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EX-32.2 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER - ICON INCOME FUND TEN LLCex32-2.htm
EX-31.2 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER - ICON INCOME FUND TEN LLCex31-2.htm
EX-31.1 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER - ICON INCOME FUND TEN LLCex31-1.htm
EX-32.1 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER - ICON INCOME FUND TEN LLCex32-1.htm
EX-31.3 - CERTIFICATION OF PRINCIPAL ACCOUNTING AND FINANCIAL OFFICER - ICON INCOME FUND TEN LLCex31-3.htm
EXCEL - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCFinancial_Report.xls
EX-32.3 - CERTIFICATION OF PRINCIPAL ACCOUNTING AND FINANCIAL OFFICER - ICON INCOME FUND TEN LLCex32-3.htm
 



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
June 30, 2011
 
 
or
[  ]           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_
000-50654
 

ICON Income Fund Ten, LLC
(Exact name of registrant as specified in its charter)

Delaware
35-2193184
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

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

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


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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).       
[X] Yes     [  ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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 shares of limited liability company interests of the registrant on August 8, 2011 is 148,211.
 

 
 
 

 
 
 
ICON Income Fund Ten, LLC
Table of Contents
   
Page
     
 
     
1
     
1
         
2
     
3
     
4
     
6
     
14
     
20
     
20
     
 
     
 
21
     
 
21
     
21
     
21
     
21
     
 
21
     
 
22
     
 
23
 

 
 

 

 
PART I – FINANCIAL INFORMATION


Item 1.  Consolidated Financial Statements
 
ICON Income Fund Ten, LLC
 
(A Delaware Limited Liability Company)
 
Consolidated Balance Sheets
 
   
Assets
 
   
   
June 30,
       
   
2011
   
December 31,
 
   
(unaudited)
   
2010
 
 Current assets:
           
 Cash and cash equivalents
  $ 3,359,516     $ 2,740,590  
 Current portion of net investment in finance leases
    -       616,088  
 Current portion of notes receivable
    540,491       -  
 Service contracts receivable
    199,667       441,742  
 Equipment held for sale
    23,393       23,393  
 Other current assets
    728,338       845,417  
                 
   Total current assets
    4,851,405       4,667,230  
                 
 Non-current assets:
               
 Net investment in finance leases, less current portion
    38,095,796       35,901,863  
 Leased equipment at cost (less accumulated depreciation of
               
      $22,057 and $900,124, respectively)
    2,135       18,115  
 Fixed assets (less accumulated depreciation of
               
      $4,818,480 and $3,909,365, respectively)
    2,139,195       2,804,715  
 Notes receivable, less current portion
    209,478       -  
 Investments in joint ventures
    13,503,857       24,531,251  
 Investments in unguaranteed residual values
    -       128,368  
 Other non-current assets, net
    67,811       83,213  
                 
       Total non-current assets
    54,018,272       63,467,525  
                 
 Total Assets
  $ 58,869,677     $ 68,134,755  
                 
Liabilities and Equity
 
                 
 Current liabilities:
               
 Due to Manager and affiliates
  $ 134,824     $ 171,156  
 Accrued expenses
    159,979       202,908  
 Other current liabilities      1,756,294        1,820,329  
                 
 Total Liabilities
    2,051,097       2,194,393  
                 
 Commitments and contingencies (Note 10)
               
                 
 Equity:
               
 Members' Equity:
               
    Additional Members
   
59,048,696
      68,395,072  
    Manager
    (715,981 )     (621,572 )
    Accumulated other comprehensive loss
    (1,983,216 )     (1,964,780 )
                 
       Total Members' Equity
    56,349,499       65,808,720  
                 
 Noncontrolling Interests
    469,081       131,642  
                 
 Total Equity
    56,818,580       65,940,362  
                 
 Total Liabilities and Equity
  $ 58,869,677     $ 68,134,755  
 
 
See accompanying notes to consolidated financial statements.
 
1

 


ICON Income Fund Ten, LLC
 
(A Delaware Limited Liability Company)
 
Consolidated Statements of Operations
 
(unaudited)
 
   
   
   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2011
   
2010
   
2011
   
2010
 
 Revenue:
                       
 Rental income
  $ 133,394     $ 1,395,422     $ 293,591     $ 3,535,258  
 Finance income
    1,567,503       1,398,737       3,087,808       2,742,958  
 Servicing income
    1,203,051       1,308,802       2,451,398       2,798,091  
 (Loss) income from investments in joint ventures
    (4,449,584 )     713,754       (8,959,547 )     1,409,056  
 Net gain (loss) on sales of equipment and unguaranteed residual values
    209,858       (35,637 )     798,747       158,970  
 Interest and other income
    88,303       50,624       184,140       90,206  
                                 
        Total revenue
    (1,247,475 )     4,831,702       (2,143,863 )     10,734,539  
                                 
 Expenses:
                               
 Management fees - Manager
    144,496       208,056       269,590       437,141  
 Administrative expense reimbursements - Manager
    285,607       282,593       452,970       478,520  
 General and administrative
    1,770,355       1,802,413       3,713,893       3,302,522  
 Interest
    3,708       10,091       10,056       18,669  
 Loss on guaranty
    -       807,057       -       807,057  
 Depreciation and amortization
    389,427       1,293,902       791,935       2,951,032  
                                 
        Total expenses
    2,593,593       4,404,112       5,238,444       7,994,941  
                                 
 Net (loss) income
    (3,841,068 )     427,590       (7,382,307 )     2,739,598  
                                 
 Less: Net (loss) income attributable to noncontrolling interests
    (55,803 )     70,743       (19,771 )     173,924  
                                 
 Net (loss) income attributable to Fund Ten
  $ (3,785,265 )   $ 356,847     $ (7,362,536 )   $ 2,565,674  
                                 
 Net (loss) income attributable to Fund Ten allocable to:
                               
 Additional Members
  $ (3,747,412 )   $ 353,279     $ (7,288,911 )   $ 2,540,017  
 Manager
    (37,853 )     3,568       (73,625 )     25,657  
                                 
    $ (3,785,265 )   $ 356,847     $ (7,362,536 )   $ 2,565,674  
                                 
 Weighted average number of additional
                               
 shares of limited liability company interests outstanding
    148,211       148,211       148,211       148,211  
                                 
 Net (loss) income attributable to Fund Ten per weighted
                               
 average additional share of limited liability company interests outstanding
  $ (25.28 )   $ 2.38     $ (49.18 )   $ 17.14  
 
 
See accompanying notes to consolidated financial statements.
 
