UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2012
		OR
o		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.)
3 Park Avenue, 36^th Floor New York, New York		10016
(Address of principal executive offices)		(Zip Code)

(212) 418-4700

(Registrant’s telephone number, including area code)

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

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

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

Yes o

No þ

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

Yes o

No þ

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

Yes þ

No o

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).

Yes þ

No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

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 o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company þ

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

Yes o

No þ

PART I

Forward-Looking Statements

Certain statements within this Annual Report on Form 10-K may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). These statements are being made pursuant to the PSLRA, with the intention of obtaining the benefits of the “safe harbor” provisions of the PSLRA, and, other than as required by law, we assume no obligation to update or supplement such statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. You can identify these statements by the use of words such as “may,” “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 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.

Item 1. Business

Our History

ICON Income Fund Ten, LLC (the “LLC” or “Fund Ten”) was formed on January 2, 2003 as a Delaware limited liability company. The LLC will continue until December 31, 2023, unless terminated sooner. When used in this Annual Report on Form 10-K, the terms “we,” “us,” “our” or similar terms refer to the LLC and its consolidated subsidiaries.

Our manager is ICON Capital, LLC, a Delaware limited liability company formerly known as ICON Capital Corp. (our “Manager”). 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 amended and restated operating agreement (our “LLC Agreement”). Additionally, our Manager has a 1% interest in our profits, losses, cash distributions and liquidation proceeds of the LLC.

Our offering period began in June 2003 and ended in April 2005. We offered our shares of limited liability company interests (“Shares”) with the intention of raising up to $150,000,000 of capital and we commenced operations on our initial closing date, August 22, 2003, when we issued 5,066 Shares, representing $5,065,736 of capital contributions. Between August 23, 2003 and April 5, 2005, our final closing date, we sold 144,928 Shares representing $144,928,766 of capital contributions, bringing the total number of Shares sold and capital contributions to 149,994 and $149,994,502, respectively. Through December 31, 2012, we redeemed 1,783 Shares, bringing the total number of outstanding Shares to 148,211.

Effective April 30, 2010, we completed our operating period. On May 1, 2010, we commenced our liquidation period, during which we have sold and will continue to sell our assets in the ordinary course of business. If our Manager believes it would benefit our members to reinvest the proceeds received from investments in additional investments during the liquidation period, our Manager may do so. Our Manager will not receive any acquisition fees on equipment purchased during the liquidation period.

Our Business

We operated as an equipment leasing program in which the capital our members invested was pooled together to make investments, pay fees and establish a small reserve. We 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. Some of our equipment leases were acquired for cash and were expected to provide current cash flow, which we refer to as “income” leases. For our other equipment leases, we financed the majority of the purchase price through borrowings from third parties. We refer to these leases as “growth” leases. These growth leases generated little or no current cash flow because substantially all of the rental payments received from the lessee were used to service the indebtedness associated with acquiring or financing the lease. For these leases, we anticipated that the future value of the leased equipment would exceed the cash portion of the purchase price.

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

(1) Offering Period: We invested most of the net proceeds from the sale of Shares in equipment leases and other financing transactions.

(2) Operating Period: After the close of the offering period, we reinvested the cash generated from our investments to the extent that cash was not needed for our expenses, reserves and distributions to members. Effective April 30, 2010, we completed our operating period.

(3) Liquidation Period: On May 1, 2010, we commenced our liquidation period, during which we are selling and will continue to sell our assets in the normal course of business. If our Manager believes it would benefit the members to reinvest the proceeds received from investments in additional investments during the liquidation period, our Manager may do so. Our Manager will not receive any acquisition fees on investments made during the liquidation period.

At December 31, 2012 and 2011, we had total assets of $42,664,364 and $55,072,676, respectively. For the year ended December 31, 2012, one lessee accounted for approximately 99.9% of our total rental and finance income of $6,791,917. We had a net loss attributable to us for the year ended December 31, 2012 of $2,413,858. For the year ended December 31, 2011, one lessee accounted for approximately 57.1% of our total rental, finance and servicing income of $11,125,830. We had a net loss attributable to us for the year ended December 31, 2011 of $7,774,700.

During 2009 and 2010, we acquired 100% of the shares of Pretel Group Limited (“Pretel”). During 2011, we sold our entire interest in Pretel. For the year ended December 31, 2011, our investment in Pretel generated $4,277,587 of our servicing income, which accounted for 38.4% of our total rental, finance and servicing income of $11,125,830.

At December 31, 2012, our portfolio, which we hold either directly or through joint ventures, consisted primarily of the following investments:

Marine Vessels

· Two container vessels, the China Star and the Dubai Star (f/k/a the ZIM Canada and the ZIM Korea, respectively) that are subject to bareboat charters with ZIM Israel Navigation Co. Ltd. (“ZIM”). The charter for the China Star expires on March 31, 2017 and the charter for the Dubai Star expires on March 31, 2016.

· A 35.7% ownership interest in the aframax product tankers, the Eagle Carina and the Eagle Corona, both of which are subject to 84 month bareboat charters with AET Inc. Limited that expire on November 14, 2013.

For a discussion of the significant transactions that we engaged in during the years ended December 31, 2012 and 2011, please refer to “Item 7. Manager’s Discussion and Analysis of Financial Condition and Results of Operations.”

Segment Information

We are engaged in one business segment, the business of purchasing equipment and leasing or servicing it to third parties, providing equipment and other financing, acquiring equipment subject to lease and, to a lesser degree, acquiring ownership rights to items of leased equipment at lease expiration.

Competition

The commercial leasing and financing industry is highly competitive and is characterized by competitive factors that vary based upon product and geographic region. When we made our investments, we competed, and as we seek to liquidate our portfolio, we compete with a variety of competitors, including other equipment leasing and finance funds, hedge funds, private equity funds, captive and independent finance companies, commercial and industrial banks, manufacturers and vendors. Our competitors may have been and/or may be in a position to offer equipment to prospective customers on financial terms that were or are more favorable than those that we could offer or that we can offer in liquidating our portfolio, which may have affected our ability to make investments and may affect our ability to liquidate our portfolio, in each case, in a manner that would enable us to achieve our investment objectives.

Employees

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

Available Information

Our Annual Report on Form 10-K, our most recent Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, and any amendments to those reports, are available free of charge on our Manager’s internet website at http://www.iconinvestments.com as soon as reasonably practicable after such reports are electronically filed with or furnished to

PART II

Item 5. Market for Registrant's Securities, Related Security Holder Matters and Issuer Purchases of Equity Securities

Our Shares are not publicly traded and there is no established public trading market for our Shares. It is unlikely that any such market will develop.

Title of Class

Number of Members

as of March 15, 2013

Manager (as a member)

Additional members

4,513

We, at our Manager’s discretion, paid monthly distributions to each of our members beginning the first month after each such member was admitted to the LLC through the end of our operating period, which was on April 30, 2010. During our liquidation period, we have made and plan to continue 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, finance and other income from our investments. We paid distributions to additional members of $9,750,109 and $5,625,060 for the years ended December 31, 2012 and 2011, respectively. Additionally, we paid our Manager distributions of $98,486 and $56,819 for the years ended December 31, 2012 and 2011, respectively. See “Item 7. Manager’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

In order for Financial Industry Regulatory Authority, Inc. (“FINRA”) members and their associated persons to have participated in the offering and sale of Shares pursuant to the offering or to participate in any future offering of our Shares, we are required pursuant to FINRA Rule 2310(b)(5) to disclose in each annual report distributed to our members a per Share estimated value of our Shares, the method by which we developed the estimated value, and the date used to develop the estimated value. In addition, our Manager prepares statements of our estimated Share values to assist fiduciaries of retirement plans subject to the annual reporting requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) in the preparation of their reports relating to an investment in our Shares. For these purposes, the estimated value of our Shares is deemed to be $310.04 per Share as of December 31, 2012. This estimated value is provided to assist plan fiduciaries in fulfilling their annual valuation and reporting responsibilities and should not be used for any other purpose. Because this is only an estimate, we may subsequently revise this valuation.

The estimated value of our Shares is based on the estimated amount that a holder of a Share would receive if all of our assets were sold in an orderly liquidation as of the close of our fiscal year and all proceeds from such sales, without reduction for transaction costs and expenses, together with any cash held by us, were distributed to the members upon liquidation. To estimate the amount that our members would receive upon such liquidation, we calculated the sum of: (i) the fair market value of our finance leases and notes receivable, as determined by our internal credit assessment; (ii) the fair market value of our operating leases, equipment held for sale or lease, and other assets, as determined by the most recent third-party appraisals we have obtained for certain assets or our Manager’s estimated values of certain other assets, as applicable; and (iii) our cash on hand. From this amount, we then subtracted our total debt outstanding and then divided that sum by the total number of Shares outstanding.

The foregoing valuation is an estimate only. The appraisals that we obtained and the methodology utilized by our management in estimating our per Share value were subject to various limitations and were based on a number of assumptions and estimates that may or may not be accurate or complete. No liquidity discounts or discounts relating to the fact that we are currently externally managed were applied to our estimated per Share valuation, and no attempt was made to value us as an enterprise.

As noted above, the foregoing valuation was performed solely for the ERISA and FINRA purposes described above and was based solely on our Manager’s perception of market conditions and the types and amounts of our assets as of the reference date for such valuation and should not be viewed as an accurate reflection of the value of our Shares or our assets. Except for independent third-party appraisals of certain assets, no independent valuation was sought. In addition, as stated above, as there is no significant public trading market for our Shares at this time and none is expected to develop, there can be no assurance that members could receive $310.04 per Share if such a market did exist and they sold their Shares or that they will be able to receive such amount for their Shares in the future. Furthermore, there can be no assurance:

· as to the amount members may actually receive if and when we seek to liquidate our assets or the amount of lease and note receivable payments and asset disposition proceeds we will actually receive over our remaining term; the total amount of

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

Our Manager’s Discussion and Analysis of Financial Condition and Results of Operations relates to our consolidated financial statements and should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. Statements made in this section may be considered forward-looking. These statements are not guarantees of future performance and are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of these risks and assumptions, including, among other things, factors discussed in “Part I. Forward-Looking Statements” located elsewhere in this Annual Report on Form 10-K.

Overview

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 Agreement.

Current Business Environment

Recent trends indicate that domestic and global equipment financing volume is correlated to overall business investments in equipment, which are typically impacted by general economic conditions. As the economy slows or builds momentum, the demand for productive equipment generally slows or builds and equipment financing volume generally decreases or increases, depending on a number of factors. These factors include the availability of liquidity to provide equipment financing and/or provide it on terms satisfactory to borrowers, lessees, and other counterparties, as well as the desire to upgrade equipment and/or expand operations during times of growth, but also in times of recession in order to, among other things, seize the opportunity to obtain competitive advantage over distressed competitors and/or increase business as the economy recovers.

While our Manager believes the U.S. economy is likely to continue its recovery, our Manager believes this recovery will maintain its gradual progression. Further, this recovery will likely face certain headwinds as we move through 2013 due to factors such as the rate of employment expansion, uncertainty surrounding changes to the U.S. Internal Revenue Code and future U.S. budget policies.

Lease and Other Significant Transactions

We engaged in the following significant transactions during the years ended December 31, 2012 and 2011:

Telecommunications Equipment

On March 17, 2010, ICON Global Crossing, LLC, an entity owned 79.31% by us and 20.69% by ICON Income Fund Eight A L.P., an affiliate of our Manager, and Global Crossing Telecommunications, Inc. agreed to extend five leases from March 31, 2010 through March 31, 2011 and to fix the purchase option at $5, resulting in the reclassification of the leases to finance leases. On March 31, 2011, ICON Global Crossing sold all equipment under lease to Global Crossing for $5.

We and ICON Leasing Fund Eleven, LLC (“Fund Eleven”), an affiliate of our Manager, own ICON Global Crossing V, LLC, with ownership interests of 45% and 55%, respectively. On January 3, 2011, ICON Global Crossing V sold all equipment under lease to Global Crossing for approximately $2,077,000. Our share of the gain was approximately $351,000, which is included in loss from investment in joint ventures.

Bedside Entertainment and Communication Terminals

Our wholly-owned subsidiary, ICON Premier, LLC, owned bedside entertainment and communication terminals on lease to Premier Telecom Contracts Limited. Pretel Group Limited was the ultimate parent company of Premier Telecom. During 2009 and 2010, in consideration for restructuring our pre-existing lease transaction, we acquired 100% of the outstanding stock of Pretel for £1. The acquisition was accounted for as a business combination and the results of operations of Pretel were included in our consolidated financial statements from January 2009.

On January 17, 2011, we sold 25% of Pretel to its new Chief Executive Officer for £100,000. This sale consisted of 100,000 Class B Pretel shares (“Pretel Shares”). The Pretel Shares represented 25% of the voting and earning rights of Pretel, including 25% of the existing equity at the close of the sale. As part of the sale agreement, if Pretel did not achieve certain financial targets during the year ended December 31, 2011, we retained the right to re-purchase the Pretel Shares at £100,000. As a result, the difference between the fair market value of the Pretel Shares and the amount paid was charged to compensation expense ratably during 2011.

The fair value of the Pretel Shares as of January 17, 2011 was determined using a discounted cash flow analysis utilizing Pretel’s projected cash flows and expected future terminal value. Based on that analysis, we estimated the difference between the fair value of the Pretel Shares and the £100,000 paid to be approximately £750,000. This difference was charged to compensation expense ratably during 2011, and classified in general and administrative expense on the consolidated statements of comprehensive loss. Pretel also agreed to indemnify its new CEO for a portion of the tax liability resulting from the transaction. This liability was accrued throughout 2011 and included in compensation expense.

On December 2, 2011, ICON Premier sold its remaining 75% interest in Pretel to a third party for approximately £2,928,000 ($4,596,000), net of transaction costs. ICON Premier recognized a net gain on the sale of approximately $1,918,000. ICON Premier agreed to indemnify the buyer for the exposure to the personal tax liability of the Pretel CEO resulting from his January 2011 purchase of the 25% interest in Pretel. At December 31, 2012 and 2011, we have an accrued liability of approximately £230,000 ($372,000) and £230,000 ($357,000), respectively, related to this indemnification.

Marine Vessels

We and ICON Leasing Fund Twelve, LLC (“Fund Twelve”), an affiliate of our Manager, own ICON Mayon, LLC, with ownership interests of 49% and 51%, respectively. On July 24, 2007, ICON Mayon purchased an aframax product tanker, the Mayon Spirit, from an affiliate of Teekay Corporation. The Mayon Spirit was bareboat chartered back to Teekay for a term of 48 months commencing on July 24, 2007.

As a result of negotiations to remarket and ultimately dispose of certain vessels, our Manager reviewed the joint venture’s investment in the vessel subject to charter and determined that the net book value exceeded the fair value. As a result, during the year ended December 31, 2011, ICON Mayon recognized an impairment loss related to the Mayon Spirit of approximately $21,858,000, of which our share was approximately $10,700,000, which is included in the 2011 loss from investment in joint ventures. On September 23, 2011, ICON Mayon sold the vessel for net proceeds of approximately $8,275,000 and satisfied the remaining related third-party debt. Our portion of the loss on sale was approximately $46,000.

