XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Feb. 28, 2017	Jun. 30, 2016
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Entity Registrant Name	ATEL CAPITAL EQUIPMENT FUND IX LLC
Entity Central Index Key	0001125264
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	No
Entity Public Float			$ 0
Entity Units Outstanding		12,055,016

XML

Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents	$ 3,421	$ 2,240
Accounts receivable, net	105	533
Prepaid expenses and other assets	69	66
Investment in securities	5	5
Investments in equipment and leases, net	4,198	11,127
Total assets	7,798	13,971
Accounts payable and accrued liabilities:
Managing Member	24	4
Other	297	211
Deposits due lessees	4
Non-recourse debt		3,921
Unearned operating lease income	112	105
Total liabilities	437	4,241
Commitments and contingencies
Members' capital:
Managing Member
Other Members	7,361	9,730
Total Members' capital	7,361	9,730
Total liabilities and Members' capital	$ 7,798	$ 13,971

XML

Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Balance Sheets [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 2	$ 1
Investments in equipment and leases, accumulated depreciation	$ 23,382	$ 23,772

XML

Statements of Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Leasing and lending activities:
Operating leases	$ 2,626	$ 3,830
Direct financing leases	1,013	1,867
Interest on notes receivable		22
Gain on sales of lease assets and early termination of notes receivable	1,379	184
Unrealized loss on value adjustment for warrants		(125)
Gain on sales or dispositions of investment in securities	5	94
Other revenue	22	105
Total revenues	5,045	5,977
Expenses:
Depreciation of operating lease assets	440	899
Asset management fees to Managing Member	218	296
Cost reimbursements to Managing Member and/or affiliates	395	517
(Reversal of) provision for credit losses	1	(6)
Impairment losses		132
Amortization of initial direct costs	2	6
Other management fees	29	26
Interest expense	112	395
Professional fees	114	123
Outside services	81	59
Insurance	47	50
Marine vessel maintenance and other operating costs	109	17
Railcar and equipment maintenance	127	128
Franchise fees and state taxes	42	68
Storage fees	52	47
Other	100	125
Total operating expenses	1,869	2,882
Other expense, net	(7)	(4)
Net income	3,169	3,091
Net income:
Managing Member	415	391
Other Members	2,754	2,700
Net income	$ 3,169	$ 3,091
Net income per Limited Liability Company Unit (Other Members)	$ 0.23	$ 0.22
Weighted average number of Units outstanding	12,055,016	12,055,016

XML

Statements of Changes in Members' Capital - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Beginning Balance (in units)	12,055,016
Beginning Balance	$ 9,730	$ 11,852
Distributions to Other Members	(5,123)	(4,822)
Distributions to Managing Member	(415)	(391)
Net income	$ 3,169	$ 3,091
Ending Balance (in units)	12,055,016	12,055,016
Ending Balance	$ 7,361	$ 9,730
Other Members [Member]
Beginning Balance (in units)	12,055,016	12,055,016
Beginning Balance	$ 9,730	$ 11,852
Distributions to Other Members	(5,123)	(4,822)
Net income	$ 2,754	$ 2,700
Ending Balance (in units)	12,055,016	12,055,016
Ending Balance	$ 7,361	$ 9,730
Managing Member [Member]
Distributions to Managing Member	(415)	(391)
Net income	$ 415	$ 391

XML

Statements of Changes in Members' Capital (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Statements of Changes in Members' Capital [Abstract]
Distributions to Other Members, per unit	$ 0.42	$ 0.40

XML

Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Operating activities:
Net income	$ 3,169	$ 3,091
Adjustment to reconcile net income to cash provided by operating activities:
Gain on sales of lease assets and early termination of notes receivable	(1,379)	(184)
Gain on sales or dispositions of investment in securities	(5)	(94)
Unrealized loss on value adjustment for warrants		125
Depreciation of operating lease assets	440	899
Amortization of initial direct costs	2	6
(Reversal of) provision for credit losses	1	(6)
Impairment losses		132
Changes in operating assets and liabilities:
Accounts receivable	427	37
Prepaid expenses and other assets	(3)	(10)
Accounts payable, Managing Member	20	(171)
Accounts payable, other	86	4
Deposits due lessees	4
Unearned operating lease income	7	(95)
Net cash provided by operating activities	2,769	3,734
Investing activities:
Proceeds from sales of lease assets and early termination of notes receivable	5,193	690
Proceeds from sales or dispositions of investment in securities	5	94
Payments of initial direct costs	(1)
Principal payments received on direct financing leases	2,674	2,586
Principal payments received on notes receivable		332
Net cash provided by investing activities	7,871	3,702
Financing activities:
Repayments of non-recourse debt	(3,921)	(4,616)
Net cash used in financing activities	(9,459)	(9,829)
Net increase (decrease) in cash and cash equivalents	1,181	(2,393)
Cash and cash equivalents at beginning of year	2,240	4,633
Cash and cash equivalents at end of year	3,421	2,240
Supplemental disclosures of cash flow information:
Cash paid during the year for interest	134	420
Cash paid during the year for taxes	47	70
Other Members [Member]
Operating activities:
Net income	2,754	2,700
Financing activities:
Distributions to Members	(5,123)	(4,822)
Managing Member [Member]
Operating activities:
Net income	415	391
Financing activities:
Distributions to Members	$ (415)	$ (391)

XML

Organization and Limited Liability Company Matters

12 Months Ended

Dec. 31, 2016

Organization and Limited Liability Company Matters [Abstract]

Organization and Limited Liability Company Matters

1.Organization and Limited Liability Company matters:

ATEL Capital Equipment Fund IX, LLC (the “Company” or the “Fund”) was formed under the laws of the State of California on September 27, 2000 for the purpose of engaging in the sale of limited liability company investment units and acquiring equipment to engage in equipment leasing, lending and sales activities, primarily in the United States. The Managing Member of the Company is ATEL Financial Services, LLC (“AFS”), a California limited liability company. The Company may continue until December 31, 2020. Contributions in the amount of $600 were received as of December 31, 2000, $100 of which represented AFS’s continuing interest, and $500 of which represented the Initial Member’s capital investment.

The Company conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. On February 21, 2001, subscriptions for the minimum number of Units (120,000, representing $1.2 million) had been received (excluding subscriptions from Pennsylvania investors) and AFS requested that the subscriptions be released to the Company. On that date, the Company commenced operations in its primary business (acquiring equipment to engage in equipment leasing, lending and sales activities). As of April 3, 2001, the Company had received subscriptions for 753,050 Units ($7.5 million), thus exceeding the $7.5 million minimum requirement for Pennsylvania, and AFS requested that the remaining funds in escrow (from Pennsylvania investors) be released to the Company.

As of January 15, 2003, the offering was terminated. As of that date, the Company had received subscriptions for 12,065,266 Units ($120.7 million). Subsequent to January 15, 2003, Units totaling 10,250 were rescinded or repurchased and funds returned to investors (net of distributions paid and allocated syndication costs, as applicable). As of December 31, 2016,  12,055,016 Units remain issued and outstanding.

The Company’s principal objectives have been to invest in a diversified portfolio of equipment that (i) preserves, protects and returns the Company’s invested capital; (ii) generates regular distributions to the members of cash from operations and cash from sales or refinancing, with any balance remaining after certain minimum distributions to be used to purchase additional equipment during the reinvestment period (“Reinvestment Period”) (defined as six full years following the year the offering was terminated), which ended on December 31, 2009 and (iii) provides additional distributions following the Reinvestment Period and until all equipment has been sold. The Company is governed by the Limited Liability Company Operating Agreement (“Operating Agreement”), as amended. On January 1, 2010, the Company commenced liquidation phase activities pursuant to the guidelines of the Operating Agreement.

Pursuant to the terms of the Operating Agreement, AFS receives compensation and reimbursements for services rendered on behalf of the Company (See Note 7). The Company is required to maintain reasonable cash reserves for working capital, the repurchase of Units and contingencies. The repurchase of Units is solely at the discretion of AFS.

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2016

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2.Summary of significant accounting policies:

Basis of presentation:

The accompanying balance sheets as of December 31, 2016 and 2015, and the related statements of income, changes in members’ capital, and cash flows for the years then ended, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts may have been reclassified to conform to the current year presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data.

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after December 31, 2016, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements.

