**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-K**





þ
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934For
                the fiscal year ended**December
                31, 2006**ORo
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934





Commission
      file number: **000-50217**




**ICON
      Income Fund Nine, LLC**


(Exact
      name of registrant as specified in its charter)




**Delaware**
            
            **13-4183234**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)**100
                Fifth Avenue, 4****th****Floor**
              **New
                York, New York**
            
            **10011-1505**(Address
                of principal executive offices)
            
            (Zip
                Code)





**(212)
      418-4700**


(Registrant’s
      telephone number, including area code)




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




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




Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.


Yes
ྑ
No þ




Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Exchange Act.


Yes
༂
No þ




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


Yes þ No
ྑ




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K.


Yes þ No
ྑ




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, 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 þ




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


Yes
ྑ
No þ




State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      last sold, or the average bid and asked price of such common equity, as of
      the
      last day of the registrant’s most recently completed second fiscal quarter: **Not
      applicable.**




There
      is
      no established market for shares of the registrant.




Number
      of
      outstanding limited liability company shares of the Registrant on March 31,
      2007
      is 98,102.





**DOCUMENTS
      INCORPORATED BY REFERENCE**





None.
















**Table
                of Contents****Pages**PART
                I
            1Item
                1. Business
            1Item
                1A. Risk Factors
            4Item
                1B. Unresolved Staff Comments
            10Item
                2. Properties
            10Item
                3. Legal Proceedings
            10Item
                4. Submission of Matters to a Vote of Security Holders
            10PART
                II
            11Item
                5. Market for the Registrant's Securities and Related
                Security Holder Matters
            11Item
                6. Selected Consolidated Financial
                Data
            12Item
                7. Manager's Discussion and Analysis of Financial
                Condition andResults
                of Operations
            13Item
                7A. Qualitative and Quantitative Disclosures About Market
                Risk
            29Item
                8. Consolidated Financial Statements and Supplementary
                Data
            31Item
                9.Changes
                in and Disagreements with Accountants on Accounting andFinancial
                Disclosure
            62Item
                9A. Controls and Procedures
            62Item
                9B. Other Information
            62PART
                III
            63Item
                10. Directors and Executive Officers of the
                Registrant's Manager
            63Item
                11. Executive Compensation
            65Item
                12. Security Ownership of Certain Beneficial Owners
                and Managerand
                Related Security Holder Matters
            65Item
                13. Certain Relationships and Related
                Transactions
            65Item
                14. Principal Accountant Fees and
                Services
            66PART
                IV
            67Item
                15. Exhibits and Financial Statement
                Schedules
            67SIGNATURES
            68













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




Our
      initial capitalization was $1,000, which was 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, 2006, we redeemed 1,564 member shares. At December 31, 2006, we had 98,102
      member shares outstanding.




**Our
      Business**




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





1








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





(1) *Offering
      Period* :
      We
      invested most of the net proceeds from the sale of member shares in items of
      equipment subject to a lease.





(2) *Reinvestment
      Period* :
      After
      the close of the offering period, we have continued to reinvest the cash
      generated from our initial investments to the extent that cash is not needed
      for
      our expenses, reserves and distributions to members. We anticipate that the
      reinvestment period will end on April 29, 2008. However, our Manager may, at
      its
      sole discretion, extend the reinvestment period for up to an additional three
      years.





(3) *Liquidation
      Period* :
      After
      the reinvestment period, we will then sell our assets in the ordinary course
      of
      business. If our Manager believes it would benefit our members to reinvest
      the
      proceeds received from our investments in additional investments during our
      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 our liquidation period in three years after the end of our
      reinvestment period, but it may take longer to do so.





At
      December 31, 2006 and 2005, we had total assets of $137,187,658 and
      $151,635,559, respectively. For the year ended December 31, 2006, our total
      rental and finance income was $24,325,355, which included three lessees that
      accounted for approximately 88% of our total rental income and finance income.
      We had a net loss for the year ended December 31, 2006 of $667,903. For the
      year
      ended December 31, 2005, our total rental and finance income was $30,253,218,
      which included three lessees that accounted for approximately 86% of our total
      rental income and finance income. We incurred a net loss for the year ended
      December 31, 2005 of $2,777,128. For the year ended December 31, 2004, our
      total
      rental income and finance income was $32,768,610, which included three lessees
      that 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.




At
      December 31, 2006, our current portfolio, which we hold either directly or
      through joint venture investments with affiliates and others, consists primarily
      of the following equipment subject to lease:




*Air
      Transportation Industry*




·
            We
                had an 85% interest in a joint venture, ICON Aircraft 46835 LLC (“Aircraft
                46835”), which owned a McDonnell Douglas DC-10-30F aircraft that
                was on lease with Federal Express Corporation (“FedEx”). 
                The lease expired on March 31,
                2007.





On
      September 21, 2006, FedEx provided Aircraft 46835 its irrevocable notice to
      purchase the aircraft. Pursuant to the lease, Aircraft 46835 had twenty days
      to
      agree with FedEx on the fair value of the aircraft. The lease further provided
      that if the parties did not agree within that time period, then they have ten
      days to appoint a mutually acceptable appraiser. If the parties could not agree
      on an appraiser, the lease provided that the fair value would be determined
      by
      independent appraisers, one selected by our Manager and one selected by FedEx.
      Moreover, the lease provided that if those appraisers could not agree on the
      fair value, the two appraisers would appoint a third nationally recognized
      independent aircraft appraiser.





Aircraft
      46835 selected a nationally recognized appraiser who is the former Chairman
      of
      the International Society of Transport Aircraft Trading appraisal board and
      received an appraisal value for the aircraft of $7,300,000. In addition, our
      Manager commissioned an additional nationally recognized appraiser to conduct
      an
      appraisal on the aircraft who appraised the aircraft at $6,700,000.





The
      appraiser selected by FedEx, however, valued the aircraft at only $4,400,000,
      which was significantly lower than our Manager’s two appraisals and much lower
      than all publicly available published values for this type of
      aircraft.






2





When
      the
      appraisers chosen by our Manager and FedEx could not agree on the fair value,
      they selected a third appraiser. Although FedEx did not initially agree to
      this
      appraiser, it ultimately did so, but only after substantial delay. In February
      2007, FedEx finally agreed to allow the process to proceed with the third
      appraiser and on February 23, 2007, the third appraiser was retained by the
      parties.





On
      March
      2, 2007, Aircraft 46835 was notified that the third appraiser valued the
      aircraft at what our Manager believes is an exceedingly low appraisal valuing
      the aircraft at $4,120,000. Pursuant to a formula in the lease, the two
      appraisals that are closest in value are to be averaged, which resulted in
      a
      sales price for the aircraft of $4,260,000, resulting in a loss on the sale
      of
      the aircraft of approximately $640,000, which will be recorded by Aircraft
      46835
      during the first quarter of 2007.





Our
      Manager has serious concerns about the propriety of the appraisal process and
      has advised FedEx that it believes that FedEx improperly interfered with the
      process and thereby negatively impacted the appraised price of the aircraft.
      Our
      Manager is thoroughly reviewing the facts with its outside legal counsel. On
      March 30, 2007, Aircraft 46835 sold the Aircraft to FedEx for $4,260,000. 
The final lease payment was paid to the lender, satisfying all remaining
      debt obligations.





Our
      Manager concluded, based upon an independent third party appraisal, that no
      impairments were required on this aircraft at December 31, 2006. At December
      31,
      2005, our Manager determined, based upon an independent third party appraisal
      that indicated the aircraft was impaired due to a slower than expected recovery
      in the air transportation industry, and recorded an impairment loss of
      approximately $3,182,000, to more closely approximate the adjusted book value
      to
      the current fair value of the aircraft.




· **
            We
                have a 100% interest in one Airbus A340-313X aircraft and a 50% interest
                through a joint venture ICON Aircraft 126, LLC ("ICON 126") with ICON
                Income Fund Eight B L.P. (“Fund Eight B”), an entity also managed by our
                Manager, in a second Airbus A340-313X aircraft, both on lease to
                Cathay
                Pacific Airways Limited (“Cathay”). During June 2006, we entered into an
                agreement with Cathay with respect to the aircraft in which we have
                a 100%
                interest, which extended the lease through December 1, 2011, and
                during
                March 2006, ICON 126 entered into an agreement with Cathay with respect
                to
                the aircraft in which we have a 50% interest, which extended the
                lease
                through July 1, 2011. The purchase price of the first aircraft was
                approximately $69,069,000, comprised of approximately $4,278,000
                in cash
                and approximately $64,791,000 of non-recourse debt. The total purchase
                price of the second aircraft was approximately $74,527,000. Our
                cash portion of the purchase price of the second aircraft was
                approximately $2,125,000.





*Shipping*





·
            We
                have a 100% interest in three car and truck carrying vessels (the
                “Vessels”) on bareboat charter to Wilhelmsen Lines Shipowning AS
                (“Wilhelmsen”). Effective March 14, 2006, the terms of the bareboat
                charters were extended through December 22, 2013. The purchase price
                was
                approximately $74,020,000, consisting of approximately $9,690,000
                in cash
                and approximately $64,330,000 of non-recourse
                debt.




*Manufacturing
      Industry*





·
            We
                have a 100% interest in two leases relating to microprocessor
                manufacturing devices and semi-conductor memory testing equipment
                on lease
                with Advanced Micro Devices, Inc. with expiration dates of June 30,
                2007
                and July 1, 2007, respectively. The purchase prices were approximately
                $6,391,000 in cash for the lease that expires on June 30, 2007 and
                $4,561,000 in cash for the lease that expires on July 1,
                2007.







3





·
            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 January 2007 and September 2008. The purchase price for these
                leases was approximately $3,472,000 in cash. Pursuant to the terms
                of the
                lease, the lease that was scheduled to expire in January 2007, has
                been
                extended for an additional twelve months under the terms of the original
                lease.





For
      a
      discussion of our lease and other significant transactions for the years ended
      December 31, 2006, 2005 and 2004, please refer to “Item 7. Manager’s Discussion
      and Analysis of Financial Condition and Results of Operations.”





**Segment
      Information**




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





**Available
      Information**





Our
      Annual Report on Form 10-K and our most recent Quarterly Reports on Form 10-Q
      and amendments to those reports, if any, and our Current Reports on Form 8-K
      and
      any amendments to those reports are available free of charge on our Manager’s
      internet website at http://www.iconcapital.com as soon as reasonably practicable
      after such reports are electronically filed with or furnished to the Securities
      and Exchange Commission (the “SEC”). The information contained on our Manager’s
      website is not deemed part of this Annual Report on Form 10-K. Our reports
      are
      also available on the SEC’s website, at http://www.sec.gov.





**Financial
      Information Regarding Geographic Areas**





We
      have
      long-lived assets, which include finance leases and operating leases, net of
      accumulated depreciation and revenues in geographic areas outside of the United
      States. For additional information, see Note 17 to our consolidated financial
      statements in "Item 8. Consolidated Financial Statements and Supplementary
      Data".





**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.








4






**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 that may affect our business, operating results and financial
      condition. These include:





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


·
            the
                technological and economic obsolescence of
                equipment;


·
            potential
                defaults by lessees;


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


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





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




Our
      Manager’s decisions could be subject to various conflicts of interest arising
      out of its relationship to us and its affiliates. Our Manager could be
      confronted with decisions in which it will have an economic incentive to place
      its interests above ours. Our Manager sponsors and currently manages five other
      equipment leasing businesses. See “Item 13. Certain Relationships and Related
      Transactions.” These conflicts may include:





·
            Our
                Manager will receive more fees for making investments if we incur
                indebtedness to fund these acquisitions than if indebtedness is not
                incurred;


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


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


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


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


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


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





**Because
      we borrowed, and may in the future borrow funds, to purchase equipment, losses
      as a result of lessee defaults may be greater than if debt were not incurred.
      Restrictions imposed by the terms of our indebtedness may limit our financial
      flexibility.**





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





We,
      together with certain of our affiliates (entities sponsored and organized by
      our
      Manager) Fund Eight B, ICON Income Fund Ten, LLC ("Fund Ten") and ICON
      Leasing Fund Eleven, LLC ("Fund Eleven"), are party to a revolving line of
      credit agreement with California Bank & Trust. The terms of that agreement
      could restrict us from paying distributions to our members if such payments
      would cause us not to be in compliance with our financial covenants in that
      agreement. See “Item 7. Manager’s Discussion and Analysis of Financial Condition
      and Results of Operations - Liquidity and Capital Resources.”






5





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




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





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





A
      significant part of the value of most of the equipment that we purchase is
      the
      potential value of the equipment once the lease term expires (“residual value”).
      Generally, leased equipment is expected to decline in value over its useful
      life. In acquiring equipment, we assume a residual value for the equipment
      at
      the end of the lease that, when combined with lease payments, is expected to
      be
      enough to return the cost of our investment in the equipment and provide a
      rate
      of return despite the expected decline in the value of the equipment over the
      lease term. However, the residual value of the equipment at the end of a lease,
      and whether that value meets our expectations, depends, to a significant extent,
      upon the following factors, many of which are beyond our control:





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


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


·
            market
                conditions prevailing at the time the lease
                expires;


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


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


·
            the
                strength of the economy; and


·
            the
                condition of the equipment when the lease
                expires.





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





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





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





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





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


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


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






6





We
      would
      have rights against the seller of the equipment for any losses arising from
      a
      breach of representations made to us, and against the lessee for a default
      under
      the lease. However, we cannot assure you that these rights would make us whole
      with respect to our entire investment in the equipment or our expected returns
      on the equipment, including legal costs, costs of repair and lost revenue from
      the delay in being able to sell or re-lease the equipment due to undetected
      problems or issues.





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





We
      may
      lease equipment to lessees that have senior debt rated below investment grade.
      We do not require our lessees to have a minimum credit rating. Lessees with
      such
      lower credit ratings may default on lease payments more frequently than lessees
      with higher credit ratings. If a lessee does not make lease payments to us
      when
      due, or violates the terms of its lease in another important way, we may be
      forced to terminate the lease and attempt to recover the equipment. We may
      do
      this at a time when we may not be able to arrange for a new lease or to sell
      the
      equipment right away, if at all. 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 costs of recovering equipment upon a lessee’s
      default, enforcing the lessee’s obligations under the lease, and transporting,
      storing, repairing and finding a new lessee for the equipment may be high and
      may negatively affect the value of our investment in the equipment.





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





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





**We
      may invest in options that could become worthless if the option grantor files
      for bankruptcy.**





We
      may
      acquire options to purchase equipment, usually for a fixed price at a future
      date, which is typically at the end of a lease term. In the event of a
      bankruptcy by the party granting the option, we might be unable to enforce
      the
      option or recover the option price paid.





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





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





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






7





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





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





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





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





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





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





We
      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 may be
      required to guarantee all of the joint venture’s obligations. Alternatively, the
      co-investors may have economic or business interests or goals that are
      inconsistent with our investment objectives and want to manage the joint venture
      in ways that do not maximize our return. Among other things, actions by a
      co-investor might subject leases that are owned by the joint venture to
      liabilities greater than those contemplated by the joint venture agreement.
      Also, when none of the joint owners control a joint venture, there might be
      a
      stalemate on decisions, including when to sell the equipment or the prices
      or
      terms of a lease. Finally, while we may have the right to buy out the other
      joint owner’s interest in the equipment in the event of the sale, we may not
      have the resources available to do so.





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





Leased
      equipment may be damaged or lost. Fire, weather, accidents, theft or other
      events can cause damage or loss of leased equipment. While our leases generally
      require lessees to have comprehensive insurance and assume the risk of loss,
      some losses, such as from acts of war, terrorism or earthquakes may either
      be
      uninsurable or not economically feasible to insure. Furthermore, not all
      possible liability claims or contingencies affecting equipment can be
      anticipated or insured against, and, if insured, the insurance proceeds may
      not
      be sufficient to cover a loss. If such a disaster occurs to the equipment,
      we
      could suffer a total loss of any investment in the affected equipment. In
      leasing some types of equipment, we may be exposed to environmental tort
      liability. Although we use our best efforts to minimize the possibility and
      exposure of such liability including by means of attempting to obtain insurance,
      we cannot assure you that our assets will be protected against any such
      claims.






8







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





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





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





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





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





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





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





Our
      Manager is evaluating our internal controls over financial reporting in order
      to
      allow management to report on, and our independent registered public accounting
      firm to attest to, our internal controls over financial reporting, as required
      by Section 404 of the Sarbanes-Oxley Act of 2002, as amended, and the rules
      and
      regulations of the SEC thereunder, which we refer to as “Section 404.” Our
      Manager is in the process of documenting and testing our internal control
      procedures in order to satisfy the requirements of Section 404, which requires
      annual management assessments of the effectiveness of our internal controls
      over
      financial reporting and a report by our independent registered public
      accountants addressing these assessments. During the course of our testing,
      our
      Manager may identify deficiencies that it may not be able to remediate in time
      to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with
      the
      requirements of Section 404. We expect that we will be required to comply with
      the requirements of Section 404 and issue management’s report on our internal
      controls in connection with our Annual Report on Form 10-K for our fiscal year
      ending December 31, 2007. In addition, if we fail to achieve and






9






maintain
      the adequacy of our internal controls, as such standards are modified,
      supplemented or amended from time to time, we may not be able to ensure that
      we
      can conclude on an ongoing basis that we have effective internal controls over
      financial reporting in accordance with Section 404. We cannot be certain as
      to
      the timing of completion of our evaluation, testing and any remediation actions
      or the impact of the same on our operations. If we are not able to implement
      the
      requirements of Section 404 in a timely manner or with adequate compliance,
      our
      independent registered public accounting firm may not be able to certify as
      to
      the effectiveness of our internal control over financial reporting in connection
      with our Annual Report on Form 10-K for the year ending December 31, 2008,
      and
      we may be subject to sanctions or investigation by regulatory authorities,
      such
      as the SEC. As a result, we may be required to incur costs in improving our
      internal control system and the hiring of additional personnel. Any such action
      could negatively affect our results of operations.