2


 
ICON Income Fund Ten, LLC
 
(A Delaware Limited Liability Company)
 
Consolidated Statements of Changes in Equity
 
   
   
   
Members' Equity
       
   
Additional Shares
of Limited Liability
Company Interests
   
Additional
Members
   
Manager
   
Accumulated
Other
Comprehensive
Loss
   
Total
Members'
Equity
   
Noncontrolling
Interests
   
Total
Equity
 
Balance, December 31, 2010
    148,211     $ 68,395,072     $ (621,572 )   $ (1,964,780 )   $ 65,808,720     $ 131,642     $ 65,940,362  
                                                         
Comprehensive income:
                                                       
     Net (loss) income
    -       (3,541,498 )     (35,773 )     -       (3,577,271 )     36,032       (3,541,239 )
     Change in valuation of interest
                                                       
    rate swap contracts
    -       -       -       90,447       90,447       -       90,447  
     Currency translation adjustments
    -       -       -       142,021       142,021       -       142,021  
            Total comprehensive income
    -       -       -       232,468       (3,344,803 )     36,032       (3,308,771 )
Stock based compensation in subsidiary
            221,553       2,238               223,791       74,597       298,388  
Investment by noncontrolling interest in subsidiary
            (611,132 )     (6,173 )             (617,305 )     775,944       158,639  
Cash distributions
    -       (1,550,015 )     (15,657 )     -       (1,565,672 )     (122,407 )     (1,688,079 )
 
                                                       
Balance, March 31, 2011 (unaudited)
    148,211       62,913,980       (676,937 )     (1,732,312 )     60,504,731       895,808       61,400,539  
                                                         
Comprehensive income:
                                                       
     Net loss
    -       (3,747,412 )     (37,853 )     -       (3,785,265 )     (55,803 )     (3,841,068 )
     Change in valuation of interest
                                                       
    rate swap contracts
    -       -       -       14,334       14,334       -       14,334  
     Currency translation adjustments
    -       204,595       2,067       (265,238 )     (58,576 )     27,815       (30,761 )
            Total comprehensive income
    -       -       -       (250,904 )     (3,829,507 )     (27,988 )     (3,857,495 )
Stock based compensation in subsidiary
            227,539       2,298               229,837       76,612       306,449  
Cash distributions
    -       (550,006 )     (5,556 )     -       (555,562 )     (475,351 )     (1,030,913 )
 
                                                       
Balance, June 30, 2011 (unaudited)
    148,211     $ 59,048,696     $ (715,981 )   $ (1,983,216 )   $ 56,349,499     $ 469,081     $ 56,818,580  
 
 
See accompanying notes to consolidated financial statements.
 
3

 

 
ICON Income Fund Ten, LLC
 
(A Delaware Limited Liability Company)
 
Consolidated Statements of Cash Flows
 
(unaudited)
 
   
   
   
Six Months Ended June 30,
 
   
2011
   
2010
 
 Cash flows from operating activities:
           
 Net (loss) income
  $ (7,382,307 )   $ 2,739,598  
 Adjustments to reconcile net (loss) income  to net cash
               
   provided by operating activities:
               
Finance income
    (3,087,808 )     (2,742,958 )
Loss (income) from investments in joint ventures
    8,959,547       (1,409,056 )
Net gain on sales of equipment and unguaranteed residual values
    (798,747 )     (158,970 )
Depreciation and amortization
    791,935       2,951,032  
Loss on guaranty
    -       807,057  
Stock based compensation
    604,838       -  
Loss on financial instruments
    6,406       4,122  
 Changes in operating assets and liabilities:
               
Collection of finance leases
    1,509,963       1,379,448  
Service contracts receivable
    226,195       108,397  
Other assets, net
    599,870       (124,061 )
Deferred revenue
    -       (7,126 )
Due to/from Manager and affiliates, net
    (34,382 )     39,699  
Accrued expenses
    (168,043 )     (51,696 )
Other current liabilities      119,278        (298,783
Distributions from joint ventures
    333,917       287,923  
                 
 Net cash provided by operating activities
    1,680,662       3,524,626  
                 
 Cash flows from investing activities:
               
    Proceeds from sales of equipment and unguaranteed residual values
    457,368       480,149  
    Repayments of note receivable
    465,822       -  
  Purchase of equipment
    -       (3,236 )
    Investments in joint ventures
    (10,286 )     -  
    Distributions received from joint ventures in excess of profits
    597,583       1,590,840  
                 
 Net cash provided by investing activities
    1,510,487       2,067,753  
                 
 Cash flows from financing activities:
               
    Proceeds from revolving line of credit, recourse
    -       1,350,000  
    Repayments of revolving line of credit, recourse
    -       (100,000 )
    Proceeds from sale of subsidiary shares
    158,638       -  
    Cash distributions to members
    (2,121,234 )     (6,071,623 )
    Distributions to noncontrolling interests
    (597,758 )     (788,032 )
                 
 Net cash used in financing activities
    (2,560,354 )     (5,609,655 )
                 
 Effects of exchange rates on cash and cash equivalents
    (11,869 )     (59,884 )
                 
 Net increase (decrease) in cash and cash equivalents
    618,926       (77,160 )
 Cash and cash equivalents, beginning of the period
    2,740,590       2,428,058  
                 
 Cash and cash equivalents, end of the period
  $ 3,359,516     $ 2,350,898  
 
 
See accompanying notes to consolidated financial statements.
 