During the past several years, the shipping market has experienced historical lows in vessel charter rates. Those rates are a critical component of estimating the future forecasts of the non-contractual cash flows of ICON Eagle Carina Holdings, LLC and ICON Eagle Corona Holdings, LLC, both of which are joint ventures owned 35.7% by us and 64.3% by Fund Twelve. During its 2011 analysis, our Manager determined that, while the vessels owned by the joint ventures were not impaired, the expected future cash flows would not allow us to recover our investments in ICON Eagle Carina and ICON Eagle Corona. Accordingly, our Manager concluded that our carrying values in the joint ventures ICON Eagle Carina and ICON Eagle Corona exceeded the fair values, determined by the present values of the joint ventures’ estimated future cash flows, and that the decrease in the values of the investments was other than temporary. During the year ended December 31, 2011, we recorded impairment losses of approximately $1,890,000 and $2,064,000 related to the write down of the investment in the joint ventures in ICON Eagle Carina and ICON Eagle Corona, respectively.

During the year ended December 31, 2012, based on our Manager’s review of the vessels owned by the joint ventures, the net book values of the vessels exceeded the estimated undiscounted cash flows and exceeded the fair values and, as a result, the joint ventures recognized impairment losses of approximately $7,804,000 and $10,084,000 for the year ended December 31, 2012, of

which our share was approximately $2,786,000 and $3,600,000, respectively. These losses are included in loss from investment in joint ventures.

Notes Receivable

On November 25, 2008, a joint venture owned 12.25% by us, 52.75% by Fund Twelve and 35.00% by Fund Eleven, purchased four promissory notes issued by Northern Capital Associates XIV, L.P. Effective January 1, 2011, we exchanged our 12.25% ownership interest in the joint venture for notes receivable from Northern Capital Associates that were previously owned by the joint venture. The aggregate principal balance of the notes was approximately $1,237,000, with interest rates ranging from 9.47% to 9.90% per year and maturing through February 15, 2013. No gain or loss was recorded as a result of this transaction. Upon completion of the exchange, the joint venture was deconsolidated and then terminated. On May 2, 2012, Northern Capital Associates satisfied its remaining obligations in connection with these notes by making a payment of approximately $355,000. No material gain or loss was recorded as a result of this transaction.

Recent Accounting Pronouncements

We do not believe any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our consolidated financial statements.

Critical Accounting Policies

An understanding of our critical accounting policies is necessary to understand our financial results. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires our Manager to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates primarily include the determination of allowance for doubtful accounts, depreciation, impairment losses, estimated useful lives and residual values. Actual results could differ from those estimates. We applied our critical accounting policies and estimation methods consistently in all periods presented. We consider the following accounting policies to be critical to our business:

· Lease classification and revenue recognition;

· Asset impairments;

· Depreciation; and

· Derivative financial instruments.

Lease Classification and Revenue Recognition

Each equipment lease we enter into is classified as either a finance lease or an operating lease, based upon the terms of each lease. For a finance lease, the initial direct costs were capitalized and amortized over the lease term. For an operating lease, the initial direct costs were included as a component of the cost of the equipment and depreciated over the lease term.

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

For operating leases, rental income is recognized on a straight-line basis over the lease term. Billed operating lease receivables are included in accounts receivable until collected. The difference between the timing of the cash received and the income recognized on a straight-line basis is recognized as either deferred revenue or other current assets, as appropriate.

Our Manager has an investment committee that approved each new equipment lease and other financing transaction. As part of its process, the investment committee determined the residual value, if any, to be used once the investment was approved. The factors considered in determining the residual value included, but were not limited to, the creditworthiness of the potential lessee, the type of equipment considered, how the equipment was integrated into the potential lessee’s business, the length of the lease and the industry in which the potential lessee operated. Residual values are reviewed for impairment in accordance with our impairment review policy.

The residual value assumed, among other things, that the asset would be utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace were disregarded and it was assumed that there was no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. The residual value was calculated using information from various external sources, such as trade publications, auction data, equipment dealers, wholesalers and industry experts, as well as inspection of the physical asset and other economic indicators.

Asset Impairments

The significant assets in our portfolio are periodically reviewed, no less frequently than annually or when indicators of impairment exist, to determine whether events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss will be recognized only if the carrying value of a long-lived asset is not recoverable and exceeds its fair market value. If there is an indication of impairment, we will estimate the future cash flows (undiscounted and without interest charges) expected from the use of the asset and its eventual disposition. Future cash flows are the future cash inflows expected to be generated by an asset less the future outflows expected to be necessary to obtain those inflows. If an impairment is determined to exist, the impairment loss will be measured as the amount by which the carrying value of a long-lived asset exceeds its fair value and recorded in the consolidated statement of comprehensive loss in the period the determination is made.

The events or changes in circumstances that generally indicate that an asset may be impaired are (i) the estimated fair value of the underlying equipment is less than its carrying value or (ii) the lessee is experiencing financial difficulties and it does not appear likely that the estimated proceeds from the disposition of the asset will be sufficient to satisfy the residual position in the asset. The preparation of the undiscounted cash flows requires the use of assumptions and estimates, including the level of future rents, the residual value expected to be realized upon disposition of the asset, estimated downtime between re-leasing events and the amount of re-leasing costs. Our Manager’s review for impairment includes a consideration of the existence of impairment indicators including third-party appraisals, published values for similar assets, recent transactions for similar assets, adverse changes in market conditions for specific asset types and the occurrence of significant adverse changes in general industry and market conditions that could affect the fair value of the asset.

Depreciation

We record depreciation expense on equipment when the lease is classified as an operating lease. In order to calculate depreciation, we first determine the depreciable base, which is the equipment cost less the estimated residual value at lease termination. Depreciation expense is recorded on a straight-line basis over the lease term.

Derivative Financial Instruments

We 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 our non-recourse long-term debt. We enter into these instruments only for hedging underlying exposures. We do 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 we believe that these are effective economic hedges.

We account for our interests in derivative financial instruments through our joint ventures as either assets or liabilities on the consolidated balance sheets and measure those instruments at fair value. Changes in the fair value of such instruments are recognized immediately in earnings unless certain criteria are met. 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 we must document and assess at inception and on an ongoing basis, we recognize the changes in fair value of such instruments in accumulated other comprehensive loss, 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.

Results of Operations for the Years Ended December 31, 2012 (“2012”) and 2011 (“2011”)

Revenue and other income for 2012 and 2011 is summarized as follows:

		Years Ended December 31,
		2012		2011		Change
Rental income		$	4,944	$	491,946	$	(487,002)
Finance income			6,786,973		6,356,297		430,676
Servicing income			-		4,277,587		(4,277,587)
Loss from investment in joint ventures			(7,815,624)		(8,762,029)		946,405
Net gain on sales of equipment and unguaranteed residual values			-		854,915		(854,915)
Gain on sale of equity interest in Pretel			-		1,917,549		(1,917,549)
Interest and other income			10,429		442,036		(431,607)
	Total revenue and other income	$	(1,013,278)	$	5,578,301	$	(6,591,579)

Total revenue and other income for 2012 decreased $6,591,579, or 118.2%, as compared to 2011. The decrease in total revenue and other income was primarily due to no longer earning servicing income or recognizing a gain on sale of equity interest in Pretel during 2012 as a result of the sale of Pretel in December 2011. The decrease was partially offset by a smaller loss from investment in joint ventures during 2012 as compared to 2011 resulting from a lower impairment loss recorded on assets held by joint ventures in 2012.

Expenses for 2012 and 2011 are summarized as follows:

		Years Ended December 31,
		2012		2011		Change
Management fees		$	224,216	$	564,350	$	(340,134)
Administrative expense reimbursements			273,489		735,260		(461,771)
General and administrative			894,412		6,785,303		(5,890,891)
Depreciation and amortization			590		1,402,745		(1,402,155)
Impairment loss			-		3,976,983		(3,976,983)
	Total expenses	$	1,392,707	$	13,464,641	$	(12,071,934)

Total expenses for 2012 decreased $12,071,934, or 89.7%, as compared to 2011. The decrease in total expenses was primarily due to a decrease in general and administrative expense and depreciation and amortization expense due to the sale of Pretel in December 2011. In addition, total expenses decreased as there was no impairment loss in 2012.

Noncontrolling Interests

Net income (loss) attributable to noncontrolling interests increased $119,513 from a net loss of $111,640 in 2011 to net income of $7,873 in 2012. The increase was primarily due to the sale of Pretel, which had a net loss attributable to noncontrolling interest during 2011.

Net Loss Attributable to Fund Ten

As a result of the foregoing factors, net loss attributable to us for 2012 and 2011 was $2,413,858 and $7,774,700, respectively. Net loss attributable to us per weighted average additional Share outstanding for 2012 and 2011 was $16.12 and $51.93, respectively.

Financial Condition

This section discusses the major balance sheet variances from 2012 compared to 2011.

Total Assets

Total assets decreased $12,408,312 to $42,664,364 at December 31, 2012 from $55,072,676 at December 31, 2011. The decrease was primarily due to cash distributions paid to our members and a decrease in investment in joint ventures due to the impairment in 2012 of certain leased equipment held by those joint ventures.

Current Assets

Current assets increased $5,385,768 to $12,202,186 at December 31, 2012 from $6,816,418 at December 31, 2011. The increase was primarily due to the increase in the current portion of the net investment in finance leases resulting from the scheduled increase in charter payments due pursuant to the bareboat charters on two of our vessels. The increase was partially offset by cash distributions paid to our members in 2012.

Total Liabilities

Total liabilities decreased $245,052 to $431,509 at December 31, 2012 from $676,561 at December 31, 2011. The decrease was primarily the result of the timing of payments related to certain operating expenses and the settlement of amounts previously due to our Manager.

Equity

Equity decreased $12,163,260 to $42,232,855 at December 31, 2012 from $54,396,115 at December 31, 2011. The decrease was primarily due to cash distributions paid to our members and the net loss during 2012.

Liquidity and Capital Resources

Summary

At December 31, 2012 and 2011, we had cash and cash equivalents of $1,805,049 and $6,171,596, respectively. During our liquidation period, which commenced on May 1, 2010, our main sources of cash are the collection of rentals pursuant to our non-leveraged operating and finance leases and proceeds from sales of equipment and our main use of cash is distributions to our members.

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.

On May 1, 2010, we commenced our liquidation period. During the liquidation period, cash generated by our investing activities has become a more significant source of our liquidity as we sell assets in the ordinary course of business. 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 members, general and administrative expense, management fees and administrative expense reimbursements. 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’ and borrowers’ businesses that are beyond our control.

Cash Flows

The following table sets forth summary cash flow data:

		Years Ended December 31,
		2012		2011
Net cash provided by (used in):
	Operating activities	$	5,091,081	$	1,315,990
	Investing activities		390,967		8,519,278
	Financing activities		(9,848,595)		(6,315,869)
	Effects of exchange rates on cash and cash equivalents		-		(88,393)
Net (decrease) increase in cash and cash equivalents		$	(4,366,547)	$	3,431,006

Note: See the Consolidated Statements of Cash Flows included in “Item 8. Consolidated Financial Statements” of this Annual Report on Form 10-K for additional information.

Operating Activities

Cash provided by operating activities increased $3,775,091 to $5,091,081 in 2012 from $1,315,990 in 2011. The increase was primarily due to the increase in finance lease collections resulting from the scheduled increase in charter payments in 2012.

Investing Activities

Cash provided by investing activities decreased $8,128,311 to $390,967 in 2012 from $8,519,278 in 2011. The decrease was primarily due to the absence of the sale of equity interest in Pretel and sales of equipment or unguaranteed residual values in 2012, and a decrease in the amount of distributions received from joint ventures in excess of profits in 2012 as compared to 2011.

Financing Activities

Cash used in financing activities increased $3,532,726 to $9,848,595 in 2012 from $6,315,869 in 2011. The increase was primarily due to an increase in cash distributions to our members in 2012.

Financings and Borrowings

We and certain entities managed by our Manager were parties to an agreement with California Bank & Trust for a revolving line of credit (the “Facility”). The Facility was terminated effective May 10, 2011.

Distributions

We, at our Manager’s discretion, paid monthly distributions to our members starting with the first month after each additional member’s admission following the commencement of our operations through the end of our operating period, which was on April 30, 2010. Distributions made during our 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 additional members of $9,750,109 and $5,625,060, respectively, for the years ended December 31, 2012 and 2011. We paid distributions to our Manager of $98,486 and $56,819, respectively, for the years ended December 31, 2012 and 2011. Additionally, we paid distributions to our noncontrolling interests of $0 and $792,629, respectively, for the years ended December 31, 2012 and 2011.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At the time we acquire or divest our interest in an equipment lease or other financing transaction, we may, under very limited circumstances, agree to indemnify the seller or buyer for specific contingent liabilities. Our Manager 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.

Off-Balance Sheet Transactions

None.

Inflation and Interest Rates

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

If interest rates increase significantly, leases already in place would generally not be affected.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Smaller reporting companies are not required to provide the information required by this item.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Consolidated Balance Sheets

				December 31,
				2012		2011
Assets
Current assets:
	Cash and cash equivalents			$	1,805,049	$	6,171,596
	Current portion of net investment in finance leases				10,304,383		183,913
	Current portion of notes receivable				-		422,568
	Other current assets				92,754		38,341
		Total current assets			12,202,186		6,816,418
Non-current assets:
	Net investment in finance leases, less current portion				29,726,814		39,832,259
	Notes receivable, less current portion				-		20,097
	Investment in joint ventures				710,564		8,378,185
	Other non-current assets				24,800		25,717
		Total non-current assets			30,462,178		48,256,258
Total assets				$	42,664,364	$	55,072,676

Liabilities and Equity
Current liabilities:
	Due to Manager and affiliates			$	-	$	111,615
	Accrued expenses				45,885		162,530
	Indemnification liability				372,143		357,211
	Other current liabilities				13,481		45,205
		Total liabilities			431,509		676,561

Commitments and contingencies (Note 12)

Equity:
	Members’ equity:
		Additional members			43,138,938		55,278,766
		Manager			(876,685)		(754,060)
		Accumulated other comprehensive loss			(57,405)		(148,725)
			Total members’ equity		42,204,848		54,375,981
	Noncontrolling interests				28,007		20,134
			Total equity		42,232,855		54,396,115
Total liabilities and equity				$	42,664,364	$	55,072,676

See accompanying notes to consolidated financial statements.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Comprehensive Loss

			Years Ended December 31,
			2012		2011
Revenue and other income:
	Rental income		$	4,944	$	491,946
	Finance income			6,786,973		6,356,297
	Servicing income			-		4,277,587
	Loss from investment in joint ventures			(7,815,624)		(8,762,029)
	Net gain on sales of equipment and unguaranteed residual values			-		854,915
	Gain on sale of equity interest in Pretel			-		1,917,549
	Interest and other income			10,429		442,036
		Total revenue and other income		(1,013,278)		5,578,301
Expenses:
	Management fees			224,216		564,350
	Administrative expense reimbursements			273,489		735,260
	General and administrative			894,412		6,785,303
	Depreciation and amortization			590		1,402,745
	Impairment loss			-		3,976,983
		Total expenses		1,392,707		13,464,641
Net loss				(2,405,985)		(7,886,340)
	Less: net income (loss) attributable to noncontrolling interests			7,873		(111,640)
Net loss attributable to Fund Ten				(2,413,858)		(7,774,700)

Other comprehensive income:
	Change in fair value of derivative financial instruments			92,471		191,674
	Currency translation adjustments			(1,151)		938
		Total other comprehensive income		91,320		192,612
Comprehensive loss				(2,314,665)		(7,693,728)
	Less: comprehensive income (loss) attributable to noncontrolling interests			7,873		(111,693)
Comprehensive loss attributable to Fund Ten			$	(2,322,538)	$	(7,582,035)

Net loss attributable to Fund Ten allocable to:
	Additional members		$	(2,389,719)	$	(7,696,953)
	Manager			(24,139)		(77,747)
			$	(2,413,858)	$	(7,774,700)

Weighted average number of additional shares of limited liability company
	interests outstanding			148,211		148,211
Net loss attributable to Fund Ten per weighted average additional
	share of limited liability company interests outstanding		$	(16.12)	$	(51.93)

See accompanying notes to consolidated financial statements.