**We
      compete with a variety of financing sources for our lessees, which may affect
      our ability to achieve our investment objectives.**





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





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





**Item
      1B. Unresolved Staff Comments**





None.





**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
      2006.







10








**PART
      II**




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





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




Number
                of MembersTitle
                of Class
            
            as
                of March 31, 2007Manager
                (as a member)
            
            1Additional
                members
            
            3229




We
      pay
      monthly distributions to our members beginning with the first month after the
      members’ admission through the termination of our reinvestment period,
      which we currently anticipate will be on April 29, 2008 .
      We paid
      distributions to additional members totaling $8,831,229, $8,840,105 and
      $8,758,942, respectively, for the years ended December 31, 2006, 2005 and 2004.
      Additionally, our Manager was paid distributions of $89,204, $89,294 and
      $89,744, respectively, for the years ended December 31, 2006, 2005 and
      2004. The
      terms of the loan agreement with California Bank and Trust 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 the National Association of Securities Dealers (the “NASD”) members and
      their associated persons to have participated in the offering and sale of member
      shares (the “Shares”) pursuant to the offering or to participate in any future
      offering of our Shares, we are required pursuant to NASD Rule 2710(c)(6) to
      disclose in each annual report distributed to our members a per share estimated
      value of our Shares, the method by which we developed the estimated value and
      the date used to develop the estimated value. In addition, our Manager must
      prepare annual statements of our estimated share values to assist fiduciaries
      of
      retirement plans subject to the annual reporting requirements of Employee
      Retirement Income Security Act (“ERISA”) in the preparation of their reports
      relating to an investment in our Shares. For these purposes, the estimated
      value
      of our Shares is deemed to be $740.75 per Share at September 30, 2006.





This
      estimate was based on the amount of remaining undiscounted lease payments on
      our
      existing leases, the booked estimated residual values of the equipment held
      by
      us upon the termination of those leases and our cash on hand. From this amount,
      we then subtracted our total debt outstanding and then divided that sum by
      the
      total number of Shares outstanding. This valuation was based solely on our
      Manager’s perception of market conditions and the types and amounts of our
      assets. No independent valuation was sought. However, as set forth below, there
      is no significant public trading market for our Shares at this time, and there
      can be no assurance that additional members could receive $740.75 per Share
      if
      such a market did exist and they sold their Shares or that they will be able
      to
      receive such amount for their Shares in the future. The foregoing valuation
      was
      performed solely for the ERISA and NASD purposes described above. Furthermore,
      there can be no assurance as to the amount we may actually receive if and when
      we seek to liquidate our assets or the amount of lease payments and equipment
      disposition proceeds we will actually receive over our remaining term. Our
      Shares are not publicly traded nor is there currently a market for our Shares.
      It is unlikely that any such market will develop.






11






**Item
      6. Selected Consolidated Financial
      Data**





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





Year
                Ended December 31,2006
            
            2005
            
            2004
            
            2003
            
            2002Total
                revenue (a)
            
            $
            24,885,153
            
            $
            30,349,467
            
            $
            33,240,316
            
            $
            34,982,056
            
            $
            11,453,549Net
                loss (b)
            
            $
            (667,903
            )
            $
            (2,777,128
            )
            $
            (17,768
            )
            $
            (793,837
            )
            $
            (1,976,068
            )Net
                loss allocable to additional members
            
            $
            (661,224
            )
            $
            (2,749,357
            )
            $
            (17,590
            )
            $
            (785,899
            )
            $
            (1,956,307
            )Net
                loss allocable to Manager
            
            $
            (6,679
            )
            $
            (27,771
            )
            $
            (178
            )
            $
            (7,938
            )
            $
            (19,761
            )Weighted
                average number of additionalmember
                shares outstanding
            
            
            98,123
            
            
            98,215
            
            
            98,695
            
            
            90,813
            
            
            29,023Net
                loss per weighted averageadditional
                member share outstanding
            
            $
            (6.74
            )
            $
            (27.99
            )
            $
            (0.18
            )
            $
            (8.65
            )
            $
            (67.41
            )Distributions
                to additional members
            
            $
            8,831,229
            
            $
            8,840,105
            
            $
            8,758,942
            
            $
            7,955,313
            
            $
            2,181,537Distributions
                per weighted averageadditional
                member share outstanding
            
            $
            90.00
            
            $
            90.01
            
            $
            88.75
            
            $
            87.60
            
            $
            75.17Distributions
                to the Manager
            
            $
            89,204
            
            $
            89,294
            
            $
            89,744
            
            $
            80,356
            
            $
            22,036




December
                31,2006
            
            2005
            
            2004
            
            2003
            
            2002Total
                assets
            
            $
            137,187,658
            
            $
            151,635,559
            
            $
            184,100,455
            
            $
            212,717,298
            
            $
            209,483,843Notes
                payable and revolving loan facility
            
            $
            92,480,648
            
            $
            97,782,942
            
            $
            117,261,455
            
            $
            134,463,196
            
            $
            156,955,116Members'
                equity
            
            $
            42,333,349
            
            $
            52,543,253
            
            $
            64,455,803
            
            $
            73,842,948
            
            $
            46,338,518




(a)
            The
                decrease in total revenue between 2005 and 2006 relates to the
                renegotiated lease terms of two of our leases and to the terminationof
                several leases during 2006. The decrease in total revenue between
                2004 and
                2005 relates to the renegotiated lease terms of one ofour
                leases and to transfer of a consolidating interest. The increase
                in total
                revenue between 2002 and 2003 relates to our initialacquisition
                of equipment leases with third parties.(b)
            During
                2002, we entered into three interest rate swap contracts that increased
                our interest expense during 2002 by approximately$788,000,
                or $27.15 per weighted average additional member share outstanding.
                During
                2006, we received approximately $705,000,or
                $7.18 per weighted average additonal member share outstanding for
                terminating the three interest rate swap contracts. The decreasein
                our net loss between 2002 and 2003 cannot be attributible to any
                one
                event. The equipment leases we entered into during 2002 wereperforming
                as expected and the additional equipment leases we entered into during
                2003 added to the overall decrease in our netloss
                from 2002 to 2003. During
                2006, we reclassified the three Wilhelmsen bareboat charters from
                investments in operating leases to
              investments
                in finance leases,
                resulting in a decrease in depreciation expense of approximately
                50%.
                During 2006, 2005 and 2004,
              we
                recorded impairment losses
                of approximately $3,005,000, $3,182,000 and $236,000, respectively,
                or
                $30.62, $32.40 and $2.39,
              respectively,
                per weighted average
                additional member share outstanding. The positive effect of our interest
                rate swap contacts reduced
              our
                interest expense during
                2005 and 2004 by approximately $452,000 and $743,000, respectively,
                or
                $4.60 and $7.53, respectively,
              per
                weighted average additional
                member share outstanding.







12






**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.*





**Overview**





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




**Current
      Business Environment and Outlook**





We
      believe that domestic equipment leasing volume is correlated to overall business
      investments in equipment. According to information published by the Equipment
      Leasing and Finance Association, domestic business investment in equipment
      in
      2006 is forecasted to be an estimated $794.0 billion from a low of $620.0
      billion in 2002, while the corresponding forecast for equipment leasing volume
      in 2006 is estimated to be $220.0 billion from a low of $182.0 billion in 2003.
      In addition, we believe that a similar correlation exists in the international
      markets in which we expect that capital spending by corporations should continue
      to increase in 2007. Increased capital spending may increase available leases,
      thereby creating more opportunities in the leasing market. While lower interest
      rates will remain a key obstacle for the equipment leasing industries because
      of
      the increased likelihood of customers choosing to purchase rather than lease
      for
      business investments in equipment, we believe the leasing industry’s outlook for
      the foreseeable future is encouraging.





Other
      factors that 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 overall business investment in equipment increases and interest rates remain
      higher, we are optimistic that more equipment leasing volume will increase
      as
      more lessees return to the marketplace.





***Lease
      and Other Significant Transactions***





We
      entered into the following lease and other significant transactions during
      the
      years ended December 31, 2006, 2005 and 2004:





*Sale
      of two McDonnell Douglas DC-10-30F aircraft*





During
      September 2002, we and Fund Eight B formed a joint venture, Aircraft 46835,
      for
      the purpose of acquiring an investment in a McDonnell Douglas DC-10-30F aircraft on
      lease
      with FedEx. The lease expired on March 31, 2007. We have an 85% 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 approximately $18,948,000
      of
      non-recourse debt. The
      non-recourse debt accrues interest at 4.04% per year and matured in March 2007.
      The lender had a security interest in the aircraft and an assignment of the
      rental payments under the lease. Our Manager was paid an acquisition fee of
      approximately $759,000 relating to this transaction, of which we paid
      approximately $645,000.






13







On
      September 21, 2006, FedEx provided Aircraft 46835 its irrevocable notice to
      purchase the aircraft. Pursuant to the lease, Aircraft 46835 had twenty days
      to
      agree with FedEx on the fair value of the aircraft. The lease further provided
      that if the parties did not agree within that time period, then they have ten
      days to appoint a mutually acceptable appraiser. If the parties could not agree
      on an appraiser, the lease provided that the fair value would be determined
      by
      independent appraisers, one selected by our Manager and one selected by FedEx.
      Moreover, the lease provided that if those appraisers could not agree on the
      fair value, the two appraisers would appoint a third nationally recognized
      independent aircraft appraiser.





Aircraft
      46835 selected a nationally recognized appraiser who is the former Chairman
      of
      the International Society of Transport Aircraft Trading appraisal board and
      received an appraisal value for the aircraft of $7,300,000. In addition, our
      Manager commissioned an additional nationally recognized appraiser to conduct
      an
      appraisal on the aircraft who appraised the aircraft at $6,700,000.





The
      appraiser selected by FedEx, however, valued the aircraft at only $4,400,000,
      which was significantly lower than our Manager’s two appraisals and much lower
      than all publicly available published values for this type of
      aircraft.





When
      the
      appraisers chosen by our Manager and FedEx could not agree on the fair value,
      they selected a third appraiser. Although FedEx did not initially agree to
      this
      appraiser, it ultimately did so, but only after substantial delay. In February
      2007, FedEx finally agreed to allow the process to proceed with the third
      appraiser and on February 23, 2007, the third appraiser was retained by the
      parties.





On
      March
      2, 2007, Aircraft 46835 was notified that the third appraiser valued the
      aircraft at what our Manager believes is an exceedingly low appraisal valuing
      the aircraft at $4,120,000. Pursuant to a formula in the lease, the two
      appraisals that are closest in value are to be averaged, which resulted in
      a
      sales price for the aircraft of $4,260,000, resulting in a loss on the sale
      of
      the aircraft of approximately $640,000, which will be recorded by Aircraft
      46835
      during the first quarter of 2007.





Our
      Manager has serious concerns about the propriety of the appraisal process and
      has advised FedEx that it believes that FedEx improperly interfered with the
      process and thereby negatively impacted the appraised price of the aircraft.
      Our
      Manager is thoroughly reviewing the facts with its outside legal counsel. On
      March 30, 2007, Aircraft 46835 sold the aircraft to FedEx for $4,260,000. 
The final lease payment was paid to the lender, satisfying all remaining
      debt obligations.





Our
      Manager concluded, based upon an independent third party appraisal, that no
      impairments were required on this aircraft at December 31, 2006. At December
      31,
      2005, our Manager determined, based upon an independent third party appraisal
      that indicated the aircraft was impaired due to a slower than expected recovery
      in the air transportation industry, and recorded an impairment loss of
      approximately $3,182,000, to more closely approximate the adjusted book value
      to
      the current fair value of the aircraft.





During
      February 2003, we and Fund Eight B, formed a joint venture, ICON Aircraft 47820
      LLC (“Aircraft 47820”), for the purpose of acquiring an investment in a
      McDonnell Douglas DC-10-30F aircraft and two spare engines (the “Aircraft and
      engines”) on lease to FedEx. The lease expired on March 31, 2007. We had a 10%
      interest in this joint venture. On March 11, 2003, Aircraft 47820 acquired
      the
      Aircraft and engines for approximaltely $27,288,00, which consisted of
      approximately $3,077,000 in cash and approximately $24,211,00 of non-recourse
      debt. Our portion of the purchase price was approximately $390,000 in cash. The
      non-recourse debt accrues interest at 4.035% per year and matured in March
      2007.
      The lender had a security interest in the Aircraft and engines and an
      assignment of the rental payments under the lease. Our
      Manager was paid an acquisition fee of approximately $819,000 relating to this
      transaction, of which we paid approximately $82,000.






14






On
      September 21, 2006, FedEx provided Aircraft 47820 its irrevocable notice to
      purchase the Aircraft and engines. Pursuant to the lease, Aircraft 47820 had
      twenty days to agree with FedEx on the fair value of the Aircraft and engines.
      The lease further provided that if the parties did not agree within that time
      period, then they have ten days to appoint a mutually acceptable appraiser.
      If
      the parties could not agree on an appraiser, the lease provided that the
      fair value would be determined by independent appraisers, one selected by our
      Manager and one selected by FedEx. Moreover, the lease provided that if those
      appraisers could not agree on the fair value, the two appraisers would appoint
      a
      third nationally recognized independent aircraft appraiser.





Aircraft
      47820 selected a nationally recognized appraiser who is the former Chairman
      of
      the International Society of Transport Aircraft Trading appraisal board and
      received an appraisal value for the Aircraft and engines of $10,460,000. In
      addition, our Manager commissioned an additional nationally recognized appraiser
      to conduct an appraisal on the Aircraft and engines who appraised the Aircraft
      and engines at $7,820,000.





The
      appraiser selected by FedEx, however, valued the Aircraft and engines at only
      $5,500,000, which was significantly lower than our Manager’s two appraisals and
      much lower than all publicly available published values for this type of
      aircraft.





When
      the
      appraisers chosen by our Manager and FedEx could not agree on the fair value,
      they selected a third appraiser. Although FedEx did not initially agree to
      this
      appraiser, it ultimately did so, but only after substantial delay. In February
      2007, FedEx finally agreed to allow the process to proceed with the third
      appraiser and on February 23, 2007, the third appraiser was retained by the
      parties.





On
      March
      2, 2007, Aircraft 47820 was notified that the third appraiser valued the
      Aircraft and engines at what our Manager believes is an exceedingly low
      appraisal valuing the Aircraft and engines at $5,450,000. Pursuant to a formula
      in the lease, the two appraisals that are closest in value are to be averaged,
      which resulted in a sales price for the Aircraft and engines of $5,475,000,
      resulting in a loss on the sale of the Aircraft and engines of approximately
      $1,020,000, which will be recorded by Aircraft 47820 during the first quarter
      of
      2007.





Our
      Manager has serious concerns about the propriety of the appraisal process and
      has advised FedEx that it believes that FedEx improperly interfered with the
      process and thereby negatively impacted the appraised price of the Aircraft
      and
      engines. Our Manager is thoroughly reviewing the facts with its outside legal
      counsel. On March 30, 2007, Aircraft 47820 sold the Aircraft and engines to
      FedEx for $5,475,000.  The final lease payment was paid to the
      leander, satisfying all remaining debt obligations.




Our
      Manager concluded, based upon an independent third party appraisal, that no
      impairments were required on the Aircraft and engines at December 31, 2006.
      At
      December 31, 2005, our Manager determined, based upon an independent third
      party
      appraisal that indicated the Aircraft and engines were impaired due to a slower
      than expected recovery in the air transportation industry, and recorded an
      impairment loss of approximately $3,626,000 to more closely approximate the
      adjusted book value to the current fair value of the aircraft. Our share of
      the
      impairment loss, which is reflected in income from investments in joint ventures
      on the accompanying consolidated statement of operations for the year ended
      December 31, 2005, is approximately $363,000.





*Information
      Technology Equipment on lease with GEICO*





On
      March
      31, 2004, we and Fund Ten, 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 interest
      of 26% in this joint venture. On April 30, 2004, ICON GeicJV acquired the
      information technology equipment. The lease expired on March 31, 2007. Our
      Manager has been notified that GEICO will return the equipment following the
      expiration of the lease. Our
      portion of purchase price was approximately $1,522,000 in cash. Our
      Manager was paid an acquisition fee of approximately $46,000 relating to this
      transaction.








15






*Lease
      Renewal of Manufacturing Equipment*





On
      April
      30, 2003, we acquired a
      Double
      Kraft Paper Forming Tubing Unit on lease
      to Wildwood
      Industries, Inc. through January 2007 for approximately $1,350,000 in
      cash.  Our Manager
      was paid acquisition fees of approximately $41,000 relating to this transaction.
      Pursuant to the terms of the lease, effective February 1, 2007, the lease has
      been extended for an additional twelve months under the same term as the
      original lease.





