UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 [x]           Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the
 
 quarterly
      period ended
                March 31, 2008
 
 [  ]           Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the
 
 transition
      period from
                
                to
 
 Commission_File_Number_
                000-51916
 
 ICON Leasing Fund Eleven,
    LLC(Exact
      name of registrant as specified in its
charter)
 
 Delaware
                20-1979428(State
      or other jurisdiction of incorporation or organization)
                (IRS
      Employer Identification Number)
 
 100 Fifth Avenue, 4thFloor, New York, New York
                10011-1505(Address
      of principal executive offices)
                (Zip
      code)
 
 (212) 418-4700Registrant's
      telephone number, including area
code
 
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. [X] Yes     [ ] No
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or smaller reporting company. See
the definitions of “large accelerated filer’’, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange
Act.   Large accelerated filer [  ] Accelerated
filer [  ] Non-accelerated filer [X] Smaller reporting
company [   ]
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). [  ] Yes [X]
No
 
 Number of
outstanding limited liability company shares of the registrant on April 30, 2008
is 363,468.
 
  
  ICON Leasing Fund Eleven, LLC
                  Table
      of ContentsPART I - FINANCIAL INFORMATION
                PageItem 1.  Condensed Consolidated Financial
      StatementsCondensed Consolidated Balance Sheets
                1Condensed Consolidated Statements of
      Operations
                2Condensed Consolidated Statement of Changes in Members’
      Equity
                3Condensed Consolidated Statements of Cash
      Flows
                4Notes to Condensed Consolidated Financial
      Statements
                6Item 2. Manager’s Discussion and Analysis of Financial
      Condition and Results of Operations
                18Item 3. Quantitative and Qualitative Disclosures About
      Market Risk
                28Item 4T. Controls and Procedures
                28PART II – OTHER INFORMATIONItem 1. Legal Proceedings
                
                29Item 1A. Risk Factors
                
                29Item 2. Unregistered Sales of Equity Securities and Use of
      Proceeds
                29Item 3. Defaults Upon Senior
Securities
                29Item 4. Submission of Matters to a Vote of Security
      Holders
                29Item 5. Other Information
                
                29Item 6. Exhibits
                
                30Signatures
                
                31
 
 Table of Contents
 
 PART I – FINANCIAL INFORMATION
 
 Item 1.  Condensed Consolidated Financial
Statements
 
 ICON Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Condensed
      Consolidated Balance SheetsAssetsMarch
      31,2008
              
              
              December
      31,(unaudited)
              
              
              2007Current
      assetsCash
      and cash equivalents
              
              $
              28,983,543
              
              
              $
              42,339,549Current
      portion of net investment in finance leases
              
              
              10,013,758
              
              
              
              10,442,124Accounts
      receivable (net of allowancefor
      doubtful accounts of $72,516 and $73,321, respectively)
              
              
              7,023,007
              
              
              
              4,087,034Restricted
      cash
              
              
              1,016,949
              
              
              
              1,426,170Equipment
      held for sale or lease, net
              
              
              3,794,478
              
              
              
              2,226,905Prepaid
      expenses
              
              
              2,815,876
              
              
              
              2,991,302Other
      current assets
              
              
              759,813
              
              
              
              651,516Total
      current assets
              
              
              54,407,424
              
              
              
              64,164,600Non-current
      assetsNet
      investment in finance leases, less current portion
              
              
              82,165,213
              
              
              
              89,080,301Leased
      equipment at cost, (less accumulated depreciation of$119,531,303
      and $109,756,923 respectively)
              
              
              397,842,998
              
              
              
              417,738,629Note
      receivable on financing facility, net
              
              
              4,252,390
              
              
              
              4,087,568Mortgage
      note receivable
              
              
              12,722,006
              
              
              
              12,722,006Investments
      in joint ventures
              
              
              4,435,153
              
              
              
              4,638,393Deferred
      income taxes
              
              
              1,001,724
              
              
              
              963,595Other
      non-current assets, net
              
              
              2,307,845
              
              
              
              2,356,913Total
      non-current assets
              
              
              504,727,329
              
              
              
              531,587,405Total
      Assets
              
              $
              559,134,753
              
              
              $
              595,752,005Liabilities
      and Members' EquityCurrent
      liabilitiesCurrent
      portion of non-recourse long-term debt
              
              $
              67,889,098
              
              
              $
              79,084,120Interest
      rate swap contracts
              
              
              9,222,963
              
              
              
              4,556,116Deferred
      rental income
              
              
              6,620,971
              
              
              
              11,869,874Current
      portion of leasing payables and other lease liabilities
              
              
              2,925,712
              
              
              
              5,253,451Due
      to Manager and affiliates, net
              
              
              567,436
              
              
              
              296,476Income
      taxes payable
              
              
              274,016
              
              
              
              139,310Accrued
      expenses and other liabilities
              
              
              2,606,128
              
              
              
              3,995,256Total
      current liabilities
              
              
              90,106,324
              
              
              
              105,194,603Non-current
      liabilitiesNon-recourse
      long-term debt, net of current portion
              
              
              198,888,539
              
              
              
              206,410,288Leasing
      payables and other lease liabilities, net of current
    portion
              
              
              9,730,033
              
              
              
              10,533,826Total
      non-current liabilities
              
              
              208,618,572
              
              
              
              216,944,114Total
      Liabilities
              
              
              298,724,896
              
              
              
              322,138,717Minority
      Interest
              
              
              11,567,441
              
              
              
              12,389,412Commitments
      and contingencies (Note 13)Members'
      EquityManaging
      Member
              
              
              (730,652
              )
              
              
              (643,560
              )Additional
      Members
              
              
              247,836,895
              
              
              
              256,754,095Accumulated
      other comprehensive income
              
              
              1,736,173
              
              
              
              5,113,341Total
      Members' Equity
              
              
              248,842,416
              
              
              
              261,223,876Total
      Liabilities and Members' Equity
              
              $
              559,134,753
              
              
              $
              595,752,005
 
  See accompanying
notes to condensed consolidated financial statements.
 1
 Table of Contents
   ICON Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Condensed
      Consolidated Statements of Operations(unaudited)Three Months Ended March
31,2008
              
              
              2007Revenue:Rental
      income
              
              $
              27,506,275
              
              
              $
              22,818,090Finance
      income
              
              
              1,911,039
              
              
              
              2,332,210Income
      from investments in joint ventures
              
              
              78,465
              
              
              
              35,680Net
      gain on sales of  new equipment
              
              
              177,727
              
              
              
              189,256Net
      (loss) gain on sales of  leased equipment
              
              
              (227,049
              )
              
              
              82,761Interest
      and other income
              
              
              758,246
              
              
              
              1,415,572Total
      revenue
              
              
              30,204,703
              
              
              
              26,873,569Expenses:Management
      fees - Manager
              
              
              1,811,388
              
              
              
              1,482,064Administrative
      expense reimbursements - Manager
              
              
              1,568,510
              
              
              
              1,700,883General
      and administrative
              
              
              801,561
              
              
              
              720,991Interest
              
              
              4,016,638
              
              
              
              3,537,824Depreciation
      and amortization
              
              
              20,405,123
              
              
              
              19,590,530Loss
      on derivative instruments
              
              
              1,493,972
              
              
              
              360,590Total
      expenses
              
              
              30,097,192
              
              
              
              27,392,882Income
      (loss) before minority interest
              
              
              107,511
              
              
              
              (519,313
              )Minority
      interest
              
              
              (448,414
              )
              
              
              (261,333
              )Loss
      before income taxes
              
              
              (340,903
              )
              
              
              (780,646
              )Provision
      for income taxes
              
              
              27,671
              
              
              
              701,857Net
      loss
              
              $
              (368,574
              )
              
              $
              (1,482,503
              )Net
      loss allocable to:Additional
      Members
              
              $
              (364,888
              )
              
              $
              (1,467,678
              )Manager
              
              
              (3,686
              )
              
              
              (14,825
              )$
              (368,574
              )
              
              $
              (1,482,503
              )Weighted
      average number of additionalmember
      shares outstanding
              
              
              363,563
              
              
              
              317,954Net
      loss per weighted averageadditional
      member share outstanding
              
              $
              (1.00
              )
              
              $
              (4.62
              )
  
 See
accompanying notes to condensed consolidated financial
statements.
 2
 Table of Contents
 
 
 ICON Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Condensed
      Consolidated Statement of Changes in Members' EquityAccumulatedOther
              
              
              TotalAdditional
              
              
              Additional
              
              
              
              
              
              Comprehensive
              
              
              Members'Member Shares
              
              
              Members
              
              
              Manager
              
              
              Loss
              
              
              EquityBalance,
      December 31, 2007
              
              
              363,859
              
              
              
              256,754,095
              
              
              
              (643,560
              )
              
              
              5,113,341
              
              
              
              261,223,876Net
      loss
              
              
              -
              
              
              
              (364,888
              )
              
              
              (3,686
              )
              
              
              -
              
              
              
              (368,574
              )Change
      in valuation of interest rate swap contracts
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (3,253,516
              )
              
              
              (3,253,516
              )Foreign
      exchange translation adjustments
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (123,652
              )
              
              
              (123,652
              )Comprehensive
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (3,745,742
              )Additional
      member shares redeemed
              
              
              (355
              )
              
              
              (280,039
              )
              
              
              -
              
              
              
              -
              
              
              
              (280,039
              )Cash
      distributions to members
              
              
              -
              
              
              
              (8,272,273
              )
              
              
              (83,406
              )
              
              
              -
              
              
              
              (8,355,679
              )Period
      ended March 31, 2008 (unaudited)
              
              
              363,504
              
              
              $
              247,836,895
              
              
              $
              (730,652
              )
              
              $
              1,736,173
              
              
              $
              248,842,416
  
 See
accompanying notes to condensed consolidated financial
statements.
 3
 Table of Contents
 
 
 ICON Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Condensed
      Consolidated Statements of Cash Flows(unaudited)Three Months Ended March
31,2008
              
              
              2007Cash
      flows from operating activities:Net
      loss
              
              $
              (368,574
              )
              
              $
              (1,482,503
              )Adjustments
      to reconcile net loss to net cashprovided
      by operating activities:Rental
      income paid directly to lenders by lessees
              
              
              (3,502,983
              )
              
              
              (737,536
              )Finance
      income
              
              
              (1,911,039
              )
              
              
              (2,332,210
              )Income
      from investments in joint ventures
              
              
              (78,465
              )
              
              
              (35,680
              )Net
      loss (gain) on sales of new and leased equipment
              
              
              49,322
              
              
              
              (272,017
              )Depreciation
      and amortization
              
              
              20,405,123
              
              
              
              19,590,530Interest
      expense paid directly to lenders by lessees
              
              
              964,405
              
              
              
              72,156Unrealized
      loss on derivative instruments
              
              
              1,493,972
              
              
              