4

 


ICON Income Fund Ten, LLC
 
(A Delaware Limited Liability Company)
 
Consolidated Statements of Cash Flows
 
(unaudited)
 
             
             
   
Six Months Ended June 30,
 
   
2011
   
2010
 
 Supplemental disclosure of non-cash investing and financing activities:
           
 Transfer from leased equipment at cost to net investment in finance leases
  $ -     $ 2,440,135  
 Exchange of investment in joint venture for notes receivable
  $ 1,251,414     $ -  
 
 
See accompanying notes to consolidated financial statements.
 
5

ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
June 30, 2011
(unaudited)
         
 
 
The accompanying consolidated financial statements of ICON Income Fund Ten, 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. In the opinion of the manager of the LLC, ICON Capital Corp., a Delaware corporation (the “Manager”), all adjustments considered necessary for a fair presentation have been included.  These 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, 2010.  The results for the interim period are not necessarily indicative of the results for the full year.
 
The consolidated financial statements include the accounts of the LLC and its majority-owned subsidiaries and other controlled entities.  All intercompany accounts and transactions have been eliminated in consolidation.  In joint ventures where the LLC has majority ownership, the financial condition and results of operations of the joint venture are consolidated.  Noncontrolling interest represents the minority owner’s proportionate share of its equity in the joint venture.  The noncontrolling interest is adjusted for the minority owner’s share of the earnings, losses, investments and distributions of the joint venture.
 
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 policy.
 
Reclassifications
 
 Certain reclassifications have been made to the accompanying consolidated financial statements in prior periods to conform to the current presentation.
 
Recent Accounting Pronouncements
 
In June 2011, the FASB issued ASU No 2011-05, Presentation of Comprehensive Income ("ASU 2011-05"), which revises the manner in which companies present comprehensive income in their financial statements. The new guidance removes the current option to report other comprehensive income and its components in the statement of changes in equity and instead requires presentation in one continuous statement of comprehensive income or two separate but consecutive statements. The adoption of ASU 2011-05 becomes effective for the Company's interim and annual periods beginning January 1, 2012. The Company does not believe the adoption of this guidance will have a material impact on its consolidated financial statements, as it only requires a change in the format of presentation.
 
 
 
6

ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
June 30, 2011
(unaudited)
 
 
(2)
Net Investment in Finance Leases

Net investment in finance leases consisted of the following:
 
   
June 30,
   
December 31,
 
   
2011
   
2010
 
 Minimum rents receivable, net
  $ 53,392,465     $ 54,902,428  
 Estimated residual values
    7,300,000       7,300,000  
 Unearned income
    (22,596,669 )     (25,684,477 )
 Net investment in finance leases
    38,095,796       36,517,951  
                 
 Less: Current portion of net investment in finance leases
    -       616,088  
                 
 Net investment in finance leases, less current portion
  $ 38,095,796     $ 35,901,863  
 
Telecommunications Equipment
 
On March 31, 2011, at the expiration of the leases and in accordance with their terms, a joint venture owned 79.31% by the LLC and 20.69% by ICON Income Fund Eight A L.P. Liquidating Trust ("Fund Eight A"), an entity also managed by the Manager, sold telecommunications equipment subject to leases with Global Crossing Telecommunications, Inc. (“Global Crossing”) to Global Crossing for the aggregate purchase price of $5. 

(3)
Notes Receivable

Effective January 1, 2011, the LLC exchanged its 12.25% ownership interest in a joint venture, for notes receivable from Northern Capital Associates, which were previously owned by the joint venture. The aggregate principal balance of the notes was approximately $1,237,000, and the notes accrue interest at rates ranging from 9.47% to 9.895% and mature between November 15, 2011 and January 15, 2013. No gain or loss was recorded as a result of this transaction. Upon completion of the exchange, the joint venture was terminated.
 
Credit Quality of Notes Receivable and Allowance for Credit Losses
 
The Manager weighs all credit decisions on a combination of external credit ratings as well as internal credit evaluations of all potential borrowers. A potential borrower’s credit application is analyzed using those credit ratings as well as the potential borrower’s financial statements and other financial data deemed relevant.
 
The LLC’s notes receivable are limited in number. Accordingly, the LLC does not aggregate notes receivable into portfolio segments or classes. Due to the limited number of notes receivable, the LLC is able to estimate the allowance for credit losses based on a detailed analysis of each note receivable as opposed to using portfolio based metrics and allowance for credit losses. Notes are analyzed quarterly and categorized as either performing or non-performing based on payment history. If a note becomes non-performing due to a borrower’s missed scheduled payments or failed financial covenants, the Manager analyzes whether a reserve should be established or the note should be restructured. Such events are specifically disclosed in the discussion of each note held. As of June 30, 2011, the Manager determined that no allowance for credit losses was required.

 
 
7

ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
June 30, 2011
(unaudited)
 

(4)
 Investments in Joint Ventures
 
   ICON Mayon, LLC
 
On June 26, 2007, the LLC and ICON Leasing Fund Twelve, LLC (“Fund Twelve”), formed a joint venture, with ownership interests of 49% and 51%, respectively.  The joint venture purchased a 98,507 deadweight ton Aframax product tanker, the Mayon Spirit, from an affiliate of Teekay Corporation (“Teekay”), which was bareboat chartered back to Teekay for a term of 48 months. As a result of negotiations to remarket certain vessels during the three months ended March 31, 2011, the Manager reviewed the LLC’s investment in the joint venture and determined that the net book value of the vessel under lease exceeded the fair value.  As a result, during the 3 months ended March 31, 2011, the joint venture recognized a non-cash impairment charge of approximately $11,291,000, of which the LLC’s share was approximately $5,532,000. Subsequent to June 30, 2011, the Manager terminated efforts to remarket the Mayon Spirit.  As a result, the Manager modified the exit strategy related to the investment in the vessel and the joint venture recognized an additional non-cash impairment charge of approximately $10,568,000 during the three months ended June 30, 2011, of which the LLC’s share was approximately $5,178,000.
 