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 Income (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

	Net loss		-		(7,696,953)		(77,747)		-		(7,774,700)		(111,640)		(7,886,340)
	Change in fair value of
		derivative financial instruments	-		-		-		191,674		191,674		-		191,674
	Currency translation
		adjustments	-		-		-		991		991		(53)		938
	Investment by noncontrolling
		interest in subsidiary	-		(611,132)		(6,173)		-		(617,305)		775,944		158,639
	Stock based compensation
		in subsidiary	-		816,839		8,251		-		825,090		275,030		1,100,120
	Sale of subsidiary		-		-		-		1,623,390		1,623,390		(258,160)		1,365,230
	Cash distributions		-		(5,625,060)		(56,819)		-		(5,681,879)		(792,629)		(6,474,508)
Balance, December 31, 2011			148,211		55,278,766		(754,060)		(148,725)		54,375,981		20,134		54,396,115

	Net (loss) income		-		(2,389,719)		(24,139)		-		(2,413,858)		7,873		(2,405,985)
	Change in fair value of
		derivative financial instruments	-		-		-		92,471		92,471		-		92,471
	Currency translation
		adjustments	-		-		-		(1,151)		(1,151)		-		(1,151)
	Cash distributions		-		(9,750,109)		(98,486)		-		(9,848,595)		-		(9,848,595)
Balance, December 31, 2012			148,211	$	43,138,938	$	(876,685)	$	(57,405)	$	42,204,848	$	28,007	$	42,232,855

See accompanying notes to consolidated financial statements.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Cash Flows

				Years Ended December 31,
					2012		2011
Cash flows from operating activities:
	Net loss			$	(2,405,985)	$	(7,886,340)
	Adjustments to reconcile net loss to net cash provided by
		operating activities:
			Finance income		(6,786,973)		(6,356,297)
			Loss from investment in joint ventures		7,815,624		8,762,029
			Net gain on sales of equipment and unguaranteed residual values		-		(854,915)
			Gain on sale of equity interest in Pretel		-		(1,917,549)
			Depreciation and amortization		590		1,402,745
			Impairment loss		-		3,976,983
			Loss on derivative financial instruments		-		70,669
			Stock-based compensation		-		1,100,120
			Interest and other income		9,947		-
	Changes in operating assets and liabilities:
		Collection of finance leases			6,771,948		2,858,076
		Service contracts receivable			-		128,677
		Distributions from joint ventures			-		332,437
		Other assets, net			(54,086)		(363,424)
		Due to Manager and affiliates, net			(111,615)		(26,746)
		Accrued expenses			(116,645)		(165,492)
		Indemnification liability			-		357,211
		Other current liabilities			(31,724)		(102,194)
Net cash provided by operating activities					5,091,081		1,315,990
Cash flows from investing activities:
	Proceeds from sales of equipment and unguaranteed residual values				-		1,598,127
	Proceeds from sale of equity interest in Pretel, net of cash included in sale				-		4,090,253
	Investment in joint ventures				(55,532)		(8,158)
	Distributions received from joint ventures in excess of profits				-		2,053,428
	Principal received on notes receivable				446,499		785,628
Net cash provided by investing activities					390,967		8,519,278
Cash flows from financing activities:
	Proceeds from sales of subsidiary shares				-		158,639
	Distributions to noncontrolling interests				-		(792,629)
	Cash distributions to members				(9,848,595)		(5,681,879)
Net cash used in financing activities					(9,848,595)		(6,315,869)
Effects of exchange rates on cash and cash equivalents					-		(88,393)
Net (decrease) increase in cash and cash equivalents					(4,366,547)		3,431,006
Cash and cash equivalents, beginning of year					6,171,596		2,740,590
Cash and cash equivalents, end of year				$	1,805,049	$	6,171,596

Supplemental disclosure of non-cash investing and financing activities:
	Transfer from investment in joint ventures to notes receivable			$	-	$	1,251,414

See accompanying notes to consolidated financial statements.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

(1) Organization

ICON Income Fund Ten, LLC (the “LLC”) was formed on January 2, 2003 as a Delaware limited liability company. The LLC is engaged in one business segment, the business of purchasing equipment and leasing it to third parties, providing equipment and other financing, acquiring equipment subject to lease and, to a lesser degree, acquiring ownership rights to items of leased equipment at lease expiration. The LLC will continue until December 31, 2023, unless terminated sooner.

The manager of the LLC is ICON Capital, LLC, a Delaware limited liability company formerly known as ICON Capital Corp. (the “Manager”). The Manager manages and controls the business affairs of the LLC, including, but not limited to, the equipment leases and other financing transactions that the LLC enters into. Additionally, the Manager has a 1% interest in the profits, losses, cash distributions and liquidation proceeds of the LLC.

The LLC offered shares of limited liability company interests (“Shares”) with the intention of raising up to $150,000,000 of capital from additional members. The LLC commenced business operations on its initial closing date, August 22, 2003, with the admission of investors holding 5,066 Shares, representing $5,065,736 of capital contributions. Between August 23, 2003 and April 5, 2005, the final closing date, the LLC admitted investors holding 144,928 Shares representing $144,928,766 of capital contributions, bringing the total Shares to 149,994 representing $149,994,502 of capital contributions. In addition, pursuant to the terms of the LLC’s offering, the LLC established a reserve in the amount of 1.0% of the gross offering proceeds, or $1,499,945. Through December 31, 2012, the LLC redeemed 1,783 Shares, bringing the total number of outstanding Shares to 148,211.

Effective April 30, 2010, the LLC completed its operating period. On May 1, 2010, the LLC commenced its liquidation period, during which the LLC has sold and will continue to sell its assets in the ordinary course of business. If the Manager believes it would benefit the members to reinvest the proceeds received from investments in additional investments during the liquidation period, the Manager may do so. The Manager will not receive any acquisition fees on investments made during the liquidation period.

The LLC invested most of the net proceeds from its offering in equipment subject to leases, other financing transactions and residual ownership rights in items of leased equipment. After the net offering proceeds were invested, additional investments were made with the cash generated from the LLC’s investments to the extent that cash was not needed for expenses, reserves and distributions to members. The investment in additional equipment leases and other financing transactions in this manner is called “reinvestment.”

Members’ capital accounts are increased for their initial capital contribution plus their proportionate share of earnings and decreased by their proportionate share of losses and distributions. Profits, losses, cash distributions and liquidation proceeds are allocated 99% to the additional members and 1% to the Manager until each additional member has (a) received cash distributions and liquidation proceeds sufficient to reduce its adjusted capital account to zero and (b) received, in addition, other distributions and allocations that would provide an 8% per year cumulative return, compounded daily, on its outstanding adjusted capital account. After such time, distributions will be allocated 90% to the additional members and 10% to the Manager.

(2) Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying consolidated financial statements of the LLC have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). In the opinion of the Manager, all adjustments considered necessary for a fair presentation have been included.

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 a controlling financial interest, the financial condition and results of operations of the joint venture are consolidated. A 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.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

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 investment 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 investment in joint ventures are subject to its impairment review policy.

Net loss attributable to the LLC per weighted average additional Share outstanding is based upon the weighted average number of additional Shares outstanding during the year.

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

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and highly liquid investments with original maturity dates of three months or less.

The LLC's cash and cash equivalents are held principally at one financial institution and at times may exceed insured limits. The LLC has placed these funds in a high quality institution in order to minimize risk relating to exceeding insured limits.

Revenue Recognition

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

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

For operating leases, rental income is recognized on a straight-line basis over the lease term. Billed operating lease receivables are included in accounts receivable until collected or written off. The difference between the timing of the cash received and the income recognized on a straight-line basis is recognized as either deferred revenue or other current assets, as appropriate.

Income Taxes

The LLC is taxed as a partnership for federal and State income tax purposes. Therefore, no provision for federal and State income taxes has been recorded since the liability for such taxes is the responsibility of each of the individual members rather than the LLC. The LLC is potentially subject to New York City unincorporated business tax (“UBT”), which is imposed on the taxable income of any active trade or business carried on in New York City. The UBT is imposed for each taxable year at a rate of approximately 4% of taxable income that is allocable to New York City. The LLC’s federal, State and local income tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the applicable taxing authorities. All penalties and interest associated with income taxes are included in general and administrative expense on the consolidated statements of comprehensive loss. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof.

Some of the LLC’s wholly-owned foreign subsidiaries were taxed as corporations in their local tax jurisdictions. For these entities, the LLC used the liability method of accounting for income taxes as required by the accounting pronouncement for

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

income taxes. Under this method, deferred tax assets and liabilities were determined based on differences between financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities were measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances were established when it was determined that it is more likely than not that the deferred tax assets will not be realized.

The LLC records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The LLC recognizes interest and penalties, if any, related to unrecognized tax benefit in income tax expense. The LLC did not have any material liabilities recorded related to uncertain tax positions nor did it have any unrecognized tax benefits as of the periods presented herein.

Depreciation

The LLC records depreciation expense on equipment when the lease is classified as an operating lease. In order to calculate depreciation, the LLC first determines the depreciable base, which is the equipment cost less the estimated residual value at lease termination. Depreciation expense is recorded on a straight-line basis over the lease term.

Asset Impairments

The significant assets in the LLC’s portfolio are periodically reviewed, no less frequently than annually or when indicators of impairment exist, to determine whether events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss will be recognized only if the carrying value of a long-lived asset is not recoverable and exceeds its fair market value. If there is an indication of impairment, the LLC will estimate the future cash flows (undiscounted and without interest charges) expected from the use of the asset and its eventual disposition. Future cash flows are the future cash inflows expected to be generated by an asset less the future outflows expected to be necessary to obtain those inflows. If an impairment is determined to exist, the impairment loss will be measured as the amount by which the carrying value of a long-lived asset exceeds its fair value and recorded in the consolidated statement of comprehensive loss in the period the determination is made.

The events or changes in circumstances that generally indicate that an asset may be impaired are (i) the estimated fair value of the underlying equipment is less than its carrying value or (ii) the lessee is experiencing financial difficulties and it does not appear likely that the estimated proceeds from the disposition of the asset will be sufficient to satisfy the residual position in the asset. The preparation of the undiscounted cash flows requires the use of assumptions and estimates, including the level of future rents, the residual value expected to be realized upon disposition of the asset, estimated downtime between re-leasing events and the amount of re-leasing costs. The Manager’s review for impairment includes a consideration of the existence of impairment indicators including third-party appraisals, published values for similar assets, recent transactions for similar assets, adverse changes in market conditions for specific asset types and the occurrence of significant adverse changes in general industry and market conditions that could affect the fair value of the asset.

Initial Direct Costs

The LLC capitalizes initial direct costs, including acquisition fees, associated with the origination and funding of leased assets and other financing transactions. Pursuant to the LLC Agreement, the LLC paid acquisition fees to the Manager equal to 3% of the purchase price of the LLC’s investments. These costs are amortized over the transaction term using the straight-line method for operating leases and the effective interest rate method for finance leases and notes receivable. Costs related to leases or other financing transactions that are not consummated are expensed as an acquisition expense.

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 has interests in derivative financial instruments through its joint ventures. The joint ventures account for their derivatives as either assets or liabilities on the consolidated balance sheets and measure those instruments at fair value. Changes

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

in the fair value of such instruments are recognized immediately in earnings unless certain criteria are met. 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 joint ventures must document and assess at inception and on an ongoing basis, the LLC recognizes its share of 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 of the joint ventures.

Foreign Currency Translation

Assets and liabilities having non-U.S. dollar functional currencies are translated at month-end exchange rates. Contributed capital accounts are translated at the historical rate of exchange when the capital was contributed or distributed. Revenues, expenses and cash flow items are translated at the weighted average exchange rate for the period. Resulting translation adjustments are recorded as a separate component of AOCI.

Credit Quality of Finance Leases and Credit Loss Reserve

The Manager weighs all credit decisions based on a combination of external credit ratings as well as internal credit evaluations of all borrowers. A borrower’s credit is analyzed using those credit ratings as well as the borrower’s financial statements and other financial data deemed relevant.

As the LLC’s finance leases are limited in number, the LLC is able to estimate the credit loss reserve based on a detailed analysis of each lease as opposed to using portfolio based metrics and credit loss reserve. Leases are analyzed quarterly and categorized as either performing or non-performing based on payment history. If a lease becomes non-performing due to a borrower’s missed scheduled payments or failed financial covenants, the Manager analyzes whether a credit loss reserve should be established or whether the lease should be restructured. Material events would be specifically disclosed in the discussion of each lease held.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires the Manager to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates primarily include the determination of allowance for doubtful accounts, depreciation, impairment losses, estimated useful lives and residual values. Actual results could differ from those estimates.

(3) Net Investment in Finance Leases

Net investment in finance leases consisted of the following:

		December 31,
		2012		2011
Minimum rents receivable		$	45,272,403	$	52,044,351
Estimated residual values			7,300,000		7,300,000
Unearned income			(12,541,206)		(19,328,179)
	Net investment in finance leases		40,031,197		40,016,172
Less: current portion of net investment in finance leases			10,304,383		183,913
	Net investment in finance leases, less current portion	$	29,726,814	$	39,832,259

Marine Vessels

The LLC owns two container vessels, the China Star and the Dubai Star on lease to ZIM Israel Navigation Co. Ltd. through March 31, 2017 and March 31, 2016, respectively.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

Telecommunications Equipment

On March 17, 2010, the LLC and Global Crossing Telecommunications, Inc. agreed to extend five leases between the entities for the period beginning on April 1, 2010 and ending on March 31, 2011. In connection with the extension, the end of the lease purchase option was fixed at $1 for each schedule of equipment, resulting in the reclassification of the leases to finance leases. On March 31, 2011, at the expiration of the leases and in accordance with their terms, the LLC sold the telecommunications equipment to Global Crossing for the aggregate purchase price of $5.