Cash and cash equivalents:

Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities ofninety days or less.

Use of estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimates relate primarily to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes and determination of the allowance for doubtful accounts.

Accounts receivable:

Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are due to the Company. Allowances for doubtful accounts are typically established based on historical charge off and collection experience and the collectability of specifically identified lessees and invoiced amounts. Accounts receivable deemed uncollectible are charged off to the allowance on a specific identification basis. Amounts recovered that were previously written-off are recorded as other income in the period received.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company generally places the majority of its cash deposits in noninterest-bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Funds’ cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating and direct financing leases or notes receivable.

Equipment on operating leases and related revenue recognition:

Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with ASC 840-20-35-3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell (ASC 360-10-35-43).

The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize anyappropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized.

Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet.

Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis.

The Company may earn revenues from its marine vessel based on charter utilization of the vessel or a fixed term lease. When the vessel is chartered, contingent rentals and the associated expenses are recorded when earned and/or incurred. From time to time, the Company incurs “drydocking” costs on its vessel. Drydocking costs include labor and material costs related to refurbishing, overhauling and/or replacing engine and other major mechanical components of the vessel, hull maintenance and other repairs that bring the vessel into seaworthy compliance with U.S. marine codes in order to have it certified as available for charter. Such drydocking costs are capitalized and added to the equipment cost and depreciated over the period between scheduled drydockings, which generally occur every 24 to 30 months.

Direct financing leases and related revenue recognition:

Income from direct financing lease transactions is reported using the financing method of accounting, in which the Company’s investment in the leased property is reported as a receivable from the lessee to be recovered through future rentals. The interest income portion of each rental payment is calculated so as to generate a constant rate of return on the net receivable outstanding.

Allowances for losses on direct financing leases are typically established based on historical charge off and collection experience and the collectability of specifically identified lessees and billed and unbilled receivables. Direct financing leases are charged off to the allowance as they are deemed uncollectible.

Direct financing leases are generally placed in a non-accrual status (i.e., no revenue is recognized) and deemed impaired when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of all direct finance lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related direct financing leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, all payments received are applied only against outstanding principal balances.

Notes receivable, unearned interest income and related revenue recognition:

The Company records all future payments of principal and interest on notes as notes receivable which is then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports only the net amount of principal due on the balance sheet. The unearned interest is recognized over the term of the note and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Any fees or costs related to notes receivable are recorded as part of the net investment in notes receivable and amortized over the term of the loan.

Allowances for losses on notes receivable are typically established based on historical charge off and collection experience and the collectability of specifically identified borrowers and billed and unbilled receivables. Notes are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the note agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. If it is determined that a loan is impaired with regard to scheduled payments, the Company will perform an analysis of the note to determine if an impairment valuation reserve is necessary. This analysis considers the estimated cash flows from the note, or the collateral value of the property underlying the note when note repayment is collateral dependent. Any required valuation reserve is charged to earnings when determined; and notes are charged off to the allowance for losses as they are deemed uncollectible.

Notes receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with note payments outstanding less than 90 days. Based upon management’s judgment, notes may be placed in a non-accrual status. Notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable.Until such time, all payments received are applied only against outstanding principal balances.

Initial direct costs:

The Company capitalizes initial direct costs (“IDC”) associated with the origination and funding of lease assets and investments in notes receivable. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease and loan originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease (or note by note) basis based on actual contract term using a straight-line method for operating leases and the effective interest rate method for direct financing leases and notes receivable. Upon disposal of the underlying lease or loan assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases or notes receivable that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense.

Acquisition expense:

Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses and miscellaneous expenses related to the selection and acquisition of equipment which are reimbursable to the Managing Member under the terms of the Operating Agreement. As the costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred.

Asset valuation:

Recorded values of the Company’s leased asset portfolio are reviewed each quarter to confirm the reasonableness of established residual values and to determine whether there is indication that an asset impairment might have taken place.The Company uses a variety of sources and considers many factors in evaluating whether the respective book values of its assets are appropriate. In addition, the company may direct a residual value review at any time if it becomes aware of issues regarding the ability of a lessee to continue to make payments on its lease contract. An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than their net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract. 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. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date. Upward adjustments for impairments recognized in prior periods are not made in any circumstances.

Segment reporting:

The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States.

The Company’s principal decision makers are the Managing Member’s Chief Executive Officer and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas.

The primary geographic regions in which the Company seeks leasing and lending opportunities are North America and Europe.

The table below summarizes geographic information relating to the sources, by nation, of the Company’s total revenues for the years ended December 31, 2016 and 2015 and long-lived assets as of December 31, 2016 and 2015 (dollars in thousands):

		For The Year Ended December 31,
		2016	% of Total		2015	% of Total
Revenue
United States	$	5,004	99%	$	5,936	99%
Canada		5	0%		-	0%
United Kingdom		36	1%		41	1%
Total International		41	1%		41	1%
Total	$	5,045	100%	$	5,977	100%
		As of December 31,
		2016	% of Total		2015	% of Total
Long-lived assets
United States	$	4,150	99%	$	11,093	100%
Canada		15	0%		-	0%
United Kingdom		33	1%		34	0%
Total International		48	1%		34	0%
Total	$	4,198	100%	$	11,127	100%

Foreign currency transactions:

Foreign currency transaction gains and losses are reported in the results of operations as “other income” or “other expense” in the period in which they occur. Currently, the Company does not use derivative instruments to hedge its economic exposure with respect to assets, liabilities and firm commitments as the foreign currency transactions risks to date have not been significant. During 2016 and 2015, the Company’s net foreign currency gains (losses) were nominal.

Investment in securities:

        Purchased securities

Purchased securities are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. There were neither impaired securities at December 31, 2016 and 2015 nor investment securities sold or disposed of during the years ended December 31, 2016 and 2015.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet as determined by the Managing Member. During 2015, the Company recorded unrealized losses of $125 thousand, on the fair value adjustment of its warrant holdings. As of December 31, 2015, the Company’s remaining warrants had no fair value amount. Such warrants expired in January 2016. During 2016 and 2015, the Company realized $5 thousand and $94thousand of gains on the net exercise of warrants, respectively.

Unearned operating lease income:

The Company records prepayments on operating leases as a liability under the caption of unearned operating lease income.  The liability is recorded when prepayments are received and recognized as operating lease revenue over the period to which the prepayments relate using a straight-line method.

Income taxes:

The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Revenue Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current income taxes for only those states which levy income taxes on partnerships. For the years ended December 31, 2016 and 2015, the related provision for state income taxes was approximately $42 thousand and $68 thousand, respectively. The Company does not have any entity level uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions and is generally subject to examination by U.S. federal (or state and local) income tax authorities for three years from the filing of a tax return.

The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2016 and 2015 were as follows (in thousands):

		2016		2015
Financial statement basis of net assets	$	7,361	$	9,730
Tax basis of net assets (unaudited)		22,019		18,433
Difference	$	(14,658)	$	(8,703)

The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for syndication costs and differences between the depreciation methods used in the financial statements and the Company’s tax returns.

The following reconciles the net income reported in these financial statements to the income reported on the Company’s federal tax return (unaudited) for each of the years ended December 31, 2016 and 2015 (in thousands):

		2016		2015
Net income per financial statements	$	3,169	$	3,091
Tax adjustments (unaudited):
Adjustment to depreciation expense		(437)		(430)
Provision for losses and doubtful accounts		1		(6)
Adjustments to revenues / other expenses		2,681		2,616
Adjustments to gain on sales of assets		3,710		504
Other		-		132
Income per federal tax return (unaudited)	$	9,124	$	5,907

Other expense, net:

Other expense, net for the years ended December 31, 2016 and 2015 consisted solely of net losses on foreign exchange transactions. Such net losses were nominal for both 2016 and 2015.

Per Unit data:

Net income and distributions per Unit are based upon the weighted average number of Other Members’ Units outstanding during the year.

Recent accounting pronouncements:

In August 2016, the FASB issued Accounting Standards Update 2016-15 —Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”).  ASU 2016-15 addresses specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. Management is currently evaluating the standard and its impact on operations and financial reporting.

