EX-31.1

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 XI, 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: August 13, 2013

/s/ Dean L. Cash

Dean L. Cash
President and Chief Executive Officer of
ATEL Financial Services, LLC (Managing Member)

EX-31.2

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 XI, 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: August 13, 2013

/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)

EX-32.1

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 XI, LLC (the “Company”) on Form 10-Q for the period ended June 30, 2013 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: August 13, 2013

/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.

EX-32.2

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 XI, LLC (the “Company”) on Form 10-Q for the period ended June 30, 2013 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: August 13, 2013

/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.

XML

Guarantees

6 Months Ended

Jun. 30, 2013

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

Fair Value Measurements (Summary Valuation Techniques and Significant Unobservable Inputs Used) (Details) (USD $)	Jun. 30, 2013
Fair value inputs third party agents' pricing quotes, total	$ 7,400
Maximum [Member]
Fair value inputs, third party agents' pricing quotes per equipment	700
Minimum [Member]
Fair value inputs, third party agents' pricing quotes per equipment	$ 400

XML

Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Leasing and lending activities:
Operating leases	$ 1,098	$ 1,415	$ 2,249	$ 3,071
Direct financing leases	22	33	48	45
Interest on notes receivable	14	19	29	41
Gain on sales of lease assets and early termination of notes	64	77	96	200
Gain on sales or dispositions of securities	2	1	3	1
Unrealized gain on securities		6		59
Other	81	16	86	37
Total revenues	1,281	1,567	2,511	3,454
Expenses:
Depreciation of operating lease assets	548	793	1,206	1,596
Asset management fees to Managing Member and/or affiliates	61	84	130	172
Acquisition expense				12
Cost reimbursements to Managing Member and/or affiliates	77	103	161	216
Reversal of provision for credit losses	(3)	(59)	(5)	(49)
Impairment losses on equipment	13	34	13	34
Provision for losses on investment in securities				32
Amortization of initial direct costs	5	6	10	13
Interest expense	39	62	85	131
Professional fees	9	16	53	65
Outside services	13	24	20	32
Other	29	56	73	102
Total operating expenses	791	1,119	1,746	2,356
Other income (loss), net	4		(1)	1
Net income	494	448	764	1,099
Net income:
Managing Member	98	98	195	195
Other Members	396	350	569	904
Net income	$ 494	$ 448	$ 764	$ 1,099
Net income per Limited Liability Company Unit (Other Members)	$ 0.08	$ 0.07	$ 0.11	$ 0.17
Weighted average number of Units outstanding	5,209,307	5,209,307	5,209,307	5,209,307

XML

Notes Receivable, Net

6 Months Ended

Jun. 30, 2013

Notes Receivable, Net

Notes Receivable, Net

3.  Notes receivable, net:

The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. At June 30, 2013, the original terms of the notes receivable are from 17 to 120 months and bear interest at rates ranging from 8.42% to 11.58%. The notes are secured by the equipment financed, and mature from 2013 through 2016.  

The Company had no notes in non-accrual status at bothJune 30, 2013 and December 31, 2012. As of December 31, 2012, the Company did, however, have a note receivable that was deemed impaired. Such impaired note remained outstanding as of June 30, 2013.

The impaired note at December 31, 2012 was placed in non-accrual status in 2010, at which time its term was modified to defer the repayment of principal until April 2012 while maintaining interest-only payments at the original rate of 11.58%. During 2011, the note was deemed impaired relative to its original payment terms. From April 1, 2012 well into the third quarter of 2012, the interest only payment arrangement was continued pending final resolution of the terms of repayment. Prior to the end of the third quarter of 2012, a large dollar amount was received to significantly reduce the then outstanding principal balance by September 30, 2012. During the periods when interest only was being paid, all such payments were made in accordance with the then applicable note modification agreements. The note was returned to accrual status effective October 1, 2012. As ofJune 30, 2013,  $10 thousand of the aforementioned note remains outstanding.  As of the same date, the fair value of the impaired note is $0, reflecting previous valuation adjustments of $10 thousand.

The minimum future payments receivable as of June 30, 2013 are as follows (in thousands):

Six months ending December 31, 2013	$	157
Year ending December 31, 2014		221
2015		166
2016		188
		732
Less: portion representing unearned interest income		(81)
		651
Less: Reserve for impairment		(10)
Notes receivable, net	$	641

XML

Investments an Equipment and Leases, Net (Tables)

6 Months Ended

Jun. 30, 2013

Investments in Equipment and Leases, Net [Abstract]

Investment in Leases

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

		Balance December 31, 2012		Reclassifications, Additions/ Dispositions and Impairment Losses		Depreciation/ Amortization Expense or Amortization of Leases		Balance June 30, 2013
Net investment in operating leases	$	10,515	$	(463)	$	(1,206)	$	8,846
Net investment in direct financing leases		300		(1)		(98)		201
Assets held for sale or lease, net		371		(175)		-		196
Initial direct costs, net of accumulated   amortization of $78 at June 30, 2013 and $80 at December 31, 2012		59		-		(10)		49
Total	$	11,245	$	(639)	$	(1,314)	$	9,292