Non-cancelable minimum annual amounts due on investments in finance leases over the next five years were as follows at December 31, 2012:

Years Ending December 31,
2013	$	16,184,616
2014		18,535,936
2015		6,031,990
2016		3,776,191
2017		743,670
	$	45,272,403

(4) Notes Receivable

On November 25, 2008, a joint venture owned 12.25% by the LLC, 52.75% by ICON Leasing Fund Twelve, LLC (“Fund Twelve”) and 35.00% by ICON Leasing Fund Eleven, LLC (“Fund Eleven”), both affiliates of the Manager, purchased four promissory notes issued by Northern Capital Associates XIV, L.P. Effective January 1, 2011, the LLC exchanged its 12.25% ownership interest in the joint venture for notes receivable from Northern Capital Associates that were previously owned by the joint venture. The aggregate principal balance of the notes was approximately $1,237,000, with interest rates ranging from 9.47% to 9.90% per year. No gain or loss was recorded as a result of this transaction. Upon completion of the exchange, the joint venture was deconsolidated and then terminated. On May 2, 2012, Northern Capital Associates satisfied its remaining obligations in connection with these notes by making a payment of approximately $355,000. No material gain or loss was recorded as a result of this transaction.

(5) Pretel Group Limited

The LLC’s wholly-owned subsidiary, ICON Premier, LLC, owned bedside entertainment and communication terminals on lease to Premier Telecom Contracts Limited. Pretel Group Limited was the ultimate parent company of Premier Telecom. During 2009 and 2010, in consideration for restructuring the LLC’s pre-existing lease transaction, the LLC acquired 100% of the outstanding stock of Pretel for £1. The acquisition was accounted for as a business combination, and the results of operations of Pretel were included in the consolidated financial statements of the LLC from January 2009.

On January 17, 2011, the LLC sold 25% of Pretel to Pretel's new Chief Executive Officer for £100,000. This sale consisted of 100,000 Class B Pretel shares (the “Pretel Shares”). The Pretel Shares represented 25% of the voting and earnings rights of Pretel, including 25% of the existing equity at the close of the sale. As part of the sale agreement, if Pretel did not achieve certain financial targets during the year ended December 31, 2011, ICON Premier retained the right to re-purchase the Pretel Shares for £100,000. As a result, the difference between the fair market value of the Pretel Shares and the amount paid was charged to compensation expense ratably during 2011.

The fair value of the Pretel Shares as of January 17, 2011 was determined using a discounted cash flow analysis utilizing Pretel’s projected cash flows and expected future terminal value. Based on this analysis, the LLC estimated the difference between the fair value of the Pretel Shares and the £100,000 paid to be approximately £750,000. This difference was charged to compensation expense ratably during 2011, and classified in general and administrative expense on the consolidated statements of comprehensive loss. Pretel indemnified its new CEO for a portion of the tax liability resulting from the transaction and a liability was accrued throughout 2011 and included in compensation expense.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

On December 2, 2011, the LLC sold its remaining 75% interest in Pretel to a third party for approximately £2,928,000 ($4,596,000), net of transaction costs. ICON Premier recognized a net gain on the sale of approximately $1,918,000. ICON Premier agreed to indemnify the buyer for the exposure to the personal tax liability of the Pretel CEO resulting from his January 2011 purchase of the 25% interest in Pretel. At December 31, 2012 and 2011, the LLC has an accrued liability of approximately £230,000 ($372,000) and £230,000 ($357,000), respectively, related to this indemnification.

(6) Investment in Joint Ventures

The LLC and certain of its affiliates, entities also managed and controlled by the Manager, formed the joint ventures discussed below for the purpose of acquiring and managing various assets. The LLC and these affiliates have substantially identical investment objectives and participate on the same terms and conditions. The LLC and the other joint venture members have a right of first refusal to purchase the equipment, on a pro-rata basis, if any of the other joint venture members desires to sell its interests in the equipment or joint venture.

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

ICON Mayon, LLC

The LLC and Fund Twelve own ICON Mayon, LLC, with ownership interests of 49% and 51%, respectively. On July 24, 2007, ICON Mayon purchased an aframax product tanker, the Mayon Spirit, from an affiliate of Teekay Corporation. The purchase price was approximately $40,250,000, with approximately $15,312,000 funded in the form of a capital contribution to ICON Mayon and approximately $24,938,000 of non-recourse debt borrowed from BNP Paribas (f/k/a Fortis Bank SA/NV). Simultaneously, the Mayon Spirit was bareboat chartered back to Teekay for a term of 48 months.

As a result of negotiations to remarket and ultimately dispose of certain vessels, the Manager reviewed the joint venture’s investment in the vessel subject to charter and determined that the net book value exceeded the fair value and was not recoverable. As a result, during the year ended December 31, 2011, the joint venture recognized an impairment loss of approximately $21,858,000. On September 23, 2011, the joint venture sold the vessel for net proceeds of approximately $8,275,000 and satisfied the remaining third-party debt. The LLC’s share of the impairment loss and the loss on sale was approximately $10,710,000 and $46,000, respectively.

ICON Global Crossing V, LLC

The LLC and Fund Eleven own ICON Global Crossing V, LLC, with ownership interests of 45% and 55%, respectively. On January 3, 2011, upon the conclusion of the lease and in accordance with its terms, ICON Global Crossing V sold telecommunications equipment subject to lease with Global Crossing to Global Crossing for approximately $2,077,000. The LLC’s share of the gain was approximately $351,000.

ICON Eagle Carina Holdings, LLC

On December 18, 2008, ICON Eagle Carina Holdings, LLC, a Marshall Islands limited liability company owned 35.7% by the LLC and 64.3% by Fund Twelve, purchased an aframax product tanker, the Eagle Carina, for $39,010,000, of which $27,000,000 was financed with non-recourse debt. The Eagle Carina is subject to an 84 month bareboat charter with AET Inc. Limited (“AET”) that expires on November 14, 2013.

During the past several years, the shipping market has experienced historical lows in vessel charter rates. Those rates are a critical component of estimating the future forecasts of the non-contractual cash flows of ICON Eagle Carina. During its 2011 analysis, the Manager determined that, while the vessel owned by the joint venture was not impaired, the expected future cash flows would not allow the LLC to recover its investment in ICON Eagle Carina. Accordingly, the Manager concluded that the LLC’s carrying value in the joint venture ICON Eagle Carina exceeded the fair value, determined by the present value of the joint venture’s estimated future cash flows, and that the decrease in the value of the investment was other than temporary. During the year ended December 31, 2011, the LLC recorded an impairment loss of approximately $1,890,000 related to the write down of the investment in the joint venture.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

venture recognized an impairment loss of approximately $7,804,000 for the year ended December 31, 2012, of which the LLC’s share was approximately $2,786,000.

ICON Eagle Corona Holdings, LLC

On December 18, 2008, ICON Eagle Corona Holdings, LLC, a Marshall Islands limited liability company owned 35.7% by the LLC and 64.3% by Fund Twelve, purchased an aframax product tanker, the Eagle Corona, for $41,270,000, of which $28,000,000 was financed with non-recourse debt. The Eagle Corona is subject to an 84 month bareboat charter with AET that expires on November 14, 2013.

During the past several years, the shipping market has experienced historical lows in vessel charter rates. Those rates are a critical component of estimating the future forecasts of the non-contractual cash flows of ICON Eagle Corona. During its 2011 analysis, the Manager determined that, while the vessel owned by the joint venture was not impaired, the expected future cash flows would not allow the LLC to recover its investment in ICON Eagle Corona. Accordingly, the Manager concluded that the LLC’s carrying value in the joint venture ICON Eagle Corona exceeded the fair value, determined by the present value of the joint venture’s estimated future cash flows, and that the decrease in the value of the investment was other than temporary. During the year ended December 31, 2011, the LLC recorded an impairment loss of approximately $2,064,000 related to the write down of the investment in the joint venture.

During the year ended December 31, 2012, based on the Manager’s review of the vessel owned by the joint venture, the net book value of the vessel exceeded the estimated undiscounted cash flows and exceeded the fair value and, as a result, the joint venture recognized an impairment loss of approximately $10,084,000 for the year ended December 31, 2012, of which the LLC’s share was approximately $3,600,000.

(7) Transactions with Related Parties

The LLC paid the Manager (i) management fees ranging from 1% to 5% based on a percentage of the rentals and other contractual payments recognized either directly by the LLC or through its joint ventures and (ii) acquisition fees, through the end of the operating period, of 3% of the purchase price of the LLC’s investments. In addition, the Manager is reimbursed for administrative expenses incurred in connection with the LLC’s operations. The Manager also has a 1% interest in the LLC’s profits, losses, cash distributions and liquidation proceeds. 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, re-leasing services in connection with equipment which is off-lease, inspections of the equipment, liaising with and general supervision of lessees 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 are costs incurred by the Manager or its affiliates that are necessary to the LLC’s operations. These costs include the Manager’s and its affiliates’ legal, accounting, investor relations and operations personnel costs, as well as professional fees and other costs that are charged to the LLC based upon the percentage of time such personnel dedicate to the LLC. Excluded are salaries and related costs, office rent, travel expenses and other administrative costs incurred by individuals with a controlling interest in the Manager.

The LLC paid distributions to the Manager of $98,486 and $56,819 for the years ended December 31, 2012 and 2011, respectively. Additionally, the Manager’s interest in the net loss attributable to Fund Ten was $24,139 and $77,747 for the years ended December 31, 2012 and 2011, respectively.

During the year ended December 31, 2012, the Manager suspended the collection of management fees and administrative expense reimbursements of approximately $338,000 and $183,000, respectively.

Fees and other expenses paid or accrued by the LLC to the Manager or its affiliates for the years ended December 31, 2012 and 2011 were as follows:

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

Entity	Capacity	Description	2012		2011
ICON Capital, LLC	Manager	Management fees ⁽¹⁾	$	224,216	$	564,350
ICON Capital, LLC	Manager	Administrative expense reimbursements ⁽¹⁾		273,489		735,260
			$	497,705	$	1,299,610

(1) Amount charged directly to operations.

At December 31, 2012 and 2011, the LLC had a net payable of $0 and $111,615, respectively, due to the Manager and its affiliates that primarily consisted of administrative expense reimbursements.

(8) Derivative Financial Instruments

The LLC recognizes all derivatives as either assets or liabilities on the consolidated balance sheets and measures those instruments at fair value. Changes in the fair value of such instruments are recognized immediately in earnings unless certain criteria are met. 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 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

The LLC’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements on its variable non-recourse debt. The LLC’s strategy to accomplish these objectives 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 making fixed-rate interest payments over the life of the agreements without exchange of the underlying notional amount.

Non-designated Derivatives

As of December 31, 2012, 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 LLC’s warrants generated a loss on the statements of comprehensive loss for the years ended December 31, 2012 and 2011 of $0 and $70,669, respectively. The net loss recorded was comprised of an unrealized loss recorded in general and administrative expense relating to warrants. As of December 31, 2011, the fair value of the warrants was $0.

As of December 31, 2012, there are no other non-designated derivatives.

Designated Derivatives

As of December 31, 2012 and 2011, the LLC has interests through joint ventures in two floating-to-fixed interest rate swaps relating to ICON Eagle Corona and ICON Eagle Carina designated and qualifying as cash flow hedges with an aggregate notional amount of $14,684,914 and $25,306,179, respectively. These interest rate swaps mature on November 14, 2013.

For these derivatives, the joint ventures record their 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

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

loss from investment in joint ventures. During the year ended December 31, 2012, the joint ventures recorded no hedge ineffectiveness in earnings.

During the year ending December 31, 2013, the LLC estimates that approximately $57,000 will be transferred from AOCI to loss from investment in joint ventures.

The table below presents the effect of the LLC’s share of the joint ventures’ derivative financial instruments designated as cash flow hedging instruments on the consolidated statements of comprehensive loss for the years ended December 31, 2012 and 2011:


Year Ended	Derivatives Designated as Hedging Instruments	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)		Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)

December 31, 2012	Interest rate swaps	$	(32,915)	Loss from investment in joint ventures	$	(125,386)

December 31, 2011	Interest rate swaps	$	(92,128)	Loss from investment in joint ventures	$	(283,802)

At December 31, 2012, the total unrealized loss recorded to AOCI related to the joint ventures’ interest in the change in fair value of interest rate swaps was $57,405.

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 only with banks of internationally acknowledged standing, the LLC considers the counterparty risk to be remote.

(9) Accumulated Other Comprehensive Loss

AOCI includes accumulated unrealized losses on derivative financial instruments of joint ventures of $57,405 at December 31, 2012, and accumulated unrealized losses on derivative financial instruments of joint ventures of $149,876 and accumulated unrealized gains on currency translation adjustments of $1,151 at December 31, 2011.

(10) Concentrations of Risk

In the normal course of business, the LLC is exposed to two significant types of economic risk: credit and market. Credit risk is the risk of a lessee, borrower or other counterparty’s inability or unwillingness to make contractually required payments.

Market risk reflects the change in the value of debt instruments, derivatives and credit facilities due to changes in interest rate spreads or other market factors. The LLC believes that the carrying value of its investments and interests in derivative obligations through its joint ventures is reasonable, taking into consideration these risks, along with estimated collateral values, payment history and other relevant information.

For the year ended December 31, 2012, the LLC had one lessee that accounted for approximately 99.9% of rental and finance income. For the year ended December 31, 2011, the LLC had one lessee that accounted for approximately 57.1% of rental, finance and servicing income.

At December 31, 2012, the LLC had two lessees that accounted for approximately 95.5% of total assets. For the year ended December 31, 2011, the LLC had two lessees that accounted for approximately 87.9% of total assets.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

(11) Geographic Information

Geographic information for revenue, based on the country of origin, and long-lived assets, which include finance leases, investment in joint ventures and notes receivable, were as follows:

		Year Ended December 31, 2012
		United States		United Kingdom		Vessels^(a)		Total
Revenue:
	Rental income	$	-	$	4,944	$	-	$	4,944
	Finance income	$	-	$	-	$	6,786,973	$	6,786,973
	Loss from investment in joint ventures	$	-	$	-	$	(7,815,624)	$	(7,815,624)
	Interest and other income	$	10,429	$	-	$	-	$	10,429

		As of December 31, 2012
		United States		United Kingdom		Vessels^(a)		Total
Long-lived assets:
	Net investment in finance leases	$	-	$	-	$	40,031,197	$	40,031,197
	Investment in joint ventures	$	-	$	-	$	710,564	$	710,564

(a) Vessels are free to trade worldwide.

