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

                                    FORM 10-K

[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended                  December 31, 2004

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities 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             (IRS Employer Identification Number)
incorporation or organization)

100 Fifth Avenue, 4th Floor, New York, New York                10011-1505
--------------------------------------------------------------------------------
(Address of principal executive offices)                      (Zip code)

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

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

Securities  registered  pursuant to Section 12(g) of the Act: Limited  Liability
Company Shares

Indicate by check mark whether the registrant is a well-known  seasoned  issuer,
as defined in Rule 405 of the Security Act. [ ] Yes [x] No

Indicate by check mark  whether the  registrant  is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [x] No

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 [x] No

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

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer or a  non-accelerated  filer.  See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the  Exchange  Act.  Large
accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [x]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ] Yes [x] No

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

Number of outstanding limited liability company shares of the registrant on June
15, 2006 is 98,122.

                       Documents Incorporated by Reference
None.

<PAGE>

<TABLE>
<CAPTION>
                                            Table of Contents

                                     PART I
                                                                                       Page
<S>                                                                                    <C>
Item 1.    Business                                                                      1

Item 1A.   Risk Factors                                                                  5

Item 1B.   Unresolved Staff Comments                                                     9

Item 2.    Properties                                                                    9

Item 3.    Legal Proceedings                                                             9

Item 4.    Submission of Matters to a Vote of Security Holders                           9

                                     PART II

Item 5.    Market for the Registrant's Securities and Related Security Holder
           Matters                                                                      10

Item 6.    Selected Consolidated Financial Data                                         10

Item 7.    Manager's Discussion and Analysis of Financial Condition and Results of
           Operations                                                                   11

Item 7A.   Qualitative and Quantitative Disclosures About Market Risk                   27

Item 8.    Consolidated Financial Statements                                            27

Item 9.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure                                                     58

Item 9A.   Controls and Procedures                                                      58

Item 9B.   Other Information                                                            59

                                    PART III

Item 10.   Directors and Executive Officers of the Registrant's Manager                 59

Item 11.   Executive Compensation                                                       60

Item 12.   Security Ownership of Certain Beneficial Owners and Manager and
           Related Security Holder Matters                                              60

Item 13.   Certain Relationships and Related Transactions                               60

Item 14.   Principal Accountant Fees and Services                                       60

                                     PART IV

Item 15.   Exhibits and Financial Statement Schedules                                   61

SIGNATURES                                                                              62

</TABLE>

<PAGE>

                                EXPLANATORY NOTE

     This  Annual  Report  on Form 10-K for the year  ended  December  31,  2004
includes restated consolidated financial statements for the years ended December
31,  2003  and  2002 in  order  to  correct  the  previously  issued  historical
consolidated  financial statements of ICON Income Fund Nine, LLC at December 31,
2003 and 2002 and for the years then ended,  initially filed with the Securities
and  Exchange  Commission  (the  "SEC")  on March 30,  2004 and March 31,  2003,
respectively   (the  "Original   Filings").   During  the   preparation  of  our
consolidated  financial  statements  for the year ended December 31, 2004 it was
determined  that we did not account for three  interest  rate swap  transactions
entered into during 2002. Additionally,  during the review process we determined
that  the  accounting  treatment  of  certain  lease  transactions,   consisting
primarily of incorrect lease termination dates and the capitalization of certain
expenses  related  to these  transactions  was  incorrect.  Corrections  made to
properly record these transactions are summarized as follows:  (i) to record the
proper accounting treatment for derivative  financial  instruments in accordance
with  Statement of  Financial  Accounting  Standards  No. 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities" ("SFAS 133"), which established
new accounting  and reporting  standards for  derivative  financial  instruments
which has been  amended by SFAS No. 137,  issued in June 1999,  by SFAS No. 138,
issued in June 2000 and by SFAS No 149,  issued in June 2003,  (ii) to  properly
record depreciation and amortization,  deferred rental income and rental income,
(iii) to properly capitalize costs incurred to acquire equipment leases and (iv)
to properly record interest and other expense accruals. See Note 1, "Restatement
of Consolidated  Financial  Statements"  under Notes to  Consolidated  Financial
Statements  included  in Item 8,  "Consolidated  Financial  Statements"  of this
Annual Report on Form 10-K for the year ended  December 31, 2004, for additional
discussion  and a summary  of the effect of these  changes  on our  consolidated
financial statements at December 31, 2003 and 2002 and for the years then ended.

                                     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," "expects," "intend," "predict" or "project"
and variations of these words or comparable words or phrases of similar meaning.
These  forward-looking  statements  reflect our current beliefs and expectations
with respect to future  events and are based on  assumptions  and are subject to
risks and  uncertainties  and other  factors  outside our control that may cause
actual results to differ materially from those projected.

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" refers to the LLC.

     Our  Manager  is  ICON  Capital  Corp.  (the   "Manager"),   a  Connecticut
corporation.  Our Manager manages and controls the business affairs,  including,
but not limited to, our equipment leases and financing  transactions,  under the
terms of our limited liability company agreement (the "LLC Agreement").

                                       1
<PAGE>

     Our  initial  capitalization  was $1,000  contributed  by our  Manager.  We
offered  member  shares  with the  intention  of raising 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, 2004, we redeemed 1,318 member  shares.  At December 31, 2004, we had 98,348
member shares outstanding.

     Our Business

     We are an equipment leasing fund. Our principal  investment objective is to
obtain the maximum  economic  return from our investments for the benefit of our
members. To achieve this objective we: (i) are acquiring a diversified portfolio
of leases and financing  transactions;  (ii) make monthly cash  distributions to
our members  commencing  with each member's  admission;  (iii) are  re-investing
substantially  all  undistributed  cash from  operations  and cash from sales of
equipment and financing  transactions during the operating period; and (iv) will
dispose  of  our  investments  and  distribute  the  cash  from  sales  of  such
investments to our members during the liquidation period.

     We primarily engage in the business of acquiring equipment subject to lease
and, to a lesser extent, acquiring ownership rights to items of leased equipment
at lease expiration.  Some of our equipment leases will be acquired for cash and
are expected to provide current cash flow, which we refer to as "income" leases.
The  majority  of the  purchase  price of our  other  equipment  leases  will be
financed,  so these leases will generate  little or no current cash flow because
substantially  all of the rental payments received from a lessee will be paid to
a lender.  For these "growth" leases, we anticipate that the future value of the
leased equipment will exceed the cash portion of the purchase price paid for the
equipment.

     We invest most of the net proceeds  from our offering in items of equipment
that will be  subject  to a lease.  After the net  offering  proceeds  have been
invested,  it is anticipated  that additional  investments will be made with the
cash  generated  from our  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."  We  anticipate
purchasing  equipment from time to time for  approximately  the next four years.
This time frame is called the "operating  period,"  which we may extend,  at our
discretion, up to an additional three years. After the operating period, we will
then sell our  assets in the  ordinary  course of  business  during a time frame
called the "liquidation period."

     If we believe it would  benefit our  members to  reinvest  our cash flow in
equipment 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 within three years after the end
of the  operating  period,  but it may take  longer to do so.  Accordingly,  our
members  should  expect to hold their member  shares for at least ten years from
the time they invest.

     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 our  additional
members and 1% to our Manager  until each  additional  member has received  cash
distributions  and  liquidation  proceeds  sufficient  to reduce their  adjusted
capital  contribution  account  to zero and has  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, the distributions  will be allocated 90% to our additional members and 10%
to our Manager.

                                       2
<PAGE>

     Substantially all of our recurring  operating cash flows are generated from
the "income" leases in our portfolio. On a monthly basis, we deduct the expenses
related to the  recurring  operations  of the  portfolio  from such revenues and
assess the amount of the  remaining  cash  flows that will be  required  to fund
known re-leasing costs and equipment  management  costs. Any residual  operating
cash flows are considered available for distribution to our members.

     At December 31, 2004,  2003 and 2002, we had total assets of  $184,100,455,
$212,717,298  and  $209,483,843,  respectively.  For the year ended December 31,
2004, our rental income and finance income was $32,768,610, which included three
lessees  which  accounted for  approximately  81% of our total rental income and
finance  income.  We incurred a net loss for the year ended December 31, 2004 of
$17,768.  For the year ended  December  31, 2003,  our total  rental  income and
finance income was $34,560,886,  which included four lessees which accounted for
approximately  90% of our total rental income and finance income.  We incurred a
net loss for the year ended  December 31, 2003 of  $793,837.  For the year ended
December  31, 2002,  our rental  income was  $11,282,534,  which  included  four
lessees which  accounted for  approximately  99% of our total rental income.  We
incurred a net loss for the year ended December 31, 2002 of $1,976,068.

     At December  31,  2004,  our  portfolio,  which we hold either  directly or
through  joint  venture  investments  with  affiliates  and  others,   consisted
primarily of the following equipment subject to lease:

     Air Transportation Industry:

     o    We have an 85% interest in a McDonnell Douglas  DC-10-30F  aircraft on
          lease  with  Federal  Express  Corporation   ("FedEx")  with  a  lease
          expiration  date of March 31, 2007. The lessee may renew the lease for
          up to five years  thereafter.  The aircraft was  purchased on December
          27, 2002 for a total purchase price of approximately $25,292,000.  Our
          portion  of  the  purchase   price  was   approximately   $21,498,000,
          consisting  of  approximately  $2,550,000  in cash  and  approximately
          $18,948,000 of non-recourse debt.

     o    We have a 100%  interest in one Airbus  A340-300ER  aircraft and a 50%
          interest  in a  second  Airbus  A340-313X  aircraft,  both on lease to
          Cathay Pacific  Airways Limited  ("Cathay")  with expiration  dates of
          June 2006 and March  2006,  respectively.  The  purchase  price of the
          first aircraft was approximately $69,069,000,  comprised of $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.

          During June 2006,  we entered into a lease  extension  with Cathay for
          the first aircraft  through December 1, 2011 and during March 2006, we
          entered  into a lease  extension  with Cathay for the second  aircraft
          through July 1, 2011.

     Shipping:

     o    We have a 100%  interest  in three car and truck  carrying  vessels on
          bareboat  charter to Wilhelmsen  Lines  Shipowning ASA  ("Wilhelmsen")
          with an expiration  date of December 22, 2008.  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.  Effective
          March 14, 2006, we extended the terms of the related  bareboat charter
          with Wilhelmsen  through  December 22, 2013 and refinanced the related
          non-recourse debt.

     Energy Industry:

     o    We had a 100% interest in a 25 MW  co-generation  facility on lease to
          Schering-Plough  until July 1, 2004, which was  subsequently  extended
          through   July  1,  2009.   The  purchase   price  was   approximately
          $15,328,000,  consisting  of  approximately  $8,410,000  in  cash  and
          approximately  $6,918,000 of non-recourse  debt. On April 20, 2006, we
          sold this leased equipment to a third party for $4,800,000 in cash. We
          incurred  a loss  of  approximately  $2,600,000  on the  sale  of this
          equipment.

                                       3
<PAGE>

     Information Technology Industry:

     o    We have a 100% interest in computer equipment and corresponding  parts
          acquired from Insight  Investments  Corporation.  The lease expires 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.

     o    We have a 100% interest in computer equipment and corresponding  parts
          acquired from Insight  Investments  Corporation.  The lease expires 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.

     o    We have a 100% interest in various  components of computer  equipment,
          consisting of DMX hard drives, Brocade 12000 Directors with 128 usable
          ports  and  associated  hardware  acquired  from  Insight  Investments
          Corporation. The lease expires 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.

     Manufacturing Industry:

     o    We have a 100%  interest in  microprocessor  manufacturing  devices on
          lease with Advanced  Micro  Devices,  Inc. with an expiration  date of
          June 30, 2007.  The purchase  price was  approximately  $6,391,000  in
          cash.  Additionally,  we have a 100% interest in semiconductor  memory
          testing  equipment on lease with Advance Micro  Devices,  Inc. with an
          expiration date of July 1, 2007. The purchase price was  approximately
          $4,561,000 in cash.

     o    We had a 100%  interest in lathes,  presses and robotic  manufacturing
          equipment on lease to Metaldyne Corporation.  The lease expires during
          December  2009.  The purchase  price was  approximately  $2,412,000 in
          cash.  During  March  2006,  this  equipment  was  sold  to  Metaldyne
          Corporation for  approximately  $1,985,000 in cash and we recognized a
          gain of approximately $356,000.

     o    We have a 100%  interest in several  leases for various  manufacturing
          equipment on lease to Wildwood  Industries,  Inc. 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.

     Segment Information

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

     Competition

     The equipment leasing industry is highly competitive.  When seeking leasing
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 of our
competitors are larger than us and have greater financial resources than we do.

     Employees

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

                                       4
<PAGE>

     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, are available free of charge
on our  internet  website at  http://www.iconcapital.com  as soon as  reasonably
practicable after such reports are electronically filed with or furnished to the
Securities and Exchange  Commission.  This  information is also available on the
Securities and Exchange Commission's website, at http://www.sec.gov.

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. 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 business may affect our
business, operating results and financial condition.

     We are subject to a number of  uncertainties  associated with the equipment
leasing business which may affect our business,  operating results and financial
condition. These include:

o        the technological and economic obsolescence of equipment;
o        potential defaults by lessees;
o        management and other fees paid by us;
o        the existence of leverage, which increases the risk of foreclosure; and
o        increases in our expenses (including taxes and insurance expenses).

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

     Our Manager  could be  confronted  with  decisions in which it will have an
economic  incentive  to place its  interests  above ours.  As of June 2006,  our
Manager sponsors and manages five other equipment leasing businesses.  See "Item
13. Certain  Relationships  and Related  Transactions"  and "Item 11.  Executive
Compensation." These conflicts may include:

     o    Our LLC Agreement  does not restrict our Manager's  ability to compete
          with us for equipment acquisitions and other types of business;
     o    Our  Manager  may have  opportunities  to earn  fees for  referring  a
          prospective  acquisition  opportunity  to  another  purchaser;
     o    Our Manager may receive  fees in  connection  with the turnover of our
          equipment portfolio;
     o    Our Manager has the ability as tax matters  partner to negotiate  with
          the IRS to settle tax disputes that would bind us and our members; and
     o    Our Manager may control the decisions as to when and whether to sell a
          jointly-owned asset with another business that it manages.

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

     A significant part of the value of any our equipment is the potential value
of the equipment  once the lease term  expires.  We call this value the residual
value.  Generally,  leased  equipment  is  expected to decline in value over its
useful life. In acquiring equipment,  we will estimate a value for the equipment
at the end of the lease which, when combined with lease payments, is expected to
be enough to return the cost of our  investment  in the  equipment and provide a
profit  despite the  expected  decline in  equipment  value over the lease term.
However,  the value of the  equipment  at the end of a lease,  and whether  that
value  meets our  expectations,  will  depend to a  significant  extent upon the
following factors, many of which are beyond our control:

                                       5
<PAGE>

     o    our  ability  to  acquire  or, to a lesser  degree,  enter  into lease
          agreements  that  preserve  or  enhance  the  relative  value  of  the
          equipment;
     o    our ability to maximize  the value of the  equipment  upon its sale or
          re-lease when the lease expires;
     o    market conditions prevailing at the time the lease expires;
     o    the  cost  of new  equipment  at the  time  we  are  remarketing  used
          equipment;
     o    the extent to which  technological or regulatory  developments  during
          the lease term reduce the market for such used equipment;
     o    the strength of the economy; and
     o    the condition of the equipment when the lease expires.

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 its lease,  we
may make unanticipated  expenditures to repair the equipment in order to protect
our investment.  While we plan to inspect most used equipment prior to purchase,
there  can be no  assurance  that an  inspection  of  used  equipment  prior  to
purchasing it will reveal any defects, and problems with the equipment may occur
after it is acquired by us.

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

     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. We would then 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 cost 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.  We may lease  equipment to lessees which have
senior debt rated below investment  grade. We do not require our lessees to have
a minimum credit rating,  and lessees with such lower credit ratings may default
on lease payments more frequently than higher credit rated lessees.

If a lessee files for bankruptcy, we may have difficulty enforcing the lease and
may incur losses.

     If a lessee files for  protection  under  applicable  bankruptcy  laws, the
remaining  term of the lease or option to  purchase  the  equipment  for a fixed
price at a future date could be shortened  or the lease could be  rejected,  and
unpaid pre-bankruptcy lease payments may be cancelled as part of the bankruptcy.
We may also  experience  difficulty  and delays in recovering  equipment  from a
bankrupt lessee. If a lease is rejected in a bankruptcy,  we would bear the cost
of retrieving  and storing the  equipment,  and then have to remarket it, and we
would be an unsecured creditor for any amounts due under the lease.

Leasing  equipment in foreign  countries may be riskier than  domestic  leasing,
which may result in losses.

     We lease  equipment  to  domestic  and  foreign  lessees  which may be used
outside of the United States.  Regulations of foreign  countries may apply which
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.

     It may be difficult for us to repossess  our equipment if a foreign  lessee
defaults,  and  lease  enforcement  outside  the  United  States  could  be more
expensive  as legal  counsel  would need to be hired in the  applicable  foreign
jurisdiction.  We may  have  difficulty  enforcing  our  rights  under a  lease.
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 will seek to require lessees to reimburse us for
all taxes on the use of the  equipment  and require  them to maintain  insurance
covering the risks of confiscation of the equipment,  there is no assurance that
we will be successful or that insurance reimbursements will be adequate to allow
for recovery of and a return on foreign investments.

                                       6
<PAGE>
We could incur losses as a result of foreign currency fluctuation.

     We have the ability to acquire  leases  where the rental  payments  are not
paid in U.S.  dollars.  In these  cases,  we may then enter  into a contract  to
protect us 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 at unfavorable exchange rates. If a lease is denominated in a major
foreign  currency such as the pound sterling,  which  historically  has 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,  it
may be impossible to hedge  foreign  currency  exposure with respect to residual
values.  This is because  the  amount  and  timing of  receipt  of the  residual
interest  is  unpredictable  and  hedge  contracts  typically  require a precise
monetary  amount and date.  Even with leases  requiring  rental  payment 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.

Changes in interest rates may affect our results of operations.

At December 31, 2004, a portion of our debt was fixed  directly and a portion is
managed through  interest rate swap  contracts.  Any change in the fair value of
the interest rate swap  contacts is recognized in earnings  during the period of
change and therefore may affect our results of operations.

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

     We may 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  which  could  adversely  impact  the  financial  results  of joint
ventures.

     We invest in joint ventures with other  businesses our Manager sponsors and
manages.  Investing in joint ventures involves additional risks not present when
acquiring  leased equipment that will be wholly owned by us. These risks include
the possibility that our co-investors might become bankrupt or otherwise fail to
meet  financial  commitments,  thereby  obligating  us to pay  all  of the  debt
associated  with the joint venture,  as each party to a joint venture  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 us and want to manage the joint  ventures in ways that do not
maximize the return to us. 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 prices or terms of a lease.  Finally,
while we will 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.

                                       7
<PAGE>

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

     Equipment may be damaged or lost. Fire, weather,  accident,  theft or other
events can cause damage or loss of  equipment.  While our leases will  generally
require  lessees to have  comprehensive  insurance  and assume the risk of loss,
some  losses,  such as from  acts of war,  terrorism  and  acts of God,  such as
earthquakes,  may be either uninsurable or not economically  feasible to insure.
Furthermore,   not  all  possible  contingencies   affecting  equipment  can  be
anticipated or insured against,  and, if insured, the insurance proceeds may not
be sufficient to cover a loss. If such a disaster  would occur 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 will use our best efforts to minimize the possibility and
exposure  of  such  liability,  including  by  means  of  attempting  to  obtain
insurance,  there can be no assurance that our assets will be protected  against
any claims.

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 capital 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 leases may provide for rent  reductions if the equipment must
remain out of service for an extended period or is removed from service.  We may
then have reduced rental income from the lease for this item of equipment. If we
did not have the capital to make a required change, we might be required to sell
the affected equipment.  If so, we could suffer a loss on our investment,  might
lose future revenues, and also might suffer adverse tax consequences.

If a lease were determined to be a loan, it would 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 which we
believe  are  structured  so that  they  avoid  being  deemed  loans,  and would
therefore  not be subject to the usury laws,  there can be no assurance  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 the 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.

The  telecommunication  market is  subject  to  significant  uncertainty  as its
success is closely tied to government regulation, both domestically and abroad.

     Unforeseen   changes  in   telecommunications   regulation,   such  as  the
requirement  for  voice-over-Internet-Protocol   service  providers  to  provide
enhanced  911, or E911  services,  in the United States may increase the chances
that our  potential  lessees may lose  revenue and not be able to make  required
lease payments.

Because  we will  borrow  to  purchase  equipment,  losses as a result of lessee
defaults may be greater than if debt were not incurred.

