Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
☒Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the quarterly period ended September 30, 2019
☐Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the transition period from to
Commission File number 000‑50687
ATEL Capital Equipment Fund X, LLC
(Exact name of registrant as specified in its charter)
California |
68‑0517690 |
(State or other jurisdiction of |
(I. R. S. Employer |
The Transamerica Pyramid, 600 Montgomery Street, 9th Floor, San Francisco, California 94111
(Address of principal executive offices)
Registrant’s telephone number, including area code (415) 989‑8800
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Limited Liability Company Units
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
|
Trading Symbol |
|
Name of each exchange on which registered: |
N/A |
|
N/A |
|
N/A |
Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer, large accelerated filer and smaller reporting company” in Rule 12b‑2 of the Exchange Act.
Large accelerated filer ☐ |
Accelerated filer ☐ |
Non-accelerated filer ☒ |
Smaller reporting company ☒ |
Emerging growth company ☐ |
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes ☐ No ☒
The number of Limited Liability Company Units outstanding as of October 31, 2019 was 13,971,486.
DOCUMENTS INCORPORATED BY REFERENCE
None.
ATEL CAPITAL EQUIPMENT FUND X, LLC
2
Item 1. Financial Statements (Unaudited).
ATEL CAPITAL EQUIPMENT FUND X, LLC
SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(In Thousands)
|
|
September 30, |
|
December 31, |
||
|
|
2019 |
|
2018 |
||
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,717 |
|
$ |
2,877 |
Accounts receivable, net |
|
|
76 |
|
|
96 |
Due from Managing Member and affiliates |
|
|
— |
|
|
15 |
Investment in securities |
|
|
44 |
|
|
55 |
Equipment under operating leases, net |
|
|
3,904 |
|
|
4,884 |
Prepaid expenses and other assets |
|
|
108 |
|
|
109 |
Total assets |
|
$ |
5,849 |
|
$ |
8,036 |
|
|
|
|
|
|
|
LIABILITIES AND MEMBERS’ CAPITAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities: |
|
|
|
|
|
|
Due to Managing Member |
|
$ |
13 |
|
$ |
— |
Other |
|
|
1,138 |
|
|
1,095 |
Deposits due lessees |
|
|
1 |
|
|
1 |
Unearned operating lease income |
|
|
19 |
|
|
17 |
Total liabilities |
|
|
1,171 |
|
|
1,113 |
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Members’ capital: |
|
|
|
|
|
|
Managing Member |
|
|
— |
|
|
— |
Other Members |
|
|
4,678 |
|
|
6,923 |
Total Members’ capital |
|
|
4,678 |
|
|
6,923 |
Total liabilities and Members’ capital |
|
$ |
5,849 |
|
$ |
8,036 |
See accompanying notes.
3
ATEL CAPITAL EQUIPMENT FUND X, LLC
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2019 AND 2018
(In Thousands Except for Units and Per Unit Data)
(Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating leases |
|
$ |
312 |
|
$ |
603 |
|
$ |
1,255 |
|
$ |
1,847 |
|
Gain (loss) on sales of equipment under operating leases |
|
|
47 |
|
|
(304) |
|
|
40 |
|
|
137 |
|
Other |
|
|
— |
|
|
1 |
|
|
118 |
|
|
19 |
|
Total revenues |
|
|
359 |
|
|
300 |
|
|
1,413 |
|
|
2,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of operating lease assets |
|
|
47 |
|
|
125 |
|
|
117 |
|
|
458 |
|
Asset management fees to Managing Member and/or affiliates |
|
|
22 |
|
|
23 |
|
|
74 |
|
|
80 |
|
Costs reimbursed to Managing Member and/or affiliates |
|
|
40 |
|
|
39 |
|
|
161 |
|
|
330 |
|
Amortization of initial direct costs |
|
|
2 |
|
|
1 |
|
|
3 |
|
|
2 |
|
Impairment losses on equipment |
|
|
— |
|
|
— |
|
|
281 |
|
|
459 |
|
Railcar maintenance |
|
|
26 |
|
|
44 |
|
|
88 |
|
|
120 |
|
Provision for (reversal of) credit losses |
|
|
27 |
|
|
(21) |
|
|
58 |
|
|
40 |
|
Impairment losses on investment in securities |
|
|
— |
|
|
— |
|
|
11 |
|
|
— |
|
Professional fees |
|
|
38 |
|
|
13 |
|
|
155 |
|
|
106 |
|
Franchise fees and taxes |
|
|
5 |
|
|
8 |
|
|
32 |
|
|
(111) |
|
Outside services |
|
|
33 |
|
|
32 |
|
|
83 |
|
|
102 |
|
Insurance |
|
|
7 |
|
|
11 |
|
|
27 |
|
|
31 |
|
Printing and photocopying |
|
|
6 |
|
|
6 |
|
|
16 |
|
|
12 |
|
Storage fees |
|
|
67 |
|
|
8 |
|
|
71 |
|
|
90 |
|
Other |
|
|
19 |
|
|
31 |
|
|
65 |
|
|
73 |
|
Total operating expenses |
|
|
339 |
|
|
320 |
|
|
1,242 |
|
|
1,792 |
|
Other expense, net |
|
|
— |
|
|
(1) |
|
|
— |
|
|
(1) |
|
Net income (loss) |
|
$ |
20 |
|
$ |
(21) |
|
$ |
171 |
|
$ |
210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Managing Member |
|
$ |
— |
|
$ |
— |
|
$ |
181 |
|
$ |
266 |
|
Other Members |
|
|
20 |
|
|
(21) |
|
|
(10) |
|
|
(56) |
|
|
|
$ |
20 |
|
$ |
(21) |
|
$ |
171 |
|
$ |
210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per Limited Liability Company Unit (Other Members) |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Weighted average number of Units outstanding |
|
|
13,971,486 |
|
|
13,971,486 |
|
|
13,971,486 |
|
|
13,971,486 |
|
See accompanying notes.