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and its operational and related disclosure requirements.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new standard will require lessees to recognize lease assets and lease liabilities arising from operating leases with lease terms greater than 12 months in the statement of financial position. Lessor accounting per ASU 2016-02 is mostly unchanged from the previous lease accounting GAAP. Certain changes were made to the lessor accounting guidance in order to align the lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. Similar to the previous guidance, lessors will classify leases as operating, direct financing, or sales-type. Lessors in operating leases will continue to recognize the underlying asset and recognize income on a straight-line basis. Lessors determine whether a lease is a sale of the underlying asset based on whether the lessee effectively obtains control of the underlying assets. ASU-2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Management will adopt the standard and is currently evaluating the standard and its operational and related disclosure requirements.

In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The new standard provides guidance related to accounting for equity investments and financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management is currently evaluating the standard and its operational and related disclosure requirements.

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU-2014-15”). The new standard provides guidance relative to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. Management does not expect the adoption of ASU 2014-15 to have a material impact on the Company’s financial statements or related disclosures.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year and in August 2015, issued Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”). ASU 2015-14 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company evaluated the impact of the new standard on its financial statements and has determined that such impact is virtually non-existent as the new revenue guideline does not affect revenues from leases and loans, which comprise the majority of the Company’s revenues.

XML

Concentration of Credit Risk and Major Customers

12 Months Ended

Dec. 31, 2016

Concentration of Credit Risk and Major Customers [Abstract]

Concentration of Credit Risk and Major Customers

3.  Concentration of credit risk and major customers:

The Company leases equipment to lessees and provides debt financing to borrowers in diversified industries. Leases and notes receivable are subject to AFS’s credit committee review. The leases and notes receivable provide for the return of the equipment to the Company upon default.

As of December 31, 2016 and 2015, there were concentrations (greater than or equal to 10% as a percentage of total equipment cost) of equipment leased to lessees and/or financed for borrowers in certain industries were as follows:

	2016	2015
Transportation, rail	35%	27%
Marine transportation/Transportation, other	33%	25%
Paper products	16%	12%
Mining	*	20%
*  Less than 10%

During 2016 and 2015, certain lessees and/or financial borrowers generated significant portions (defined as greater than or equal to 10%) of the Company’s total leasing and lending revenues, excluding gains or losses on disposition of assets, were as follows:

		Percentage of Total Leasing and Lending Revenues
Lessee	Type of Equipment	2016	2015
The Sabine Mining Company	Mining	28%	33%
Yellow Fin Marine Services LLC	Transportation, marine	22%	15%
MRXX-Interstate Commodities	Transportation, rail	10%	*
Union Pacific Railroad Company	Transportation, rail	*	12%
* Less than 10%

XML

Notes Receivable, Net

12 Months Ended

Dec. 31, 2016

Notes Receivable, Net [Abstract]

Notes Receivable, Net

4.Notes receivable, net:

The Company has had various notes receivable from borrowers who have financed the purchase of equipment through the Company. The notes were secured by the equipment financed. As of December 31, 2016 and 2015, the notes have been fully settled.

XML

Investment in Equipment and Leases, Net

12 Months Ended

Dec. 31, 2016

Investment In Equipment And Leases Net [Abstract]

Investment in Equipment and Leases, Net

5. Investment in equipment and leases, net:

The Company’s investment in leases consisted of the following (in thousands):

		Balance December 31, 2015		Reclassifications, Additions/ Dispositions		Depreciation/ Amortization Expense or Amortization of Leases		Balance December 31, 2016
Net investment in operating leases	$	4,112	$	(177)	$	(440)	$	3,495
Net investment in direct financing leases		6,216		(3,541)		(2,674)		1
Assets held for sale or lease, net		797		(96)		-		701
Initial direct costs, net of accumulated amortization of $2 at December 31, 2016 and $83 at December 31, 2015		2		1		(2)		1
Total	$	11,127	$	(3,813)	$	(3,116)	$	4,198

Impairment of investments in leases and assets held for sale or lease:

The Company did not record any fair value adjustments during 2016. The Company recorded $132 thousand of fair value adjustments to reduce the cost basis of certain impaired off-lease equipment during 2015.

As of December 31, 2016 and 2015, there were no lease contracts placed in non-accrual status. As of the same dates, the Company had certain other leases with related accounts receivable aged 90 days or more that had not been placed on non-accrual status. In accordance with Company policy, the related accounts receivable were fully reserved. Management continues to closely monitor these leases for any actual change in collectability status and indication of necessary valuation adjustments.

The Company utilizes a straight line depreciation method for equipment in all of the categories currently in its portfolio of operating lease transactions. Depreciation expense on the Company’s equipment was approximately $440 thousand and $899 thousand  for the respective years ended December 31, 2016 and 2015. IDC amortization expense totaled $2 thousand and $6 thousand during 2016 and 2015, respectively, all of which was related to operating leases and direct financing leases. All of the leased property was acquired during the years 2001 through 2010.

Operating leases:

Property on operating leases consisted of the following (in thousands):

		Balance December 31, 2015		Additions		Reclassifications or Dispositions		Balance December 31, 2016
Transportation, rail	$	12,154	$	-	$	(863)	$	11,291
Marine vessels		9,700		-		-		9,700
Transportation, other		2,011		-		(184)		1,827
Materials handling		628		-		(97)		531
Construction		565		-		-		565
Manufacturing		528		-		(173)		355
Other		16		-		(5)		11
		25,602		-		(1,322)		24,280
Less accumulated depreciation		(21,490)		(440)		1,145		(20,785)
Total	$	4,112	$	(440)	$	(177)	$	3,495

The average estimated residual value for assets on operating leases was 11% and 12% of the assets’ original cost at December 31, 2016 and 2015, respectively.

The Company may earn revenues from its rail transportation and certain other assets based on utilization of such assets or a fixed-term lease. Contingent rentals (i.e., short-term, operating charter hire payments) and the associated expenses are recorded when earned and/or incurred. The revenues associated with these rentals are included as a component of Operating Lease Revenues and totaled $69 thousand and $97 thousand during the years ended December 31, 2016 and 2015, respectively.

Direct financing leases:

As of December 31, 2016, investment in direct financing leases consisted of materials handling equipment. Such investment consists of materials handling and mining equipment as of December 31, 2015. The following lists the components of the Company’s investment in direct financing leases as of December 31, 2016 and 2015 (in thousands):

		December 31,		December 31,
		2016		2015
Total minimum lease payments receivable	$	1	$	3,687
Estimated residual values of leased       equipment (unguaranteed)		-		3,543
Investment in direct financing leases		1		7,230
Less unearned income		-		(1,014)
Net investment in direct financing leases	$	1	$	6,216

At December 31, 2016, the aggregate amounts of future minimum lease payments receivable were as follows (in thousands):

		Operating Leases		Direct Financing Leases		Total
Year ending December 31, 2017	$	1,854	$	1	$	1,855
2018		1,058		-		1,058
2019		873		-		873
2020		484		-		484
2021		81		-		81
	$	4,350	$	1	$	4,351

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of December 31, 2016 and 2015, the respective useful lives of each category of lease assets in the Company’s portfolio were as follows (in years):

Equipment category	Useful Life
Transportation, rail	35 - 40
Marine vessels	20 - 30
Manufacturing	10 - 15
Construction	7 - 10
Materials handling	7 - 10
Transportation, other	7 - 10

XML

Allowance for Credit Losses

12 Months Ended

Dec. 31, 2016

Allowance for Credit Losses [Abstract]

Allowance for Credit Losses

6. Allowance for credit losses:

The Company’s allowance for credit losses totaled $2 thousand and $1 thousand at December 31, 2016 and 2015, respectively. All of such allowance was related to delinquent operating lease receivables. The Company had neither financing receivables in non-accrual status nor impaired financing receivables at both December 31, 2016 and 2015.

XML

Related Party Transactions

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Related Party Transactions

7.Related party transactions:

The terms of the Operating Agreement provide that AFS and/or affiliates are entitled to receive certain fees for equipment management and resale and for management of the Company.

The Operating Agreement allows for the reimbursement of costs incurred by AFS for providing administrative services to the Company. Administrative services provided include Company accounting, finance/treasury, investor relations, legal counsel and lease and equipment documentation. AFS is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of equipment. The Company will be liable for certain future costs to be incurred by AFS to manage the administrative services provided to the Company.

Each of ATEL Leasing Corporation (“ALC”) and AFS is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations, communications services and general administrative services for the Company are performed by AFS.

