$173,000 in cash. During December 2007, the phone system was sold for total
proceeds of approximately $45,000 and a gain on sale of approximately $6,000 was
recognized.





Aggregate
minimum future rentals receivable from all of the LLC’s non-cancelable
leases consisted of the following at December 31, 2007:





Years
      EndingDecember 31,2008
            
            $
            13,548,1422009
            
            $
            12,920,5602010
            
            $
            12,403,5202011
            
            $
            7,891,000





54
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(5)
            Investments
      in Joint Ventures





The LLC
and certain of its affiliates, entities also managed by the Manager, formed the
joint ventures discussed below, for the purpose of acquiring and managing
various leased equipment.  The LLC and these affiliates have
substantially identical investment objectives and participate on identical terms
and conditions.  The LLC and the other joint venture members have a
right of first refusal to purchase the equipment, on a pro-rata basis, if any of
the other joint venture members desire to sell their interests in the equipment
or joint venture.





ICON
Global Crossing II, LLC





On
September 28, 2006, the LLC along with ICON Income Fund Ten, LLC (“Fund Ten”),
an entity also managed by the Manager, formed ICON Global Crossing II, LLC
(“Global Crossing II”), with original interests of approximately 17% and 83%,
respectively. The total capital contributions made to Global Crossing II were
approximately $12,044,000, of which the LLC’s share was approximately
$2,000,000.  The Manager was paid an acquisition fee totaling $60,000
relating to this transaction, which was included in other assets and will be
amortized to operations over the life of the related lease with Global
Crossing.





On
September 28, 2006, Global Crossing II purchased telecommunications equipment
for approximately $12,044,000. The LLC collected interim rent until the
commencement of the lease term.  This equipment is subject to a 48 month
base lease term with Global Crossing that commenced on November 1,
2006.





On
October 31, 2006, ICON Leasing Fund Eleven, LLC (“Fund Eleven”), an entity also
managed by the Manager, made a capital contribution of approximately $1,841,000
to Global Crossing II.  The contribution changed the interests for the
LLC, Fund Ten and Fund Eleven at October 31, 2006 to 14.40%, 72.34% and 13.26%,
respectively.  The additional contribution was used to purchase
telecommunications equipment subject to a 48 month lease with Global Crossing
that commenced on November 1, 2006.





ICON SPK
2023-A, LLC





On
December 31, 2001, the LLC and Fund Eight B formed ICON SPK for the purpose of
acquiring and managing a portfolio of equipment leases consisting of material
handling, telecommunication and computer equipment.  The LLC paid
approximately $3,953,000 for its investment in ICON SPK.  The LLC and
Fund Eight B originally had interests of 51% and 49%, respectively.





ICON SPK
completed the transaction, with a total cost of approximately $7,750,000 in
cash.  The Manager was paid an acquisition fee totaling approximately
$233,000 relating to this transaction, of which the LLC paid approximately
$119,000.




During 2006, ICON SPK sold various
pieces of its portfolio of equipment for approximately $460,000 in cash and
recognized a loss of approximately $106,000 on these sales.




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.





ICON
GeicJV




On March
31, 2004, the LLC along with Fund Ten, formed a joint venture, ICON GeicJV, for
the purpose of purchasing information technology equipment subject to a lease
with Government Employees Insurance Company (“GEICO”) until March 31,
2007.  The LLC paid approximately $1,522,000 for its investment in
ICON GeicJV.  The LLC and Fund Ten have interests of 26% and 74%,
respectively.  On April 30, 2004, ICON GeicJV acquired the technology
equipment subject to the lease for a total cost of approximately $5,853,000 in
cash.  The LLC paid the Manager an acquisition fee totaling
approximately $46,000 relating to this transaction.






55
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(5)
              Investments
      in Joint Ventures -
continued




During
2007, GEICO returned equipment with an original cost basis of
approximately $5,798,000 and extended on a month–to-month basis equipment
with an original cost basis of approximately $55,000. Of the equipment
that was returned, the Manager has sold equipment with a net book value of
approximately $781,000. ICON GeicJV realized proceeds of approximately
$775,000 and recognized a loss of approximately $6,000 on the sale of the
equipment. The remaining returned equipment has a net book value of
approximately $58,000, is currently being remarketed by the Manager and was
reclassified to equipment held for sale.





ICON
Aircraft 47820 LLC





During
March 2003, the LLC and Fund Eight B formed a joint venture, ICON Aircraft 47820
LLC (“Aircraft 47820”), for the purpose of acquiring an investment in a
McDonnell Douglas DC10-30F aircraft and two spare engines (the “Aircraft and
engines”) on lease to FedEx. The lease expired on March 31, 2007. The LLC and
Fund Eight B had interests of 10% and 90%, respectively, in this joint venture.
On March 11, 2003, Aircraft 47820 acquired the Aircraft and engines for
approximately $27,288,000, which consisted of approximately $3,077,000 in cash
and approximately $24,211,000 of non-recourse debt. The LLC’s cash portion of
the purchase price was approximately $308,000. The non-recourse debt accrued
interest at 4.035% per year and matured in March 2007. The lender had a security
interest in the Aircraft and engines and an assignment of the rental payments
under the lease. The Manager was paid an acquisition fee of approximately
$819,000 relating to this transaction, of which the LLC paid approximately
$82,000.




At
December 31, 2005, the Manager determined that the Aircraft and engines were
impaired, based upon an appraisal that indicated a slower than expected recovery
in the air transportation industry, and recorded an impairment loss of
approximately $3,626,000.




On March
30, 2007, Aircraft 47820 sold the Aircraft and engines to FedEx for $5,475,000
and recognized a loss on the sale of approximately $1,025,000. The final lease
payment was paid to the lender, satisfying all remaining debt
obligations.





ICON
Aircraft 126 LLC





During
February 2002, the LLC and Fund Eight B 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 that is on lease to
Cathay. ICON 126 completed the transaction during March 2002. The lease was
initially scheduled to expire in March 2006, but has been extended until July 1,
2011.  The LLC and Fund Eight B each have interests of 50% in ICON
126.  ICON 126 consolidates the financial position and operations of
D.A.L. in its consolidated financial statements.





Effective
March 27, 2006, the owner trustee, in connection with the lease extensions,
refinanced the non-recourse debt associated with the aircraft. The refinancing
was entered into because the original non-recourse debt of approximately
$52,850,000 was due to be repaid on March 27, 2006. ICON 126 established, under
the original lease, a reserve account totaling approximately $583,000, which was
used to reduce the balloon payment to approximately $52,267,500. The refinanced
non-recourse debt initially accrued interest at the London Interbank
Eurocurrency Market Rate (“LIBOR”) plus 1.165%, and matures on July 1, 2011 and
requires a balloon payment of approximately $32,000,000 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.