*Sale
      and Return of Information Technology Equipment*





During
      March 2004, we acquired from Insight Investments Corporation a lease for
      computer equipment and corresponding parts. The lease expired on December 1,
      2006. The purchase price was approximately $3,036,000, consisting of
      approximately $74,000 in cash and the assumption of approximately $2,962,000
      of
      non-recourse debt. The
      non-recourse debt accrued interest at 4.5% per year and matured in December
      2006. The lender had a security interest in the computer equipment and an
      assignment of the rental payments under the lease .
      The
      equipment was uninstalled during December 2006 and returned to us during January
      2007. The associated estimated residual value of the equipment was subsequently
      reclassified to equipment held for sale or lease as of December 31, 2006. Our
      Manager is exploring our options with respect to re-leasing or selling this
      equipment. At December 31, 2006, based on recent sales estimates, we recorded
      an
      impairment loss of approximately $98,000.




During
      March 2004, we acquired from Insight Investments Corporation an additional
      lease
      for computer equipment and corresponding parts. The lease expired on December
      1,
      2006. The purchase price was approximately $1,751,000, consisting of
      approximately $43,000 in cash and the assumption of approximately $1,708,000
      of
      non-recourse debt. The
      non-recourse debt accrued interest at 5.36% per year and matured in December
      2006. The lender had a security interest in the computer equipment and an
      assignment of the rental payments under the lease. The
      equipment was uninstalled during December 2006 and returned to us during January
      2007. The associated estimated residual value of the equipment was subsequently
      reclassified to equipment held for sale or lease as of December 31, 2006. Our
      Manager is exploring our options with respect to re-leasing or selling this
      equipment. At December 31, 2006, based on recent sales estimates, we recorded
      an
      impairment of approximately $56,000.





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





*Impairment
      of Noritsu QSS 3011 Digital Mini-Labs*





During
      December 2004, we acquired four Noritsu QSS 3011 digital mini-labs subject
      to
      leases with Rite Aid Corporation. The leases expire during November 2008. The
      purchase price of this equipment was approximately $399,000 in cash. At
      December 31, 2006, the Manager determined, based upon an independent third
      party
      appraisal, to record an impairment loss of approximately $80,000 to more closely
      approximate the adjusted book value to the current fair value of the
      equipment.





*Investment
      in ICON Global Crossing II, LLC*




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






16






On
      September 28, 2006, ICON Global Crossing II purchased state-of-the-art
      telecommunications equipment for approximately $12,044,000. This equipment
      is
      subject to a 48 month lease with Global Crossing Telecommunications, Inc and
      Global Crossing North American Networks, Inc. (collectively the “Global
      Crossing Group”) that commenced on November 1, 2006. We incurred acquisition
      fees payable to our Manager in the amount of $60,000 related to this
      transaction.





On
      October 31, 2006, Fund Eleven made a capital contribution of approximately
      $1,841,000 to ICON Global Crossing II. The contribution changed the interests
      for us, Fund Ten and Fund Eleven at October 31, 2006 to 14.4%, 72.3% and 13.3%,
      respectively. The additional contribution was used to purchase state-of-the-art
      telecommunications equipment subject to a 48 month lease with the Global
      Crossing Group that commenced on November 1, 2006.







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





Effective
      June 7, 2006, the owner trustee, in connection with the Cathay lease extension,
      refinanced the non-recourse debt related to the Cathay aircraft in which we
      have
      a 100% interest (the “Initial Refinancing”). The Initial Refinancing was entered
      into because the original non-recourse debt of approximately $44,250,000 was
      due
      to be repaid on June 12, 2006. We were required by the lender to pay down
      approximately $6,754,000 of the balloon payment as part of the Initial
      Refinancing. The principal balance of the Initial Refinancing was approximately
      $37,495,000 and was scheduled to mature on December 1, 2011, required a balloon
      payment of approximately $11,550,000 and accrued interest at the London
      Interbank Offered Rate (“LIBOR”) plus 0.80% per year. The Initial Refinancing
      required monthly payments of approximately $545,000 through May 2010 and
      approximately $495,000 through December 2011. We incurred approximately $197,000
      of costs in connection with the Initial Refinancing. We expensed these costs
      to
      interest expense during the third quarter of 2006.





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




We
      had a
      commitment with respect to the Cathay aircraft in which we have a 100% interest
      to pay certain of the maintenance overhaul costs, which were incurred during
      June 2006. The total estimated costs for this maintenance overhaul were
      approximately $1,300,000 and were accrued at June 30, 2006. During November
      2006, we paid approximately $1,300,000 for these maintenance overhaul
      costs.





Effective
      March 27, 2006, the owner trustee, in connection with the Cathay lease
      extensions, refinanced the non-recourse debt associated with the Cathay aircraft
      in which we have a 50% interest through an investment in ICON Aircraft 126
      LLC
      (“ICON 126”) a joint venture with Fund Eight B. The refinancing was entered into
      because the original non-recourse debt of approximately $52,850,000 was due
      to
      be repaid on March 27, 2006. ICON 126 established, under the original lease,
      a
      reserve account totaling approximately $583,000, which was used to reduce the
      balloon payment to approximately $52,267,000. The refinanced non-recourse debt
      accrues interest at LIBOR plus 1.165%, matures on July 1, 2011 and requires
      a
      balloon payment of approximately $32,000,000 at maturity. The variable interest
      rate of the refinanced debt was fixed at 6.104% under the terms of the debt
      agreement, effective October 3, 2006.





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






17





ICON
      126
      had a commitment with respect to the Cathay aircraft that it owns to pay certain
      of the maintenance overhaul costs, which were incurred on or prior to March
      27,
      2006. ICON 126 had established a maintenance account, which totaled prior to
      incurring the maintenance overhaul costs, approximately $1,385,000 at September
      30, 2006 (including interest accreted in the amount of approximately $31,000
      through December 31, 2006), to pay for its portion of these costs. This account
      was funded by the lessee in accordance with the terms of the original lease.
      During September 2006, approximately $1,153,000 was paid for the maintenance
      overhaul costs.




In
      connection with the original purchase of the aircraft in which we have a 50%
      interest, the owner trustee entered into two first priority charge on cash
      deposit agreements pursuant to which the maintenance account for the Cathay
      aircraft owned by ICON 126 was cross-collateralized with the maintenance account
      for the Cathay aircraft owned by ICON Aircraft 123 LLC (“ICON 123”), a wholly
      owned subsidiary of Fund Eight B. Under the terms of this agreement, ICON 126
      was required to pay on behalf of ICON 123, any maintenance cost shortfalls
      incurred by the affiliate. On January 30, 2007, ICON 126 paid approximately
      $143,000 in maintenance costs from the remaining balance in its maintenance
      account on behalf of ICON 123. The maintenance account and related security
      interests were then terminated. ICON 126 will be reimbursed by ICON 123 for
      the
      maintenance short fall when the aircraft is sold.





*Sale
      of Manufacturing Equipment*





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 $1,931,000 in cash and
      we
      recognized a gain of approximately $302,000.





*Sale
      of Co-generation Facility*





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





During
      December 2004, we transferred a 25.87% interest in ICON SPK 2023-A, LLC (“SPK
      2023-A”), a joint venture with Fund Eight B, to Fund Eight B in exchange for its
      entire 5% 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 believed it was in their best interest to no longer
      have any interest in equipment held in New Jersey. After the exchange, we had
      a
      100% interest in the co-generation
      facility and a
      25.13% interest in SPK 2023-A. The fair value of the co-generation
      facility was
      determined using an independent third party appraisal and our Manager determined
      that fair value for SPK 2023-A, was its net book value, based upon our Manager’s
      knowledge of equipment leases held by SPK 2023-A.





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






18








*Lease
      Extension and Non-Recourse Debt Refinancing of Vessels*





Effective
      March 14, 2006, we extended the term of our bareboat charters with Wilhelmsen
      through December 22, 2013. The charter extension provides Wilhelmsen with the
      option to acquire the Vessels at the expiration of the charter extension
      for a nominal amount.





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





Simultaneously
      with the execution of the refinanced non-recourse debt, we entered into three
      interest rate swap contracts with Fortis Bank NV/SA, New York Branch in the
      aggregate amount of $51,000,000 in order to fix the variable interest rate
      on
      the non-recourse debt and minimize our risk of interest rate fluctuation. The
      interest rate swap contracts fixed the interest rate at 7.02% per year. On
      May
      22, 2006, we received $705,000 from the original swap provider to terminate
      the
      original three interest rate swap contracts that applied to the original
      financing of the Vessels and, in accordance with accounting principles generally
      accepted in the United States of America ("GAAP"), were recorded through the
      statement of operations. We recognized a gain on this transaction of
      approximately $26,000.





*Assignment
      of Sodium Chlorate Production Facility*





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





*Assignment
      of Rowan Cash Flow*





On
      February 23, 2005, L.P. Seven assigned to us 3.02% of its rights in the profits,
      losses and cash flows from its limited partnership interest in an entity that
      owns a 100% interest in a mobile offshore drilling rig that is subject to
      lease with Rowan Companies, Inc. L.P. Seven assigned the rights to us as
      repayment of its $755,000 outstanding debt obligation to us pursuant to the
      contribution agreement that we entered into in connection with the line of
      credit agreement we had with Comerica Bank. This assignment increased our rights
      to the profits, losses and cash flows from L.P. Seven’s limited partnership
      interest from 2.60%, which were assigned to us 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.  During the year ended December 31, 2006, we received
      approximately $253,000 in cash distributions related to this
      assignment.







19





*Acquisition
      of Mitel Networks 3340 Global Branch Office Solution Phone
      Systems*





During
      December 2004, we acquired a Mitel Networks 3340 Global Branch Office Solution
      Phone System subject to lease with CompUSA, Inc. The
      lease term expires during December 2008. The
      purchase price was approximately $173,000 in cash.





*Acquisition
      of Medical Equipment*





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




**Recent
      Accounting Pronouncements**





In
      April
      2006, the Financial Accounting Standards Board (“FASB”) issued Statement of
      Financial Accounting Standards (“SFAS”) No. 155, “Accounting for Certain
      Financial Instruments”, an amendment to SFAS 133 and SFAS 140. SFAS 155 addresses
      what had been characterized as a temporary exemption from the application of
      the
      bifurcation requirements of SFAS 133 to
      beneficial interests in securitized financial assets.The
      adoption of SFAS 155 did not have any impact on our consolidated financial
      statements.





In
      September 2006, the FASB issued SFAS No. 157, “Accounting for Fair Value
      Measurements” (“SFAS 157”). SFAS 157 establishes a separate framework for
      determining fair values of assets and liabilities that are required by other
      authoritative GAAP pronouncements to be measured at fair value. In
      addition, SFAS 157 incorporates and clarifies the guidance in FASB Concepts
      Statement No. 7 regarding the use of present value techniques in measuring
      fair
      value. SFAS 157 is effective for financial statements with fiscal years
      beginning after November 15, 2007. Our Manager is currently evaluating the
      impact of this pronouncement, but does not currently believe it will have a
      material impact on our consolidated financial statements.





In
      September 2006, the SEC issued Staff Accounting Bulletin No. 108, “Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements” (“SAB 108”). SAB 108 expresses the views of
      the SEC regarding the process of quantifying the materiality of financial
      misstatements. SAB 108 requires both the balance sheet and income statement
      approaches be used when quantifying the materiality of misstated amounts. In
      addition, SAB 108 contains guidance on correcting errors under the dual approach
      and provides transition guidance for correcting errors existing in prior years.
      SAB 108 is effective for the fiscal years ending after November 15, 2006. The
      adoption of SAB 108 did not have an impact on our consolidated financial
      statements.





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





·
            Lease
                classification and revenue
                recognition


·
            Asset
                impairments


·
            Depreciation


·
            Derivative
                financial instruments






20





*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 value 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 lessee’s
      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.





*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 our 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.








21






*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 the 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 or cash flow hedges, and establishes accounting standards for reporting
      changes in the fair value of the derivative instruments.





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





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





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




We
      are
      currently in our reinvestment period and anticipate entering our liquidation
      period during April 2008, but may be extended for an additional three years,
      at
      our Manager’s discretion. While in our reinvestment period, we will continue to
      look to purchase equipment subject to leases, either with cash or with a
      combination of cash and financing. As such, we expect our revenue will fluctuate
      due to our selling some equipment while purchasing other equipment subject
      to
      leases. We also expect to have gains and losses from the sales of equipment
      during this time period. As for our expenses, we anticipate interest expense
      to
      decrease as our outstanding debt decreases. If we enter into an equipment lease
      where we finance a portion of the purchase price, then interest expense will
      increase.





Once
      we
      enter our liquidation period, we will sell our assets in the ordinary course
      of
      business. As we begin to sell our assets, both rental income and finance income
      will decrease over time as will expenses related to our assets such as
      depreciation 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.








22





Revenue
      for 2006 and 2005 are summarized as follows:





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





(1)
      Certain reclassifications have been made to the accompanying consolidated
      financial statements in prior years to conform to the current
      presentation.





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





Expenses
      for 2006 and 2005 are summarized as follows:





Years
                Ended December 31,2006
            
            2005
            
            ChangeTotal
                expenses
            
            $
            25,553,056
            
            $
            33,126,595
            
            $
            (7,573,539
            )Impairment
                loss
            
            
            3,005,403
            
            
            3,182,485
            
            
            (177,082
            )Depreciation
                and amortization
            
            
            10,579,026
            
            
            21,328,939
            
            
            (10,749,913
            )Interest
            
            
            6,897,802
            
            
            5,653,467
            
            
            1,244,335Management
                fees - Manager
            
            
            2,114,283
            
            
            2,131,445
            
            
            (17,162
            )Administrative
                expense reimbursements - Manager
            
            
            596,881
            
            
            647,534
            
            
            (50,653
            )Maintenance
                expense
            
            
            1,317,361
            
            
            -
            
            
            1,317,361General
                and administrative
            
            
            607,142
            
            
            596,519
            
            
            10,623Minority
                interest
            
            
            435,158
            
            
            (413,794
            )
            
            848,952





Total
      expenses for 2006 decreased by $7,573,539, or 22.9%, as compared to 2005. This
      decrease is primarily the result of the decrease in depreciation and
      amortization expense resulting from the change in the lease classification
      of
      our charters with Wilhelmsen discussed above, and to a lesser extent the
      decrease in depreciation on FedEx discussed in conjunction with minority
      interest below. The increase in interest expense is related to our net increase
      in non-recourse debt, during 2006 of approximately 21,855,000. Additionally
      the
      interest rate on our refinanced debt related to Wilhelmsen increased from 4.85%
      to 7.02% per year. The increase in maintenance expense is due to the one time
      charge for maintenance overhaul costs incurred in 2006. The increase in
      minority interest expense is due to the increase in net income on our
      consolidating interest in FedEx resulting from the impairment charge at December
      31, 2005, which decreased depreciation expense.








23






*Net
      Loss*





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





**Results
      of Operations for the Years Ended December 31, 2005 (“2005”) and 2004
      (“2004”)**





Revenue
      for 2005 and 2004 are summarized as follows:





Years
                Ended December 31,2005
                (a)
            
            2004
            
            ChangeTotal
                revenue
            
            $
            30,349,467
            
            $
            33,240,316
            
            $
            (2,890,849
            )Rental
                income
            
            
            28,934,363
            
            
            31,111,650
            
            
            (2,177,287
            )Finance
                income
            
            
            1,318,855
            
            
            1,656,960
            
            
            (338,105
            )(Loss)
                income from investments in joint ventures
            
            
            345,661
            
            
            425,066
            
            
            (79,405
            )Net
                gain (loss) on sales of equipment
            
            
            (301,052
            )
            
            (65,074
            )
            
            (235,978
            )Interest
                and other income
            
            
            51,640
            
            
            111,714
            
            
            (60,074
            )





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





Revenue
      for 2005 decreased by $2,890,849, or 8.7%, as compared to 2004. The
      decrease in revenue is due primarily to a decrease in rental income that
      resulted from the renegotiated lease terms of the Kenilworth lease. Offsetting
      this decrease in rental income is the increase in rental income as a result
      of
      the new operating leases with Rite-Aid, CompUSA, Hudson Crossing Surgery Center
      and Short Hills Surgery Center which took effect in 2005. The
      decrease in finance income was due to the normal amortization of income which
      decreases as leases mature. The increase in net loss in sale of equipment is
      due
      to the increased number of sales in 2005 as compared to 2004. The decrease
      in
      interest income was due to the decrease in available cash held in interest
      bearing accounts by us during 2005 as compared to 2004. This cash was used
      primarily to invest in leased equipment and make member distributions in
      2005.





Expenses
      for 2005 and 2004 are summarized as follows:





Years
                Ended December 31,2005
            
            2004
            
            ChangeTotal
                expenses
            
            $
            33,126,595
            
            $
            33,258,084
            
            $
            (131,489
            )Impairment
                loss
            
            
            3,182,485
            
            
            236,003
            
            
            2,946,482Depreciation
                and amortization
            
            
            21,328,939
            
            
            22,968,907
            
            
            (1,639,968
            )Interest
            
            
            5,653,467
            
            
            6,170,420
            
            
            (516,953
            )Management
                fees - Manager
            
            
            2,131,445
            
            
            2,109,282
            
            
            22,163Administrative
                expense reimbursements - Manager
            
            
            647,534
            
            
            1,139,479
            
            
            (491,945
            )General
                and administrative
            
            
            596,519
            
            
            528,722
            
            
            67,797Minority
                interest
            
            
            (413,794
            )
            
            105,271
            
            
            (519,065
            )





Expenses
      for 2005 decreased by $131,489, or 0.4%, as compared to 2004. The overall
      decrease in expenses is due primarily to the renegotiated lease terms of the
      Kenilworth lease, which resulted in decreased depreciation expense on the
      co-generation plant held by 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 in a decrease of interest expense of
      approximately $452,000. The increase in impairment loss was due to our Manager’s
      determination that one of the aircraft was impaired, which also decreased
      minority interest expense. The impairment charge was approximately $3,182,000.