                                       8
<PAGE>

     Although  we expect to acquire  some of our  investments  for cash,  we are
likely to borrow a  substantial  portion of the purchase  price of our equipment
investments  and there is no limit to the  amount  of debt that may be  incurred
when purchasing  equipment.  While we believe the use of leverage will result 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 non-recourse  borrowings, a lessee default could force
us to make debt service  payments so as to protect our  investment  in equipment
and  prevent us from  being  subject  to  repossession.  The terms of our credit
facility  could  restrict  us from paying  distributions  to  investors  if such
payments  would cause us not to 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."

The computer  hardware market is cyclical and subject to obsolescence  which may
affect our ability to lease or resell the assets.

     The  computer  hardware  market is  cyclical  and is  vulnerable  to market
downturns.  The intrinsic  boom-bust nature of the technology  sector challenges
hardware companies to constantly try to improve and create innovative  hardware,
aggressively pushing the incumbent equipment into obsolescence. We cannot assure
you that we will be able to locate a willing buyer or lessee for our assets,  or
if one is  located,  that the buyer or lessee  will pay a price for the asset at
least equal to the appraised value.

The container  shipping industry is subject to uncertainties that are beyond our
control and may adversely affect our lease revenue.

     The container  shipping industry is subject to volatility in profitability,
vessel values and charter rates  resulting from changes in supply of, and demand
for,  shipping  capacity  as well as changing  environmental  and other laws and
regulations.  In  addition,  the  nature,  timing  and  degree of changes in the
container  shipping  markets,  as well as future  charter rates and value of its
vessels, are not readily predictable and beyond our control. These factors could
adversely  affect the  container  vessel  operators  to whom we lease  container
vessels, which could result in a reduction of our lease revenue.

Item 1B. Unresolved Staff Comments

         None.

Item 2.  Properties

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

Item 3.  Legal Proceedings

     In the  ordinary  course of  conducting  our  business,  we are  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.  No material legal
proceedings 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 2004.

                                       9
<PAGE>

                                     PART II

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

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

                                                   Number of Members
               Title of Class                     as of June 15, 2006
------------------------------------      ------------------------------------
            Manager (as a member)                          1
             Additional members                          3,229

     We pay monthly  distributions to our members beginning with the first month
after the members' admission through the termination of the reinvestment period,
which we anticipate will be April 29, 2008. We paid  distributions to additional
members totaling $8,758,942,  $7,955,313 and $2,181,537,  respectively,  for the
years ended December 31, 2004, 2003 and 2002. Additionally, our Manager was paid
distributions of $89,744, $80,356 and $22,036, respectively, for the years ended
December 31, 2004,  2003 and 2002. The terms of the Loan Agreement with Comerica
Bank, could restrict us from paying cash distributions on our members' shares 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 National  Association of Securities  Dealers  ("NASD") members
and their  associated  persons to have  participated in the offering and sale of
member shares (the "Units")  pursuant to the offering or to  participate  in any
future offering of our Units,  we are required  pursuant to NASD Rule 2710(c)(6)
to  disclose  in each  annual  report  distributed  to our  members  a per share
estimated  value of our Units,  the method by which we developed  the  estimated
value and the date used to develop the estimated value. In addition, our Manager
must  prepare  annual   statements  of  our  estimated  Unit  values  to  assist
fiduciaries of retirement plans subject to the annual reporting  requirements of
Employee  Retirement  Income  Security Act ("ERISA") in the preparation of their
reports  relating  to an  investment  in our  Units.  For  these  purposes,  the
estimated  value of our Units is deemed to be $740.75 per Unit at September  30,
2004.

     This  estimate  was based on the  amount of  remaining  undiscounted  lease
payments on our existing  leases,  the booked  estimated  residual values of the
equipment held by us upon the  termination of those leases and our cash on hand.
From this amount we then subtracted our total debt  outstanding and then divided
that sum by the total  number of Units  outstanding.  This  valuation  was based
solely  on 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 Units at this
time, and there can be no assurance that limited  partners could receive $740.75
per Unit if such a market did exist and they sold their  Units or that they will
be able to receive  such  amount for their Units in the  future.  The  foregoing
valuation was performed solely for the ERISA and NASD purposes  described above.
There  is no  market  for our  Units,  and,  accordingly,  this  value  does not
represent  an estimate of the amount our members  would  receive if they were to
seek to sell  their  Units.  Furthermore,  there can be no  assurance  as to the
amount we may actually  receive if and when we seek to  liquidate  our assets or
the amount of lease payments and equipment disposition proceeds we will actually
receive over our remaining term.

Item 6. Selected Consolidated Financial Data

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

                                       10
<PAGE>

<TABLE>
<CAPTION>

                                                                                                          Period From
                                                                                                         July 11, 2001
                                                                                                       (Commencement of
                                                                  Year Ended December 31,                 Operations)
                                                     -----------------------------------------------       Through
                                                                          2003             2002          December 31,
                                                         2004          (Restated)       (Restated)           2001
                                                     ------------      -----------     ------------       ---------
<S>                                                  <C>               <C>             <C>                <C>
 Total revenue (1)                                   $ 33,240,316      $34,982,056     $ 11,453,549       $       -
                                                     ============      ===========     ============       =========
 Net loss (2) (3)                                    $   (17,768)      $  (793,837)    $ (1,976,068)      $    (324)
                                                     ============      ===========     ============       ========
 Net loss allocable to additional members            $    (17,590)     $  (785,899)    $ (1,956,307)      $    (321)
                                                     ============      ===========     ============       =========
 Net loss allocable to Manager                       $      (178)      $    (7,938)    $    (19,761)      $      (3)
                                                     ============      ===========     ============       =========

 Weighted average number of additional
        member shares outstanding                          98,695           90,813           29,023           2,043
                                                     ============      ===========     ============       =========
 Net loss per weighted average additional
        member share outstanding                     $      (0.18)     $     (8.65)    $     (67.41)      $   (0.16)
                                                     ============      ===========     ============       =========

 Distributions to additional members                 $  8,758,942      $ 7,955,313     $  2,181,537       $       -
                                                     ============      ===========     ============       =========
 Distributions per weighted average
        additional member share outstanding                $88.75      $     87.60     $      75.17       $       -
                                                     ============      ===========     ============       =========
 Distributions to Manager                            $     89,744      $    80,356     $     22,036       $       -
                                                     ============      ===========     ============       =========

                                                                              At December 31,
                                                     ---------------------------------------------------------------
                                                                         2003             2002
                                                       2004           (Restated)       (Restated)             2001
                                                     ------------     ------------     ------------       ----------
 Total assets                                        $184,100,455     $212,717,298     $209,483,843       $2,454,640
                                                     ============     ============     ============       ==========
 Notes payable                                       $117,261,455     $134,463,196     $156,955,116       $        -
                                                     ============     ============     ============       ==========
 Members' equity                                     $ 64,455,803     $ 73,842,948     $ 46,338,518       $2,452,107
                                                     ============     ============     ============       ==========


</TABLE>

(1)  The increase in total revenue  between 2001 and 2003 relates to our initial
     acquisition of equipment leases with third parties.

(2)  During  2002,  we entered into three  interest  rate swap  contracts  which
     increased our interest  expense during 2002 by approximately  $788,000,  or
     approximately   $27.15  per  weighted  average   additional   member  share
     outstanding.  The  decrease in our net loss between 2002 and 2003 cannot be
     attributible to any one event.  The equipment leases we entered into during
     2002 were  performing as expected and the  additional  equipment  leases we
     entered into during 2003 added to the overall decrease in our net loss from
     2002 to 2003.

(3)  The positive effect of our interest rate swap contacts reduced our interest
     expense during 2004 by approximately  $743,000,  or approximately $7.52 per
     weighted  average  additional  member share  outstanding.  During 2004,  we
     recorded an impairment loss of  approximately  $236,000,  or  approximately
     $2.39 per weighted average additional member share outstanding.

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 contains  forward-looking  statements.  These statements are based on
current   expectations   and   assumptions   that  are   subject  to  risks  and
uncertainties.  Actual  results  could  differ  materially  because  of  factors
discussed in "Part I.  Forward-Looking  Statements"  and "Item 1A. Risk Factors"
located elsewhere in this Annual Report on Form 10-K.

                                       11
<PAGE>

     Restatement of Consolidated Financial Statements

     We have restated our consolidated financial statements at December 31, 2003
and 2002 and for the years then ended as discussed in Note 1 to the consolidated
financial statements contained in Item 8. The following Manager's discussion and
analysis takes into account the effects of the restatement.

     Restatement

     During the  preparation of our  consolidated  financial  statements for the
year ended December 31, 2004 it was determined that we did not account for three
interest rate swap transactions entered into during 2002.  Additionally,  during
our review  process it was determined  that the accounting  treatment of certain
lease  transactions,  consisting  primarily of incorrect lease termination dates
and the  capitalization  of certain expenses  related to these  transactions was
incorrect.

     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.  We may  finance  leases with  variable  interest  rate  financing,
therefore,  we are 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  variable
interest  rates to a fixed  interest  rate.  SFAS 133 requires  that  derivative
financial  instruments  used for hedging must be  specifically  matched with the
underlying exposures to an outside third party and documented  contemporaneously
to qualify for hedge accounting treatment.

     During  September  2002, we acquired three car and truck carrying  vessels,
which included debt obligations  which accrued  interest at a variable  interest
rate equal to the three month  London Inter Bank  Offered  Rate  ("LIBOR")  plus
1.79% per year.  In order to properly  manage  these  variable  interest  rates,
simultaneously  with the  acquisition of the vessels and the assumption of debt,
we entered  into three  interest  rate swap  contracts  to  effectively  fix the
interest  rate.  The  internal  review  determined  that  we did  not  meet  the
contemporaneous documentation requirements to meet the hedging requirements with
respect to the interest rate swap contracts.  Accordingly, we are accounting for
these transactions as derivatives,  and as such, any change in the fair value on
the interest rate swap  contacts is recognized in earnings  during the period of
change.

     During March 2002 and September  2002, we entered into two equipment  lease
transactions,  one to acquire an aircraft and the other to acquire three car and
truck carrying vessels,  respectively. We used incorrect lease termination dates
for these  transactions.  As a result of this, we incorrectly  calculated rental
income,  depreciation  and  amortization,  interest  expense and deferred rental
income. During our review of these transactions we determined that various costs
associated with the acquisition of these equipment  leases should be capitalized
and amortized over the life of the related leases.

     This Annual  Report on Form 10-K and the  restated  consolidated  financial
statements  included  herein  reflect  the  corrections  of our  accounting  and
disclosures  related to the incorrect  accounting  treatment of certain  hedging
activities  and lease  transactions  entered into during the year ended December
31,  2002.  These  non-cash  charges  do not affect our cash flows from past and
future operations, or our liquidity.

     As discussed in Note 1 of the consolidated  financial statements in Item 8,
we have restated our consolidated  balance sheet at December 31, 2002 to reflect
total assets of $209,483,843  (instead of  $209,646,396),  total  liabilities of
$163,145,325  (instead of $161,907,586) and total members' equity of $46,338,518
(instead of $47,738,810).  For the year ended December 31, 2002, we restated our
consolidated  statement  of  operations  to  reflect  a net  loss of  $1,976,068
(instead of $575,776),  a net loss allocable to additional members of $1,956,307
(instead of $570,018)  and a net loss per  weighted  average  additional  member
share  outstanding of $67.41 (instead of $19.64).  We restated our  consolidated
balance  sheet at December  31,  2003 to reflect  total  assets of  $212,717,298
(instead  of  $212,905,177),  total  liabilities  of  $138,874,350  (instead  of
$137,751,308) and total members' equity of $73,842,948 (instead of $75,153,869).
For the year ended December 31, 2003, we restated our consolidated  statement of
operations to reflect a net loss of $793,837  (instead of $883,208),  a net loss
allocable to additional members of $785,899 (instead of $874,376) and a net loss
per weighted average  additional  member share  outstanding of $8.65 (instead of
$9.63).

                                       12
<PAGE>

     Overview

     We are an equipment  leasing  business  formed on July 11,  2001.  We began
active  operations on December 18, 2001. We primarily  engage in the business of
acquiring  equipment  subject  to  lease  and,  to a  lesser  degree,  acquiring
ownership rights to items of leased equipment at lease  expiration.  Some of our
equipment  leases are acquired for cash and are expected to provide current cash
flow, which we refer to as "income"  leases.  The majority of the purchase price
of our other  equipment  leases will be financed,  so these leases will generate
little or no current cash flow because  substantially all of the rental payments
received  from a lessee  are paid to a lender.  For these  "growth"  leases,  we
anticipate  that the future value of the leased  equipment  will exceed the cash
portion of the purchase  price paid for the  equipment.  We are currently in our
"reinvestment"  phase,  wherein we seek to purchase  equipment from time to time
through April 29, 2008, unless extended.

Lease and Other Significant Transactions

     We entered  into the  following  lease and other  significant  transactions
during the years ended December 31, 2004, 2003 and 2002:

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. to us for $745,000.  This assignment was made in order
for L.P. Seven to repay its outstanding debt obligation to us as required by 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 is
more fully  explained  elsewhere in this document (See Financings and Borrowings
located in the Liquidity and Capital Resources section). This amount represented
L.P.  Seven's  fair value of its  interest in EKA  Chemicals,  Inc. on March 28,
2005.  This amount was  determined to represent the fair value of the lease with
EKA Chemicals,  Inc. based upon the expected  future cash flows from such lease.
In December 2005, we received the final installment from EKA Chemicals, Inc.

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  $755,000   outstanding  debt  obligation   pursuant  to  the
contribution  agreement  related to the line of credit  agreement  with Comerica
Bank. This assignment increased our rights to the profits, losses and cash flows
from L.P. Seven's limited  partnership  interest from 2.60%, which were assigned
to us  in  November  2004,  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 independent third party appraisal.

     On November 24, 2004,  L.P. Seven assigned to us 2.60% of its rights to the
profits,  losses,  and cash flows from its  limited  partnership  interest in an
entity  that owns a 100%  interest  in a mobile  offshore  drilling  rig that is
subject to lease with Rowan Companies, Inc. L.P. Seven assigned the rights to us
as  repayment  of its  $650,000  outstanding  debt  obligation  pursuant  to the
contribution  agreement  related to the line of credit  agreement  with Comerica
Bank.  This amount  represented  L.P.  Seven's  proportionate  fair value of its
interest in the mobile  offshore  drilling rig at November  24,  2004.  The fair
value of the mobile  offshore  drilling rig was determined  using an independent
third party appraisal.

                                       13
<PAGE>

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 expire during November
2008. 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.

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
expires during December 2008. The purchase price was  approximately  $173,000 in
cash. Our Manager was paid an acquisition fee of  approximately  $5,000 relating
to this transaction.

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.

Information Technology Equipment

     During March 2004, we acquired  from Insight  Investments  Corporation  the
lease for computer  equipment  and  corresponding  parts.  The lease  expires 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 accrues interest at 4.5% per year and
matures in December  2006.  The lender has a security  interest in the  computer
equipment and an assignment of the rental payments under the lease.  Our Manager
was  paid  an  acquisition  fee  of  approximately   $91,000  relating  to  this
transaction.

     During March 2004,  we acquired  from Insight  Investments  Corporation  an
additional  lease for computer  equipment  and  corresponding  parts.  The lease
expires 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 accrues interest at 5.36%
per year and matures in December 2006. The lender has a security interest in the
computer equipment and an assignment of the rental payments under the lease. Our
Manager was paid an acquisition fee of  approximately  $53,000  relating to this
transaction.

     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 expires 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 accrues  interest at 5.87% per year and matures in
December 2007. The lender has a security interest in the computer  equipment and
an assignment of the rental  payments  under the lease.  Our Manager was paid an
acquisition fee of approximately $102,000 relating to this transaction.

     On March 31, 2004, we and ICON Income Fund Ten LLC ("Fund Ten"),  an entity
also  managed by our  Manager,  formed a joint  venture,  ICON  GeicJV,  for the
purpose of purchasing  information  technology equipment subject to a three year
lease  with  Government  Employees  Insurance  Company  ("GEICO").  We  have  an
ownership interest of 26% in this joint venture.  On April 30, 2004, ICON GeicJV
acquired the information technology equipment. Our portion of purchase price was
approximately  $1,522,000 in cash.  Our Manager was paid an  acquisition  fee of
approximately   $177,000  relating  to  this  transaction,   of  which  we  paid
approximately $46,000.

                                       14
<PAGE>

McDonnell Douglas DC10-30F aircraft

     During  February  2003,  we and ICON Income Fund Eight B L.P.  ("Fund Eight
B"),  an entity  also  managed  by our  Manager,  formed a joint  venture,  ICON
Aircraft  47820 LLC, for the purpose of acquiring an  investment  in a McDonnell
Douglas DC10-30F aircraft on lease to FedEx with an expiration date of March 31,
2007. This lease may be renewed for up to five years  thereafter.  We have a 10%
ownership  interest in this joint venture.  On March 11, 2003, the joint venture
acquired  the  aircraft.  Our portion of the  purchase  price was  approximately
$2,712,000,  comprised  of  approximately  $291,000  in cash  and  approximately
$2,421,000 of  non-recourse  debt.  Our Manager was paid an  acquisition  fee of
approximately   $819,000  relating  to  this  transaction,   of  which  we  paid
approximately $82,000.

Acquisition of Manufacturing Equipment

     On June 20, 2003, we acquired micro processing  manufacturing  equipment on
lease to  Advance  Micro  Devices,  Inc.  through  June  2007 for  approximately
$6,391,000 in cash. On July 24, 2003, we acquired two leases for semi  conductor
memory testing  equipment on lease to Advance Micro Devices,  Inc.  through June
2007 for approximately $4,561,000 in cash. Our Manager was paid acquisition fees
of approximately $329,000 relating to these transactions.

     On May 30,  2003,  we acquired  lathes,  presses and robotic  manufacturing
equipment  on  lease  to  Metaldyne   Corporation   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   Corporation  was  sold  for  approximately
$1,985,000 in cash and we recognized a gain of approximately $356,000.

     On April 30, 2003, we acquired a Double Kraft Paper Forming  Tubing Unit on
lease to Wildwood  Industries,  Inc.  through  February  2007 for  approximately
$1,350,000  in cash.  On August 20,  2003,  we  acquired  various  manufacturing
equipment  on  lease  to  Wildwood  Industries,  Inc.  through  August  2008 for
approximately  $957,000 in cash.  On  September  24, 2003,  we acquired  various
manufacturing equipment on lease to Wildwood Industries,  Inc. through September
2008 for approximately $1,165,000 in cash. Our Manager was paid acquisition fees
of approximately $104,000 relating to these transactions.

     During  December  2003,  we entered  into an  agreement  with Summit  Asset
Management Limited (a United Kingdom based company) to acquire a 90% interest in
the unguaranteed  residual values of manufacturing  and technology  equipment on
lease to various lessees located in the United  Kingdom.  We paid  approximately
$4,454,000 in cash for this investment.  Our Manager was paid an acquisition fee
of approximately $1,131,000 relating to this transaction.

McDonnell Douglas DC-10-30F Aircraft

     During  September  2002, we and Fund Eight B formed a joint  venture,  ICON
Aircraft  46835 LLC, for the purpose of acquiring an  investment  in a McDonnell
Douglas  DC-10-30F  aircraft on lease with FedEx with a lease expiration date of
March 31, 2007.  We have an 85%  ownership  interest in this joint  venture.  On
December 27, 2002, the joint venture  acquired the aircraft.  Our portion of the
purchase  price  was  approximately  $21,498,000,  consisting  of  approximately
$2,550,000,   in  cash  and  the  assumption  of  approximately  $18,948,000  of
non-recourse  debt. The non-recourse debt accrues interest at 4.04% per year and
matures in March 2007. The lender has 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.

Great Dane Trailers

     During  September  2003, we acquired fifty Great Dane trailers with Carrier
Ultra  Refrigeration  units on lease with Frozen Foods Industries,  Inc. through
April 2010. The purchase price was approximately $2,001,000 in cash. Our Manager
was  paid  an  acquisition  fee  of  approximately   $58,000  relating  to  this
transaction.

                                       15
<PAGE>

Railcars

     During  November  2002,  we acquired  110 railcars on lease to Trinity Rail
Management  with the  lease  expiring  in April  2010.  The  purchase  price was
approximately  $1,243,000 which consisted of approximately  $126,000 in cash and
the  assumption  of   approximately   $1,117,000  of   non-recourse   debt.  The
non-recourse  debt accrues  interest at 9.50% per year and matures in July 2010.
The lender has a security  interest in the  railcars  and an  assignment  of the
rental  payments under the lease. We paid our Manager  approximately  $37,000 in
acquisition fees relating to this transaction.