56
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(5)
              Investments
      in Joint Ventures -
continued




During
2006, ICON 126 recognized a $182,020 capital contribution from both of its
members, of which $50,000 was for amounts relating to the maintenance reserve
account and $132,020 related to costs paid by its members relating to the
refinancing of the non-recourse debt.





ICON 126
had a commitment with respect to its Cathay aircraft to pay certain maintenance
costs, which were incurred on or prior to March 27, 2006.  ICON 126
had established a maintenance account, which totaled approximately $1,385,000 at
September 30, 2006 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 September 2006, approximately $1,153,000 was
paid for the maintenance costs. The excess cash remaining of approximately
$95,000, which includes interest accreted in the amount of approximately $36,000
through December 31, 2007, is being held in the maintenance account and will be
used to pay down the principal balance of the related non-recourse
debt.





In
connection with the original purchase of the Cathay aircraft owned by ICON 126,
the owner trustee entered into two first priority charge on cash deposit
agreements pursuant to which the maintenance account for the Cathay aircraft
owned by ICON 126 was cross-collateralized with the maintenance account for the
Cathay aircraft owned by ICON Aircraft 123 LLC (“ICON 123”), a wholly owned
subsidiary of Fund Eight B. Under the terms of this agreement, 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 the remaining balance in its maintenance
account on behalf of ICON 123. The maintenance account and related security
interest were then terminated. ICON 126 will be reimbursed by ICON 123 for the
maintenance short fall when the aircraft is sold.





ICON 126
is a party to a residual sharing agreement (the “Airtrade Residual Sharing
Agreement”) with ICON 128 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 extension
of the aircraft owned by ICON 128 and ICON 126 in excess of $8,500,000 (in the
aggregate) of the debt associated with each aircraft (net of expenses) will be
allocated 55% to ICON 126 or ICON 128, as applicable, and 45% will be allocated
to Airtrade.





Information
as to the financial position and results of operations of ICON 126 at December
31, 2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005 are
summarized below:





December 31,2007
            
            
            2006Assets
            
            $
            53,292,710
            
            
            $
            57,312,243Liabilities
            
            $
            46,493,816
            
            
            $
            49,931,268Equity
            
            $
            6,798,894
            
            
            $
            7,380,975LLC's
      share of equity
            
            $
            3,399,447
            
            
            $
            3,690,487Contributions
            
            $
            11,415
            
            
            $
            91,010Years Ended December 31,2007
            
            
            2006
            
            
            2005Revenue
            
            $
            6,406,476
            
            
            $
            6,816,667
            
            
            $
            8,231,334Expenses
            
            $
            (7,011,386
            )
            
            $
            (8,440,872
            )
            
            $
            (7,435,492
            )Net
      (loss) income
            
            $
            (604,910
            )
            
            $
            (1,624,205
            )
            
            $
            795,842LLC's
      share of net (loss) income
            
            $
            (302,455
            )
            
            $
            (812,103
            )
            
            $
            397,921




57
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(6)
              Investments
      in Unguaranteed Residual
Values




On
December 31, 2003, the LLC entered into an agreement with Summit Asset
Management (a United Kingdom based company) to acquire a 90% interest in the
unguaranteed residual values of manufacturing and technology equipment valued at
approximately $37,713,000 and on lease to various lessees located in the
United Kingdom for approximately $4,454,000 in cash.  The LLC’s
investment return is contingent upon the residual value of the equipment after
repayment of the debt.  The Manager was paid an acquisition fee of
approximately $1,131,000 related to this transaction.





At
December 31, 2007, 2006 and 2005, the LLC received approximately $710,000,
$1,104,000 and $801,000, respectively, in proceeds for the sale of various
pieces of equipment and recognized a loss for the years ended December 31, 2007
and 2006, and 2005, of approximately $157,000, $87,000 and $301,000 on these
sales, respectively.





Additionally,
for the years ended December 31, 2007, 2006 and 2005, the LLC received
approximately $250,000, $310,000 and $117,000, respectively, in renewal income
that is classified as rental income in the accompanying consolidated statements
of operations.





(7)
            Non-Recourse
      Long-Term Debt





The LLC
acquired the Vessels on bareboat charter to Wilhelmsen for cash and non-recourse
debt (See Note 3). On May 18, 2006, in connection with the charter
extension through December 22, 2013, the LLC refinanced the non-recourse debt
related to the Vessels and borrowed an additional $22,043,000. The principal
amount of the refinanced non-recourse debt is $51,000,000, which debt matures on
December 22, 2013 and accrues interest at LIBOR plus 1.50% per year. The
refinanced non-recourse debt requires quarterly payments ranging from $450,000
to $800,000. The lender has a security interest in the Vessels and an assignment
of the rental payments under the charter. The LLC paid approximately $630,000 in
costs associated with the non-recourse debt refinancing, which were capitalized
to other assets and are being amortized to operations over the term of the
non-recourse debt. In 2006, the LLC wrote off approximately $417,000 of loan
origination costs associated with the original non-recourse debt to interest
expense.




On July
24, 2007, the LLC, through its wholly-owned subsidiary, ICON Samar, borrowed
approximately $23,382,000 in connection with a bareboat charter with
Teekay. The long-term debt matures on July 25, 2011 and accrues interest at
LIBOR plus 1.00% per year.  The long-term debt requires monthly
payments ranging from $480,000 to $530,000. The lender has a security interest
in the vessel and an assignment of the rental payments under the bareboat
charter. The LLC paid approximately $175,000 in costs associated with the debt,
which was capitalized as deferred financing costs. As of December 31, 2007,
approximately $19,000 was recorded to interest expense related to the
amortization of the non-recourse debt financing costs.





Simultaneously
with the execution of the refinancing and borrowing of the non-recourse
long-term debts for ICON Samar mentioned above, the LLC entered into
interest rate swap contracts with Fortis Bank NV/SA, New York Branch, in order
to fix the variable interest rate on the non-recourse debts and minimize the
LLC’s risk of interest rate fluctuation. The interest rate swap contracts fixed
the refinanced debt interest rate at 7.02%. The LLC designated its interest rate
swaps as cash flow hedges and accounts for them in accordance with SFAS No. 133,
as amended, by recording the interest rate swap contracts at their estimated
fair market values, and recognizing the periodic change in their fair market
values of effective hedges as other comprehensive income. At December 31,
2007 and 2006, the fair value of the interest rate swap contracts was a
liability of $2,016,030 and $639,304, respectively.