4
ATEL CAPITAL EQUIPMENT FUND X, LLC
STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
(In Thousands Except for Units and Per Unit Data)
(Unaudited)
|
|
Three Months Ended September 30, 2019 |
|
|||||||||
|
|
Other Members |
|
Managing |
|
|
|
|
||||
|
|
Units |
|
Amount |
|
Member |
|
Total |
|
|||
Balance June 30, 2019 |
|
13,971,486 |
|
$ |
4,658 |
|
$ |
— |
|
$ |
4,658 |
|
Net income |
|
— |
|
|
20 |
|
|
— |
|
|
20 |
|
Balance September 30, 2019 |
|
13,971,486 |
|
$ |
4,678 |
|
$ |
— |
|
$ |
4,678 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2019 |
|
|||||||||
|
|
Other Members |
|
Managing |
|
|
|
|
||||
|
|
Units |
|
Amount |
|
Member |
|
Total |
|
|||
Balance December 31, 2018 |
|
13,971,486 |
|
$ |
6,923 |
|
$ |
— |
|
$ |
6,923 |
|
Distributions to Other Members ($0.16 per Unit) |
|
— |
|
|
(2,235) |
|
|
— |
|
|
(2,235) |
|
Distributions to Managing Member |
|
— |
|
|
— |
|
|
(181) |
|
|
(181) |
|
Net (loss) income |
|
— |
|
|
(10) |
|
|
181 |
|
|
171 |
|
Balance September 30, 2019 |
|
13,971,486 |
|
$ |
4,678 |
|
$ |
— |
|
$ |
4,678 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2018 |
|
|||||||||
|
|
Other Members |
|
Managing |
|
|
|
|
||||
|
|
Units |
|
Amount |
|
Member |
|
Total |
|
|||
Balance June 30, 2018 |
|
13,971,486 |
|
|
6,457 |
|
$ |
— |
|
$ |
6,457 |
|
Net loss |
|
— |
|
|
(21) |
|
|
— |
|
|
(21) |
|
Balance September 30, 2018 |
|
13,971,486 |
|
$ |
6,436 |
|
$ |
— |
|
$ |
6,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2018 |
|
|||||||||
|
|
Other Members |
|
Managing |
|
|
|
|
||||
|
|
Units |
|
Amount |
|
Member |
|
Total |
|
|||
Balance December 31, 2017 |
|
13,971,486 |
|
$ |
9,776 |
|
$ |
— |
|
$ |
9,776 |
|
Distributions to Other Members ($0.24 per Unit) |
|
— |
|
|
(3,284) |
|
|
— |
|
|
(3,284) |
|
Distributions to Managing Member |
|
— |
|
|
— |
|
|
(266) |
|
|
(266) |
|
Net (loss) income |
|
— |
|
|
(56) |
|
|
266 |
|
|
210 |
|
Balance September 30, 2018 |
|
13,971,486 |
|
$ |
6,436 |
|
$ |
— |
|
$ |
6,436 |
|
See accompanying notes.