     During  November  2002, we acquired 324 railcars on lease to Texas Genco LP
with the lease  expiring in March 2007.  The  purchase  price was  approximately
$4,424,000,  which  consisted  of  approximately  $1,100,000  in  cash,  and the
assumption of  approximately  $3,324,000 of non-recourse  debt. The non-recourse
debt  accrues  interest at 9.25% per year and  matures in  September  2007.  The
lender has a security  interest in the railcars and an  assignment of the rental
payments  under  the  lease.  We paid  our  Manager  approximately  $133,000  of
acquisition fees relating to this transaction.

Co-generation Facility

     During   May  2002,   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  through July 2004 which was
subsequently  extended through July 1, 2009. We had a 95% ownership  interest in
this joint venture. On September 30, 2002, Kenilworth acquired the co-generation
facility.  Our  portion of the  purchase  price was  approximately  $14,562,000,
consisting  of   approximately   $7,990,000  in  cash  and  the   assumption  of
approximately  $6,572,000 of non-recourse  debt. The non-recourse  debt includes
both senior and junior  non-recourse  debt,  accrues interest at 10.61% per year
and  9.86%  per  year,  respectively,  and both  matured  on July 1,  2004.  The
outstanding  balance 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.

     During  December 2004, we transferred a 25.87%  ownership  interest in ICON
SPK 2023-A,  LLC, a joint venture with Fund Eight B, to Fund Eight B in exchange
for their entire 5% ownership interest in the co-generation facility. We entered
into this  exchange  to  reduce  Fund  Eight B's New  Jersey  State  income  tax
obligations. Our Manager believes it is in their best interest to no longer have
any ownership interest in equipment held in New Jersey.  After the exchange,  we
have a 100%  ownership  interest  in the  co-generation  facility  and a  25.13%
ownership interest in ICON SPK 2023-A,  LLC. The fair value of the co-generation
facility was  determined  using an  independent  third party  appraisal  and our
Manager  determined  that fair value for ICON SPK  2023-A,  LLC was its net book
value based upon our  Manager's  knowledge of equipment  leases held by ICON SPK
2023-A, LLC.

     On April 20,  2006,  we sold this  leased  equipment  to a third  party for
$4,800,000 in cash. We incurred a loss of  approximately  $2,600,000 on the sale
of this equipment.

Shipping

     During  September 2002, we acquired three car and truck carrying vessels on
bareboat  charter to Wilhelmsen  Lines  Shipowning ASA  ("Wilhelmsen"),  with an
expiration  date of December 22,  2008.  The  purchase  price was  approximately
$74,020,000,  consisting of approximately  $9,690,000 in cash and the assumption
of approximately $64,330,000 of non-recourse debt. The non-recourse debt accrues
interest at the London Inter Bank Offered  Rate  ("LIBOR")  plus 1.79% per year.
The non-recourse debt matures in September 2008.

                                       16
<PAGE>

     Simultaneously  with the  acquisition,  we  entered  into  three  identical
interest rate swap contracts, each having a notional amount of $21,443,255, with
Fortis  Bank.  We entered  into these  agreements  in order to swap the variable
interest rate on the non-recourse  debt with a fixed interest rate. The interest
rate swap contracts have a fixed interest rate of 4.85% per year. The lender has
a security  interest  in the vessels and an  assignment  of the rental  payments
under  the  lease.  We  accrued  acquisition  fees  payable  to our  Manager  of
approximately $2,072,000,  of which we paid approximately  $2,041,000,  with the
balance recorded as due from Manager and affiliates on the consolidated  balance
sheet at December 31, 2002.

     Effective  March 14, 2006,  we extended  the terms of the bareboat  charter
with   Wilhelmsen   through   December  22,  2013  and  refinanced  the  related
non-recourse  debt. As part of the non-recourse  debt  refinancing,  we incurred
approximately  $21,753,000 of additional non-recourse debt. The principal amount
of refinanced non-recourse debt is $51,000,000 and matures on December 22, 2013.
The non-recourse  debt has quarterly  payments ranging from $450,000 to $800,000
and  accrues  interest  at LIBOR  plus 1.50% per year.  Simultaneously  with the
execution of the refinanced non-recourse debt we entered into interest rate swap
agreements to fix the interest rate at 7.02% per year. The lender has a security
interest in the leased  equipment and an assignment of the rental payments under
the lease.

Airbus Aircraft

     During  July 2002,  we  acquired  a 53%  interest  in an Airbus  A340-300ER
aircraft on lease to Cathay  through June 2006 for  approximately  $2,250,000 in
cash.  During  December  2002,  we exercised our right to purchase the remaining
interest in the aircraft for approximately $2,028,000 in cash and the assumption
of approximately $64,791,000 of non-recourse debt. The non-recourse debt accrued
interest at 5.70% per year and was due on June 12,  2006 with a balloon  payment
of approximately  $44,250,000.  The lender has a security interest in the leased
equipment and an assignment of the rental payments under the lease.  Our Manager
was  paid  an  acquisition  fee of  approximately  $2,078,000  relating  to this
transaction.

     Effective  June 7, 2006,  we entered  into a lease  extension  with  Cathay
through December 1, 2011.  Simultaneously  with the lease  extension,  the owner
trustee  refinanced  the  non-recourse  debt,  which had a principal  balance of
$44,363,166.   The  refinanced   non-recourse   debt  has  monthly  payments  of
approximately  $545,000  through May 2010 and monthly  payments of approximately
$495,000  through  December  2011 and  accrues  interest at LIBOR plus 0.80% per
year.  The  refinanced  non-recourse  debt matures on December 1, 2011 and has a
balloon payment of approximately $11,550,000.  The variable interest rate of the
refinanced  debt may be fixed at our sole discretion on any monthly payment date
up to  September 1, 2006,  or fixed  automatically  under the debt  agreement on
September 1, 2006.  The lender has a security  interest in the leased  equipment
and an assignment of the rental payments under the lease.

     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, which
owns, through an Owner Trust, an Airbus A340-313X aircraft which was on lease to
Cathay  through March 2006 and has been extended until July 1, 2011. We and Fund
Eight B each  have  ownership  interests  of 50%.  On  March 4,  2002,  ICON 126
acquired  all of the  outstanding  stock of D.A.L.  Our portion of the  purchase
price was approximately  $37,264,000,  consisting of approximately $2,125,000 in
cash and  non-recourse  debt of  approximately  $35,139,000.  The  lender  has a
security interest in the aircraft and an assignment of the rental payments under
the lease.  Our  Manager  was paid an  acquisition  fee  totaling  approximately
$2,236,000  relating  to  this  transaction,  of  which  we  paid  approximately
$1,118,000.

     Simultaneously  with the lease extension,  the owner trustee refinanced the
non-recourse  debt that was  associated  with the aircraft that was scheduled to
mature on March 27, 2006 with a balloon  payment of  approximately  $52,850,000.
ICON 126  established a reserve  account  totaling  $582,509,  which reduced the
balloon  payment  to  $52,267,491.  The  refinanced  non-recourse  debt  accrues
interest at the London  Interbank  Offered Rate ("LIBOR") plus 1.17% and matures
on July 1,  2011  with a  balloon  payment  of  approximately  $32,000,000.  The
variable  interest  rate  of the  refinanced  debt  may  be  fixed  at our  sole
discretion on June 27, 2006, or fixed  automatically under the debt agreement on
September 27, 2006. We did not exercise our option to fix the variable  interest
rate on June 27, 2006.

                                       17
<PAGE>

     The owner trustee has a commitment  with respect to its Cathay  aircraft to
pay 50% of the maintenance  overhaul  costs,  which were incurred on or prior to
March 27, 2006.  The owner trustee has  established  a maintenance  reserve cash
account to pay for its portion of these costs,  which account has been funded in
accordance  with the terms of the lease.  Any excess  cash  remaining  after the
maintenance overhaul is performed will be used to pay down the principal balance
of the related non-recourse debt.

Portfolio of Leases

     During December 2001, we and Fund Eight B formed a joint venture,  ICON SPK
2023-A,  LLC,  to acquire a  portfolio  of 32  equipment  leases  consisting  of
material  handling,  telecommunication  and computer  equipment with  expiration
dates at various dates  through  April 2008. We had a 51% ownership  interest in
this joint  venture.  During  March  2002,  ICON SPK 2023-A LLC  completed  this
transaction. Our portion of the total purchase price for the portfolio of leases
was  approximately  $3,953,000,  in  cash.  We paid  our  Manager  approximately
$119,000 of acquisition fees relating to this purchase.

     During  December 2004, we transferred a 25.87%  ownership  interest in ICON
SPK  2023-A,  LLC to Fund  Eight B in  exchange  for their  entire 5%  ownership
interest  in   Kenilworth,   a  25  MW   co-generation   facility  on  lease  to
Schering-Plough.

Current Business Environment and Outlook

     The  United  States  economy  appears  to be  recovering,  and the  leasing
industry's outlook for the foreseeable future is encouraging.  The November 2005
Economic Vital Signs Report by the United States Joint Economic Committee stated
that  fears  stemming  from the  economic  impact of natural  disasters  appears
unfounded,  that gross domestic product  increased 3.8% during the third quarter
2005.  As  conditions  for capital  investment  remain  favorable  and  indicate
continued  growth,  we anticipate that capital  spending by corporations  should
continue to increase in 2006.  Increased capital spending may increase available
leases thereby creating more opportunities in the leasing market. We believe the
leasing industry's outlook for the foreseeable future is encouraging.

     Other  factors  which may  negatively  affect the leasing  industry are the
proposed  legal and  regulatory  changes that may affect tax benefits of leasing
and the  continued  misperception  by potential  lessees,  stemming  from Enron,
WorldCom and others,  that leasing should not play a central role as a financing
alternative. However, as economic growth continues and interest rates inevitably
begin to rise over time, we are optimistic  that more lessees will return to the
marketplace.

New Accounting Pronouncements

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

                                       18
<PAGE>

     On June 1, 2005 the Financial  Accounting  Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 154 "Accounting Changes and Error
Corrections" ("SFAS 154") which replaces Accounting Principles Board Opinion No.
20,  "Accounting  Changes"  ("APB  20") and SFAS No.  3,  "Reporting  Accounting
Changes in Interim  Financial  Statements," and changes the requirements for the
accounting  for and  reporting  of a change in  accounting  principle.  SFAS 154
requires  retrospective  application to prior periods' financial statements of a
voluntary change in accounting  principle unless it is impracticable  for fiscal
years  beginning  after December 15, 2005. APB 20 previously  required that most
voluntary  changes in  accounting  principle be  recognized  by including in net
income of the period of the change the cumulative  effect of changing to the new
accounting  principle.  We do not  expect  the  adoption  of SFAS 154 to have an
impact on our financial position or results of operations.

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

Critical Accounting Policies

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

o        Lease classification and revenue recognition
o        Asset impairments
o        Depreciation
o        Derivative financial instruments

Lease Classification and Revenue Recognition

     The equipment we expect to lease to third parties will be classified either
as a finance lease or an operating  lease,  which will be determined  based upon
the terms of each lease. Initial direct costs are capitalized and amortized over
the term of the 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, we will record,  at lease inception,  the total minimum
lease payments receivable from the lessee, the estimated  unguaranteed  residual
value of the equipment at lease termination, the initial direct costs related to
the lease and the  related  unearned  income.  Unearned  income  represents  the
difference  between the sum of the minimum lease  payments  receivable  plus the
estimated unguaranteed residual minus the cost of the leased equipment. Unearned
income is recognized as finance income ratably over the term of the lease.

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

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

                                       19
<PAGE>

Asset Impairments

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

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

Depreciation

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

Derivative Financial Instruments

     We account for derivative financial instruments in accordance with SFAS No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities"  ("SFAS
133"),  which  established  accounting  and reporting  standards for  derivative
instruments.  SFAS 133 has been amended by SFAS No. 137, issued in June 1999, by
SFAS No. 138, issued in June 2000 and by SFAS No. 149, issued in June 2003.

     SFAS 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, cash flow, or foreign currency 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.

                                       20
<PAGE>

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

     We are currently in our  reinvestment  period and  anticipate  entering our
liquidation   period  during  April  2008,   unless  our  Manager   extends  the
reinvestment period, which it may do, at its discretion, for up to an additional
three years.  While in the  reinvestment  period,  we will  continue to look for
equipment leases to purchase, 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 leases while purchasing other equipment 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  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.

     Revenue for 2004 and 2003 are summarized as follows:

<TABLE>
<CAPTION>


                                                               Years Ended December 31,
                                                     ----------------------------------------------
                                                                         2003
                                                         2004          (Restated)        Change
                                                     ------------      -----------     ------------
<S>                                                  <C>               <C>             <C>
 Total revenue                                       $ 33,240,316      $34,982,056     $ (1,741,740)
                                                     ============      ===========     ============

 Rental income                                       $ 31,111,650      $33,814,372     $ (2,702,722)
 Finance income                                      $  1,656,960      $   746,514     $    910,446
 Income from investments in joint ventures           $    425,066      $   197,986     $    227,080
 Net loss on sales of equipment                      $    (65,074)     $    (2,753)    $    (62,321)
 Interest and other income                           $    111,714      $   225,937     $   (114,223)

</TABLE>

     Revenues for 2004  decreased by  $1,741,740,  or 5.0%, as compared to 2003.
The  decrease in revenue is due  primarily  to a decrease in rental  income that
resulted  from the  renegotiated  lease  terms from the  Kenilworth  lease.  The
increase in finance  income was due to our  investment  in three direct  finance
leases in 2004. The increase in income from investment in joint ventures was due
primarily to newly acquired joint venture  interests by us in 2004. The decrease
in interest  income was due to the decrease in  available  cash held in interest
bearing  accounts  by us during  2004 as  compared  to 2003.  This cash was used
primarily to invest in leased equipment and make member distributions in 2004.

     Expenses for 2004 and 2003 are summarized as follows:

<TABLE>
<CAPTION>

                                                                Years Ended December 31,
                                                     ----------------------------------------------
                                                                           2003
                                                        2004            (Restated)        Change
                                                     ------------      -----------     -------------
<S>                                                  <C>               <C>             <C>
 Total expenses                                      $ 33,258,084      $35,775,893     $ (2,517,809)
                                                     ============      =============   ============

 Depreciation and amortization                       $ 22,968,907      $24,843,250     $ (1,874,343)
 Interest                                            $  6,170,420      $ 7,716,000     $ (1,545,580)
 Management fees - Manager                           $  2,109,282      $ 1,897,722     $    211,560
 Administrative expense reimbursements - Manager     $  1,139,479      $   834,089     $    305,390
 General and administrative                          $    528,722      $   346,080     $    182,642
 Impairment loss                                     $    236,003      $        -      $    236,003
 Minority interest                                   $    105,271      $   138,752     $    (33,481)

</TABLE>

                                       21
<PAGE>

     Expenses for 2004  decreased by  $2,517,809,  or 7.0%, as compared to 2003.
The overall  decrease in expenses is due  primarily  to the  renegotiated  lease
terms on the Kenilworth lease, which resulted in decreased  depreciation expense
on the co-generation plant held in Kenilworth.  The decrease in interest expense
was due to the renegotiated  lease terms on the Kenilworth lease, which resulted
in a repayment of the note payable in July 2004 and the increase in the value of
our  interest  rate swaps which  resulted  to a decrease to interest  expense of
approximately  $743,000. The increase in both management fees and administrative
expense  reimbursements  were  due  to the  addition  of  new  equipment  leases
throughout 2004 which required more of our Manager's resources.  The increase in
impairment  loss was due to the Manager's  determination  that a direct  finance
lease's  estimated   unguaranteed  residual  value  was  lower  than  originally
estimated.

Net Loss

     As a result of the foregoing factors, the net loss for 2004 was $17,768, as
compared to the net loss for 2003 of $793,837. The net loss per weighted average
number of additional members' shares outstanding for 2004 was $0.18, as compared
to the net loss per  weighted  average  number  of  additional  members'  shares
outstanding for 2003 of $8.65.

Results of  Operations  for the Years Ended  December 31, 2003 ("2003") and 2002
("2002")

         Revenue for 2003 and 2002 are summarized as follows:

<TABLE>
<CAPTION>

                                                                Years Ended December 31,
                                                     -----------------------------------------------
                                                          2003            2002
                                                       (Restated)      (Restated)          Change
                                                     ------------      -----------     ------------
<S>                                                  <C>               <C>             <C>
 Total revenue                                       $ 34,982,056      $11,453,549     $ 23,528,507
                                                     =============     ===========     ============

 Rental income                                       $ 33,814,372      $11,282,534     $ 22,531,838
 Finance income                                      $    746,514      $        -      $    746,514
 Income from investments in joint ventures           $    197,986      $   124,228     $     73,758
 Net loss on sales of equipment                      $     (2,753)     $        -      $     (2,753)
 Interest and other income                           $    225,937      $    46,787     $    179,150

</TABLE>


     Revenues for 2003 increased by $23,528,507, or 205.4%, as compared to 2002.
The increase in revenue  resulted  primarily from the additional  investments in
leased equipment,  both operating leases and direct finance leases, during 2003,
as well as increased investments in joint ventures with other related entities.

         Expense for 2003 and 2002 are summarized as follows:

<TABLE>
<CAPTION>
                                                               Years Ended December 31,
                                                     ----------------------------------------------
                                                          2003            2002
                                                       (Restated)     (Restated)          Change
                                                     ------------      -----------     ------------
<S>                                                  <C>               <C>             <C>
 Total expenses                                      $ 35,775,893      $13,429,617     $ 22,346,276
                                                     ============      ===========     ============

 Depreciation and amortization                       $ 24,843,250      $ 7,929,712     $ 16,913,538
 Interest                                            $  7,716,000      $ 3,947,842     $  3,768,158
 Management fees - Manager                           $  1,897,722      $   604,003     $  1,293,719
 Administrative expense reimbursements - Manager     $    834,089      $   241,597     $    592,492
 General and administrative                          $    346,080      $   452,638     $   (106,558)
 Minority interest                                   $    138,752      $   253,825     $   (115,073)

</TABLE>


     Expenses for 2003 increased by $22,346,276, or 166.4%, as compared to 2002.
The increase in expenses is primarily  due an increase in  depreciation  expense
during 2003.  This increase is directly  related to our acquisition of operating
leases during 2003.  Similarly,  interest expenses increased because some of the
leased equipment we acquired was financed with debt during 2003. The increase in
management fees and administrative expense reimbursements is consistent with the
increase in equipment leasing activity we had during 2003.

                                       22
<PAGE>

Net Loss

     As a result of the foregoing  factors,  the net loss for 2003 was $793,837,
as compared to the net loss for 2002 of  $1,976,068.  The net loss per  weighted
average number of additional  members' shares outstanding for 2003 was $8.65, as
compared to the net loss per  weighted  average  number of  additional  members'
shares outstanding for 2002 of $67.41.

Liquidity and Capital Resources

Sources and Uses of Cash

     At December 31, 2004,  2003 and 2002, we had cash and cash  equivalents  of
$3,449,768,  $14,651,555 and $9,456,992,  respectively.  Historically,  our main
source  of  cash is  from  financing  activities.  Our  main  use of cash is for
investing activities and financing activities.

     Our main  sources of cash during 2004 were from  operating  activities  and
investing activities.  Our main source of cash from operating activities was the
collection  of   non-financed   receivables   from  direct   finance  leases  of
approximately $4,393,000 which provided us with approximately $3,211,000 of cash
from  operating  activities.  Our  sources  of cash  from  investing  activities
consisted  of  distributions  received  from  joint  ventures  of  approximately
$581,000 and proceeds from the sales of equipment of approximately $296,000.

     Our main  sources  of cash  during  2003  were from  financing  activities,
operating activities and investing  activities.  During 2003, our main source of
cash was from financing activities of approximately  $36,955,000 relating to the
issuance of additional member shares,  net of offering expenses of approximately
$4,781,000.  Our  source  of cash from  operating  activities  consisted  of the
collection  of   non-financed   receivables   from  direct   finance  leases  of
approximately $2,393,000 which provided us with approximately $1,778,000 of cash
from  operating  activities.  Our  source  of  cash  from  investing  activities
consisted  of  approximately  $554,000  from  the  proceeds  from  the  sales of
equipment.

     Our main  sources  of cash  during  2002  were from  financing  activities,
investing activities and operating  activities.  During 2002, our main source of
cash was from financing activities of approximately $48,066,000, relating to the
issuance of additional member shares,  net of offering expenses of approximately
$7,030,000.   Our  sources  of  cash  from  investing  activities  consisted  of
approximately $4,922,000 from several affiliated entities, which represented the
affiliates'  investment  our majority  owned joint  ventures  and  approximately
$1,650,000  from  previously  made  escrow  deposits.  Our  sources of cash from
operating  activities  consisted  of  increases  in  deferred  rental  income of
approximately   $840,000  and  accrued   expenses  and  other   liabilities   of
approximately $451,000,  which provided us with approximately $1,463,000 of cash
from operating activities.