Property on Operating Leases

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

		Balance December 31, 2012		Additions		Reclassifications, Dispositions and Impairment Losses		Balance June 30, 2013
Transportation, rail	$	11,626	$	-	$	(103)	$	11,523
Transportation, other		6,086		-		(1,677)		4,409
Materials handling		6,089		-		(2,294)		3,795
Mining		2,893		-		-		2,893
Aviation		1,658		-		-		1,658
Marine vessels		1,415		-		-		1,415
Construction		898		-		-		898
Manufacturing		953		-		(123)		830
Other		4		-		1		5
		31,622		-		(4,196)		27,426
Less accumulated depreciation		(21,107)		(1,206)		3,733		(18,580)
Total	$	10,515	$	(1,206)	$	(463)	$	8,846

Components of Company's Investment in Direct Financing Leases

The components of the Company’s investment in direct financing leases as of June 30, 2013 and December 31, 2012 are as follows (in thousands):

		June 30, 2013		December 31, 2012
Total minimum lease payments receivable	$	199	$	325
Estimated residual values of leased equipment (unguaranteed)		47		60
Investment in direct financing leases		246		385
Less unearned income		(45)		(85)
Net investment in direct financing leases	$	201	$	300

Future Minimum Lease Payments Receivable

At June 30, 2013, the aggregate amounts of future minimum lease payments to be received are as follows (in thousands):

		Operating Leases		Direct Financing Leases		Total
Six months ending December 31, 2013	$	1,385	$	88	$	1,473
Year ending December 31, 2014		2,142		80		2,222
2015		1,134		31		1,165
2016		463		-		463
2017		441		-		441
2018		105		-		105
	$	5,670	$	199	$	5,869

XML

Members' Capital

6 Months Ended

Jun. 30, 2013

Members' Capital [Abstract]

Members' Capital

11.  Members’ capital:

A total of 5,209,307 Units were issued and outstanding as of June 30, 2013 and December 31, 2012. The Fund was authorized to issue up to 15,000,000 Units. The Company terminated sales of Units effective April 30, 2006.

The Company has the right, exercisable at the Manager’s discretion, but not the obligation, to repurchase Units of aUnitholder 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 Manager on terms it determines to be appropriate under given circumstances, in the event that the Manager 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.

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

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Distributions	$	1,205	$	1,204	$	2,409	$	2,409
Weighted average number of Units outstanding		5,209,307		5,209,307		5,209,307		5,209,307
Weighted average distributions per Unit	$	0.23	$	0.23	$	0.46	$	0.46

XML

Borrowing Facilities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012
Borrowing Facilities [Abstract]
Maximum amount of credit facility	$ 60

XML

Allowance for Credit Losses (Schedule of Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Allowance for Credit Losses [Abstract]
Notes receivable, With no allowance recorded, Recorded investment
Notes receivable, With an allowance recorded, Recorded investment	10	10
Recorded investment, Total	10	10
Notes receivable, With no allowance recorded, Unpaid Principal Balance
Notes receivable, With an allowance recorded, Unpaid Principal Balance	10	10
Unpaid Principal Balance, Total	10	10
Note Receivable, With no allowance recorded, Related Allowance
Note Receivable, With an allowance recorded, Related Allowance	10	10
Notes receivable, Related Allowance	10	10
Notes receivable, With no allowance recorded, Average Recorded Investment
Notes receivable, With an allowance recorded, Average Recorded Investment	10	14
Impaired Financing Receivable, Average Recorded Investment, Total	10	14
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method
Notes receivable, With an allowance recorded, Interest Income Recognized		4
Interest Income Recognized, Total		$ 4

XML

Members' Capital (Tables)

6 Months Ended

Jun. 30, 2013

Members' Capital [Abstract]

Distributions to Other Members

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

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Distributions	$	1,205	$	1,204	$	2,409	$	2,409
Weighted average number of Units outstanding		5,209,307		5,209,307		5,209,307		5,209,307
Weighted average distributions per Unit	$	0.23	$	0.23	$	0.46	$	0.46

XML

Non-Recourse Debt (Tables)

6 Months Ended

Jun. 30, 2013

Non-Recourse Debt [Abstract]

Future Minimum Payments of Non-Recourse Debt

Future minimum payments of non-recourse debt are as follows (in thousands):

		Principal		Interest		Total
Six months ending December 31, 2013	$	855	$	66	$	921
Year ending December 31, 2014		1,313		73		1,386
2015		639		17		656
	$	2,807	$	156	$	2,963

XML

Non-Recourse Debt (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Gross operating lease rentals and future payments on direct financing leases	$ 2,900
Carrying value of pledged assets	$ 5,500
Maximum [Member]
Fixed Interest rate on note	5.95%
Note maturity year	2015
Minimum [Member]
Fixed Interest rate on note	4.40%
Note maturity year	2014