              360,590Minority
      interest
              
              
              448,414
              
              
              
              261,333Deferred
      tax provision
              
              
              (78,372
              )
              
              
              -Distributions
      to/from minority interest holders and joint ventures
              
              
              (343,008
              )
              
              
              (236,519
              )Changes
      in operating assets and liabilities:Collection
      of minimum rents receivable
              
              
              10,972,321
              
              
              
              4,841,080Rents
      receivable
              
              
              (2,952,067
              )
              
              
              (986,135
              )Other
      assets, net
              
              
              748,276
              
              
              
              (1,292,823
              )Payables,
      deferred rental income and other liabilities
              
              
              (8,985,953
              )
              
              
              (3,787,409
              )Due
      to Manager and affiliates, net
              
              
              (183,066
              )
              
              
              206,755Net
      cash provided by operating activities
              
              
              16,678,306
              
              
              
              14,169,612Cash
      flows from investing activities:Investments
      in leased assets, net of cash received
              
              
              (10,665,849
              )
              
              
              (31,713,501
              )Proceeds
      from sales of new and leased equipment
              
              
              4,707,677
              
              
              
              4,953,900Investment
      in financing facility
              
              
              (164,822
              )
              
              
              -Investment
      in mortgage note receivable
              
              
              -
              
              
              
              (661,743
              )Proceeds
      from mortgage note receivable
              
              
              -
              
              
              
              568,797Investments
      in joint ventures, net of cash acquired
              
              
              -
              
              
              
              (2,625
              )Change
      in restricted cash
              
              
              371,885
              
              
              
              323,174Distributions
      received from joint ventures in excess of profits
              
              
              198,611
              
              
              
              101,682Other
      assets, net
              
              
              -
              
              
              
              (9,297,981
              )Net
      cash used in investing activities
              
              
              (5,552,498
              )
              
              
              (35,728,297
              )Cash
      flows from financing activities:Proceeds
      from notes payable - non-recourse
              
              
              4,497,793
              
              
              
              8,675,040Repayments
      of notes payable - non-recourse
              
              
              (18,858,036
              )
              
              
              (18,937,753
              )Issuance
      of additional member shares, net of sales and offering expenses
      paid
              
              
              -
              
              
              
              50,565,892Redemption
      of additional member shares
              
              
              (280,039
              )
              
              
              (136,048
              )Due
      to Manager and affiliates, net
              
              
              -
              
              
              
              (61,111
              )Cash
      distributions to members
              
              
              (8,355,679
              )
              
              
              (6,902,472
              )Distributions
      to minority interest holders in joint ventures
              
              
              (821,971
              )
              
              
              (445,600
              )Net
      cash (used in) provided by financing activities
              
              
              (23,817,932
              )
              
              
              32,757,948Effects
      of exchange rates on cash and cash equivalents
              
              
              (663,882
              )
              
              
              79,095Net
      (decrease) increase in cash and cash equivalents
              
              
              (13,356,006
              )
              
              
              11,278,358Cash
      and cash equivalents, beginning of the period
              
              
              42,339,549
              
              
              
              61,200,675Cash
      and cash equivalents, end of the period
              
              $
              28,983,543
              
              
              $
              72,479,033
 
  See
accompanying notes to condensed consolidated financial
statements.
 4
 Table of Contents
 
  ICON
      Leasing Fund Eleven, LLC(A
      Delaware Limited Liability Company)Condensed
      Consolidated Statements of Cash Flows(unaudited)Three Months Ended March
31,2008
              
              
              2007Supplemental
      disclosure of cash flow information:Cash
      paid during the period for interest
              
              $
              3,136,701
              
              
              $
              3,826,258Supplemental
      disclosure of non-cash investing and financing activities:Principal
      and interest paid on non-recourse long term debtdirectly
      to lenders by lessees
              
              $
              3,832,626
              
              
              $
              1,096,371
 
 
 See
accompanying notes to condensed consolidated financial
statements.
 5
 Table of Contents
 ICON Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
 
 (1)
              Basis
      of Presentation and Consolidation
 
 The
accompanying condensed consolidated financial statements of ICON Leasing Fund
Eleven, LLC (the “LLC”) have been prepared in accordance with U.S. generally
accepted accounting principles (“US GAAP”) for interim financial information and
pursuant to the rules and regulations of the Securities and Exchange Commission
for Quarterly Reports on Form 10-Q.  Accordingly, they do not include
all of the information and footnotes required by US GAAP for complete financial
statements.  In the opinion of ICON Capital Corp. (the “Manager”), all
adjustments considered necessary for a fair presentation have been
included.  These condensed consolidated financial statements should be
read together with the consolidated financial statements and notes included in
the LLC’s Annual Report on Form 10-K for the year ended December 31,
2007.  The results for the interim period are not necessarily
indicative of the results for the full year.
 
 The
condensed 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 over financial and operational matters, generally 50% or less
ownership interest, under the equity method of accounting. In such cases, the
LLC's original investments are recorded at cost and adjusted for its share of
earnings, losses and distributions.  The LLC accounts for investments
in joint ventures where the LLC has virtually no influence over financial and
operational matters using the cost method of accounting.  In such
cases, the LLC's original investments are recorded at cost and any distributions
received are recorded as revenue.  All of the LLC's investments in
joint ventures are subject to its impairment review policies.
 
 In joint
ventures where the LLC’s interest is majority owned, the financial condition and
results of operations of the joint venture are consolidated.  Minority
interest represents the minority owner’s proportionate share of its equity in
the joint venture. The minority interest is adjusted for the minority owner’s
share of the earnings, losses and distributions of the joint
venture.
 
 (2)
              Organization
 
 The LLC
was formed on December 2, 2004 as a Delaware limited liability company and
commenced operations on May 6,2005
when the LLC admitted its first Additional Members.  Additional
Members represent all members other than the Manager.  The LLC is
engaged in one business segment, the business of purchasing equipment and
leasing it to third-party end users, providing equipment and other financing,
acquiring equipment subject to lease and, to a lesser extent, acquiring
ownership rights to items of leased equipment at lease
expiration.  From time to time, the LLC also purchases equipment and
sells it to its leasing customers.  The LLC will continue until
December 31, 2024, unless terminated sooner.
 
 The
Manager of the LLC was originally formed as a Connecticut corporation. Effective
June 1, 2007 the Manager was reincorporated as a Delaware corporation. The
Manager manages and controls the business affairs of the LLC, including, but not
limited to, the equipment leases and financing transactions that the LLC enters
into pursuant to the terms of the LLC’s limited liability company agreement (the
“LLC Agreement”).  Additionally, the Manager has a 1% interest in the
profits, losses, cash distributions and liquidation proceeds of the
LLC.
  
 6
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
 
 (2)
              Organization
      - continued
 
 The LLC’s
offering period ended on April 20, 2007 and its operating period
commenced.  The LLC invests most of the net proceeds from its offering
in items of equipment that are subject to a lease. After the net offering
proceeds are fully invested, additional investments will be made with the cash
generated from the LLC’s initial investments, to the extent that cash is not
needed for expenses, reserves, or 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
2012, unless that date is extended for up to an additional three years, at the
Manager’s sole discretion. After the reinvestment period, the LLC will then sell
its assets in the ordinary course of business, 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 (a) received cash distributions and liquidation
proceeds sufficient to reduce their adjusted capital contribution account to
zero and (b) received, in addition, other distributions and allocations that
would provide an 8% per year cumulative return on their outstanding adjusted
capital contribution account. After such time, the distributions will be
allocated 90% to the additional members and 10% to the Manager.
 
 (3)
              Summary
      of Significant Accounting Policies
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with US GAAP requires the
Manager to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
as of the date of the condensed consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.
Significant estimates primarily include the determination of allowance for
doubtful accounts, depreciation and amortization, impairment losses, estimated
useful lives and residual values. Actual results could differ from those
estimates.
 
 Reclassifications
 
 Certain
reclassifications have been made to the accompanying condensed consolidated
financial statements in prior periods to conform to the current period
presentation.
 
 Derivative
Financial Instruments
 
 In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) SFAS No. 157 (“SFAS
No. 157”).  SFAS No. 157 defines fair value, establishes a framework
for measuring fair value in generally accepted accounting principles and
establishes a hierarchy that categorizes and prioritizes the sources to be used
to estimate fair value. SFAS No. 157 also expands financial statement
disclosures about fair value measurements. On February 12, 2008, the FASB issued
FASB Staff Position (“FSP”) SFAS No. 157-2 (“FSP 157-2”), which delayed the
effective date of SFAS No. 157 for one year, for all non-financial assets and
non-financial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least
annually).  On February 14, 2008, the FASB issued FSP No. 157-1, which
amended SFAS No. 157 to exclude SFAS No. 13, “Accounting for Leases” and other
accounting pronouncements that address fair value measurements of leases from
the provisions of SFAS No. 157.  SFAS No. 157 and FSP 157-2 are
effective for the LLC’s financial statements beginning January 1,
2008.  The LLC adopted the provisions of SFAS No. 157 beginning
January 1, 2008 for all financial assets and financial liabilities that are
recognized at fair value.
   7
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
  (3)
              Summary
      of Significant Accounting Policies –
continued
  Additionally
for all non-financial assets and non-financial liabilities that are recognized
at fair value in the financial statements on a nonrecurring basis, the LLC has
adopted the provisions of FSP 157-2 and delayed the effective date of SFAS No.
157 until January 1, 2009.  The impact of partially adopting SFAS No.
157 effective January 1, 2008 is not material to the condensed consolidated
financial statements.
 
 SFAS No.
157 requires that assets and liabilities carried at fair value be classified and
disclosed in one of the following three categories:
 
 ·
              Level
      1:  Quoted market prices available in active markets for
      identical assets or liabilities as of the reporting
  date.
 ·
              Level
      2:  Pricing inputs other than quoted prices in active markets
      included in Level 1, which are either directly or indirectly observable as
      of the reporting date.
 ·
              Level
      3:  Pricing inputs that are generally unobservable and may not
      be corroborated by market data.
 
 Financial
assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurements. The LLC’s
assessment of the significance of a particular input to the fair value
measurements requires judgment, and may affect the valuation of the assets and
liabilities being measured and their placement within the fair value
hierarchy.
 