The results of operations of the joint venture are summarized below:

   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2011
   
2010
   
2011
   
2010
 
 Revenue
  $ 1,549,555     $ 1,549,555     $ 3,099,111     $ 3,106,995  
 Net (loss) income
  $ (9,662,841 )   $ 691,136     $ (20,222,901 )   $ 1,255,373  
 LLC's share of net (loss) income
  $ (4,715,966 )   $ 357,483     $ (9,871,569 )   $ 652,785  
 
(5)
Revolving Line of Credit, Recourse
 
The LLC and certain entities managed by the Manager were party to a Commercial Loan Agreement, as amended (the “Prior Loan Agreement”), with California Bank & Trust (“CB&T”). The Prior Loan Agreement was terminated effective May 10, 2011.

 
 
8

ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
June 30, 2011
(unaudited)

 
(6)
Transactions with Related Parties

The Manager performs certain services relating to the management of the LLC’s equipment leasing and other financing activities.  Such services include, but are not limited to, the collection of lease payments from the lessees of the equipment or loan payments from borrowers, re-leasing services in connection with equipment that is off-lease, inspections of the equipment, liaising with and general supervision of lessees and borrowers to ensure 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 were costs incurred by the Manager or its affiliates that were necessary to the LLC’s operations.  These costs included the Manager’s and its affiliates’ legal, accounting, investor relations and operations personnel costs, as well as professional fees and other costs that were charged to the LLC based upon the percentage of time such personnel dedicated to the LLC. Excluded were salaries and related costs, office rent, travel expenses and other administrative costs incurred by individuals with a controlling interest in the Manager.
 
Fees and other expenses paid or accrued by the LLC to the Manager or its affiliates were as follows:
 
           
Three Months Ended June 30,
   
Six Months Ended June 30,
 
 Entity
 
 Capacity
 
 Description
 
2011
   
2010
   
2011
   
2010
 
 ICON Capital Corp.
 
 Manager
 
 Management fees (1)
  $ 144,496     $ 208,056     $ 269,590     $ 437,141  
 ICON Capital Corp.
 
 Manager
 
 Administrative expense reimbursements (1)
    285,607       282,593       452,970       478,520  
    $ 430,103     $ 490,649     $ 722,560     $ 915,661  
   
(1) Amount charged directly to operations.
 
 
At June 30, 2011, the LLC had a net obligation of $134,824 due to the Manager and affiliates, which consisted primarily of a net payable due to the Manager for administrative expense reimbursements.

(7)
Derivative Financial Instruments

The LLC may enter into derivative transactions for purposes of hedging specific financial exposures, including movements in foreign currency exchange rates and changes in interest rates on its non-recourse long-term debt. The LLC enters into these instruments only for hedging underlying exposures.  The LLC does not hold or issue derivative financial instruments for purposes other than hedging, except for warrants, which are not hedges.  Certain derivatives may not meet the established criteria to be designated as qualifying accounting hedges, even though the LLC believes that these are effective economic hedges.
 
The LLC recognizes all derivatives as either assets or liabilities on the consolidated balance sheets and measures those instruments at fair value.  The LLC recognizes the fair value of all derivatives as either assets or liabilities on the consolidated balance sheets and changes in the fair value of such instruments are recognized immediately in earnings unless certain accounting criteria established by the accounting pronouncements are met.
 
 
 
9

ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
June 30, 2011
(unaudited)
 
 
(7)
Derivative Financial Instruments - continued
        
These criteria demonstrate that the derivative is expected to be highly effective at offsetting changes in the fair value or expected cash flows of the underlying exposure at both the inception of the hedging relationship and on an ongoing basis and include an evaluation of the counterparty risk and the impact, if any, on the effectiveness of the derivative.  If these criteria are met, which the LLC must document and assess at inception and on an ongoing basis, the LLC recognizes the changes in fair value of such instruments in accumulated other comprehensive income (loss) (“AOCI”), a component of equity on the consolidated balance sheets.  Changes in the fair value of the ineffective portion of all derivatives are recognized immediately in earnings.
 
Interest Rate Risk
 
Interest rate derivatives are used to add stability to interest expense and to manage exposure to interest rate movements on the LLC’s variable non-recourse debt.  The strategy to accomplish this objective is to match the projected future cash flows with the underlying debt service. Interest rate swaps designated as cash flow hedges involve the receipt of floating-rate interest payments from a counterparty in exchange for the LLC or joint ventures making fixed interest rate payments over the life of the agreements without exchange of the underlying notional amount. 

As of June 30, 2011, the LLC had interests through joint ventures in three floating-to-fixed interest rate swaps relating to the debt of ICON Eagle Corona Holdings, LLC, ICON Eagle Carina Holdings, LLC and ICON Mayon designated and qualifying as cash flow hedges with an aggregate notional amount of approximately $34,839,281. These interest rate swaps have maturity dates ranging from July 25, 2011 to November 14, 2013.
 
For these derivatives, the LLC records its interest in the gain or loss from the effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges in AOCI and such gain or loss is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings and is recorded as a component of (loss) income from investments in joint ventures. During the six months ended June 30, 2011, the joint ventures recorded no hedge ineffectiveness in earnings.

