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ICON ECI FUND FIFTEEN, L.P. - 10-Q - General Partner's Discussion and Analysis of Financial Condition and Results of Operations

August 13, 2014

The following is a discussion of our current financial position and results of operations. This discussion should be read together with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2013. This discussion should also be read in conjunction with the disclosures below regarding "Forward-Looking Statements."



As used in this Quarterly Report on Form 10-Q, references to "we," "us," "our" or similar terms include ICON ECI Fund Fifteen, L.P. 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," "would," "could," "anticipate," "believe," "estimate," "expect," "continue," "further," "plan," "seek," "intend," "predict" or "project" and variations of these words or comparable words or phrases of similar meaning. These forward-looking statements reflect our current beliefs and expectations with respect to future events. They are based on assumptions and are subject to risks and uncertainties and other factors outside of 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 are a direct financing fund that primarily makes investments in domestic and international companies, which investments are primarily structured as debt and debt-like financings (such as loans and leases) that are collateralized by Capital Assets utilized by such companies to operate their businesses, as well as other strategic investments in or collateralized by Capital Assets that our General Partner believes will provide us with a satisfactory, risk-adjusted rate of return. We were formed as a Delaware limited partnership and have elected to be treated as a partnership for federal income tax purposes. As of July 28, 2011 (the "Initial Closing Date"), we raised a minimum of $1,200,000 from the sale of our limited partnership interests ("Interests"), at which time we commenced operations. Subsequent to the Initial Closing Date, we returned the initial capital contribution of $1,000 to our Investment Manager. From the commencement of our offering on June 6, 2011 through the completion of our offering on June 6, 2013, we sold 197,597 Interests to 4,644 limited partners, representing $196,688,918 of capital contributions. Investors from the Commonwealth of Pennsylvania and the State of Tennessee were not admitted until we raised total equity in the amount of $20,000,000, which we achieved on November 17, 2011. Our operating period commenced on June 7, 2013. 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 used for our expenses, reserves and distributions to our partners. The investment in additional Capital Assets in this manner is called "reinvestment." We anticipate investing and reinvesting in Capital Assets from time to time for five years from June 6, 2013, the date we completed our offering. This time frame is called the "operating period" and may be extended, at our General Partner's discretion, for up to an additional three years. After the operating period, we will then sell our assets and/or let our investments mature in the ordinary course of business, during a time frame called the "liquidation period."



We seek to generate returns in three ways. We seek to:

generate current cash flow from payments of principal and/or interest (in the case of secured loans and other financing transactions) and rental payments (in the case of leases);



generate deferred cash flow by realizing the value of certain Capital Assets or interests therein at the maturity of the investment; and

generate a combination of both current and deferred cash flow from other structured investments.

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In the case of secured loans and other financing transactions, the principal and interest payments due under the loan are expected to provide a return of and a return on the amount we lend to borrowers. In the case of leases where there is significant current cash flow generated during the primary term of the lease and the value of the Capital Assets at the end of the term will be minimal or is not considered a primary reason for making the investment, the rental payments due under the lease are expected to be, in the aggregate, sufficient to provide a return of and a return on the purchase of the leased Capital Assets. In the case of investments in leased Capital Assets that decline in value at a slow rate due to the long economic life of such Capital Assets, we expect that we will generate sufficient net proceeds at the end of the investment from the sale or re-lease of such Capital Assets. In the case of operating leases, we expect most, if not all, of the return of and the return on such investments to be realized upon the sale or re-lease of the Capital Assets. For leveraged leases, we expect the rental income we receive to be less than the purchase price of the Capital Assets because we will structure these transactions to utilize some or all of the lease rental payments to reduce the amount of non-recourse indebtedness used to acquire such assets.



In some cases with respect to the above investments, we may acquire equity interests, as well as warrants or other rights to acquire equity interests, in the borrower or lessee that may increase the expected return on our investments.

Our General Partner manages and controls our business affairs, including, but not limited to, our investments in Capital Assets, under the terms of our limited partnership agreement. Our Investment Manager, an affiliate of our General Partner, originates and services our investments. Our Investment Manager manages or is the investment manager or managing trustee for seven other public equipment funds.