 The
following table summarizes the valuation of the LLC’s material financial assets
and liabilities measured at fair value on a recurring basis as of March 31,
2008:
 
 
 Level
      1(1)
              
              
              Level
      2(2)
              
              
              Level
      3(3)
              
              
              TotalAssets:Warrants
              
              $
              -
              
              
              $
              89,819
              
              
              $
              -
              
              
              $
              89,819Liabilities:Derivative
      Liability
              
              $
              -
              
              
              $
              9,222,963
              
              
              $
              -
              
              
              $
              9,222,963(1)
      - quoted prices in active markets for identical assets or
      liabilities(2)
      - observable inputs other than quoted prices in active markets for
      identical assets and liabilities(3)
      - no observable pricing inputs in the market
 
 
 8
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
 
 (3)
              Summary
      of Significant Accounting Policies –
continued
 
 The LLC’s
derivative contracts, including interest rate swaps and warrants, are valued
using models based on readily observable market parameters for all substantial
terms of the LLC’s derivative contracts and are classified within Level
2.  As permitted by SFAS No. 157, the LLC uses market prices and
pricing models for fair value measurements of its derivative
instruments.  The fair value of the warrants is recorded in other
non-current assets and the derivative liabilities are recorded in interest rate
swap contracts.
 
 Recent
Accounting Pronouncements
 
 In
February 2007, the FASB issued Statement of Financial Accounting Standards No.
159, “The Fair Value Option for Financial Assets and Financial Liabilities —
including an Amendment of SFAS No. 115” (“SFAS No. 159”), which permits but does
not require the LLC to measure financial instruments and certain other items at
fair value. Unrealized gains and losses on items for which the fair value option
has been elected are reported in earnings. The LLC did not elect to fair value
any of its financial instruments under the provisions of SFAS No.
159.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an Amendment of ARB No. 51” (“SFAS No.
160”). SFAS No. 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the retained interest and gain
or loss when a subsidiary is deconsolidated. This statement is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 with earlier adoption prohibited. The Manager is
currently evaluating the impact of SFAS No. 160 on the LLC’s consolidated
financial statements.
 
 On March
19, 2008, the FASB issued Statement of Financial Accounting Standards No. 161,
“Disclosures about Derivative Instruments and Hedging Activities — an Amendment
of SFAS No. 133” (“SFAS No. 161”). SFAS No. 161 enhances required disclosures
regarding derivatives and hedging activities, including enhanced disclosures
regarding how: (a) an entity uses derivative instruments; (b) derivative
instruments and related hedged items are accounted for under SFAS No. 133,
“Accounting for Derivative Instruments and Hedging Activities;” and (c)
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. SFAS No. 161 is effective for
fiscal years and interim periods beginning after November 15, 2008 and therefore
the LLC will be required to provide such disclosures beginning with the interim
period ended March 31, 2009.
 
 (4)
              Leasing
      Portfolio
 
 On March
7, 2006, the LLC acquired substantially the entire equipment leasing portfolio
(the “Leasing Portfolio”) of Clearlink Capital Corporation (“Clearlink”), based
in Mississauga, Ontario, Canada.  At the time of the acquisition, the
Leasing Portfolio consisted of approximately 1,100 equipment schedules
originated by Clearlink with predominantly large, investment grade quality
lessees and was comprised mainly of information technology and
technology-related equipment, including personal computers and client/server
equipment that perform business-related functions such as database
inquiries.  This equipment is leased primarily in the United States
and Canada.  The Leasing Portfolio had a weighted average remaining
lease term of approximately 18 months at the time of acquisition.
 
 For the
three months ended March 31, 2008, the LLC purchased approximately $9,401,000 of
additional new equipment related to the Leasing Portfolio.  The LLC
paid or accrued an acquisition fee to the Manager of approximately $282,000
relating to these transactions.
  9
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
  (5)
              Net
      Investments in Finance Leases
 
 Net
investments in finance leases consisted of the following:
 
 March
      31,2008
              
              
              December
      31,(unaudited)
              
              
              2007Minimum
      rents receivable
              
              $
              96,702,538
              
              
              $
              104,858,623Estimated
      residual values
              
              
              7,245,459
              
              
              
              7,440,417Initial
      direct costs, net
              
              
              2,121,394
              
              
              
              2,583,319Unearned
      income
              
              
              (13,890,420
              )
              
              
              (15,359,934
              )92,178,971
              
              
              
              99,522,425Less:
      Current portion of net investment in finance lease
              
              
              10,013,758
              
              
              
              10,442,124Net
      investments in finance leases, less current portion
              
              $
              82,165,213
              
              
              $
              89,080,301
 
 Information
Technology Equipment
 
 On
December 20, 2007, the LLC, along with ICON Income Fund Ten, LLC (“Fund Ten”),
an entity also managed by the Manager, formed ICON Global Crossing V, LLC (“ICON
Global Crossing V”) with interests of 55% and 45%, respectively, to purchase
telecommunications equipment from various vendors for approximately $12,982,000
in cash. This equipment is subject to a lease with Global Crossing
Telecommunications, Inc. (“Global Crossing”).  The term of the lease
is 36 months and the lease commenced on January 1, 2008. The total capital
contributions made to ICON Global Crossing V as of December 31, 2007 were
approximately $12,982,000, of which the LLC’s share was approximately
$7,140,000.  The LLC paid an acquisition fee to the Manager of
approximately $214,000 relating to this transaction.
 
 (6)
              Leased
      Equipment at Cost
 
 Leased
equipment at cost consisted of the following:
 
 March
      31,2008
              
              
              December
      31,(unaudited)
              
              
              2007Container
      vessels
              
              $
              142,500,324
              
              
              $
              142,500,324Tanker
      vessels
              
              
              115,097,430
              
              
              
              115,097,430Product
      tankers
              
              
              90,798,632
              
              
              
              90,798,632Auto
      parts manufacturing equipment
              
              
              14,701,846
              
              
              
              13,705,284Information
      Technology Equipment
              
              
              42,686,715
              
              
              
              42,686,715Manufacturing
      equipment
              
              
              25,064,743
              
              
              
              25,064,743Other
              
              
              86,524,611
              
              
              
              97,642,424517,374,301
              
              
              
              527,495,552Less:
      accumulated depreciation
              
              
              (119,531,303
              )
              
              
              (109,756,923
              )$
              397,842,998
              
              
              $
              417,738,629
   10
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
  (6)
              Leased
      Equipment at Cost - continued
 
 Depreciation
expense was $20,146,142 and $19,456,410 for the three months ended March
31, 2008 and 2007, respectively.
 
 Product
Tankers
 
 On April
11, 2007, the LLC, through its wholly-owned subsidiaries, ICON Senang, LLC and
ICON Sebarok, LLC (the “Teekay Purchasers”), acquired two Aframax 95,649 DWT
product tankers, the Senang Spirit and the Sebarok Spirit (collectively, the
“Teekay Vessels”). The purchase price for the Teekay Vessels was approximately
$88,000,000, comprised of (i) a cash payment of approximately $21,300,000 funded
in the form of a capital contribution and (ii) borrowings of approximately
$66,700,000 of non-recourse debt under a secured loan agreement with Fortis
Capital Corp. The LLC paid an acquisition fee to the Manager of approximately
$2,640,000 relating to this transaction.  Simultaneously with the
closing of the purchase of the Teekay Vessels, a bareboat charter was entered
into by an affiliate of Teekay Corporation for a term of 60 months.  The
charter commenced on April 11, 2007.
 
 MW
Universal
 
 On
September 28, 2007, the LLC completed the acquisitions and simultaneously leased
back all of the manufacturing assets of W Forge Holdings, Inc. (“W Forge”), MW
Scott, Inc. (“Scott”), and MW Gilco, LLC (“Gilco”), wholly-owned subsidiaries of
MW Universal, Inc. (“MWU”), for purchase prices of $21,000,000, $600,000 and
$600,000, respectively.  The LLC paid acquisition fees to the manager
for W Forge, Scott, and Gilco of approximately $630,000, $18,000 and $18,000,
respectively.  Each of the leases commenced on January 1, 2008 and
continue for a period of 60 months.
 
 On
December 10, 2007, the LLC completed the acquisitions and simultaneously leased
back substantially all of the manufacturing assets of MW General, Inc.
(“General”), and AMI Manchester, LLC (“AMI”), wholly-owned subsidiaries of MWU,
for purchase prices of $400,000 and $1,700,000, respectively.  The LLC
paid acquisition fees to the Manager for General and AMI of approximately
$12,000 and $51,000, respectively.  Each of the leases commenced on
January 1, 2008 and continues for a period of 60 months.
 
 Simultaneously
with the closing of the transactions for W Forge, Scott, Gilco, General and AMI,
ICON Leasing Fund Twelve, LLC (“Fund Twelve”) and Fund Ten, two entities also
managed by the Manager (together, the “Participating Funds”), completed similar
acquisitions with four other subsidiaries of MWU pursuant to which the
respective funds purchased substantially all of the machining and metal working
equipment of each subsidiary.  Each subsidiary’s obligations under its
respective leases (including those of W Forge, Scott, Gilco, General and AMI)
are cross-collateralized, cross-defaulted, and all subsidiaries’ obligations are
guaranteed by MWU.  Each of the Participating Funds have also entered
into a credit support agreement with the LLC, pursuant to which if losses are
incurred by a Participating Fund with respect to any MWU subsidiary, those
losses are shared among the Participating Funds proportionately based on the
amount of capital invested.
 
 Auto
Parts Manufacturing Equipment
 
 On March
30, 2007, the LLC, through its wholly-owned subsidiary, ICON French Equipment I,
LLC (“ICON Heuliez”), entered into a purchase and sale agreement (the
“Agreement”) with Heuliez SA (“HSA”) and Heuliez Investissements SNC (“Heuliez”)
to purchase certain auto parts manufacturing equipment from Heuliez.  In
connection with the Agreement, ICON Heuliez agreed to lease the equipment to HSA
and Heuliez, respectively, for an initial term of 60 months.  The
purchase price for the equipment was approximately $11,994,000 (€9,000,000) at
March 30, 2007.  The LLC incurred professional fees of approximately
$42,000 and paid an acquisition fee to the Manager of approximately $360,000
relating to this transaction.  These fees were capitalized as part of
the acquisition cost of the equipment.  The leases commenced on April 1,
2007.
   11
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
  (6)
              Leased
      Equipment at Cost - continued
  On
October 26, 2007, HSA, a lessee of ICON Heuliez, and Groupe Henri Heuliez, the
guarantor of the leases with ICON Heuliez, filed for “procedure de sauvegarde”,
a procedure only available to a solvent company seeking to reorganize its
business affairs under French law.  ICON Heuliez’s other lessee, Heuliez
Invesissements SNC, did not file for “procedure de sauvegarde”.  HSA has
paid all amounts due under the lease through January 1, 2008.  As of
February 1, 2008 ICON Heuliez entered into an agreement with the administrator
of the “procedure de sauvegarde” to accept reduced payments for the period
beginning February 1, 2008 and ending July 31, 2008.  Beginning August
1, 2008, full payments under the lease will resume.  In addition,
beginning August 1, 2008, Heuliz’s monthly payments will be increased to include
shortfall resulting from the reduced payments ICON Heuliz received between
February 1, 2008 and July 31, 2008.  The lease remains in full force
and effect.
  (7)
                Notes
      Receivable on Financing Facility,
net
 
 On August
13, 2007, the LLC, along with a consortium of other lenders entered into an
equipment financing facility with Solyndra, Inc. (“Solyndra”), a privately held
manufacturer of solar panels for the building of a new production
facility.  The financing facility matures on June 30, 2013 and is
secured by the equipment as well as all other assets of Solyndra.  The
equipment consists of two fully automated manufacturing lines that combine glass
tubes and thin film semiconductors to produce solar panels.  The LLC
will receive principal payments starting in October 2008.  In the
interim period, interest will be paid on a quarterly basis using a range of
rates from 6.60% to 8.36%.  In connection with the transaction, the
LLC received warrants to purchase up to 40,290 shares of Solyndra common stock
at an exercise price of $4.96. The fair value of these warrants was
approximately $115,000 on the transaction date and has been reflected as a
discount on the face amount of the notes receivable.
 