5
ATEL CAPITAL EQUIPMENT FUND X, LLC
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2019 AND 2018
(In Thousands)
(Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
20 |
|
$ |
(21) |
|
$ |
171 |
|
$ |
210 |
|
Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gain) loss on sales of equipment under operating leases |
|
|
(47) |
|
|
304 |
|
|
(40) |
|
|
(137) |
|
Depreciation of operating lease assets |
|
|
47 |
|
|
125 |
|
|
117 |
|
|
458 |
|
Amortization of initial direct costs |
|
|
2 |
|
|
1 |
|
|
3 |
|
|
2 |
|
Impairment losses on equipment |
|
|
— |
|
|
— |
|
|
281 |
|
|
459 |
|
Provision for (reversal of) credit losses |
|
|
27 |
|
|
(21) |
|
|
58 |
|
|
40 |
|
Impairment losses on investment in securities |
|
|
— |
|
|
— |
|
|
11 |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(13) |
|
|
(25) |
|
|
(38) |
|
|
(50) |
|
Due from Managing Member and affiliates |
|
|
30 |
|
|
(112) |
|
|
15 |
|
|
(112) |
|
Prepaid expenses and other assets |
|
|
(18) |
|
|
(19) |
|
|
1 |
|
|
1 |
|
Due to Managing Member and affiliates |
|
|
13 |
|
|
70 |
|
|
13 |
|
|
37 |
|
Other accounts payable and accruals |
|
|
(121) |
|
|
(17) |
|
|
43 |
|
|
(200) |
|
Unearned operating lease income |
|
|
6 |
|
|
20 |
|
|
2 |
|
|
2 |
|
Net cash (used in) provided by operating activities |
|
|
(54) |
|
|
305 |
|
|
637 |
|
|
710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal payments received on direct financing leases |
|
|
— |
|
|
— |
|
|
3 |
|
|
— |
|
Proceeds from sales of equipment under operating leases |
|
|
311 |
|
|
511 |
|
|
616 |
|
|
1,071 |
|
Net cash provided by investing activities |
|
|
311 |
|
|
511 |
|
|
619 |
|
|
1,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments under non-recourse debt |
|
|
— |
|
|
— |
|
|
— |
|
|
(83) |
|
Distributions to Other Members |
|
|
— |
|
|
— |
|
|
(2,235) |
|
|
(3,284) |
|
Distributions to Managing Member |
|
|
— |
|
|
— |
|
|
(181) |
|
|
(266) |
|
Net cash used in financing activities |
|
|
— |
|
|
— |
|
|
(2,416) |
|
|
(3,633) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
257 |
|
|
816 |
|
|
(1,160) |
|
|
(1,852) |
|
Cash and cash equivalents at beginning of period |
|
|
1,460 |
|
|
1,367 |
|
|
2,877 |
|
|
4,035 |
|
Cash and cash equivalents at end of period |
|
$ |
1,717 |
|
$ |
2,183 |
|
$ |
1,717 |
|
$ |
2,183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for taxes |
|
$ |
— |
|
$ |
— |
|
$ |
44 |
|
$ |
17 |
|
See accompanying notes.
6
1. Organization and Limited Liability Company matters:
ATEL Capital Equipment Fund X, LLC (the “Company” or the “Fund”) was formed under the laws of the State of California on August 12, 2002 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 or Manager of the Company is ATEL Financial Services, LLC (“AFS”), a California limited liability company. The Company may continue until December 31, 2022.
As of March 11, 2005, subscriptions for 14,059,136 Units ($140.6 million) had been received, of which 87,650 Units ($720 thousand) were subsequently rescinded or repurchased (net of distributions paid and allocated syndication costs, as applicable) by the Company through September 30, 2019. As of September 30, 2019, 13,971,486 Units remain issued and outstanding.
The Company is governed by the Limited Liability Company Operating Agreement (“Operating Agreement”), as amended. On January 1, 2012, 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 5). The Company is required to maintain reasonable cash reserves for working capital, for the repurchase of Units and for contingencies. The repurchase of Units is solely at the discretion of AFS.
These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10‑K for the year ended December 31, 2018, filed with the Securities and Exchange Commission.
2. Summary of significant accounting policies:
Basis of presentation:
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10‑Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year.
Certain prior period amounts may have been reclassified to conform to the current period 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 unaudited financial statements, the Managing Member has reviewed events that have occurred after September 30, 2019, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements, or adjustments thereto.
7
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 primarily relate 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 allowances for doubtful accounts.
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 primary geographic region in which the Company sought leasing opportunities was North America. The table below summarizes geographic information relating to the sources, by nation, of the Company’s total revenues for the three and nine months ended September 30, 2019 and 2018, and long-lived tangible assets as of September 30, 2019 and December 31, 2018 (dollars in thousands):
|
|
Nine months ended September 30, |
|
|
||||||||
|
|
2019 |
|
% of Total |
|
2018 |
|
% of Total |
|
|
||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
1,369 |
|
97 |
% |
$ |
1,945 |
|
97 |
% |
|
Canada |
|
|
44 |
|
3 |
% |
|
58 |
|
3 |
% |
|
Total |
|
$ |
1,413 |
|
100 |
% |
$ |
2,003 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
||||||||
|
|
2019 |
|
% of Total |
|
2018 |
|
% of Total |
|
|
||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
343 |
|
96 |
% |
$ |
300 |
|
100 |
% |
|
Canada |
|
|
16 |
|
4 |
% |
|
— |
|
- |
% |
|
Total |
|
$ |
359 |
|
100 |
% |
$ |
300 |
|
100 |
% |
|
|
|
As of September 30, |
|
As of December 31, |
|
|
||||||
|
|
2019 |
|
% of Total |
|
2018 |
|
% of Total |
|
|
||
Long-lived assets |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
3,813 |
|
98 |
% |
$ |
4,793 |
|
98 |
% |
|
Canada |
|
|
91 |
|
2 |
% |
|
91 |
|
2 |
% |
|
Total |
|
$ |
3,904 |
|
100 |
% |
$ |
4,884 |
|
100 |
% |
|
8
Investment in securities:
From time to time, the Company may purchase securities of its borrowers or receive warrants to purchase securities in connection with its lending arrangements.
Purchased securities
Purchased securities registered for public sale are carried at fair value. Such securities with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company`s results of operations. The Company`s investment securities that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. 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. The investment in securities balance was $44 thousand and $55 thousand as of September 30, 2019 and December 31, 2018, respectively. Impairment losses on investment securities totaled $11 thousand for the nine months ended September 30, 2019, all of which were recorded during the first quarter. There were no impairment losses on investment securities during the three and nine months ended September 30, 2018. Also, there were no observable price changes for the three and nine months ended September 30, 2019 and 2018. In addition, there were no investment securities purchased, sold or disposed for the three and nine months ended September 30, 2019 and 2018.