 
 
10

ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
June 30, 2011
(unaudited)
 

(7)
Derivative Financial Instruments - continued
         
The table below presents the effect of the LLC’s derivative financial instruments designated as cash flow hedging instruments on the consolidated statements of operations for the three and six months ended June 30, 2011 and 2010:
 
Three Months Ended June 30, 2011
         
               
   
Amount of Gain (Loss)
Recognized
in AOCI on Derivative
 (Effective Portion)
 
Location of Gain (Loss)
Reclassified
from AOCI into Income
 (Effective Portion)
 
 
Gain (Loss) Reclassified
from AOCI into Income
 (Effective Portion)
 
 
 
 Derivatives
               
 Interest rate swaps
  $ (70,835 )
 (Loss) income from investments in joint ventures
  $ (85,169 )
                   
Six Months Ended June 30, 2011
           
                   
   
Amount of Gain (Loss)
Recognized
in AOCI on Derivative
 (Effective Portion)
 
Location of Gain (Loss)
Reclassified
from AOCI into Income
 (Effective Portion)
 
 
Gain (Loss) Reclassified
from AOCI into Income
 (Effective Portion)
 
 
 
 Derivatives
                   
 Interest rate swaps
  $ (77,358 )
 (Loss) income from investments in joint ventures
  $ (182,139 )
                   
Three Months Ended June 30, 2010
           
                   
   
Amount of Gain (Loss)
Recognized
in AOCI on Derivative
 (Effective Portion)
 
Location of Gain (Loss)
Reclassified
from AOCI into Income
 (Effective Portion)
 
 
Gain (Loss) Reclassified
from AOCI into Income
 (Effective Portion)
 
 
 
 Derivatives
                   
 Interest rate swaps
  $ 156,987  
 (Loss) income from investments in joint ventures
  $ 135,304  
                   
Six Months Ended June 30, 2010
           
                   
   
Amount of Gain (Loss)
Recognized
in AOCI on Derivative
 (Effective Portion)
 
Location of Gain (Loss)
Reclassified
from AOCI into Income
 (Effective Portion)
 
 
Gain (Loss) Reclassified
from AOCI into Income
 (Effective Portion)
 
 
 
 Derivatives
                   
 Interest rate swaps
  $ 317,509  
 (Loss) income from investments in joint ventures
  $ 259,060  
 
 
At June 30, 2011, the total unrealized loss recorded to AOCI related to the joint ventures’ interest in the change in fair value of these interest rate swaps was approximately $237,000.
 
During the twelve months ending June 30, 2012, the LLC estimates that approximately $172,000 will be reclassified from AOCI to income (loss) from investments in joint ventures.

 
 
11

ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
June 30, 2011
(unaudited)
 

(7)
 Derivative Financial Instruments - continued
       
Non-designated Derivatives

As of June 30, 2011, warrants are the only derivatives that the LLC holds for purposes other than hedging. All changes in the fair value of the warrants are recorded directly in earnings.
 
The table below presents the fair value of the LLC’s derivative financial instruments and their classification within the LLC’s consolidated balance sheets as of June 30, 2011 and December 31, 2010:
 
   
Asset Derivatives
 
   
June 30,
   
December 31,
 
   
2011
   
2010
 
 
Balance Sheet Location
 
Fair Value
   
Fair Value
 
 Derivatives not designated as hedging instruments:
             
               
 Warrants
Other non-current assets, net
  $ 64,262     $ 70,669  
 
The LLC’s derivative financial instruments not designated as hedging instruments generated a net loss recorded in general and administrative expense on the consolidated statements of operations for the three and six months ended June 30, 2011 of $3,667 and $6,407, respectively. The net loss recorded for the three and six months ended June 30, 2011 was comprised of an unrealized loss relating to warrants.
 
The LLC’s derivative financial instruments not designated as hedging instruments generated a net loss recorded in general and administrative expense on the consolidated statements of operations for the three and six months ended June 30, 2010 of $2,333 and $4,122, respectively. The net loss recorded for the three and six months ended June 30, 2010 was comprised of an unrealized loss relating to warrants.
 
Derivative Risks
 
       The LLC manages exposure to possible defaults on derivative financial instruments by monitoring the concentration of risk that the LLC has with any individual bank and through the use of minimum credit quality standards for all counterparties.  The LLC does not require collateral or other security in relation to derivative financial instruments.  Since it is the LLC’s policy to enter into derivative contracts with banks of internationally acknowledged standing only, the LLC considers the counterparty risk to be remote.
 
 
 
12

ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Consolidated Financial Statements
June 30, 2011
(unaudited)

 
(8)
Accumulated Other Comprehensive Loss

AOCI included unrealized accumulated losses on derivative financial instruments of joint ventures and currency translation adjustments of $236,769 and $1,746,447, respectively, at June 30, 2011 and accumulated unrealized losses on derivative financial instruments of joint ventures and currency translation adjustments of $341,550 and $1,623,230, respectively, at December 31, 2010.

Total comprehensive loss for the three and six months ended June 30, 2011 was $3,857,495 and $7,166,266, respectively. Total comprehensive loss for the three and six months ended June 30, 2010 was $403,245 and $2,397,373, respectively.
 
(9)
Stock Based Compensation

In January 2011, the LLC sold 25% of Pretel Group Limited (“Pretel”) to its new Chief Executive Officer for £100,000. This sale consisted of 100,000 class B Pretel shares (“Pretel Shares”) representing 25% of the voting and earning rights of Pretel. The difference of approximately £750,000 between the fair market value of the Pretel Shares on the date of the sale and the amount paid will be charged to compensation expense ratably during 2011, with a corresponding credit to equity.  For the three and six months ended June 30, 2011, the LLC recorded £187,500 (approximately $306,000) and £375,000 (approximately $605,000) as compensation expense related to the Pretel Shares.
 
(10)
Commitments and Contingencies
   
At the time the LLC acquires or divests of its interest in an equipment lease or other financing transaction, the LLC may, under very limited circumstances, agree to indemnify the seller or buyer for specific contingent liabilities.  The Manager believes that any liability that may arise as a result of any such indemnification obligations will not have a material adverse effect on the consolidated financial condition of the LLC taken as a whole.
 
In connection with certain acquisitions, certain joint ventures maintain restricted cash accounts with certain banks.  The aforementioned cash amounts are presented within investments in joint ventures in the LLC’s consolidated balance sheets as of June 30, 2011 and December 31, 2010.
 
 
 
13

 
 
 
Item 2. Manager’s Discussion and Analysis of Financial Condition and Results of Operations

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, 2010.  This discussion should also be read in conjunction with the disclosures below regarding “Forward-Looking Statements” and the “Risk Factors” set forth in Item 1A of Part II of this Quarterly Report on Form 10-Q.
 