 At March
31, 2008, the Manager has determined, based on the Black-Scholes option pricing
model, that the aggregate fair value of the warrants is $89,819.  The
assumptions used for the Black-Scholes option pricing model were as follows:
Strike price $4.96, share price $2.23, expiration date of April 6, 2014, a
volatility of 300%, and the risk free interest rate of 2.10%.  The
volatility percentage was
determined by taking a sampling of six similar businesses from their initial
public offering date to present and placing a percentage based on the
performance of the share price of this sampling.
 
 The
financing facility is for a maximum amount of $93,500,000, of which the LLC has
committed to invest up to $5,000,000.  At March 31, 2008, the LLC had
loaned approximately $4,367,000. The LLC paid acquisition fees of approximately
$131,000 to the Manager in relation to this transaction.
 
 
 12
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
 
 (8)
              Investments
      in Joint Ventures
 
 The joint ventures described below are
not consolidatedbythe LLC.
 
 ICON
AEROTV, LLC
 
 The LLC
owns a 50% interest in ICON AeroTV, LLC (“ICON AeroTV”), whose sole purpose was
owning equipment leased to AeroTV Ltd (“AeroTV”). In February 2007, AeroTV’s
customer, the largest scheduled bus line in Europe, terminated its service
agreement with AeroTV. Shortly thereafter, AeroTV notified the Manager of its
inability to pay certain rent owed to ICON AeroTV and subsequently filed for
insolvency protection in the United Kingdom. In February 2007, ICON AeroTV sent
a notice to AeroTV terminating the master lease agreement. Shortly thereafter
certain facts came to light that gave the Manager serious concerns regarding the
propriety of AeroTV's actions during and after the execution of the lease with
AeroTV. On April 18, 2007, ICON AeroTV filed a lawsuit in the United Kingdom’s
High Court of Justice, Queen’s Bench Division against AeroTV and one of its
directors for fraud. ICON AeroTV obtained a default judgment against the AeroTV
director, which was subsequently set aside. On April 17, 2008, the judgment was
reinstated. At this time, it is not possible to determine ICON AeroTV's ability
to collect the judgment.
 
 ICON EAM,
LLC
 
 The LLC
has a 50% interest in ICON EAM, LLC (“ICON EAM”), whose sole purpose is to lease
gas meters and accompanying data gathering equipment to EAM Assets Ltd.
(“EAM”)
 
 Information
as to the results of operations of ICON EAM, LLC is summarized
below:
 
 Three
      Months Ended March 31,
              
              
              Three
      Months Ended March 31,2008
              
              
              2007Net
      income
              
              $
              -
              
              
              $
              97,390LLC's
      share of net income
              
              $
              -
              
              
              $
              48,695
 
 ICON
Global Crossing II
 
 The LLC
has a 13.3% interest in ICON Global Crossing II LLC (“ICON Global Crossing II”),
whose sole purpose is to lease telecommunications equipment to Global Crossing
Group.
 
 Information
as to the results of operations of ICON Global Crossing II is summarized
below:
 
 Three
      Months Ended March 31,
              
              
              Three
      Months Ended March 31,2008
              
              
              2007Net
      income
              
              $
              300,276
              
              
              $
              187,132LLC's
      share of net income
              
              $
              39,817
              
              
              $
              24,814
 
 13
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
 
 (9)
              Non-Recourse
      Long-Term Debt
 
 Containership
Vessels
 
 On June
21, 2006, the LLC, through its wholly-owned subsidiaries ICON European
Container, LLC and ICON European Container II, LLC, acquired four container
vessels (collectively, the “ZIM Vessels”).  The ZIM Vessels are owned
by two Norwegian limited partnerships, European Container KS and European
Container KS II (collectively, the “KS Companies”).
 
 In
connection with the acquisition of the ZIM Vessels, the LLC assumed
approximately $93,325,000 of senior non-recourse debt.  Pursuant to
the terms of the loan agreement with HSH Nordbank AG (“HSH”), there are two
separate portions to the senior non-recourse debt obligation.  HSH has
first priority security interest in the ZIM Vessels.  The KS Companies
are jointly and severally liable for the obligations under the loan agreement
and the ZIM Vessels are cross-collateralized.
 
 The
portion of the senior non-recourse debt obligation relating to the acquisition
of the M/V ZIM Japan and M/V Adaman Sea (f/k/a ZIM America) (collectively,
“Portion I”) matures on November 18, 2010 and accrues interest at the London
Eurocurrency Market Offered Rate (“LIBOR”) plus 1.25% per year.  On
November 18, 2010, a balloon payment of approximately $11,250,000 is
due.   The LLC may, at its discretion, make periodic prepayments
of the outstanding principal balance without penalty. On February 18, 2008, the
LLC prepaid $400,000 which was applied against the outstanding principal balance
and reduced the balloon payment due on the maturity date.
 
 The
portion of the senior non-recourse debt obligation relating to the acquisition
of the M/V ZIM Hong Kong and M/V ZIM Israel (collectively, “Portion II”) matures
on January 27, 2011 and accrues interest at LIBOR plus 1.25% per
year.  On January 27, 2011, a balloon payment of approximately
$14,000,000 is due.   On February 4, 2008, the LLC prepaid $300,000
which was applied against the outstanding principal balance and reduced the
balloon payment due on the maturity date.
 
 On April
24, 2008, the LLC amended the loan agreement with HSH changing the payment terms
from quarterly payments to monthly payments.  As a result of this
amendment, Portion I has a balloon payment at November 18, 2010 of approximately
$7,300,000 and Portion II has a balloon payment at January 27, 2011 of
approximately $13,900,000.
 
 As part
of the acquisition of the ZIM Vessels, the LLC assumed three interest rate swap
contracts. These interest rate swap contracts were established in order to fix
the variable interest rates on the senior non-recourse debt obligation and
minimize the LLC’s risk for interest rate
fluctuations.     The interest rate swap contracts have
a fixed interest rate of 4.16% for M/V ZIM Japan, 4.72% for M/V Adaman Sea
(f/k/a ZIM America), and 4.74% for M/V ZIM Hong Kong and M/V ZIM Israel. At
March 31, 2008, no hedge designation has been made by the LLC on these
interest rate swaps for accounting purposes, therefore, the LLC recognized the
periodic change in the fair value of the interest rate swap contracts through
the statement of operations.
 
 In
conjunction with the amended loan agreement, the interest rate swap contracts
have been adjusted to move with the reduction of the outstanding principle
balance on a monthly basis.  Furthermore, the swaps associated with
M/V ZIM Japan and M/V Adaman Sea (f/k/a ZIM America) were combined into one swap
with a fixed interest rate of 4.50%.
 
 14
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
 
 (9)
              Non-Recourse
      Long-Term Debt - continued
 
 Leasing
Portfolio
 
 In
connection with the acquisition of the Leasing Portfolio from Clearlink (See
Note 4), the LLC incurred non-recourse debt obligations.  In the
ordinary course of operations, the LLC continually enters into non-recourse debt
obligations in order to finance acquisitions relating to the Clearlink
operations.  For the three months ended March 31, 2008, the LLC
incurred additional borrowings of approximately $4,498,000.  At March
31, 2008, the Leasing Portfolio’s non-recourse debt obligations accrue interest
at rates ranging from 4.30% to 8.09% per year and mature at various dates
through September 2015.  At March 31, 2008, the outstanding balance of
the non-recourse debt obligations was approximately $71,265,000.
 
 (10)
              Revolving
      Line of Credit, Recourse
 
 The LLC,
along with ICON Income Fund Eight B, L.P., ICON Income Fund Nine, LLC, Fund Ten
and Fund Twelve (entities sponsored and organized by the Manager
-  collectively, the “Borrowers”) are parties to a Commercial Loan
Agreement (the “Loan Agreement”) with California Bank & Trust (the
“Lender”). The Loan Agreement originally provided for a revolving line of credit
of up to $17,000,000 pursuant to a senior secured revolving loan facility (the
“Facility”), which is secured by all assets of the Borrowers not subject to a
first priority lien, as defined in the Loan Agreement. Each of the Borrowers is
jointly and severally liable for all amounts borrowed under the Facility.
Amounts available under the Facility are subject to a borrowing base that is
determined, subject to certain limitations, on the present value of the future
receivables under certain lease agreements in which the Borrowers have a
beneficial interest.
 
 The
Facility was originally to expire on September 30, 2008 and established (i) the
interest rate for advances under the Facility at 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 which United States dollar deposits can be acquired
by the Lender at LIBOR plus 2.5%. The interest
rate at March 31, 2008 was 5.25%.
 
 The
Borrowers were in compliance with the covenants under the Loan Agreement at
March 31, 2008.
 
 Aggregate
borrowings by all Borrowers under the Facility amounted to $4,255,000 at March
31, 2008. The LLC had no borrowings outstanding under the Facility as of such
date.  The balance of $4,255,000 relates to borrowings by Fund Eight B
of $1,255,000 and Fund Ten of $3,000,000. Subsequent to March 31, 2008, Fund Ten
repaid the outstanding $3,000,000 balance.
 
 On May 1,
2008, the Borrowers entered into a Loan Modification Agreement. The agreement
increased the revolving line of credit up to $30,000,000 and extended the
expiration date to April 30, 2010. The Borrowers may request a one year
extension to the revolving line of credit within 390 days of the expiration
date, but the Lender has no obligation to extend. The quarterly commitment fee
of 0.5% was reduced to 0.25% on unused commitments under the
Facility.
 
 (11)
              Income
      Tax
 
 Certain
of the LLC’s direct and indirect wholly-owned subsidiaries are unlimited
liability companies and are taxed as corporations under the laws of
Canada.  Other indirect wholly-owned subsidiaries are taxed as
corporations in Barbados.  For the 2008 Quarter, the provision
(benefit) for income taxes was comprised of $106,043 in current taxes and
($78,372) in deferred taxes.  The Company under the laws of Canada is
subject to income tax examination from 2006 through 2007 periods.
  15
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
  (12)
              Transactions
      with Related Parties
 
 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 or its affiliates that
are necessary to the LLC’s operations.  These costs include the Manager’s
and its affiliates’ 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 $83,406
for the three months ended March 31, 2008.  The Manager’s interest in
the LLC’s net loss for the three months ended March 31, 2008 and 2007 was $3,686
and $14,825, respectively.
 