58
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





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





At
December 31, 2005, the fair value of the refinanced Wilhelmsen interest rate
swap contracts was recorded as an asset of $720,458 and the LLC reduced
interest expense by $451,962 for the year ended December 31, 2005. On May 22,
2006, the LLC terminated the initial interest rate swap contracts in connection
with the non-recourse debt refinancing and received $705,000 from the swap
provider to terminate the existing three interest rate swap contracts. The LLC
recognized a gain on this termination of approximately $25,600 during the year
ended December 31, 2006.





The
LLC acquired its interest in the aircraft on lease to Cathay for cash and
non-recourse debt (See Note 4).Effective
June 7, 2006, the owner trustee, in connection with the Cathay lease extension
refinanced the non-recourse debt related to the aircraft (the “Initial
Refinancing”).  The Initial Refinancing was entered into because the
original non-recourse debt of approximately $44,250,000 was due to be repaid on
June 12, 2006. The LLC was required by the lender to pay down approximately
$6,754,000 of the balloon payment as part of the Initial Refinancing. The
principal balance of the Initial Refinancing was approximately $37,495,000, and
was scheduled to mature on December 1, 2011, required a balloon payment of
approximately $11,550,000 and accrued interest at LIBOR plus 0.80% per year. The
Initial Refinancing required monthly payments of approximately $545,000 through
May 2010 and approximately $495,000 through December 2011. The LLC incurred
approximately $197,000 of costs in connection with the Initial Refinancing. The
non-recourse debt lender had a security interest in the aircraft and an
assignment of the lease payments. The LLC expensed these costs to interest
expense during the year ended December 31, 2006.





On August
1, 2006, the owner trustee was able to negotiate more favorable terms with a new
lender and refinanced the Initial Refinancing (the “Second Refinancing”). In
connection with the Second Refinancing, the LLC was able to borrow approximately
an additional $6,242,000. The principal balance of the Second Refinancing is
approximately $43,800,000, and matures on December 1, 2011, requires a balloon
payment of approximately $22,750,000 and accrues interest at 6.85% per year. The
Second Refinancing requires monthly payments of approximately $545,000 through
May 2010 and approximately $495,000 through December 2011. The LLC paid
approximately $749,000 of costs in connection with the Second Refinancing, which
were capitalized to other assets and will be amortized to operations over the
term of the Second Refinancing. The lender has a security interest in the
aircraft and an assignment of the lease payments.




As
discussed in Notes 3 and 4, the LLC has non-recourse notes outstanding in
connection with various lease acquisitions.




As of December 31,
2007 and 2006, the LLC had deferred financing costs of $665,443 and
$563,306, respectively. For the year ended December 31, 2007 and 2006 the
LLC recognized amortization expense of $73,231 and $44,354,
respectively.




The
aggregate maturities of non-recourse long-term debt, including the effects of
refinancing discussed above, consisted of the following at December 31,
2007:





Years
      EndingDecember 31,2008
            
            $
            18,116,3572009
            
            
            15,139,6052010
            
            
            15,692,1322011
            
            
            36,374,1872012
            
            
            5,400,000Thereafter
            
            
            5,400,000$
            96,122,281





59
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(8)
            Revolving
      Line of Credit, Recourse





On August
31, 2005, the LLC, together with certain of its affiliates (entities sponsored
and organized by the Manager), Fund Eight B, Fund Ten and Fund Eleven
(collectively, the “Borrowers”) entered into a Commercial Loan Agreement (the
“Loan Agreement”), with California Bank & Trust (the “Lender”). The Loan
Agreement provides for a revolving line of credit of up to $17,000,000 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. 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 in which the Borrowers have a beneficial interest.





As part
of the Loan Agreement, the Borrowers are required to comply with certain
financial covenants, including a minimum debt coverage ratio, a tangible
net worth covenant, a leverage ratio and a minimum liquidity covenant. The
Loan Agreement prohibits any Borrower from declaring or paying any distribution
to investors if such a payment would cause such Borrower to become non-compliant
with the financial covenants in the Loan Agreement. The Borrowers are obligated
to pay a quarterly commitment fee of 0.5% on unused commitments under the
Facility.





In
addition, on August 31, 2005, the Borrowers entered into a Contribution
Agreement (the “Contribution Agreement”) pursuant to which the Borrowers agreed
to certain restrictions on the amounts and terms of their respective borrowings
under the Facility in order to minimize the risk that a Borrower would be
unable to repay its portion of the outstanding obligations under the Facility
at any time. These restrictions include, but are not limited to, borrowing
in excess of the lesser of (a) an amount each Borrower could reasonably expect
to repay in one year from its projected free cash flow, or (b) the greater of
(i) the borrowing base, as defined in the Loan Agreement, as applied to such
Borrower and (ii) 50% of the net worth of such Borrower. The Contribution
Agreement also provides that, in the event a Borrower pays an amount under the
Contribution Agreement in excess of its share of the total obligations under the
Facility, whether by reason of an event of default or otherwise, the other
Borrowers will immediately make a contribution payment to such Borrower and in
such amount that the aggregate amount paid by each Borrower reflects its
allocable share of the aggregate obligations under the Facility. The Borrowers'
obligations to each other under the Contribution Agreement
are collateralized by a subordinate lien on the assets of each
Borrower.





On
December 26, 2006, the Borrowers entered into a Loan Modification Agreement (the
“Loan Modification”) to the Loan Agreement. The Loan Modification extended the
Facility from August 31, 2007 to September 30, 2008 and lowered (i) the
interest rate for advances under the Facility from the Lender’s prime rate plus
0.25% to the Lender’s prime rate and (ii) the interest rate on the five
separate advances that are permitted to be made under the Facility at the rate
at which United States dollar deposits can be acquired by the Lender in LIBOR
plus 2.75% per year to LIBOR plus 2.5% per year. In addition, pursuant to the
terms of the Loan Modification, the Borrowers no longer have to maintain a
cash reserve. The interest rate at December 31, 2007 was 7.25%.





At
December 31, 2006, there was $3,125,000 outstanding under the Facility, which
represented the entire amount outstanding for all Borrowers. The LLC had no
borrowings outstanding under the Facility as of such date.