     Our primary cash outflows  during 2004 were from  investing  activities and
financing  activities.  Our  uses of cash  during  2004  relating  to  financing
activities were cash  distributions to our members of  approximately  $8,849,000
and the redemption of additional  member shares of approximately  $521,000.  Our
uses of cash during 2004 relating to investing  activities  were  investments in
various  leases  and  joint  ventures  of  approximately  $4,345,000,  loans and
advances to affiliates of approximately  $650,000 and  distributions to minority
interest owners of our consolidated joint ventures of approximately $925,000.

     Our primary cash outflows  during 2003 were from  investing  activities and
financing  activities.  Our  uses of cash  during  2004  relating  to  financing
activities were cash  distributions to our members of  approximately  $8,036,000
and the redemption of additional  member shares of approximately  $622,000.  Our
uses of cash during 2003 relating to investing  activities  were  investments in
various leases,  joint ventures and unguaranteed  residual value  investments of
approximately  $24,185,000 and  distributions to minority interest owners of our
consolidated  joint  ventures of  approximately  $1,251,000.

     Our primary cash outflows  during 2002 were from  investing  activities and
financing  activities.  Our  uses of cash  during  2002  relating  to  financing
activities was cash distributions to our members of approximately $2,204,000 and
legal  fees  relating  to  various   non-recourse   notes  payable   entered  of
approximately  $1,131,000.  Our uses of cash during 2002  relating to  investing
activities   were   investments   in  various   leases  and  joint  ventures  of
approximately  $42,862,000 and  distributions to minority interest owners of our
consolidated joint ventures of approximately $1,252,000.

                                       23
<PAGE>

     At December 31, 2004,  2003 and 2002, we had no borrowings from our line of
credit.  We have amounts  available to borrow,  if necessary,  under our line of
credit agreement.

Financings and Borrowings

     We have  non-recourse debt obligations which are being paid directly to the
lenders by the lessees and accrue  interest at rates ranging from 4.04% per year
to 9.50% per year. The outstanding balances of our non-recourse debt at December
31,  2004,  2003 and 2002  were  $117,261,455,  $134,463,196  and  $156,955,116,
respectively.

Comerica Line of Credit Agreement

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

     The  Initial  Funds  also  entered  into  a  Contribution   Agreement  (the
"Contribution  Agreement")  dated as of May 30,  2002,  which  was  amended  and
restated  effective  as of  August  5, 2004 in order to  facilitate  Fund  Ten's
addition  to the  LOC  Agreement.  Pursuant  to the  terms  of the  Contribution
Agreement,  the Borrowers  agreed to restrictions on the amount and the terms of
their  respective  borrowings  under the LOC  Agreement in order to minimize the
unlikely risk that a Borrower  would not be able to repay its allocable  portion
of the outstanding revolving loan obligation at any time, including restrictions
on any Borrower borrowing in excess of the lesser of (A) an amount each Borrower
could  reasonably  expect  to repay in one year out of its  projected  free cash
flow,  or (B) the  greater  of (i) the  Borrowing  Base (as  defined  in the LOC
Agreement)  as applied to such  Borrower,  and (ii) 50% of the net worth of such
Borrower.

     The Contribution  Agreement  provides that, in the event a Borrower pays an
amount under the  agreement in excess of its allocable  share of the  obligation
under the agreement  whether by reason of an Event of Default or otherwise,  the
other  Borrowers will promptly make a  contribution  payment to such Borrower in
such  amount  that the  aggregate  amount  paid by each  Borrower  reflects  its
allocable share of the aggregate obligations under the agreement. The Borrowers'
obligations to each other under the Contribution Agreement are collateralized by
a subordinate lien on the assets of each participating Borrower.

     During 2004 and 2005, we paid  Comerica  Bank a portion of the  outstanding
obligations  of L.P.  Seven.  As  required  under the terms of the  Contribution
Agreement, L.P. Seven was required to promptly repay us for amounts paid on L.P.
Seven's  behalf.  L.P.  Seven  did not have  sufficient  liquidity  to repay us,
accordingly,  L.P.  Seven  assigned its rights to the  profits,  losses and cash
flows from its investments in a limited partnership  interests and its ownership
interest in a direct  finance lease as full  repayment of amounts due to us (See
Note 15 to the consolidated financial statements in Item 8).

                                       24
<PAGE>

     At  December  31,  2004,  we had no  outstanding  balance due under the LOC
Agreement.  The aggregate borrowing by all Borrowers under the LOC Agreement was
$10,272,992 at December 31, 2004.

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

California Bank & Trust Revolving Loan Facility

     On August 31, 2005, we,  together with certain of our affiliates  (entities
sponsored and organized by our Manager), Fund Eight B, Fund Ten and ICON Leasing
Fund Eleven, LLC (collectively,  the "New Borrowers")  entered into a Commercial
Loan Agreement (the  "Agreement"),  with California Bank & Trust (the "Lender").
The  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 New Borrowers not subject to a first priority lien,
as defined in the Agreement.  Each of the New 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,  based on the present value of the future receivables under certain
lease  agreements in which the New  Borrowers  have a beneficial  interest.  The
interest rate on any advances made under the Facility is the Lender's prime rate
plus 0.25% per year. In  accordance  with the  Agreement,  the New Borrowers may
elect to have up to five separate  advances  under the Facility each made at the
rate at which United States dollar deposits can be acquired by the Lender in the
London Interbank  Eurocurrency Market, plus 2.75% per year. The Facility expires
on August 31, 2007 unless  renewed by the New Borrowers  for an  additional  one
year term, in the sole discretion of the Lender.

     In  accordance  with the terms and  conditions  of the  Agreement,  the New
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 Agreement  prohibits the New Borrowers from
declaring or paying any  distribution to investors if such a payment would cause
the New Borrowers to become  non-compliant  with the financial  covenants in the
Agreement.

     In  addition,  on  August  31,  2005,  the  Borrowers  entered  into  a New
Contribution Agreement (the "New Contribution Agreement"), pursuant to which the
New Borrowers  have agreed to certain  restrictions  on the amounts and terms of
their  respective  borrowings  under the  Facility in order to minimize the risk
that a New  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 New
Borrower  could  reasonably  expect to repay in one year from its projected cash
flow, or (b) the greater of (i) the borrowing base, as defined in the Agreement,
as  applied  to such New  Borrower  and  (ii)  50% of the net  worth of such New
Borrower.  The New Contribution Agreement also provides that, in the event a New
Borrower  pays an amount under the New  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 New  Borrowers  will  immediately  make a
contribution  payment to such New Borrower and in such amount that the aggregate
amount paid by each New Borrower  reflects its allocable  share of the aggregate
obligations  under the Facility.  The New  Borrowers'  obligations to each other
under the New Contribution Agreement are collateralized by a subordinate lien on
the assets of each New Borrower.

     Under  the  terms of the  Agreement,  the New  Borrowers  are  required  to
maintain a cash  reserve  with the Lender  representing  20% of all  outstanding
advances  plus all pending  advances.  Fund Eleven has  established  an interest
bearing cash account with the Lender which  satisfies  the Lender's cash reserve
requirement.

                                       25
<PAGE>

     On  September  7,  2005,   certain  of  the  New  Borrowers  were  advanced
approximately   $10,200,000  under  the  Facility,  which  amount  was  used  to
completely repay all of the outstanding  indebtedness owed by certain of the New
Borrowers and their affiliates under the LOC Agreement.

     Our Manager  believes  that with the cash we have  currently  available and
with the cash  being  generated  from our  leases,  we have  sufficient  cash to
continue our operations into the  foreseeable  future.  However,  our ability to
generate  cash  in  the  future  is  subject  to  general  economic,  financial,
competitive, regulatory and other factors that affect our lessee's business that
are beyond our control. See "Item 1A. Risk Factors."

         Distributions

     We pay monthly  distributions to our members beginning with the first month
after the members' admission through the termination of the reinvestment period,
which we anticipate will be April 29, 2008. We paid  distributions to additional
members for the years ended  December  31,  2004,  2003 and 2002 of  $8,758,942,
$7,955,313 and $2,181,537,  respectively.  We paid  distributions to our Manager
for the years ended  December  31, 2004,  2003 and 2002 of $89,744,  $80,356 and
$22,036, respectively.

Contractual Obligations and Commitments

     At December 31, 2004, we are parties to both recourse and non-recourse debt
obligations.  The lenders have security  interests in the 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
non-recourse   debt  the   equipment   would  be   returned  to  the  lender  in
extinguishment  of the non-recourse  debt. We are a party to a revolving line of
credit as discussed in the financing and borrowings  section  above.  We have no
borrowings under this Facility at December 31, 2004.

     Principal  maturities of our non-recourse  debt consist of the following at
December 31, 2004:

<TABLE>
<CAPTION>

                                              Less Than 1         1 - 3            3 - 5         More Than 5
                               Total             Year             Years            Years            Years
                          -------------        -----------      ------------      -----------       ---------

<S>                       <C>                  <C>              <C>                <C>              <C>
 Non-recourse debt        $  117,261,455       $ 24,549,770     $ 82,971,077       $9,353,917       $ 386,691
                          ==============       ============     ============       ==========       =========

</TABLE>

     We have a commitment  in regards to our 100% owned  Cathay  aircraft to pay
50% of the maintenance  overhaul costs, which were incurred on or prior to March
14,  2006.  The  total  estimated  costs  for this  overhaul  are  approximately
$1,750,000.  At December 31, 2004, we have a maintenance reserve cash account of
approximately  $840,000 to pay for these costs when  incurred.  This  account is
funded monthly with  approximately  $31,000 in accordance  with the terms of the
lease.  Any excess cash remaining after the  maintenance  over haul is performed
will be used to pay down the principal balance of the related non-recourse debt.

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.

                                       26
<PAGE>

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

Item 7A. Qualitative and Quantitative 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 the
counterparty to the swap agreement by dealing only with institutions our Manager
considers financially sound.

     Effective March 14, 2006, we refinanced the  non-recourse  debt obligations
of the three car and truck  carrying  vessels.  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.  We  entered  into  these
agreements  in  order  to  effectively  fix the  variable  interest  rate on the
non-recourse  debt.  The interest rate swap contracts have a fixed interest rate
of 7.02% per year.

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

Item 8.   Consolidated Financial Statements

 Index to Consolidated Financial Statements                                Page

 Report of Independent Registered Public Accounting Firm                    28

 Consolidated Balance Sheets at December 31, 2004, 2003 (Restated)
   and 2002 (Restated)                                                      29

 Consolidated Statements of Operations for the Years Ended December 31,
   2004, 2003 (Restated) and 2002 (Restated)                                31

 Consolidated Statement of Changes in Members' Equity for the Years Ended
   December 31, 2002 (Restated), 2003 (Restated) and 2004                   32

 Consolidated Statements of Cash Flows for the Years Ended December 31,
   2004, 2003 (Restated) and 2002 (Restated)                                33

 Notes to Consolidated Financial Statements                                 35


                                       27
<PAGE>


The Members
ICON Income Fund Nine, LLC


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying consolidated balance sheets of ICON Income Fund
Nine, LLC (a Delaware limited liability company) and subsidiaries as of December
31, 2004, 2003 and 2002 and the related  consolidated  statements of operations,
changes in  members'  equity,  and cash flows for each of the three years in the
period ended December 31, 2004. These consolidated  financial statements are the
responsibility of the 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 includes examining,
on a  test  basis,  evidence  supporting  the  amounts  and  disclosures  in the
financial statements. An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of ICON Income Fund
Nine,  LLC and  subsidiaries  as of December  31, 2004,  2003 and 2002,  and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 2004, in conformity  with  accounting  principles
generally accepted in the United States of America.

As  discussed  in  Note  1  to  the  consolidated   financial  statements,   the
consolidated   balance  sheets  as  of  December  31,  2003  and  2002  and  the
consolidated statements of operations, changes in members' equity and cash flows
for the years ended then ended, have been restated.


July 7, 2006
New York, New York

                                       28
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                           Consolidated Balance Sheets
                                  December 31,

                                     ASSETS

<TABLE>
<CAPTION>
                                                                           2003            2002
                                                          2004          (Restated)       (Restated)
                                                     ------------      ------------     ------------

<S>                                                  <C>               <C>              <C>
 Cash and cash equivalents                           $  3,449,768      $ 14,651,555     $  9,456,992
                                                     ------------      ------------     ------------

 Investments in finance leases:
      Minimum rents receivable                         19,125,597        16,958,283               -
      Estimated unguaranteed residual values            1,753,811         1,693,570               -
      Initial direct costs, net                           250,475           410,719               -
      Unearned income                                  (2,575,125)       (3,462,258)              -
                                                     ------------      ------------     ------------

         Net investments in finance leases             18,554,758        15,600,314               -
                                                     ------------      ------------     ------------

 Investments in operating leases:
      Equipment, at cost                              198,825,080       202,572,886      202,382,030
      Accumulated depreciation                        (49,595,834)      (31,127,156)      (7,852,541)
                                                     ------------      ------------     ------------

         Net investments in operating leases          149,229,246       171,445,730      194,529,489
                                                     ------------      ------------     ------------

 Investments in joint ventures                          5,770,341         3,954,634        3,367,129
 Investments in unguaranteed residual values            4,440,907         4,454,003                -
 Due from Manager and affiliates                          250,698           493,307          105,307
 Interest rate swap contracts                             268,496                 -                -
 Other assets, net                                      2,136,241         2,117,755        2,024,926
                                                     ------------      ------------     ------------

         Total assets                                $184,100,455      $212,717,298     $209,483,843
                                                     ============      ============     ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       29
<PAGE>


                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                           Consolidated Balance Sheets
                                  December 31,

                         LIABILITIES AND MEMBERS' EQUITY

<TABLE>
<CAPTION>

                                                                           2003            2002
                                                          2004          (Restated)       (Restated)
                                                     ------------      ------------    ------------

<S>                                                  <C>               <C>             <C>
 Notes payable - non-recourse                        $117,261,455      $ 134,463,196    $156,955,116
 Accrued expenses and other liabilities                   454,363            538,819         639,134
 Deferred rental income                                   671,928            585,928         839,601
 Due to Manager and affiliates                            677,187                 -               -
 Interest rate swap contracts                                   -            474,548         787,809
 Minority interest                                        579,719          2,811,859       3,923,665
                                                     ------------      -------------    ------------

      Total liabilities                               119,644,652        138,874,350     163,145,325
                                                     ------------      -------------    ------------

 Commitments and contingencies

 Members' equity:
  Manager (one share outstanding, $1,000 per share
     original issue price)                               (219,016)         (129,094)         (40,800)
  Additional Members (98,348, 98,991 and 57,930 shares
     outstanding,
      $1,000 per share original issue price)           64,674,819        73,972,042       46,379,318
                                                     ------------      ------------     ------------

   Total members' equity                               64,455,803        73,842,948       46,338,518
                                                     ------------      ------------     ------------

   Total liabilities and members' equity             $184,100,455      $212,717,298     $209,483,843
                                                     ============      ============     ============

</TABLE>

See accompanying notes to consolidated financial statements.


                                       30
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                      Consolidated Statements of Operations
                            Years Ended December 31,


<TABLE>
<CAPTION>
                                                                          2003             2002
                                                         2004          (Restated)       (Restated)
                                                    ------------      -----------     ------------
<S>                                                  <C>               <C>             <C>
 Revenue:
      Rental income                                  $ 31,111,650      $33,814,372     $ 11,282,534
      Finance income                                    1,656,960          746,514                -
      Income from investments in joint ventures           425,066          197,986          124,228
      Net loss on sales of equipment                      (65,074)          (2,753)               -
      Interest and other income                           111,714          225,937           46,787
                                                     ------------      -----------     ------------

         Total revenue                                 33,240,316       34,982,056       11,453,549
                                                     ------------      -----------     ------------

 Expenses:
      Depreciation and amortization                    22,968,907       24,843,250        7,929,712
      Interest                                          6,170,420        7,716,000        3,947,842
      Management fees - Manager                         2,109,282        1,897,722          604,003
      Administrative expense reimbursements - Manager   1,139,479          834,089          241,597
      General and administrative                          528,722          346,080          452,638
      Impairment loss                                     236,003                -                -
      Minority interest                                   105,271          138,752          253,825
                                                     ------------      -----------     ------------

         Total expenses                                33,258,084       35,775,893       13,429,617
                                                     ------------      -----------     ------------

 Net loss                                            $    (17,768)     $  (793,837)    $ (1,976,068)
                                                     ============      ===========     ============

 Net loss allocable to:
      Additional members                             $    (17,590)     $  (785,899)    $ (1,956,307)
      Manager                                                (178)          (7,938)         (19,761)
                                                     ------------      -----------     ------------

                                                     $    (17,768)     $  (793,837)    $ (1,976,068)
                                                     ============      ===========     ============

 Weighted average number of additional members'
      shares outstanding                                   98,695           90,813           29,023
                                                     ============      ===========     ============

 Net loss per weighted average additional
      members' share outstanding                     $      (0.18)     $     (8.65)    $     (67.41)
                                                     ============      ===========     ============

</TABLE>

See accompanying notes to consolidated financial statements.

                                       31
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
              Consolidated Statement of Changes in Members' Equity
                  Years Ended December 31, 2002, 2003 and 2004


<TABLE>
<CAPTION>
                                                                                                               Total
                                                    Additional          Additional                            Members'
                                                   Member Shares         Members          Manager              Equity
                                                   -------------       -----------     ------------       --------------

<S>                                                 <C>               <C>             <C>                <C>
 Balance, January 1, 2002                                   2,834      $ 2,451,110     $        997       $   2,452,107

 Proceeds from issuance of additional
       members' shares                                     55,096       55,095,580               -           55,095,580
 Sales and offering expenses                                  -         (7,029,528)              -           (7,029,528)
 Cash distributions to members                                -         (2,181,537)         (22,036)         (2,203,573)
 Net loss                                                     -         (1,956,307)         (19,761)         (1,976,068)
                                                    -------------      -----------     ------------       -------------


 Balance, December 31, 2002 (Restated)                     57,930       46,379,318          (40,800)         46,338,518


 Proceeds from issuance of additional
      members' shares                                      41,736       41,736,480               -           41,736,480
 Sales and offering expenses                                  -         (4,781,018)              -           (4,781,018)
 Cash distributions to members                                -         (7,955,313)         (80,356)         (8,035,669)

 Additional members' shares redeemed                         (675)        (621,526)              -             (621,526)
 Net loss                                                     -           (785,899)          (7,938)           (793,837)
                                                     ------------      -----------     ------------       -------------


 Balance, December 31, 2003 (Restated)                     98,991       73,972,042         (129,094)         73,842,948

 Cash distributions to members                                 -        (8,758,942)         (89,744)         (8,848,686)
 Additional members' shares redeemed                         (643)        (520,691)              -             (520,691)
 Net loss                                                      -           (17,590)           (178)             (17,768)
                                                     -------------     -----------     ------------       -------------

 Balance, December 31, 2004                                98,348      $64,674,819     $   (219,016)      $  64,455,803
                                                     ============      ============    ============       =============

</TABLE>

See accompanying notes to consolidated financial statements.

                                       32
<PAGE>


                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                      Consolidated Statements of Cash Flows
                            Years Ended December 31,

<TABLE>
<CAPTION>

                                                                                                  2003            2002
 Increase (decrease) in cash and cash equivalents                                2004          (Restated)       (Restated)
                                                                             -------------     ------------     -----------
 Cash flows from operating activities:
<S>                                                                          <C>               <C>              <C>
      Net loss                                                               $     (17,768)    $   (793,837)    $(1,976,068)
      Adjustments to reconcile net loss to net cash provided by
         operating activities:
            Rental income paid directly to lenders by lessees                  (29,914,946)     (30,407,300)     (9,772,961)
            Finance income                                                      (1,656,960)        (746,514)              -
            Income from investments in joint ventures                             (425,066)        (197,986)       (124,228)
            Net loss on sales of equipment                                          65,074            2,753               -
            Depreciation and amortization                                       22,968,907       24,843,250       7,929,712
            Interest expense on non-recourse financing paid directly
               to lenders by lessees                                             6,826,076        7,915,380       3,947,842
            Change in fair value of interest rate swap contracts                  (743,044)        (313,261)        787,809
            Impairment loss                                                        236,003                -               -
            Minority interest                                                      105,271          138,752         253,825
         Changes in operating assets and liabilities:
            Collection of principal - non-financed receivables                   4,392,885        2,392,613               -
            Due to/from Manager and affiliates                                     919,796         (388,000)       (105,307)
            Other assets, net                                                      160,981          231,467        (768,327)
            Accrued expenses and other liabilities                                 193,988           (9,778)        451,226
            Deferred rental income                                                  99,432         (889,791)        839,601
                                                                             -------------     ------------     -----------


 Net cash provided by operating activities                                       3,210,629        1,777,748       1,463,124
                                                                             -------------     ------------     -----------

 Cash flows from investing activities:
      Investments in operating leases and direct finance leases                 (2,823,323)     (19,341,779)    (39,619,320)
      Investments in joint ventures                                             (1,521,571)        (389,519)     (3,242,901)
      Cash received from escrow                                                          -                -       1,650,000
      Investment in unguaranteed residual values                                         -       (4,454,003)              -
      Proceeds from sales of equipment                                             296,009          554,407               -
      Loans and advances to affiliate                                             (650,000)               -               -
      Minority interest contribution, net                                               -                 -       4,922,283
      Distributions to minority interest in joint venture                         (925,108)      (1,250,558)     (1,252,443)
      Distributions received from joint ventures                                   580,954                -               -
                                                                             -------------     ------------     -----------

 Net cash used in investing activities                                          (5,043,039)     (24,881,452)    (37,542,381)
                                                                             -------------     ------------     -----------

 Cash flows from financing activities:
      Cash distributions to members                                             (8,848,686)      (8,035,669)     (2,203,573)
      Issuance of additional membership shares net of offering expenses                  -       36,955,462      48,066,052
      Cash paid for legal fees relating to notes payable - non-recourse                  -                -      (1,130,870)
      Redemption of additional members' shares                                    (520,691)        (621,526)              -
                                                                             -------------     ------------     -----------

 Net cash (used in) provided by  financing activities                           (9,369,377)      28,298,267      44,731,609
                                                                             -------------     ------------     -----------


 Net (decrease)  increase in cash and cash equivalents                         (11,201,787)       5,194,563       8,652,352

 Cash and cash equivalents, beginning of the year                               14,651,555        9,456,992         804,640
                                                                             -------------     ------------     -----------

 Cash and cash equivalents, end of the year                                     $3,449,768     $ 14,651,555      $9,456,992
                                                                             =============     ============     ===========

</TABLE>

See accompanying notes to consolidated financial statements.