Cost reimbursements to the Managing Member are based on its costs incurred in performing administrative services for the Company. These costs are allocated to each managed entity based on certain criteria such as total assets, number of investors or contributed capital based upon the type of cost incurred. The Operating Agreement places an annual limit and a cumulative limit for cost reimbursements to AFS and/or affiliates. Any reimbursable costs incurred by AFS and/or affiliates during the year exceeding the annual and/or cumulative limits cannot be reimbursed in the current year, though such costs may be recovered in future years to the extent of the cumulative limit. As of December 31, 2016, the Company has not exceeded the annual and/or cumulative limitations discussed above.

AFS and/or affiliates earned fees and reimbursements, pursuant to the Operating Agreement as follows during each of the years ended December 31, 2016 and 2015 (in thousands):

		2016		2015
Costs reimbursed to Managing Member and/or affiliates	$	395	$	517
Asset management fees to Managing Member and/or affiliates		218		296
	$	613	$	813

XML

Non-Recourse Debt

12 Months Ended

Dec. 31, 2016

Non-Recourse Debt [Abstract]

Non-Recourse Debt

8.Non-recourse debt:

At December 31, 2016, all of the Company’s outstanding non-recourse debt had been fully paid. At December 31, 2015, non-recourse debt consisted of notes payable to financial institutions, maturing from 2016 through 2017. The notes were due in monthly installments. Interest on the notes were at a fixed rates ranging from6.58% to 6.66%. The notes were secured by assignments of lease payments and pledges of assets. At December 31, 2015, gross lease rentals totaled approximately  $3.7 million over the remaining lease terms; and the carrying value of the pledged assets were approximately  $6.2 million.  

The non-recourse debt did not contain any material financial covenants. The debt was secured by liens granted by the Company to the non-recourse lenders on (and only on) the discounted lease transactions. The lenders had recourse only to the following collateral: the specific leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. The non-recourse obligation was payable solely out of the respective specific security and the Company did not guarantee (nor is the Company otherwise contractually responsible for) the payment of the non-recourse debt as a general obligation or liability of the Company. Although the Company did not have any direct or general liability in connection with the non-recourse debt apart from the security granted, the Company was directly and generally liable and responsible for certain representations, warranties, and covenants made to the lenders, such as warranties as to genuineness of the transaction parties' signatures, as to the genuineness of the respective lease chattel paper or the transaction as a whole, or as to the Company's good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants typically provided by non-recourse borrowers and customary inthe equipment finance industry, and were viewed by such industry as being consistent with non-recourse discount financing obligations. Accordingly, as there were no financial covenants or ratios imposed on the Company in connection with the non-recourse debt, the Company had determined that there were no material covenants with respect to the non-recourse debt that warrant footnote disclosure.

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies [Abstract]

Commitments and Contingencies

9.  Commitments and contingencies:

At December 31, 2016, the Company had nocommitments to purchase lease assets or fund investments in notes receivable.

XML

Guarantees

12 Months Ended

Dec. 31, 2016

Guarantees [Abstract]

Guarantees

10.  Guarantees:

The Company enters into contracts that contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

The Managing Member knows of no facts or circumstances that would make the Company’s contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Company believes that these indemnification obligations are made in the ordinary course of business as part of standard commercial and industry practice, and that any potential liability under the Company’s similar commitments is remote. Should any such indemnification obligation become payable, the Company would separately record and/or disclose such liability in accordance with GAAP.

XML

Members' Capital

12 Months Ended

Dec. 31, 2016

Members' Capital [Abstract]

Members' Capital

11.  Members’ capital:

As of December 31, 2016 and 2015,  12,055,016 Units were issued and outstanding. The Company was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial member  (50 Units).

The Company has the right, exercisable in the Managing Member’s discretion, but not the obligation, to repurchase Units of a Unitholder who ceases to be a U.S. Citizen, for a price equal to 100% of the holder’s capital account. The Company is otherwise permitted, but not required, to repurchase Units upon a holder’s request. The repurchase of Fund units is made in accordance with Section 13 of the Amended and Restated Limited Liability Company Operating Agreement. The repurchase would be at the discretion of the Managing Member on terms it determines to be appropriate under given circumstances, in the event that the Managing Member deems such repurchase to be in the best interest of the Company; provided,the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units are cancelled.  Units repurchased in prior periods were repurchased at amounts representing the original investment less cumulative distributions made to the Unitholder with respect to the Units. All Units repurchased during a quarter are deemed to be repurchased effective the last day of the preceding quarter, and are not deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs.

As defined in the Operating Agreement, the Company’s Net Income, Net Losses, and Distributions are to be allocated 92.5% to the Other Members and 7.5% to AFS. In accordance with the terms of the Operating Agreement, additional allocations of income were made to AFS in 2016 and 2015. The amounts allocated were determined to bring AFS’s ending capital account balance to zero at the end of each year.

Distributions to the Other Members were as follows (in thousands, except Units and per Unit data):

		2016		2015
Distributions declared	$	5,123	$	4,822
Weighted average number of Units outstanding		12,055,016		12,055,016
Weighted average distributions per Unit	$	0.42	$	0.40

XML

Fair Value Measurements

12 Months Ended

Dec. 31, 2016

Fair Value Measurements [Abstract]

Fair Value Measurements

12.  Fair value measurements:

Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, generally on a national exchange.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market.

Level 3 – Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company's own estimates of assumptions that market participants would use in pricing the asset or liability.

The Company had no assets or liabilities requiring measurement at fair value on a recurring or non-recurring basis at December 31, 2016. By comparison, at December 31, 2015, only the Company’s warrants were measured on a recurring basis. During 2015, the Company also recorded non-recurring adjustments to reduce the cost basis of certain equipment deemed impaired. Amounts at December 31, 2015 reflect the fair value of the then existing impaired assets.

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

The measurement methodologies are as follows:

Warrants (recurring)

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried on the balance sheet at an estimated fair value at the end of the period. The Company did not hold any warrant positions at December 31, 2016. The valuation of the warrants at December 31, 2015 was determined using a Black-Scholes formulation of value based upon the stock price(s), the exercise price(s), the volatility of comparable venture companies, and a risk free interest rate for the term(s) of the warrant exercise(s). As of the same date, the Company’s remaining warrants had no fair value.

Impaired off-lease equipment (non-recurring)

During 2016, the Company had no fair value adjustments relative to impaired equipment. During 2015, the Company deemed certain off-lease equipment (assets) to be impaired and recorded fair value adjustments of $132 thousand to reduce the cost basis of the equipment.

The aforementioned adjustments were non-recurring. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair values of such impaired equipment are classified within Level 3 of the valuation hierarchy as the data sources utilized for the valuation of the assets reflect significant inputs that are unobservable in the market. Such valuation utilizes a market approach technique and uses inputs that reflect the sales price of similar assets sold by affiliates and/or information from third party remarketing agents not readily available in the market.

The table below presents the fair value measurement of assets and liabilities measured at fair value on a non-recurring basis and the level within the hierarchy in which the fair value measurements fall at December 31, 2015 (in thousands):

		December 31, 2015		Level 1 Estimated Fair Value		Level 2 Estimated Fair Value		Level 3 Estimated Fair Value
Assets measured at fair value on a non-recurring basis:
Impaired off-lease equipment	$	300	$	-	$	-	$	300

The following table summarizes the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy as of December 31, 2015:

December 31, 2015
Name	Valuation Frequency	Valuation Technique	Unobservable Inputs	Range of Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$2.01
			Exercise price	$2.01
			Time to maturity (in years)	0.04
			Risk-free interest rate	0.14%
			Annualized volatility	100.00%
Impaired Off-lease Equipment	Non-recurring	Market Approach	Third Party Agents' Pricing     Quotes - per equipment	$100,000 (total of $300,000)
			Equipment Condition	Poor to Average

The following disclosure of the estimated fair value of financial instruments is made in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification. Fair value estimates, methods and assumptions, set forth below for the Company’s financial instruments, are made solely to comply with the requirements of the Financial Instruments Topic.

The Company has determined the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash and cash equivalents

The recorded amounts of the Company’s cash and cash equivalents approximate fair value because of the liquidity and short-term maturity of these instruments.