 Fees and
other expenses paid or accrued by the LLC to the Manager or its affiliates for
the three months ended March 31, 2008 and 2007, are as follows:
 
 Three
      Months EndedMarch
      31,Entity
              Capacity
              Description
              
              2008
              
              
              2007ICON
      Capital Corp.
              Manager
              Organization
      and offering expenses (1)
              
              $
              -
              
              
              $
              857,037ICON
      Securities Corp.
              Managing
      broker-dealer
              Underwriting
      fees (1)
              
              
              -
              
              
              
              1,142,716ICON
      Capital Corp.
              Manager
              Acquisition
      fees (2)
              
              
              286,951
              
              
              
              2,822,907ICON
      Capital Corp.
              Manager
              Management
      fees (3)
              
              
              1,811,388
              
              
              
              1,482,064ICON
      Capital Corp. and affiliate
              Manager
              Administrative
      fees (3)
              
              
              1,568,510
              
              
              
              1,700,883Total
      fees paid to the Manager and its affiliates
              
              
              $
              3,666,849
              
              
              $
              8,005,607(1)  Charged
      directly to members' equity.(2) Capitalized
      and amortized to operations over the estimated service period in
      accordance withthe
      LLC's accounting policies.(3)  Charged
      directly to operations.
 
 At March
31, 2008, the LLC had a net payable due to its Manager and affiliates that
consisted primarily of accruals due to the Manager for acquisition fees,
administrative expense reimbursements and management fees of
$567,436.
 
 16
 Table of Contents
 ICON
Leasing Fund Eleven, LLC
 (A
Delaware Limited Liability Company)
 Notes to
Condensed Consolidated Financial Statements
 March 31,
2008
 (unaudited)
 
 (13)
              Commitments
      and Contingencies and Off Balance Sheet
Risk
 
 On
September 28, 2007 and December 10, 2007, the LLC completed the acquisitions and
simultaneously leased back substantially all, of the machining and metal working
equipment of W Forge, Scott, Gilco, General and AMI, a wholly-owned subsidiary
of MWU.  Simultaneously with the closing of the transactions with W
Forge, Scott, Gilco, General and AMI, the Participating Funds completed similar
acquisitions with four other subsidiaries of MWU pursuant to which the
respective funds purchased substantially all of the machining and metal working
equipment of each subsidiary.  Each subsidiary’s obligations under its
respective leases (including those of W Forge, Scott, Gilco, General and AMI)
are cross-collateralized and cross-defaulted, and all subsidiaries’ obligations
are guaranteed by MWU.  Each of the Participating Funds has also
entered into a credit support agreement with the LLC, pursuant to which if
losses are incurred by a Participating Fund with respect to any MWU subsidiary,
those losses are shared among the Participating Funds proportionately based on
the amount of capital invested.  The term of each credit support
agreement matches that of the lease agreements.  No amounts were
accrued at March 31, 2008 and management cannot reasonably estimate at this time
the maximum potential amounts that may become payable under the credit support
agreement, if any.
 
 The LLC
has established a program (the “Program”), in which lessees may participate,
that streamlines the process of ordering, accepting and leasing equipment under
the lessee’s master lease agreement (the “Master Lease Agreement”) for
information-technology equipment.  The Program allows lessees to
periodically and systematically order equipment either directly from the
manufacturer or from the LLC, which acts as a reseller and procures equipment
for the lessee, to meet their current equipment requirements without having to
negotiate a new lease agreement with the LLC.  In order to
participate in the Program, lessees must meet certain credit requirements, as
defined in the form agreement governing the terms of the Program (the “Program
Agreement”), and may not be in default under the Program Agreement or the Master
Lease Agreement.
 
 In
advance of each calendar quarter, the LLC notifies the Program participants
of the estimated cost of new equipment purchases available for that
participant during the coming quarter as well as the monthly rental payment that
will be applied to each piece of equipment purchased.
 
 (14)
              Subsequent
      Event
 
 On April
24, 2008, ICON EAR II LLC, a wholly owned subsidiary of the LLC, completed the
acquisition and leaseback of semiconductor manufacturing equipment from EAR for
an initial acquisition price of $6,347,500. The LLC will collect $3,965 per day
until the commencement of the base lease term, which is the earlier of June 30,
2008 or upon EAR meeting a specific threshold and will continue for 60
months.
 
 Effective
as of May 19, 2008, substantially all of the remaining assets in the Leasing
Portfolio were sold to affiliates of U.S. Micro Corporation, an unaffiliated
third party (the “Remaining Assets”).  The purchase price for the
Remaining Assets was $19,000,000, and is subject to a number of post-closing
adjustments.






17
 Table of Contents


Item 2.  Manager’s Discussion and Analysis of Financial
Condition and Results of Operations
 
 The
following is a discussion of our results of operations and current financial
position. This discussion should be read together with our unaudited condensed
consolidated financial statements and related notes included elsewhere in this
Quarterly report, Part II, Item 1A. Risk Factors and the audited consolidated
financial statements and related notes included in our Annual Report on Form
10-K for the year ended December 31, 2007.
 
 As used
in this Quarterly Report on Form 10-Q, references to “we,” “us,” “our” or
similar terms include ICON Leasing Fund Eleven, LLC and its consolidated
subsidiaries.
 
 Forward-Looking
Statements
 
 Certain
statements within this Quarterly Report on Form 10-Q 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,” “plan,” “seek,” “intend,” “predict” or
“project” and variations of these words or comparable words or phrases of
similar meaning.  These forward-looking statements reflect our current
beliefs and expectations with respect to future events and are based on
assumptions and are subject to risks and uncertainties and other factors outside
our control that may cause actual results to differ materially from those
projected. We undertake no obligation to update publicly or review any
forward-looking statement, whether as a result of new information, future
developments or otherwise.
 
 Overview
 
 We
operate as an equipment leasing program formed on December 2,
2004.  We began active operations on May 6, 2005.  We
primarily engage in the business of purchasing equipment and leasing it to
third-party end users, equipment financing, acquiring equipment subject to lease
and, to a lesser extent, acquiring ownership rights to items of leased equipment
at lease expiration. Some of our equipment leases will be acquired for cash and
are expected to provide current cash flow, which we refer to as "income"
leases.  The majority of the purchase price of our other equipment
leases will be financed, so these leases will generate little or no current cash
flow because substantially all of the rental payments received from the lessees
will be paid to lenders. For these “growth” leases, we anticipate that the
future value of the leased equipment will exceed the cash portion of the
purchase price paid for the equipment.
 
 We expect
to invest most of the net proceeds from our offering in items of equipment that
will be subject to a lease. After the net offering proceeds have been invested,
it is anticipated that additional investments will be made with the cash
generated from our initial investments to the extent that cash is not needed for
expenses, reserves and distributions to members. The investment in additional
equipment in this manner is called “reinvestment.” We anticipate purchasing
equipment from time to time for the next five years. This time frame is called
the “operating period,” which may be extended, at the discretion of our Manager,
up to an additional three years.  After the operating period, we will
then sell our assets in the ordinary course of business during a time frame
called the “liquidation period.”
  
 18
 Table of Contents
  
 Investment
Portfolio and Significant Transactions
 
 At March
31, 2008, our portfolio, which we hold either directly or through joint venture
investments with affiliates, consists primarily of the following equipment
subject to lease:
 
 Lumber
Processing Equipment
 
 We own
equipment, plant and machinery, which is subject to a lease with The Teal Jones
Group and Teal Jones Lumber Services, Inc. (collectively, “Teal
Jones”).  The lease expires in November 2013.
 
 Marine
Vessels
 
 Containership
Vessels
 
 On June
21, 2006, we acquired, through our wholly-owned subsidiaries ICON European
Container, LLC (“EC I”) and ICON European Container II, LLC (“EC II” and
together with EC I, the “ZIM Purchasers”), four container vessels from Old
Course Investments LLC (“Old Course”).  The M/V Adaman Sea (f/k/a ZIM
America) and the M/V ZIM Japan (both owned by EC I) are subject to bareboat
charters that expire in November 2010.  The M/V ZIM Hong Kong and the
M/V ZIM Israel (both owned by EC II) are subject to bareboat charters that
expire in January 2011.  These vessels (collectively, the “ZIM
Vessels”) are subject to bareboat charters with ZIM Integrated Shipping Services
Ltd. (“ZIM”).
 
 The
purchase price for the ZIM Vessels was approximately $142,500,000, comprised of
(i) a cash payment of approximately $35,900,000, (ii) the assumption of
approximately $93,300,000 of non-recourse indebtedness under a secured loan
agreement with HSH Nordbank AG (the “HSH Loan Agreement”), (iii) the assumption
of approximately $12,000,000 of non-recourse indebtedness, secured by a second
priority mortgage over the ZIM Vessels in favor of ZIM and (iv) less the
acquisition of related assets of approximately $3,300,000.  The
obligations under the HSH Loan Agreement are secured by a first priority
mortgage over the ZIM Vessels.  We incurred professional fees of
approximately $300,000 and paid to our Manager an acquisition fee of
approximately $4,200,000 relating to this transaction.  These fees
were capitalized as part of the acquisition cost of the ZIM
Vessels.
 
 Tanker
Vessels
 
 On April
11, 2007, we acquired, through our wholly-owned subsidiaries, ICON Senang, LLC
and ICON Sebarok, LLC, the Teekay Vessels. The purchase price for the Teekay
Vessels was approximately $88,000,000, comprised of (i) a cash payment of
approximately $21,300,000 funded in the form of a capital contribution and (ii)
borrowings of approximately $66,700,000 of non-recourse debt under a secured
loan agreement with Fortis Capital Corp.  We paid an acquisition fee
to the Manager of approximately $2,640,000 relating to this
transaction.  Simultaneously with the closing of the purchase of the
Teekay Vessels, the Teekay Vessels were bareboat chartered back to an affiliate
of Teekay Corporation for a term of 60 months.  The charter commenced on
April 11, 2007.
 
 We own
four product carrying vessels, the M/T Doubtless, the M/T Faithful, the M/T
Spotless, and the M/T Vanguard, which are subject to bareboat charters with
subsidiaries of Top Ships, Inc. (“Top Ships”) that expire in February
2011.
 