                                       33
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                      Consolidated Statements of Cash Flows
                            Years Ended December 31,


<TABLE>
<CAPTION>
                                                                                                 2003              2002
                                                                                 2004          (Restated)        (Restated)
                                                                           ------------       -------------     -------------
 Supplemental disclosure of cash flow information:
<S>                                                                        <C>                <C>                <C>
      Cash paid during the period for interest                             $     87,388       $      91,559      $          -
                                                                           ============       =============      ============



 Supplemental disclosure of non-cash investing and financing activities:
      Non-cash portion of equipment purchased with non-recourse debt       $  7,979,500       $          -       $ 162,780,235
                                                                           ============       =============      =============

      Principal and interest paid directly to lenders by lessees           $ 32,007,317       $  30,407,300      $   9,772,961
                                                                           ============       =============      =============


      Asset acquired from affiliate in exchange for amounts owed           $    650,000       $          -       $          -
                                                                           ============       =============      =============
</TABLE>


See accompanying notes to consolidated financial statements.


                                       34
<PAGE>
                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(1) Restatement of Consolidated Financial Statements

     During  the  preparation  of ICON  Income  Fund  Nine,  LLC's  (the  "LLC")
consolidated  financial  statements for the year ended December 31, 2004, it was
determined   that  the  LLC  did  not  account  for  three  interest  rate  swap
transactions entered into during 2002.  Additionally,  during the review process
it was determined that the accounting  treatment of certain lease  transactions,
consisting primarily of incorrect lease termination dates and the capitalization
of certain  expenses related to these  transactions  was incorrect.  Corrections
made by the LLC to properly record these transactions are summarized as follows:
(i)  to  record  the  proper  accounting   treatment  for  derivative  financial
instruments in accordance with Statement of Financial  Accounting  Standards No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities"  ("SFAS
133"),  which established new accounting and reporting  standards for derivative
financial  instruments  which has been  amended by SFAS No. 137,  issued in June
1999,  by SFAS No. 138,  issued in June 2000 and by SFAS No 149,  issued in June
2003, (ii) to properly record  depreciation  and  amortization,  deferred rental
income and rental income, (iii) to properly capitalize costs incurred to acquire
equipment  leases  and  (iv) to  properly  record  interest  and  other  expense
accruals.  Corrections  of the  errors  were made to  properly  account  for the
recording  of  these  transactions.   The  accompanying  consolidated  financial
statements reflect the proper accounting treatment for these transactions.

     The  following  tables show the impact of the  restatement  on the relevant
captions from the LLC's consolidated  financial  statements at December 31, 2003
and 2002 and for the years then ended.  These tables  contain only the corrected
balances  and do not  represent  the  complete  consolidated  balance  sheets at
December 31, 2003 and 2002 nor  consolidated  statements of  operations  for the
years then ended.

         Changes to the consolidated balance sheet at December 31, 2002:


<TABLE>
<CAPTION>
                                                 Previously
                                                  Reported       Adjustments      Restated
                                               --------------  ---------------- -------------

<S>                                            <C>             <C>              <C>
 Investments in operating leases               $ 203,025,329   $      (643,299) $ 202,382,030
                                               =============   ===============  =============
 Accumulated depreciation                      $  (7,651,465)  $      (201,076) $  (7,852,541)
                                               =============   ===============  =============
 Due from Manager and affiliates               $      36,994   $        68,313  $     105,307
                                               =============   ===============  =============
 Other assets, net                             $   1,411,417   $       613,509  $   2,024,926
                                               =============   ===============  =============

 Total assets                                  $ 209,646,396   $      (162,553) $ 209,483,843
                                               =============   ===============  =============

 Accrued expenses and other liabilities        $     236,549   $       402,585  $     639,134
                                               =============   ===============  =============
 Deferred rental income                        $     759,569   $        80,032  $     839,601
                                               =============   ===============  =============
 Due to Manager and affiliates                 $      32,687   $       (32,687) $          -
                                               =============   ===============  =============
 Interest rate swap contacts                   $          -    $       787,809  $     787,809
                                               =============   ===============  =============
 Total liabilities                             $ 161,907,586   $     1,237,739  $ 163,145,325
                                               =============   ===============  =============

 Members' equity:
      Manager                                  $     (26,797)  $       (14,003) $     (40,800)
                                               =============   ===============  =============
      Additional Members                       $  47,765,607   $    (1,386,289) $  46,379,318
                                               =============   ===============  =============
 Total members' equity                         $  47,738,810   $    (1,400,292) $  46,338,518
                                               =============   ===============  =============
 Total liabilities and members' equity         $ 209,646,396   $      (162,553) $ 209,483,843
                                               =============   ===============  =============
</TABLE>

                                       35
<PAGE>
                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(1)    Restatement of Consolidated Financial Statements - continued

         Changes to the consolidated statement of operations for the year ended
December 31, 2002:

<TABLE>
<CAPTION>
                                                Previously
                                                 Reported         Adjustments      Restated
                                               -------------   ---------------   -------------

<S>                                            <C>             <C>               <C>
 Rental income                                 $  11,362,566   $       (80,032)  $  11,282,534
                                               =============   ===============   =============
 Total revenue                                 $  11,533,581   $       (80,032)  $  11,453,549
                                               =============   ===============   =============

 Depreciation and amortization                 $   7,651,465   $       278,247   $   7,929,712
                                               =============   ===============   =============


 Interest                                      $   2,855,092   $     1,092,750   $   3,947,842
                                               =============   ===============   =============

 General and administrative                    $     503,375   $       (50,737)  $     452,638
                                               =============   ===============   =============
 Total expenses                                $  12,109,357   $     1,320,260   $  13,429,617
                                               =============   ===============   =============
 Net loss                                      $    (575,776)  $    (1,400,292)  $  (1,976,068)
                                               =============   ===============   =============

 Net loss allocable to:
      Additional Members                       $    (570,018)  $    (1,386,289)  $  (1,956,307)
                                               =============   ===============   =============

      Manager                                  $      (5,758)  $       (14,003)  $     (19,761)
                                               =============   ===============   =============

 Net loss per weighted average additional
      members' share outstanding               $      (19.64)  $        (47.77)  $      (67.41)
                                               =============   ===============   =============

         Changes to the consolidated balance sheet at December 31, 2003:

                                                  Previously
                                                   Reported       Adjustments      Restated
                                               -------------   ---------------   -------------

 Investments in operating leases               $ 203,216,185   $      (643,299)  $ 202,572,886
                                               =============   ===============   =============

 Accumulated depreciation                      $ (31,186,896)  $        59,740   $ (31,127,156)
                                               =============   ===============   =============
 Due from Manager and affiliates               $     393,307   $       100,000   $     493,307
                                               =============   ===============   =============

 Other assets, net                             $   1,822,075   $       295,680   $   2,117,755
                                               =============   ===============   =============

 Total assets                                  $ 212,905,177   $      (187,879)  $ 212,717,298
                                               =============   ===============   =============


 Accrued expenses and other liabilities        $     476,253   $        62,566   $     538,819
                                               =============   ===============   =============
 Deferred rental income                        $           -   $       585,928   $     585,928
                                               =============   ===============   =============
 Interest rate swap contacts                   $           -   $       474,548   $     474,548
                                               =============   ===============   =============
 Total liabilities                             $ 137,751,308   $     1,123,042   $ 138,874,350
                                               ==============  ===============   =============

 Members' equity:
      Manager                                  $    (115,985)  $       (13,109)  $    (129,094)
                                               =============   ===============   =============
      Additional Members                       $  75,269,854   $    (1,297,812)  $  73,972,042
                                               =============   ===============   =============
 Total members' equity                         $  75,153,869   $    (1,310,921)  $  73,842,948
                                               =============   ===============   =============
 Total liabilities and members' equity         $ 212,905,177   $      (187,879)  $ 212,717,298
                                               =============   ===============   =============
</TABLE>

                                       36
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(1)    Restatement of Consolidated Financial Statements - continued

         Changes to the consolidated statement of operations for the year ended
December 31, 2003:

<TABLE>
<CAPTION>
                                                Previously
                                                 Reported        Adjustments       Restated
                                               -------------   ---------------   ------------

<S>                                            <C>             <C>               <C>
 Rental income                                 $  34,320,268   $      (505,896)  $ 33,814,372
                                               =============   ===============   ============
 Total revenue                                 $  35,487,952   $      (505,896)  $ 34,982,056
                                               =============   ===============   ============

 Depreciation and amortization                 $  24,835,383   $         7,867   $ 24,843,250
                                               ==============  ===============   ===========
 Interest                                      $   8,040,778   $      (324,778)  $  7,716,000
                                               =============   ===============   ============
 Administrative expense reimbursements -
      Manager                                  $     759,089   $        75,000   $    834,089
                                               =============   ===============   ============
 General and administrative                    $     699,436   $      (353,356)  $    346,080
                                               =============   ===============   ============
 Total expenses                                $  36,371,160   $      (595,267)  $ 35,775,893
                                               =============   ===============   ============
 Net loss                                      $    (883,208)  $        89,371   $   (793,837)
                                               =============   ===============   ============


 Net loss allocable to:
      Additional Members                       $    (874,376)  $        88,477   $   (785,899)
                                               =============   ===============   ============

      Manager                                  $      (8,832)  $           894   $     (7,938)
                                               =============   ===============   ============


 Net loss per weighted average additional
      members' share outstanding               $       (9.63)  $          0.98   $      (8.65)
                                               =============   ===============   ============
</TABLE>

(2)    Organization

     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 acquiring
equipment  subject to lease.  The LLC will  continue  until  December  31, 2020,
unless terminated sooner.

     The principal objective of the LLC 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 to its members  commencing
with each member's  admission to the LLC,  continuing  through the  reinvestment
period,  which  period will end no later than the eighth  anniversary  after the
final closing date; (iii) re-invests  substantially all undistributed  cash from
operations  and cash from sales of equipment and financing  transactions  during
the reinvestment  period; and (iv) after the reinvestment period, which is known
as  the  liquidation  period,  the  LLC  will  dispose  of its  investments  and
distribute the cash from sales of such investments to its members.

     The Manager of the LLC is ICON Capital Corp. (the "Manager"), a Connecticut
corporation.  The Manager manages and controls the business affairs of the LLC's
equipment  leases  and  financing  transactions  under the terms of the  limited
liability company  agreement with the LLC (the "LLC  Agreement").  Additionally,
the Manager has a 1% ownership interest in the LLC.

                                       37
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(2)    Organization - continued

     The  initial  capitalization  of the  LLC  was  $1,000  contributed  by the
Manager.  The LLC was offering member shares with the intention of raising up to
$100,000,000 of capital contributions.  The LLC commenced business operations on
its initial  closing  date,  December  18, 2001,  when it admitted  1,250 member
shares,  representing $1,249,910 of capital contributions.  Between December 19,
2001 and April 30, 2003,  the final closing date, the LLC admitted an additional
98,416 member shares, representing $98,403,564 of capital contributions bringing
the  total  member  shares  to  99,666   representing   $99,653,474  of  capital
contributions.  Through December 31, 2004, the LLC redeemed 1,318 member shares.
At December 31, 2004, there are 98,348 member shares outstanding.

     Members'   capital   accounts  are  increased  for  their  initial  capital
contribution plus their  proportionate  share of earnings and decreased by their
proportionate  share  of  losses  and  distributions.   Profits,   losses,  cash
distributions  and  liquidation  proceeds are  allocated  99% to the  additional
members and 1% to the Manager  until each  additional  member has received  cash
distributions  and  liquidation  proceeds  sufficient  to reduce their  adjusted
capital  contribution  account  to zero and has  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, the distributions  will be allocated 90% to the additional members and 10%
to the Manager.

     The LLC is currently in its "reinvestment" period, wherein the LLC seeks to
purchase  equipment from time to time through April 29, 2008.  The  reinvestment
period may be increased for an additional  three years at the  discretion of the
Manager.  After the reinvestment  period,  the LLC will then begin to dispose of
its assets in the  ordinary  course of business  during a time frame  called the
"liquidation period." If the Manager believes it would be beneficial to reinvest
the cash flow in equipment during the liquidation period, the LLC may do so, but
the Manager will not receive any acquisition fees for such investments.

(3)    Summary of Significant Accounting Policies

Consolidation and Minority Interest

     The consolidated  financial  statements include the accounts of the LLC and
its majority owned subsidiaries. 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 on financial and operational  matters,  generally  greater
than 5% and less  than 50%  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 reduced for  distributions.  All of the LLC's  investments in joint ventures
are subject to its impairment review policies.

     In joint ventures  where the LLC's  ownership  interest is majority  owned,
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.

                                       38
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(3)    Summary of Significant Accounting Policies - continued

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 when purchased.

Concentration of Credit Risk

     Concentrations  of credit risk with respect to lessees are dispersed across
different  industry  segments within the United States of America and throughout
the world;  accordingly  the 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 segments in which they operate.

Allowance for Doubtful Accounts

     When  evaluating the adequacy of the allowance for doubtful  accounts,  the
LLC   estimates    uncollectibility   of   receivables   by   analyzing   lessee
concentrations,  credit  worthiness of the lessees and current  economic trends.
The LLC records an allowance for doubtful  accounts when the analysis  indicates
that the probability of full collection is unlikely.

Investments in Operating Leases

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

Asset Impairments

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

     The events or changes in  circumstances  which  generally  indicate that an
asset  may be  impaired  are (i) the  estimated  fair  value  of the  underlying
equipment  is less than its  carrying  value or (ii) the lessee is  experiencing
financial difficulties and it does not appear likely that the estimated proceeds
from the  disposition  of the asset will be  sufficient  to satisfy the 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 notes payable where the
lessee remits their rental payments  directly to the lender and the LLC does not
recover its residual  position until the non-recourse  note payable is repaid in
full.

                                       39
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(3)    Summary of Significant Accounting Policies - continued

Estimated Unguaranteed Residual Values

     The LLC carries its investment in estimated unguaranteed residual values at
cost. The value is equal to or less than fair value, and is subject to the LLC's
policy relating to impairment review.

Revenue Recognition

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

     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 at lease termination, the initial direct costs related to
the lease and the  related  unearned  income.  Unearned  income  represents  the
difference  between the sum of the minimum lease  payments  receivable  plus the
estimated unguaranteed residual minus the cost of the leased equipment. Unearned
income is  recognized  as finance  income  over the term of the lease  using the
effective interest rate method.

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

Derivative Financial Instruments

     In general, the LLC manages its 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 LLC may finance leases with a floating interest rate and it is
therefore  exposed to interest rate risk until fixed rate financing is arranged.
To hedge its variable  interest rate risk,  the LLC may enter into interest rate
swap contracts that will effectively  convert the underlying  floating  interest
rates to a fixed  interest  rate.  SFAS 133 requires that  derivative  financial
instruments  used for hedging must be  specifically  matched with the underlying
exposures to an outside third party and documented  contemporaneously to qualify
for hedge accounting  treatment.  Management has determined that the LLC did not
meet  the  contemporaneous   documentation  requirements  to  meet  the  hedging
requirements with respect to the interest rate swap contracts.

     The LLC carries all derivative  financial  instruments in the  consolidated
balance sheet at fair value. The LLC designates derivative financial instruments
as  either a hedge or a  derivative  instrument.  For  hedging  instruments,  at
inception of the transaction,  these instruments and their hedging  relationship
are  identified,  designated  and  documented.  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.  The LLC assesses, both at inception
of the transaction and on a quarterly  basis,  whether the derivative  financial
instruments  used in hedging  transactions  are highly  effective in  offsetting
changes in the cash flows of hedged items.

                                       40
<PAGE>
                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(3)    Summary of Significant Accounting Policies - continued

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

     The LLC assesses,  both at the hedge's  inception and on an ongoing  basis,
whether the derivative  financial  instruments used in hedging  transactions are
highly effective in offsetting changes in the cash flows of hedged items.

Share Redemption

     The LLC may, at its discretion,  redeem shares from a limited number of its
additional  members,  as defined in its LLC Agreement.  The redemption price for
any shares  approved for  redemption is based upon a formula,  as defined in the
LLC Agreement.

Per Share Data

     Net loss and  distributions  per share are based upon the weighted  average
number of additional member shares outstanding during the year.

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.

Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities  and the disclosure of contingent  assets and liabilities
as of the date of the financial  statements and the reported amounts of revenues
and  expenses  during the  reporting  period.  Significant  estimates  primarily
include  impairments,  depreciation and  amortization and unguaranteed  residual
values. Actual results could differ from those estimates.

Recent Accounting Pronouncements

     On June 1, 2005, the Financial  Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 154 "Accounting Changes and Error
Corrections" ("SFAS 154") which replaces Accounting Principles Board Opinion No.
20,  "Accounting  Changes"  ("APB  20") and SFAS No.  3,  "Reporting  Accounting
Changes in Interim  Financial  Statements," and changes the requirements for the
accounting  for and  reporting  of a change in  accounting  principle.  SFAS 154
requires  retrospective  application to prior periods' financial statements of a
voluntary change in accounting  principle unless it is impracticable  for fiscal
years  beginning  after December 15, 2005. APB 20 previously  required that most
voluntary  changes in  accounting  principle be  recognized  by including in net
income of the period of the change the cumulative  effect of changing to the new
accounting  principle.  The LLC does not expect the adoption of SFAS 154 to have
an impact on its financial position or results of operations.

                                       41
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(3)    Summary of Significant Accounting Policies - continued

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

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

(4)    Investments in Finance Leases

     On March 28, 2005,  ICON Cash Flow Partners L.P. Seven ("L.P.  Seven"),  an
affiliated  entity,  assigned  its  entire  50%  interest  in a lease  with  EKA
Chemicals,  Inc. to the LLC for $745,000.  This assignment was made in order for
L.P. Seven to repay its  outstanding  debt  obligation to the LLC as required by
the  contribution  agreement  with  Comerica  Bank  (See  Note 9).  This  amount
represented L.P.  Seven's fair value of its interest in its EKA Chemicals,  Inc.
lease on March 28, 2005 based upon expected  future cash flows.  During December
2005, the LLC received the final installment payment from EKA Chemicals, Inc.

     During March 2004, the LLC acquired  computer  equipment and  corresponding
parts on lease to Insight  Investments  Corporation  through  November  2006 for
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 has monthly payments of approximately $95,000, accrues interest at 4.5% per
year and matures in  December  2006.  The lender has a security  interest in the
computer equipment and an assignment of the rental payments under the lease. The
outstanding   balance  of  the  non-recourse  debt  at  December  31,  2004  was
$2,190,323.  The  Manager was paid  acquisition  fees of  approximately  $91,000
relating to this transaction.

     During  March 2004,  the LLC acquired  additional  computer  equipment  and
corresponding parts on lease to Insight Investments Corporation through November
2006 for 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  has  monthly  payments  of  approximately  $55,000,  accrues
interest  at 5.36% per year and  matures  in  December  2006.  The  lender has a
security  interest in the computer  equipment  and an  assignment  of the rental
payments under the lease. The outstanding  balance of the  non-recourse  debt at
December  31, 2004 was  $1,267,368.  The Manager  was paid  acquisition  fees of
approximately $53,000 relating to this transaction.