Per Unit data:
The Company issues only one class of Units, none of which are considered dilutive. Net income (loss) and distributions per Unit are based upon the weighted average number of Other Members’ Units outstanding during the period.
Equipment under operating leases, net 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 360‑20‑35‑3, 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 any appropriate 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.
9
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.
Initial direct costs:
With the adoption of ASU No. 2016-02 certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred effective January 1, 2019. In 2018 and prior, the Company capitalized initial direct costs (“IDC”) associated with the origination of lease assets. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease basis based on actual contract term using a straight-line method for operating leases. Upon disposal of the underlying lease assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense.
Fair value:
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’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.
10
Recent accounting pronouncements:
In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors. In March 2019, the FASB issued ASU No. 2019-01, Leases: Codification Improvements. Collectively referred to hereafter as ASU No. 2016-02, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract to control an asset (i.e., lessees and lessors). The Company does not have any non-cancelable leases where it is a lessee.
ASU No. 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards were effective as of January 1, 2019. Upon adoption, the Company applied the package of practical expedients that has allowed us to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, the Company applied the optional transition method in ASU No. 2018-11, which has allowed the company to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the adoption period, although the Company did not have an adjustment. Additionally, the Company leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard.
The adoption of ASU No. 2016-02 and the related improvements did not have a material impact on the Company’s financial statements. Upon adoption, (i) amounts previously recognized as lessee reimbursements and other income, for the three and nine months ended September 30, 2019, have been classified as lease or financing income, (ii) allowances for bad debts are now recognized as a direct reduction of operating lease income, and (iii) certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. Subsequent to January 1, 2019, provisions for credit losses relating to operating leases are now included in lease income in the Company’s financial statements. Provisions for credit losses prior to January 1, 2019 were previously included in operating expenses in the Company’s financial statements and prior periods are not reclassified to conform to the current presentation.
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 expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments.
11
In November 2018, the FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses (“ASU 2018-19”). The new standard clarifies certain aspects of the new current expected credit losses (CECL) impairment model in ASU 2016-13. The amendment clarifies that receivables arising from operating leases are within the scope of ASC 842, rather than ASC 326; however, it will be applicable to the Company’s note receivables and direct financing leases, if any. The effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements.
In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. Management is currently evaluating the impact of this standard on the financial statements and related disclosure requirements.
On August 15, 2019, the FASB issued a proposed ASU that would grant private companies, not-for-profit organizations, and certain small public companies additional time to implement FASB standards on CECL, leases and hedging. The proposed ASU defers the effective date for CECL to fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years; and defers the effective dates for both leases and hedging to fiscal periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The ASU was approved on October 16, 2019.
3. Allowance for credit losses:
The Company’s allowance for credit losses are as follows (in thousands):
|
|
Accounts |
|
|
|
Receivable |
|
|
|
Allowance for |
|
|
|
Doubtful Accounts |
|
|
|
Operating Leases |
|
Beginning Balance December 31, 2017 |
|
$ |
16 |
Provision for credit losses |
|
|
40 |
Ending Balance September 30, 2018 |
|
$ |
56 |
|
|
|
|
Beginning Balance December 31, 2018 |
|
$ |
101 |
Provision for credit losses |
|
|
58 |
Ending Balance September 30, 2019 |
|
$ |
159 |
12
4. Equipment under operating leases, net:
The Company’s equipment under operating leases, net consists of the following (in thousands):
|
|
|
|
|
|
|
|
Depreciation/ |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization |
|
|
|
|
|
|
Balance |
|
Reclassifications |
|
Expense or |
|
Balance |
||||
|
|
December 31, |
|
Additions / Dispositions |
|
Amortization |
|
September 30, |
||||
|
|
2018 |
|
and Impairment Losses |
|
of Leases |
|
2019 |
||||
Equipment under operating leases, net |
|
$ |
3,689 |
|
$ |
(894) |
|
$ |
(117) |
|
$ |
2,678 |
Assets held for sale or lease, net |
|
|
1,188 |
|
|
34 |
|
|
— |
|
|
1,222 |
Initial direct costs, net of accumulated amortization of at December 31, 2018 |
|
|
7 |
|
|
— |
|
|
(3) |
|
|
4 |
Total |
|
$ |
4,884 |
|
$ |
(860) |
|
$ |
(120) |
|
$ |
3,904 |
Impairment of equipment under operating leases, net and assets held for sale or lease:
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, if any. 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.
As a result of these reviews, management determined that impairment losses existed; the Company recorded $281 thousand and $459 thousand of impairment losses to reduce the fair value of certain equipment for the respective nine months ended September 30, 2019 and 2018, all of which were recorded during the second quarters of 2019 and 2018, respectively.
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 $47 thousand and $125 thousand for the respective three months ended September 30, 2019 and 2018, and was $117 thousand and $458 thousand for the respective nine months ended September 30, 2019 and 2018. The Company recorded $2 thousand and $1 thousand of IDC amortization for the respective three months ended September 30, 2019 and 2018, and $3 thousand and $2 thousand for the respective nine months ended September 30, 2019 and 2018.
