UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2003 or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to .

Commission file number 333-71073

IKON Receivables, LLC

(Exact name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of
incorporation or organization)

1738 Bass Road, P.O. Box 9115, Macon, Georgia
(Address of principal executive offices)

23-2990188
(I.R.S. Employer Identification No.)

31208
(Zip Code)

Registrant’s telephone number, including area code: (478) 471-2300

Former name, former address and former fiscal year, if changed since last report: None

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 [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

Registered debt outstanding as of August 12, 2003 was $470,150,049.

The registrant meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing with the reduced format disclosure contemplated thereby.

IKON Receivables, LLC

INDEX*

PART I. FINANCIAL INFORMATION


Item 1. Item 2. Item 4.	Condensed Financial Statements Balance Sheets - June 30, 2003 (unaudited) and September 30, 2002 Statements of Income - Three and nine months ended June 30, 2003 and 2002 (unaudited) Statements of Cash Flows - Nine months ended June 30, 2003 and 2002 (unaudited) Notes to Condensed Financial Statements (unaudited) Management's Discussion and Analysis of Financial Condition and Results of Operations Controls and Procedures

PART II. OTHER INFORMATION


Item 6.	Exhibits and Reports on Form 8-K

SIGNATURES

* All amounts contained in this quarterly report on Form 10-Q are in thousands unless otherwise noted.

FORWARD-LOOKING INFORMATION

This Report includes or incorporates by reference information which may constitute forward-looking statements within the meaning of the federal securities laws. Although IKON Receivables, LLC (the “Company”) believes the expectations contained in such forward-looking statements are reasonable, it can give no assurances that such expectations will prove correct. Such forward-looking information is based upon management’s current plans or expectations and is subject to a number of risks and uncertainties that could significantly affect current plans, anticipated actions and the future financial condition and results of IKON Office Solutions, Inc. (“IKON”) and IOS Capital, LLC (“IOSC”). These risks and uncertainties, which apply to the Company, IOSC and IKON, include, but are not limited to, risks and uncertainties relating to: factors which may affect the Company’s ability to collect amounts due from lessees in order to make payments due in connection with the Company’s lease-backed notes (such as lessee defaults or factors impeding recovery efforts); growth opportunities and increasing market share; productivity and infrastructure initiatives; earnings, revenue, cash flow, margin, and cost-savings projections; the effect of competitive pressures on equipment sales; expected savings and lower costs from productivity and infrastructure initiatives; developing and expanding strategic alliances and partnerships; the impact of e-commerce and e-procurement initiatives; the implementation of e-IKON; anticipated growth rates in the digital and color equipment and outsourcing industries; the effect of foreign currency exchange risk; the reorganization of IKON’s business segments and the anticipated benefits of operational synergies related thereto; and IKON’s ability to finance its current operations and its growth initiatives. As a consequence of these and other risks and uncertainties, current plans, anticipated actions and future financial condition and results may differ materially from those expressed in any forward-looking statements made by or on behalf of the Company, IOSC or IKON.

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

IKON Receivables, LLC
Balance Sheets

	June 30, 2003 (unaudited)			September 30, 2002

Assets
Investment in leases:
Finance lease receivables	$	806,052		$	1,518,632
Less: Unearned income		(94,756)			(202,312)

		711,296			1,316,320

Cash		1			1
Restricted cash		68,031			83,084
Accounts receivable		23,229			39,788
Prepaid expenses and other assets		1,301			2,905
Deferred tax assets		8,592			15,353

Total Assets	$	812,450		$	1,457,451


Liabilities and Member's Deficit
Liabilities:
Accrued expenses	$	59,959		$	41,188
Lease-backed notes		568,636			1,054,042
Deferred tax liabilities		256,067			526,528

Total Liabilities		884,662			1,621,758


Commitments and contingencies

Member's deficit:
Contributed capital		525,783			467,286
Retained deficit		(585,107	)		(608,564	)
Accumulated other comprehensive loss		(12,888	)		(23,029	)

Total Member's Deficit		(72,212	)		(164,307	)

Total Liabilities and Member's Deficit	$	812,450		$	1,457,451

See notes to condensed financial statements.

IKON Receivables, LLC
Statements of Income
(unaudited)

	Three Months Ended June 30,					Nine Months Ended June 30,

		2003		2002		2003		2002

Revenues
Lease finance income	$	21,946	$	46,089	$	78,504	$	155,554
Interest income on restricted cash		131		323		502		1,458

		22,077		46,412		79,006		157,012


Expenses
Interest		10,688		21,934		38,015		74,833
General and administrative		1,214		2,539		4,340		8,669


		11,902		24,473		42,355		83,502


Income before taxes on income		10,175		21,939		36,651		73,510

Taxes on income		2,604		8,776		13,194		29,404

Net income before cumulative effect of a
change in accounting principle		7,571		13,163		23,457		44,106

Cumulative effect of a change in accounting
principle (Note 6)								(843,752	)

Net income (loss)	$	7,571	$	13,163	$	23,457	$	(799,646	)

See notes to condensed financial statements.