 Auto
Parts Manufacturing Equipment
 
 On March
30, 2007, through our wholly-owned subsidiary, ICON French Equipment I, LLC
(“ICON Heuliez”), we entered into a purchase and sale agreement (the
“Agreement”) with Heuliez SA (“HSA”) and Heuliez Investissements SNC (“Heuliez”)
to purchase certain auto parts manufacturing equipment from Heuliez.  In
connection with the Agreement, ICON Heuliez agreed to lease back the equipment
to HSA and Heuliez, respectively, for an initial term of 60
months.  The purchase price for the equipment was approximately
$11,994,000 (€9,000,000) at March 30, 2007.  We incurred professional
fees of approximately $42,000 and paid an acquisition fee to our Manager of
approximately $360,000 relating to this transaction.  These fees were
capitalized as part of the acquisition cost of the equipment.   
The leases commenced on April 1, 2007.
   19
 Table of Contents
 
 Information
Technology and Technology-Related Equipment
 
 On March
7, 2006, we acquired substantially the entire equipment leasing portfolio (the
“Leasing Portfolio”) of Clearlink Capital Corporation (“Clearlink”), based in
Mississauga, Ontario, Canada.  The Leasing Portfolio, which was
acquired effective as of March 1, 2006, was acquired by us from our Manager and
ICON Canada, Inc., an affiliate of our Manager.
 
 We
assumed non-recourse debt as part of the Leasing Portfolio
acquisition.  The non-recourse debt accrues interest at rates ranging
from 4.30% per year to 8.09% per year and matures at various dates through
January 2012. A significant portion of the Leasing Portfolio is financed with
non-recourse debt.  The rental payments received from the lessees
generally match the repayment terms of the related non-recourse debt and the
leased equipment is generally pledged as collateral for the non-recourse
debt.
 
 We added
45 new lease schedules for technology equipment in 2008, amounting to
approximately $9,245,503 in total equipment cost and approximately $929,433 in
residual value. The average term of these new lease schedules is 40
months.
 
 From the
date of acquisition of the Leasing Portfolio through March 31, 2008, we
purchased approximately $96,951,000 of additional equipment. At March 31, 2008,
there were 946 leases in the Leasing Portfolio with an aggregate original
equipment cost of approximately $176,253,565.
 
 Telecommunications
Equipment
 
 We have a
61.4% interest in ICON Global Crossing, LLC (“ICON Global Crossing”), which
purchased telecommunications equipment from various vendors and which was then
leased to Global Crossing Telecommunications, Inc. (“Global Crossing”). The
lease expires on March 31, 2010.
 
 We have a
13.3% interest in ICON Global Crossing II, LLC (“ICON Global Crossing II”),
which purchased telecommunications equipment from various vendors and which was
then leased to Global Crossing.  The lease expires on October 31,
2010.
 
 We have a
100% interest in ICON Global Crossing III, LLC (“ICON Global Crossing III”),
which purchased telecommunications equipment from various vendors and which was
then leased to Global Crossing.  The lease expires on January 1,
2011.
 
 On
December 20, 2007, we, along with ICON Income Fund Ten, LLC (“Fund Ten”), an
entity also managed by our Manager, formed ICON Global Crossing V, LLC (“ICON
Global Crossing V”), with interests of 55% and 45%, respectively, to purchase
telecommunications equipment from various vendors for approximately $12,982,000
in cash. This equipment is subject to a lease with Global Crossing. The term of
the lease is 36 months and the lease commenced on January 1, 2008. The total
capital contributions made to ICON Global Crossing V, as of December 31, 2007,
were approximately $12,982,000, of which our share was approximately
$7,140,000.  We paid an acquisition fee to our Manager of
approximately $214,000 relating to this transaction.
 
 Manufacturing
Equipment
 
 On
September 28, 2007, we completed the acquisitions and simultaneously leased back
all of the manufacturing assets of W Forge Holdings, Inc. (“W Forge”), MW Scott,
Inc. (“Scott”), and MW Gilco, LLC (“Gilco”), wholly-owned subsidiaries of MW
Universal, Inc. (“MWU”), for purchase prices of $21,000,000, $600,000 and
$600,000, respectively.  We paid acquisition fees for W Forge, Scott,
and Gilco of approximately $630,000, $18,000 and $18,000,
respectively.
   20
 Table of Contents
 
 On
December 10, 2007, we completed the acquisitions and simultaneously leased back
substantially all of the manufacturing assets of MW General, Inc. (“General”),
and AMI Manchester, LLC (“AMI”), wholly-owned subsidiaries of MWU, for purchase
prices of $400,000 and $1,700,000, respectively.  We paid acquisition
fees to our Manager for General and AMI of approximately $12,000 and $51,000,
respectively.
 
 We have a
45% interest in ICON EAR, LLC (“ICON EAR”).  ICON EAR owns certain
semiconductor manufacturing equipment, which was purchased from and leased back
to Equipment Acquisition Resources, Inc. (“EAR”).
 
 Financing
Facility
 
 On August
13, 2007, we completed a participation investment in an equipment financing
facility with Solyndra, Inc. (“Solyndra”), a privately held manufacturer of
solar panels for the building of a new production facility.  The
financing facility matures on June 30, 2013 and is secured by the equipment as
well as all other assets of Solyndra.  The equipment is comprised of
two fully automated manufacturing lines that combine glass tubes and thin film
semiconductors to produce solar panels.  Included as part of the
consideration in the acquisition are warrants to purchase 40,290 shares of
Solyndra common stock at an exercise price of $4.96.  The warrants
expire on April 6, 2014.
 
 Digital
Audio/Visual Entertainment Systems
 
 We own a
50% interest in ICON AeroTV, LLC (“ICON AeroTV”), whose sole purpose was owning
equipment leased to AeroTV Ltd (“AeroTV”).   On February 13, 2007,
AeroTV’s customer, the largest scheduled bus line in Europe, terminated its
service agreement with AeroTV. Shortly thereafter, AeroTV notified our Manager
of its inability to pay certain rent owed to ICON AeroTV and subsequently filed
for insolvency protection in the United Kingdom. In February 2007, ICON AeroTV
sent a notice to AeroTV terminating the Master Lease Agreement. Shortly
thereafter, certain facts came to light that gave our Manager serious
concerns regarding the propriety of AeroTV's actions during and after the
execution of the lease with AeroTV. On April 18, 2007, ICON AeroTV filed a
lawsuit in the United Kingdom’s High Court of Justice, Queen’s Bench Division
against AeroTV and one of its directors for fraud. ICON AeroTV obtained a
default judgment against the AeroTV director, which was subsequently set aside.
On April 17, 2008, the judgment was reinstated. At this time, it is not possible
to determine ICON AeroTV’s ability to collect the judgment.
 
 Recent
Accounting Pronouncements
 
 In
February 2007, the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities — including an Amendment of SFAS No. 115” (“SFAS No. 159”), which
permits but does not require us to measure financial instruments and certain
other items at fair value. Unrealized gains and losses on items for which the
fair value option has been elected are reported in earnings, as we did not elect
to fair value any of our financial instruments under the provisions of SFAS No.
159.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements—an Amendment of ARB No. 51” (“SFAS No.
160”). SFAS No. 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the retained interest and gain
or loss when a subsidiary is deconsolidated. This statement is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 with earlier adoption prohibited. Our Manager is
currently evaluating the impact of SFAS No. 160 on our consolidated financial
statements.
   21
 Table of Contents
 
 On March
19, 2008, the FASB issued Statement of Financial Accounting Standards No. 161,
“Disclosures about Derivative Instruments and Hedging Activities — an Amendment
of SFAS No. 133” (“SFAS No. 161”). SFAS No. 161 enhances required disclosures
regarding derivatives and hedging activities, including enhanced disclosures
regarding how: (a) an entity uses derivative instruments; (b) derivative
instruments and related hedged items are accounted for under SFAS No. 133,
“Accounting for Derivative Instruments and Hedging Activities;” and (c)
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. SFAS No. 161 is effective for
fiscal years and interim periods beginning after November 15, 2008 and therefore
we will be required to provide such disclosures beginning with the interim
period ended March 31, 2009.
 
 Results
of Operations for the Three Months Ended March 31, 2008 (the “2008 Quarter”) and
2007 (the “2007 Quarter”)
 
 Revenue
for the 2008 Quarter and the 2007 Quarter are summarized as
follows:
 
 Three Months Ended March
31,2008
              
              
              2007
              
              
              ChangeRental
      income
              
              $
              27,506,275
              
              
              $
              22,818,090
              
              
              $
              4,688,185Finance
      income
              
              
              1,911,039
              
              
              
              2,332,210
              
              
              
              (421,171
              )Income
      from investments in joint ventures
              
              
              78,465
              
              
              
              35,680
              
              
              
              42,785Net
      gain on sales of  new equipment
              
              
              177,727
              
              
              
              189,256
              
              
              
              (11,529
              )Net
      (loss) gain on sales of  leased equipment
              
              
              (227,049
              )
              
              
              82,761
              
              
              
              (309,810
              )Interest
      and other income
              
              
              758,246
              
              
              
              1,415,572
              
              
              
              (657,326
              )Total
      revenue
              
              $
              30,204,703
              
              
              $
              26,873,569
              
              
              $
              3,331,134
 
 Total
revenue for the 2008 Quarter increased $3,331,134, or 12.4%, as compared to the
2007 Quarter.  The increase in total revenue was due to higher rental
income that was partly offset by decreases in interest and other income, finance
income and net (loss) gain on sales of leased equipment.  The increase
in rental income was primarily attributable to the acquisitions of the Teekay
Vessels, manufacturing equipment purchased from MWU, and the auto parts
manufacturing equipment in 2007.  These acquisitions accounted for
approximately $3,107,000, $1,462,000 and $811,000, respectively of the increase
in rental income.  The increase in rental income was partly offset by
an increased number of leases in the Leasing Portfolio maturing during the 2008
Quarter which accounted for approximately a $946,000 decrease in rental income
for the 2008 Quarter. The increase in total revenue was partly offset by a
decrease in interest and other income resulting from lower cash balances in
interest bearing accounts during the 2008 Quarter from the use of cash to invest
in the acquisitions in 2007 mentioned above.  There was a decrease of
$825,000 in finance income related to the Leasing Portfolio which was offset by
an increase of $419,000 for ICON Global Crossing V.  The loss on sales
of leased equipment was attributed to our Leasing Portfolio.
 