     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 on lease to Insight Investments Corporation through December
2007 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
non-recourse  debt  has  monthly  payments  of  approximately  $82,000,  accrues
interest  at 5.87% per year and  matures  in  December  2007.  The  lender has a
security  interest in the computer  equipment  and an  assignment  of the rental
payments under the lease. The outstanding  balance of the  non-recourse  debt at
December  31, 2004 was  $2,704,859.  The Manager  was paid  acquisition  fees of
approximately $102,000 relating to this transaction.

                                       42
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(4)    Investments in Finance Leases - continued

     On June 20, 2003, the LLC acquired micro processing manufacturing equipment
on lease to Advance  Micro  Devices,  Inc.  through June 2007 for  approximately
$6,391,000  in cash.  On July 24,  2003,  the LLC  acquired  two leases for semi
conductor  memory  testing  equipment on lease to Advance  Micro  Devices,  Inc.
through June 2007 for  approximately  $4,561,000  in cash.  The Manager was paid
acquisition fees of approximately $329,000 relating to these transactions.

     On May 30, 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
$1,985,000 in cash and the LLC recognized a gain of approximately $356,000.

     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. On August 20, 2003, the LLC acquired  various
manufacturing  equipment on lease to Wildwood  Industries,  Inc.  through August
2008 for approximately $957,000 in cash. On September 24, 2003, the LLC acquired
various  manufacturing  equipment on lease to Wildwood Industries,  Inc. through
September  2008 for  approximately  $1,165,000  in cash.  The  Manager  was paid
acquisition fees of approximately $104,000 relating to these transactions.

         Non-cancelable minimum annual amounts due on investments finance leases
are as follows at December 31, 2004:

   Years Ending
   December 31,
-----------------------
       2005                  $  7,227,231
       2006                  $  7,227,231
       2007                  $  3,450,924
       2008                  $    803,451
       2009                  $    416,760


(5)    Investments in Operating Leases

         Investments in operating leases consist of the following at December
31, 2004, 2003 and 2002:

<TABLE>
<CAPTION>
                                                                                     2003                2002
                                                                     2004         (Restated)          (Restated)
                                                               ---------------   ------------      ---------------
<S>                                                            <C>               <C>               <C>
 Aircraft and related equipment                                $    96,832,501   $ 97,191,869      $    97,280,265
 Cargo vessels                                                      75,914,949     75,647,119           75,597,120
 Co-generation facility                                             15,824,906     15,787,934           15,721,619
 Railcars                                                            5,662,200      5,648,971            5,837,237
 Material handling, telecommunication and computer equipment         4,590,524      8,296,993            7,945,789
                                                               ---------------   ------------      ---------------
                                                                   198,825,080    202,572,886          202,382,030
 Accumulated depreciation                                          (49,595,834)   (31,127,156)          (7,852,541)
                                                               ---------------  - ------------     ---------------

                                                               $   149,229,246   $171,445,730      $   194,529,489
                                                               ===============   ============     ================
</TABLE>


                                       43
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(5)    Investments in Operating Leases - continued

     During  December  2004,  the LLC  acquired  four  Noritsu QSS 3011  digital
mini-labs  on  lease  to  Rite  Aid  Corporation   through   November  2008  for
approximately  $399,000  in  cash.  The  Manager  was paid  acquisition  fees of
approximately $12,000 relating to this transaction.

     During  December 2004, the LLC acquired a Mitel Networks 3340 Global Branch
Office Solution Phone System on lease to CompUSA, Inc. through December 2008 for
approximately  $173,000  in cash.  The Manager  was paid an  acquisition  fee of
approximately $5,000 relating to this transaction.

     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 these transactions.

     During  September  2003,  the LLC acquired  fifty Great Dane  trailers with
Carrier Ultra  Refrigeration  units on lease with Frozen Foods Industries,  Inc.
through April 2010 for approximately $2,001,000 in cash. The Manager was paid an
acquisition fee of approximately $58,000 related to this transaction.

     During  November  2002,  the LLC  acquired 110 railcars on lease to Trinity
Rail Management through April 2010 for approximately  $1,243,000,  consisting of
approximately $126,000 in cash and the assumption of approximately $1,117,000 of
non-recourse  debt. The non-recourse  debt has monthly payments of approximately
$15,000,  accrues  interest  at 9.50% per year and is due on July 1,  2010.  The
lender has a security  interest in the leased equipment and an assignment of the
rental  payments under the lease.  The outstanding  balance of the  non-recourse
debt  at  December  31,  2004,  2003  and  2002  was  $963,969,  $1,043,785  and
$1,116,395,   respectively.   The  Manager  was  paid  an  acquisition   fee  of
approximately $37,000 related to this transaction.

     During November 2002, the LLC acquired 324 railcars on lease to Texas Genco
LP through March 2007 for approximately $4,424,000,  consisting of approximately
$1,100,000  in  cash  and  the   assumption  of   approximately   $3,324,000  of
non-recourse   debt.  The   non-recourse   debt  has  semi-annual   payments  of
approximately  $303,000,  accrues  interest  at  9.25%  per  year  and is due on
September 1, 2007.  The lender has a security  interest in the leased  equipment
and an  assignment  of the  rental  payments  under the lease.  The  outstanding
balance  of the  non-recourse  debt at  December  31,  2004,  2003  and 2002 was
$2,535,205,  $2,981,560 and  $3,356,730,  respectively.  The Manager was paid an
acquisition fee of approximately $133,000 relating to this transaction.

     During  September  2002,  the LLC  acquired  three car and  truck  carrying
vessels on bareboat charter to Wilhelmsen  Lines  Shipowning ASA  ("Wilhelmsen")
through  December  22,  2008  for  approximately   $74,020,000,   consisting  of
approximately  $9,690,000 in cash and approximately  $64,330,000 of non-recourse
debt (See Note 8). The lender has a security  interest  in the leased  equipment
and an  assignment  of the  rental  payments  under the lease.  The  outstanding
balance  of the  non-recourse  debt at  December  31,  2004,  2003  and 2002 was
$42,238,782, $52,317,126 and $61,948,274,  respectively. The Manager was paid an
acquisition fee of approximately  $2,221,000, of which approximately $31,000 was
accrued at December 31, 2002 and paid during the following quarter.

                                       44
<PAGE>
                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(5)    Investments in Operating Leases

     Effective  March  14,  2006,  the LLC  extended  the  terms of the  related
bareboat  charter with Wilhelmsen  through  December 22, 2013 and refinanced the
related non-recourse debt. As part of the non-recourse debt refinancing, the LLC
incurred  approximately  $21,753,000  of additional  non-recourse  debt and will
expense  approximately  $417,000 of loan  origination  costs associated with the
original non-recourse debt. The principal amount of refinanced non-recourse debt
is  $51,000,000  and matures on December 22,  2013.  The  non-recourse  debt has
quarterly  payments  ranging from  $450,000 to $800,000 and accrues  interest at
LIBOR plus 1.50% per year.  Simultaneously  with the execution of the refinanced
non-recourse  debt the LLC entered into interest rate swap agreements to fix the
interest  rate at 7.02% per year.  The  lender has a  security  interest  in the
leased equipment and an assignment of the rental payments under the lease.

     During July 2002,  the LLC acquired a 53% interest in an Airbus  A340-300ER
aircraft (the "Aircraft") on lease to Cathay through June 2006 for approximately
$2,250,000  in cash.  During  December  2002,  the LLC  exercised  its  right to
purchase the remaining interest in the Aircraft for approximately  $2,028,000 in
cash and the assumption of approximately  $64,791,000 of non-recourse  debt. The
non-recourse  debt had  monthly  payments  of  approximately  $695,000,  accrued
interest at 5.70% per year and was due on June 12,  2006 with a balloon  payment
of approximately  $44,250,000.  The lender had a security interest in the leased
equipment  and an  assignment  of the  rental  payments  under  the  lease.  The
outstanding balance of the non-recourse debt at December 31, 2004, 2003 and 2002
was $52,477,609, $57,617,477 and $62,070,552, respectively. The Manager was paid
an acquisition fee of approximately $2,078,000 relating to this transaction.

     Effective June 7, 2006, the LLC entered into a lease  extension with Cathay
through December 1, 2011.  Simultaneously  with the lease  extension,  the owner
trustee  refinanced  the  non-recourse  debt,  which had a principal  balance of
$44,363,166.   The  refinanced   non-recourse   debt  has  monthly  payments  of
approximately  $545,000  through May 2010 and monthly  payments of approximately
$495,000  through  December  2011 and  accrues  interest at LIBOR plus 0.80% per
year.  The  refinanced  non-recourse  debt matures on December 1, 2011 and has a
balloon payment of approximately $11,550,000.  The variable interest rate of the
refinanced debt may be fixed at the LLC's sole discretion on any monthly payment
date up to September 1, 2006, or fixed automatically under the debt agreement on
September 1, 2006.  The lender has a security  interest in the leased  equipment
and an assignment of the rental payments under the lease.

     Non-cancelable  minimum  annual rental  amounts  receivable  from operating
leases, including recent lease extensions, are as follows:

                         Years Ending
                         December 31,
                        -------------
                             2005           $  35,229,302
                             2006           $  31,557,724
                             2007           $  26,868,733
                             2008           $  16,407,507
                             2009           $  16,770,915


(6)    Joint Ventures

     The LLC  and  certain  of its  affiliates,  entities  also  managed  by the
Manager,  formed the six 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.

                                       45
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002


(6)    Joint Ventures - continued

     The two joint ventures  described below are majority owned and consolidated
with the LLC.

ICON Aircraft 46835 LLC

     During  September  2002,  the LLC and ICON Income Fund Eight B L.P.  ("Fund
Eight B") formed  ICON  Aircraft  46835,  LLC ("ICON  46835") for the purpose of
acquiring an investment in a McDonnell  Douglas  DC-10-30F  aircraft on lease to
Federal Express Corporation  ("FedEx") until March 31, 2007. FedEx may renew the
lease for up to five years thereafter. The LLC paid approximately $2,550,000 for
its investment in ICON 46835. The LLC and Fund Eight B have ownership  interests
of 85% and 15%, respectively. The LLC accounts for its interest in this aircraft
as an operating lease.

     On December 27, 2002, ICON 46835 acquired the aircraft subject to the lease
for a total  cost of  approximately  $25,292,000,  consisting  of  approximately
$3,000,000  in cash and  non-recourse  debt of  approximately  $22,292,000.  The
non-recourse debt has semi-annual payments of approximately $2,708,000,  accrues
interest  at 4.04%  per year and is due on March  31,  2007.  The  lender  has a
security interest in the aircraft and an assignment of the rental payments under
the lease.  The  outstanding  balance of the  non-recourse  debt at December 31,
2004, 2003 and 2002 was $12,883,340, $18,216,134 and $22,301,600,  respectively.
The Manager was paid an acquisition fee totaling approximately $759,000 relating
to this transaction, of which the LLC paid approximately $645,000.

ICON/Kenilworth LLC

     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 "Facility") on lease to Schering-Plough  until July
1, 2004,  which was  subsequently  extended  through July 1, 2009.  The LLC paid
approximately  $7,989,500  for its  investment in  Kenilworth.  The LLC and Fund
Eight B had ownership interests of 95% and 5%, respectively.

     On September  30,  2002,  Kenilworth  acquired the 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.  The
non-recourse  debt was  comprised of senior and junior  non-recourse  debt.  The
senior  debt  was   approximately   $6,679,000,   had   quarterly   payments  of
approximately $938,000,  accrued interest at 10.61% per year and matured on July
1, 2004. The junior debt was approximately  $239,000,  had quarterly payments of
approximately $39,000, accrued interest at 9.86% per year and matured on July 1,
2004. The outstanding  balance of both the senior and junior  non-recourse  debt
was fully repaid at the end of the base lease term in July 2004. The outstanding
balance of both the senior and junior non-recourse debt at December 31, 2003 and
2002 was  $2,669,979  and  $6,161,565,  respectively.  The  Manager  was paid an
acquisition fee totaling approximately $460,000 relating to this transaction, of
which the LLC paid approximately $437,000.

     On  December  1, 2004,  Fund Eight B  transferred  its entire 5%  ownership
interest in Kenilworth to the LLC in exchange for a 25.87%  interest in ICON SPK
2023-A LLC ("SPK 2023-A") for  approximately  $488,000 (see below).  The Manager
computed the fair value of the Kenilworth  interest and the SPK 2023-A  interest
based uopon their knowledge of current market  conditions and a recent appraisal
received for Kenilworth.

     On April 20, 2006, the Facility was sold to a third party for approximately
$4,800,000 in cash. The LLC incurred a loss of  approximately  $2,600,000 on the
sale of this equipment.

                                       46
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(6)    Joint Ventures - continued

     The four joint ventures  described  below are minority owned by the LLC and
accounted for under the equity method.

ICON SPK 2023-A, LLC

     During  December  2001,  the LLC and Fund Eight B formed SPK 2023-A for the
purpose of acquiring and managing a portfolio of equipment leases  consisting of
material  handling,  telecommunication  and  computer  equipment.  The LLC  paid
approximately  $3,952,500  for its  investment  in SPK 2023-A.  The LLC and Fund
Eight B had ownership interests of 51% and 49%, respectively.

     During March 2002, SPK 2023-A completed the transaction,  with a total cost
of  approximately  $7,750,000  in cash.  SPK 2023-A  acquired a portfolio  of 32
leases,  of which 17 remain active at December 31, 2004,  with lease  expiration
dates at various dates through April 2008.  The Manager was paid an  acquisition
fee totaling approximately  $233,000 relating to this transaction,  of which the
LLC paid approximately $119,000.

     On December 1, 2004, the LLC transferred  25.87% of its ownership  interest
in SPK 2023-A to Fund Eight B in exchange for Fund Eight B's entire 5% ownership
interest in Kenilworth  (see above).  The LLC and Fund Eight B entered into this
transaction in order to minimize the New Jersey State income tax  obligations of
Fund Eight B. After the exchange, the LLC has a 25.13% ownership interest in SPK
2023-A and has a 100% ownership interest in Kenilworth. The Manager computed the
fair value of the Kenilworth interest and the SPK 2023-A interest based upon its
knowledge  of current  market  conditions  and a recent  appraisal  received for
Kenilworth.

     The LLC had consolidated the financial  condition and results of operations
of SPK 2023-A for the eleven months ended  November 30, 2004 and at December 31,
2003 and December 31, 2002 and for the years then ended.

ICON GeicJV

     On March 31,  2004,  the LLC along with ICON  Income  Fund Ten,  LLC ("Fund
Ten") formed a joint  venture,  ICON GeicJV LLC,  for the purpose of  purchasing
information  technology  equipment subject to a lease with Government  Employees
Insurance  Company until March 31, 2007. The LLC paid  approximately  $1,522,000
for its  investment  in ICON  GeicJV  LLC.  The LLC and Fund Ten have  ownership
interests  of 26% and 74%,  respectively.  On April 30,  2004,  ICON  GeicJV LLC
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.

ICON Aircraft 47820 LLC

     During  February  2003, the LLC and Fund Eight B formed ICON Aircraft 47820
LLC ("ICON  47820") for the purpose of  acquiring an  investment  in a McDonnell
Douglas DC 10-30F  aircraft on lease to FedEx until March 31, 2007. The LLC paid
approximately  $390,000 for its investment in ICON 47820. The LLC and Fund Eight
B have ownership interests of 10% and 90%, respectively.

                                       47
<PAGE>
                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(6)    Joint Ventures - continued

     On March 11, 2003,  ICON 47820  acquired the aircraft  subject to the lease
for a total  cost of  approximately  $27,288,000,  consisting  of  approximately
$3,077,000  in cash and  non-recourse  debt of  approximately  $24,211,000.  The
lender has a security  interest in the aircraft and an  assignment of the rental
payments  under the lease.  The Manager  was paid an  acquisition  fee  totaling
approximately  $819,000  relating  to this  transaction,  of which  the LLC paid
approximately $82,000.

     At December 31, 2005,  the Manager  determined,  based upon an  independent
third party  appraisal  that  indicated  the  aircraft  may be impaired due to a
slower than expected recovery in the air transportation  industry,  to record an
impairment  loss for  approximately  $3,626,000 to more closely  approximate the
adjusted book value to the current fair value of the  aircraft.  The LLC's share
of the impairment  loss,  which is reflected in income form investments in joint
ventures on the accompanying statement of operations, is approximately $362,600.

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, which
owns, through an Owner Trust, an Airbus A340-313X aircraft which was on lease to
Cathay  Pacific  Airways  Limited  ("Cathay")  through  March  2006,  which  was
subsequently extended until July 1, 2011. The LLC paid approximately  $2,125,000
for its  investment  in ICON 126.  The LLC and Fund Eight B each have  ownership
interests of 50% in ICON 126. ICON 126 consolidates  the financial  position and
operations of D.A.L. in its consolidated financial statements.

     On March 4, 2002, ICON 126 acquired all of the outstanding  stock of D.A.L.
with a total cost of  approximately  $74,527,000,  consisting  of  approximately
$4,250,000  in cash and  non-recourse  debt of  approximately  $70,277,000.  The
lender has a security  interest in the aircraft and an  assignment of the rental
payments  under the lease.  The Manager  was paid an  acquisition  fee  totaling
approximately  $2,236,000  relating to this  transaction,  of which the LLC paid
approximately $1,118,000.

     Simultaneously  with the lease extension,  the owner trustee refinanced the
non-recourse debt which was scheduled to mature on March 27, 2006 with a balloon
payment of  approximately  $52,850,000.  ICON 126  established a reserve account
totaling  $582,509,  which  reduced  the  balloon  payment to  $52,267,491.  The
refinanced  non-recourse  debt accrues interest at the London Interbank  Offered
Rate  ("LIBOR") plus 1.17% (6.32% at March 31, 2006) and matures on July 1, 2011
with a balloon payment of approximately $32,000,000.  The variable interest rate
of the  refinanced  debt may be fixed at the sole  discretion of the LLC on June
27, 2006, or fixed automatically under the debt agreement on September 27, 2006.
The LLC did not exercise its option to fix the  variable  interest  rate on June
27, 2006.

     The owner trustee had a commitment  with respect to its Cathay  aircraft to
pay 50% of the maintenance  overhaul  costs,  which were incurred on or prior to
March 27, 2006.  The owner trustee had  established  a maintenance  reserve cash
account, which totaled approximately $1,354,000 at March 31, 2006 to pay for its
portion of these costs. The maintenance reserve account was funded in accordance
with the terms of the lease.  Any excess cash  remaining  after the  maintenance
overhaul  is  performed  will be used to pay down the  principal  balance of the
related non-recourse debt.

                                       48
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002


(7)    Investment in Unguaranteed Residual Values

     During  December  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 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  debt.   During  2004,  the  LLC   capitalized
approximately  an additional  $127,000 in legal fees and received  approximately
$141,000 in disposal  proceeds,  which was applied against the carrying value of
the  unguaranteed  residual  value.  The Manager was paid an acquisition  fee of
approximately $1,131,000 related to this transaction.

(8)    Notes Payable - Non-recourse

     During  September  2002,  the LLC  acquired  three car and  truck  carrying
vessels  (the  "Vessels")  on  bareboat  charter  to  Wilhelmsen  Lines  through
September  2008 for cash and  non-recourse  debt (See Note 5). The  non-recourse
debt  accrues  interest at LIBOR plus 1.79% per year (4.89% per year at December
31,  2004).  The  notes  mature  in  September  2008.  Simultaneously  with  the
acquisition  of the vessels and the  assumption  of debt,  the LLC entered  into
three identical  interest rate swap contracts,  each having a notional amount of
$21,443,255, with Fortis Bank. The LLC entered into these agreements in order to
effectively  fix the  variable  interest  rate  on the  non-recourse  debt.  The
interest rate swap  contracts  have a fixed interest rate of 4.85% per year. The
lender has a security  interest in the Vessels and an  assignment  of the rental
payments under the lease.

     The LLC accounts for its interest rate swap  contracts in  accordance  with
Statement  of  Financial  Accounting  Standards  No.  133,  as  amended.   These
derivatives are not designated as hedging instruments and accordingly the change
in fair value is recognized in earnings in the period of change.

     For the year ended  December 31, 2002,  the fair value of the interest rate
swap contracts was a liability of approximately $788,000 and the LLC accordingly
increased  interest  expense by an identical  amount.  At December 31, 2003, the
fair value of the interest  rate swap  contracts was a liability of $474,548 and
the LLC  accordingly  reduced  interest  expense by $313,261  for the year ended
December 31, 2003.  At December  31, 2004,  the fair value of the interest  rate
swaps was an asset of $268,496 and the LLC reduced  interest expense by $743,044
for the year ended December 31, 2004.