IKON Receivables, LLC
Statements of Cash Flows
(unaudited)

	Nine Months Ended June 30,

		2003			2002

Cash Flows from Operating Activities
Net income (loss)	$	23,457		$	(799,646	)
Additions (deductions) to reconcile net income (loss) to net cash
provided by operating activities:
Amortization		1,720			2,590
Cumulative effect of a change in accounting principle					843,752
Provision for income taxes		13,194			29,404
Changes in operating assets and liabilities:
Decrease in accounts receivable		16,559			23,290
Increase in prepaid expenses and other assets		(116	)		(54	)
Decrease in accrued expenses		35,673			(1,915	)

Net cash provided by operating activities		90,487			97,421


Cash Flows from Investing Activities
Investments in leases:
Collections, net of financing income		455,342			635,841

Net cash provided by investing activities		455,342			635,841


Cash Flows from Financing Activities
Payments on lease-backed notes		(485,406	)		(568,352	)
Decrease in restricted cash		15,053			27,192
Capital distributed to IOS Capital, LLC ("IOSC")		(75,476	)		(192,102	)

Net cash used in financing activities		(545,829	)		(733,262	)


Net increase in cash		-			-


Cash at beginning of year		1			1

Cash at end of period	$	1		$	1


Supplemental financing activities:

Non-cash capital contributions	$	133,973		$	347,258

Interest paid	$	38,015		$	53,979

See notes to condensed financial statements.

IKON Receivables, LLC
Notes to Condensed Financial Statements
(unaudited)

Note 1: Basis of Presentation

The accompanying unaudited condensed financial statements of IKON Receivables, LLC (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2002. Certain prior year amounts have been reclassified to conform with the current year presentation.

Note 2: Capital Contributions

In fiscal 2003, IOSC made non-cash capital distributions to the Company of $133,973 of office equipment leases or contracts and related assets, net of deferred taxes, and the reversal of current income tax liability.

Note 3: Lease-Backed Notes

The Company repaid $485,406 of lease-backed notes during the nine months ended June 30, 2003.

Note 4: Comprehensive Income (Loss)

Total comprehensive income (loss) is as follows:

	Three Months Ended June 30,		Nine Months Ended June 30,

	2003	2002	2003	2002

Net income (loss)	$ 7,571	$ 13,163	$ 23,457	$ (799,646)
Gain (loss) on derivative financial instruments, net
of tax expense of: $2,171 and $4,411 for the
three months ended June 30, 2003 and 2002,
respectively; $6,761 and $6,825 for the nine months
ended June 30, 2003 and 2002, respectively	3,257	(1,608)	10,141	8,629

Total comprehensive income (loss)	$ 10,828	$ 11,555	$ 33,598	$ (791,017)

Note 5: Financial Instruments

As of June 30, 2003, all of the Company’s derivatives designated as hedges are interest rate swaps which qualify for evaluation using the “short cut” method for assessing effectiveness. As such, there is an assumption of no ineffectiveness. The Company uses interest rate swaps to fix the interest rates on its variable rate classes of lease-backed notes, which results in a lower cost of capital than if we had issued fixed rate notes. During the nine months ended June 30, 2003, unrealized gains totaling $10,141 after taxes, were recorded in accumulated other comprehensive loss.

Note 6: Income Taxes

The Company is classified as a single-member limited liability corporation (“LLC”) and, as such, is disregarded as an entity separate from its owners for income tax purposes. During fiscal 2002, the Company became aware that the predominant practice for single-member LLCs is to provide for income taxes in their separate financial statements, and concluded that this is a more informative presentation. On April 1, 2002, the Company changed its accounting policy to a preferable method and began recording income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). The Company and IKON Receivables Funding, Inc. (the “Sole Member”) are included in the consolidated tax return of IKON Office Solutions, Inc. (“IKON”) and, for purposes of applying SFAS 109, are allocated current and deferred income taxes on a separate return basis. Currently payable/receivable income taxes are settled in accordance with an informal tax sharing agreement with IKON and the Sole Member.

The change in accounting for income taxes was retroactively adopted as of October 1, 2001, the first day of the fiscal year of the change. The $843,752 cumulative effect of the change on prior years is included in income for the nine months ended June 30, 2002.

The net investments in leases represents the uncollected contractual cash flow of the leases that were contributed to the Company by the Sole Member in the form of contributed capital. The tax basis and related income tax benefits attributable to the leases are retained by the Sole Member. Therefore, the effect of the change in principle resulted in a deferred tax liability of $843,752 at October 1, 2001. The related deferred tax liability is attributed to the difference between the book and tax basis of the net leases outstanding. Because, under the informal tax-sharing agreement the Company is not obligated to reimburse the Sole Member for current income taxes, all reversals of the deferred tax liability to current income taxes payable for the Company are expected to result in additional capital contributions from the Sole Member at the time of the reversal.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Pursuant to General Instruction H(2)(a) of Form 10-Q, the following analysis of the results of operations is presented in lieu of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Three Months Ended June 30, 2003
Compared to the Three Months Ended June 30, 2002