Recent Significant Transactions

We engaged in the following significant transactions since December 31, 2013:

Notes Receivable

On March 18, 2014, Green Field satisfied its obligation in connection with a superpriority, secured term loan scheduled to mature on August 26, 2014 by making a prepayment of approximately $7,458,000, comprised of all outstanding principal and accrued interest. No material gain or loss was recorded as a result of this transaction. On June 6, 2014, NTS satisfied their obligations in connection with three term loans scheduled to mature on July 1, 2017 by making a prepayment of approximately $9,522,000, comprised of all outstanding principal, accrued interest and a prepayment fee of approximately $362,000. The prepayment fee was recognized as additional finance income. During the three months ended June 30, 2014, substantially all material conditions to closing were satisfied with respect to a commitment to provide a senior secured term loan credit facility to TMA of up to $29,000,000, of which our portion is expected to be $3,625,000. On July 14, 2014, we, Fund Twelve, Fund Fourteen and TMA executed the credit facility agreement. The facility will be used by TMA to acquire and refinance two platform supply vessels. The loan will bear interest at LIBOR plus a margin of between 13% and 17% and will be for a period of five years. The loan will be secured by, among other things, a first priority security interest in and earnings from each of the vessels. We expect to fund our commitment under the facility during the three month period ending September 30, 2014. Mining Equipment On March 4, 2014, a joint venture owned 15% by us, 60% by Fund Twelve, 15% by Fund Fourteen and 10% by Fund Sixteen purchased mining equipment from an affiliate of Blackhawk. Simultaneously, the mining equipment was leased to Blackhawk and its affiliates for four years. The aggregate purchase price for the mining equipment of approximately $25,359,000 was funded by approximately $17,859,000 in cash and $7,500,000 of non-recourse long-term debt. Our contribution to the joint venture was $2,693,395. Marine Vessels 13



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On March 21, 2014, ICON Siva, through two indirect subsidiaries, entered into memoranda of agreement to purchase the SIVA Vessels from Siva Global for an aggregate purchase price of $41,600,000. The SIVA Coral and the SIVA Pearl were delivered on March 28, 2014 and April 8, 2014, respectively. The SIVA Vessels were bareboat chartered to an affiliate of Siva Global for a period of eight years upon the delivery of each respective vessel. The SIVA Vessels were each acquired for approximately $3,550,000 in cash, $12,400,000 of financing through the Loan from DVB and $4,750,000 of financing through a subordinated, non-interest-bearing seller's credit. Our contribution to ICON Siva was $1,022,225. On June 12, 2014, a joint venture owned 12.5% by us, 75% by Fund Twelve and 12.5% by Fund Fourteen purchased an offshore supply vessel from Pacific Crest for $40,000,000. Simultaneously, the vessel was bareboat chartered to Pacific Crest for ten years. The vessel was acquired for approximately $12,000,000 in cash, $26,000,000 of financing through a senior secured loan from DVB and $2,000,000 of financing through a subordinated, non-interest-bearing seller's credit. Our contribution to the joint venture was $1,617,158.



Trucks and Trailers

On March 28, 2014, a joint venture owned 27.5% by us, 60% by Fund Twelve and 12.5% by Fund Sixteen purchased trucks, trailers and other equipment from subsidiaries of D&T for $12,200,000. Simultaneously, the trucks, trailers and other equipment were leased to D&T and its subsidiaries for 57 months. Our contribution to the joint venture was $3,266,352.



Telecommunications Equipment

On May 30, 2014, Global Crossing exercised its option to purchase certain telecommunications equipment prior to lease expiration at the purchase option price of approximately $328,000. In accordance with the terms of the lease, Global Crossing was required to pay the final monthly lease payment of approximately $60,000. Acquisition Fees



We paid total acquisition fees to our Investment Manager of $315,625 and $624,598 during the three and six months ended June 30, 2014.

Recent Accounting Pronouncements

In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, which will become effective for us on January 1, 2017. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements. We do not believe any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our consolidated financial statements.



Results of Operations for the Three Months Ended June 30, 2014 (the "2014 Quarter") and 2013 (the "2013 Quarter")

We entered into our operating period on June 7, 2013, during which we will continue to make investments with the cash generated from our initial investments to the extent that the cash is not used for expenses, reserves and distributions to limited partners. As our investments mature, we may reinvest the proceeds in additional investments in Capital Assets.