All of the remaining property on lease was acquired during the years 2005 through 2011.
13
Operating leases:
Property on operating leases consists of the following (in thousands):
|
|
Balance |
|
|
|
|
|
|
Balance |
|||
|
|
December 31, |
|
|
|
|
Reclassification |
|
September 30, |
|||
|
|
2018 |
|
Additions |
|
/Dispositions |
|
2019 |
||||
Transportation, rail |
|
$ |
12,392 |
|
$ |
— |
|
$ |
(158) |
|
$ |
12,234 |
Trucks and Trailers |
|
|
3,420 |
|
|
— |
|
|
(3,335) |
|
|
85 |
Aircraft |
|
|
1,988 |
|
|
— |
|
|
— |
|
|
1,988 |
Manufacturing |
|
|
624 |
|
|
— |
|
|
— |
|
|
624 |
Petro/natural gas |
|
|
470 |
|
|
— |
|
|
— |
|
|
470 |
Materials handling |
|
|
157 |
|
|
— |
|
|
(25) |
|
|
132 |
|
|
|
19,051 |
|
|
— |
|
|
(3,518) |
|
|
15,533 |
Less accumulated depreciation |
|
|
(15,362) |
|
|
(117) |
|
|
2,624 |
|
|
(12,855) |
Total |
|
$ |
3,689 |
|
$ |
(117) |
|
$ |
(894) |
|
$ |
2,678 |
The average estimated residual value for assets on operating leases was 17% and 21% of the assets’ original cost at September 30, 2019 and December 31, 2018, respectively. There were no operating leases placed in non-accrual status as of the same dates.
At September 30, 2019, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):
|
|
Operating |
|
|
|
Leases |
|
Three months ending December 31, 2019 |
|
$ |
167 |
Year Ending December 31, 2020 |
|
|
504 |
2021 |
|
|
201 |
2022 |
|
|
71 |
2023 |
|
|
12 |
|
|
$ |
955 |
The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of September 30, 2019, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):
Equipment category |
|
Useful Life |
Transportation, rail |
|
35 - 50 |
Aircraft |
|
20 - 30 |
Manufacturing |
|
10 - 15 |
Petro/natural gas |
|
10 - 15 |
Materials handling |
|
7 - 10 |
Transportation, other |
|
7 - 10 |
14
5. 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 in 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 would 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 Fund’s 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 September 30, 2019, the Company has not exceeded the annual and/or cumulative limitations discussed above.
During the three and nine months ended September 30, 2019 and 2018, AFS and/or affiliates earned fees and billed for reimbursements of costs and expenses pursuant to the Operating Agreement as follows (in thousands):
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||
Costs reimbursed to Managing Member and/or affiliates |
|
$ |
40 |
|
$ |
39 |
|
$ |
161 |
|
$ |
330 |
|
Asset management fees to Managing Member and/or affiliates |
|
|
22 |
|
|
23 |
|
|
74 |
|
|
80 |
|
|
|
$ |
62 |
|
$ |
62 |
|
$ |
235 |
|
$ |
410 |
|
6. Commitments:
At September 30, 2019, there were no commitments to purchase lease assets.
15
7. Members’ capital:
Units issued and outstanding were 13,971,486 at both September 30, 2019 and December 31, 2018. The Company was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial members (50 Units). The Company ceased offering Units on March 11, 2005.
Distributions to the Other Members for the three months and nine months ended September 30, 2019 and 2018 were as follows (in thousands except Units and per Unit data):
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||
Distributions declared |
|
$ |
— |
|
$ |
— |
|
$ |
2,235 |
|
$ |
3,284 |
|
Weighted average number of Units outstanding |
|
|
13,971,486 |
|
|
13,971,486 |
|
|
13,971,486 |
|
|
13,971,486 |
|
Weighted average distributions per Unit |
|
$ |
— |
|
$ |
— |
|
$ |
0.16 |
|
$ |
0.24 |
|
8. Fair value measurements:
Under applicable accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
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 and should be read in conjunction with the Company’s financial statements and related notes.
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.
The measurement methodologies are as follows:
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.
Commitments and Contingencies
Management has determined that no recognition for the fair value of the Company’s loan commitments is necessary because their terms are made on a market rate basis and require borrowers to be in compliance with the Company’s credit requirements at the time of funding.
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.
16
The following tables present a summary of the carrying value and fair value by level of financial instruments on the Company’s balance sheets at September 30, 2019 and December 31, 2018 (in thousands):
|
|
Fair Value Measurements at September 30, 2019 |
|||||||||||||
|
|
Carrying |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,717 |
|
$ |
1,717 |
|
$ |
— |
|
$ |
— |
|
$ |
1,717 |
|
|
Fair Value Measurements at December 31, 2018 |
|||||||||||||
|
|
Carrying |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,877 |
|
$ |
2,877 |
|
$ |
— |
|
$ |
— |
|
$ |
2,877 |
Impaired lease and/or off-lease equipment (non-recurring)
The following table presents the fair value measurements of impaired off- lease assets at fair value on a non-recurring basis and the level within the hierarchy in which the fair measurements fall at September 30, 2019 (in thousands):
|
|
|
|
|
Level 1 Estimated |
|
Level 2 Estimated |
|
Level 3 Estimated |
|||
|
|
September 30, 2019 |
|
Fair Value |
|
Fair Value |
|
Fair Value |
||||
Assets measured at fair value on a non-recurring basis: |
|
|
|
|
|
|
|
|
|
|
|
|
Impaired lease and off-lease equipment |
|
$ |
8 |
|
$ |
— |
|
$ |
— |
|
$ |
8 |
There was no non-recurring impaired lease and/or off lease equipment at December 31, 2018, as all equipment deemed impaired were disposed in July 2018.