On June
20, 2007, the Loan Agreement, the Contribution Agreement and the Loan
Modification were modified to admit ICON Leasing Fund Twelve,
LLC  (“Fund Twelve”) as a permitted borrower.




60
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(8)
            Revolving
      Line of Credit, Recourse -
continued





The
Borrowers were in compliance with the covenants at December 31, 2007. The
Borrowers were also in compliance with the Contribution Agreement at December
31, 2007 and no amounts were due to or payable by the LLC under the Contribution
Agreement.





Aggregate
borrowings by all Borrowers under the Facility amounted to $6,255,000 at
December 31, 2007. The LLC had no borrowings outstanding under the Facility as
of such date. The balance of $6,255,000 relates to borrowings of $1,255,000 by
Fund Eight B and $5,000,000 by Fund Ten. Subsequent to December 31, 2007, Fund
Ten made repayments totaling $5,000,000.





(9)
            Transactions
      with Related Parties





In
accordance with the terms of the LLC Agreement, the LLC pays or paid the Manager
(i) management fees ranging from 1% to 7% based on a percentage of the rentals
recognized either directly by the LLC or through its joint ventures, and (ii)
acquisition fees, through the end of the operating period, of 3% of the gross
value of the LLC’s acquisition transactions.  In addition, the Manager
is reimbursed for certain administrative expenses incurred in connection with
the LLC’s operations.





The
Manager performs certain services relating to the management of the LLC’s
equipment leasing and financing activities. Such services include the collection
of lease payments from the lessees of the equipment, re-leasing services in
connection with equipment which is off-lease, inspections of the equipment,
liaison with and general supervision of lessees to assure that the equipment is
being properly operated and maintained, monitoring performance by the lessees of
their obligations under the leases and the payment of operating
expenses.





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





The
Manager also has a 1% interest in the LLC’s profits, losses, cash distributions
and liquidation proceeds. The LLC paid distributions to the Manager of $89,144,
$89,204, and $89,294 for the years ended December 31, 2007, 2006 and 2005,
respectively.  The Manager’s interest in the LLC’s net income was
$79,400 for the year ended December 31, 2007, and loss of $6,679 and
$27,771 for the years ended December 31, 2006 and 2005,
respectively.





Fees and
other expenses paid or accrued by the LLC to the Manager or its affiliates for
the years ended December 31, 2007, 2006 and 2005, were as follows:





Description
            
            2007
            
            
            2006
            
            
            2005Acquisition
      fees (1)
            
            $
            -
            
            
            $
            60,000
            
            
            $
            -Management
      fees (2)
            
            
            1,780,581
            
            
            
            2,114,283
            
            
            
            2,131,445Administrative
      expense reimbursements (2)
            
            
            677,965
            
            
            
            596,881
            
            
            
            647,534$
            2,458,546
            
            
            $
            2,771,164
            
            
            $
            2,778,979(1)
      Amount capitalized and amortized to operations.(2)
      Amount charged directly to operations.





61
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(9)
            Transactions
      with Related Parties - continued





At
December 31, 2007, the LLC owed $87,475 to the Manager.





At
December 31, 2006, the LLC owed $193,480 to various of its affiliates, of which
$189,740 was due to the Manager for administrative expense reimbursements and
management fees.  Approximately $3,740 was due to various affiliates
for distributions and rental payments received on its behalf.





At
December 31, 2005, the LLC was due $136,760, of which $100,000 was due from two
affiliates, $75,000 from Fund Eight B and $25,000 from ICON 126, for the initial
deposits relating to the establishment of maintenance accounts.  The
LLC received the $75,000 from Fund Eight B during December
2006.  During the fourth quarter of 2006 the LLC reclassified the
$25,000 it was due from ICON 126 to a contribution to its investment in joint
ventures.





At
December 31, 2005, the LLC owed $196,673, of which approximately $108,000 was
due to the Manager for administrative expense reimbursements in the amount of
approximately $66,000, approximately $17,000 in management fees and $25,000 for
legal fees paid on the LLC’s behalf in connection with the lease extensions and
refinancings. Approximately $88,000 was due to Fund Eight B for distributions
and rental payments received on its behalf.




(10)
              Interest
      Rate Swap Contracts




The LLC
is exposed to interest rate risk on the floating-rate non-recourse notes payable
and uses floating-to-fixed interest rate swaps to hedge this exposure. As of
December 31, 2007 the LLC had four floating-to-fixed interest rate swaps that
were designated as cash flow hedges with an aggregate notional amount of
$56,879,743.  As of December 31, 2006 the LLC had three
floating-to-fixed interest rate swaps designated as a cash flow hedge with
notional amounts of $45,000,000.
 
 The
hedging strategy of the LLC is to match the projected future business cash flows
with the underlying debt service. When the derivative financial instrument is
deemed to be highly effective in offsetting variability in the hedged item,
changes in its fair value are recorded in accumulated other comprehensive
income/(loss) and recognized contemporaneously with the earnings effects of the
hedged item. The fair value of the interest rate swaps was determined using
market prices and pricing models at December 31, 2007 and 2006.
 
 At
December 31, 2007, the LLC had four floating-to-fixed interest rate swaps
related to the Wilhelmsen vessels and the ICON Samar acquisition. The total
amount recorded to accumulated other comprehensive income/(loss) related to the
change in fair value of these interest rate swaps was $2,010,694.
 
 At December
31, 2006, the LLC had three floating-to-fixed interest rate swaps related to the
Wilhelmsen vessels. The total amount recorded to accumulated other comprehensive
income/(loss) related to the change in fair value of these interest rate swaps
was $639,304.


62
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005


(10)
            Interest
      Rate Swap Contracts -
continued




For the
year ended December 31, 2007 and 2006, no gains or losses were recorded in
earnings representing the amount of the hedges’ ineffectiveness.  The
LLC expects to transfer approximately $235,000 from accumulated other
comprehensive income/(loss) to earnings in the next 12 months, as the derivative
financial instruments and their underlying hedged items are paid down, along
with the earnings effects of the related forecasted transactions in the next 12
months.
 
 The LLC
manages exposure to possible defaults on derivative financial instruments by
monitoring the concentration of risk that the LLC has with any individual bank
and through the use of minimum credit quality standards for all counterparties.
The LLC does not require collateral or other security in relation to derivative
financial instruments.  Since it is the LLC’s policy to only enter
into derivative contracts with banks of internationally acknowledged standing,
the LLC considers the counterparty risk to be remote.
 