Investment in securities

The Company’s investment securities are not registered for public sale and are carried at cost which management believes approximates fair value, as appropriately adjusted for impairment.

Non-recourse debt

The fair value of the Company’s non-recourse debt was estimated using discounted cash flow analyses, based upon current market borrowing rates for similar types of borrowing arrangements.

Commitments and Contingencies

Management has determined that the fair value of contingent liabilities (or guarantees) is not considered material because management believes there has been no event that has occurred wherein a guarantee liability has been incurred or will likely be incurred.

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at December 31, 2016 and 2015 (in thousands):

		Fair Value Measurements at December 31, 2016
		Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,421	$	3,421	$	-	$	-	$	3,421
Investment in securities		5		-		-		5		5

		Fair Value Measurements at December 31, 2015
		Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	2,240	$	2,240	$	-	$	-	$	2,240
Investment in securities		5		-		-		5		5
Financial liabilities:
Non-recourse debt		3,921		-		-		3,971		3,971

XML

Summary of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2016

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation:

The accompanying balance sheets as of December 31, 2016 and 2015, and the related statements of income, changes in members’ capital, and cash flows for the years then ended, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts may have been reclassified to conform to the current year presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data.

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after December 31, 2016, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements.

Cash and Cash Equivalents

Cash and cash equivalents:

Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities ofninety days or less.

Use of Estimates

Use of estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimates relate primarily to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes and determination of the allowance for doubtful accounts.

Accounts Receivable

Accounts receivable:

Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are due to the Company. Allowances for doubtful accounts are typically established based on historical charge off and collection experience and the collectability of specifically identified lessees and invoiced amounts. Accounts receivable deemed uncollectible are charged off to the allowance on a specific identification basis. Amounts recovered that were previously written-off are recorded as other income in the period received.

Credit Risk

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company generally places the majority of its cash deposits in noninterest-bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Funds’ cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating and direct financing leases or notes receivable.

Equipment on Operating Leases and Related Revenue Recognition

Equipment on operating leases and related revenue recognition:

Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with ASC 840-20-35-3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell (ASC 360-10-35-43).

The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize anyappropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized.

Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet.

Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis.

The Company may earn revenues from its marine vessel based on charter utilization of the vessel or a fixed term lease. When the vessel is chartered, contingent rentals and the associated expenses are recorded when earned and/or incurred. From time to time, the Company incurs “drydocking” costs on its vessel. Drydocking costs include labor and material costs related to refurbishing, overhauling and/or replacing engine and other major mechanical components of the vessel, hull maintenance and other repairs that bring the vessel into seaworthy compliance with U.S. marine codes in order to have it certified as available for charter. Such drydocking costs are capitalized and added to the equipment cost and depreciated over the period between scheduled drydockings, which generally occur every 24 to 30 months.

Direct Financing Leases and Related Revenue Recognition

Direct financing leases and related revenue recognition:

Income from direct financing lease transactions is reported using the financing method of accounting, in which the Company’s investment in the leased property is reported as a receivable from the lessee to be recovered through future rentals. The interest income portion of each rental payment is calculated so as to generate a constant rate of return on the net receivable outstanding.

Allowances for losses on direct financing leases are typically established based on historical charge off and collection experience and the collectability of specifically identified lessees and billed and unbilled receivables. Direct financing leases are charged off to the allowance as they are deemed uncollectible.

Direct financing leases are generally placed in a non-accrual status (i.e., no revenue is recognized) and deemed impaired when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of all direct finance lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related direct financing leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, all payments received are applied only against outstanding principal balances.

Notes Receivable, Unearned Interest Income and Related Revenue Recognition

Notes receivable, unearned interest income and related revenue recognition:

The Company records all future payments of principal and interest on notes as notes receivable which is then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports only the net amount of principal due on the balance sheet. The unearned interest is recognized over the term of the note and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Any fees or costs related to notes receivable are recorded as part of the net investment in notes receivable and amortized over the term of the loan.

Allowances for losses on notes receivable are typically established based on historical charge off and collection experience and the collectability of specifically identified borrowers and billed and unbilled receivables. Notes are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the note agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. If it is determined that a loan is impaired with regard to scheduled payments, the Company will perform an analysis of the note to determine if an impairment valuation reserve is necessary. This analysis considers the estimated cash flows from the note, or the collateral value of the property underlying the note when note repayment is collateral dependent. Any required valuation reserve is charged to earnings when determined; and notes are charged off to the allowance for losses as they are deemed uncollectible.

Notes receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with note payments outstanding less than 90 days. Based upon management’s judgment, notes may be placed in a non-accrual status. Notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable.Until such time, all payments received are applied only against outstanding principal balances.

Initial Direct Costs

Initial direct costs:

The Company capitalizes initial direct costs (“IDC”) associated with the origination and funding of lease assets and investments in notes receivable. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease and loan originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease (or note by note) basis based on actual contract term using a straight-line method for operating leases and the effective interest rate method for direct financing leases and notes receivable. Upon disposal of the underlying lease or loan assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases or notes receivable that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense.

Acquisition Expense

Acquisition expense:

Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses and miscellaneous expenses related to the selection and acquisition of equipment which are reimbursable to the Managing Member under the terms of the Operating Agreement. As the costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred.

Asset Valuation

Asset valuation:

Segment Reporting

Segment reporting:

The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States.

The Company’s principal decision makers are the Managing Member’s Chief Executive Officer and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas.

The primary geographic regions in which the Company seeks leasing and lending opportunities are North America and Europe.

The table below summarizes geographic information relating to the sources, by nation, of the Company’s total revenues for the years ended December 31, 2016 and 2015 and long-lived assets as of December 31, 2016 and 2015 (dollars in thousands):

		For The Year Ended December 31,
		2016	% of Total		2015	% of Total
Revenue
United States	$	5,004	99%	$	5,936	99%
Canada		5	0%		-	0%
United Kingdom		36	1%		41	1%
Total International		41	1%		41	1%
Total	$	5,045	100%	$	5,977	100%
		As of December 31,
		2016	% of Total		2015	% of Total
Long-lived assets
United States	$	4,150	99%	$	11,093	100%
Canada		15	0%		-	0%
United Kingdom		33	1%		34	0%
Total International		48	1%		34	0%
Total	$	4,198	100%	$	11,127	100%

Foreign Currency Transactions

Foreign currency transactions:

Foreign currency transaction gains and losses are reported in the results of operations as “other income” or “other expense” in the period in which they occur. Currently, the Company does not use derivative instruments to hedge its economic exposure with respect to assets, liabilities and firm commitments as the foreign currency transactions risks to date have not been significant. During 2016 and 2015, the Company’s net foreign currency gains (losses) were nominal.

Investment in Securities

Investment in securities:

        Purchased securities

Purchased securities are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. There were neither impaired securities at December 31, 2016 and 2015 nor investment securities sold or disposed of during the years ended December 31, 2016 and 2015.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet as determined by the Managing Member. During 2015, the Company recorded unrealized losses of $125 thousand, on the fair value adjustment of its warrant holdings. As of December 31, 2015, the Company’s remaining warrants had no fair value amount. Such warrants expired in January 2016. During 2016 and 2015, the Company realized $5 thousand and $94thousand of gains on the net exercise of warrants, respectively.

Unearned Operating Lease Income

Unearned operating lease income:

The Company records prepayments on operating leases as a liability under the caption of unearned operating lease income.  The liability is recorded when prepayments are received and recognized as operating lease revenue over the period to which the prepayments relate using a straight-line method.

Income Taxes

Income taxes:

The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Revenue Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current income taxes for only those states which levy income taxes on partnerships. For the years ended December 31, 2016 and 2015, the related provision for state income taxes was approximately $42 thousand and $68 thousand, respectively. The Company does not have any entity level uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions and is generally subject to examination by U.S. federal (or state and local) income tax authorities for three years from the filing of a tax return.

The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2016 and 2015 were as follows (in thousands):

		2016		2015
Financial statement basis of net assets	$	7,361	$	9,730
Tax basis of net assets (unaudited)		22,019		18,433
Difference	$	(14,658)	$	(8,703)

The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for syndication costs and differences between the depreciation methods used in the financial statements and the Company’s tax returns.