			Year Ended December 31, 2011
			United States		United Kingdom		Vessels^(a)		Total
Revenue:
	Rental income		$	77,331	$	414,615	$	-	$	491,946
	Finance income		$	1,355	$	-	$	6,354,942	$	6,356,297
	Servicing income		$	-	$	4,277,587	$	-	$	4,277,587
	Income (loss) from investment in joint ventures		$	332,437	$	-	$	(9,094,466)	$	(8,762,029)
	Net gain on sales of equipment and unguaranteed
		residual values	$	197,400	$	657,515	$	-	$	854,915
	Gain on sale of equity interest in Pretel		$	-	$	1,917,549	$	-	$	1,917,549
	Interest and other income		$	442,036	$	-	$	-	$	442,036

		As of December 31, 2011
		United States		United Kingdom		Vessels^(a)		Total
Long-lived assets:
	Net investment in finance leases	$	-	$	-	$	40,016,172	$	40,016,172
	Investment in joint ventures	$	-	$	-	$	8,378,185	$	8,378,185
	Notes receivable	$	442,665	$	-	$	-	$	442,665

(a) Vessels are free to trade worldwide.

(12) 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 of the LLC that may arise as a result of any such indemnification obligations will not have a material adverse effect on the consolidated financial condition or results of operations of the LLC taken as a whole.

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

(13) Foreign Income Taxes

Upon the acquisition of Pretel, some of the LLC’s subsidiaries were subject to taxation under the laws of the United Kingdom. As of December 31, 2010, the LLC had a net deferred tax asset of approximately $9,679,000 (£6,245,000), which was composed primarily of net operating loss carry forwards as well as temporary differences relating to equipment depreciation. The LLC had a full valuation allowance on its net deferred tax asset. The LLC had not identified any uncertain tax positions as of December 31, 2011 or 2010. The LLC sold its interest in Pretel on December 2, 2011 and has no further obligations related to foreign income taxes.

(14) Income Tax Reconciliation (unaudited)

At December 31, 2012 and 2011, the members’ equity included in the consolidated financial statements totaled $42,204,848 and $54,375,981, respectively. The members’ capital for federal income tax purposes at December 31, 2012 and 2011 totaled $66,105,527 and $72,204,304, respectively. The difference arises primarily from sales and offering expenses reported as a reduction in the additional members’ capital accounts for financial reporting purposes, but not for federal income tax reporting purposes, and the differences in gain (loss) on sale of equipment, depreciation and amortization between financial reporting purposes and federal income tax purposes.

The following table reconciles net loss attributable to the LLC for financial statement reporting purposes to the net income (loss) attributable to the LLC for federal income tax purposes for the years ended December 31, 2012 and 2011:

			2012		2011
Net loss attributable to Fund Ten per consolidated
	financial statements		$	(2,413,858)	$	(7,774,700)
		Finance income		(6,786,973)		(4,112,920)
		Rental income		2,710,532		-
		Depreciation and amortization		-		(4,126,784)
		Income from consolidated joint venture		10,079,720		1,035,153
		Gain on sale of equipment		-		7,775,815
		Other items		162,801		240,287
Net income (loss) attributable to Fund Ten for federal income tax purposes			$	3,752,222	$	(6,963,149)

Schedule II – Valuation and Qualifying Accounts

Description					Balance At Beginning Of Year		Additions Charged To Costs, Expenses and Revenues		Additions Charged to Deferred Tax Asset		Deductions		Balance at End of Year
Valuation allowance for deferred tax
	assets:
		Year ended December 31, 2012
			Valuation allowance for deferred tax
				assets	$	-	$	-	$	-	$	-	$	-
		Year ended December 31, 2011
			Valuation allowance for deferred tax
				assets	$	9,679,464	$	-	$	-	$	9,679,464 ^(a)	$	-

		(a) Represents the valuation allowance as of December 2, 2011, the date of the sale of Pretel.

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

None.

Item 9A. Controls and Procedures

Evaluation of disclosure controls and procedures

In connection with the preparation of this Annual Report on Form 10-K for the year ended December 31, 2012, 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 Financial and Accounting Officer, of the effectiveness of the design and operation of our Manager’s disclosure controls and procedures as of the end of the period covered by this report pursuant to the Securities Exchange Act of 1934, as amended. Based on the foregoing evaluation, the Co-Chief Executive Officers and the Principal Financial and Accounting 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.

Our Manager’s Co-Chief Executive Officers and Principal Financial and Accounting Officer have determined that no weakness in disclosure controls and procedures had any material effect on the accuracy and completeness of our financial reporting and disclosure included in this Annual Report on Form 10-K.

Evaluation of internal control over financial reporting

Our Manager is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our Manager assessed the effectiveness of its internal control over financial reporting as of December 31, 2012. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control — Integrated Framework.”

Based on its assessment, our Manager believes that, as of December 31, 2012, its internal control over financial reporting is effective.

PART III

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

Our Manager, ICON Capital, LLC, a Delaware limited liability company formerly known as ICON Capital Corp. (“ICON”), was formed in 1985. Our Manager's principal office is located at 3 Park Avenue, 36^th Floor, New York, New York 10016, and its telephone number is (212) 418-4700.

In addition to the primary services related to our making and disposing of investments, our Manager provides services relating to the day-to-day management of our investments. These services include collecting payments due from lessees, borrowers, and other counterparties; remarketing equipment that is off-lease; inspecting equipment; serving as a liaison with lessees, borrowers, and other counterparties; supervising equipment maintenance; and monitoring performance by lessees, borrowers, and other counterparties of their obligations, including payment of contractual payments and all operating expenses.

Name	Age	Title
Michael A. Reisner	42	Co-Chairman, Co-Chief Executive Officer and Director
Mark Gatto	40	Co-Chairman, Co-Chief Executive Officer and Director
Nicholas A. Sinigaglia	43	Managing Director
David J. Verlizzo	40	Senior Managing Director and Counsel
Craig A. Jackson	54	Managing Director
Harry Giovani	38	Managing Director and Chief Credit Officer

Michael A. Reisner, Co-President, Co-CEO and Director, joined ICON in 2001. Prior to purchasing the company in 2008, Mr. Reisner held various positions in the firm, including Executive Vice President and Chief Financial Officer, General Counsel and Executive Vice President of Acquisitions. Before his tenure with ICON, Mr. Reisner was an attorney from 1996 to 2001 with Brodsky Altman & McMahon, LLP in New York, concentrating on commercial transactions. Mr. Reisner received a J.D. from New York Law School and a B.A. from the University of Vermont.

Mark Gatto, Co-President, Co-CEO, and Director, originally joined ICON in 1999. Prior to purchasing the company in 2008, Mr. Gatto held various positions in the firm, including Executive Vice President and Chief Acquisitions Officer, Executive Vice President - Business Development and Associate General Counsel. Before his tenure with ICON, he was an attorney with Cella & Goldstein in New Jersey, concentrating on commercial transactions and general litigation matters. Additionally, he was Director of Player Licensing for the Topps Company and in 2003, he co-founded a specialty business consulting firm in New York City, where he served as managing partner before re-joining ICON in 2005. Mr. Gatto received an M.B.A. from the W. Paul Stillman School of Business at Seton Hall University, a J.D. from Seton Hall University School of Law, and a B.S. from Montclair State University.

Nicholas A. Sinigaglia, Managing Director, joined ICON in March 2008 as a Vice President of Accounting and Finance and was promoted to Managing Director in July 2011. Mr. Sinigaglia was previously the Chief Financial Officer of Smart Online, Inc. from February 2006 through March 2008 and the Vice President of Ray-X Medical Management Corp. from 1997 through 2005. Mr. Sinigaglia began his accounting career at Arthur Andersen LLP in 1991, where he was employed through 1997, rising to the level of Audit Manager. Mr. Sinigaglia received a B.S. from the University of Albany and is a certified public accountant.

David J. Verlizzo, Senior Managing Director and Counsel, joined ICON in 2005. Mr. Verlizzo was formerly Vice President and Deputy General Counsel from February 2006 to July 2007 and was Assistant Vice President and Associate General Counsel from May 2005 until January 2006. Previously, from May 2001 to May 2005, Mr. Verlizzo was an attorney with Cohen Tauber Spievack & Wagner LLP in New York, concentrating on public and private securities offerings, securities law compliance and corporate and commercial transactions. Mr. Verlizzo received a J.D. from Hofstra University School of Law and a B.S. from The University of Scranton.

Craig A. Jackson, Managing Director, joined ICON in 2006. Mr. Jackson was previously Vice President – Remarketing and Portfolio Management from February 2006 through March 2008. Previously, from October 2001 to February 2006, Mr. Jackson was President and founder of Remarketing Services, Inc., a transportation equipment remarketing company. Prior to 2001, Mr. Jackson served as Vice President of Remarketing and Vice President of Operations for Chancellor Fleet Corporation (an equipment leasing company). Mr. Jackson received a B.A. from Wilkes University.

Item 11. Executive Compensation

We have no directors or officers. Our Manager and its affiliates were paid or we accrued the following compensation and reimbursement for costs and expenses for the years ended December 31, 2012 and 2011:

Entity	Capacity	Description	2012		2011
ICON Capital, LLC	Manager	Management fees ⁽¹⁾	$	224,216	$	564,350
ICON Capital, LLC	Manager	Administrative expense reimbursements ⁽¹⁾		273,489		735,260
			$	497,705	$	1,299,610

(1) Amount charged directly to operations.

Our Manager also has a 1% interest in our profits, losses, cash distributions and liquidation proceeds. We paid distributions to our Manager of $98,486 and $56,819 for the years ended December 31, 2012 and 2011, respectively. Our Manager’s interest in the net loss attributable to us was $24,139 and $77,747, for the years ended December 31, 2012 and 2011, respectively.

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

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

(b) As of March 15, 2013, no directors or officers of our Manager own any of our equity securities.

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

Item 13. Certain Relationships and Related Transactions, and Director Independence

See “Item 11. Executive Compensation” for a discussion of our related party transactions. See Notes 6 and 7 to our consolidated financial statements for a discussion of our investment in joint ventures and transactions with related parties, respectively.

Because we are not listed on any national securities exchange or inter-dealer quotation system, we have elected to use the Nasdaq Stock Market’s definition of “independent director” in evaluating whether any of our Manager’s directors are independent. Under this definition, the board of directors of our Manager has determined that our Manager does not have any independent directors, nor are we required to have any.

Item 14. Principal Accounting Fees and Services

During the years ended December 31, 2012 and 2011, our auditors provided audit services relating to our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. Additionally, our auditors provided other services in the form of tax compliance work. The following table presents the fees for both audit and non-audit services rendered by Ernst & Young LLP for the years ended December 31, 2012 and 2011:

	2012		2011
Audit fees	$	315,000	$	425,100
Tax fees		61,644		73,564
	$	376,644	$	498,664

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) 1. Financial Statements

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

2. Financial Statement Schedules

Financial Statement Schedule II – Valuation and Qualifying Accounts is filed with this Annual Report on Form 10-K. Schedules not listed above have been omitted because they are not applicable or the information required to be set forth therein is included in the financial statements or notes thereto.

3. Exhibits:

3.1 Certificate of Formation of 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)).

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 Financial and Accounting 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 Financial and Accounting 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.DEF* XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB* XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document.

(b) 1. Financial Statements of ICON Mayon, LLC.

2. Financial Statements of ICON Eagle Carina Holdings, LLC.

3. Financial Statements of ICON Eagle Corona Holdings, LLC.

* 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.

ICON Mayon, LLC

(A Marshall Islands Limited Liability Company)

Balance Sheets


		December 31,
		2012		2011
			(unaudited)
Assets
Current assets:
	Cash	$	-	$	435

Total assets		$	-	$	435

Liabilities and Members' (Deficit) Equity
Current liabilities:
	Other current liabilities	$	-	$	117,822

Total liabilities			-		117,822

Commitments and contingencies

Members' (deficit) equity			-		(117,387)

Total liabilities and members' (deficit) equity		$	-	$	435

See accompanying notes to financial statements.

ICON Mayon, LLC

(A Marshall Islands Limited Liability Company)

Statements of Comprehensive Loss

			Years Ended December 31,
			2012		2011
				(unaudited)
Revenue:
	Rental income		$	-	$	3,803,492
	Finance income			-		9,687
	Loss on sale of leased asset			-		(94,487)
		Total revenue		-		3,718,692
Expenses:
	Depreciation			-		1,325,246
	Impairment loss			-		21,858,385
	Vessel operating			446		1,444,183
	Interest			-		224,078
		Total expenses		446		24,851,892
Net loss				(446)		(21,133,200)

Other comprehensive income:
	Change in fair value of derivative financial instruments			-		153,520
		Total other comprehensive income		-		153,520
Comprehensive loss			$	(446)	$	(20,979,680)

See accompanying notes to financial statements.

ICON Mayon, LLC

(A Marshall Islands Limited Liability Company)

Statements of Changes in Members’ (Deficit) Equity

		Members' (Deficit) Equity		Accumulated Other Comprehensive Loss		Total Members' (Deficit) Equity
Balance, December 31, 2010		$	24,056,762	$	(153,520)	$	23,903,242
	Net loss		(21,133,200)		-		(21,133,200)
	Change in fair value of derivative financial instruments		-		153,520		153,520
	Cash distributions to members		(3,040,949)		-		(3,040,949)
Balance, December 31, 2011			(117,387)		-		(117,387)
	Net loss (unaudited)		(446)		-		(446)
	Equity investment from members (unaudited)		117,833		-		117,833
Balance, December 31, 2012 (unaudited)		$	-	$	-	$	-

See accompanying notes to financial statements.

ICON Mayon, LLC

(A Marshall Islands Limited Liability Company)

Statements of Cash Flows

					Years Ended December 31,
						2012		2011
						(unaudited)
Cash flows from operating activities:
	Net loss				$	(446)	$	(21,133,200)
	Adjustments to reconcile net loss to net cash used in
		operating activities:
			Rental income paid directly to lender by lessee			–		(2,550,000)
			Finance income			–		(9,687)
			Depreciation			–		1,325,246
			Interest expense on non-recourse financing paid directly to
				lender by lessee		–		174,510
			Interest expense from amortization of debt financing costs			–		43,301
			Loss on sale of leased asset			–		94,487
			Impairment loss			–		21,858,385
	Changes in operating assets and liabilities:
			Other non-current assets			–		(105,614)
			Deferred revenue			–		(554,109)
			Other current liabilities			(117,822)		32,508
			Accrued interest			–		(1,194)
Net cash used in operating activities						(118,268)		(825,367)
Cash flows from investing activities:
	Proceeds from sale of equipment					–		6,508,019
Net cash provided by investing activities						–		6,508,019
Cash flows from financing activities:
	Repayments of notes payable - non-recourse					–		(2,608,468)
	Equity investment from members					117,833		–
	Payment to settle interest rate swap					–		(32,800)
	Cash distributions to members					–		(3,040,949)
Net cash provided by (used in) financing activities						117,833		(5,682,217)
Net (decrease) increase in cash						(435)		435
Cash and cash equivalents, beginning of year						435		–
Cash and cash equivalents, end of year					$	–	$	435

Supplemental disclosure of non-cash investing and financing activities:
	Principal and interest paid directly to lender by lessee				$	–	$	2,550,000
	Proceeds from sale of equipment paid directly to lender in settlement of non-recourse debt				$	–	$	1,767,409

See accompanying notes to financial statements.