 It is the
LLC’s policy to have an International Swaps and Derivatives Association (“ISDA”)
Master Agreement established with every bank with which it has entered into any
derivative contact. Under the ISDA Master Agreement, the LLC agrees to settle
only the net amount of the combined market values of all derivative contracts
outstanding with any counterparty should that counterparty default. As of
December 31, 2007, the LLC does not have an economic exposure to loss due to
credit risk on derivative financial instruments if the bank counterparty was to
default.






(11)
              Fair
      Value of Financial
Instruments







Fair
value information with respect to the LLC's leased assets and liabilities is not
separately provided since (i) SFAS No. 107, “Disclosures About Fair Values of
Financial Instruments,” does not require fair value disclosures of lease
arrangements and (ii) the carrying value of financial assets, other than lease
related investments, and the recorded value of recourse notes payable, if any,
approximates fair value due to their short-term maturities and variable interest
rates.




(12)
              Concentrations








At times,
the LLC's cash and cash equivalents may exceed insured limits. The LLC has
placed these funds in high quality institutions in order to minimize the risk of
loss relating to exceeding insured limits.





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





For the
year ended December 31, 2007, the LLC had three lessees that accounted for
approximately 77% of its rental and finance income.  Wilhelmsen
accounted for approximately 32%.  For the year ended December 31,
2006, the LLC had three lessees which accounted for approximately 88% of its
rental and finance income.  Wilhelmsen accounted for approximately
34%.  For the year ended December 31, 2005, the LLC had three lessees
that accounted for approximately 86% of its rental and finance
income.  Wilhelmsen accounted for approximately 39%.





For the
year ended December 31, 2007, the LLC had one aircraft that accounted for
approximately 53% of operating assets and one vessel that accounted for
approximately 43%.  For the year ended December 31, 2006, the LLC had
two aircraft that accounted for 90% of total assets.





For the
year ended December 31, 2007, the LLC had lease payments from three lessees that
were used to repay approximately 99% of non-recourse long-term
debt.  Cathay, Wilhelmsen and Teekay accounted for approximately 40%,
37% and 22%, respectively.  For the year ended December 31, 2006, the
LLC had lease payments from two lessees that were used to
repay approximately 95% of non-recourse long-term
debt.  Wilhelmsen and Cathay accounted for approximately 49% and 46%,
respectively.






63
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(13)
              Commitments
      and Contingencies and Off-Balance Sheet
      Transactions







The LLC
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.





ICON 128
is a party to a residual sharing agreement (the “Airfleet Residual Sharing
Agreement”) with Airfleet Credit Corporation (“Airfleet”) and HXO Leasing
Limited.  Pursuant to the terms of the Airfleet Residual Sharing
Agreement, all proceeds received in connection with the sale or lease extension
of the aircraft in excess of $4,250,000 of the loan balance associated with the
aircraft will be allocated 55% to ICON 128 and 45% to Airfleet.





ICON 128
had a commitment with respect to the Cathay aircraft to pay certain maintenance
costs, which were incurred during June 2006.  The total estimated
costs were approximately $1,300,000.  During November 2006, the LLC
paid approximately $1,300,000 for these maintenance costs.





On
February 23, 2005, L.P. Seven assigned to the LLC 3.02% 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.  L.P. Seven assigned the rights to the LLC as repayment of its
$755,000 outstanding debt obligation pursuant to a contribution agreement that
the LLC entered into with some of its affiliates in connection with the line of
credit agreement the LLC had with Comerica Bank.  This assignment
increased the LLC’s rights to the profits, losses, and cash flows from L.P.
Seven’s limited partnership interest from 2.60%, which were assigned to the LLC
in November 2004 as repayment of its $650,000 outstanding debt obligation, to
5.62%.  The repayment amount represented the Manager’s estimated fair
value of L.P. Seven's interest in the mobile offshore drilling rig at February
23, 2005.   The fair value of the mobile offshore drilling rig
was determined using an appraisal and cash flow analysis.  During the
year ended December 31, 2006, the LLC received approximately $253,000 in cash
distributions related to this assignment.





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




(14)
              Share
      Redemptions




The
Manager consented to the LLC redeeming 147, 42, and 204 additional member shares
for the years ended December 31, 2007, 2006 and 2005,
respectively.  The redemption amounts are calculated according to a
specified redemption formula pursuant to the LLC Agreement.  Redeemed
shares have no voting rights and do not share in distributions.  The
LLC Agreement limits the number of shares which can be redeemed in any one
year and redeemed shares may not be reissued.  Redeemed member shares
are accounted for as a reduction of members' equity.







64
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(15)
              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, investments in joint ventures and investments in unguaranteed
residual values at December 31, 2007 and 2006 and for the years then ended is as
follows:





Year Ended December 31,
2007United
            
            
            United
            
            
            
            
            
            SouthStates
            
            
            Kingdom
            
            
            Vessels (a)
            
            
            East Asia
            
            
            TotalRevenue:Rental
      income
            
            $
            3,900,854
            
            
            $
            264,248
            
            
            $
            2,722,170
            
            
            $
            6,944,786
            
            
            $
            13,832,058Finance
      income
            
            
            153,612
            
            
            
            -
            
            
            
            6,542,523
            
            
            
            51,070
            
            
            
            6,747,205Income
      from investments in joint ventures
            
            
            291,765
            
            
            
            -
            
            
            
            -
            
            
            
            (289,460
            )
            
            
            2,305





At December 31, 2007United
            
            
            United
            
            
            
            
            
            SouthStates
            
            
            Kingdom
            
            
            Vessels (a)
            
            
            East Asia
            
            
            TotalLong-lived
      assets:Investments
      in finance leases
            
            $
            621,599
            
            
            $
            -
            
            
            $
            34,067,962
            
            
            $
            -
            
            
            $
            34,689,562Equipment
      on operating leases, net
            
            
            3,164,118
            
            
            
            -
            
            
            
            39,113,405
            
            
            
            48,179,943
            
            
            
            90,457,467Investments
      in joint ventures
            
            
            291,765
            
            
            
            -
            
            
            
            -
            
            
            
            (289,460
            )
            
            
            2,305Investments
      in unguaranteed residual values
            
            
            -
            
            
            
            1,312,364
            
            
            
            -
            
            
            
            -
            
            
            
            1,312,364





Year Ended December 31,
2006United
            
            
            United
            
            
            
            
            
            SouthStates
            
            
            Kingdom
            
            
            Vessels (a)
            