Financing Transactions

The following tables set forth the types of assets securing the financing transactions in our portfolio:

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Table of contents June 30, 2014 December 31, 2013 Net Percentage of Net Percentage of Carrying Total Net Carrying Total Net Asset Type Value Carrying Value Value Carrying Value Marine - product tankers $ 30,424,579 27% $ 31,262,890 23% Platform supply vessel 21,182,649 19% 22,135,705 16% Oil field services equipment 20,629,721 18% 28,259,026 21% Lubricant manufacturing and blending equipment 9,384,313 8% 9,430,935 7% Vessel - tanker 7,531,579 7% 7,612,365 6% Trailers 6,738,148 6% 7,105,225 5% Marine - asphalt carrier 6,258,704 5% 6,825,681 5% Marine - dry bulk vessels 5,674,918 5% 5,752,690 4% Metal pipe and tube manufacturing equipment 2,506,752 2% 2,526,063 2% Rail support construction equipment 1,838,866 2% 1,931,228 2% Aircraft parts 1,642,908 1% 1,687,868 1% Telecommunications equipment - - 10,165,395 8% $ 113,813,137 100% $ 134,695,071 100% The net carrying value of our financing transactions includes the balances of our net investment in notes receivable and our net investment in finance leases, which are included in our consolidated balance sheets.



During the 2014 Quarter and the 2013 Quarter, certain customers generated significant portions (defined as 10% or more) of our total finance income as follows:

Percentage of Total Finance Income Customer Asset Type 2014 Quarter 2013 Quarter Varada Ten Pte. Ltd. Oil field services equipment 18% - Gallatin Marine Management, LLC Platform supply vessel 17% 22% NTS Communications, Inc. Telecommunications equipment 15% 10% Lubricating Specialties Company Lubricant manufacturing and blending equipment 8% 13% 58% 45% Interest income from our net investment in notes receivable and finance income from our net investment in finance leases are included in finance income in the consolidated statements of operations. The foregoing percentages are only as of a stated period and are not expected to be comparable in future periods. Further, these percentages are only representative of the percentage of the carrying value of such assets or finance income as of each stated period, and as such are not indicative of the concentration of any asset type or customer by the amount of equity invested or our investment portfolio as a whole.



Operating Lease Transactions

The following tables set forth the types of equipment subject to operating leases in our portfolio: June 30, 2014 December 31, 2013 Net Percentage of Net Percentage of Carrying Total Net Carrying Total Net Asset Type Value Carrying Value Value Carrying Value Marine - container vessels $ 73,867,849 78% $ 76,405,717 76% Mining equipment 10,854,187 11% 13,033,237 13% Oil field services equipment 10,038,005 11% 10,849,919 11% $ 94,760,041 100% $ 100,288,873 100%



The net carrying value of our operating lease transactions includes the balance of our leased equipment at cost, which is

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included in our consolidated balance sheets.

During the 2014 Quarter and the 2013 Quarter, certain customers generated significant portions (defined as 10% or more) of our total rental income as follows:

Percentage of Total Rental Income

Customer Asset Type



2014 Quarter 2013 Quarter

Hoegh Autoliners Shipping AS Marine - container vessels 54% 54% Murray Energy Corporation Mining equipment 33% 33% Go Frac, LLC Oil field services equipment 13% 13% 100% 100% The foregoing percentages are only as of a stated period and are not expected to be comparable in future periods. Further, these percentages are only representative of the percentage of the carrying value of such assets or rental income as of each stated period, and as such are not indicative of the concentration of any asset type or customer by the amount of equity invested or our investment portfolio as a whole.