As used in this Quarterly Report on Form 10-Q, references to “we,” “us,” “our” or similar terms include ICON Income Fund Ten, 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,” “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 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 and finance program in which the capital our members invested was pooled together to make investments, pay fees and establish a small reserve.  We were primarily engaged in the business of purchasing equipment and leasing or servicing it to third parties, equipment financing, acquiring equipment subject to lease and, to a lesser degree, acquiring ownership rights to items of leased equipment at lease expiration.
 
Our Manager manages and controls our business affairs, including, but not limited to, our equipment leases and other financing transactions, pursuant to the terms of our LLC’s amended and restated operating agreement (the “LLC Agreement”). We completed our operating period on April 30, 2010 and entered our liquidation period effective May 1, 2010. During our liquidation period, we are selling and will continue to sell our assets in the ordinary course of business. As we sell our assets, both rental income and finance income will decrease over time, as will expenses related to our assets, such as depreciation and amortization expense. As leased equipment is sold, we will incur gains or losses on these sales. We will continue to liquidate our assets during this period and we expect to see a reduction in revenue and expenses accordingly.
 

 
14

 
 
 
Recent Significant Transactions

We engaged in the following significant transactions since December 31, 2010:
 
Notes Receivable
 
Effective January 1, 2011, we exchanged our 12.25% ownership interest in a joint venture, for notes receivable from Northern Capital Associates, which were previously owned by the joint venture. The aggregate principal balance of the notes was approximately $1,237,000, and the notes accrue interest at rates ranging from 9.47% to 9.895% and mature between November 15, 2011 and January 15, 2013. No gain or loss was recorded as a result of this transaction. Upon completion of the exchange, the joint venture was terminated.
 
Telecommunications Equipment
 
On January 3, 2011, at the expiration of the lease and in accordance with its terms, a joint venture in which we have a 45% ownership interest sold telecommunications equipment subject to lease with Global Crossing to Global Crossing for approximately $2,077,000.  Our share of the gain was approximately $351,000, which is included in income from investments in joint ventures.
 
On March 31, 2011, at the expiration of the leases and in accordance with their terms, a joint venture owned 79.31% by us and 20.69% by Fund Eight A, sold telecommunications equipment subject to leases with Global Crossing to Global Crossing for the aggregate purchase price of $5. 
 
Materials Handling and Manufacturing Equipment
 
On April 29, 2011, we sold equipment for approximately $329,000 and recorded a gain on sale of approximately $197,000.
 
Sale of Noncontrolling Interest

Effective January 17, 2011, we sold a 25% interest in Pretel to its new CEO for £100,000.
 
Recent Accounting Pronouncements
 
There are no recent accounting pronouncements that are expected to have a significant impact on our consolidated financial statements as of June 30, 2011. See Note 1 to our consolidated financial statements for a discussion of recent accounting pronouncements.
 
 
 
15

 


Results of Operations for the Three Months Ended June 30, 2011 (the “2011 Quarter”) and 2010 (the “2010 Quarter”)

Revenue for the 2011 Quarter and the 2010 Quarter is summarized as follows:

   
Three Months Ended June 30,
       
   
2011
   
2010
   
Change
 
 Rental income
  $ 133,394     $ 1,395,422     $ (1,262,028 )
 Finance income
    1,567,503       1,398,737       168,766  
 Servicing income
    1,203,051       1,308,802       (105,751 )
 (Loss) income from investments in joint ventures
    (4,449,584 )     713,754       (5,163,338 )
 Net gain (loss) on sales of equipment and unguaranteed residual values
    209,858       (35,637 )     245,495  
 Interest and other income
    88,303       50,624       37,679  
                         
 Total revenue
  $ (1,247,475 )   $ 4,831,702     $ (6,079,177 )
 
Total revenue for the 2011 Quarter decreased $6,079,177, or 125.8%, as compared to the 2010 Quarter. The decrease in total revenue was primarily due to the loss from investments in joint ventures from our 49% ownership interest in a joint venture that recognized an impairment loss of approximately $10,568,000 in the 2011 Quarter, of which our share was approximately $5,178,000. Rental income decreased primarily as a result of the sale of the majority of our remaining leased equipment at cost.
 
Expenses for the 2011 Quarter and the 2010 Quarter are summarized as follows:
 
   
Three Months Ended June 30,
       
   
2011
   
2010
   
Change
 
 Management fees - Manager
  $ 144,496     $ 208,056     $ (63,560 )
 Administrative expense reimbursements - Manager
    285,607       282,593       3,014  
 General and administrative
    1,770,355       1,802,413       (32,058 )
 Interest
    3,708       10,091       (6,383 )
 Loss on guaranty
    -       807,057       (807,057 )
 Depreciation and amortization
    389,427       1,293,902       (904,475 )
                         
 Total expenses
  $ 2,593,593     $ 4,404,112     $ (1,810,519 )
 
Total expenses for the 2011 Quarter decreased $1,810,519, or 41.1%, as compared to the 2010 Quarter. Depreciation and amortization expense decreased due to the sale of the majority of the remaining leased equipment at cost, at which time we ceased recording depreciation expense on those assets. In addition, during the 2010 Quarter we recorded a loss on guaranty in connection with the credit support agreement related to financing provided to the MW Universal, Inc. (“MWU”) subsidiaries.
 
Noncontrolling Interests
 
Net (loss) income attributable to noncontrolling interests decreased $126,546, from income of $70,743 in the 2010 Quarter to a loss of $55,803 in the 2011 Quarter.  This decrease was primarily attributable to the sale of assets on lease to Global Crossing, as well as the loss attributable to the noncontrolling interest in Pretel resulting from the sale of the Pretel Shares.
 
 
 
16

 
 

Net Income Attributable to Fund Ten
 
As a result of the foregoing factors, net (loss) income attributable to us for the 2011 Quarter and the 2010 Quarter was ($3,785,265) and $356,847, respectively.  Net (loss) income attributable to us per weighted average additional share of limited liability company interests (“Share”) outstanding for the 2011 Quarter and the 2010 Quarter was ($25.28) and $2.38, respectively.