24





*Net
      Loss*





As
      a
      result of the foregoing factors, the net loss for 2005 was $2,777,128, as
      compared to the net loss for 2004 of $17,768.  The net loss per weighted
      average number of additional members’ shares outstanding for 2005 was $27.99, as
      compared to the net loss per weighted average number of additional members’
shares outstanding for 2004 of $0.18.





**Liquidity
      and Capital Resources**





**** *Sources
      and Uses of Cash*





At
      December 31, 2006 and 2005, we had cash and cash equivalents of $19,730,600
      and
      $2,237,797, respectively. During our offering period our main source of cash
      was
      from financing activities and during our reinvestment period our main source
      of
      cash has been from investing activities, which we expect to continue
      during our liquidation period. During our offering period our main use
      of cash was from investing activities and during our reinvestment period our
      main use of cash has been from financing activities, which we anticipate will
      continue during our liquidation period.





*Operating
      Activities*




Sources
      of cash




Our
      main
      source of cash from operating activities in 2006 was primarily from the
      collection of non-financed receivables from our finance leases of
      approximately $3,965,000, from the following lessees, approximately
      $902,000 from Wildwood Industries, Inc (“Wildwood”), Metaldyne Corporation
      (“Metaldyne”) of approximately $87,000 which was sold during March 2006,
      and Advanced Micro Devices, Inc. (“AMD”) of approximately $2,928,000. Our
      main
      source of cash from operating activities in 2005 was primarily from the
      collection of non-financed receivables from finance leases of approximately
      $5,186,000, which were received from our finance leases with Wildwood of
      approximately $932,000, Metaldyne of approximately $417,000, and with AMD of
      $3,089,000. Additionally, we received approximately $745,000 from EKA Chemicals,
      Inc. The $745,000 was the only installment due to us under the terms of the
      investment. Our main source of cash from operating activities in 2004 was
      primarily from the collection of non-financed receivables from finance
      leases of approximately $4,393,000, which were received from our finance leases
      with Wildwood of approximately $853,000, AMD, Inc. of approximately $3,089,000,
      and Metaldyne of approximately $451,000.




*Investing
      Activities*




Sources
      of cash




Our
      sources of cash from investing activities in 2006 consisted of proceeds from
      the
      sales of equipment of approximately $7,865,000, which consisted of the proceeds
      we received from the sale of the Kenilworth facility of approximately
      $4,800,000, the sale of manufacturing equipment from Metaldyne for approximately
      $1,931,000, $1,104,000 for the sale of the investment in unguaranteed
      residual value and $30,000 for the sale of the information technology equipment,
      and to distributions received from our joint ventures of approximately $813,000,
      of which we received approximately $105,000 from ICON Global Crossing II,
      approximately $471,000 from ICON GeicJV, and approximately $237,000 from SPK
      2023-A. Our sources of cash from investing activities in 2005 consisted of
      proceeds from the sales of equipment of approximately $801,000, which consisted
      of the proceeds we received from the sales of our investment in unguaranteed
      residual values, and distributions received from joint ventures of approximately
      $658,000, of which we received approximately $360,000 from our ICON GeicJV
      and
      approximately $298,000 from SPK 2023-A. Our sources of cash from investing
      activities in 2004 consisted of proceeds from the sales of equipment of
      approximately $296,000, which consisted of approximately $24,000 from Texas
      Genco, LLC, for material handling equipment, approximately $259,000 from our
      then consolidating entity SPK 2023-A for manufacturing and material handling
      equipment, approximately $13,000 for our sale of investment in unguaranteed
      residual value, and distributions received from joint ventures of approximately
      $581,000, of which we received approximately $479,000 from ICON GeicJV and
      approximately $102,000 from SPK 2023-A.






25


Uses
      of cash




Our
      use
      of cash from investing activities in 2006 was approximately $2,091,000, for
      investments in joint ventures, of which approximately $2,000,000 was for our
      investment in Global Crossing II, and $91,000 was for our investment in ICON
      126. Our uses of cash from investing activities in 2005 were for loans and
      advances to affiliates of $1,500,000, which were repaid with investments, and
      approximately $575,000, for amounts paid to Fund Ten for our Comp USA and
      Rite-Aid operating leases acquired in 2004. Our uses of cash from investing
      activities in 2004 were distributions to minority interest owners of our
      consolidated joint ventures of approximately $925,000, of which approximately
      $6,000 was paid to Kenilworth and $919,000 was paid to Fund Eight B, investments
      in various leases and joint ventures of approximately $4,300,000, which
      primarily consisted of investments in operating leases of approximately $600,000
      for information technology equipment on lease to Rite-Aid and Comp USA,
      approximately $2,100,000 for medical equipment on lease to Hudson Crossing
      Surgery Center and Short Hills Surgery Center and approximately $1,600,000
      for
      our investment in ICON GeicJV, in addition to loans and advances to affiliates
      of approximately $650,000.





*Financing
      Activities*




Sources
      of cash


Our
      sources of cash in 2006 consisted of proceeds from non-recourse borrowings
      of
      approximately $28,723,000, from our refinancing of our Wilhelmsen charters
      and
      Cathay leases proceeds from our recourse borrowings of approximately $875,000
      and one-time proceeds from the termination of our interest rate swap contracts
      relating to our Wilhelmsen charters of approximately $705,000. We do not
      anticipate future proceeds from our non-recourse borrowings. Our source of
      cash
      from financing activities in 2005 was from proceeds we received from our
      recourse debt in the amount of $4,535,000.




Uses of
      cash


Our
      uses
      of cash from financing activities in 2006 were cash distributions paid to our
      members of approximately $8,920,000, the repayment of non-recourse borrowings
      of
      approximately $6,868,000, repayment of recourse borrowings of approximately
      $5,410,000, and approximately $1,200,000 relating to costs incurred for various
      non-recourse debt refinancings. We do not anticipate any future cash outflows
      for the repayment of non-recourse debt or for the costs related to obtaining
      such non-recourse debt. Our uses of cash from financing activities in 2005
      were
      primarily cash distributions to our members of approximately $8,929,000 and
      the
      redemption of additional member shares of approximately $161,000. Our uses
      of
      cash from financing activities in 2004 were cash distributions to our members
      of
      approximately $8,849,000 and the redemption of additional member shares of
      approximately $521,000.





*Financings
      and Borrowings*





We
      have
      non-recourse debt obligations. The non-recourse debt obligations 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, 2006 and 2005 were $92,480,648 and $93,247,942,
      respectively.





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





Simultaneously
      with the execution of the refinanced non-recourse debt, we entered into three
      interest rate swap contracts with Fortis Bank NV/SA, New York Branch in the
      aggregate amount of $51,000,000 in order to fix the variable interest rate
      on
      the non-recourse debt and minimize our risk of interest rate fluctuation. The
      interest rate swap contracts fixed the interest rate at 7.02% per year. On
      May
      22, 2006, we received $705,000 from the original swap provider to terminate
      the
      original three interest rate swap contracts that applied to the original
      financing of the Vessels and, in accordance with GAAP, were recorded through
      the
      statement of operations. We recognized a gain on this transaction of
      approximately $26,000.






26





Effective
      June 7, 2006, the owner trustee, in connection with the Cathay lease extension,
      refinanced the non-recourse debt related to the Cathay aircraft, in which we
      have a 100% interest, (the “Initial Refinancing”). The Initial Refinancing was
      entered into due to the fact that the original non-recourse debt of
      approximately $44,250,000, was due to be paid on June 12, 2006. We were required
      by the Lender to pay down approximately $6,754,000 of the balloon payment as
      part of the Initial Refinancing. The principal balance of the Initial
      Refinancing was approximately $37,495,000, was scheduled to mature on December
      1, 2011, required a balloon payment of approximately $11,550,000 and accrued
      interest at LIBOR plus 0.80% per year. The Initial Refinancing required monthly
      payments of approximately $545,000 through May 2010 and approximately $495,000
      through December 2011.




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





*Revolving
      Loan Facility - recourse*




On
      August
      31, 2005, we, together with certain of our affiliates (entities sponsored and
      organized by our Manager), Fund Eight B, Fund Ten, and Fund Eleven
      (collectively, the “Borrowers”) entered into a Commercial Loan Agreement (the
      "Loan Agreement"), with California Bank & Trust (the “Lender”). The Loan
      Agreement provides for a revolving line of credit of up to $17,000,000 pursuant
      to a senior secured revolving loan facility (the "Facility") which is secured
      by
      all assets of the Borrowers not subject to a first priority lien, as defined
      in
      the Loan Agreement. Each of the Borrowers is jointly and severally liable for
      all amounts borrowed under the Facility. Amounts available under the Facility
      are subject to a borrowing base that is determined, subject to certain
      limitations, based on the present value of the future receivables under certain
      lease agreements in which the Borrowers have a beneficial interest.





As
      part
      of the Loan Agreement, the Borrowers are required to comply with certain
      financial covenants, including, a minimum debt coverage ratio, a tangible net
      worth covenant, a leverage ratio and a minimum liquidity covenant. The Borrowers
      are in compliance with these covenants at December 31, 2006. The Loan Agreement
      prohibits the Borrowers from declaring or paying any distribution to investors
      if such a payment would cause the Borrowers to become non-compliant with the
      financial covenants in the Loan Agreement.





In
      addition, on August 31, 2005, the Borrowers entered into a Contribution
      Agreement (the “Contribution Agreement”), pursuant to which the 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 Borrower
      would be unable to repay its portion of the outstanding obligations under the
      Facility at any time. These restrictions include, but are not limited to,
      borrowing in excess of the lesser of (a) an amount each Borrower could
      reasonably expect to repay in one year from its projected cash flow, or (b)
      the
      greater of (i) the borrowing base, as defined in the Loan Agreement, as applied
      to such Borrower and (ii) 50% of the net worth of such Borrower. The
      Contribution Agreement also provides that, in the event a Borrower pays an
      amount under the Contribution Agreement in excess of its share of the total
      obligations under the Facility, whether by reason of an event of default or
      otherwise, the other Borrowers will immediately make a contribution payment
      to
      such Borrower in such amount that the aggregate amount paid by each Borrower
      reflects its allocable share of the aggregate obligations under the Facility.
      The Borrowers' obligations to each other under the Contribution Agreement are
      collateralized by a subordinate lien on the assets of each Borrower. The
      Borrowers are in compliance with the Contribution Agreement at December 31,
      2006
      and no amounts are due to or payable by us under the Contribution
      Agreement.






27





On
      December 26, 2006, the Borrowers entered into a Loan Modification Agreement
      (the
“Loan Modification”) to the Loan Agreement. The changes to the Loan
      Agreement included, but are not limited to, an extension of the
      Facility from August 31, 2007 to September 30, 2008 and the lowering of (i)
      the
      interest rate for advances under the Facility from the Lender’s prime rate plus
      0.25% to the Lender’s prime rate and (ii) the interest rate on the five separate
      advances that are permitted to be made under the Facility at the rate at which
      United States dollar deposits can be acquired by the Lender in the London
      Interbank Eurocurrency Market (the “LIBOR Rate”) plus 2.75% per year to the
      LIBOR Rate plus 2.5% per year. In addition, pursuant to the terms of the Loan
      Modification, the Borrowers no longer have to maintain a cash reserve. The
      interest rate at December 31, 2006 was 8.25%.





Aggregate
      borrowings by all Borrowers under the Facility amounted to $3,125,000 at
      December 31, 2006. We had no borrowings outstanding under the Facility at
      December 31, 2006.





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








*Distributions*





We
      pay
      monthly distributions to our members beginning with the first month after the
      member’s admission through the termination of our reinvestment period,
      which we anticipate will be April 29, 2008 ,
      unless
      that date is extended for up to an additional three years, in our Manager’s sole
      discretion .
      We paid
      distributions to additional members for the years ended December 31, 2006,
      2005
      and 2004 in the amount of $8,831,229, $8,840,105 and $8,758,942. We paid
      distributions to our Manager for the year ended December 31, 2006, 2005 and
      2004
      in the amount of $89,204, $89,294 and $89,744.





**Contractual
      Obligations and Commitments**





At
      December 31, 2006, we have 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. At December 31, 2006, our outstanding non-recourse indebtedness was
      $92,480,648. We are a
      party to the Facility, as discussed in the financing and borrowings section
      above, although we had no borrowings under the Facility at December 31,
      2006.





Principal
      maturities of our non-recourse debt and interest consist of the following at
      December 31, 2006:





Payments
                Due by PeriodLess
                Than 1
            
            1
                -
                3
            
            4 -
                5
            
            More
                Than 5Total
            
            Year
            
            Years
            
            Years
            
            YearsNon-recourse
                debt
            
            $
            92,480,648
            
            $
            17,325,073
            
            $
            22,897,394
            
            $
            41,458,181
            
            $
            10,800,000Non-recourse
                interest
            
            
            21,782,532
            
            
            5,993,690
            
            
            9,023,317
            
            
            5,947,608
            
            
            817,917$
            114,263,180
            
            $
            23,318,763
            
            $
            31,920,711
            
            $
            47,405,789
            
            $
            11,617,917






28






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





On
      June
      7, 2006, we refinanced the non-recourse debt related to our Cathay aircraft
      in
      which we have a 100% interest, which extended the maturity of the debt to
      December 1, 2011, from the original maturity of July 1, 2006. The monthly
      payments were approximately $545,000 through May 2010 and approximately $495,000
      through December 2011 and required a balloon payment of $11,550,000. On August
      1, 2006, we were able to negotiate more favorable terms with a new lender and
      refinanced the earlier refinancing. The existing non-recourse debt matures
      on
      December 1, 2011. It requires monthly payments of approximately $545,000 through
      May 2010 and approximately $495,000 through December 1, 2011 and a balloon
      payment of approximately $22,750,000. Interest accrues on the debt at 6.85%
      per
      year.





We
      had a
      commitment with respect to our Cathay aircraft to pay certain of the maintenance
      overhaul costs, which were incurred during June 2006. The total estimated costs
      for this overhaul were approximately $1,300,000 and were accrued at June 30,
      2006. During November 2006, we paid approximately $1,300,000 for these
      maintenance overhaul costs.





We
      entered into remarketing and residual sharing agreements with various 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.








**Off-Balance
      Sheet Transactions**





None.





**Inflation
      and Interest Rates**





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





If
      interest rates increase significantly, the lease rates that we can obtain on
      future leases may be expected to increase as the cost of capital is a
      significant factor in the pricing of lease financing.  Leases already in
      place, 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, however, finance leases with a floating interest rate and we
      are
      therefore exposed to interest rate risk until fixed rate financing is arranged.






29





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





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







30






**Item
      8. Consolidated Financial Statements and Supplementary
      Data**





PageReport
                of Independent Registered Public Accounting Firm
            32Consolidated
                Balance Sheets at December 31, 2006 and
                2005
            33Consolidated
                Statements of Operations for the Years Ended
                December 31, 2006, 2005
              and
                2004
            34****Consolidated
                Statement of Changes in Members’ Equity for the
                Years Ended
              December
                31, 2004, 2005 and 2006
            35Consolidated
                Statements of Cash Flows for the Years Ended
                December 31, 2006, 2005
              and
                2004
            36Notes
                to Consolidated Financial Statements
            38







31






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,
      2006 and 2005 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, 2006. 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, 2006 and 2005, and the results of
      their operations and their cash flows for each of the three years in the period
      ended December 31, 2006, in conformity with accounting principles generally
      accepted in the United States of America.








/s/
      Hays
& Company LLP





April
      2,
      2007


New
      York,
      New York






32








ICON
                Income Fund Nine, LLC(A
                Delaware Limited Liability Company)Consolidated
                Balance SheetsDecember
                31,ASSETS2006
            
            2005Cash
                and cash equivalents
            
            $
            19,730,600
            
            $
            2,237,797Investments
                in finance leases:Minimum
                rents receivable
            
            
            70,895,398
            
            
            11,895,122Estimated
                unguaranteed residual values
            
            
            1,207,567
            
            
            1,753,811Initial
                direct costs, net
            
            
            24,109
            
            
            124,284Unearned
                income
            
            
            (28,697,566
            )
            
            (1,256,271
            )Net
                investments in finance leases
            
            
            43,429,508
            
            
            12,516,946Investments
                in operating leases:Equipment,
                at cost
            
            
            104,106,477
            
            
            195,639,121Accumulated
                depreciation
            
            
            (42,657,483
            )
            
            (70,791,992
            )Net
                investments in operating leases
            
            
            61,448,994
            
            
            124,847,129Investments
                in joint ventures
            
            
            6,472,600
            
            
            5,473,170Investments
                in unguaranteed residual values
            
            
            2,147,793
            
            
            3,339,010Interest
                rate swap contracts
            
            
            -
            
            
            720,458Due
                from Manager and affiliates
            
            
            -
            
            
            136,760Other
                assets, net
            
            
            3,958,163
            
            
            2,364,289Total
                assets
            
            $
            137,187,658
            
            $
            151,635,559





LIABILITIES
                AND MEMBERS' EQUITYLiabilities:Notes
                payable - non-recourse
            
            $
            92,480,648
            
            $
            93,247,942Revolving
                loan facility - recourse
            
            
            -
            
            
            4,535,000Accrued
                expenses and other liabilities
            
            
            915,793
            
            
            653,581Deferred
                rental income
            
            
            -
            
            
            269,184Interest
                rate swap contracts
            
            
            639,304
            
            
            -Due
                to Manager and affiliates
            
            
            193,480
            
            
            196,673Minority
                interest
            
            
            625,084
            
            
            189,926Total
                liabilities
            
            
            94,854,309
            
            
            99,092,306Commitments
                and contingenciesMembers'
                equity:Manager
                (one share outstanding, $1,000 per shareoriginal
                issue price)
            
            
            (431,964
            )
            
            (336,081
            )Additional
                Members (98,102 and 98,144 shares outstanding,$1,000
                per share original issue price)
            
            
            43,404,617
            
            
            52,924,519Accumulated
                other comprehensive income
            
            
            (639,304
            )
            
            (45,185
            )Total
                members' equity
            
            
            42,333,349
            
            
            52,543,253Total
                liabilities and members' equity
            
            $
            137,187,658
            
            $
            151,635,559






See
        accompanying notes to consolidated financial statements.