ICON Mayon, LLC

(A Marshall Islands Limited Liability Company)

Notes to Financial Statements

December 31, 2012

(unaudited)

(1) Organization

ICON Mayon, LLC (the “LLC”) was formed on June 26, 2007 as a Marshall Islands limited liability company. The LLC commenced operations on July 24, 2007 (the “Commencement of Operations”). The LLC is a joint venture between two affiliated entities, ICON Leasing Fund Twelve, LLC (“Fund Twelve”) and ICON Income Fund Ten, LLC (“Fund Ten”) (collectively, the “LLC’s Members”). Fund Twelve and Fund Ten have ownership interests of 51% and 49%, respectively, in the LLC’s profits, losses and cash distributions. The LLC is engaged in one business segment, the business of purchasing equipment and leasing to businesses.

The manager of the LLC’s Members is ICON Capital, LLC, a Delaware limited liability company formerly known as ICON Capital Corp. (the “Manager”). The Manager manages and controls the business affairs of the LLC pursuant to the terms of the respective limited liability company agreements, as amended, of the LLC’s Members.

In 2011, the LLC sold the Mayon Spirit, its only operating asset, and paid down the related outstanding debt.

(2) Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements of the LLC have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). In the opinion of the Manager, all adjustments considered necessary for a fair presentation have been included.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and highly liquid investments with original maturity dates of three months or less.

Leased Equipment at Cost

Investments in leased equipment are stated at cost less accumulated depreciation. Leased equipment is depreciated on a straight-line basis over the lease term, which typically ranges from 3 to 8 years, to the asset’s residual value.

Depreciation

Asset Impairments

The asset in the LLC’s portfolio is periodically reviewed, no less frequently than annually, to determine whether events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss will be recognized only if the carrying value of a long-lived asset is not recoverable and exceeds its fair market value. If there is an indication of impairment, the LLC will estimate the future cash flows (undiscounted and without interest charges) expected from the use of the asset and its eventual disposition. Future cash flows are the future cash inflows expected to be generated by an asset less the future outflows expected to be necessary to obtain those inflows. If an impairment is determined to exist, the impairment loss will be measured as the amount by which the carrying value of a long-lived asset exceeds its fair value and recorded in the statement of comprehensive loss in the period the determination is made.

ICON Mayon, LLC

(A Marshall Islands Limited Liability Company)

Notes to Financial Statements

December 31, 2012

(unaudited)

asset and, if applicable, the remaining obligation to the non-recourse lender. Generally in the latter situation, the residual position relates to equipment subject to third-party non-recourse debt where the lessee remits its rental payments directly to the lender and the LLC does not recover its residual position until the non-recourse debt is repaid in full. The preparation of the undiscounted cash flows requires the use of assumptions and estimates, including the level of future rents, the residual value expected to be realized upon disposition of the asset, estimated downtime between re-leasing events and the amount of re-leasing costs. The Manager’s review for impairment includes a consideration of the existence of impairment indicators including third-party appraisals, published values for similar assets, recent transactions for similar assets, adverse changes in market conditions for specific asset types and the occurrence of significant adverse changes in general industry and market conditions that could affect the fair value of the asset.

Revenue Recognition

Each equipment lease the LLC enters into is classified as either a finance lease or an operating lease, which is based upon the terms of each lease. For an operating lease, initial direct costs are included as a component of the cost of the equipment and depreciated. The LLC has not entered into any finance leases.

For operating leases, rental income is recognized on a straight-line basis over the lease term. Billed operating lease receivables are included in accounts receivable until collected or written off. Accounts receivable is stated at its estimated net realizable value. Deferred revenue is the difference between the timing of the receivables billed and the income recognized on a straight-line basis.

Allowance for Doubtful Accounts

When evaluating the adequacy of the allowance for doubtful accounts, the LLC estimates the uncollectibility of receivables by analyzing lessee, borrower and other counterparty concentrations, creditworthiness and current economic trends. The LLC records an allowance for doubtful accounts when the analysis indicates that the probability of full collection is unlikely. Accounts receivable are generally placed in a non-accrual status when payments are more than 90 days past due. Additionally, the LLC periodically reviews the creditworthiness of companies with payments outstanding less than 90 days. Based upon the Manager’s judgment, accounts may be placed in a non-accrual status. Accounts on a non-accrual status are only returned to an accrual status when the account has been brought current and the LLC believes recovery of the remaining unpaid receivable is probable. Revenue on non-accrual accounts is recognized only when cash has been received. No allowance was deemed necessary at December 31, 2012 and 2011.

Acquisition Fees

Pursuant to Fund Twelve’s limited liability company agreement, an acquisition fee was paid to the Manager equal to 3% of the proportionate share of the purchase price for Fund Twelve’s investment. These fees are capitalized and included in the cost of the investment. Pursuant to Fund Ten’s amended and restated operating agreement, no acquisition fees were paid by Fund Ten to the Manager in connection with the LLC’s investment in the Mayon Spirit.

Income Taxes

The LLC is taxed as a partnership for federal and State income tax purposes. Therefore, no provision for federal and State income taxes has been recorded since the liability for such taxes is the responsibility of each of the individual members rather than the LLC. The LLC’s federal, State and local income tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the applicable taxing authorities. All penalties and interest associated with income taxes are included in general and administrative expense on the statements of comprehensive loss. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. The LLC did not have any uncertain tax positions nor did it have any unrecognized tax benefits as of the periods presented herein.

Derivative Financial Instruments

ICON Mayon, LLC

(A Marshall Islands Limited Liability Company)

Notes to Financial Statements

December 31, 2012

(unaudited)

other than hedging. 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 accounts for derivative financial instruments as either assets or liabilities on the balance sheets and measures those instruments at fair value. Changes in the fair value of such instruments are recognized immediately in earnings unless certain criteria are met. 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 members’ (deficit) equity on the balance sheets. Changes in the fair value of the ineffective portion of all derivatives are recognized immediately in earnings.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires the Manager to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates primarily include the determination of allowance for doubtful accounts, depreciation, amortization and impairment losses. Actual results could differ from those estimates.

(3) Leased Equipment at Cost

On July 24, 2007, the LLC purchased an aframax product tanker, the Mayon Spirit, from an affiliate of Teekay Corporation (“Teekay”). The purchase price for the Mayon Spirit was approximately $40,250,000, with approximately $15,312,000 funded in the form of a capital contribution to the LLC and approximately $24,938,000 of non-recourse debt borrowed from BNP Paribas (“Paribas,” f/k/a Fortis Bank SA/NV). Simultaneously with the closing of the purchase of the Mayon Spirit, the Mayon Spirit was bareboat chartered back to Teekay for a term of 48 months. The charter commenced on July 24, 2007. The LLC paid approximately $845,000 in transaction-related costs, which included an acquisition fee of approximately $616,000 paid to the Manager.

Depreciation expense was $0 and $1,325,246 for the years ended December 31, 2012 and 2011, respectively.

As a result of negotiations to remarket and ultimately dispose of certain vessels, the Manager determined that the net book value of the Mayon Spirit exceeded the fair value. The LLC recognized an impairment loss of approximately $21,858,000 during the year ended December 31, 2011. On September 23, 2011, the LLC sold the Mayon Spirit for proceeds of approximately $8,275,000 and satisfied the remaining related third-party debt. The LLC recorded a loss on sale of approximately $94,000.

(4) Non-Recourse Long-Term Debt

On July 24, 2007, the LLC borrowed approximately $24,938,000 in connection with the acquisition of the Mayon Spirit. The non-recourse long-term debt matured on July 25, 2011 and accrued interest at the London Interbank Offered Rate (“LIBOR”) plus 1.00% per year. The non-recourse long-term debt required monthly payments ranging from $476,000 to $527,000. The lender had a security interest in the Mayon Spirit and an assignment of the charter hire payments. The LLC paid and capitalized approximately $187,000 in debt financing costs. All obligations under the non-recourse long-term debt were satisfied in 2011.

Simultaneously with the execution of the non-recourse long-term debt agreement mentioned above, the LLC entered into an interest rate swap contract with Paribas in order to hedge the variable interest rate on the non-recourse long-term debt and minimize the LLC’s risk of interest rate fluctuation. The interest rate swap contract, which was deemed effective as of June 19, 2008, fixed the interest rate at 6.35% per year. During the year ended December 31, 2011, the LLC recorded in accumulated other comprehensive loss a cumulative decrease in the fair value of the interest rate swap contract of approximately $154,000.

ICON Mayon, LLC

(A Marshall Islands Limited Liability Company)

Notes to Financial Statements

December 31, 2012

(unaudited)

(5) Fair Value Measurements

Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

· Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

· Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

· Level 3: Pricing inputs that are generally unobservable and cannot be corroborated by market data.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The LLC is required, on a nonrecurring basis, to adjust the carrying value or provide valuation allowances for certain assets and liabilities using fair value measurements. The LLC’s non-financial assets, such as leased equipment at cost, are measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized.

The following table summarizes the valuation of the LLC’s material non-financial assets and liabilities measured at fair value on a nonrecurring basis, of which the fair value information presented is not current but rather as of the date the impairment was recorded, and the carrying value of the asset as of December 31, 2011:

									Total Impairment Loss
	Carrying value at		Fair Value at Impairment Date						for the Year Ended
	December 31, 2011		Level 1		Level 2		Level 3		December 31, 2011
Leased equipment at cost	$	-	$	-	$	8,260,208	$	-	$	21,858,385

The LLC’s non-financial assets are valued using observable market inputs and are classified within Level 2. As permitted by the accounting pronouncements, the LLC uses market prices and prices determined based on arm’s length negotiated transactions with a third party for fair value measurements of its non-financial assets.

(6) Derivative Financial Instruments

Interest Rate Risk

The LLC settled its remaining interest rate swap on July 5, 2011.

For this derivative, the LLC recorded 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 was subsequently reclassified into earnings in the period that the hedged forecasted transaction affected earnings and within the same line item on the statements of comprehensive loss as the impact of the hedged transaction. During the years ended December 31, 2012 and 2011, the LLC recorded no hedge ineffectiveness in earnings.

The table below presents the effect of the LLC’s derivative financial instruments designated as cash flow hedging instruments on the statements of comprehensive loss for the year ended December 31, 2011:

ICON Mayon, LLC

(A Marshall Islands Limited Liability Company)

Notes to Financial Statements

December 31, 2012

(unaudited)

Year Ended

Derivatives Designated as Hedging Instruments

Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)

Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)

Gain (Loss) Reclassified from AOCI into Income (Effective Portion)

December 31, 2011

Interest rate swaps

(3,756)

Interest

(157,276)

Derivative Risks

(7) Transactions with Related Parties

In the ordinary course of operations, the LLC’s Members will pay certain operating and general and administrative expenses on behalf of the LLC in proportion to their membership interests.

The financial condition and results of operations of the LLC, as reported, are not necessarily indicative of the results that would have been reported had the LLC operated completely independently.

(8) Concentration of Risk

Market risk reflects the change in the value of debt instruments, derivatives and credit facilities due to changes in interest rate spreads or other market factors. The LLC believes that the carrying value of its investment and derivative obligations is reasonable, taking into consideration these risks, along with estimated collateral values, payment history and other relevant information.

For the year ended December 31, 2011, the LLC had one lessee that accounted for 100% of total rental income.

ICON Eagle Carina Holdings, LLC
(A Marshall Islands Limited Liability Company)
Consolidated Balance Sheets
				December 31,
				2012		2011
							(unaudited)
Assets
Current assets:
	Cash			$	482,853	$	230,934
Non-current assets:
	Leased equipment at cost (less accumulated depreciation
		of $18,540,558 and $11,304,073, respectively)			13,927,719		28,967,985
	Other non-current assets				522,434		575,456
			Total non-current assets		14,450,153		29,543,441
Total assets				$	14,933,006	$	29,774,375
Liabilities and Members’ Equity
Current liabilities:
	Current portion of non-recourse long-term debt			$	7,049,880	$	5,255,668
	Derivative financial instrument				89,398		217,434
	Deferred revenue				724,084		720,557
	Accrued expense				35,435		61,852
			Total current liabilities		7,898,797		6,255,511
Non-current liabilities:
	Non-recourse long-term debt, less current portion				-		7,049,880
Total liabilities					7,898,797		13,305,391
Members’ equity:
	Members’ equity				7,106,781		16,659,392
	Accumulated other comprehensive loss				(72,572)		(190,408)
Total members’ equity					7,034,209		16,468,984
Total liabilities and members’ equity				$	14,933,006	$	29,774,375
See accompanying notes to consolidated financial statements.

ICON Eagle Carina Holdings, LLC
(A Marshall Islands Limited Liability Company)
Consolidated Statements of Comprehensive (Loss) Income
			Years Ended December 31,
			2012		2011
						(unaudited)
Revenue:
	Rental income		$	5,945,972	$	5,945,972
Expenses:
	Interest			458,317		675,327
	Depreciation			7,236,485		3,721,772
	Impairment loss			7,803,781		-
		Total expenses		15,498,583		4,397,099
Net (loss) income				(9,552,611)		1,548,873

Other comprehensive income:
	Change in fair value of derivative financial instrument			117,836		149,223
		Total other comprehensive income		117,836		149,223
Comprehensive (loss) income			$	(9,434,775)	$	1,698,096
See accompanying notes to consolidated financial statements.

ICON Eagle Carina Holdings, LLC
(A Marshall Islands Limited Liability Company)
Consolidated Statements of Cash Flows
				Years Ended December 31,
				2012		2011
							(unaudited)
Cash flows from operating activities:
	Net (loss) income			$	(9,552,611)	$	1,548,873
	Adjustments to reconcile net (loss) income to net cash provided by
		operating activities:
			Rental income paid directly to lender by lessee		(5,697,581)		(5,686,403)
			Depreciation		7,236,485		3,721,772
			Interest expense on non-recourse financing paid directly to lender by lessee		405,296		586,441
			Interest expense from amortization of debt financing costs		53,022		81,109
			Impairment loss		7,803,781		-
	Changes in operating assets and liabilities:
			Other assets		-		(24,385)
			Deferred revenue		3,527		3,527
Net cash provided by operating activities					251,919		230,934
Net increase in cash					251,919		230,934
Cash, beginning of year					230,934		-
Cash, end of year				$	482,853	$	230,934

Supplemental disclosure of non-cash financing activities:
	Principal and interest on non-recourse long-term debt paid directly to
		lenders by lessee		$	5,697,581	$	5,686,403
See accompanying notes to consolidated financial statements.

ICON Eagle Carina Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

(1) Organization

ICON Eagle Carina Holdings, LLC (the “LLC”) was formed on December 3, 2008 as a Marshall Islands limited liability company, and commenced operations on December 18, 2008. The LLC is a joint venture between two affiliated entities, ICON Income Fund Ten, LLC (“Fund Ten”) and ICON Leasing Fund Twelve, LLC (“Fund Twelve”) (collectively, the “LLC’s Members”). Fund Ten and Fund Twelve have ownership interests of 35.7% and 64.3%, respectively, in the LLC’s profits, losses and cash distributions. The LLC is engaged in one business segment, the business of purchasing business-essential equipment and corporate infrastructure and leasing to businesses.