Results of Operations for the Six Months Ended June 30, 2011 (the “2011 Period”) and 2010 (the “2010 Period”)

Revenue for the 2011 Period and the 2010 Period is summarized as follows:
 
   
Six Months Ended June 30,
       
   
2011
   
2010
   
Change
 
 Rental income
  $ 293,591     $ 3,535,258     $ (3,241,667 )
 Finance income
    3,087,808       2,742,958       344,850  
 Servicing income
    2,451,398       2,798,091       (346,693 )
 (Loss) income from investments in joint ventures
    (8,959,547 )     1,409,056       (10,368,603 )
 Net gain on sales of equipment and unguaranteed residual values
    798,747       158,970       639,777  
 Interest and other income
    184,140       90,206       93,934  
                         
 Total revenue
  $ (2,143,863 )   $ 10,734,539     $ (12,878,402 )
 
Total revenue for the 2011 Period decreased $12,878,402, or 120%, as compared to the 2010 Period. The decrease in total revenue was primarily due to the loss from investments in joint ventures from our 49% ownership interest in a joint venture which recognized an impairment loss of approximately $21,858,000 in the 2011 Period, of which our share was approximately $10,711,000. Rental income decreased resulting primarily from the sale of the majority of our remaining leased equipment at cost, as well as the reclassification of our lease with Global Crossing from an operating lease to a finance lease effective March 17, 2010.  These decreases were partially offset by an increase in net gain on sales of equipment and unguaranteed residual values as we are in our liquidation period and incur gains or losses as we dispose of assets.
 
Expenses for the 2011 Period and the 2010 Period are summarized as follows:
 
   
Six Months Ended June 30,
       
   
2011
   
2010
   
Change
 
 Management fees - Manager
  $ 269,590     $ 437,141     $ (167,551 )
 Administrative expense reimbursements - Manager
    452,970       478,520       (25,550 )
 General and administrative
    3,713,893       3,302,522       411,371  
 Interest
    10,056       18,669       (8,613 )
 Loss on guaranty
    -       807,057       (807,057 )
 Depreciation and amortization
    791,935       2,951,032       (2,159,097 )
                         
 Total expenses
  $ 5,238,444     $ 7,994,941     $ (2,756,497 )
 
Total expenses for the 2011 Period decreased $2,756,497, or 34.5%, as compared to the 2010 Period. Depreciation and amortization expense decreased due to the sale of the majority of the remaining leased equipment at cost, as well as the reclassification of our lease with Global Crossing from an operating lease to a finance lease effective March 17, 2010.  In addition, during the 2010 Period we recorded a loss on guaranty in connection with the credit support agreement related to financing provided to the MWU subsidiaries.
 
 
 
17

 
 
 
Noncontrolling Interests
 
Net (loss) income attributable to noncontrolling interests decreased $193,695, from income of $173,924 in the 2010 Period to a loss of $19,771 in the 2011 Period.  This decrease was primarily attributable to the sale of assets on lease to Global Crossing, as well as the loss attributable to the noncontrolling interest in Pretel resulting from the sale of the Pretel Shares.
 
Net Income Attributable to Fund Ten
 
As a result of the foregoing factors, net (loss) income attributable to us for the 2011 Period and the 2010 Period was ($7,362,536) and $2,565,674, respectively.  Net (loss) income attributable to us per weighted average additional Share for the 2011 Period and the 2010 Period was ($49.18) and $17.14, respectively.

Financial Condition
 
This section discusses the major balance sheet variances at June 30, 2011 compared to December 31, 2010.
 
Total Assets
 
Total assets decreased $9,265,078, from $68,134,755 at December 31, 2010 to $58,869,677 at June 30, 2011. The decrease was primarily due to a decrease in our investments in joint ventures resulting from our 49% ownership interest in a joint venture that recognized an impairment loss of approximately $21,858,000 in the 2011 Period, of which our share was approximately $10,711,000. The decrease is also attributable to the depreciation and amortization of assets during the 2011 Period. This decrease was partially offset by a gain on sale of approximately $601,000 for a portion of Pretel’s assets, the gain on sale of telecommunication equipment to Global Crossing in January 2011, and the gain on sale of assets on lease to WPS, Inc. in April 2011.  The decrease was also offset by the appreciation of our finance leases, resulting from the finance income accrued during the year exceeding the cash collected.
 
Current Assets
 
Current assets increased $184,175, from $4,667,230 at December 31, 2010 to $4,851,405 at June 30, 2011.  The increase was primarily due to distributions received from a joint venture owned 45% by us, which sold telecommunication equipment on January 3, 2011. The increase is also attributable to the restructuring of ICON Northern Leasing, LLC, resulting in our investment in a joint venture being exchanged for a note receivable, the current portion of which was $540,491 as of June 30, 2011. This increase was partially offset by a decrease in the current portion of net investment in finance leases, as ICON Global Crossing, LLC’s leases expired on March 31, 2011. 
 
Equity
 
Equity decreased $9,121,782, from $65,940,362 at December 31, 2010 to $56,818,580 at June 30, 2011. The decrease was the result of our net loss and distributions paid to our members and noncontrolling interests in the 2011 Period.
 
 
 
18

 

 
Liquidity and Capital Resources

Summary
 
At June 30, 2011 and December 31, 2010, we had cash and cash equivalents of $3,359,516 and $2,740,590, respectively.  Cash and cash equivalents include cash in banks and highly liquid investments with original maturity dates of three months or less.  Our cash and cash equivalents are held principally at one financial institution and at times may exceed insured limits.  We have placed these funds in a high quality institution in order to minimize risk relating to exceeding insured limits. During our liquidation period, which we entered May 1, 2010, our main sources of liquidity have been and are expected to continue to be the collection of rentals pursuant to our non-leveraged leases and proceeds from sales of equipment and our main use of liquidity has been and is expected to continue to be distributions to our members.
 
We anticipate that our liquidity requirements for the remaining life of the fund will be financed by the expected results of our operations, as well as cash received from our investments at maturity.
 