The following table summarizes the valuation techniques and significant unobservable inputs used for the Company’s non-recurring fair value adjustments categorized as Level 3 in the fair value hierarchy at September 30, 2019 and December 31, 2018.
September 30, 2019 |
||||||||
Name |
|
Valuation Frequency |
|
Valuation Technique |
|
Unobservable Inputs |
|
Range of |
Impaired off-lease Equipment |
|
Non-recurring |
|
Market Approach |
|
Third Party Agents' Pricing |
|
$0 - $8,000 |
|
|
|
|
|
|
Quotes – per equipment |
|
(total of $8,000) |
|
|
|
|
|
|
Equipment Condition |
|
Poor to Average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Statements contained in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Form 10-Q, which are not historical facts, may be forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. In particular, economic recession and changes in general economic conditions, including, fluctuations in demand for equipment, lease rates, and interest rates, may result in delays in investment and reinvestment, delays in leasing, re-leasing, and disposition of equipment, and reduced returns on invested capital. The Company’s performance is subject to risks relating to lessee defaults and the creditworthiness of its lessees. The Company’s performance is also subject to risks relating to the value of its equipment at the end of its leases, which may be affected by the condition of the equipment, technological obsolescence and the market for new and used equipment at the end of lease terms. Investors are cautioned not to attribute undue certainty to these forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events, other than as required by law.
Overview
ATEL Capital Equipment Fund X, LLC (the “Company” or the “Fund”) is a California limited liability company that was formed in August 2002 for the purpose of engaging in the sale of limited liability company investment units and acquiring equipment to generate revenues from equipment leasing 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, 2022. However, pursuant to the guidelines of the Limited Liability Company Operating Agreement (“Operating Agreement”), the Company commenced liquidation phase activities subsequent to the end of the Reinvestment Period which ended on December 31, 2011. Periodic distributions will be paid at the discretion of the Managing Member.
Results of Operations
The Fund had net income of $20 thousand and $171 thousand for the respective three and nine month periods ended September 30, 2019.
Total revenues were $359 thousand for the quarter and $1.4 million for the year to date. Such revenues were from operating lease rents, gains on sales of lease assets and a termination settlement in favor of the fund recorded as other income during the second quarter. Operating lease rents for the quarter were $312 thousand and $1.3 million for the year to date period; the gains on sales of operating leases was $47 thousand for current quarter and $40 thousand for the year to date ended September 30, 2019. Compared to prior periods, revenues have been declining consistent with a fund in its liquidating stage where lease assets are sold as lease commitments end.
Total operating expenses were $339 thousand for the quarter and $1.2 million for the year to date. The main components of operating expense were impairment losses on equipment, depreciation of operating lease assets, railcar maintenance fees, cost reimbursements to Managing Member and affiliates, outside services and professional fees.
Depreciation of operating lease assets for the quarter was $47 thousand and $117 thousand for the year to date period. Compared to prior periods, depreciation has been declining consistent with a fund in its liquidating stage where lease assets are sold as lease commitments end. There was $281 thousand in impairment losses on equipment for the year to date period ended September 30, 2019. All of such impairment was recognized during the second quarter, and there was no impairment loss for current quarter.
18
Cost reimbursements to Managing Member and/or affiliates were $40 thousand and $161 thousand for the respective three and nine month periods ended September 30, 2019. Similar to the decline in depreciation expense, the cost reimbursements have been declining consistent with a fund in late stage liquidation, and the adjustments of baseline allocations of common costs among the fund and its affiliates.
The provision for credit losses was $27 thousand and $58 thousand for the respective three and nine months ended September 30, 2019, these amounts represent incremental period charges for past due invoices greater than ninety days at September 30, 2019.
Expense amounts reflected as professional fees of $38 thousand and $155 thousand, and outside services of $33 thousand and $83 thousand for the respective quarter end and year to date periods were incurred for direct fund specific core costs of preparation, printing, filing and distribution of annual Form 1065 tax and shareholder reports on Form K-1. In addition, such costs include costs attributable to the Company’s annual / quarterly tax preparation, valuation reports and mandated periodic regulatory filings with the Securities and Exchange Commission.
Cash balances increased during the current quarter by $257 thousand and decreased by $1.2 million for the year to date period. This was mainly the result of the annual distribution to the Other Members, aforementioned items of net income (loss), depreciation of operating lease assets augmented by the proceeds capitalize from sales of lease assets of $311 thousand and $616 thousand during the respective quarter and year to date periods.