33








ICON
                Income Fund Nine, LLC(A
                Delaware Limited Liability Company)Consolidated
                Statements of OperationsYears
                Ended December 31,2006
            
            2005
            
            2004RevenueRental
                income
            
            $
            17,863,494
            
            $
            28,934,363
            
            $
            31,111,650Finance
                income
            
            
            6,461,861
            
            
            1,318,855
            
            
            1,656,960(Loss)
                income from investments in joint ventures
            
            
            (279,072
            )
            
            345,661
            
            
            425,066Net
                gain (loss) on sales of equipment
            
            
            128,181
            
            
            (301,052
            )
            
            (65,074
            )Interest
                and other income
            
            
            710,689
            
            
            51,640
            
            
            111,714Total
                revenue
            
            
            24,885,153
            
            
            30,349,467
            
            
            33,240,316ExpensesImpairment
                loss
            
            
            3,005,403
            
            
            3,182,485
            
            
            236,003Depreciation
                and amortization
            
            
            10,579,026
            
            
            21,328,939
            
            
            22,968,907Interest
            
            
            6,897,802
            
            
            5,653,467
            
            
            6,170,420Management
                fees - Manager
            
            
            2,114,283
            
            
            2,131,445
            
            
            2,109,282Administrative
                expense reimbursements - Manager
            
            
            596,881
            
            
            647,534
            
            
            1,139,479Maintenance
                expense
            
            
            1,317,361
            
            
            -
            
            
            -General
                and administrative
            
            
            607,142
            
            
            596,519
            
            
            528,722Minority
                interest
            
            
            435,158
            
            
            (413,794
            )
            
            105,271Total
                expenses
            
            
            25,553,056
            
            
            33,126,595
            
            
            33,258,084Net
                loss
            
            $
            (667,903
            )
            $
            (2,777,128
            )
            $
            (17,768
            )Net
                loss allocable to:Additional
                Members
            
            $
            (661,224
            )
            $
            (2,749,357
            )
            $
            (17,590
            )Manager
            
            
            (6,679
            )
            
            (27,771
            )
            
            (178
            )$
            (667,903
            )
            $
            (2,777,128
            )
            $
            (17,768
            )Weighted
                average number of additional membershares
                outstanding
            
            
            98,123
            
            
            98,215
            
            
            98,695Net
                loss per weighted average additionalmember
                share outstanding
            
            $
            (6.74
            )
            $
            (27.99
            )
            $
            (0.18
            )








See
        accompanying notes to consolidated financial statements.


34








ICON
                Income Fund Nine, LLC(A
                Delaware Limited Liability Company)Consolidated
                Statement of Changes in Members' EquityYears
                Ended December 31, 2004, 2005 and 2006AccumulatedAdditional
                Member
            
            Additional
            
            
            
            Other
                Comprehensive
            
            TotalMembers'Shares
            
            Members
            
            Manager
            
            Income
                (Loss)
            
            EquityBalance,
                January 1, 2004
            
            
            98,991
            
            $
            73,972,042
            
            $
            (129,094
            )
            $
            -
            
            $
            73,842,948Additional
                members' shares redeemed
            
            
            (643
            )
            
            (520,691
            )
            
            -
            
            
            -
            
            
            (520,691
            )Cash
                distributions to members
            
            
            -
            
            
            (8,758,942
            )
            
            (89,744
            )
            
            -
            
            
            (8,848,686
            )Net
                loss
            
            
            -
            
            
            (17,590
            )
            
            (178
            )
            
            -
            
            
            (17,768
            )Balance,
                December 31, 2004
            
            
            98,348
            
            
            64,674,819
            
            
            (219,016
            )
            
            -
            
            
            64,455,803Additional
                members' shares redeemed
            
            
            (204
            )
            
            (160,838
            )
            
            -
            
            
            -
            
            
            (160,838
            )Cash
                distributions to members
            
            
            -
            
            
            (8,840,105
            )
            
            (89,294
            )
            
            -
            
            
            (8,929,399
            )Foreign
                currency translation adjustment
            
            
            -
            
            
            -
            
            
            -
            
            
            (45,185
            )
            
            (45,185
            )Net
                loss
            
            
            -
            
            
            (2,749,357
            )
            
            (27,771
            )
            
            -
            
            
            (2,777,128
            )Balance,
                December 31, 2005
            
            
            98,144
            
            
            52,924,519
            
            
            (336,081
            )
            
            (45,185
            )
            
            52,543,253Additional
                members' shares redeemed
            
            
            (42
            )
            
            (27,449
            )
            
            -
            
            
            -
            
            
            (27,449
            )Cash
                distributions to members
            
            
            -
            
            
            (8,831,229
            )
            
            (89,204
            )
            
            -
            
            
            (8,920,433
            )Foreign
                currency translation adjustment
            
            
            -
            
            
            -
            
            
            -
            
            
            45,185
            
            
            45,185Change
                in valuation of interest rate
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -swap
                contracts
            
            
            
            
            
            
            
            
            
            
            
            (639,304
            )
            
            (639,304
            )Net
                loss
            
            
            -
            
            
            (661,224
            )
            
            (6,679
            )
            
            -
            
            
            (667,903
            )Balance,
                December 31, 2006
            
            
            98,102
            
            $
            43,404,617
            
            $
            (431,964
            )
            $
            (639,304
            )
            $
            42,333,349







See
        accompanying notes to consolidated financial statements.


35







ICON
                Income Fund Nine, LLC(A
                Delaware Limited Liability Company)Consolidated
                Statements of Cash FlowsYears
                Ended December 31,2006
            
            2005
            
            2004Cash
                flows from operating activities:Net
                loss
            
            $
            (667,903
            )
            $
            (2,777,128
            )
            $
            (17,768
            )Adjustments
                to reconcile net loss to net cashprovided
                by operating activities:Rental
                income paid directly to lenders by lessees
            
            
            (13,470,826
            )
            
            (26,690,121
            )
            
            (29,914,946
            )Finance
                income
            
            
            (6,461,861
            )
            
            (1,318,854
            )
            
            (1,656,960
            )Loss
                (income) from investments in joint ventures
            
            
            279,072
            
            
            (345,662
            )
            
            (425,066
            )Net
                (gain) loss on sales of equipment
            
            
            (128,181
            )
            
            301,052
            
            
            65,074Net
                gain on sale of interest rate swap contracts
            
            
            (25,656
            )
            
            -
            
            
            -Impairment
                loss
            
            
            3,005,403
            
            
            3,182,485
            
            
            236,003Depreciation
                and amortization
            
            
            10,579,026
            
            
            21,328,939
            
            
            22,968,907Interest
                expense on non-recourse financing paid directlyto
                lenders by lessees
            
            
            5,850,979
            
            
            5,918,949
            
            
            6,826,076Change
                in fair value of interest rate swap contracts
            
            
            41,114
            
            
            (451,962
            )
            
            (743,044
            )Minority
                interest in joint ventures
            
            
            435,158
            
            
            (413,794
            )
            
            105,271Changes
                in operating assets and liabilities:Collection
                of principal - non-financed receivables
            
            
            3,965,426
            
            
            5,185,643
            
            
            4,392,885Due
                to/from Manager and affiliates
            
            
            133,567
            
            
            208,151
            
            
            919,796Other
                assets
            
            
            697,010
            
            
            (258,520
            )
            
            160,981Accrued
                expenses and other liabilities
            
            
            347,212
            
            
            199,218
            
            
            193,988Deferred
                rental income
            
            
            (1,613,143
            )
            
            44,119
            
            
            99,432Net
                cash provided by operating activities
            
            
            2,966,397
            
            
            4,112,515
            
            
            3,210,629Cash
                flows from investing activities:Proceeds
                from sales of equipment
            
            
            7,864,799
            
            
            800,845
            
            
            296,009Investments
                in operating leases and direct finance leases
            
            
            -
            
            
            (574,727
            )
            
            (2,823,323
            )Investments
                in joint ventures
            
            
            (2,091,010
            )
            
            -
            
            
            (1,521,571
            )Loans
                and advances to affiliate
            
            
            -
            
            
            (1,500,000
            )
            
            (650,000
            )Distributions
                to minority interest in joint venture
            
            
            -
            
            
            -
            
            
            (925,108
            )Distributions
                received from joint ventures
            
            
            812,508
            
            
            657,446
            
            
            580,954Net
                cash provided by (used in) investing activities
            
            
            6,586,297
            
            
            (616,436
            )
            
            (5,043,039
            )




Cash
                flows from financing activities:Cash
                distributions paid to members
            
            
            (8,920,433
            )
            
            (8,929,399
            )
            
            (8,848,686
            )Proceeds
                from non-recourse borrowings
            
            
            28,722,634
            
            
            -
            
            
            -Repayment
                of non-recourse borrowings
            
            
            (6,867,630
            )
            
            -
            
            
            -Proceeds
                from recourse borrowings
            
            
            875,000
            
            
            4,535,000
            
            
            -Repayment
                of recourse borrowings
            
            
            (5,410,000
            )
            
            -
            
            
            -Fiancing
                costs paid
            
            
            (1,182,198
            )
            
            (107,628
            )
            
            -Proceeds
                from sale of interest rate swap contracts
            
            
            705,000
            
            
            -
            
            
            -Cash
                paid for additional members' shares redeemed
            
            
            (27,449
            )
            
            (160,838
            )
            
            (520,691
            )Net
                cash provided by (used in) financing activities
            
            
            7,894,924
            
            
            (4,662,865
            )
            
            (9,369,377
            )Effects
                of exchange rates on cash and cash equivalents
            
            
            45,185
            
            
            (45,185
            )
            
            -Net
                increase (decrease) in cash and cash equivalents
            
            
            17,492,803
            
            
            (1,211,971
            )
            
            (11,201,787
            )Cash
                and cash equivalents, beginning of year
            
            
            2,237,797
            
            
            3,449,768
            
            
            14,651,555Cash
                and cash equivalents, end of year
            
            $
            19,730,600
            
            $
            2,237,797
            
            $
            3,449,768





See
        accompanying notes to consolidated financial statements.


36








ICON
                Income Fund Nine, LLC(A
                Delaware Limited Liability Company)Consolidated
                Statements of Cash FlowsYears
                Ended December 31,2006
            
            2005
            
            2004Supplemental
                disclosure of cash flow information:Cash
                paid during the year for interest
            
            $
            164,267
            
            $
            159,800
            
            $
            87,388Supplemental
                disclosure of non-cash investing and financing activities:Non-cash
                portion of equipment purchased with non-recourse debt
            
            $
            -
            
            $
            -
            
            $
            7,979,500Principal
                and interest paid on non-recourse notes payablepaid
                directly to lenders by lessees
            
            $
            28,473,277
            
            $
            29,655,779
            
            $
            32,007,317Reclassification
                of net assets from investments in operatingleases
                to investments in finance leases
            
            $
            45,399,576
            
            $
            -
            
            $
            -Other
                Assets acquired from affiliate in exchangefor
                amounts owed
            
            $
            -
            
            $
            755,000
            
            $
            650,000Interest
                in Finance Lease acquired from affiliate inexchange
                for amounts owed
            
            $
            -
            
            $
            745,000
            
            $
            -








See
        accompanying notes to consolidated financial statements.


37




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(1)  Organization





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





The
      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 the LLC expects will end no later than April
      29, 2008, but may be extended for an additional three years at the discretion
      of
      its Manager; (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 excess 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,
      including, but not limited to, the equipment leases and financing transactions
      that the LLC enters into under the terms of the LLC’s limited liability company
      agreement (the “LLC Agreement”). A dditionally,
      the Manager has a 1% interest in the profits, losses, cash distributions and
      liquidation proceeds of the LLC.





The
      initial capitalization of the LLC was $1,000 contributed by the Manager. The
      LLC
      offered membership interests with the intention of raising up to $100,000,000
      of
      capital from additional members. The LLC commenced business operations on its
      initial closing date, December 18, 2001, when it admitted 1,250 membership interests, representing $1,249,910 of capital contributions. Between
      December 19, 2001 and April
      30,
      2003 ,
      the
      final closing date, the LLC admitted additional members owning 98,416 membership
      interests, representing $98,403,564 of capital contributions and bringing the
      total membership interests to 99,666 representing $99,653,474 of capital
      contributions. Through December 31, 2006, the LLC redeemed 1,564 additional
      membership interests, leaving 98,102 additional membership interests outstanding
      at December 31, 2006.





The
      LLC
      invested most of the net proceeds from its offering in items of equipment that
      are subject to a lease. After the net offering proceeds were invested,
      additional investments are made with the cash generated from the LLC’s initial
      investments to the extent that cash is not needed for expenses, reserves and
      distributions to members. The investment in additional equipment in this manner
      is called "reinvestment." The LLC currently anticipates purchasing equipment
      from time to time until approximately April 29, 2008, unless that date is
      extended for up to an additional three years, in the Manager’s sole discretion.
      After the reinvestment period, the LLC will then sell its assets in the ordinary
      course of business during a time frame called the "liquidation
      period."





Members’
      capital accounts are increased for their initial capital contribution plus
      their
      proportionate share of earnings and decreased by their proportionate share
      of
      losses and distributions. Profits, losses, cash distributions and liquidation
      proceeds are allocated 99% to the 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, distributions will be allocated
      90% to the additional members and 10% to the Manager.






38




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(2)  Summary
      of Significant Accounting Policies





Basis
      of
      Presentation





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% 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 distributions are recorded as revenue.
      All
      of the LLC's investments in joint ventures are subject to its impairment review
      policies.




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





Cash
      and
      Cash Equivalents





Cash
      and
      cash equivalents include cash in banks and highly liquid investments with
      original maturity dates of three months or less 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,
      creditworthiness and current economic trends. The LLC records an allowance
      for
      doubtful accounts when the analysis indicates that the probability of full
      collection is unlikely.





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.








39




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(2)  Summary
      of Significant Accounting Policies - continued





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.





Equipment
      Held for Sale or Lease





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





Unguaranteed
      Residual Values





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





Revenue
      Recognition





The
      LLC
      leases equipment to third parties 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 value minus the cost of the leased equipment. Unearned
      income is recognized as finance income over the term of the lease using the
      effective interest rate method.








40




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(2)  Summary
      of Significant Accounting Policies - continued





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





Derivative
      Financial Instruments





When
      possible, the LLC uses derivative financial instruments to mitigate the variable
      cash flows associated with the LLC’s variable rate debt. All derivatives are
      recognized on the balance sheet at fair value. Certain derivatives, at
      inception, are designated as hedges and evaluated for effectiveness at least
      quarterly throughout the hedge period. These derivatives are designated as
      either (i) a hedge of the fair value of a recognized asset or liability or
      of an
      unrecognized firm commitment (a fair value hedge), or (ii) a hedge of a
      forecasted transaction or of the variability of cash flows to be received or
      paid related to a recognized asset or liability (a cash flow hedge). The LLC
      only had cash flow hedges at December 31, 2006.


****


The
      gains
      or losses on these instruments are reclassified into earnings in the same line
      item associated with the forecasted transaction in the same period during which
      the hedged transaction affects earnings. Cash flows from cash flow hedges are
      classified in the same line item as the cash flows from the items being hedged.





The
      LLC
      formally documents all relationships between hedging instruments and hedged
      items, as well as the risk-management objective and strategy for undertaking
      various hedge transactions. This process includes linking all derivatives that
      are designated as fair value or cash flow hedges to specific assets and
      liabilities on the balance sheet or to specific firm commitments or forecasted
      transactions.





When
      possible, 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. Statement of Financial Accounting Standard
      ("SFAS") No. 133 (“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 entered into in 2002.





The
      LLC
      carries all derivative financial instruments on 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 the LLC’s 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.






41




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004


(2)  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.









Share
      Redemption





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





Per
      Share
      Data





Net
      loss
      per share is 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 consolidated financial statements in conformity with accounting
      principles generally accepted in the United States of America (“GAAP”) requires
      the Manager to make estimates and assumptions that affect the reported amounts
      of assets and liabilities and the disclosure of contingent assets and
      liabilities as of the date of the consolidated financial statements and the
      reported amounts of revenues and expenses during the reporting period.
      Significant estimates primarily include the allowance for doubtful accounts,
      depreciation and amortization, residual values and impairments. Actual results
      could differ from those estimates.





Recent
      Accounting Pronouncements





In
      April
      2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      155, “Accounting for Certain Financial Instruments” (“SFAS 155”), amendment to
      SFAS 133 and SFAS 140. SFAS 155 addresses
      what had been characterized as a temporary exemption from the application of
      the
      bifurcation requirements of SFAS 133 to beneficial interests in securitized
      financial assets. The
      adoption of SFAS 155 did not have any impact on the LLC’s consolidated financial
      statements.