We anticipate being able to meet our liquidity requirements into the foreseeable future.  However, our ability to generate cash in the future is subject to general economic, financial, competitive, regulatory and other factors that affect us and our lessees’ businesses that are beyond our control.
 
Cash Flows
 
Operating Activities
 
Cash provided by operating activities decreased $1,843,964, from $3,524,626 in the 2010 Period to $1,680,662 in the 2011 Period.  The decrease was primarily due to a decrease in rental income resulting from the sale of equipment previously on lease to Global Crossing, MW Texas Die Casting, Inc. and Cerion MPI, LLC.  This decrease was partially offset by an increase in distributions from joint ventures.
 
Investing Activities
 
Cash provided by investing activities decreased $557,266, from $2,067,753 in the 2010 Period to $1,510,487 in the 2011 Period.  The decrease was primarily due to distributions received from our joint ventures in excess of profits decreasing to approximately $598,000 during the 2011 Period, as compared to approximately $1,591,000 during the 2010 Period, partially offset by repayments of notes receivable of approximately $466,000.
 
Financing Activities
 
Cash used in financing activities decreased $3,049,301, from $5,609,655 in the 2010 Period to $2,560,354 in the 2011 Period.  The change was due to a decrease in cash distributions to members and noncontrolling interests totaling approximately $4,141,000. This was partially offset by the decrease in net proceeds from our recourse revolving line of credit of $1,250,000.
 
Distributions
 
We, at our Manager’s discretion, paid monthly distributions to each of our additional members and noncontrolling interests beginning the first month after each such member’s admission and the commencement of our joint venture operations, respectively, through April 30, 2010, the end of our operating period.  During the liquidation period, we plan to make distributions in accordance with the terms of our LLC Agreement.  We expect that distributions made during the liquidation period will vary, depending on the timing of the sale of our assets and our receipt of rental and other income from our investments.  We paid distributions to our Manager, additional members and noncontrolling interests of $21,213, $2,100,021 and $597,758, respectively, during the 2011 Period.
 
Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies
 
In connection with certain acquisitions, certain joint ventures maintain restricted cash accounts with certain banks.  The aforementioned cash amounts are presented within investments in joint ventures in our consolidated balance sheets as of June 30, 2011 and December 31, 2010.
 
Off-Balance Sheet Transactions
 
None.
 
 
 
19

 

 
Item 3. Quantitative and Qualitative Disclosures About Market Risk

There are no material changes to the disclosures related to this item since the filing of our Annual Report on Form 10-K for the year ended December 31, 2010.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures
 
In connection with the preparation of this Quarterly Report on Form 10-Q for the three months ended June 30, 2011, as well as the financial statements for our Manager, our Manager carried out an evaluation, under the supervision and with the participation of the management of our Manager, including its Co-Chief Executive Officers and the Principal Accounting and 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, as amended.  Based on the foregoing evaluation, the Co-Chief Executive Officers and the Principal Accounting and 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 the three months ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
 
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Item 1.  Legal Proceedings

In the ordinary course of conducting our business, we may be subject to certain claims, suits and complaints filed against us.  In our Manager’s opinion, the outcome of such matters, if any, will not have a material impact on our consolidated financial position, cash flows or results of operations.  We are not aware of any material legal proceedings that are currently pending against us or against any of our assets.

Item 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, 2010.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

We did not sell or redeem any Shares during the three months ended June 30, 2011.

Item 3.  Defaults Upon Senior Securities

Not applicable.

Item 4.  (Removed and Reserved)

Item 5.  Other Information

Not applicable.

 
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Item 6. Exhibits
 
 3.1
Certificate of Formation of Registrant (Incorporated by reference to Exhibit 3.1 to Registrant’s Registration Statement on Form S-1 filed with the SEC on February 28, 2003 (File No. 333-103503)).
   
 4.1
Amended and Restated Operating Agreement of Registrant (Incorporated by reference to Exhibit 4.1 to Pre-Effective Amendment No. 3 to Registrant’s Registration Statement on Form S-1 filed with the SEC on June 2, 2003 (File No. 333-103503)).
   
10.1
Commercial Loan Agreement, dated as of August 31, 2005, by and among 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 (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated August 31, 2005).
   
10.2
Loan Modification Agreement, dated as of December 26, 2006, 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 (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated December 26, 2006).
   
10.3
Loan Modification Agreement, dated as of June 20, 2007, 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 (Incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, filed November 12, 2009).
   
10.4
Third 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 (Incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008, filed May 19, 2008).
   
10.5
Fourth Loan Modification Agreement, dated as of August 12, 2009, 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, ICON Leasing Fund Twelve, LLC and ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P. (Incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, filed August 14, 2009).
   
10.5
Termination of Commercial Loan Agreement, by and among California Bank & Trust and ICON   Income Fund Eight B L.P.; ICON Income Fund Nine, LLC; ICON Income Fund Ten, LLC; ICON Leasing Fund Eleven, LLC; ICON Leasing Fund Twelve, LLC; and ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P., dated as of May 10, 2011 (Incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011, filed May 13, 2011).
   
 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 Principal Accounting and Financial Officer.
   
 32.1
Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. §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. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
 32.3
Certification of Principal Accounting and Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
101.INS*
XBRL Instance Document
   
101.SCH*
XBRL Taxonomy Extension Schema Document
   
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document
   
101.LAB*
XBRL Taxonomy Extension Labels Linkbase Document
   
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase
   
XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ICON Income Fund Ten, LLC
(Registrant)

By: ICON Capital Corp.
      (Manager of the Registrant)
 
August 11, 2011
 
By: /s/ Michael A. Reisner
Michael A. Reisner
Co-Chief Executive Officer and Co-President
(Co-Principal Executive Officer)
 
By: /s/ Mark Gatto
Mark Gatto
Co-Chief Executive Officer and Co-President
(Co-Principal Executive Officer)

By: /s/ Keith S. Franz
Keith S. Franz
Senior Vice President - Finance
(Principal Accounting and Financial Officer)

 
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