Commitments and Contingencies and Off-Balance Sheet Transactions
Commitments and Contingencies
At September 30, 2019, there were no commitments to purchase lease assets.
Off-Balance Sheet Transactions
None.
Recent Accounting Pronouncements
For detailed information on recent accounting pronouncements, see Note 2, Summary of significant accounting policies.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America 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. On an on-going basis, the Company evaluates its estimates, which are based upon historical experiences, market trends and financial forecasts, and upon various other assumptions that management believes to be reasonable under the circumstances and at that certain point in time. Actual results may differ, significantly at times, from these estimates under different assumptions or conditions.
The Company’s critical accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes to the Company’s critical accounting policies since December 31, 2018 except as disclosed in Note 2 related to the new lease accounting guidance adopted on January 1, 2019.
19
Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures
The Company’s Managing Member’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer and Chief Operating Officer (“Management”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on the evaluation of the Company’s disclosure controls and procedures, Management concluded that as of the end of the period covered by this report, the design and operation of these disclosure controls and procedures were effective.
The Company does not control the financial reporting process, and is solely dependent on the Management of the Managing Member, who is responsible for providing the Company with financial statements in accordance with generally accepted accounting principles in the United States. The Managing Member’s disclosure controls and procedures, as they are applicable to the Company, means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal control
There were no changes in the Managing Member’s internal control over financial reporting, as it is applicable to the Company, during the quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, the Managing Member’s internal control over financial reporting, as it is applicable to the Company.
20
In the ordinary course of conducting business, there may be certain claims, suits, and complaints filed against the Company. In the opinion of management, the outcome of such matters, if any, will not have a material impact on the Company’s financial position or results of operations. No material legal proceedings are currently pending against the Company or against any of its assets.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
None.
Documents filed as a part of this report:
1. |
Financial Statement Schedules |
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
2. |
Other Exhibits |
31.1 |
|
31.2 |
Rule 13a-14(a)/ 15d-14(a) Certification of Paritosh K. Choksi |
32.1 |
Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash |
32.2 |
Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi |
101.INS |
XBRL Instance Document |
101.SCH |
XBRL Taxonomy Extension Schema Document |
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document |
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 13, 2019
ATEL CAPITAL EQUIPMENT FUND X, LLC
(Registrant)
|
|
By: |
ATEL Financial Services, LLC |
|
|
|
Managing Member of Registrant |
By: |
/s/ Dean L. Cash |
|
|
|
Dean L. Cash |
|
|
|
President and Chief Executive Officer of ATEL Financial Services, LLC (Managing Member) |
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Paritosh K. Choksi |
|
|
|
Paritosh K. Choksi |
|
|
|
Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Financial Services, LLC (Managing Member) |
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Samuel Schussler |
|
|
|
Samuel Schussler |
|
|
|
Senior Vice President and Chief Accounting Officer of ATEL Financial Services, LLC (Managing Member) |
|
|
22
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Dean L. Cash, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ATEL Capital Equipment Fund X, LLC;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 13, 2019
/s/ Dean L. Cash |
|
Dean L. Cash |
|
President and Chief Executive Officer of |
|
ATEL Financial Services, LLC (Managing Member) |
Exhibit 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Paritosh K. Choksi, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ATEL Capital Equipment Fund X, LLC;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 13, 2019
/s/ Paritosh K. Choksi |
|
Paritosh K. Choksi |
|
Executive Vice President and Chief Financial Officer and Chief Operating |
|
Officer of ATEL Financial Services, LLC (Managing Member) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C.§1350,
AS ADOPTED PURSUANT TO
§906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ATEL Capital Equipment Fund X, LLC (the ‘‘Company’’) on Form 10-Q for the period ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the ‘‘Report’’), I, Dean L. Cash, President and Chief Executive Officer of ATEL Financial Services, LLC, Managing Member of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 13, 2019
/s/ Dean L. Cash |
|
Dean L. Cash |
|
President and Chief Executive Officer of |
|
ATEL Financial Services, LLC (Managing Member) |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
§906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ATEL Capital Equipment Fund X, LLC (the ‘‘Company’’) on Form 10-Q for the period ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the ‘‘Report’’), I, Paritosh K. Choksi, Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Financial Services, LLC, Managing Member of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 13, 2019
/s/ Paritosh K. Choksi |
|
Paritosh K. Choksi |
|
Executive Vice President and Chief Financial |
|
Officer and Chief Operating Officer of |
|
ATEL Financial Services, LLC (Managing Member) |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Equipment Under Operating Leases, Net (Future Minimum Lease Payments Receivable) (Details) $ in Thousands |
Sep. 30, 2019
USD ($)
|
---|---|
Operating Leases | |
Three months ending December 31, 2019 | $ 167 |
Year Ending December 31, 2020 | 504 |
2021 | 201 |
2022 | 71 |
2023 | 12 |
Operating leases, future minimum payments receivable, total | $ 955 |
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Values of Financial Instruments | The following tables present a summary of the carrying value and fair value by level of financial instruments on the Company’s balance sheets at September 30, 2019 and December 31, 2018 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement of Impaired Assets at Fair Value on Non-recurring Basis | The following table presents the fair value measurements of impaired off- lease assets at fair value on a non-recurring basis and the level within the hierarchy in which the fair measurements fall at September 30, 2019 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 non-recurring fair value adjustments categorized as Level 3 in the fair value hierarchy at September 30, 2019 and December 31, 2018.