42




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(2)  Summary
      of Significant Accounting Policies - continued





In
      September 2006, the FASB issued SFAS No. 157, “Accounting for Fair Value
      Measurements” (“SFAS 157”). SFAS 157 establishes a separate framework for
      determining fair values of assets and liabilities that are required by other
      authoritative GAAP pronouncements to be measured at fair value. In addition,
      SFAS 157 incorporates and clarifies the guidance in FASB Concepts Statement
      No.
      7 regarding the use of present value techniques in measuring fair value. SFAS
      157 is effective for financial statements with fiscal years beginning after
      November 15, 2007. The Manager is currently evaluating the impact of this
      pronouncement, but does not currently believe it will have a material impact
      on
      the LLC’s consolidated financial statements.





In
      September 2006, the Securities and Exchange Commission (the
      "SEC") issued Staff Accounting Bulletin No. 108, “Considering the Effects
      of Prior Year Misstatements when Quantifying Misstatements in Current Year
      Financial Statements” ** (“SAB
      108”). SAB 108 expresses the views of the SEC regarding the process of
      quantifying the materiality of financial misstatements. SAB 108 requires both
      the balance sheet and income statement approaches be used when quantifying
      the
      materiality of misstated amounts. In addition, SAB 108 contains guidance on
      correcting errors under the dual approach and provides transition guidance
      for
      correcting errors existing in prior years. SAB 108 is effective for the fiscal
      years ending after November 15, 2006. The adoption of SAB 108 did not have
      an
      impact on the LLC’s consolidated financial statements.





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





Reclassifications





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





(3)  Investments
      in Finance Leases





On
      March
      28, 2005, ICON Cash Flow Partners L.P. Seven (“L.P. Seven”), an entity also
      managed by the Manager, assigned its entire 50% interest in a lease with EKA
      Chemicals, Inc. (“EKA”) 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 the LLC entered in to with some of its
      affiliates in connection with the line of credit the LLC had with Comerica
      Bank.
      This amount represented L.P. Seven’s fair value of its interest in the EKA lease
      on March 28, 2005 based upon expected future cash flows. At December 31, 2005,
      the LLC received the full payment of $745,000 from EKA.





During
      March 2004, the LLC acquired from Insight Investments Corporation a lease for
      computer equipment and corresponding parts. 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 lease expired on December
      1,
      2006. The equipment was uninstalled during December 2006 and returned to the
      LLC
      during January 2007. The associated estimated residual value of the equipment
      was reclassified to equipment held for sale or lease at December 31, 2006.
      The
      Manager is exploring options with respect to re-leasing or selling this
      equipment.







43




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(3)  Investments
      in Finance Leases - continued





During
      March 2004, the LLC acquired from Insight Investments Corporation an additional
      lease for computer equipment and corresponding parts. The purchase price was
      approximately $1,751,000, consisting of approximately $43,000 in cash and the
      assumption of approximately $1,708,000 of non-recourse debt. The lease expired
      on December 1, 2006. The equipment was uninstalled during December 2006 and
      returned to the LLC during January 2007. The associated estimated residual
      value
      of the equipment was reclassified to equipment held for sale or lease at
      December 31, 2006. The Manager is exploring options with respect to re-leasing
      or selling this equipment.




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





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





On
      April
      30, 2003, the LLC acquired a
      Double
      Kraft Paper Forming Tubing Unit on lease
      to Wildwood
      Industries, Inc., through January 2007 for approximately $1,350,000 in
      cash. Effective February 1, 2007, the lease with Wildwood was, pursuant to the terms
      of the lease, extended for an additional twelve months under the same terms
      as
      the original lease.





During
      September 2002, the LLC acquired three car and truck carrying vessels (the
      “Vessels”) on bareboat charter to Wilhelmsen
      Lines Shipowning AS (“Wilhelmsen”) through December 22, 2008. Effective March 14, 2006, the LLC
      extended the terms of its bareboat charters with Wilhelmsen through December
      22,
      2013. The charter extension includes a provision that provides Wilhelmsen to
      own
      the Vessels at the expiration of the charter extension for a nominal amount.
      Accordingly, the LLC reclassified the net book value of the Vessels of
      approximately $45,399,000 from investments in operating leases to investments
      in
      finance leases as of March 14, 2006. The non-recourse debt associated with
      the
      Vessels was refinanced on May 18, 2006 (See Note 8).








44




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(3)  Investments
      in Finance Leases - continued





Non-cancelable
      minimum annual amounts due on investments in finance leases over the next five
      years are as follows at December 31, 2006:





Years
                EndingDecember
                31,2007
            
            $
            14,565,3032008
            
            $
            11,964,9492009
            
            $
            9,307,5002010
            
            $
            9,061,1252011
            
            $
            8,322,000





(4)  Investments
      in Operating Leases





Investments
      in operating leases consist of the following at December 31, 2006 and
      2005:





December
                31,
            
            December
                31,2006
            
            2005Aircraft
            
            $
            93,978,544
            
            $
            93,978,544Cargo
                vessels
            
            
            -
            
            
            75,664,671Co-generation
                facility
            
            
            -
            
            
            15,787,934Railcars
            
            
            5,631,436
            
            
            5,631,436Material
                handling, telecommunication and computer equipment
            
            
            4,496,497
            
            
            4,576,536104,106,477
            
            
            195,639,121Accumulated
                depreciation
            
            
            (42,657,483
            )
            
            (70,791,992
            )$
            61,448,994
            
            $
            124,847,129





*Aircraft*





During
      September 2002, the LLC and ICON Income Fund Eight B L.P. (“Fund Eight B”), an
      entity also managed by the Manager, formed a joint venture, ICON Aircraft 46835
      LLC (“Aircraft 46835”), for the purpose of acquiring an investment in a
      McDonnell Douglas DC-10-30F aircraft on
      lease
      with Federal Express Corporation (“FedEx”). The lease expired on March 31,
      2007. The LLC and Fund Eight B have interests in the joint venture of 85% and
      15%, respectively. On December 27, 2002, Aircraft 46835 acquired the aircraft
      for approximately $21,498,000, consisting of approximately $2,550,000, in cash
      and approximately $18,948,000 of non-recourse debt. The
      non-recourse debt accrues interest at 4.04% per year and matured in March 2007.
      The lender had a security interest in the aircraft and an assignment of the
      rental payments under the lease. The Manager was paid an acquisition fee of
      approximately $759,000 relating to this transaction.





On
      September 21, 2006, FedEx provided Aircraft 46835 its irrevocable notice to
      purchase the aircraft. Pursuant to the lease, Aircraft 46835 had twenty days
      to
      agree with FedEx on the fair value of the aircraft. The lease further provided
      that if the parties did not agree within that time period, then they have ten
      days to appoint a mutually acceptable appraiser. If the parties could not agree
      on an appraiser, the lease provided that the fair value would be determined
      by
      independent appraisers, one selected by the Manager and one selected by FedEx.
      Moreover, the lease provided that if those appraisers could not agree on the
      fair value, the two appraisers would appoint a third nationally recognized
      independent aircraft appraiser.







45




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(4)  Investments
      in Operating Leases - continued





Aircraft
      46835 selected a nationally recognized appraiser and received an appraisal
      value
      for the aircraft of $7,300,000. In addition, the Manager commissioned an
      additional nationally recognized appraiser to conduct an appraisal on the
      aircraft who appraised the aircraft at $6,700,000.





The
      appraiser selected by FedEx, however, valued the aircraft at only $4,400,000,
      which was significantly lower than the Manager’s two appraisals and much lower
      than all publicly available published values for this type of
      aircraft.





When
      the
      appraisers chosen by the Manager and FedEx could not agree on the fair value,
      they selected a third appraiser. Although FedEx did not initially agree to
      this
      appraiser, it ultimately did so, but only after substantial delay. In February
      2007, FedEx finally agreed to allow the process to proceed with the third
      appraiser and on February 23, 2007, the third appraiser was retained by the
      parties.





On
      March
      2, 2007, Aircraft 46835 was notified that the third appraiser valued the
      aircraft at what the Manager believes is an exceedingly low appraisal valuing
      the aircraft at $4,120,000. Pursuant to a formula in the lease, the two
      appraisals that are closest in value are to be averaged, which resulted in
      a
      sales price for the aircraft of $4,260,000, resulting in a loss on the sale
      of
      the aircraft of approximately $640,000, which will be recorded by Aircraft
      46835
      during the first quarter of 2007.





The
      Manager has serious concerns about the propriety of the appraisal process and
      has advised FedEx that it believes that FedEx improperly interfered with the
      process and thereby negatively impacted the appraised price of the aircraft.
      The
      Manager is thoroughly reviewing the facts with its outside legal counsel. On
      March 30, 2007, Aircraft 46835 sold the aircraft to FedEx for $4,260,000. 
The final lease payment was paid to the lender, satisfying all remaining
      debt obligations.





The
      Manager concluded, based upon an independent third party appraisal obtained
      in
      December, 2006, that no impairments were required on this aircraft at December
      31, 2006. At December 31, 2005, the Manager determined, based upon an
      independent third party appraisal that indicated the aircraft was impaired
      due
      to a slower than expected recovery in the air transportation industry, and
      recorded an impairment loss of approximately $3,182,000, to more closely
      approximate the adjusted book value to the current fair value of the aircraft.





During
      December 2002, the LLC acquired, through its wholly owned subsidiary ICON
      Aircraft 128 LLC (“ICON 128”), a 100% interest in an Airbus A340-313X aircraft
      (the “Aircraft”) on lease to Cathay Pacific Airways Limited (“Cathay”) for
      approximately $4,278,000 in cash and the assumption of approximately $64,791,000
      of non-recourse debt. Effective June 7, 2006, the LLC entered into a lease
      extension with Cathay through December 1, 2011. In connection with the lease
      extension the LLC refinanced the related non-recourse debt (See Note 8). ICON
      128 is also subject to a residual sharing agreement with respect to the Aircraft
      (See Note 14).








46




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(4)  Investments
      in Operating Leases - continued





*Co-generation
      Facility*





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





Kenilworth
      acquired the Kenilworth Facility subject to the lease for a total cost of
      approximately $15,328,000, consisting of approximately $8,410,000 in cash and
      non-recourse debt of approximately $6,918,000. The non-recourse debt was
      comprised of senior and junior non-recourse debt. The senior debt was
      approximately $6,679,000, required 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, required 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.





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





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





*Material
      Handling, Telecommunications and Computer Equipment*





During
      December 2004, the LLC acquired four Noritsu QSS 3011 digital mini-labs on
      lease
      to Rite Aid Corporation through November 2008 for approximately $399,000 in
      cash. The Manager was paid acquisition fees of approximately $12,000 relating
      to
      this transaction. At December 31, 2006, the Manager determined, based upon
      an
      independent third party appraisal, to record an impairment loss of approximately
      $80,000 to more closely approximate the adjusted book value to the current
      fair
      value of the equipment.





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








47




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(4)  Investments
      in Operating Leases - continued





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





Years
                EndingDecember
                31,2007
            
            $
            10,626,5192008
            
            $
            6,886,0612009
            
            $
            6,841,5332010
            
            $
            6,568,4942011
            
            $
            5,842,694





(5)  Joint
      Ventures





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





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





ICON
      Global Crossing II, LLC





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





On
      September 28, 2006, ICON Global Crossing II purchased state-of-the-art
      telecommunications equipment for approximately $12,044,000. This equipment
      is
      subject to a 48 month lease with the Global Crossing Group that commenced on
      November 1, 2006.





On
      October 31, 2006, ICON Leasing Fund Eleven, LLC (“Fund Eleven”), an entity also
      managed by the Manager, made a capital contribution of approximately $1,841,000
      to ICON Global Crossing II. The contribution changed the interests for the
      LLC,
      Fund Ten and Fund Eleven at October 31, 2006 to 14.4%, 72.3% and 13.3%,
      respectively. The additional contribution was used to purchase state-of-the-art
      telecommunications equipment subject to a 48 month lease with the Global
      Crossing Group that commenced on November 1, 2006.





ICON
      SPK
      2023-A, LLC





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 $3,953,000 for its investment in SPK 2023-A. The LLC
      and Fund Eight B originally had interests of 51% and 49%,
      respectively.






48




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004


(5)  Joint
      Ventures - continued





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 4 remain active
      at December 31, 2006, with lease expiration 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 interest in SPK 2023-A
      to
      Fund Eight B in exchange for Fund Eight B’s 5% interest in Kenilworth (see Note
      4). 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 giving effect
      to the exchange, the LLC has a 25.13% interest in SPK 2023-A and had a 100%
      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 the Kenilworth Facility.





ICON
      GeicJV




On
      March
      31, 2004, the LLC along with Fund Ten, formed a joint venture, ICON GeicJV,
      for
      the purpose of purchasing information technology equipment subject to a lease
      with Government Employees Insurance Company (“GEICO”) until March 31, 2007. The
      LLC paid approximately $1,522,000 for its investment in ICON GeicJV. The LLC
      and
      Fund Ten have interests of 26% and 74%, respectively. On April 30, 2004, ICON
      GeicJV acquired the information 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.
      The
      Manager has been notified that GEICO will return the equipment following the
      expiration of the lease.




ICON
      Aircraft 47820 LLC





During
      February 2003, the LLC and Fund Eight B, formed a joint venture, ICON Aircraft
      47820 LLC (“Aircraft 47820”), for the purpose of acquiring an investment in a
      McDonnell Douglas DC-10-30F aircraft and two spare engines (the “Aircraft and
      engines”) on lease to FedEx. The lease expired on March 31, 2007. The LLC
      and Fund Eight B have interests of 10% and 90%, respectively. On March 11,
      2003,
      Aircraft 47820 acquired the Aircraft and engines for approximaltely $27,288,00,
      which consisted of approximately $3,077,000 in cash and approximately $24,211,00
      of non-recourse debt. The LLC paid approximately $390,000 in cash for its cash
      portion of its investment in ICON 47820. The
      non-recourse debt accrues interest at 4.035% per year and matured in March
      2007.
      The lender had a security interest in the Aircraft and engines and an
      assignment of the rental payments under the lease. The Manager
      was paid an acquisition fee of approximately $819,000 relating to this
      transaction, of which the LLC paid approximately $82,000.




On
      September 21, 2006, FedEx provided Aircraft 47820 its irrevocable notice to
      purchase the Aircraft and engines. Pursuant to the lease, Aircraft 47820 had
      twenty days to agree with FedEx on the fair value of the Aircraft and engines.
      The lease further provided that if the parties did not agree within that time
      period, then they have ten days to appoint a mutually acceptable appraiser.
      If
      the parties could not agree on an appraiser, the lease provided that the
      fair value would be determined by independent appraisers, one selected by the
      Manager and one selected by FedEx. Moreover, the lease provided that if those
      appraisers could not agree on the fair value, the two appraisers would appoint
      a
      third nationally recognized independent aircraft appraiser.







49




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004


(5)  Joint
      Ventures - continued





Aircraft
      47820 selected a nationally recognized appraiser and received an appraisal
      value
      for the Aircraft and engines of $10,460,000. In addition, the Manager
      commissioned an additional nationally recognized appraiser to conduct an
      appraisal on the Aircraft and engines who appraised the Aircraft and engines
      at
      $7,820,000.





The
      appraiser selected by FedEx, however, valued the Aircraft and engines at only
      $5,500,000, which was significantly lower than the Manager’s two appraisals and
      much lower than all publicly available published values for this type of
      aircraft.





When
      the
      appraisers chosen by the Manager and FedEx could not agree on the fair value,
      they selected a third appraiser. Although FedEx did not initially agree to
      this
      appraiser, it ultimately did so, but only after substantial delay. In February
      2007, FedEx finally agreed to allow the process to proceed with the third
      appraiser and on February 23, 2007, the third appraiser was retained by the
      parties.





On
      March
      2, 2007, Aircraft 47820 was notified that the third appraiser valued the
      Aircraft and engines at what the Manager believes is an exceedingly low
      appraisal valuing the Aircraft and engines at $5,450,000. Pursuant to a formula
      in the lease, the two appraisals that are closest in value are to be averaged,
      which resulted in a sales price for the Aircraft and engines of $5,475,000,
      resulting in a loss on the sale of the Aircraft and engines of approximately
      $1,020,000, which will be recorded by Aircraft 47820 during the first quarter
      of
      2007.




The
      Manager has serious concerns about the propriety of the appraisal process and
      has advised FedEx that it believes that FedEx improperly interfered with the
      process and thereby negatively impacted the appraised price of the Aircraft
      and
      engines. The Manager is thoroughly reviewing the facts with its outside legal
      counsel. On March 30, 2007, Aircraft 47820 sold the Aircraft and engines to
      FedEx for $5,475,000.  The final lease payment was paid to the lender,
      satisfying all remaining debt obligations.




The
      Manager concluded, based upon an independent third party appraisal obtained
      in
      December, 2006, that no impairments were required on the Aircraft and engines
      at
      December 31, 2006. At December 31, 2005, the Manager determined, based upon
      an
      independent third party appraisal that indicated the Aircraft and engines
      were impaired due to a slower than expected recovery in the air transportation
      industry, and recorded an impairment loss of 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
      from investments in joint ventures on the accompanying consolidated statement
      of
      operations for the year ended December 31, 2005, is approximately
      $363,000.