The manager of the LLC’s Members is ICON Capital, LLC, a Delaware limited liability company formerly known as ICON Capital Corp. (the “Manager”). The Manager manages and controls the business affairs of the LLC, including, but not limited to, the equipment leases and other financing transactions into which the LLC enters.

(2) Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

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

The LLC evaluated all subsequent events through March 19, 2013, the date the consolidated financial statements were issued.

Cash

Cash includes cash in banks. Restricted cash of $500,000 is included in other assets in the LLC’s consolidated balance sheets at December 31, 2012 and 2011.

The LLC’s cash is held principally at one financial institution and at times may exceed insured limits. The LLC has placed these funds in high quality institutions in order to minimize risk relating to exceeding insured limits.

Leased Equipment at Cost

The Manager has an investment committee that approves each new equipment lease and other financing transaction. As part of its process, the investment committee determines the residual value, if any, to be used once the investment has been approved. The factors considered in determining the residual value include, but are not limited to, the creditworthiness of the potential lessee, the type of equipment considered, how the equipment is integrated into the potential lessee’s business, the length of the lease and the industry in which the potential lessee operates. Residual values are reviewed for impairment in accordance with the LLC’s impairment review policy.

The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. The residual value is calculated using information from various external sources, such as trade publications, auction data, equipment dealers, wholesalers and industry experts, as well as inspection of the physical asset and other economic indicators.

ICON Eagle Carina Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

Depreciation

Asset Impairments

The significant assets in the LLC’s portfolio are periodically reviewed, no less frequently than annually or when indicators of impairment exist, to determine whether events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss will be recognized only if the carrying value of a long-lived asset is not recoverable and exceeds its fair market value. If there is an indication of impairment, the LLC will estimate the future cash flows (undiscounted and without interest charges) expected from the use of the asset and its eventual disposition. Future cash flows are the future cash inflows expected to be generated by an asset less the future outflows expected to be necessary to obtain those inflows. If an impairment is determined to exist, the impairment loss will be measured as the amount by which the carrying value of a long-lived asset exceeds its fair value and recorded in the consolidated statements of comprehensive (loss) income in the period the determination is made.

The events or changes in circumstances that generally indicate that an asset may be impaired are (i) the estimated fair value of the underlying equipment is less than its carrying value or (ii) the lessee is experiencing financial difficulties and it does not appear likely that the estimated proceeds from the disposition of the asset will be sufficient to satisfy the residual position in the asset and, if applicable, the remaining obligation to the non-recourse lender. Generally in the latter situation, the residual position relates to equipment subject to third-party non-recourse debt where the lessee remits its rental payments directly to the lender and the LLC does not recover its residual position until the non-recourse debt is repaid in full. The preparation of the undiscounted cash flows requires the use of assumptions and estimates, including the level of future rents, the residual value expected to be realized upon disposition of the asset, estimated downtime between re-leasing events and the amount of releasing costs. The Manager’s review for impairment includes a consideration of the existence of impairment indicators including third-party appraisals, published values for similar assets, recent transactions for similar assets, adverse changes in market conditions for specific asset types and the occurrence of significant adverse changes in general industry and market conditions that could affect the fair value of the asset.

Revenue Recognition

For operating leases, rental income is recognized on a straight-line basis over the lease term. Billed operating lease receivables are included in accounts receivable until collected or written off. The difference between the timing of the cash received and the income recognized on a straight-line basis is recognized as either deferred revenue or other current assets, as appropriate.

Allowance for Doubtful Accounts

ICON Eagle Carina Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

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 the LLC’s 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. 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 accounts for its derivatives as either assets or liabilities on the consolidated balance sheets and measures those instruments at fair value. Changes in the fair value of such instruments are recognized immediately in earnings unless certain criteria are met. 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.

Initial Direct Costs

The LLC capitalizes initial direct costs, including acquisition fees, associated with the origination and funding of leased assets and other financing transactions. The LLC paid an acquisition fee to the Manager equal to 3% of the investment made in long-lived assets by or on behalf of the LLC, including, but not limited to, the cash paid, indebtedness incurred or assumed, and the excess of the collateral value of the long-lived asset over the amount of the investment, if any. The costs of each transaction are amortized over the transaction term using the straight-line method for operating leases and the effective interest rate method for finance leases and notes receivable in the LLC’s consolidated statements of comprehensive (loss) income. Costs related to leases or other financing transactions that are not consummated are expensed as an acquisition expense in the LLC’s consolidated statements of comprehensive (loss) income.

Income Taxes

The LLC is taxed as a partnership for federal and State income tax purposes. Therefore, no provision for federal and State income taxes has been recorded since the liability for such taxes is the responsibility of each of the individual members rather than the LLC. The LLC’s federal, State and local income tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the applicable taxing authorities. All penalties and interest associated with income taxes are included in general and administrative expense on the consolidated statements of comprehensive (loss) income. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. The LLC did not have any uncertain tax positions nor did it have any unrecognized tax benefits as of the periods presented herein.

Use of Estimates

(3) Leased Equipment at Cost

Leased equipment at cost consisted of the following:

ICON Eagle Carina Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

		December 31,
		2012		2011
Marine - crude oil tanker		$	32,468,277	$	40,272,058
	Less: accumulated depreciation		18,540,558		11,304,073
Leased equipment at cost, less accumulated depreciation		$	13,927,719	$	28,967,985

Depreciation expense was $7,236,485 and $3,721,772 for the years ended December 31, 2012 and 2011, respectively.

On December 18, 2008, the Singaporean flag vessel Eagle Carina was purchased for $39,010,000, of which $27,000,000 was financed through non-recourse debt from BNP Paribas and DVB Bank SE. The Eagle Carina is subject to an 84-month bareboat charter with AET Inc. Limited that expires on November 14, 2013.

In connection with the LLC’s annual impairment review process for the year ended December 31, 2011, the LLC’s Manager had changed the end of lease residual value relating to the Eagle Carina. Accordingly, effective January 1, 2012, the remaining net book value of the Eagle Carina will be depreciated over the remaining term of the lease using the straight-line method to the reduced residual value.

In connection with the LLC’s annual impairment review process for the year ended December 31, 2012, the LLC’s Manager concluded that the carrying value of the Eagle Carina was not recoverable and determined that an impairment existed. That determination was based on a forecast of undiscounted contractual cash flows for the remaining term of the lease and non-contractual cash flows based on a weighted average probability of alternate opportunities of re-leasing or disposing of the vessel. Projected future scrap rates are a critical component of that analysis as well as negotiated rates related to re-leasing of the vessel. Based on the Manager’s review of the Eagle Carina, the net book value of the Eagle Carina exceeded the estimated undiscounted cash flows and exceeded the fair value and, as a result, the LLC recognized an impairment loss of approximately $7,804,000 for the year ended December 31, 2012.

Aggregate annual minimum future rentals receivable from the LLC’s non-cancelable leases over the next year were $4,462,125 at December 31, 2012.

(4) Non-Recourse Long-Term Debt

On December 18, 2008, the LLC borrowed $27,000,000 in connection with the acquisition of the Eagle Carina. The non-recourse long-term debt obligation matures on November 14, 2013 and accrues interest at the London Interbank Offered Rate (“LIBOR”) plus a 1.75% per year margin. The lender has a security interest in the Eagle Carina and an assignment of the charter hire. The LLC paid and capitalized approximately $405,000 in debt financing costs.

Simultaneously with the execution of the non-recourse long-term debt agreement mentioned above, the LLC entered into an interest rate swap contract with BNP Paribas on December 4, 2008 in order to hedge the variable interest rate on the non-recourse long-term debt and minimize the LLC’s risk of interest rate fluctuation. The interest rate swap contract fixed the interest rate of the debt at 3.85% per year.

As of December 31, 2012 and 2011, the LLC had capitalized debt financing costs of $22,434 and $75,456, respectively. For the years ended December 31, 2012 and 2011, the LLC recognized interest expense from amortization of debt financing costs of $53,022 and $81,109, respectively.

The aggregate maturities of non-recourse long-term debt over the next year were $7,049,880 at December 31, 2012.

(5) Transactions with Related Parties

In the ordinary course of operations, the LLC’s Members will pay certain operating and general and administrative expenses on behalf of the LLC in proportion to their membership interests.

The financial condition and results of operations of the LLC, as reported, are not necessarily indicative of the results that would have been reported had the LLC operated completely independently.

ICON Eagle Carina Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

(6) 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. 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.

Interest Rate Risk

The LLC’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements on its variable non-recourse debt. The LLC’s strategy to accomplish these objectives 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 making fixed rate interest payments over the life of the agreement without exchange of the underlying notional amount.

Designated Derivative

As of December 31, 2012 and 2011, the LLC had one floating-to-fixed interest rate swap with BNP Paribas that is designated and qualifying as a cash flow hedge with a notional amount of $7,049,880 and $12,305,548, respectively. This interest rate swap matures on November 14, 2013.

For this derivative, the LLC records the gain or loss from the effective portion of changes in the fair value of derivative designated and qualifying as a cash flow hedge in AOCI and such gain or loss is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings and within the same line item on the consolidated statements of comprehensive (loss) income as the impact of the hedged transaction. At December 31, 2012 and 2011, AOCI included accumulated unrealized losses on derivative financial instrument of $72,572 and $190,408, respectively.

The table below presents the fair value of the LLC’s derivative financial instrument as well as its classification within the LLC’s consolidated balance sheets as of December 31, 2012 and 2011:

		Liability Derivative
			December 31,
			2012		2011
		Balance Sheet Location	Fair Value		Fair Value
Derivative designated as hedging instrument:
	Interest rate swap	Derivative financial instrument	$	89,398	$	217,434

The table below presents the effect of the LLC’s derivative financial instrument designated as a cash flow hedging instrument on the consolidated statements of comprehensive (loss) income for the years ended December 31, 2012 and 2011:

ICON Eagle Carina Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

	Derivative		Amount of Gain (Loss)	Location of		Amount of
	Designated as		Recognized in	Gain (Loss) Reclassified		Gain (Loss) Reclassified
	Hedging		AOCI on Derivative	from AOCI into Income		from AOCI into Income
Year Ended	Instrument		(Effective Portion)	(Effective Portion)		(Effective Portion)
December 31, 2012	Interest rate swap	$	(43,762)	Interest expense	$	(161,598)

December 31, 2011	Interest rate swap	$	(120,540)	Interest expense	$	(269,763)

Derivative Risks

As of December 31, 2012 and 2011, the fair value of the derivatives in a liability position was $89,398 and $217,434, respectively. Derivative contracts may contain credit risk related contingent features that can trigger a termination event, such as maintaining specified financial ratios. In the event that the LLC would be required to settle its obligations under the agreements as of December 31, 2012 and 2011, the termination value would be $73,859 and $223,135, respectively.

(7) Fair Value Measurements

Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

· Level 1: Quoted market price available in active markets for identical assets or liabilities as of the reporting date.

· Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

· Level 3: Pricing inputs that are general unobservable and cannot be corroborated by market data.

Financial Assets and Liabilities Measured on a Recurring Basis

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Manager’s assessment, on the LLC’s behalf, of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

The following table summarizes the valuation of the LLC’s material financial liability measured at fair value on a recurring basis as of December 31, 2012 and 2011:

		December 31, 2012
		Level 1		Level 2		Level 3		Total
Liability:
	Derivative financial instrument	$	-	$	89,398	$	-	$	89,398

		December 31, 2011
		Level 1		Level 2		Level 3		Total
Liability:
	Derivative financial instrument	$	-	$	217,434	$	-	$	217,434

ICON Eagle Carina Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

The LLC’s derivative financial instruments are valued using models based on readily observable and unobservable market parameters for all substantial terms of the LLC’s derivative financial instruments and are classified within Level 2. As permitted by the accounting pronouncements, the LLC uses market prices and pricing models for fair value measurements of its derivative financial instruments. The LLC utilizes a model that incorporates common market pricing methods, including a spread measurement to the Treasury yield curve or interest rate swap curve as well as underlying characteristics of the particular contract. Interest rate swaps are modeled by incorporating such factors as the term to maturity, Treasury curve, LIBOR rates, and the payment rates on the fixed portion of the interest rate swaps. Thereafter, the LLC compares third party quotations received to its own estimate of fair value to evaluate for reasonableness.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table summarizes the valuation of the LLC’s material non-financial assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2012:

										Impairment Loss
		Carrying Value at	Fair Value at Impairment Date							for the Year Ended
		December 31, 2012		Level 1		Level 2		Level 3		December 31, 2012
Leased equipment at cost	$	13,927,719	$	-	$	-	$	13,927,719	$	7,803,781

No impairment loss was recorded during the year ended December 31, 2011.

The LLC’s non-financial assets were valued using inputs that are generally unobservable and cannot be corroborated by market data and are classified within Level 3. The LLC used projected cash flows discounted at rates ranging between 8% and 10% per year for fair value measurements of its non-financial assets.

(8) Concentration of Risk

In the ordinary course of business, the LLC is exposed to two significant types of economic risk: credit and market. Credit risk is the risk of a lessee, borrower or other counterparty’s inability or unwillingness to make contractually required payments.

Market risk reflects the change in the value of debt instruments, derivatives and credit facilities due to changes in interest rate spreads or other market factors. The LLC believes that the carrying value of its investments and derivative obligations is reasonable, taking into consideration these risks, along with estimated collateral values, payment history and other relevant information.

For the years ended December 31, 2012 and 2011, the LLC had one lessee that accounted for 100% of total rental income.

As of December 31, 2012 and 2011, the LLC had one lessee that accounted for 93.0% and 97.3% of total assets, respectively.

As of December 31, 2012 and 2011, the LLC had one lender that accounted for 89.3% and 92.5% of total liabilities, respectively.

ICON Eagle Corona Holdings, LLC
(A Marshall Islands Limited Liability Company)
Consolidated Balance Sheets

				December 31,
				2012		2011
						(unaudited)
Assets
Current assets:
	Cash			$	92,426	$	-
Non-current assets:
	Leased equipment at cost (less accumulated depreciation
		of $18,528,018 and $10,843,474, respectively)			13,992,131		31,761,128
	Other non-current assets				524,913		505,435
		Total non-current assets			14,517,044		32,266,563
Total assets				$	14,609,470	$	32,266,563


Liabilities and Members’ Equity
Current liabilities:
	Current portion of non-recourse long-term debt			$	7,635,035	$	5,365,595
	Derivative financial instrument				108,129		260,828
	Deferred revenue				793,932		860,256
	Accrued expense				41,724		71,047
			Total current liabilities		8,578,820		6,557,726
Non-current liabilities:
	Non-recourse long-term debt, less current portion				-		7,635,035
Total liabilities					8,578,820		14,192,761
Members’ equity:
	Members' equity				6,118,877		18,303,216
	Accumulated other comprehensive loss				(88,227)		(229,414)
	Total members' equity				6,030,650		18,073,802
Total liabilities and members’ equity				$	14,609,470	$	32,266,563

See accompanying notes to consolidated financial statements.