                                       49
<PAGE>
                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

     As discussed in Notes 4 and 5, the LLC has non-recourse  notes  outstanding
in connection with various lease acquisitions.

     The aggregate  maturities  of notes  payable - non recourse,  including the
effects of refinancing discussed in Note 5, consist of the following at December
31, 2004:

                      Years Ending
                      December 31,
                  -------------------
                          2005           $  24,549,770
                          2006           $  22,334,205
                          2007           $  17,913,807
                          2008           $  15,340,766
                          2009           $  11,815,726


(9)    Note Payable - Recourse

     Comerica Line of Credit Agreement

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

     The  Initial  Funds  also  entered  into  a  Contribution   Agreement  (the
"Contribution  Agreement")  dated as of May 30,  2002,  which  was  amended  and
restated  effective  as of August 5,  2004,  in order to  facilitate  Fund Ten's
addition  to the  LOC  Agreement.  Pursuant  to the  terms  of the  Contribution
Agreement,  the Borrowers  agreed to restrictions on the amount and the terms of
their  respective  borrowings  under the LOC  Agreement in order to minimize the
unlikely risk that a Borrower  would not be able to repay its allocable  portion
of the outstanding revolving loan obligation at any time, including restrictions
on any Borrower borrowing in excess of the lesser of (A) an amount each Borrower
could  reasonably  expect  to repay in one year out of its  projected  free cash
flow,  or (B) the greater of (i) the  Borrowing  Base (as defined in the line of
credit agreement) as applied to such Borrower,  and (ii) 50% of the net worth of
such Borrower.

     The Contribution  Agreement  provides that, in the event a Borrower pays an
amount under the  agreement in excess of its allocable  share of the  obligation
under the agreement  whether by reason of an Event of Default or otherwise,  the
other  Borrowers will promptly make a  contribution  payment to such Borrower in
such  amount  that the  aggregate  amount  paid by each  Borrower  reflects  its
allocable share of the aggregate obligations under the agreement. The Borrowers'
obligations to each other under the Contribution Agreement are collateralized by
a subordinate lien on the assets of each participating Borrower.

     During  2004  and  2005,  the  LLC  paid  Comerica  Bank a  portion  of the
outstanding  obligations  of  L.P.  Seven  as  required  by  the  terms  of  the
Contribution  Agreement.  As  required  under  the  terms  of  the  Contribution
Agreement, L.P. Seven was required to promptly repay the LLC for amounts paid on
L.P. Seven's behalf.  L.P. Seven did not have sufficient  liquidity to repay the
LLC and, accordingly,  L.P. Seven assigned its rights to the profits, losses and
cash  flows  from its  investment  in a  limited  partnership  interest  and its
ownership interest in a direct finance lease as full repayment of amounts due to
the LLC (See Notes 4 and 15).

     At December 31, 2004, the LLC had no outstanding  balance due under the LOC
Agreement.  The aggregate borrowing by all Borrowers under the LOC Agreement was
$10,272,992 at December 31, 2004.

     Effective  March 8, 2005,  the  Borrowers  and Comerica Bank entered into a
Seventh Amendment to the LOC Agreement.  This Agreement released L.P. Seven from
all of its obligations under the Loan and Security Agreement dated as of May 30,
2002.  As such,  as of March 8,  2005  L.P.  Seven  was no longer a party to the
$17,500,000 line of credit.

                                       50
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002


(9)    Note Payable - Recourse - continued

California Bank & Trust Revolving Loan Facility

     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
ICON Leasing Fund Eleven, LLC (collectively, the "New Borrowers") entered into a
Commercial Loan Agreement (the  "Agreement"),  with California Bank & Trust (the
"Lender").  The  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 New Borrowers not subject to a
first priority  lien, as defined in the Agreement.  Each of the New 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,  based on the present value of the
future  receivables  under certain  lease  agreements in which the New Borrowers
have a beneficial  interest.  The interest  rate on any advances  made under the
Facility is the Lender's prime rate plus 0.25% per year. In accordance  with the
Agreement,  the New  Borrowers  may elect to have up to five  separate  advances
under the Facility each made at the rate at which United States dollar  deposits
can be acquired by the Lender in the London Interbank  Eurocurrency Market, plus
2.75% per year.  The Facility  expires on August 31, 2007 unless  renewed by the
New  Borrowers for an  additional  one year term, in the sole  discretion of the
Lender.

     In  accordance  with the terms and  conditions  of the  Agreement,  the New
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 Agreement  prohibits the New Borrowers from
declaring or paying any  distribution to investors if such a payment would cause
the New Borrowers to become  non-compliant  with the financial  covenants in the
Agreement.

     In  addition,  on August 31,  2005,  the New  Borrowers  entered into a New
Contribution Agreement (the "New Contribution Agreement"), pursuant to which the
New Borrowers  have agreed to certain  restrictions  on the amounts and terms of
their  respective  borrowings  under the  Facility in order to minimize the risk
that a New  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 New
Borrower  could  reasonably  expect to repay in one year from its projected cash
flow, or (b) the greater of (i) the borrowing base, as defined in the Agreement,
as  applied  to such New  Borrowers  and  (ii) 50% of the net  worth of such New
Borrower.  The New Contribution Agreement also provides that, in the event a New
Borrower  pays an amount under the New  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 New  Borrowers  will  immediately  make a
contribution  payment to such New Borrower and in such amount that the aggregate
amount paid by each New Borrower  reflects its allocable  share of the aggregate
obligations  under the Facility.  The New  Borrowers'  obligations to each other
under the New Contribution Agreement are collateralized by a subordinate lien on
the assets of each New Borrower.

     Under  the  terms of the  Agreement,  the New  Borrowers  are  required  to
maintain a cash  reserve  with the Lender  representing  20% of all  outstanding
advances  plus all pending  advances.  Fund Eleven has  established  an interest
bearing cash account with the Lender which  satisfies  the Lender's cash reserve
requirement.

     On  September  7,  2005,   certain  of  the  New  Borrowers  were  advanced
approximately   $10,200,000  under  the  Facility,  which  amount  was  used  to
completely repay all of the outstanding  indebtedness owed by certain of the New
Borrowers and their  affiliates  under the LOC Agreement with Comerica Bank. The
LOC Agreement with Comerica bank was subsequently cancelled.

                                       51
<PAGE>
                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

 (10)  Income Taxes (Unaudited)

     The LLC is treated as a partnership  for Federal income tax purposes and as
such 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 member
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 taxes of the members.

     At December 31, 2004, 2003 and 2002, the members' capital accounts included
in the consolidated  financial statements totaled  $64,455,803,  $73,842,948 and
$46,338,518,  respectively. The members' capital for Federal income tax purposes
at  December  31,  2004,  2003 and 2002  totaled  $87,008,303,  $86,910,435  and
$54,950,761  (unaudited),  respectively.  The difference  arises  primarily from
sales and offering  expense  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  loss  for  consolidated   financial
statement  reporting  purposes  to the loss for Federal  income tax  purposes as
follows:


<TABLE>
<CAPTION>

                                                                        Years Ended December 31,
                                                               ---------------------------------------------------
                                                                                      2003               2002
                                                                     2004          (Restated)         (Restated)
                                                               ---------------   -------------     ---------------
<S>                                                            <C>               <C>               <C>
 Net loss per consolidated financial statements                $       (17,768)  $    (793,837)    $    (1,976,068)

      Direct finance leases                                          4,994,525       1,646,099                   -
      Depreciation expense                                           1,466,952       5,047,682           5,155,681
      Interest expense - consolidated joint venture                  3,200,132       3,498,228           1,829,398
      Loss on sale of equipment                                          9,829          27,121                   -
      Rent - consolidated joint venture                             (8,367,308)     (8,316,900)         (8,168,089)
      Tax gain from joint venture                                     (612,505)     (3,031,139)            184,747
      Change in valuation of interest rate swap contracts             (743,044)       (313,261)             787,809
      Other                                                           (105,203)        638,467           1,388,907
                                                               ---------------   -------------     ---------------

 Net loss for Federal income tax purposes                      $      (174,390)  $  (1,597,540)    $      (797,615)
                                                               ===============   =============     ===============

</TABLE>


(11)   Share Redemptions

     The Manager  consented to the LLC  redeeming  643 and 675 member shares for
the  years  ended  December  31,  2004 and  2003,  respectively.  There  were no
redemptions  for the year ended December 31, 2002.  The  redemption  amounts are
calculated  according to a specified  redemption  formula in accordance with 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 from members' equity.

(12)   Transactions with Related Parties

     The LLC has  entered  into  certain  agreements  with its  Manager and ICON
Securities Corp., a wholly-owned subsidiary of the Manager, whereby the LLC pays
certain fees and  reimbursements  to these parties.  ICON  Securities  Corp. was
entitled to receive a 2% underwriting  fee from the gross proceeds from sales of
shares to the additional members.

                                       52
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(12)   Transactions with Related Parties - continued

     In accordance with the terms of these agreements,  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,
(ii) acquisition fees,  through the reinvestment  period, of 3% calculated based
on the gross value of the LLC's acquisition  transactions (iii) organization and
offering  expenses,  ranging from 1.5% to 3.5%, from the gross proceeds from the
sale of shares to additional members, as defined in the agreement.  In addition,
the Manager is reimbursed  for  administrative  expenses  incurred in connection
with the LLC's operations.

     The total compensation that the Manager and ICON Securities Corp. may earn,
not including  management fees and  administrative  expense  reimbursements,  is
limited to 13.5% of gross offering proceeds up to the first $25,000,000  raised,
12.5% of gross offering  proceeds from  $25,000,001 to $50,000,000  and 11.5% of
gross offering proceeds from $50,000,001 to $100,000,000.

     Management  fees relate to certain  services  relating to the management of
the LLC's equipment leasing activities  performed by the Manager.  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 and
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 salary and related costs,
travel expenses and other  administrative  costs incurred by individuals  with a
controlling interest in the Manager.

     The  Manager  also has a 1%  interest  in the  LLC's  profits,  losses  and
distributions. The LLC paid distributions to the Manager of $89,744, $80,356 and
$22,036 for the years ended  December  31,  2004,  2003 and 2002,  respectively.
Additionally,  the Manager's interest in the LLC's net loss was $178, $7,938 and
$19,761 for the years ended December 31, 2004, 2003 and 2002, respectively.

     Fees and other  expenses  paid or accrued by the LLC to the  Manager or its
affiliates  for the years  ended  December  31,  2004,  2003 and  2002,  were as
follows:

<TABLE>
<CAPTION>

                                                                                                       2003               2002
        Entity                  Capacity              Compensation                2004           (Restated)         (Restated)
 ------------------       ------------------      -----------------------    ------------      ---------------     -------------
<S>                       <C>                     <C>                       <C>                <C>                 <C>
 ICON Capital Corp.       Manager                 Organization and
                                                     offering expenses (1)   $         -       $       626,083     $   1,521,620
                                                                             ============      ===============     =============
 ICON Securities Corp.    Managing broker-dealer  Underwriting fees (1)      $         -       $       834,777     $   1,101,912
                                                                             ============      ===============     =============
 ICON Capital Corp.       Manager                 Acquisition fees (2)       $     51,632      $     1,776,676     $   6,780,518
                                                                             ============      ===============     =============
 ICON Capital Corp.       Manager                 Management fees (3)        $  2,109,282      $     1,897,722     $     604,003
                                                                             ============      ===============     =============
 ICON Capital Corp.       Manager                 Administrative fees (3)    $  1,139,479      $       834,089     $     241,597
                                                                             ============      ===============     =============

</TABLE>

(1)  Amount charged directly to members equity.
(2)  Amount is  capitalized  and  amortized to  operations  over the life of the
     related acquisition.
(3)  Amount represents  administrative  expense reimbursements and is charged to
     operations.

                                       53
<PAGE>
                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(12)   Transactions with Related Parties - continued

     The LLC had a payable of  $677,187  due to its Manager  and  affiliates  at
December  31,  2004  comprised  of  $102,460  due to  the  Manager  relating  to
administrative  expense  reimbursements  and  $574,727  due to Fund  Ten for the
assignment of leased  equipment  purchased in December 2004. The LLC repaid Fund
Ten all amounts owed during January 2005.

     At  December  31,  2004,  the LLC was due  $250,698  from its  Manager  and
affiliates  consisting of $92,753 from a joint venture for prior year  advances,
$32,945 due from ICON Receivables  1998-A LLC, an affiliate of the Manager,  for
rents collected on the LLC's behalf, $25,000 due from L.P. Seven. The LLC is due
$100,000  from  several  affiliates  for the  initial  deposits  relating to the
establishment of maintenance reserves.

     At  December  31,  2003,  the LLC was due  $493,307  from its  Manager  and
affiliates  consisting  of $289,422 from the Manager which was due to a decrease
in the  cost of an  investment  in  unguaranteed  residuals,  which  the LLC had
previously paid acquisition fees to the Manager based on the original investment
and  $92,753  from a joint  venture  for  prior  year  advances.  The LLC is due
$100,000  from  several  affiliates  for the  initial  deposits  relating to the
establishment of maintenance reserves.

     At  December  31,  2002,  the LLC was due  $105,307  from its  Manager  and
affiliates  consisting  of $36,994  due from the  Manager  and  $68,313 due from
affiliates.

     As discussed in Notes 4 and 15, the LLC was  assigned  certain  rights in a
limited partnership interest during 2004 and 2005 and an ownership interest in a
direct  finance lease during 2005 from L.P.  Seven as repayment for amounts paid
by the LLC on behalf of L.P.  Seven  under the terms of the LOC  Agreement  with
Comerica Bank (See Note 9).

(13)   Fair Value of Financial Instruments

     Fair value  information with respect to the LLC's assets and liabilities is
not separately  provided since (i) Statement of Financial  Accounting  Standards
("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 notes payable  approximates fair value due to their short-term
maturities and variable interest rates. The fair value of the LLC's non-recourse
debt,  estimated  based upon the interest rate available from the LLC's recourse
lender at  December  31,  2004,  2003 and 2002 are  approximately  $100,780,000,
$113,179,000 and $124,483,000, respectively.

(14)   Concentrations

     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 the risk.

     For the year  ended  December  31,  2004,  the LLC had three  lessees  that
accounted for  approximately  81% of rental income.  For the year ended December
31, 2003,  the LLC had four lessees  which  accounted for  approximately  89% of
rental  income.  For the year ended  December 31, 2002, the LLC had four lessees
that accounted for approximately 99% of rental income and finance income.

                                       54
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(15)   Commitments and Contingencies

     The LLC has entered into remarketing and residual  sharing  agreements with
third parties.  In connection  with these  agreements,  remarketing and residual
proceeds  received in excess of specific amounts will be shared with these third
parties based on specific formulas.

     The LLC has a commitment  in regards to its 100% owned  Cathay  aircraft to
pay 50% of the maintenance overhaul costs, which were incurred during June 2006.
The total estimated costs for this overhaul are approximately $1,750,000.

     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 that is
subject to lease with Rowan  Companies,  Inc. L.P.  Seven assigned the rights to
the LLC as repayment  of its $755,000  outstanding  debt  obligation  pursuant 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, 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 independent third party appraisal
and cash flow analysis.

     On November 24, 2004, L.P. Seven assigned to the LLC 2.60% of its rights to
the profits,  losses, and cash flows from its limited partnership interest in an
entity  that owns a 100%  interest  in a mobile  offshore  drilling  rig that is
subject to lease with Rowan  Companies,  Inc. L.P.  Seven assigned the rights to
the LLC as repayment  of its $650,000  outstanding  debt  obligation  pursuant 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. The
repayment amount represented the Manager's  estimated fair value of L.P. Seven's
interest in the mobile  offshore  drilling rig at November  24,  2004.  The fair
value of the mobile  offshore  drilling rig was determined  using an independent
third party appraisal and cash flow analysis.

(16)   Geographic Information

     Geographic  information  for revenue,  based on the country of origin,  and
long-lived  assets,  which include  finance  leases,  operating  leases,  net of
accumulated  depreciation,  investments  in joint  ventures and  investments  in
unguaranteed  residual  values at December 31,  2004,  2003 and 2002 and for the
years then ended are as follows:

<TABLE>
<CAPTION>


                                                             Year Ended December 31, 2004
                                -------------------------------------------------------------------------------
                                    United        United                               South
                                    States        Kingdom           Norway           East Asia          Total
                               ---------------  -----------  --------------    ---------------   ---------------
<S>                             <C>              <C>          <C>               <C>               <C>
 Revenue:
      Rental income             $    10,466,551  $       -    $   12,277,792    $     8,367,307   $   31,111,650
      Finance income                  1,229,552          -                 -            427,408        1,656,960
      Income from investments
         in joint ventures              112,003          -                 -            313,063          425,066
                                ---------------  ----------   --------------    ---------------   --------------


                                $    11,808,106  $       -    $   12,277,792    $     9,107,778   $   33,193,676
                                ===============  ==========   ==============    ===============   ==============
</TABLE>


                                       55
<PAGE>

                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002


(16)   Geographic Information - continued

<TABLE>
<CAPTION>
                                                                                       At December 31, 2004
                                                    ------------------------------------------------------------------------------
                                                        United         United                           South
                                                        States         Kingdom          Norway         East Asia          Total
                                                   ---------------   ----------      -----------   -------------    --------------
<S>                                                <C>               <C>             <C>           <C>              <C>
 Long-lived assets:
      Investments in finance leases:
         Minimum rents receivable                  $    15,808,029   $       -       $        -    $   3,317,568    $  19,125,597
         Estimated unguaranteed residual values          1,302,239           -                -          451,572        1,753,811
         Initial direct costs, net                         186,120           -                -           64,355          250,475
         Unearned income                                (2,011,284)          -                -         (563,841)      (2,575,125)
                                                   ---------------   ----------      -----------   -------------    -------------

                                                   $    15,285,104   $       -       $       -     $   3,269,654    $  18,554,758
                                                   ===============   ==========      ============  =============    =============


      Investments in operating leases, net         $    33,830,945   $       -       $55,968,081   $  59,430,220    $ 149,229,246
                                                   ===============   ==========      ===========   =============    =============
      Investments in joint ventures                $     1,886,908   $       -       $         -   $   3,883,433    $   5,770,341
                                                   ===============   ==========      ===========   =============    =============

      Investments in unguaranteed residual values  $            -    $4,440,907      $         -   $          -     $   4,440,907
                                                   ===============   ==========      ===========   =============    =============


                                                                                Year Ended December 31, 2003
                                                   --------------------------------------------------------------------------------
                                                         United         United                         South
                                                         States         Kingdom       Norway         East Asia          Total
                                                   ---------------   ----------   --------------   ---------------   --------------
 Revenue:
      Rental income                                $    13,566,981   $        -   $   12,015,436   $     8,231,955   $   33,814,372
      Finance income                                       538,965            -               -            207,549          746,514
      Income from investments in joint ventures             (5,255)           -               -            203,241          197,986
                                                   ---------------   ----------   --------------   ---------------   --------------

                                                   $    14,100,691   $        -   $   12,015,436   $     8,642,745   $   34,758,872
                                                   ===============   ==========   ==============   ===============   ==============

                                                                                  At December 31, 2003
                                                     ------------------------------------------------------------------------------
                                                           United          United                      South
                                                           States         Kingdom       Norway       East Asia           Total
                                                     ---------------   ----------  -------------- ---------------   ---------------
 Long-lived assets:
      Investments in finance leases:
         Minimum rents receivable                    $    12,313,689   $       -   $           -  $     4,644,594   $   16,958,283
         Estimated unguaranteed residual values            1,241,998           -               -          451,572        1,693,570
         Initial direct costs, net                           297,581           -               -          113,138          410,719
         Unearned income                                  (2,471,009)          -               -         (991,249)      (3,462,258)
                                                     ---------------   ----------  -------------- ---------------   --------------

                                                     $    11,382,259   $       -   $           -  $     4,218,055   $   15,600,314
                                                     ===============   ==========  ============== ===============   ==============

      Investments in operating leases, net           $    42,671,383   $       -   $   64,657,090 $    64,117,257   $  171,445,730
                                                     ===============   ==========  ============== ===============   ==============
      Investments in joint ventures                  $       384,264   $       -   $           -  $     3,570,370   $    3,954,634
                                                     ===============   ==========  ============== ===============   ==============
      Investments in unguaranteed residual values    $            -    $4,454,003  $           -  $           -     $    4,454,003
                                                     ===============   ==========  ============== ===============   ==============

</TABLE>


                                       56
<PAGE>
                           ICON Income Fund Nine, LLC
                     (A Delaware Limited Liability Company)
                   Notes To Consolidated Financial Statements
                        December 31, 2004, 2003 and 2002