50




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(5)  Joint
      Ventures - continued




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





Simultaneously
      with the lease extension, ICON 126, through the owner trustee, refinanced the
      non-recourse debt associated with the aircraft. The refinancing was done due
      to
      the fact that the original non-recourse debt of approximately $52,850,000 was
      due to be repaid on March 27, 2006. ICON 126 established, under the original
      lease, a reserve account totaling approximately $582,500, which was used to
      reduce the balloon payment to approximately $52,267,500. The refinanced
      non-recourse debt, which accrues interest at the London Interbank Offered Rate
      (“LIBOR”) plus 1.165%, matures on July 1, 2011 and requires a balloon payment of
      approximately $32,000,000. The variable interest rate of the refinanced debt
      was
      fixed at 6.104% under the terms of the debt agreement, effective October 3,
      2006.





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





ICON
      126
      had a commitment with respect to its Cathay aircraft to pay certain of the
      maintenance overhaul costs, which were incurred on or prior to March 27, 2006.
      ICON 126 had established a maintenance account, which totaled, prior to
      incurring the maintenance overhaul costs, approximately $1,385,000 at
      September 30, 2006, to pay for these costs. This account was funded by the
      lessee in accordance with the terms of the original lease. During September
      2006, approximately $1,153,000 was paid for the maintenance overhaul
      costs.






51




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004


(5)  Joint
      Ventures - continued





In
      connection with the original purchase of the Cathay aircraft owned by ICON
      126,
      the owner trustee entered into two first priority charge on cash deposit
      agreements pursuant to which the maintenance account for the Cathay aircraft
      owned by ICON 126 was cross-collateralized with the maintenance account for
      the
      Cathay Aircraft owned by ICON Aircraft 123 LLC ("ICON 123"), a wholly owner
      subsidiary of Fund Eight B. Under the terms of this agreement, ICON 126 was
      required to pay on behalf of ICON 123, any maintenance cost shortfalls incurred
      by the affiliate. On January 30, 2007, ICON 126 paid approximately $143,000
      in
      maintenance costs from the remaining balance in its maintenance account on
      behalf of ICON 123. The maintenance account and related security interests
      were
      then terminated. ICON 126 will be reimbursed by ICON 123 for the maintenance
      short fall when the aircraft is sold.




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




(6)  Investment
      in Unguaranteed Residual Values





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
      the debt. The Manager was paid an acquisition fee of approximately $1,131,000
      related to this transaction.





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





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




(7)  Equipment
      Held for Sale or Lease





Equipment
      held for sale or lease at December 31, 2006, consists solely of computer
      equipment and corresponding parts. On December 1, 2006, two of the LLC’s leases
      in investment in finance leases expired and the equipment was returned and
      classified as held for sale or lease. The LLC is currently exploring its options
      with respect to re-leasing or selling this equipment. At December 31, 2006,
      based on recent sales estimates, the LLC recorded an impairment loss of
      approximately $154,000.








52




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(8)  Notes
      Payable - Non-recourse





The
      LLC
      acquired the Vessels on bareboat charter to Wilhelmsen through December 2008
      for
      cash and non-recourse debt (See Note 3).  On
      May
      18, 2006, in connection with the charter extension through December 22, 2013,
      the LLC refinanced the non-recourse debt related to the Vessels and borrowed
      approximately an additional $22,043,000. The principal amount of the refinanced
      non-recourse debt is $51,000,000, matures on December 22, 2013 and accrues
      interest at LIBOR plus 1.50% per year. The refinanced non-recourse debt requires
      quarterly payments ranging from $450,000 to $800,000. The lender has a security
      interest in the Vessels and an assignment of the rental payments under the
      charter. The LLC paid approximately $630,000 in costs associated with the
      non-recourse debt refinancing, which were capitalized to other assets and will
      be amortized to operations over the term of the non-recourse debt. The LLC
      expensed approximately $417,000 of loan origination costs associated with the
      original non-recourse debt to interest expense.





Simultaneously
      with the execution of the refinanced non-recourse debt, the LLC entered into
      three interest rate swap contracts with Fortis Bank NV/SA, New York Branch
      in
      the aggregate amount of $51,000,000 in order to fix the variable interest rate
      on the non-recourse debt and minimize the LLC’s risk of interest rate
      fluctuation. The interest rate swap contracts fixed the interest rate at 7.02%
      per year. The LLC accounts for its interest rate swap contracts in accordance
      with SFAS No. 133, as amended, and recorded the interest rate swap contracts
      at
      their estimated fair values, and recognizes the periodic change in their fair
      values as other comprehensive
      income. At December 31, 2006, the fair value of the interest rate swap contracts
      was a liability of $639,304 .





During
      September 2002, the LLC had entered into three interest rate swap contracts
      associated with the original non-recourse debt assumed by the LLC as part of
      the
      acquisition of the Vessels. 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 had a fixed interest rate of 4.67% per year. The
      Manager did not contemporaneously identify these interest rate swap contracts
      as
      hedging instruments and is accounting for these derivatives at fair value.
      Accordingly the change in fair value is recognized in earnings in the period
      of
      change.





At
      December 31, 2004, the fair value of the interest rate swap contracts was
      recorded as an asset of $268,496 and the LLC reduced interest expense
      by approximately $743,000 for the year ended December 31, 2004. At
      December 31, 2005, the fair value of the interest rate swap contracts was
      recorded as an asset of $720,458 and the LLC reduced interest expense by
      $451,962 for the year ended December 31, 2005. On May 22, 2006, the LLC
      terminated the initial interest rate swap contracts in connection with the
      non-recourse debt refinancing and received $705,000 from the swap provider
      to
      terminate the existing three interest rate swap contracts. The LLC recognized
      a
      gain on this termination of approximately $26,000 during the year ended December
      31, 2006.





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






53




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004


(8)  Notes
      Payable - Non-recourse - continued





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





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





The
      aggregate maturities of notes payable - non recourse, including the effects
      of
      refinancing discussed above, consist of the following at December 31,
      2006:





Years
                EndedDecember
                31,2007
            
            $
            17,325,0742008
            
            $
            13,096,4192009
            
            $
            9,800,9752010
            
            $
            9,912,8632011
            
            $
            31,545,318Thereafter
            
            $
            10,800,000








(9)  Revolving
      Loan Facility - recourse





On
      August
      31, 2005, the LLC, together with certain of its affiliates (entities sponsored
      and organized by the Manager), Fund Eight B, Fund Ten and Fund Eleven
      (collectively, the “Borrowers”) entered into a Commercial Loan Agreement (the
“Loan Agreement”), with California Bank & Trust (the “Lender”). The Loan
      Agreement provides for a revolving line of credit of up to $17,000,000 pursuant
      to a senior secured revolving loan facility (the “Facility”) which is secured by
      all assets of the Borrowers not subject to a first priority lien, as defined
      in
      the Loan Agreement. Each of the Borrowers is jointly and severally liable for
      all amounts borrowed under the Facility. Amounts available under the Facility
      are subject to a borrowing base that is determined, subject to certain
      limitations, based on the present value of the future receivables under certain
      lease agreements in which the Borrowers have a beneficial interest.





As part of
      the Loan Agreement, the Borrowers are required to comply with certain financial
      covenants, including, a minimum debt coverage ratio, a tangible net worth
      covenant, a leverage ratio and a minimum liquidity covenant. The Borrowers
      are
      in compliance with these covenants at December 31, 2006. The Loan Agreement
      prohibits the Borrowers from declaring or paying any distribution to investors
      if such a payment would cause the Borrowers to become non-compliant with the
      financial covenants in the Loan Agreement.






54




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004


(9)  Revolving
      Loan Facility - recourse - continued





In
      addition, on August 31, 2005, the Borrowers entered into a Contribution
      Agreement (the “Contribution Agreement”), pursuant to which the 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 Borrower
      would be unable to repay its portion of the outstanding obligations under the
      Facility at any time. These restrictions include, but are not limited to,
      borrowing in excess of the lesser of (a) an amount each Borrower could
      reasonably expect to repay in one year from its projected cash flow, or (b)
      the
      greater of (i) the borrowing base, as defined in the Loan Agreement, as applied
      to such Borrower and (ii) 50% of the net worth of such Borrower.





The
      Contribution Agreement also provides that, in the event a Borrower pays an
      amount under the Contribution Agreement in excess of its share of the total
      obligations under the Facility, whether by reason of an event of default or
      otherwise, the other Borrowers will immediately make a contribution payment
      to
      such Borrower and in such amount that the aggregate amount paid by each Borrower
      reflects its allocable share of the aggregate obligations under the Facility.
      The Borrowers' obligations to each other under the Contribution
      Agreement are collateralized by a subordinate lien on the assets of each
      Borrower. The Borrowers are in compliance with the Contribution Agreement at
      December 31, 2006, and no amounts are due to or payable by the LLC under the
      Contribution Agreement.





On
      September 7, 2005, certain of the Borrowers were advanced approximately
      $10,200,000 under the Facility, which amount was used to completely repay all
      of
      the outstanding indebtedness incurred by certain of the Borrowers and their
      affiliates under a line of credit agreement they had with Comerica Bank.





The
      line
      of credit with Comerica Bank was subsequently terminated and the Borrowers
      entered into the new line of credit agreement with California Bank & Trust.




On
      December 26, 2006, the Borrowers entered into a Loan Modification Agreement
      (the
“Loan Modification”) to the Loan Agreement. The changes to the Loan
      Agreement included, but are not limited to, an extension of the
      Facility from August 31, 2007 to September 30, 2008 and the lowering of (i)
      the
      interest rate for advances under the Facility from the Lender’s prime rate plus
      0.25% to the Lender’s prime rate and (ii) the interest rate on the five separate
      advances that are permitted to be made under the Facility at the rate at which
      United States dollar deposits can be acquired by the Lender in the London
      Interbank Eurocurrency Market (the “LIBOR Rate”), plus 2.75% per year to the
      LIBOR Rate plus 2.5% per year. In addition, pursuant to the Loan Modification,
      the Borrowers no longer have to maintain a cash reserve. The interest rate
      at
      December 31, 2006 was 8.25%.





Aggregate
      borrowings by all Borrowers under the Facility amounted to $3,125,000 at
      December 31, 2006. The LLC had no borrowings under the Facility at December
      31,
      2006.





(10)  Transactions
      with Related Parties





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






55




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004


(10)  Transactions
      with Related Parties - continued





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





Administrative
      expense reimbursements are costs incurred by the Manager 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 salaries 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, cash distributions
      and liquidation proceeds. The LLC paid distributions to the Manager of $89,204,
      $89,294 and $89,744 for the years ended December 31, 2006, 2005 and 2004,
      respectively. The Manager’s interest in the LLC’s net loss was $6,679, $27,771
      and $178 for the years ended December 31, 2006, 2005 and 2004,
      respectively.




Fees
      and
      other expenses paid or accrued by the LLC to the Manager or its affiliates
      for
      the years ended December 31, 2006, 2005 and 2004, were as follows:





2006
            
            2005
            
            2004Acquisition
                fees (a)
            
            $
            60,000
            
            $
            -
            
            $
            51,632Management
                fees (b)
            
            
            2,114,283
            
            
            2,131,445
            
            
            2,109,282Administrative
                expense reimbursements (b)
            
            
            596,881
            
            
            647,534
            
            
            1,139,479Total
                fees paid to
                the Manager
            
            $
            2,771,164
            
            $
            2,778,979
            
            $
            3,300,393(a)
                Amount charged to other assets and amortized to operations over the
                life
                of the related acquisition.(b)
                Amount charged to operations.





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





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





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








As
      discussed in Notes 3, and 14, the LLC was assigned certain other assets during
      2004 and 2005 and an 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 line of credit the LLC had with Comerica Bank.






56




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004


(11)  Fair
      Value of Financial Instruments





Fair
      value information with respect to the LLC's leased assets and liabilities is
      not
      separately provided since (i) SFAS No. 107, “Disclosures About Fair Values of
      Financial Instruments,” does not require fair value disclosures of lease
      arrangements and (ii) the carrying value of financial assets, other than lease
      related investments, and the recorded value of recourse notes payable
      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, 2006 and
      2005, was approximately $58,563,000 and $83,829,000, respectively.





(12)  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.





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





For
      the
      year ended December 31, 2006, the LLC had three lessees that accounted for
      approximately 88% of its rental and finance income. Wilhelmsen accounted for
      approximately 34%. For the year ended December 31, 2005, the LLC had three
      lessees which accounted for approximately 86% of its rental and finance income.
      Wilhelmsen accounted for approximately 39%. For the year ended December 31,
      2004, the LLC had three lessees that accounted for approximately 81% of its
      rental and finance income. Wilhelmsen accounted for approximately 38%.





For
      the
      year ended December 31, 2006 the LLC had two aircraft that accounted for
      approximately 90% of operating assets. For the year ended December 31, 2005,
      the
      LLC had two aircraft that accounted for 48% of total assets and three vessels
      that accounted for approximately 39%.





For
      the
      year ended December 31, 2006, the LLC had two lenders that accounted for
      approximately 95% of notes payable - non-recourse. Wilhelmsen accounted for
      approximately 49% and Cathay accounted for approximately 46%. For the year
      ended
      December 31, 2005, the LLC had two lessees that accounted for approximately
      84%
      of notes payable - non-recourse. Wilhelmsen accounted for approximately 34%
      and
      Cathay accounted for 50%.








57




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004


(13)  Other
      Comprehensive Income (Loss)





For
      the
      years ended December 31, 2006, 2005 and 2004, other comprehensive loss consists
      of the following:





2006
            
            2005
            
            2004Net
                loss
            
            $
            (667,903
            )
            $
            (2,777,128
            )
            $
            (17,768
            )Other
                comprehensive income:Change
                in valuation interest rateswap
                contracts
            
            
            (639,304
            )Foreign
                currency translation adjustment
            
            
            45,185
            
            
            (45,185
            )
            
            -Comprehensive
                loss
            
            $
            (1,262,022
            )
            $
            (2,822,313
            )
            $
            (17,768
            )








(14)  Commitments
      and Contingencies





The
      LLC
      has entered into remarketing and residual sharing agreements with various 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 speciic formulas.





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





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




On
      February 23, 2005, L.P. Seven assigned to the LLC 3.02% of its rights to the
      profits, losses, and cash flows from its limited partnership interest in an
      entity that owns a 100% interest in a mobile offshore drilling rig. L.P. Seven
      assigned the rights to the LLC as repayment of its $755,000 outstanding debt
      obligation pursuant a contribution agreement that the LLC entered into with
      some
      of its affiliates in connection with the line of credit agreement the LLC had
      with Comerica Bank. This assignment increased the LLC’s rights to the profits,
      losses, and cash flows from L.P. Seven’s limited partnership interest from
      2.60%, which were assigned to the LLC in November 2004 as repayment of its
      $650,000 outstanding debt obligation, to 5.62%. The repayment amount represented
      the Manager’s estimated fair value of L.P. Seven's interest in the mobile
      offshore drilling rig at February 23, 2005. The fair value of the mobile
      offshore drilling rig was determined using an independent third party appraisal
      and cash flow analysis. During the year ended December 31, 2006, the LLC
      received approximately $253,000 in cash distributions, related to this
      assignment.





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








58




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(15)  Income
      Taxes (Unaudited)





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





At
      December 31, 2006 and 2005, the members’ capital accounts included in the
      consolidated financial statements totaled $42,333,349 and $52,543,253,
      respectively. The members’ capital for Federal income tax purposes at December
      31, 2006 and 2005 totaled $70,782,921 and $71,837,442, respectively. The
      difference arises primarily from sales and offering expenses reported as a
      reduction in the additional members’ capital accounts for financial reporting
      purposes, but not for Federal income tax reporting purposes and differences
      in
      depreciation and amortization between financial reporting purposes and Federal
      income tax purposes.





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





Years
                Ended December 31,2006
            
            2005
            
            2004Net
                loss per consolidated financial statements
            
            $
            (667,903
            )
            $
            (2,777,128
            )
            $
            (17,768
            )Direct
                finance leases
            
            
            12,039,904
            
            
            6,034,568
            
            
            4,994,525Depreciation
                expense
            
            
            1,018,532
            
            
            1,207,259
            
            
            1,466,952Interest
                expense - consolidating joint venture
            
            
            (1,734,784
            )
            
            (5,298,044
            )
            
            3,200,132Maintenance
                expense - consolidating joint venture
            
            
            (1,317,361
            )
            
            -
            
            
            -Gain
                on sale of equipment
            
            
            497,486
            
            
            -
            
            
            9,829Rent
                - consolidating joint venture
            
            
            (5,472,966
            )
            
            4,962,772
            
            
            (8,367,308
            )Tax
                gain from joint venture
            
            
            2,994,299
            
            
            997,361
            
            
            (612,505
            )Change
                in valuation of interest swap contracts
            
            
            20,455
            
            
            (451,962
            )
            
            (743,044
            )Other
            
            
            594,864
            
            
            (1,161,517
            )
            
            (105,203
            )Net
                income (loss) for Federal income tax purposes
            
            $
            7,972,526
            
            $
            3,513,309
            
            $
            (174,390
            )





(16)  Share
      Redemptions





The
      Manager consented to the LLC redeeming 42, 204 and 643 member shares for the
      years ended December 31, 2006, 2005 and 2004, respectively. The redemption
      amounts are calculated according to a specified redemption formula that is
      calculated pursuant to the LLC Agreement. Redeemed shares have no voting rights
      and do not share in distributions. The LLC Agreement limits the number of shares
      which can be redeemed in any one year and redeemed shares may not be reissued.
      Redeemed member shares are accounted for as a reduction of members'
      equity.