The following reconciles the net income reported in these financial statements to the income reported on the Company’s federal tax return (unaudited) for each of the years ended December 31, 2016 and 2015 (in thousands):

		2016		2015
Net income per financial statements	$	3,169	$	3,091
Tax adjustments (unaudited):
Adjustment to depreciation expense		(437)		(430)
Provision for losses and doubtful accounts		1		(6)
Adjustments to revenues / other expenses		2,681		2,616
Adjustments to gain on sales of assets		3,710		504
Other		-		132
Income per federal tax return (unaudited)	$	9,124	$	5,907

Other Expense, Net

Other expense, net:

Other expense, net for the years ended December 31, 2016 and 2015 consisted solely of net losses on foreign exchange transactions. Such net losses were nominal for both 2016 and 2015.

Per Unit Data

Per Unit data:

Net income and distributions per Unit are based upon the weighted average number of Other Members’ Units outstanding during the year.

Recent Accounting Pronouncements

Recent accounting pronouncements:

In August 2016, the FASB issued Accounting Standards Update 2016-15 —Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”).  ASU 2016-15 addresses specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. Management is currently evaluating the standard and its impact on operations and financial reporting.

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and its operational and related disclosure requirements.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new standard will require lessees to recognize lease assets and lease liabilities arising from operating leases with lease terms greater than 12 months in the statement of financial position. Lessor accounting per ASU 2016-02 is mostly unchanged from the previous lease accounting GAAP. Certain changes were made to the lessor accounting guidance in order to align the lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. Similar to the previous guidance, lessors will classify leases as operating, direct financing, or sales-type. Lessors in operating leases will continue to recognize the underlying asset and recognize income on a straight-line basis. Lessors determine whether a lease is a sale of the underlying asset based on whether the lessee effectively obtains control of the underlying assets. ASU-2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Management will adopt the standard and is currently evaluating the standard and its operational and related disclosure requirements.

In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The new standard provides guidance related to accounting for equity investments and financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Management is currently evaluating the standard and its operational and related disclosure requirements.

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU-2014-15”). The new standard provides guidance relative to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. Management does not expect the adoption of ASU 2014-15 to have a material impact on the Company’s financial statements or related disclosures.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year and in August 2015, issued Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”). ASU 2015-14 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company evaluated the impact of the new standard on its financial statements and has determined that such impact is virtually non-existent as the new revenue guideline does not affect revenues from leases and loans, which comprise the majority of the Company’s revenues.

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Summary of Significant Accounting Policies [Abstract]

Summary of Geographic Information Relating to Sources, by Nation, of Company's Total Revenue and Long-Lived Assets

The table below summarizes geographic information relating to the sources, by nation, of the Company’s total revenues for the years ended December 31, 2016 and 2015 and long-lived assets as of December 31, 2016 and 2015 (dollars in thousands):

		For The Year Ended December 31,
		2016	% of Total		2015	% of Total
Revenue
United States	$	5,004	99%	$	5,936	99%
Canada		5	0%		-	0%
United Kingdom		36	1%		41	1%
Total International		41	1%		41	1%
Total	$	5,045	100%	$	5,977	100%
		As of December 31,
		2016	% of Total		2015	% of Total
Long-lived assets
United States	$	4,150	99%	$	11,093	100%
Canada		15	0%		-	0%
United Kingdom		33	1%		34	0%
Total International		48	1%		34	0%
Total	$	4,198	100%	$	11,127	100%

Schedule of Differences Between Book Value and Tax Basis of Net Assets

The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2016 and 2015 were as follows (in thousands):

		2016		2015
Financial statement basis of net assets	$	7,361	$	9,730
Tax basis of net assets (unaudited)		22,019		18,433
Difference	$	(14,658)	$	(8,703)

Reconciliation of Net Income (Loss) Reported in Financial Statements and Federal Tax Return

The following reconciles the net income reported in these financial statements to the income reported on the Company’s federal tax return (unaudited) for each of the years ended December 31, 2016 and 2015 (in thousands):

		2016		2015
Net income per financial statements	$	3,169	$	3,091
Tax adjustments (unaudited):
Adjustment to depreciation expense		(437)		(430)
Provision for losses and doubtful accounts		1		(6)
Adjustments to revenues / other expenses		2,681		2,616
Adjustments to gain on sales of assets		3,710		504
Other		-		132
Income per federal tax return (unaudited)	$	9,124	$	5,907

XML

Concentration of Credit Risk and Major Customers (Tables)

12 Months Ended

Dec. 31, 2016

Concentration of Credit Risk and Major Customers [Abstract]

Schedule of Equipment Leased, Credit Risk Concentration

As of December 31, 2016 and 2015, there were concentrations (greater than or equal to 10% as a percentage of total equipment cost) of equipment leased to lessees and/or financed for borrowers in certain industries were as follows:

	2016	2015
Transportation, rail	35%	27%
Marine transportation/Transportation, other	33%	25%
Paper products	16%	12%
Mining	*	20%
*  Less than 10%

Schedule of Major Customers Credit Risk Concentration

During 2016 and 2015, certain lessees and/or financial borrowers generated significant portions (defined as greater than or equal to 10%) of the Company’s total leasing and lending revenues, excluding gains or losses on disposition of assets, were as follows:

		Percentage of Total Leasing and Lending Revenues
Lessee	Type of Equipment	2016	2015
The Sabine Mining Company	Mining	28%	33%
Yellow Fin Marine Services LLC	Transportation, marine	22%	15%
MRXX-Interstate Commodities	Transportation, rail	10%	*
Union Pacific Railroad Company	Transportation, rail	*	12%
* Less than 10%

XML

Investment in Equipment and Leases, Net (Tables)

12 Months Ended

Dec. 31, 2016

Investment In Equipment And Leases Net [Abstract]

Investment in Leases

The Company’s investment in leases consisted of the following (in thousands):

		Balance December 31, 2015		Reclassifications, Additions/ Dispositions		Depreciation/ Amortization Expense or Amortization of Leases		Balance December 31, 2016
Net investment in operating leases	$	4,112	$	(177)	$	(440)	$	3,495
Net investment in direct financing leases		6,216		(3,541)		(2,674)		1
Assets held for sale or lease, net		797		(96)		-		701
Initial direct costs, net of accumulated amortization of $2 at December 31, 2016 and $83 at December 31, 2015		2		1		(2)		1
Total	$	11,127	$	(3,813)	$	(3,116)	$	4,198

Property on Operating Leases

Property on operating leases consisted of the following (in thousands):

		Balance December 31, 2015		Additions		Reclassifications or Dispositions		Balance December 31, 2016
Transportation, rail	$	12,154	$	-	$	(863)	$	11,291
Marine vessels		9,700		-		-		9,700
Transportation, other		2,011		-		(184)		1,827
Materials handling		628		-		(97)		531
Construction		565		-		-		565
Manufacturing		528		-		(173)		355
Other		16		-		(5)		11
		25,602		-		(1,322)		24,280
Less accumulated depreciation		(21,490)		(440)		1,145		(20,785)
Total	$	4,112	$	(440)	$	(177)	$	3,495

Components of Company's Investment in Direct Financing Leases

The following lists the components of the Company’s investment in direct financing leases as of December 31, 2016 and 2015 (in thousands):

		December 31,		December 31,
		2016		2015
Total minimum lease payments receivable	$	1	$	3,687
Estimated residual values of leased       equipment (unguaranteed)		-		3,543
Investment in direct financing leases		1		7,230
Less unearned income		-		(1,014)
Net investment in direct financing leases	$	1	$	6,216

Future Minimum Lease Payments Receivable

At December 31, 2016, the aggregate amounts of future minimum lease payments receivable were as follows (in thousands):

		Operating Leases		Direct Financing Leases		Total
Year ending December 31, 2017	$	1,854	$	1	$	1,855
2018		1,058		-		1,058
2019		873		-		873
2020		484		-		484
2021		81		-		81
	$	4,350	$	1	$	4,351

Schedule of Useful Lives of Assets

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of December 31, 2016 and 2015, the respective useful lives of each category of lease assets in the Company’s portfolio were as follows (in years):

Equipment category	Useful Life
Transportation, rail	35 - 40
Marine vessels	20 - 30
Manufacturing	10 - 15
Construction	7 - 10
Materials handling	7 - 10
Transportation, other	7 - 10