(16)   Geographic Information - continued
<TABLE>
<CAPTION>
                                                                            Year Ended December 31, 2002
                                                     ---------------------------------------------------------------------------
                                                           United                              South
                                                           States              Norway         East Asia             Total
                                                     ----------------     ------------     ---------------     -----------------
 <S>                                                  <C>                   <C>             <C>                  <C>
 Revenue:
      Rental income                                  $     4,056,055       $3,018,871      $    4,207,608       $    11,282,534
      Income from investments in joint ventures                -                   -              124,228               124,228
                                                     ---------------       ----------      --------------       ---------------
                                                     $     4,056,055       $3,018,871      $    4,331,836       $    11,406,762
                                                     ===============       ==========      ==============       ===============
                                                                                 At December 31, 2002
                                                     --------------------------------------------------------------------------
                                                           United                              South
                                                           States              Norway         East Asia              Total
                                                     ---------------       -----------     --------------       --------------
 Long-lived assets:
      Investments in operating leases, net           $    52,446,413       $73,279,260     $   68,803,816       $   194,529,489
                                                     ===============       ===========     ==============       ===============
      Investments in joint ventures                  $                     $       -       $    3,367,129       $     3,367,129
                                                     ===============       ===========     ==============       ===============
</TABLE>

(17) Selected Quarterly Financial Data (Unaudited)

         The following table is a summary of selected financial data, by
     quarter, for the years ended December 31, 2004, 2003 and 2002:
<TABLE>
<CAPTION>
                                                                             Quarters Ended in 2004
                                                      ---------------------------------------------------------------------------
                                                        March 31,           June 30,         September 30,        December 31,
                                                        (Restated)         (Restated)         (Restated)          (Restated)
                                                     ----------------      ----------      --------------       ----------------
<S>                                                  <C>                   <C>             <C>                  <C>
 Revenue                                             $     8,963,531       $9,080,922      $    7,676,185       $     7,519,678
                                                     ===============       ==========      ==============       ===============
 Net income (loss) allocable to additional members   $        89,670      $   153,512      $     (440,576)      $       179,804
                                                     ===============       ==========      ==============       ===============
 Net income (loss) per weighted average
      additional member shares                       $          0.91       $     1.55      $        (4.48)      $          1.84
                                                     ===============       ==========      ==============       ===============

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

 Revenue                                             $     8,748,027       $8,746,486      $    8,950,551       $     8,536,992
                                                     ===============       ==========      ==============       ===============
 Net (loss) income allocable to additional members   $      (594,185)      $ (363,342)     $     (152,471)      $       324,099
                                                     ===============       ==========      ==============       ===============
 Net (loss) income per weighted average
   additional member shares                          $         (8.76)      $    (3.76)     $        (1.54)      $          5.41
                                                     ===============       ==========      ==============       ===============

                                                                                Quarters Ended in 2002
                                                     ---------------------------------------------------------------------------
                                                                                                                   December 31,
                                                          March 31,          June 30,       September 30,          (Restated)
                                                     ---------------       ----------      --------------       ---------------
 Revenue                                             $       652,023       $  739,312      $    2,878,634       $     7,183,580
                                                     ===============       ==========      ==============       ===============
 Net income (loss) allocable to additional members   $       159,266       $  (93,271)     $     (207,849)      $    (1,814,453)
                                                     ===============       ==========      ==============       ===============
 Net income (loss) per weighted average
      additional member shares                       $         16.40       $    (4.27)     $       (6.00)       $        (73.54)
                                                     ===============       ==========      ==============       ===============
</TABLE>

                                       57
<PAGE>

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

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

Item 9A. Controls and Procedures

Evaluation of disclosure controls and procedures

     This  Annual  Report  on Form 10-K for the year  ended  December  31,  2004
includes restated consolidated financial statements for the years ended December
31,  2003  and  2002 in  order  to  correct  our  previously  issued  historical
consolidated  financial  statements  at  December  31, 2003 and 2002 and for the
years then ended,  initially  filed with the SEC on March 30, 2004 and March 31,
2003,  respectively.  During  the  preparation  of  our  consolidated  financial
statements for the year ended  December 31, 2004, it was determined  that we did
not account for three interest rate swap transactions  entered into during 2002.
Additionally,  during  the  review  process we  determined  that the  accounting
treatment of certain lease transactions, consisting primarily of incorrect lease
termination  dates and the  capitalization  of certain expenses related to these
transactions was incorrect.  We have restated our consolidated  balance sheet at
December  31,  2002  to  reflect  total  assets  of  $209,483,843   (instead  of
$209,646,396),  total liabilities of $163,145,325  (instead of $161,907,586) and
total members'  equity of  $46,338,518  (instead of  $47,738,810).  For the year
ended December 31, 2002, we restated our consolidated statement of operations to
reflect a net loss of $1,976,068 (instead of $575,776),  a net loss allocable to
additional  members  of  $1,956,307  (instead  of  $570,018)  and a net loss per
weighted  average  additional  member share  outstanding  of $67.41  (instead of
$19.64).  We restated  our  consolidated  balance  sheet at December 31, 2003 to
reflect  total  assets  of  $212,717,298   (instead  of   $212,905,177),   total
liabilities of $138,874,350  (instead of $137,751,308) and total members' equity
of $73,842,948  (instead of $75,153,869).  For the year ended December 31, 2003,
we restated our  consolidated  statement of  operations to reflect a net loss of
$793,837  (instead of $883,208),  a net loss allocable to additional  members of
$785,899  (instead of $874,376) and a net loss per weighted  average  additional
member share outstanding of $8.65 (instead of $9.63).

     As a result  of  discovering  the  incorrect  accounting  treatment  of the
transactions  described above, our Manager carried out an evaluation,  under the
supervision  and  with  the  participation  of the  management  of our  Manager,
including its Chief Executive Officer and its Principal Financial and Accounting
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.  As part of  their
evaluation, they reviewed the circumstances surrounding the delay in filing this
Annual  Report  on  Form  10-K  and the  restatement  of our  previously  issued
financial  statements  for the years ended  December  31,  2002 and 2003.  As we
previously  reported in our Current  Report on Form 8-K dated May 18,  2006,  we
delayed the filing of this Annual Report on Form 10-K, the Annual Report on Form
10-K for the year ended December 31, 2005 and our Quarterly Reports on Form 10-Q
for the quarters  ended March 31, 2005,  June 30, 2005,  September  30, 2005 and
March 31, 2006 pending completion by our accountants, Hays & Company LLP, of the
re-audit  of our 2002  financial  statements  that  were  audited  by our  prior
accountants.

     Our Chief  Executive  Officer and the Principal  Financial  and  Accounting
Officer concluded that our Manager's disclosure controls and procedures were not
effective  as of December  31, 2004 to  properly  record the correct  accounting
treatment for the transactions described above.

     While  evaluating our Manager's  disclosure  controls and  procedures,  our
Manager  recognized that greater internal  controls were needed to aid in a more
thorough  review and  efficient  closing of our  financial  statements,  thereby
requiring our Manager to hire additional skilled accounting staff to support the
senior vice president of accounting hired by our Manager at the end of the third
quarter of 2004. Accordingly,  our Manager hired two additional accounting staff
members during 2005 that are certified  public  accountants and experienced with
public reporting entities.  Our Manager will continue to evaluate its disclosure
controls and procedures to determine their  effectiveness  and adequacy and will
take the steps necessary,  in our Manager's  opinion,  to ensure the adequacy of
our Manager's disclosure controls and procedures.

     Based on the  foregoing  evaluation,  except  as  noted  below,  the  Chief
Executive Officer and the Principal  Financial and Accounting  Officer concluded
that our Manager's  disclosure  controls and procedures were effective as of the
filing date of this Annual Report.

                                       58
<PAGE>
    It  should  be  noted  that  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  Chief  Executive   Officer  and  Principal   Financial  and
Accounting  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 report.

Item 9B. Other Information

         Not applicable.

                                    PART III

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

     Our Manager, ICON Capital Corp., a Connecticut  corporation,  was formed in
1985.  The  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. The
officers of our Manager have extensive  experience with  transactions  involving
the  acquisition,  leasing,  financing and  disposition of equipment,  including
acquiring  and  disposing  of  equipment  subject to leases  and full  financing
transactions.

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

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

  Our Manager's Officers and Directors are:

<TABLE>
<CAPTION>
           Name          Age             Position
           -----         ----            --------
<S>                       <C>
 Beaufort J. B. Clarke    59       Chairman, Chief Executive Officer and Director
 Paul B. Weiss            45       President and Director
 Thomas W. Martin         52       Chief Operating Officer, Chief Financial Officer and
                                      Director
</TABLE>

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

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

                                       59
<PAGE>
     Thomas W. Martin,  has been our Chief Operating Officer since February 2006
and has been our Chief Financial  Officer and Director (and Director,  President
and Treasurer of the  dealer-manager  as well) since August of 1996.  Mr. Martin
was the Executive Vice President,  Chief  Financial  Officer and a co-founder of
Griffin Equity  Partners,  Inc. from October 1993 to August 1996. Prior to that,
Mr. Martin was Senior Vice  President of Gemini  Financial  Holdings,  Inc. from
April  1992 to  October  1993  and he held the  position  of Vice  President  at
Chancellor  Corporation (an equipment  leasing  company) for 7 years. Mr. Martin
has a B.S. degree from  University of New Hampshire.  Mr. Martin has been in the
equipment leasing business since 1983.

Code of Ethics

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

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, 2004, 2003 and 2002.
<TABLE>
<CAPTION>
                                                                                                        2003               2002
          Entity                    Capacity                 Description              2004          (Restated)          (Restated)
  -------------------        ---------------------     ---------------------     ------------      ---------------     -------------
<S>                         <C>                        <C>                       <C>               <C>                <C>
 ICON Capital Corp.          Manager                   Organization and
                                                          offering expenses      $          -      $       626,083     $   1,521,620
                                                                                 ============      ===============     =============
 ICON Securities Corp.       Managing broker-dealer    Underwriting fees         $          -      $       834,777     $   1,101,912
                                                                                 ============      ===============     =============
 ICON Capital Corp.          Manager                   Acquisition fees          $     51,632      $     1,776,676     $   6,780,518
                                                                                 ============      ===============     =============
 ICON Capital Corp.          Manager                   Management fees           $  2,109,282            1,897,722           604,003
                                                                                 ============      ===============     ============
 ICON Capital Corp.          Manager                   Administrative
                                                       expense reimbursements    $  1,139,479      $       834,089     $     241,597
                                                                                 ============      ===============     =============
</TABLE>
     Our  Manager   also  has  a  1%  interest  in  our   profits,   losses  and
distributions.  We paid  distributions  to our Manager of  $89,744,  $80,356 and
$22,036,  respectively,  for the years ended  December 31, 2004,  2003 and 2002.
Additionally,  our  Manager's  interest  in our net loss was  $178,  $7,938  and
$19,761, respectively, for the years ended December 31, 2004, 2003 and 2002.

Item 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
Related Security Holder Matters

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

     (b)  As of June 15, 2006,  Directors and Officers of our Manager do not own
          any of our equity securities.

     (c)  The  Manager  owns  an  interest  which  represents  which  represents
          initially a 1% and potentially a 10% interest in our income,  gain and
          losses (the "Manager Interest").  The Manager owns 100% of our Manager
          Interest.

Item 13. Certain Relationships and Related Transactions

     See Item 11 for a discussion of our related party transactions. See Notes 6
and 12 to our financial  statements for a discussion of our investments in joint
ventures and transactions with related parties.

Item 14. Principal Accountant Fees and Services

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

                                                 2003               2002
                                2004          (Restated)         (Restated)
                            ---------        -------------       ----------
 Audit fees                 $  81,100        $      20,125      $         -
 Audit related fees                -                     -                -
 Tax fees (for compliance)     17,550                    -                -
                            ---------        -------------      -----------
                            $  98,650        $      20,125      $         -
                            =========        =============      ===========

                                       60
<PAGE>
                                     PART IV

Item 15. Exhibits and Financial Statement Schedules

     (a) 1. Financial Statements

         See index to financial statements included as Item 8 to this Annual
Report on Form 10-K hereof.

         2. Financial Statement Schedules

          Schedules  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:

          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 as of August 31, 2005 (incorporated  herein by reference to
               Exhibit  10.1 to ICON Income Fund Nine's  Current  Report on Form
               8-K, filed September 7, 2005).

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

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

          32.1 Certification  pursuant to 18 U.S.C. ss.1350, as adopted pursuant
               to Section 906 of the Sarbanes-Oxley Act of 2002.

          32.2 Certification  pursuant to 18 U.S.C. ss.1350, as adopted pursuant
               to Section 906 of the Sarbanes-Oxley Act of 2002.

     (c) 1.  Financial Statements of ICON Aircraft 126, LLC

                                       61
<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the LLC has 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.

/s/ Beaufort J.B. Clarke
---------------------------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
(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: July 19, 2006

/s/ Beaufort J.B. Clarke
---------------------------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
(Principal Executive Officer)

Date: July 19, 2006

/s/ Paul B. Weiss
---------------------------------------------------
Paul B. Weiss
President and Director

Date: July 19, 2006

/s/ Thomas W. Martin
---------------------------------------------------
Thomas W. Martin
Chief Operating Officer and Chief Financial Officer
(Principal Financial and Accounting Officer)

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

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

                                       62
<PAGE>


                              ICON Aircraft 126 LLC
                     (A Delaware Limited Liability Company)

                        Consolidated Financial Statements

                                December 31, 2004

                   (With Independent Auditor's Report Thereon)




<PAGE>



                              ICON Aircraft 126 LLC

                                Table of Contents




Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . 1


Consolidated Balance Sheet at December 31, 2004  .  .  .  .  . .  .  .  .  2

Consolidated Statement of Income and Changes in
   Members' Equity for the year ended December 31, 2004  .  .  .  .  .  .  3

Consolidated Statement of Cash Flows for the year ended December 31, 2004  4

Notes to Consolidated Financial Statements  .  .  .  . .  .  .  .  .  . .  5 - 7



<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


The Partners
ICON Aircraft 126 LLC

We have  audited the  consolidated  balance  sheet of ICON  Aircraft 126 LLC and
subsidiary as of December 31, 2004, and the related  consolidated  statements of
income,  changes in  members'  equity,  and cash flows for the year then  ended.
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 upon our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial position of ICON
Aircraft 126 LLC and  subsidiary  as of December  31,  2004,  and the results of
their operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.



/s/  Hays & Company LLP

March 14, 2005
New York, New York


                                       1
<PAGE>


                              ICON Aircraft 126 LLC
                     (A Delaware Limited Liability Company)
                           Consolidated Balance Sheet
                                December 31, 2004


                                     ASSETS

Investment in operating lease:
   Equipment, at cost                                         $      77,523,584
   Accumulated depreciation                                         (12,116,200)
                                                              -----------------

     Total investment in operating lease                             65,407,384

Other assets                                                          1,244,550
                                                              -----------------

Total assets                                                  $      66,651,934
                                                              =================



                         LIABILITIES AND MEMBERS' EQUITY

Notes payable - non-recourse                                  $      58,587,566
Accrued interest payable                                                289,474
Other liabilities                                                         8,030
                                                              -----------------

Total liabilities                                                    58,885,070

Commitments and contingencies

Members' equity                                                       7,766,864
                                                              -----------------

Total liabilities and members' equity                         $      66,651,934
                                                              =================


See accompanying notes to consolidated financial statements.

                                       2
<PAGE>


                              ICON Aircraft 126 LLC
                     (A Delaware Limited Liability Company)
         Consolidated Statement of Income and Changes in Members' Equity
                          Year Ended December 31, 2004



Revenue:
   Rental income                                   $       8,340,000
                                                   -----------------

Expenses:
   Depreciation expense                                    4,325,287
   Interest expense                                        3,332,187
   Amortization of loan origination fees                      56,400
                                                   -----------------

     Total expenses                                        7,713,874
                                                   -----------------

Net income                                                   626,126

Members' equity, beginning of year                         7,140,738
                                                   -----------------

Members' equity, end of year                       $       7,766,864
                                                   =================

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>

                              ICON Aircraft 126 LLC
                     (A Delaware Limited Liability Company)
                      Consolidated Statement of Cash Flows
                          Year Ended December 31, 2004



Cash flows from operating activities:
   Net income                                                   $      626,126
     Adjustments to reconcile net income to
       net cash provided by operating activities:
     Rental income paid directly to lenders by lessees              (8,340,000)
     Depreciation expense                                            4,325,287
     Interest expense on non-recourse financing paid directly
       to lender by lessee                                           3,042,713
     Accrued interest expense                                          289,474
     Amortization of loan origination fees                              56,400
                                                                --------------

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

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

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



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

Supplemental disclosure of non-cash financing activities:
   Principal and interest on operating lease paid directly
      to lender by lessee                                       $    8,340,000
                                                                ==============

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                              ICON Aircraft 126 LLC
                     (A Delaware Limited Liability Company)
                    Notes To Consolidated Financial Statements
                                December 31, 2004

(1)     Organization

     ICON  Aircraft  126 LLC (the  "Company")  was  formed  March  4,  2002 as a
Delaware limited liability  company.  The Company is a joint venture between two
affiliates; ICON Income Fund Eight B L.P. ("Fund Eight B"), and ICON Income Fund
Nine LLC ("Fund  Nine").  Fund  Eight B and Fund Nine each have a 50%  ownership
interest in the Company's profits,  losses,  cash distributions and distribution
proceeds are allocated equally to Fund Eight B and Fund Nine.

     The  primary  business  purpose of the  Company  was to acquire  all of the
outstanding  shares  of Delta  Aircraft  Leasing  Limited  ("D.A.L."),  a Cayman
Islands  registered  company,  which  owns,  through an Owner  Trust,  an Airbus
A340-313X  aircraft which is on lease to Cathay Pacific  through March 2006. The
stock was acquired as of March 4, 2002 for a total purchase price of $75,287,782
which was comprised of $4,250,000 in cash and the  assumption of  $71,037,782 of
non-recourse  debt. The lenders have a security  interest in the aircraft and an
assignment of the rentals under the lease.

     The  general  partner/Manager  of the both the  Company's  members  is ICON
Capital Corp. (the "Manager"),  a Connecticut  corporation.  The Manager manages
and  controls the business  affairs of the  Company's  assets under the terms of
separate management agreements with Fund Eight B and Fund Nine. The Company paid
the Manager $2,235,802 in acquisition fees in connection with the acquisition of
the D.A.L. shares.

(2)    Summary of Significant Accounting Policies

     Consolidation

     The consolidated  financial  statements include the accounts of the Company
and its wholly-owned subsidiary. All intercompany accounts and transactions have
been eliminated in consolidation.

     Investment in Operating Leases

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

     Asset Impairments

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

                                       5
<PAGE>

                              ICON Aircraft 126 LLC
                     (A Delaware Limited Liability Company)
                    Notes To Consolidated Financial Statements
                                December 31, 2004

(2)    Summary of Significant Accounting Policies - continued

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

     Income Taxes

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

     Revenue Recognition

     The Company  leases its  equipment to a single lessee and accounts for this
lease as an  operating  lease.  Initial  direct  costs of  $2,235,802  have been
capitalized  as a  component  of  the  cost  of  the  equipment  and  are  being
depreciated.

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

         Fair Value of Financial Instruments

     Statement of Financial Accounting Standards ("SFAS") No. 107,  "Disclosures
About Fair Values of Financial Instruments," requires disclosures about the fair
value of financial instruments, except for lease related assets and liabilities.
Separate disclosure of fair value information at December 31, 2004 and 2003 with
respect to the Company's assets and liabilities is not separately provided since
(i) SFAS No. 107 does not require fair value  disclosures of lease  arrangements
and (ii) the  carrying  value of  financial  assets,  other than  lease  related
investments,  and the recorded value of other  liabilities  approximates  market
value. The estimated fair value of the Company's  non-recourse  notes payable at
December 31, 2004 is approximately $57,989,000.

         Use of Estimates

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

                                       6
<PAGE>
                              ICON Aircraft 126 LLC
                     (A Delaware Limited Liability Company)
                    Notes To Consolidated Financial Statements
                                December 31, 2004

(2)    Summary of Significant Accounting Policies - continued

         Recent Accounting Pronouncements

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

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


(3)    Investment in Operating Leases

     The Company's sole asset is its investment in an Airbus  340-313Y  aircraft
on lease to Cathay  Pacific  through March 2006.  The current lease provides for
annual rents of $8,340,000.

         Non-cancelable minimum annual amounts due on the investment in
operating lease is as follows at December 31, 2004:

             Year Ending
            December 31,
                2005                  $       8,340,000
                2006                  $       2,085,000

(4)    Note Payable - Non-Recourse

         The note payable - non-recourse is being paid directly to the lender by
     the lessee, is due during March 2006, with a $52,850,000 balloon payment
     due at maturity and accrues interest at 5.39% per annum.

         Principal maturities of the Company's note payable - non-recourse
consist of following at December 31, 2004:

               Year Ending
               December 31,
                  2005                   $   4,713,407
                  2006                      53,874,159
                                         -------------

                                         $  58,587,566

                                       7