59




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(17)  Geographic
      Information





Geographic
      information for revenue, based on the country of origin, and long-lived assets,
      which includes finance leases, operating leases, net of accumulated
      depreciation, investments in joint ventures and investments in unguaranteed
      residual values at December 31, 2006 and 2005 and for the years then ended
      is as
      follows:




Year
                Ended December 31, 2006United
            
            United
            
            
            
            SouthStates
            
            Kingdom
            
            Vessels
                (a)
            
            East
                Asia
            
            TotalRevenue:Rental
                income
            
            $
            7,613,200
            
            $
            310,389
            
            $
            2,471,428
            
            $
            7,468,477
            
            $
            17,863,494Finance
                income
            
            
            6,266,931
            
            
            -
            
            
            -
            
            
            194,930
            
            
            6,461,861Income
                from investments in joint ventures
            
            
            457,137
            
            
            -
            
            
            -
            
            
            (736,209
            )
            
            (279,072
            )




At
                December 31, 2006United
            
            United
            
            
            
            SouthStates
            
            Kingdom
            
            Vessels
                (a)
            
            East
                Asia
            
            TotalLong-lived
                assets:Investments
                in finance leases:Minimum
                rents receivable
            
            $
            1,892,403
            
            $
            -
            
            $
            68,316,263
            
            $
            686,732
            
            $
            70,895,398Estimated
                unguaranteed residual values
            
            
            755,995
            
            
            -
            
            
            -
            
            
            451,572
            
            
            1,207,567Initial
                direct costs, net
            
            
            18,279
            
            
            -
            
            
            -
            
            
            5,830
            
            
            24,109Unearned
                income
            
            
            (190,850
            )
            
            -
            
            
            (28,455,646
            )
            
            (51,070
            )
            
            (28,697,566
            )Investments
                in finance leases, net
            
            $
            2,475,827
            
            $
            -
            
            $
            39,860,617
            
            $
            1,093,064
            
            $
            43,429,508Investments
                in operating leases, net
            
            $
            10,813,711
            
            $
            -
            
            $
            -
            
            $
            50,635,283
            
            $
            61,448,994Investments
                in joint ventures
            
            $
            2,782,114
            
            $
            -
            
            $
            -
            
            $
            3,690,486
            
            $
            6,472,600Investments
                in unguaranteed residual values
            
            $
            -
            
            $
            2,147,793
            
            $
            -
            
            $
            -
            
            $
            2,147,793




Year
                Ended December 31, 2005United
            
            United
            
            
            
            SouthStates
            
            Kingdom
            
            Vessels
                (a)
            
            East
                Asia
            
            TotalRevenue:Rental
                income
            
            $
            8,759,444
            
            $
            -
            
            $
            11,862,855
            
            $
            8,312,064
            
            $
            28,934,363Finance
                income
            
            
            1,001,015
            
            
            -
            
            
            -
            
            
            317,840
            
            
            1,318,855Income
                from investments in joint ventures
            
            
            (106,593
            )
            
            -
            
            
            -
            
            
            452,254
            
            
            345,661






60




ICON
        Income Fund Nine, LLC
 (A
        Delaware Limited Liability Company)
 Notes
        To
        Consolidated Financial Statements
 December
        31, 2006, 2005 and 2004





(17)  Geographic
      Information - continued





At
                December 31, 2005United
            
            United
            
            
            
            SouthStates
            
            Kingdom
            
            Vessels
                (a)
            
            East
                Asia
            
            TotalLong-lived
                assets:Investments
                in finance leases:Minimum
                rents receivable
            
            $
            9,904,586
            
            $
            -
            
            $
            -
            
            $
            1,990,536
            
            $
            11,895,122Estimated
                unguaranteed residual values
            
            
            1,302,239
            
            
            -
            
            
            -
            
            
            451,572
            
            
            1,753,811Initial
                direct costs, net
            
            
            96,205
            
            
            -
            
            
            -
            
            
            28,079
            
            
            124,284Unearned
                income
            
            
            (1,010,270
            )
            
            -
            
            
            -
            
            
            (246,001
            )
            
            (1,256,271
            )Investments
                in finance leases, net
            
            $
            10,292,760
            
            $
            -
            
            $
            -
            
            $
            2,224,186
            
            $
            12,516,946Investments
                in operating leases, net
            
            $
            22,981,533
            
            $
            -
            
            $
            47,221,733
            
            $
            54,643,863
            
            $
            124,847,129Investments
                in joint ventures
            
            $
            1,137,485
            
            $
            -
            
            $
            -
            
            $
            4,335,685
            
            $
            5,473,170Investments
                in unguaranteed residual values
            
            $
            -
            
            $
            3,339,010
            
            $
            -
            
            $
            -
            
            $
            3,339,010


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







(18)  Selected
      Quarterly Financial Data (Unaudited)





The
      following table is a summary of selected financial data, by quarter, for the
      years ended December 31, 2006 and 2005:





Quarters
                Ended in 2006March
                31,
            
            June
                30,
            
            September
                30,
            
            December
                31,Revenue
            
            $
            7,290,137
            
            $
            6,208,283
            
            $
            6,229,854
            
            $
            5,156,879Net
                income (loss) allocable to additional members
            
            $
            (2,292,728
            )
            $
            (162,277
            )
            $
            1,346,691
            
            $
            447,090Net
                income (loss) per weighted averageadditional
                member shares
            
            $
            (23.36
            )
            $
            (1.65
            )
            $
            13.72
            
            $
            4.55





Quarters
                Ended in 2005March
                31,
            
            June
                30,
            
            September
                30,
            
            December
                31,Revenue
            
            $
            7,742,669
            
            $
            7,639,457
            
            $
            7,594,030
            
            $
            7,373,311Net
                income (loss) allocable to additional members
            
            $
            323,836
            
            $
            (382,231
            )
            $
            292,624
            
            $
            (2,983,586
            )Net
                income (loss) per weighted averageadditional
                member shares
            
            $
            3.29
            
            $
            (3.89
            )
            $
            2.98
            
            $
            (30.37
            )








61






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





During
      the year ended December 31, 2006 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*





In
      connection with the preparation of this Annual Report on Form 10-K for the
      period ended December 31, 2006, as well as the financial statements for our
      Manager, our Manager carried out an evaluation, under the supervision and with
      the participation of the management of our Manager, including its Chief
      Executive Officer and the 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. 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.





While
      evaluating our Manager’s disclosure controls and procedures, our Manager
      recognized that greater internal controls were needed to aid in a more efficient
      closing of our financial statements, thereby requiring our
      Manager to hire  additional
      skilled accounting staff.  Our Manager hired an additional accounting staff
      member during 2006 who is a certified public accountant and experienced with
      public reporting entities. Subsequently, in 2007 our Manager hired two
      additional senior accountants with more than 16 and 8 years of experience 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.





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.








62






**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.
      Our
      Manager's principal offices are located at 100 Fifth Avenue, 4th Floor, New
      York, New York 10011, and the telephone number is (212) 418-4700.




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





Our
      Manager’s Directors and Officers are:




**Name**
            **Age**
            **Position**Beaufort
                J.B. Clarke
            60
            Chairman,
                Chief Executive Officer and DirectorThomas
                W. Martin
            53
            President,
                Chief Operating Officer and DirectorMichael
                A. Reisner
            36
            Executive
                Vice President and Chief Financial OfficerMark
                Gatto
            34
            Executive
                Vice President-Business DevelopmentPatricia
                Palmer
            43
            Executive
                Vice PresidentRichard
                L. Specker
            52
            Senior
                Managing DirectorJoel
                S. Kress
            34
            Senior
                Vice President and General CounselDavid
                J. Verlizzo
            34
            Vice
                President and Deputy General CounselDavid
                C. Wright
            49
            Senior
                Vice President-AccountingAnthony
                J. Branca
            38
            Senior
                Vice President-FinanceCraig
                A. Jackson
            48
            Vice
                President-Remarketing and Portfolio
                Management





***Beaufort
      J. B. Clarke*** has been
      Chairman, Chief Executive Officer and a Director since August 1996. He was
      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
      LLP. Mr. Clarke received a B.A. degree from the George Washington University
      and
      a J.D. degree from the University of South Carolina. Mr. Clarke has been in
      the
      equipment leasing business, as a business person and lawyer, since
      1979.




***Thomas
      W. Martin*** has been
      President since February 2007, Chief Operating Officer since February 2006,
      has
      been a Director (and Director, President and Treasurer of ICON Securities Corp.
      as well) since August 1996, and was Chief Financial Officer from May 2003
      through January 2007. Mr. Martin was the Executive Vice President, Chief
      Financial Officer and a co-founder of Griffin Equity Partners, Inc. from October
      1993 to August 1996. Prior to that, Mr. Martin was Senior Vice President of
      Gemini Financial Holdings, Inc. from April 1992 to October 1993 and he held
      the
      position of Vice President at Chancellor Corporation (an equipment leasing
      company) for 7 years. Mr. Martin has a B.S. degree from University of New
      Hampshire. Mr. Martin has been in the equipment leasing business since
      1983.




***Michael
      A. Reisner*** has been
      Executive Vice President and Chief Financial Officer since January 2007 and
      was
      Executive Vice President-Acquisitions from February 2006 through January 2007.
      Mr. Reisner was Senior Vice President and General Counsel from January 2004
      through January 2006. Mr. Reisner was Vice President and Associate General
      Counsel from March 2001 until December 2003. Previously, from 1996 to 2001,
      Mr.
      Reisner was an attorney with Brodsky Altman & McMahon, LLP in New York,
      concentrating on commercial transactions. Mr. Reisner received a J.D. from
      New
      York Law School and a B.A. from the University of Vermont.






63






***Mark
      Gatto*** has been
      Executive Vice President-Business Development since February 2006. Mr. Gatto
      is
      responsible for business and corporate development, including the acquisition
      of
      equipment subject to lease. Before serving as Associate General Counsel from
      November 1999 through October 2000, Mr. Gatto was an attorney with Cella &
Goldstein in New Jersey, concentrating on commercial transactions and general
      litigation matters. From November 2000 to June 2003, Mr. Gatto was Director
      of
      Player Licensing for the Topps Company and, in July 2003, he co-founded a
      specialty business consulting firm in New York City and served as its managing
      partner before re-joining our Manager in April 2005. Mr. Gatto received an
      M.B.A
      from the W. Paul Stillman School of Business at Seton Hall University, a J.D.
      from Seton Hall University School of Law, and a B.S. from Montclair State
      University.




***Patricia
      Palmer*** has been
      Executive Vice President (and Executive Vice President of ICON Securities Corp.
      as well) since February 2007, has been a Director of ICON Securities Corp.
      since
      December 2002, and was Senior Vice President (and Senior Vice President of
      ICON
      Securities Corp. as well) from July 2002 through February 2007. Ms. Palmer,
      who
      joined our Manager in December 1996, is responsible for our Manager’s product
      development, hiring and training, and the coordination of ICON Securities
      Corp.’s national sales and marketing efforts. Prior to joining our Manager, Ms.
      Palmer was a Regional Marketing Director at PLM Securities Corp. and a Product
      Manager at Phoenix Leasing, Inc. Ms. Palmer received a B.A. from the University
      of California, Berkeley. Ms. Palmer has more than 18 years of experience in
      the
      securities and equipment leasing industries.




***Richard
      L. Specker*** has been
      Senior Managing Director since April 2006 and was a consultant to our Manager
      from September 2005 through April 2006. Mr. Specker is responsible for certain
      portfolio strategy and management functions, including arranging and managing
      portfolio lease asset restructurings, lease debt refinancing transactions and
      strategic asset sales. Mr. Specker has over 25 years of experience in
      asset-based finance and leasing, including as President of the Global Lease
      Finance Division of Fleet Capital Leasing and as Senior Vice President and
      Manager of the Structured Lease Finance Group at NationsBanc Leasing
      Corporation. Mr. Specker received a M.B.A. from the University of North Carolina
      at Chapel Hill and a B.A. from Duke University. Mr. Specker is a former member
      of the Board of Directors of the Equipment Leasing and Finance
      Association.




***Joel
      S. Kress*** has been
      Senior Vice President and General Counsel since February 2006. Mr. Kress was
      Vice President and Associate General Counsel from August 2005 until January
      2006. Previously, from 2001 to 2005, Mr. Kress was an attorney with Fried,
      Frank, Harris, Shriver & Jacobson LLP in New York and London, England,
      concentrating on mergers and acquisitions, corporate finance and financing
      transactions (including debt and equity issuances) and private equity
      investments. Mr. Kress received a J.D. from Boston University School of Law
      and
      a B.A. from Connecticut College.




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




***David
      C. Wright*** is a
      certified public accountant and has been Senior Vice President-Accounting since
      February 2005. Mr. Wright was Vice President-Accounting from August 2004 until
      January 2005. Previously, from 1989 through 2004, Mr. Wright was employed as
      a
      manager at several regional and national public accounting
      firms, including Grant Thornton LLP, Goldstein Golub Kessler LLP and Hays &
Company LLP, having responsibility for both public and private engagements.
      Mr.
      Wright received a B.A. from Ohio Wesleyan University.




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






64






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




**Code
      of Ethics**




Our
      Manager, on our behalf, has adopted a code of ethics for its 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, 4 th 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, 2006, 2005 and 2004.





Entity
            
            Capacity
            
            Compensation
            
            2006
            
            2005
            
            2004ICON
                Capital Corp.
            Manager
            Acquisition
              fees (a)
            
            $
            60,000
            
            $
            -
            
            $
            51,632ICON
                Capital Corp.
            Manager
            Management
              fees (b)
            
            $
            2,114,283
            
            $
            2,131,445
            
            $
            2,109,282ICON
                Capital Corp.
            Manager
            Administrative
              fees (b)
            
            $
            596,881
            
            $
            647,534
            
            $
            1,139,479(a)
                Amount charged to other assets and amortized to operations over the
                life
                of the related acquisition.(b)
                Amount charged to operations.





Our
      Manager also has a 1% interest in our profits, losses, cash distributions and
      liquidation proceeds. We paid distributions to our Manager of $89,204, $89,294
      and $89,744, respectively, for the years ended December 31, 2006, 2005 and
      2004.
      Additionally, our Manager’s interest in our net loss was $6,679, $27,771 and
      $178 and, respectively, for the years ended December 31, 2006, 2005 and
      2004.





**Item
      12. Security Ownership of Certain Beneficial Owners and
      Manage****r
      and Related Security Holder Matters**





(a)
            We
                do not have any securities authorized for issuance under any equity
                compensation plan. No person of record owns, or is known by us to
                own,
                beneficially more than 5% of any class of our securities.





(b)
            As
                of February 28, 2007, no Directors and Officers of our Manager own
                any of
                our equity securities.





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





**Item
      13. Certain Relationships and Related Transactions******





See
      Item
      11 for a discussion of our related party transactions.  See Notes 5 and 10
      to our financial statements for a discussion of our investments in joint
      ventures and transactions with related parties.







65





**Item
      14. Principal Accountant Fees and Services******





During
      the years ended December 31, 2006, 2005, and 2004 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:





2006
            
            2005Audit
                fees
            
            $
            218,994
            
            $
            65,750Audit
                related fees
            
            
            -
            
            
            1,350Tax
                fees (compliance)
            
            
            26,165
            
            
            19,500$
            245,159
            
            $
            86,600







66








**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:





3.1  Certificate
      of Formation of ICON Income Fund Nine, LLC. Exhibit 4.3 to our Registration
      Statement on Form S-1 filed with the SEC on August 15, 2001 (File No.
      333-67638), is incorporated herein by reference.





4.1  ICON
      Income Fund Nine, LLC Amended and Restated Limited Liability Company Agreement.
      Exhibit A to Amendment No. 1 to our Registration Statement on Form S-1 filed
      with the SEC on October 12, 2001 (File No. 333-67638), is incorporated herein
      by
      reference.




10.1  Commercial
      Loan Agreement, by and between California Bank & Trust, ICON Income Fund
      Eight B L.P., ICON Income Fund Nine, LLC; ICON Income Fund Ten, LLC and ICON
      Leasing Fund Eleven, LLC, dated August 31,
      2005. Exhibit
      10.1 our Current Report on Form 8-K, dated September 7, 2005, is incorporated
      herein by reference.




10.2  Loan
      Modification Agreement, by and between California Bank & Trust and ICON
      Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten,
      LLC
      and ICON Leasing Fund Eleven, LLC, dated December 26, 2006. Exhibit 10.1 to
      our
      Current Report on Form 8-K dated December 29, 2006 is incorporated herein by
      reference.





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





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





32.1  Certification
      of Chairman and Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




Certification
      of Chairman and Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




(
      c )
      Financial Statements of ICON Aircraft 126 LLC and ICON Aircraft 47820,
      LLC







67






**SIGNATURES**





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




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







*Date:
      April 13, 2007*







*/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:
      April 13, 2007*







*/s/
      Beaufort J.B. Clarke*


Beaufort
      J.B. Clarke


Chairman,
      Chief Executive Officer and Director


(Principal
      Executive Officer)







*Date:
      April 13, 2007*







*/s/
      Thomas W. Martin*


Thomas
      W.
      Martin


President,
      Chief Operating Officer and Director







*Date:
      April 13, 2007*







*/s/
      Michael A. Reisner*


Michael
      A. Reisner


Executive
      Vice President 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 Registrant which have not registered securities pursuant to Section
      12 of
      the Act.





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






68