XML

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement

AFS and/or affiliates earned fees and reimbursements, pursuant to the Operating Agreement as follows during each of the years ended December 31, 2016 and 2015 (in thousands):

		2016		2015
Costs reimbursed to Managing Member and/or affiliates	$	395	$	517
Asset management fees to Managing Member and/or affiliates		218		296
	$	613	$	813

XML

Members' Capital (Tables)

12 Months Ended

Dec. 31, 2016

Members' Capital [Abstract]

Distributions to Other Members

Distributions to the Other Members were as follows (in thousands, except Units and per Unit data):

		2016		2015
Distributions declared	$	5,123	$	4,822
Weighted average number of Units outstanding		12,055,016		12,055,016
Weighted average distributions per Unit	$	0.42	$	0.40

XML

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2016

Fair Value Measurements [Abstract]

Fair Value Measurement of Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The table below presents the fair value measurement of assets and liabilities measured at fair value on a non-recurring basis and the level within the hierarchy in which the fair value measurements fall at December 31, 2015 (in thousands):

		December 31, 2015		Level 1 Estimated Fair Value		Level 2 Estimated Fair Value		Level 3 Estimated Fair Value
Assets measured at fair value on a non-recurring basis:
Impaired off-lease equipment	$	300	$	-	$	-	$	300

Summary of Valuation Techniques and Significant Unobservable Inputs Used

The following table summarizes the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy as of December 31, 2015:

December 31, 2015
Name	Valuation Frequency	Valuation Technique	Unobservable Inputs	Range of Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$2.01
			Exercise price	$2.01
			Time to maturity (in years)	0.04
			Risk-free interest rate	0.14%
			Annualized volatility	100.00%
Impaired Off-lease Equipment	Non-recurring	Market Approach	Third Party Agents' Pricing     Quotes - per equipment	$100,000 (total of $300,000)
			Equipment Condition	Poor to Average

Estimated Fair Values of Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at December 31, 2016 and 2015 (in thousands):

		Fair Value Measurements at December 31, 2016
		Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,421	$	3,421	$	-	$	-	$	3,421
Investment in securities		5		-		-		5		5

		Fair Value Measurements at December 31, 2015
		Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	2,240	$	2,240	$	-	$	-	$	2,240
Investment in securities		5		-		-		5		5
Financial liabilities:
Non-recourse debt		3,921		-		-		3,971		3,971

XML

Organization and Limited Liability Company Matters (Narrative) (Details) - USD ($)		84 Months Ended	168 Months Ended	195 Months Ended
	Jan. 16, 2001	Dec. 31, 2009	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Jan. 15, 2003	Apr. 03, 2001	Feb. 21, 2001	Dec. 31, 2000
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Limited Liability Company, business cessation date				Dec. 31, 2020
Public offering of Limited Liability Company Units, price per Unit	$ 10
Public offering of Limited Liability Company Units	15,000,000
Amount of aggregate subscriptions for Pennsylvania subscriptions to be released to the Fund							$ 7,500,000
Contributions of capital									$ 600
Reinvestment period		6 years
Sale of Limited Liability Company Units, number of Units						12,065,266	753,050
Proceeds from sale of Limited Liability Company Units						$ 120,700,000
Repurchase of Units, number of Units			10,250
Units issued			12,055,016	12,055,016	12,055,016
Units outstanding			12,055,016	12,055,016	12,055,016
Minimum [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Contributions of capital							$ 7,500,000
Sale of Limited Liability Company Units, number of Units								120,000
Proceeds from sale of Limited Liability Company Units								$ 1,200,000
Atel Financial Services LLC [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Capital investment									100
Members Equity Contributions [Member] | Atel Financial Services LLC [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Contributions of capital									$ 500

XML

Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) segment	Dec. 31, 2015 USD ($)
Unrealized loss on value adjustment for warrants		$ (125)
Number of operating segments | segment	1
Number of reportable segments | segment	1
Gain on exercise of warrants	$ 5	94
Provision for franchise fees and state income taxes	$ 42	$ 68
Period subject to income tax examination	3 years
Minimum [Member]
Required assets value of financial institutions for cash deposits	$ 10,000,000
Operating leases, initial terms	36 months
Operating leases, Period for non accrual status	90 days
Direct financing leases, period for non accrual status	90 days
Note receivable, period for non accrual status	90 days
Period of scheduled vessel drydocking	24 months
Maximum [Member]
Cash deposits, insured amount	$ 250
Operating leases, initial terms	120 months
Equipment and lessee period of review for impairment	90 days
Direct financing leases, period of review for impairment	90 days
Note receivable, period of review for impairment	90 days
Period of scheduled vessel drydocking	30 months

XML

Summary of Significant Accounting Policies (Summary of Geographic Information Relating to Sources, by Nation, of Company's Total Revenue and Long-Lived Assets) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 5,045	$ 5,977
Percentage of total revenue	100.00%	100.00%
Long-lived assets	$ 4,198	$ 11,127
Percentage of long lived assets	100.00%	100.00%
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 5,004	$ 5,936
Percentage of total revenue	99.00%	99.00%
Long-lived assets	$ 4,150	$ 11,093
Percentage of long lived assets	99.00%	100.00%
Canada [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 5
Percentage of total revenue	0.00%	0.00%
Long-lived assets	$ 15
Percentage of long lived assets	0.00%	0.00%
United Kingdom [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 36	$ 41
Percentage of total revenue	1.00%	1.00%
Long-lived assets	$ 33	$ 34
Percentage of long lived assets	1.00%	0.00%
Total International [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 41	$ 41
Percentage of total revenue	1.00%	1.00%
Long-lived assets	$ 48	$ 34
Percentage of long lived assets	1.00%	0.00%

XML

Summary of Significant Accounting Policies (Schedule of Differences Between Book Value and Tax Basis of Net Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Summary of Significant Accounting Policies [Abstract]
Financial statement basis of net assets	$ 7,361	$ 9,730	$ 11,852
Tax basis of net assets (unaudited)	22,019	18,433
Difference	$ (14,658)	$ (8,703)

XML

Summary of Significant Accounting Policies (Reconciliation of Net Income Loss Reported in Financial Statements and Federal Tax Return) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Summary of Significant Accounting Policies [Abstract]
Net income per financial statements	$ 3,169	$ 3,091
Adjustment to depreciation expense	(437)	(430)
Provision for losses and doubtful accounts	1	(6)
Adjustments to revenues / other expenses	2,681	2,616
Adjustments to gain on sales of assets	3,710	504
Other		132
Income per federal tax return (unaudited)	$ 9,124	$ 5,907

XML

Concentration of Credit Risk and Major Customers (Schedule of Leasing and Lending Revenues) (Details)	12 Months Ended
	Dec. 31, 2016		Dec. 31, 2015
Equipment Cost [Member] | Transportation, Rail [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	35.00%		27.00%
Equipment Cost [Member] | Marine Transportation/Transportation, Other [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	33.00%		25.00%
Equipment Cost [Member] | Paper Products [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	16.00%		12.00%
Equipment Cost [Member] | Mining [Member]
Concentration Risk [Line Items]
Percentage of concentration risk		[1]	20.00%
Sabine Mining Company [Member] | Operating Revenue [Member] | Mining [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	28.00%		33.00%
Yellow Fin Marine Services LLC [Member] | Operating Revenue [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	22.00%		15.00%
MRXX-Interstate Commodities [Member] | Operating Revenue [Member] | Transportation, Rail [Member]
Concentration Risk [Line Items]
Percentage of concentration risk	10.00%			[1]
Union Pacific Railroad Company [Member] | Operating Revenue [Member] | Transportation, Rail [Member]
Concentration Risk [Line Items]
Percentage of concentration risk		[1]	12.00%

[1] Less than 10%

XML

Investment in Equipment and Leases, Net (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Average estimated residual value of assets on operating leases	11.00%	12.00%
Impairment losses on equipment		$ 132
IDC amortization expense related to operating leases and direct financing leases	$ 2	6
Depreciation of operating lease assets	440	899
Revenues from contingent rentals	$ 69	$ 97
Minimum [Member]
Financing leases, period for non accrual status	90 days
Accounts receivable, period for non-accrual status	90 days