Lease finance income earned on the leases offsets interest expense on the lease-backed notes, amortization of debt issuance costs and the fees charged by IOSC for servicing the leases and providing administrative services to the Company. For the three months ended June 30, 2003 and 2002, income generated from the leases was $21,946 and $46,089, interest income on restricted cash was $131 and $323, while interest expense during the period was $10,688 and $21,934 and administrative expenses were $1,214 and $2,539, respectively. Collections on the lease receivables, net of financing income, were $123,726 and $233,772 and the Company repaid $121,895 and $191,686 of principal on the lease-backed notes for the three months ended June 30, 2003 and 2002, respectively. Taxes on income for the three months ended June 30, 2003 and 2002 were $2,604 and $8,776, respectively. The Company’s effective income tax rate was decreased from 40% to 36% in the quarter ended June 30, 2003, therefore the effective income tax rate was 26% for the three months ended June 30, 2003 and 40% for the three months ended June 30, 2002. The changes described above are directly related to the collections on finance lease receivables and the paydown of the debt from June 30, 2002 to June 30, 2003.

Nine Months Ended June 30, 2003
Compared to the Nine Months Ended June 30, 2002

Lease finance income earned on the leases offsets interest expense on the lease-backed notes, amortization of debt issuance costs and the fees charged by IOSC for servicing the leases and providing administrative services to the Company. For the nine months ended June 30, 2003 and 2002, income generated from the leases was $78,504 and $155,554, interest income on restricted cash was $502 and $1,458, while interest expense during the period was $38,015 and $74,833 and administrative expenses were $4,340 and $8,669, respectively. Collections on the lease receivables, net of financing income, were $455,341 and $635,841 and the Company repaid $485,406 and $568,352 of principal on the lease-backed notes for the nine months ended June 30, 2003 and 2002, respectively. Taxes on income for the nine months ended June 30, 2003 and 2002 were $13,194 and $29,404, respectively. The Company’s effective income tax rate was 36% for the nine months ended June 30, 2003 and 40% for the nine months ended June 30, 2002. The changes described above are directly related to the collections on finance lease receivables and the paydown of the debt from June 30, 2002 to June 30, 2003.

Contractual Obligations

The following summarizes the Company’s significant contractual obligations and commitments as of June 30, 2003:

	Payments due by


Contractual Obligations	Total	June 30, 2004	June 30, 2005

Lease-backed notes	$ 568,636	$ 387,846	$ 180,790

Payments on lease-backed notes generally are made from collections of our finance lease receivables. At June 30, 2003, lease-backed notes were $568,636 and net finance lease receivables were $711,296.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. The Company’s Principal Executive Officer and Principal Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, they have concluded that, as of the evaluation date, the Company’s disclosure controls and procedures are reasonably designed to alert them on a timely basis to material information relating to the Company (including its consolidated subsidiaries) required to be included in its reports filed or submitted under the Exchange Act.

PART II. OTHER INFORMATION

Item 6.

Exhibits and Reports on Form 8-K

a)	Exhibits

	31.1	Certification of Principal Executive Officer of IKON Receivables, LLC pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934

	31.2	Certification of Principal Financial Officer of IKON Receivables, LLC pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934

	32	Certifications of Principal Executive Officer and Principal Financial Officer of IKON Receivables, LLC pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350

b)	Reports on Form 8-K

	None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. This report has also been signed by the undersigned in his capacity as the chief accounting officer of the Registrant.

IKON Receivables, LLC
Date:       August 14, 2003

By:            IKON Receivables Funding, Inc.,
                 As Manager

By:           /s/ Harry G. Kozee
Name:      Harry G. Kozee
Title:        Vice President - Finance (Principal Financial Officer)

Form 10-Q

IKON Receivables, LLC

IKON Receivables, LLC

INDEX*

PART I. FINANCIAL INFORMATION

PART II. OTHER INFORMATION

SIGNATURES

FORWARD-LOOKING INFORMATION

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

IKON Receivables, LLC Balance Sheets

IKON Receivables, LLCStatements of Income(unaudited)

IKON Receivables, LLCStatements of Cash Flows(unaudited)

IKON Receivables, LLC Notes to Condensed Financial Statements (unaudited)

Three Months Ended June 30, 2003 Compared to the Three Months Ended June 30, 2002

Nine Months Ended June 30, 2003 Compared to the Nine Months Ended June 30, 2002

Contractual Obligations

Item 4. Controls and Procedures

IKON Receivables, LLC
Balance Sheets

IKON Receivables, LLC
Statements of Income
(unaudited)

IKON Receivables, LLC
Statements of Cash Flows
(unaudited)

IKON Receivables, LLC
Notes to Condensed Financial Statements
(unaudited)

Three Months Ended June 30, 2003
Compared to the Three Months Ended June 30, 2002

Nine Months Ended June 30, 2003
Compared to the Nine Months Ended June 30, 2002

IKON RECEIVABLES LLC 10-Q