            
            East Asia
            
            
            TotalRevenue:Rental
      income
            
            $
            7,613,200
            
            
            $
            310,389
            
            
            $
            2,471,428
            
            
            $
            7,468,477
            
            
            $
            17,863,494Finance
      income
            
            
            6,266,930
            
            
            
            -
            
            
            
            -
            
            
            
            194,930
            
            
            
            6,461,861Income
      from investments in joint ventures
            
            
            457,137
            
            
            
            -
            
            
            
            -
            
            
            
            (736,209
            )
            
            
            (279,072
            )







65
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005




(15)
              Geographic
      Information -
continued




At December 31, 2006United
            
            
            United
            
            
            
            
            
            SouthStates
            
            
            Kingdom
            
            
            Vessels (a)
            
            
            East Asia
            
            
            TotalLong-lived
      assets:Investments
      in finance leasesMinimum
      rents receivable
            
            $
            1,892,403
            
            
            $
            -
            
            
            $
            68,316,263
            
            
            $
            686,733
            
            
            $
            70,895,399Estimated
      unguaranteed residual values
            
            
            755,995
            
            
            
            -
            
            
            
            -
            
            
            
            451,572
            
            
            
            1,207,567Initial
      direct costs, net
            
            
            18,278
            
            
            
            -
            
            
            
            -
            
            
            
            5,830
            
            
            
            24,108Unearned
      income
            
            
            (190,850
            )
            
            
            -
            
            
            
            (28,455,646
            )
            
            
            (51,070
            )
            
            
            (28,697,566
            )$
            2,475,826
            
            
            $
            -
            
            
            $
            39,860,617
            
            
            $
            1,093,065
            
            
            $
            43,429,508Investments
      in operating leases, net
            
            $
            10,813,711
            
            
            $
            -
            
            
            $
            -
            
            
            $
            50,635,283
            
            
            $
            61,448,994Investments
      in joint ventures
            
            $
            2,782,114
            
            
            $
            -
            
            
            $
            -
            
            
            $
            3,690,486
            
            
            $
            6,472,600Investments
      in unguaranteed residual values
            
            $
            -
            
            
            $
            2,147,793
            
            
            $
            -
            
            
            $
            -
            
            
            $
            2,147,793





(a)
            Three
      of the LLC’s vessels are chartered to Wilhelmsen, a Norway based company.
      The fourth vessel is chartered to Teekay. When the LLC charters a vessel
      to a charter, the charterer is free to trade the vessel worldwide and, as
      a result, the disclosure of geographic
material.




(16)
              Selected
      Quarterly Financial Data
  (unaudited)







The
following table is a summary of selected financial data, by quarter, for the
years ended December 31, 2007 and 2006:




Quarters Ended in 2007
            
            
            Year
      EndedMarch 31,
            
            
            June 30,
            
            
            September 30,
            
            
            December 31,
            
            
            December 31, 2007Revenue
            
            $
            4,992,494
            
            
            $
            6,980,685
            
            
            $
            5,561,696
            
            
            $
            5,925,211
            
            
            $
            23,460,086Net
      income (loss) allocable to additional members
            
            $
            699,919
            
            
            $
            3,807,880
            
            
            $
            1,549,754
            
            
            $
            1,803,065
            
            
            $
            7,860,618Weighted
      average number of additional membershares
      outstanding
            
            
            98,102
            
            
            
            98,097
            
            
            
            98,057
            
            
            
            98,052
            
            
            
            98,052Net
      income (loss) per weighted averageadditional
      member shares
            
            $
            7.13
            
            
            $
            38.82
            
            
            $
            15.80
            
            
            $
            18.39
            
            
            $
            80.17





Quarters Ended in 2006
            
            
            Year
      EndedMarch 31,
            
            
            June 30,
            
            
            September 30,
            
            
            December 31,
            
            
            December 31, 2006Revenue
            
            $
            7,290,137
            
            
            $
            6,208,283
            
            
            $
            6,229,854
            
            
            $
            5,156,879
            
            
            $
            24,885,153Net
      income (loss) allocable to additional members
            
            $
            (2,292,728
            )
            
            $
            (162,277
            )
            
            $
            1,346,691
            
            
            $
            447,090
            
            
            $
            (661,224
            )Weighted
      average number of additional membershares
      outstanding
            
            
            98,137
            
            
            
            98,122
            
            
            
            98,122
            
            
            
            98,123
            
            
            
            98,123Net
      income (loss) per weighted averageadditional
      member shares
            
            $
            (23.36
            )
            
            $
            (1.65
            )
            
            $
            13.72
            
            
            $
            4.56
            
            
            $
            (6.74
            )








66
 Table of Contents
 ICON
Income Fund Nine, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Consolidated Financial Statements
 December
31, 2007, 2006 and 2005





(17)
              Income
      Tax Reconciliation
(unaudited)




No
provision for income taxes has been recorded by the LLC since the liability for
such taxes is the responsibility of each of the individual members rather than
the LLC.  The LLC’s income tax returns are subject to examination by
federal and state taxing authorities, and changes, if any could adjust the
individual income taxes of the members.





At
December 31, 2007 and 2006, the members’ capital accounts included in the
consolidated financial statements totaled $39,909,465 and $42,333,349,
respectively.  The members’ capital for federal income tax purposes at
December 31, 2007 and 2006 totaled $72,708,647 and $70,782,921,
respectively.  The difference arises primarily from sales and offering
expenses reported as a reduction in the additional members’ 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.





The
following table reconciles net income (loss) for financial statement reporting
purposes to the net income for federal income tax purposes for the years ended
December 31, 2007, 2006 and 2005:





Years Ended December 31,2007
            
            
            2006
            
            
            2005Net
      income (loss) per consolidated financial statements
            
            $
            7,940,018
            
            
            $
            (667,903
            )
            
            $
            (2,777,128
            )Direct
      finance leases
            
            
            6,733,396
            
            
            
            12,039,904
            
            
            
            6,034,568Depreciation
      expense
            
            
            7,063,467
            
            
            
            1,018,532
            
            
            
            1,207,259Interest
      expense - consolidating joint venture
            
            
            (2,235,890
            )
            
            
            (1,734,784
            )
            
            
            (5,298,044
            )Maintenance
      expense - consolidating joint venture
            
            
            (1,476,431
            )
            
            
            (1,317,361
            )
            
            
            -(Loss)
      gain on sale of equipment
            
            
            (1,917,987
            )
            
            
            497,486
            
            
            
            -Rent
      - consolidating joint venture
            
            
            (5,196,661
            )
            