|
Allowance for Credit Losses (Activity in Allowance for Credit Losses) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Provision for credit losses | $ 27 | $ (21) | $ 58 | $ 40 |
Allowance For Doubtful Accounts [Member] | Operating Leases [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning Balance | 101 | 16 | ||
Provision for credit losses | 58 | 40 | ||
Ending Balance | $ 159 | $ 56 | $ 159 | $ 56 |
Balance Sheets - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
ASSETS | ||
Cash and cash equivalents | $ 1,717 | $ 2,877 |
Accounts receivable, net | 76 | 96 |
Due from Managing Member and affiliates | 15 | |
Investment in securities | 44 | 55 |
Equipment under operating leases, net | 3,904 | 4,884 |
Prepaid expenses and other assets | 108 | 109 |
Total assets | 5,849 | 8,036 |
Accounts payable and accrued liabilities: | ||
Due to Managing Member | 13 | |
Other | 1,138 | 1,095 |
Deposits due lessees | 1 | 1 |
Unearned operating lease income | 19 | 17 |
Total liabilities | 1,171 | 1,113 |
Commitments and contingencies | ||
Members' capital: | ||
Managing Member | ||
Other Members | 4,678 | 6,923 |
Total Members' capital | 4,678 | 6,923 |
Total liabilities and Members' capital | $ 5,849 | $ 8,036 |
Members' Capital |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Members' Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Members' Capital | 7. Members’ capital: Units issued and outstanding were 13,971,486 at both September 30, 2019 and December 31, 2018. The Company was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial members (50 Units). The Company ceased offering Units on March 11, 2005. Distributions to the Other Members for the three months and nine months ended September 30, 2019 and 2018 were as follows (in thousands except Units and per Unit data):
|
Allowance for Credit Losses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Allowance for Credit Losses | The Company’s allowance for credit losses are as follows (in thousands):
|
Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Distributions declared | $ 2,235 | $ 3,284 | ||
Weighted average number of Units outstanding | 13,971,486 | 13,971,486 | 13,971,486 | 13,971,486 |
Other Members [Member] | ||||
Distributions declared | $ 2,235 | $ 3,284 | ||
Weighted average number of Units outstanding | 13,971,486 | 13,971,486 | 13,971,486 | 13,971,486 |
Weighted average distributions per Unit | $ 0.16 | $ 0.24 |
Organization and Limited Liability Company Matters |
9 Months Ended |
---|---|
Sep. 30, 2019 | |
Organization and Limited Liability Company Matters [Abstract] | |
Organization and Limited Liability Company Matters | 1. Organization and Limited Liability Company matters: ATEL Capital Equipment Fund X, LLC (the “Company” or the “Fund”) was formed under the laws of the State of California on August 12, 2002 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 or Manager of the Company is ATEL Financial Services, LLC (“AFS”), a California limited liability company. The Company may continue until December 31, 2022. As of March 11, 2005, subscriptions for 14,059,136 Units ($140.6 million) had been received, of which 87,650 Units ($720 thousand) were subsequently rescinded or repurchased (net of distributions paid and allocated syndication costs, as applicable) by the Company through September 30, 2019. As of September 30, 2019, 13,971,486 Units remain issued and outstanding. The Company is governed by the Limited Liability Company Operating Agreement (“Operating Agreement”), as amended. On January 1, 2012, 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 5). The Company is required to maintain reasonable cash reserves for working capital, for the repurchase of Units and for contingencies. The repurchase of Units is solely at the discretion of AFS. These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10‑K for the year ended December 31, 2018, filed with the Securities and Exchange Commission. |
Commitments |
9 Months Ended |
---|---|
Sep. 30, 2019 | |
Commitments [Abstract] | |
Commitments | 6. Commitments: At September 30, 2019, there were no commitments to purchase lease assets. |
Summary of Significant Accounting Policies (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Geographic Information Relating to Sources, by Nation, of Partnership'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 three and nine months ended September 30, 2019 and 2018, and long-lived tangible assets as of September 30, 2019 and December 31, 2018 (dollars in thousands):
|
Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Carrying Amount [Member] | ||
Financial assets: | ||
Cash and cash equivalents | $ 1,717 | $ 2,877 |
Estimate of Fair Value [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 1,717 | 2,877 |
Level 1 Estimated Fair Value [Member] | Estimate of Fair Value [Member] | ||
Financial assets: | ||
Cash and cash equivalents | $ 1,717 | $ 2,877 |
Related Party Transactions (AFS and/or Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Related Party Transactions [Abstract] | ||||
Costs reimbursed to Managing Member and/or affiliates | $ 40 | $ 39 | $ 161 | $ 330 |
Asset management fees to Managing Member and/or affiliates | 22 | 23 | 74 | 80 |
Related party transactions, total | $ 62 | $ 62 | $ 235 | $ 410 |
Members' Capital (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Members' Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to Other Members | Distributions to the Other Members for the three months and nine months ended September 30, 2019 and 2018 were as follows (in thousands except Units and per Unit data):
|
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