Revenue for the 2014 Quarter and the 2013 Quarter is summarized as follows:

Three Months Ended June 30, 2014 2013 Change Finance income $ 3,670,814$ 3,060,822$ 609,992 Rental income 4,582,116 4,571,922 10,194 Income from investment in joint ventures 591,308 165,322 425,986 Other income 148,634 65,332 83,302 Total revenue $ 8,992,872$ 7,863,398$ 1,129,474 Total revenue for the 2014 Quarter increased $1,129,474, or 14.4%, as compared to the 2013 Quarter. The increase in revenue was primarily due to entering into four new notes receivable and four new joint ventures subsequent to the 2013 Quarter. This increase was partially offset by the prepayment of four notes receivable subsequent to the 2013 Quarter. Expenses for the 2014 Quarter and the 2013 Quarter are summarized as follows: Three Months Ended June 30, 2014 2013 Change Management fees $ 659,794$ 248,377$ 411,417 Administrative expense reimbursements 421,255 1,073,535 (652,280) General and administrative 569,755 330,607 239,148 Interest 1,299,806 1,251,568 48,238 Depreciation 2,764,417 2,758,791 5,626 Credit loss - 12,530 (12,530) Total expenses $ 5,715,027$ 5,675,408$ 39,619 Total expenses for the 2014 Quarter increased $39,619, or 0.7%, as compared to the 2013 Quarter. The increase was primarily related to an increase in management fees due to the prepayment of one note receivable during the 2014 Quarter and an increase in general and administrative expenses due to an increase in legal and state tax expenses. These increases were partially offset by a decrease in administrative expense reimbursements due to lower costs incurred on our behalf by our Investment Manager.



Net Income Attributable to Noncontrolling Interests

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Net income attributable to noncontrolling interests decreased $43,416, from $415,224 in the 2013 Quarter to $371,808 in the 2014 Quarter. The decrease was primarily due to an increase in interest expense related to additional non-recourse long-term debt entered into subsequent to the 2013 Quarter.

Net Income Attributable to Fund Fifteen

As a result of the foregoing factors, net income attributable to us for the 2014 Quarter and 2013 Quarter was $2,906,037 and $1,772,766, respectively. The net income attributable to us per weighted average additional Interest outstanding for the 2014 Quarter and the 2013 Quarter was $14.57 and $9.37, respectively.



Results of Operations for the Six Months Ended June 30, 2014 (the "2014 Period") and 2013 (the "2013 Period")

Financing Transactions

During the 2014 Period and the 2013 Period, certain customers generated significant portions (defined as 10% or more) of our total finance income as follows:

Percentage of Total Finance Income

Customer Asset Type 2014



Period 2013 Period

Varada Ten Pte. Ltd. Oil field services equipment 18% - Gallatin Marine Management, LLC Platform supply vessel 17% 26% NTS Communications, Inc. Telecommunications equipment 12% 12% 47% 38% Interest income from our net investment in notes receivable and finance income from our net investment in finance leases are included in finance income in the consolidated statements of operations. The foregoing percentages are only as of a stated period and are not expected to be comparable in future periods. Further, these percentages are only representative of the percentage of finance income as of each stated period, and as such are not indicative of the concentration of any asset type or customer by the amount of equity invested or our investment portfolio as a whole.



Operating Lease Transactions

During the 2014 Period and the 2013 Period, certain customers generated significant portions (defined as 10% or more) of our total rental income as follows:

Percentage of Total Rental Income

Customer Asset Type



2014 Period 2013 Period

Hoegh Autoliners Shipping AS Marine - container vessels 54% 56% Murray Energy Corporation Mining equipment 33% 34% Go Frac, LLC Oil field services equipment 13% 10% 100% 100% The foregoing percentages are only as of a stated period and are not expected to be comparable in future periods. Further, these percentages are only representative of the percentage of rental income as of each stated period, and as such are not indicative of the concentration of any asset type or customer by the amount of equity invested or our investment portfolio as a whole.



Revenue for the 2014 Period and the 2013 Period is summarized as follows:

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Table of contents Six Months Ended June 30, 2014 2013 Change Finance income $ 7,191,522$ 5,095,798$ 2,095,724 Rental income 9,164,230 8,836,317 327,913 Income from investment in joint venture 999,341 165,322 834,019 Other income 288,499 78,594 209,905 Total revenue $ 17,643,592$ 14,176,031$ 3,467,561 Total revenue for the 2014 Period increased $3,467,561, or 24.5%, as compared to the 2013 Period. The increase in revenue was primarily due to entering into four new notes receivable and four new joint ventures subsequent to the 2013 Period. This increase was partially offset by the prepayment of four notes receivables subsequent to the 2013 Period.