            
            (5,472,966
            )
            
            
            4,962,772Tax
      gain from joint venture
            
            
            993,943
            
            
            
            2,994,299
            
            
            
            997,361Change
      in valuation of interest swap contracts
            
            
            -
            
            
            
            20,455
            
            
            
            (451,962
            )Other
            
            
            (866,739
            )
            
            
            594,864
            
            
            
            (1,161,517
            )Net
      income for federal income tax purposes
            
            $
            11,037,116
            
            
            $
            7,972,526
            
            
            $
            3,513,309







67
 Table of Contents
   Item 9. Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure







On
November 26, 2007, ICON Income Fund Nine, LLC (the “Registrant”) terminated the
services of Hays & Company LLP (“Hays”) as its independent registered public
accounting firm for the fiscal year ended December 31, 2007.  The
decision to dismiss Hays was recommended and approved by the board of directors
of ICON Capital Corp. (the “Manager”), the Manager of the Registrant (“Board of
Directors”).




The audit
report of Hays on the balance sheet as of December 31, 2006 contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principle.





During
the Registrant’s fiscal year ended December 31, 2006, and the subsequent interim
period through November 26, 2007, (i) there were no “disagreements” (as defined
in Item 304(a)(1)(iv) of Regulation S-K and related instructions) with Hays on
any matter of accounting principle or practice, financial statement disclosure,
or auditing scope or procedure that, if not resolved to the satisfaction of
Hays, would have caused Hays to make reference to the subject matter of the
disagreement in connection with its report and (ii) there were no “reportable
events” (as defined in Item 304(a)(1)(v) of Regulation S-K and related
instructions), except the following with regard to the internal controls of the
Registrant’s Manager:




While
evaluating the Manager’s disclosure controls and procedures during 2006, Hays
advised the Manager and the Manager recognized that greater internal controls
were needed to aid in a more efficient closing of the Registrant’s financial
statements, thereby requiring the Manager to hire additional skilled accounting
staff.  In response, the Manager hired several additional accounting
staff members who are certified public accountants and/or are experienced with
public reporting entities, including three additional senior accountants with
more than 16, 10, and 9 years, respectively, of experience with public reporting
entities, the most senior of those accountants was appointed Senior Vice
President of Accounting.




The
Registrant provided Hays with a copy of this disclosure and Hays furnished the
Registrant with a letter dated November 30, 2007, addressed to the Securities
and Exchange Commission (the “SEC”) stating whether or not it agrees with the
above statements.  A copy of Hays’ letter dated November 30, 2007, is
attached as Exhibit 16.1 to the Form 8-K that was filed with the SEC on November
30, 2007.





On
November 26, 2007, the Board of Directors engaged Ernst & Young LLP (“Ernst
& Young”) as the Registrant’s independent registered public accounting firm
for the fiscal year ending December 31, 2007. During the Registrant’s fiscal
year ended December 31, 2006 and the subsequent interim period through November
26, 2007, neither the Registrant nor any one acting on its behalf consulted with
Ernst & Young regarding (i) the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Registrant’s consolidated financial
statements and no written report or oral advice was provided by Ernst &
Young to the Registrant that Ernst & Young concluded was an important factor
considered by the Registrant in reaching a decision as to the accounting,
auditing or financial reporting issue, (ii) any matter that was either the
subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K
and related instructions) or a “reportable event” (as defined in Item
304(a)(1)(v) of Regulation S-K and related instructions).







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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, 2007, as well as the financial statements for our
Manager, our Manager carried out an evaluation, under the supervision and with
the participation of the management of our Manager, including its Co-Chief
Executive Officers and the Chief Financial Officer, of the effectiveness of the
design and operation of our Manager’s disclosure controls and procedures as of
the end of the period covered by this Report pursuant to the Securities Exchange
Act of 1934. Based on the foregoing evaluation, the Co-Chief Executive Officers
and the Chief Financial Officer concluded that our Manager’s disclosure controls
and procedures were effective.





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





Our
Manager’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
Manager 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
Manager assessed the effectiveness of its internal control over financial
reporting as of December 31, 2007. 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 Manager believes that, as of December 31, 2007, its internal
control over financial reporting is effective.





This
annual report does not include an attestation report of the LLC’s registered
public accounting firm pursuant to the temporary rules of the Securities and
Exchange Commission that permits the LLC to only provide management’s reports in
this annual report.





Item 9B. Other Information





Not
applicable.






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PART III





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




Our
Manager, ICON Capital Corp., a Delaware corporation, was formed in 1985 as a
Connecticut corporation and was re-incorporated in Delaware effective June 1,
2007.  Our Manager's principal offices are located at 100 Fifth
Avenue, 4th Floor, New York, New York 10011, and the telephone number is
(212) 418-4700.





In
addition to the primary services related to our acquisition and disposition
of equipment, our Manager 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
            
            TitleThomas
      W. Martin
            
            53
            
            Chairman
      and DirectorMichael
      A. Reisner
            
            37
            
            Co-Chief
      Executive Officer, Co-President, Chief Financial Officer, and
      DirectorMark
      Gatto
            
            35
            
            Co-Chief
      Executive Officer, Co-President,  Chief Acquisitions Officer,
      and DirectorJoel
      S. Kress
            
            35
            
            Executive
      Vice President — Business and Legal AffairsH.
      Daniel Kramer
            
            56
            
            Senior
      Vice President and Chief Marketing OfficerDavid
      J. Verlizzo
            
            35
            
            Senior
      Vice President — Business and Legal AffairsAnthony
      J. Branca
            
            39
            
            Senior
      Vice President — Accounting and FinanceCraig
      A. Jackson
            
            49
            
            Senior
      Vice President — Remarketing and Portfolio
  Management





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





Michael A.
Reisner, Co-Chief Executive Officer, Co-President, Chief Financial
Officer, and Director, joined ICON in 2001. Mr. Reisner was previously Executive
Vice President, Chief Financial Officer, and Director.  In addition, Mr.
Reisner was formerly General Counsel and he also formerly held the position of
Executive Vice President – Acquisitions.  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-Chief Executive Officer, Co-President, Chief Acquisitions
Officer, and Director, originally joined ICON in 1999 and was previously
Executive Vice President and Chief Acquisitions Officer.  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.
 Mr. Gatto is responsible for business and corporate development, including
the acquisition of equipment subject to lease. 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 a specialty business
consulting firm in New York City and served as its managing partner before
re-joining our Manager 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 our Manager 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 2001 to 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.