 Expenses
for the 2008 Quarter and the 2007 Quarter are summarized as
follows:
 
 Three Months Ended March
31,2008
                
                
                2007
                
                
                ChangeManagement
      fees - Manager
                
                $
                1,811,388
                
                
                $
                1,482,064
                
                
                $
                329,324Administrative
      expense reimbursements - Manager
                
                
                1,568,510
                
                
                
                1,700,883
                
                
                
                (132,373
                )General
      and administrative
                
                
                801,561
                
                
                
                720,991
                
                
                
                80,570Interest
                
                
                4,016,638
                
                
                
                3,537,824
                
                
                
                478,814Depreciation
      and amortization
                
                
                20,405,123
                
                
                
                19,590,530
                
                
                
                814,593Loss
      on derivative instruments
                
                
                1,493,972
                
                
                
                360,590
                
                
                
                1,133,382Total
      expenses
                
                $
                30,097,192
                
                
                $
                27,392,882
                
                
                $
                2,704,310
   22
 Table of Contents
 
 
 Total
expenses for the 2008 Quarter increased $2,704,310, or 9.9%, as compared to the
2007 Quarter.  The increase was primarily due to an increase in loss
on derivative instruments, depreciation and amortization, interest expense and
Management fees – Manager. The increase in loss on derivative instruments
is related to the change in the fair value of the interest rate swap contracts
that have no hedge designation. The increase in depreciation and amortization
expense was primarily attributable to the acquisitions during 2007, which
accounted for the increase of approximately $2,982,000 during the 2008
Quarter. The increase in depreciation and amortization expense was partly offset
by the expiration of our leases in the Leasing Portfolio, which decreased
depreciation and amortization expense by approximately $2,378,000 during
the 2008 Quarter. The increase in interest expense was due to the acquisition of
the Teekay Vessels acquired in April 2007, which accounted for an increase
in interest expense of approximately $939,000. This was partly offset by a
decrease in interest expense of approximately $385,000, relating to the
continued reduction of our non-recourse debt on the ZIM Vessels and Top Ships
acquired in June 2006.  The overall increase in Management fees –
Manager was a result of the increased investment in leased assets in the 2008
Quarter.
 
 Minority
Interest
 
 The
increase in minority interest for the 2008 Quarter primarily relates to the
investment by Fund Ten in ICON Global Crossing V in December
2007.
 
 Provision
for Income Taxes
 
 Certain
of our direct and indirect wholly-owned subsidiaries are unlimited
liability companies and are taxed as corporations under the laws of
Canada.  Other indirect wholly-owned subsidiaries are taxed as
corporations in Barbados.  For the 2008 Quarter, the provision
(benefit) for income taxes was comprised of $106,043 in current taxes and
($78,372) in deferred taxes.
 
 Net
Loss
 
 As a
result of the foregoing factors, net loss for the 2008 Quarter and 2007 Quarter
was $368,574 and $1,482,503, respectively.  The net loss per weighted
average number of additional member share for the 2008 Quarter and 2007 Quarter
was $1.00 and $4.62, respectively.
 
 Financial
Condition
 
 This
section discusses the major balance sheet variances at March 31, 2008 compared
to December 31, 2007.
 
 Total
Assets
 
 Total
assets decreased $36,617,252 from $595,752,005 at December 31, 2007 to
$559,134,753 at March 31, 2008. The decrease was primarily due to the
depreciation of our leased equipment and the use of cash for distributions to
our Additional Members and Manager.
 
 Current
Assets
 
 Current
assets decreased $9,757,176 from $64,164,600 at December 31, 2007 to $54,407,424
at March 31, 2008.  The decrease was primarily from the use of cash
for distributions to our Additional Members and Manager.
   23
 Table of Contents
 
 Total
Liabilities
 
 Total
liabilities decreased $23,413,821 from $322,138,717 at December 31, 2007 to
$298,724,896 at March 31, 2008. The decrease was primarily due to the repayment
of the outstanding balance on the non-recourse debt obligation from the
normal course of business.
 
 Current
Liabilities
 
 Current
liabilities decreased $15,088,279 from $105,194,603 at December 31, 2007 to
$90,106,324 at March 31, 2008. The decrease was primarily due to the repayment
of the outstanding balance on the non-recourse debt obligation from the
normal course of business and decreases in our deferred rental income
related to timing differences in revenue recognition between periods. The
decrease in current liabilities was primarily offset by the increase in our
liability related to our interest rate swap contracts.
 
 Members’
Equity
 
 Members’
Equity decreased $12,381,460 from $261,223,876 at December 31, 2007 to
$248,842,416 at March 31, 2008. The decrease was primarily due to distributions
to our Additional Members and Manager and the change in the valuation of our
interest rate swap contracts.
 
 Liquidity
and Capital Resources
 
 Sources
and Uses of Cash
 
 At March
31, 2008 and 2007, we had cash and cash equivalents of $28,983,543 and
$72,479,033, respectively. During our offering period, our main source of cash
was from financing activities and during our operating period, we anticipate our
main source of cash will be from investing activities, which we expect will
continue during our liquidation period. During our offering period, our main use
of cash was from investing activities and during our operating period, our main
use of cash will be from financing activities, which we anticipate will continue
during the liquidation period.  Our offering period ended on April 20,
2007 and our operating period commenced.
 
 The
majority of our investments will be the purchase of equipment that will be
subject to lease.  From this type of investment, we will be legally
entitled to receive rental payments from leasing the equipment and, as owner of
the equipment, may sell or re-lease it at lease expiration.  We will
purchase equipment subject to lease either directly or through subsidiary
entities.  We may, in some cases, jointly purchase equipment with
other businesses our Manager sponsors and manages or with unaffiliated third
parties.  In such cases, we may co-own a joint venture with other
parties.
 
 We will
seek to acquire a portfolio of equipment leases that is comprised of both (a)
transactions that provide current cash flow in the form of rental payments made
directly to us, and (b) transactions where the cash flow in the form of rental
payments has been pledged or assigned, in whole or in part, to a lender. We
refer to current cash flow leases which we acquire for cash as income
leases.  We call leases where a substantial portion of the cash flow
(and perhaps a portion of the expected residual value of the equipment) has been
pledged or assigned to a lender as growth leases (also known within the
equipment leasing industry as leveraged leases). We expect that most of the
indebtedness incurred by us to pay a portion of the purchase price for growth
leases will be non-recourse to our other assets, meaning that in the event the
lender is not paid, our other assets would not be at risk as a source of
payment; only the particular item or items of financed equipment would be at
risk.
 
 Unanticipated
or greater than anticipated operating costs or losses (including a lessee’s
inability to make timely lease payments) would adversely affect our liquidity.
To the extent that working capital reserves may be insufficient to satisfy our
cash requirements, we anticipate that we would fund our operations from cash
flow generated by operating and financing activities.  In addition, we
may use a portion of cash on hand to re-establish working capital reserves. Our
Manager has no intent to fund any of our cash flow deficit or provide other
financial assistance to us.
 
  24
 Table of Contents
 
 
 Operating
Activities
  Sources
of cash
  Our main
source of cash from operating activities in the 2008 Quarter and 2007 Quarter
was from the collection of rental income from our operating leases and the
collection of non-financed receivables from our finance leases.
 
 Investing
Activities
  Uses
of cash
  Use of
cash from investing activities decreased $30,845,179 from $41,675,850 in the
2007 Quarter to $10,830,671 in the 2008 Quarter.  Our main use of cash
for investing activities in the 2008 Quarter was for the purchase of leased
equipment of approximately $10,666,000, primarily relating to the acquisition of
the information technology equipment in our Leasing Portfolio.
 
 Our main
use of cash for investing activities in the 2007 Quarter was for the purchase of
leased equipment of approximately $31,714,000, relating to the acquisition of
the information technology equipment in our Leasing Portfolio,
telecommunications equipment and auto parts manufacturing equipment. We also
paid approximately $9,298,000 for other assets, including approximately
$7,330,000 for an escrow deposit on an acquisition not yet completed at March
31, 2007.
 
 Financing
Activities
  Sources
of cash
  Source of
cash from financing activities decreased $54,743,139 from $59,240,932 in the
2007 Quarter to $4,497,793 in the 2008 Quarter.  The proceeds from
non-recourse long-term debt on our Leasing Portfolio of approximately $4,498,000
was our main source of cash from financing activities in the 2008
Quarter.
 
 Our main
source of cash from financing activities in the 2007 Quarter was from the
issuance of additional member shares, net of sales and offering expenses. We
sold 57,136 additional member shares, representing approximately $57,136,000 of
capital contributions. We paid and accrued various selling expenses of
approximately $6,570,000, which provided us with net proceeds from the sale of
our member shares of approximately $50,566,000.  We also received
proceeds from non-recourse long-term debt on our Leasing Portfolio of
approximately $8,675,000 during the 2007 Quarter.
 
 Uses
of cash
  Our main
use of cash for financing activities in the 2008 Quarter was for the repayment
of approximately $18,858,000 of non-recourse long-term debt on our Leasing
Portfolio, the Top Ships and the ZIM Vessels.  We also paid
distributions to our members of approximately $8,356,000.
  Our main
use of cash for financing activities in the 2007 Quarter was for the repayment
of approximately $18,938,000 of non-recourse notes payable on our Leasing
Portfolio, the Tankers and the ZIM Vessels. We also paid distributions to our
members of approximately $6,902,000.
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 Table of Contents
  Financings
and Borrowings
 
 Non-recourse
Long-Term Debt
 
 We have
non-recourse long-term debt at March 31, 2008 of $266,777,637.  All of
our non-recourse long-term debt consists of debt in which the lender has a
security interest in the equipment. In some cases, in addition to the security
interest, the lender has an assignment of the rental payments under the
lease.  In that case, the lender is being paid directly by the
lessee.  In other cases, we receive the rental payments and remit to
the lender.
 
 Revolving
Line of Credit, Recourse
 
 We, along
with ICON Income Fund Eight B, L.P. (“Fund Eight B”), ICON Income Fund
Nine, LLC, Fund Ten and ICON Leasing Fund Twelve, LLC (entities sponsored and
organized by our Manager - collectively, the “Borrowers”) are parties to a
Commercial Loan Agreement (the “Loan Agreement”) with California Bank &
Trust (the “Lender”). The Loan Agreement originally provided for a revolving
line of credit of up to $17,000,000 pursuant to a senior secured revolving loan
facility (the “Facility”), which is secured by all assets of the Borrowers not
subject to a first priority lien, as defined in the Loan Agreement. Each of the
Borrowers is jointly and severally liable for all amounts borrowed under the
Facility. Amounts available under the Facility are subject to a borrowing base
that is determined, subject to certain limitations, on the present value of the
future receivables under certain lease agreements in which the Borrowers have a
beneficial interest.
 
 The
Facility was originally set to expire on September 30, 2008 and established (i)
the interest rate for advances under the Facility at 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 which United States dollar deposits can be acquired
by the Lender at the London Interbank Eurocurrency Market Rate (“LIBOR”) plus
2.5%. The interest rate at March 31, 2008 was 5.25%.
 
 The
Borrowers were in compliance with the covenants under the Loan Agreement at
March 31, 2008.
 
 Aggregate
borrowings by all Borrowers under the Facility amounted to $4,255,000 at March
31, 2008. We had no borrowings outstanding under the Facility as of such
date.  The balance of $4,255,000 relates to borrowings by Fund Eight B
of $1,255,000 and Fund Ten of $3,000,000. Subsequent to March 31, 2008, Fund Ten
repaid the outstanding $3,000,000 balance.
 