Expenses for the 2014 Period and the 2013 Period are summarized as follows:

Six Months Ended June 30, 2014 2013 Change Management fees $ 909,774$ 457,868$ 451,906 Administrative expense reimbursements 1,103,799 2,043,230 (939,431) General and administrative 1,062,529 635,072 427,457 Interest 2,630,103 2,279,692 350,411 Depreciation 5,528,833 5,312,968 215,865 Credit loss - 12,530 (12,530) Total expenses $ 11,235,038$ 10,741,360$ 493,678 Total expenses for the 2014 Period increased $493,678, or 4.6%, as compared to the 2013 Period. The increase primarily related to (i) an increase in management fees due to the prepayment of two notes receivable during the 2014 Period, (ii) an increase in general and administrative expenses due to an increase in legal and state tax expenses, (iii) an increase in interest expense on our additional non-recourse long-term debt and (iv) an increase in depreciation expense due to the purchase of equipment pursuant to a new operating lease entered into during the 2013 Period. These increases were partially offset by a decrease in administrative expense reimbursements due to lower costs incurred on our behalf by our Investment Manager.



Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests increased $110,631, from $651,615 in the 2013 Period to $762,246 in the 2014 Period. The increase was primarily due to net income related to our joint ventures with Fund Fourteen, which invested in two new finance leases during the 2013 Period.



Net Income Attributable to Fund Fifteen

As a result of the foregoing factors, net income attributable to us for the 2014 Period and 2013 Period was $5,646,308 and $2,783,056, respectively. The net income attributable to us per weighted average additional Interest outstanding for the 2014 Period and the 2013 Period was $28.30 and $15.73, respectively. Financial Condition



This section discusses the major balance sheet variances at June 30, 2014 compared to December 31, 2013.

Total Assets

Total assets decreased $9,281,570, from $277,768,205 at December 31, 2013 to $268,486,635 at June 30, 2014. The decrease in total assets was primarily the result of distributions paid to our partners and noncontrolling interests and depreciation of our leased equipment at cost. These decreases were partially offset by our operating income during the 2014 Period. Total Liabilities 18



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Total liabilities decreased $7,334,607, from $109,969,220 at December 31, 2013 to $102,634,613 at June 30, 2014. The decrease was primarily the result of scheduled repayments of our non-recourse long-term debt during the 2014 Period.

Equity Equity decreased $1,946,963, from $167,798,985 at December 31, 2013 to $165,852,022 at June 30, 2014. The decrease primarily related to distributions paid to our partners and noncontrolling interests, partially offset by our net income in the 2014 Period.



Liquidity and Capital Resources

Summary At June 30, 2014 and December 31, 2013, we had cash of $32,390,053 and $24,297,314, respectively. Pursuant to the terms of our offering, we have established a reserve in the amount of 0.50% of the gross offering proceeds from the sale of our Interests. As of June 30, 2014, the cash reserve was $983,445. During our operating period, our main source of cash is typically from operating activities and our main use of cash is in investing and financing activities. Our liquidity will vary in the future, increasing to the extent cash flows from investments and proceeds from the sale of our investments exceed expenses and decreasing as we make new investments, pay distributions to our partners and to the extent that expenses exceed cash flows from operations and proceeds from the sale of our investments. We believe that cash generated from the expected results of our operations will be sufficient to finance our liquidity requirements for the foreseeable future, including distributions to our partners, general and administrative expenses, new investment opportunities, management fees and administrative expense reimbursements.



Our ability to generate cash in the future is subject to general economic, financial, competitive, regulatory and other factors that affect us and our borrowers' and lessees' businesses that are beyond our control.