ICON Eagle Corona Holdings, LLC
(A Marshall Islands Limited Liability Company)
Consolidated Statements of Comprehensive (Loss) Income

			Years Ended December 31,
			2012		2011
					(unaudited)
Revenue:
	Rental income		$	6,088,824	$	6,088,824
Expenses:
	Interest			504,166		733,884
	Depreciation			7,684,544		3,611,285
	Impairment loss			10,084,453		-
		Total expenses		18,273,163		4,345,169
Net (loss) income				(12,184,339)		1,743,655

Other comprehensive income:
	Change in fair value of derivative financial instrument			141,187		176,965
		Total other comprehensive income		141,187		176,965
Comprehensive (loss) income			$	(12,043,152)	$	1,920,620

See accompanying notes to consolidated financial statements.

ICON Eagle Corona Holdings, LLC
(A Marshall Islands Limited Liability Company)
Consolidated Statements of Cash Flows

				Years Ended December 31,
				2012		2011
						(unaudited)
Cash flows from operating activities:
	Net (loss) income			$	(12,184,339)	$	1,743,655
	Adjustments to reconcile net (loss) income to net cash provided by operating activities:
			Rental income paid directly to lender by lessee		(5,853,839)		(5,849,869)
			Depreciation		7,684,544		3,611,285
			Interest expense on non-recourse financing paid directly to lender by lessee		447,409		683,474
			Interest expense from amortization of debt financing costs		56,758		85,605
			Impairment loss		10,084,453		-
	Changes in operating assets and liabilities:
		Deferred revenue			(66,324)		(66,324)
		Other asset			(76,236)		(207,826)
Net cash provided by operating activities					92,426		-
Net increase in cash					92,426		-
Cash, beginning of year					-		-
Cash, end of year				$	92,426	$	-


Supplemental disclosure of non-cash financing activities:
	Principal and interest on non-recourse long-term debt paid directly to lenders by lessee			$	5,853,839	$	5,849,869

See accompanying notes to consolidated financial statements.

ICON Eagle Corona Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

(1) Organization

ICON Eagle Corona Holdings, LLC (the “LLC”) was formed on December 3, 2008 as a Marshall Islands limited liability company, and commenced operations on December 18, 2008. The LLC is a joint venture between two affiliated entities, ICON Income Fund Ten, LLC (“Fund Ten”) and ICON Leasing Fund Twelve, LLC (“Fund Twelve”) (collectively the “LLC’s Members”). Fund Ten and Fund Twelve have ownership interests of 35.7% and 64.3%, respectively, in the LLC’s profits, losses and cash distributions. The LLC is engaged in one business segment, the business of purchasing business-essential equipment and corporate infrastructure and leasing to businesses.

The manager of the LLC’s Members is ICON Capital, LLC, a Delaware limited liability company formerly known as ICON Capital Corp. (the “Manager”). The Manager manages and controls the business affairs of the LLC, including, but not limited to, the equipment leases and other financing transactions into which the LLC enters.

(2) Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

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

The LLC evaluated all subsequent events through March 19, 2013, the date the consolidated financial statements were issued.

Cash

Cash includes cash in banks. Restricted cash of $500,000 and approximately $424,000 is included in other assets in the LLC’s consolidated balance sheets at December 31, 2012 and 2011, respectively.

Leased Equipment at Cost

ICON Eagle Corona Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

Depreciation

Asset Impairments

The significant assets in the LLC’s portfolio are periodically reviewed, no less frequently than annually or when indicators of impairment exist, to determine whether events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss will be recognized only if the carrying value of a long-lived asset is not recoverable and exceeds its fair market value. If there is an indication of impairment, the LLC will estimate the future cash flows (undiscounted and without interest charges) expected from the use of the asset and its eventual disposition. Future cash flows are the future cash inflows expected to be generated by an asset less the future outflows expected to be necessary to obtain those inflows. If an impairment is determined to exist, the impairment loss will be measured as the amount by which the carrying value of a long-lived asset exceeds its fair value and recorded in the consolidated statements of comprehensive (loss) income in the period the determination is made.

The events or changes in circumstances that generally indicate that an asset may be impaired are (i) the estimated fair value of the underlying equipment is less than its carrying value or (ii) the lessee is experiencing financial difficulties and it does not appear likely that the estimated proceeds from the disposition of the asset will be sufficient to satisfy the residual position in the asset and, if applicable, the remaining obligation to the non-recourse lender. Generally in the latter situation, the residual position relates to equipment subject to third-party non-recourse debt where the lessee remits its rental payments directly to the lender and the LLC does not recover its residual position until the non-recourse debt is repaid in full. The preparation of the undiscounted cash flows requires the use of assumptions and estimates, including the level of future rents, the residual value expected to be realized upon disposition of the asset, estimated downtime between re-leasing events and the amount of releasing costs. The Manager’s review for impairment includes a consideration of the existence of impairment indicators including third-party appraisals, published values for similar assets, recent transactions for similar assets, adverse changes in market conditions for specific asset types and the occurrence of significant adverse changes in general industry and market conditions that could affect the fair value of the asset.

Revenue Recognition

For operating leases, rental income is recognized on a straight-line basis over the lease term. Billed operating lease receivables are included in accounts receivable until collected or written off. The difference between the timing of the cash received and the income recognized on a straight-line basis is recognized as either deferred revenue or other current assets, as appropriate.

Allowance for Doubtful Accounts

ICON Eagle Corona Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

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 the LLC’s 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. 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 accounts for derivative transactions as either assets or liabilities on the consolidated balance sheets and measures those instruments at fair value. Changes in the fair value of such instruments are recognized immediately in earnings unless certain criteria are met. 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.

Initial Direct Costs

Income Taxes

The LLC is taxed as a partnership for federal and State income tax purposes. Therefore, no provision for federal and State income taxes has been recorded since the liability for such taxes is the responsibility of each of the individual members rather than the LLC. The LLC’s federal, State and local income tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the applicable taxing authorities. All penalties and interest associated with income taxes are included in general and administrative expense on the consolidated statements of comprehensive (loss) income. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. The LLC did not have any uncertain tax positions nor did it have any unrecognized tax benefits as of the periods presented herein.

Use of Estimates

(3) Leased Equipment at Cost

Leased equipment at cost consisted of the following:

ICON Eagle Corona Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

	December 31,
	2012		2011
Marine - crude oil tanker	$	32,520,149	$	42,604,602
Less: accumulated depreciation		18,528,018		10,843,474
Leased equipment at cost, less accumulated depreciation	$	13,992,131	$	31,761,128

Depreciation expense was $7,684,544 and $3,611,285 for the years ended December 31, 2012 and 2011, respectively.

On December 18, 2008, the Singaporean flag vessel Eagle Corona was purchased for $41,270,000, of which $28,000,000 was financed through non-recourse debt from BNP Paribas and DVB Bank SE. The Eagle Corona is subject to an 84-month bareboat charter with AET Inc. Limited that expires on November 14, 2013.

In connection with the LLC’s annual impairment review process for the year ended December 31, 2011, the LLC’s Manager had changed the end of lease residual value relating to the Eagle Corona. Accordingly, effective January 1, 2012, the remaining net book value of the Eagle Corona will be depreciated over the remaining term of the lease using the straight-line method to the reduced residual value.

In connection with the LLC’s annual impairment review process for the year ended December 31, 2012, the LLC’s Manager concluded that the carrying value of the Eagle Corona was not recoverable and determined that an impairment existed. That determination was based on a forecast of undiscounted contractual cash flows for the remaining term of the lease and non-contractual cash flows based on a weighted average probability of alternate opportunities of re-leasing or disposing of the vessel. Projected future scrap rates are a critical component of that analysis as well as negotiated rates related to re-leasing of the vessel. Based on the Manager’s review of the Eagle Corona, the net book value of the Eagle Corona exceeded the estimated undiscounted cash flows and exceeded the fair value and, as a result, the LLC recognized an impairment loss of approximately $10,084,000 for the year ended December 31, 2012.

Aggregate annual minimum future rentals receivable from the LLC’s non-cancelable leases over the next year were $4,516,875 at December 31, 2012.

(4) Non-Recourse Long-Term Debt

On December 18, 2008, the LLC borrowed $28,000,000 in connection with the acquisition of the Eagle Corona. The non-recourse long-term debt obligation matures on November 14, 2013 and accrues interest at the London Interbank Offered Rate (“LIBOR”) plus a 1.75% per year margin. The lender has a security interest in the Eagle Corona and an assignment of the charter hire. The LLC paid and capitalized approximately $422,000 in debt financing costs.

As of December 31, 2012 and 2011, the LLC had capitalized net debt financing costs of $24,913 and $81,671, respectively. For the years ended December 31, 2012 and 2011, the LLC recognized interest expense from amortization of debt financing costs of $56,758 and $85,605, respectively.

The aggregate maturities of non-recourse long-term debt over the next year were $7,635,035 at December 31, 2012.

(5) Transactions with Related Parties

In the ordinary course of operations, the LLC’s Members will pay certain operating and general and administrative expenses on behalf of the LLC in proportion to their membership interests.

The financial condition and results of operations of the LLC, as reported, are not necessarily indicative of the results that would have been reported had the LLC operated completely independently.

ICON Eagle Corona Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

(6) 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. 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.

Interest Rate Risk

The LLC’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements on its variable non-recourse debt. The LLC’s strategy to accomplish these objectives 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 making fixed-rate interest payments over the life of the agreement without exchange of the underlying notional amount.

Designated Derivative

As of December 31, 2012 and 2011, the LLC had one floating-to-fixed interest rate swap with BNP Paribas that is designated and qualifying as a cash flow hedge with notional amounts of $7,635,035 and $13,000,630, respectively. This interest rate swap matures on November 14, 2013.

At December 31, 2012 and 2011, AOCI included accumulated unrealized losses on derivative financial instruments of $88,227 and $229,414, respectively.

The table below presents the fair value of the LLC’s derivative financial instrument as well as its classification within the LLC’s consolidated balance sheets as of December 31, 2012 and 2011:

	Liability Derivative
		December 31,
			2012		2011
	Balance Sheet Location	Fair Value		Fair Value

Derivative designated as hedging instrument:

Interest rate swap	Derivative financial instrument	$	108,129	$	260,828

ICON Eagle Corona Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

	Derivative		Amount of Gain (Loss)	Location of Gain (Loss)		Amount of
	Designated as		Recognized in AOCI on	Reclassified		Gain (Loss) Reclassified
	Hedging		Derivatives	from AOCI into Income		from AOCI into Income
Year Ended	Instrument		(Effective Portion)	(Effective Portion)		(Effective Portion)
December 31, 2012	Interest rate swap	$	(48,435)	Interest expense	$	(189,622)

December 31, 2011	Interest rate swap	$	(132,366)	Interest expense	$	(309,331)

Derivative Risks

The LLC manages exposure to possible defaults on derivatives 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 only with banks of internationally acknowledged standing, the LLC considers the counterparty risk to be remote.

As of December 31, 2012 and 2011, the fair value of the derivative in a liability position was $108,129 and $260,828, respectively. Derivative contracts may contain credit risk related contingent features that can trigger a termination event, such as maintaining specified financial ratios. In the event that the LLC would be required to settle its obligations under the agreements as of December 31, 2012 and 2011, the termination value would be $89,808 and $236,638, respectively.

(7) Fair Value Measurements

Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

· Level 1: Quoted market price available in active markets for identical assets or liabilities as of the reporting date.

· Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

· Level 3: Pricing inputs that are generally unobservable and cannot be corroborated by market data.

Financial Assets and Liabilities Measured on a Recurring Basis

The following table summarizes the valuation of the LLC’s material financial liability measured at fair value on a recurring basis as of December 31, 2012 and 2011:

ICON Eagle Corona Holdings, LLC

(A Marshall Islands Limited Liability Company)

Notes to Consolidated Financial Statements

December 31, 2012

		December 31, 2012
		Level 1		Level 2		Level 3		Total
Liability:
	Derivative financial instrument	$	-	$	108,129	$	-	$	108,129

		December 31, 2011
		Level 1		Level 2		Level 3		Total
Liability:
	Derivative financial instrument	$	-	$	260,828	$	-	$	260,828

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table summarizes the valuation of the LLC’s material non-financial assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2012:

									Impairment Loss
	Carrying Value at		Fair Value at Impairment Date						for the Year Ended
	December 31, 2012		Level 1		Level 2		Level 3		December 31, 2012
Leased equipment at cost	$	13,992,131	$	-	$	-	$	13,992,131	$	10,084,453

No impairment loss was recorded during the year ended December 31, 2011.

(8) Concentration of Risk

Market risk reflects the change in the value of debt instruments, derivatives and credit facilities due to changes in interest rate spreads or other market factors. The LLC believes that the carrying value of its investments and derivative obligations is reasonable, taking into consideration these risks, along with estimated collateral values, payment history and other relevant information.

For the years ended December 31, 2012 and 2011, the LLC had one lessee that accounted for 100% of total rental income.

	Page
PART I	1
Item 1. Business	1
Item 1A. Risk Factors	4
Item 1B. Unresolved Staff Comments	4
Item 2. Properties	4
Item 3. Legal Proceedings	4
Item 4. Mine Safety Disclosures	4

PART II	5
Item 5. Market for Registrant’s Securities, Related Security Holder Matters and Issuer Purchases of Equity Securities	5
Item 6. Selected Financial Data	6
Item 7. Manager’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	13
Item 8. Consolidated Financial Statements	14
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	32
Item 9A. Controls and Procedures	32
Item 9B. Other Information	33

PART III	34
Item 10. Directors, Executive Officers of the Registrant’s Manager and Corporate Governance	34
Item 11. Executive Compensation	36
Item 12. Security Ownership of Certain Beneficial Owners and the Manager and Related Security Holder Matters	36
Item 13. Certain Relationships and Related Transactions, and Director Independence	36
Item 14. Principal Accounting Fees and Services	36

PART IV	37
Item 15. Exhibits, Financial Statement Schedules	37
SIGNATURES	76

	Page
Report of Independent Registered Public Accounting Firm	15
Consolidated Balance Sheets	16
Consolidated Statements of Comprehensive Loss	17
Consolidated Statements of Changes in Equity	18
Consolidated Statements of Cash Flows	19
Notes to Consolidated Financial Statements	20
Schedule II – Valuation and Qualifying Accounts	31

ICON Eagle Carina Holdings, LLC
(A Marshall Islands Limited Liability Company)
Consolidated Statements of Changes in Members’ Equity
			Members’ Equity
Balance, December 31, 2010 (unaudited)		$	14,770,888
	Net income (unaudited)		1,548,873
	Change in fair value of derivative financial instrument (unaudited)		149,223
Balance, December 31, 2011 (unaudited)			16,468,984
	Net loss		(9,552,611)
	Change in fair value of derivative financial instrument		117,836
Balance, December 31, 2012		$	7,034,209
See accompanying notes to consolidated financial statements.