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H. Daniel
Kramer, Senior Vice President and Chief Marketing Officer, joined our
Manager in 2008.  Mr. Kramer has more than 30 years of equipment leasing
and structured finance experience. Most recently, 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, Mr. Kramer was Senior Vice President,
National Sales Manager with GMAC Commercial Equipment Finance leading a direct
sales origination team, 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.





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 2001 to 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.





Anthony J.
Branca has been Senior Vice President – Accounting and Finance since
January 2007. Mr. Branca was Director of Corporate Reporting & Analysis
for The Nielsen Company (formerly VNU) from May 2005 until January 2007, and
held various other management positions with The Nielsen Company from July 1997
through May 2005.  Previously, from 1994 through 1997, Mr. Branca was
employed as a senior accountant at Fortune Brands and started his career as an
auditor with KPMG Peat Marwick in 1991.  Mr. Branca received a B.B.A.
from Pace University.





Craig A.
Jackson was Vice President – Remarketing and Portfolio Management
since February 2006.  He became a Senior Vice President in March 2008.
Previously, from October 2001 to 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.





Code
of Ethics





Our
Manager, 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 Manager.  Our
Manager's address is 100 Fifth Avenue, 4th Floor,
New York, New York 10011.







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Item 11. Executive Compensation





We have
no directors or officers. Our Manager and its affiliates were paid or accrued
the following compensation and reimbursement for costs and expenses for the
years ended December 31, 2007, 2006 and 2005.





Entity
            Capacity
            Description
            
            2007
            
            
            2006
            
            
            2005ICON
      Capital Corp.
            Manager
            Acquisition
      fees (1)
            
            $
            -
            
            
            $
            60,000
            
            
            $
            -ICON
      Capital Corp.
            Manager
            Management
      fees (2)
            
            
            1,780,581
            
            
            
            2,114,283
            
            
            
            2,131,445ICON
      Capital Corp.
            Manager
            Administrative
      expense reimbursements (2)
            
            
            677,965
            
            
            
            596,881
            
            
            
            647,534$
            2,458,546
            
            
            $
            2,771,164
            
            
            $
            2,778,979(1)
      Amount capitalized and amortized to operations.(2)
      Amount charged directly to operations.





Our
Manager also has a 1% interest in our profits, losses, cash distributions and
liquidation proceeds. We paid distributions to our Manager of $89,144,
$89,204 and $89,294, respectively, for the years ended December 31, 2007,
2006 and 2005.  Additionally, our Manager’s interest in our net income
was $79,400 for the year ended December 31, 2007. Our Manager’s interest in our
net loss was $6,679 and $27,771, respectively, for the years ended December 31,
2006, and 2005.







Item 12. Security Ownership of Certain Beneficial Owners and the
Manager 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 February 29, 2008, Directors and Officers of our Manager do not own any
      of our equity securities.





(c)
            Neither
      we nor our Manager 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 for a discussion of our related party transactions.  See Notes 5, 9 and
13 to our consolidated financial statements for a discussion of our investments
in joint ventures and transactions with related parties.







72
 Table of Contents







Item 14. Principal Accounting Fees and Services





During
the years ended December 31, 2007 and 2006, 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.





Hays
& Company LLP (“Hays”) was our independent registered public accounting firm
in 2006 and 2007.  On November 26, 2007, the Board of Directors of our
Manager terminated the services of Hays as our independent registered public
accounting firm.  As a result of Hays’ termination, Hays did not
complete the audit of our financial statements for the year ended December 31,
2007.   On November 26, 2007, the Board of Directors engaged
Ernst & Young LLP as the Registrant’s independent registered public
accounting firm for the fiscal year ending December 31, 2007.  The
following table presents the fees for both audit and non – audit services
rendered for the years ended December 31, 2007 and 2006.





Principal
      Audit Firm - Ernst & Young LLP2007
            
            
            2006Audit
      fees
            
            $
            180,000
            
            
            $
            -Tax
      fees
            
            
            -
            
            
            
            -$
            180,000
            
            
            $
            -Predecessor
      Audit Firm - Hays & Company LLP2007
            
            
            2006Audit
      fees
            
            $
            62,699
            
            
            $
            183,900Tax
      fees
            
            
            -
            
            
            
            59,017$
            62,699
            
            
            $
            242,917







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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   
      Certificate
      of Limited Liability Company of Registrant (Incorporated by reference to
      Exhibit 4.3 to Registrant’s Registration Statement on Form S-1 filed with
      the SEC on August 15, 2001 (File No.
      333-67638)).4.1   
      Amended
      and Restated Limited Liability Company Agreement of Registrant
      (Incorporated by reference to Exhibit A to Amendment No. 1 to Registrant’s
      Registration Statement on Form S-1 filed with the SEC on October 12, 2001
      (File No. 333-67638)).10.1   Commercial
      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).10.2   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 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 29, 2006).31.1 
      Rule 13a-14(a)/15d-14(a). Certification of Co-Chief Executive
      Officer.31.2 
      Rule 13a-14(a)/15d-14(a). Certification of Co-Chief Executive
      Officer.31.3 
      Rule 13a-14(a)/15d-14(a). Certification of Chief Financial
      Officer.32.1 
      Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2 
      Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.3 
      Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.







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 Table of Contents







SIGNATURES





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





ICON
Income Fund Nine, LLC File No. 000-50217 (Registrant) by its Manager, ICON
Capital Corp.





Date:
April 14, 2008





/s/MichaelA. Reisner


Michael
A. Reisner


Co-Chief
Executive Officer, Co-President, and Chief Financial Officer


(Co-Principal
Executive Officer and Principal Financial Officer)





/s/Mark
Gatto


Mark
Gatto


Co-Chief
Executive Officer, Co-President, and Chief Acquisitions Officer


(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
capacity and on the dates indicated.





ICON
Capital Corp.


Sole
Manager of the Registrant





Date:
April 14, 2008





/s/Michael A.
Reisner


Michael
A. Reisner


Co-Chief
Executive Officer, Co-President, and Chief Financial Officer


(Co-Principal
Executive Officer and Principal Financial Officer)





Date:
April 14, 2008





/s/Mark
Gatto


Mark
Gatto


Co-Chief
Executive Officer, Co-President, and Chief Acquisitions Officer


(Co-Principal
Executive Officer)





Date:
April 14, 2008





/s/Thomas W.
Martin


Thomas W.
Martin


Chairman
and Director





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





No annual
report or proxy material has been sent to security holders.








75