We are using the net proceeds of the offering and cash from operations to invest in Capital Assets located in North America, Europe and other developed markets, including those in Asia and elsewhere. We have sought and continue to seek to acquire a portfolio of Capital Assets that is comprised of transactions that generate (a) current cash flow from payments of principal and/or interest (in the case of secured loans and other financing transactions) and rental payments (in the case of leases), (b) deferred cash flow from realizing the value of Capital Assets or interests therein at the maturity of the investment, or (c) a combination of both. Unanticipated or greater than anticipated operating costs or losses (including a borrower's inability to make timely loan payments or a lessee's inability to make timely lease payments) would adversely affect our liquidity. To the extent that working capital may be insufficient to satisfy our cash requirements, we anticipate that we would fund our operations from cash flow generated by investing and financing activities. As of June 30, 2014, we had $10,000,000 available to us under the Facility pursuant to the borrowing base to fund our short-term liquidity needs. For additional information, see Note 8 to our consolidated financial statements. Our General Partner does not intend to fund any cash flow deficit of ours or provide other financial assistance to us. From the commencement of our offering period on June 6, 2011 through the completion of our offering on June 6, 2013, we sold 197,597 Interests to 4,644 limited partners, representing $196,688,918 of capital contributions. From the commencement of our offering period through June 6, 2013, we paid sales commissions to third parties of $13,103,139 and dealer-manager fees to ICON Securities, LLC, formerly known as ICON Securities Corp., an affiliate of our General Partner and the dealer-manager of the offering of the Interests ("ICON Securities"), of $5,749,021. In addition, organizational and offering expenses of $2,730,919 were paid or incurred by us, our General Partner or its affiliates during the offering period. Cash Flows Operating Activities Cash provided by operating activities decreased $1,315,847, from $10,484,160 in the 2013 Period to $9,168,313 in the 2014 Period. The decrease was primarily related to the receipt of a security deposit during the 2013 Period, partially offset by an increase in our receipt of finance income during the 2014 Period. 19



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Table of contents Investing Activities Cash from investing activities increased $65,197,741, from a use of cash of $53,549,465 in the 2013 Period to a source of cash of $11,648,276 in the 2014 Period. The increase was primarily related to (i) our investment in equipment and notes receivable during the 2013 Periodwithout corresponding investments during the 2014 Period, (ii) an increase in our receipt of principal on finance leases and notes receivable during the 2014 Period and (iii) a decrease in cash used to invest in joint ventures during the 2014 Period as compared to the 2013 Period. Financing Activities Cash from financing activities decreased $52,108,113, from a source of cash $39,384,263 in the 2013 Period to a use of cash of $12,723,850 in the 2014 Period. The decrease was primarily due to (i) our offering period ending on June 6, 2013, (ii) a decrease in contributions in joint ventures by noncontrolling interests and (iii) an increase in distributions to partners. Non-Recourse Long-Term Debt We had non-recourse long-term debt obligations at June 30, 2014 of $89,399,518 related to certain vessels, the Lewek Ambassador, the Hoegh Copenhagen, the Ardmore Capella and the Ardmore Calypso, and certain mining and oil field services equipment. As of December 31, 2013, we had non-recourse long-term debt obligations of $96,310,220. Our non-recourse long-term debt obligations consist of notes payable in which the lender has a security interest in the underlying assets. If the lessee were to default on the underlying lease, resulting in our default on the non-recourse long-term debt, the assets could be returned to the lender in extinguishment of that debt.



At June 30, 2014, we were in compliance with all covenants related to our non-recourse long-term debt.

Distributions We, at our General Partner's discretion, pay monthly distributions to each of our limited partners beginning with the first month after each such limited partner's admission and expect to continue to pay such distributions until the termination of our operating period. We paid distributions of $79,576, $7,878,071 and $406,785 to our General Partner, limited partners and noncontrolling interests, respectively, during the 2014 Period.



Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

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

At June 30, 2014, we had non-recourse and other debt obligations. The lender has a security interest in the majority of the assets collateralizing each non-recourse debt instrument and an assignment of the rental payments under the lease associated with the assets. If the lessee defaults on the lease, the assets could be returned to the lender in extinguishment of the non-recourse debt. At June 30, 2014, our outstanding non-recourse long-term indebtedness was $89,399,518. We have entered into a remarketing agreement with a third party. Residual proceeds received in excess of specific amounts will be shared with this third party in accordance with the terms of the remarketing agreement. The present value of the obligation related to this agreement was approximately $135,000 at June 30, 2014 and is included in accrued expenses and other liabilities on our consolidated balance sheets. In connection with certain investments, we are required to maintain restricted cash balances with certain banks. Our restricted cash amounts of approximately $1,194,000 and $1,202,000 are presented within other assets on our consolidated balance sheets at June 30, 2014 and December 31, 2013, respectively.



Off-Balance Sheet Transactions

None.

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