XML

Investment in Equipment and Leases, Net (Investment in Leases) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Leases Disclosure [Line Items]
Balance December 31, 2015	$ 11,127
Reclassifications, Additions/Dispositions	(3,813)
Depreciation/ Amortization Expense or Amortization of Leases	(3,116)
Balance December 31, 2016	4,198
Initial direct costs, accumulated amortization	2	$ 83
Operating Leases [Member]
Leases Disclosure [Line Items]
Balance December 31, 2015	4,112
Reclassifications, Additions/Dispositions	(177)
Depreciation/ Amortization Expense or Amortization of Leases	(440)
Balance December 31, 2016	3,495
Direct Financing Leases [Member]
Leases Disclosure [Line Items]
Balance December 31, 2015	6,216
Reclassifications, Additions/Dispositions	(3,541)
Depreciation/ Amortization Expense or Amortization of Leases	(2,674)
Balance December 31, 2016	1
Assets Held-for-sale or Lease[Member]
Leases Disclosure [Line Items]
Balance December 31, 2015	797
Reclassifications, Additions/Dispositions	(96)
Balance December 31, 2016	701
Initial Direct Cost [Member]
Leases Disclosure [Line Items]
Balance December 31, 2015	2
Reclassifications, Additions/Dispositions	1
Depreciation/ Amortization Expense or Amortization of Leases	(2)
Balance December 31, 2016	$ 1

XML

Investment in Equipment and Leases, Net (Property on Operating Leases) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	$ 24,280	$ 25,602
Less accumulated depreciation	(20,785)	(21,490)
Property on operating leases, net	3,495	4,112
Additions, gross
Additions, less accumulated depreciation	(440)
Additions, net	(440)
Reclassifications or dispositions, gross	(1,322)
Reclassifications or dispositions, less accumulated depreciation	1,145
Reclassifications or dispositions, net	(177)
Transportation, Rail [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	11,291	12,154
Additions, gross
Reclassifications or dispositions, gross	(863)
Marine Vessels [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	9,700	9,700
Additions, gross
Reclassifications or dispositions, gross
Marine Transportation/Transportation, Other [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	1,827	2,011
Additions, gross
Reclassifications or dispositions, gross	(184)
Materials Handling [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	531	628
Additions, gross
Reclassifications or dispositions, gross	(97)
Construction [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	565	565
Additions, gross
Reclassifications or dispositions, gross
Manufacturing [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	355	528
Additions, gross
Reclassifications or dispositions, gross	(173)
Other Properties [Member]
Property Subject to or Available for Operating Lease [Line Items]
Property on operating leases, gross	11	$ 16
Additions, gross
Reclassifications or dispositions, gross	$ (5)

XML

Investment in Equipment and Leases, Net (Components of Investment in Direct Financing Leases) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Investment In Equipment And Leases Net [Abstract]
Total minimum lease payments receivable	$ 1	$ 3,687
Estimated residual values of leased equipment (unguaranteed)		3,543
Investment in direct financing leases	1	7,230
Less unearned income		(1,014)
Net investment in direct financing leases	$ 1	$ 6,216

XML

Investment in Equipment and Leases, Net (Future Minimum Lease Payments Receivable) (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Operating Leases
Year Ending December 31, 2017	$ 1,854
2018	1,058
2019	873
2020	484
2021	81
Operating leases, future minimum payments receivable	4,350
Direct Financing Leases
Year ending December 31, 2017	1
2018
2019
2020
2021
Capital leases, future minimum payments receivable	1
Total
Year ending December 31, 2017	1,855
2018	1,058
2019	873
2020	484
2021	81
Operating and capital leases, future minimum payments receivable	$ 4,351

XML

Investment in Equipment and Leases, Net (Schedule of Useful Lives of Assets) (Details)	12 Months Ended
	Dec. 31, 2016
Minimum [Member] | Transportation, Rail [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	35 years
Minimum [Member] | Marine Vessels [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	20 years
Minimum [Member] | Manufacturing [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	10 years
Minimum [Member] | Construction [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	7 years
Minimum [Member] | Marine Transportation/Transportation, Other [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	7 years
Minimum [Member] | Materials Handling [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	7 years
Maximum [Member] | Transportation, Rail [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	40 years
Maximum [Member] | Marine Vessels [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	30 years
Maximum [Member] | Manufacturing [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	15 years
Maximum [Member] | Construction [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	10 years
Maximum [Member] | Marine Transportation/Transportation, Other [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	10 years
Maximum [Member] | Materials Handling [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Useful Lives of lease assets	10 years

XML

Allowance for Credit Losses (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Allowance for Credit Losses [Abstract]
Allowance for credit losses	$ 2	$ 1

XML

Related Party Transactions (Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Related Party Transactions [Abstract]
Costs reimbursed to Managing Member and/or affiliates	$ 395	$ 517
Asset management fees to Managing Member	218	296
Total expenses from transactions with related party	$ 613	$ 813

XML

Non-Recourse Debt (Narrative) (Details) - Non-Recourse Debt [Member] $ in Millions	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Gross operating lease rentals and future payments on direct financing leases	$ 3.7
Carrying value of pledged assets	$ 6.2
Minimum [Member]
Debt Instrument [Line Items]
Fixed interest rate on note	6.58%
Maximum [Member]
Debt Instrument [Line Items]
Fixed interest rate on note	6.66%

XML

Commitments and Contingencies (Narrative) (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Commitments and Contingencies [Abstract]
Commitments to purchase lease assets or fund new loans	$ 0

XML

Members' Capital (Narrative) (Details) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Other Members Capital Account [Line Items]
Members capital account, units issued	12,055,016	12,055,016
Members capital account, units outstanding	12,055,016	12,055,016
Members capital account, units authorized	15,000,000	15,000,000
Potential repurchase price of Units as percentage of holder's capital account	100.00%
Other Members [Member]
Other Members Capital Account [Line Items]
Members capital account, units outstanding	12,055,016	12,055,016	12,055,016
Allocation of net income, net losses and distributions	92.50%
Managing Member [Member]
Other Members Capital Account [Line Items]
Members capital account, units issued	50	50
Allocation of net income, net losses and distributions	7.50%

XML

Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Members' Capital [Abstract]
Distributions declared	$ 5,123	$ 4,822
Weighted average number of Units outstanding	12,055,016	12,055,016
Weighted average distributions per Unit	$ 0.42	$ 0.40

XML

Fair Value Measurements (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($)
Fair Value Measurements [Abstract]
Impairment losses on equipment	$ 132

XML

Fair Value Measurements (Fair Value Measurement of Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis) (Details) $ in Thousands	Dec. 31, 2015 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired off-lease equipment	$ 300
Level 1 Estimated Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired off-lease equipment
Level 2 Estimated Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired off-lease equipment
Level 3 Estimated Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired off-lease equipment	$ 300

XML

Fair Value Measurements (Summary of Valuation Techniques and Significant Unobservable Inputs Used) (Details) - Level 3 Estimated Fair Value [Member]	12 Months Ended
	Dec. 31, 2015 USD ($) $ / shares
Recurring [Member] | Warrants [Member] | Black-Scholes formulation [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Stock price | $ / shares	$ 2.01
Exercise price | $ / shares	$ 2.01
Time to maturity (in years)	15 days
Risk-free interest rate	0.14%
Annualized volatility	100.00%
Fair Value, Measurements, Nonrecurring [Member] | Impaired Off-lease Equipment [Member] | Market Approach [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair value inputs, third party agents' pricing quotes per equipment | $	$ 100,000
Fair value inputs, third party agents' pricing quotes, total | $	$ 300,000

XML

Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Financial assets:
Cash and cash equivalents	$ 3,421	$ 2,240
Investment in securities	5	5
Financial liabilities:
Non-recourse debt		3,971
Carrying Amount
Financial assets:
Cash and cash equivalents	3,421	2,240
Investment in securities	5	5
Financial liabilities:
Non-recourse debt		3,921
Estimated Fair Value | Level 1 Estimated Fair Value [Member]
Financial assets:
Cash and cash equivalents	3,421	2,240
Investment in securities
Financial liabilities:
Non-recourse debt
Estimated Fair Value | Level 2 Estimated Fair Value [Member]
Financial assets:
Cash and cash equivalents
Investment in securities
Financial liabilities:
Non-recourse debt
Estimated Fair Value | Level 3 Estimated Fair Value [Member]
Financial assets:
Investment in securities	$ 5	5
Financial liabilities:
Non-recourse debt		$ 3,971