 On May 1,
2008, the Borrowers entered into a Loan Modification Agreement. The agreement
increased the revolving line of credit up to $30,000,000 and extended the
expiration date to April 30, 2010. The Borrowers may request a one year
extension to the revolving line of credit within 390 days of the expiration
date, but the Lender has no obligation to extend. The quarterly commitment fee
of 0.5% was reduced to 0.25% on unused commitments under the
Facility.
 
 Distributions
 
 We pay
monthly distributions to our members starting with the first month after the
additional members’ admission and continue to pay such distributions until the
termination of the operating period.  We paid distributions to our
additional members of approximately $8,272,000 and $12,546,393 for the 2008
Quarter and 2007 Quarter, respectively.
 
 Contractual
Obligations and Commitments
 
 Contractual
Obligations
 
 At March
31, 2008, we have non-recourse long-term debt obligations. The lenders have
security interests in the equipment relating to each non-recourse long-term debt
instrument and, in some cases, an assignment of the rental payments under the
leases associated with the equipment.  In that case, the lender is
being paid directly by the lessee.  In other cases, we receive the
rental payments and pay the lender.  If the lessee were to default on
the non-recourse long-term debt, the equipment would be returned to the lender
in extinguishment of the non-recourse long-term debt. At March 31, 2008, our
outstanding non-recourse long-term debt obligations were
$266,777,637.  We are a party to the Facility as discussed in the
financing and borrowings section above. We have no borrowings under the Facility
at March 31, 2008.
   26
 Table of Contents
 
 Commitments
 
 We have a
program (the “Program”), in which lessees may participate, that streamlines the
process of ordering, accepting and leasing equipment under the lessee’s master
lease agreement (the “Master Lease Agreement”) for information technology
equipment.  The Program allows lessees to periodically and systematically
order equipment either directly from the manufacturer or from us, acting as a
reseller and procuring equipment for the lessee, to meet their current equipment
requirements without having to negotiate a new lease agreement with
us.  In order to participate in the Program, lessees must meet certain
credit requirements, as defined in the form agreement governing the terms of the
Program (the “Program Agreement”), and may not be in default under the Program
Agreement or the Master Lease Agreement.  In advance of each calendar
quarter, we notify the Program participants of the estimated cost of new
equipment purchases available for that participant during the coming quarter as
well as the monthly rental payment that will be applied to each piece of
equipment purchased.  While the amount of equipment actually purchased
rarely meets the pre-approved amount, it is an indicator of the amount of
business that we anticipate entering into with these lessees in the upcoming
quarter.
 
 On
September 28, 2007 and December 10, 2007, we completed the acquisitions of, and
simultaneously leased back substantially all, of the machining and metal working
equipment of W Forge, Scott, Gilco, General and AMI, a wholly-owned subsidiary
of MWU.  Simultaneously with the closing of the transactions with W
Forge, Scott, Gilco, General and AMI, the Participating Funds completed similar
acquisitions with four other subsidiaries of MWU pursuant to which the
respective funds purchased substantially all of the machining and metal working
equipment of each subsidiary.  Each subsidiary’s obligations under its
respective leases (including those of W Forge, Scott, Gilco, General and AMI)
are cross-collateralized and cross-defaulted, and all subsidiaries’ obligations
are guaranteed by MWU.  Each of the Participating Funds has also
entered into a credit support agreement with us, pursuant to which if losses are
incurred by a Participating Fund with respect to any MWU subsidiary, those
losses are shared among the Participating Funds proportionately based on the
amount of capital invested.  The term of each credit support agreement
matches that of the lease agreements.  No amounts were accrued at
March 31, 2008 and management cannot reasonably estimate at this time the
maximum potential amounts that may become payable under the credit support
agreement, if any.
 
 Subsequent
Events
 
 On April
24, 2008, ICON EAR II LLC, a wholly owned subsidiary of ours, completed the
acquisition and leaseback of semiconductor manufacturing equipment from EAR for
an initial acquisition price of $6,347,500. We will collect $3,965 per day until
the commencement of the lease term, which is the earlier of June 30, 2008 or
upon EAR meeting a specific threshold and will continue for 60
months.
 
 Effective
as of May 19, 2008, substantially all of the remaining assets in the Leasing
Portfolio were sold to affiliates of U.S. Micro Corporation, an unaffiliated
third party (the “Remaining Assets”).  The purchase price for the
Remaining Assets was $19,000,000, and is subject to a number of post-closing
adjustments.
   27
 Table of Contents
 
 Item 3.  Quantitative and Qualitative Disclosures About
Market Risk
 
 We, like
most other companies, are exposed to certain market risks, which include changes
in interest rates and the demand for equipment (and the related residuals) owned
by us.  We believe that our exposure to other market risks, including
foreign currency exchange rate risk, commodity risk and equity price risk, are
insignificant, at this time, to both our financial position and our results of
operations.  There were no other material changes to the disclosure
related to these items since the filing of our Annual Report on Form 10-K for
the year ended December 31, 2007.
 
 Item 4T. Controls and Procedures
 
 Evaluation of disclosure controls
and procedures
 
 In
connection with the preparation of this Quarterly Report on Form 10-Q for the
period ended March 31, 2008, as well as the financial statements for our
Manager, our Manager carried out an evaluation, under the supervision and with
the participation of the management of our Manager, including its Co-Chief
Executive Officers and Chief Financial Officer, of the effectiveness of the
design and operation of our Manager’s disclosure controls and procedures as of
the end of the period covered by this Report pursuant to the Securities Exchange
Act of 1934. Based on the foregoing evaluation, the Co-Chief Executive Officers
and the Chief Financial Officer concluded that our Manager’s disclosure controls
and procedures were effective.
 
 In
designing and evaluating our Manager’s disclosure controls and procedures, our
Manager recognized that disclosure controls and procedures, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the disclosure controls and procedures are met. Our
Manager’s disclosure controls and procedures have been designed to meet
reasonable assurance standards. Disclosure controls and procedures cannot detect
or prevent all error and fraud. Some inherent limitations in disclosure controls
and procedures include costs of implementation, faulty decision-making, simple
error and mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the controls. The design of any system of controls is based, in
part, upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all anticipated and unanticipated future conditions. Over time, controls
may become inadequate because of changes in conditions, or the degree of
compliance with established policies or procedures.
 
 Evaluation of internal control over
financial reporting
 
 There
have been no changes in our internal control over financial reporting during our
most recently completed fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
  
 28
 Table of Contents
 
 PART II - OTHER INFORMATION
 
 Item 1.  Legal Proceedings
 
 In the
ordinary course of conducting our business, there may be certain claims, suits
and complaints filed against us.  In the opinion of management, the
outcome of such matters, if any, will not have a material impact on our
consolidated financial position or results of operations.  No material
legal proceedings are currently pending or threatened, to our knowledge, against
us or against any of our assets.
 
 Item 1A.  Risk Factors
 
 There
have been no material changes from the risk factors disclosed in “Item 1A. Risk
Factors” of our Annual Report on Form 10-K for the year ended December 31,
2007.
 
 Item 2.  Unregistered Sales of Equity Securities and Use
of Proceeds
 
 Our
Manager consented to us redeeming 355 additional member shares during the
2008 Quarter. The redemption amounts are calculated according to a
specified redemption formula in accordance with the LLC
agreement.  Redeemed additional member shares have no voting rights
and do not share in distributions.  The LLC agreement limits the
number of additional member shares which can be redeemed in any one year and
redeemed additional member shares may not be reissued. The following table
details our additional member redemptions:
 
 Total
      Number of Additional
              
              
              Price
      Paid PerMemberShares
      Redeemed
              
              
              Additional
      MemberSharesJanuary
      1, 2008 through January 31, 2008
              
              
              355
              
              
              $
              280,038.88February
      1, 2008 through February 28, 2008
              
              
              -
              
              
              $
              -March
      1, 2008 through March 31, 2008
              
              
              -
              
              
              $
              -
 
 Item 3.  Defaults Upon Senior Securities
 
 Not
applicable.
 
 Item 4.  Submission of Matters to a Vote of Security
Holders
 
 No
matters were submitted to a vote of security holders during the 2008
Quarter.
 
 Item 5.  Other Information
 
 Not
applicable.
  
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 Table of Contents
 
 Item 6. Exhibits


3.1
            Certificate
      of Formation of ICON Leasing Fund Eleven, LLC.  Exhibit 3.1 to
      Amendment No. 1 to the Registration Statement on Form S-1 filed with the
      SEC on February 15, 2005 (File No. 333-121790), is incorporated herein by
      reference.4.1
            ICON
      Leasing Fund Eleven, LLC Amended and Restated Limited Liability Company
      Agreement.  Exhibit A to Amendment No. 1 to the Registration
      Statement on Form S-1 filed with the SEC on June 29, 2006 (File No.
      333-133730), is incorporated herein by reference.4.2
            Amendment
      No. 1 to the Amended and Restated Limited Liability Company
      Agreement.  Exhibit 4.3 to our Quarterly Report on Form 10-Q for
      the period ended June 30, 2006, filed with the SEC on August 23, 2006, 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 (Incorporated
      by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K
      dated September 7, 2005).10.2
            Loan
      Modification Agreement, by and between California Bank & Trust and
      ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON
      Income Fund Ten, LLC and ICON Leasing Fund Eleven, LLC, dated December 26,
      2006 (Incorporated by reference to Exhibit 10.1 to Registrant’s Current
      Report on Form 8-K dated December 29, 2006).10.3
            Loan
      Modification Agreement dated as of May 1, 2008 between California
      Bank & Trust, ICON Income Fund Eight B L.P., ICON Income Fund
      Nine, LLC, ICON Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC and
      ICON Leasing Fund Twelve, LLC.31.1
            Rule
      13a-14(a)/15d-14(a). Certification of Co-Chief Executive
      Officer.31.2
            Rule
      13a-14(a)/15d-14(a). Certification of Co-Chief Executive
      Officer.31.3
            Rule
      13a-14(a)/15d-14(a). Certification of Chief Financial
    Officer.32.1
            Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
            Certification
      of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.3
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.




30
 Table of Contents
  
 SIGNATURES
 
 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.
 
 File No.
000-51916
 ICON
Capital Corp.
 Sole
Manager of the Registrant
 
 June
6, 2008
 
 /s/
      Mark GattoMark
      GattoCo-Chief
      Executive Officer and Co-President
                (Co-Principal
      Executive Officer)
 
 June
6, 2008
 
 /s/
      Michael A. ReisnerMichael
      A. ReisnerCo-Chief
      Executive Officer and Co-President
                (Co-Principal
      Executive Officer)
 
 June
6, 2008
 
 /s/
      Anthony J. BrancaAnthony
      J. BrancaChief
      Financial Officer
                (Principal
      Financial Officer)
   31