XML

Allowance for Credit Losses (Narrative) (Details)	6 Months Ended
	Jun. 30, 2013
Minimum [Member]
Accounts receivable, period for non accrual status	90 days
Equipment and lessee period of review for impairment	90 days
Maximum [Member]
Accounts receivable, period of review for impairment	90 days

XML

Investments in Equipment and Leases, Net (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Sep. 30, 2013	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Impairment losses on equipment	$ 13	$ 34	$ 34	$ 13	$ 34	$ 395
Depreciation of operating lease assets	548	793	1,200	1,206	1,596
Amortization of initial direct costs	$ 5	$ 6		$ 10	$ 13
Average estimated residual value of assets on operating leases	22.00%			22.00%		21.00%
Minimum [Member]
Financing leases, period for non accrual status				90 days

XML

Members' Capital (Narrative) (Details)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Members' Capital [Abstract]
Other Members capital account, units issued	5,209,307	5,209,307
Other Members capital account, units outstanding	5,209,307	5,209,307
Other 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%

XML

Summary of Significant Accounting Policies (Summary of Geographic Information Relating to Sources, by Nation, of Partnership's Total Revenue And Long-Lived Assets) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 1,281	$ 1,567	$ 2,511	$ 3,454
Percentage of total revenue			100.00%	100.00%
Long-lived assets	9,292		9,292		11,245
Percentage of long lived assets	100.00%		100.00%		100.00%
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues			2,438	3,253
Percentage of total revenue			97.00%	94.00%
Long-lived assets	9,286		9,286		11,090
Percentage of long lived assets	100.00%		100.00%		99.00%
United Kingdom [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues			73	201
Percentage of total revenue			3.00%	6.00%
Long-lived assets	6		6		155
Percentage of long lived assets	0.00%		0.00%		1.00%
Total International [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues			73	201
Percentage of total revenue			3.00%	6.00%
Long-lived assets	$ 6		$ 6		$ 155
Percentage of long lived assets	0.00%		0.00%		1.00%

XML

Investments in Equipment and Leases, Net (Components of Investment in Direct Financing Leases) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Investments in Equipment and Leases, Net [Abstract]
Total minimum lease payments receivable	$ 199	$ 325
Estimated residual values of leased equipment (unguaranteed)	47	60
Investment in direct financing leases	246	385
Less unearned income	(45)	(85)
Net investment in direct financing leases	$ 201	$ 300

XML

Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement

AFS and/or affiliates earned fees and commissions, and billed for reimbursements, pursuant to the Operating Agreement as follows during each of the three months ended June 30, 2013 and 2012 (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Costs reimbursed to Managing Member and/or affiliates	$	77	$	103	$	161	$	216
Asset management fees to Managing Member and/or affiliates		61		84		130		172
Acquisition and initial direct costs paid to Managing Member and/or affiliates		-		-		-		12
	$	138	$	187	$	291	$	400

XML

Statements of Changes in Members' Capital (Parenthetical) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Statements of Changes In Members' Capitall [Abstract]
Distributions to Other Members, per unit	$ 0.23	$ 0.23	$ 0.46	$ 0.46	$ 0.93

XML

Organization and Limited Liability Company Matters

6 Months Ended

Jun. 30, 2013

Organization And Limited Liability Company Matters [Abstract]

Organization and Limited Liability Company Matters

1.  Organization and Limited Liability Company matters:

ATEL Capital Equipment Fund XI, LLC (the “Company” or the “Fund”) was formed under the laws of the State of California on June 25, 2004. The Company was formed for the purpose of acquiring equipment to engage in equipment leasing, lending and sales activities. Also, from time to time, the Company may purchase securities of its borrowers or receive warrants to purchase securities in connection with its lending arrangements. 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, 2025. Each Member’s personal liability for obligations of the Company generally will be limited to the amount of their respective contributions and rights to undistributed profits and assets of the Company.

The Company conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. On May 31, 2005, subscriptions for the minimum number of Units (120,000, representing $1.2 million) had been received 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 July 13, 2005, the Company had received subscriptions for 958,274 Units ($9.6 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. The Company terminated sales of Units effective April 30, 2006. Life-to-date net contributions through June 30, 2013 totaled $52.2 million, consisting of approximately $52.8 million in gross contributions from Other Members purchasing Units under the public offering less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable) of $636 thousand. As of June 30, 2013,  5,209,307 Units were issued and outstanding.  

The Company’s principal objectives are 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 December 31, 2012, and (iii) provides additional distributions following the Reinvestment Period and until all equipment has been sold. The Company is governed by its Limited Liability Company Operating Agreement (“Operating Agreement”), as amended. On January 1, 2013, 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 for services rendered and reimbursements for costs incurred on behalf of the Company (See Note 6). 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.

The Company’s 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, 2012, filed with the Securities and Exchange Commission.

XML

Allowance for Credit Losses

6 Months Ended

Jun. 30, 2013

Allowance for Credit Losses [Abstract]

Allowance for Credit Losses

4.  Allowance for credit losses:

The Company’s allowance for credit losses are as follows (in thousands):

		Accounts Receivable Allowance for Doubtful Accounts						Valuation Adjustments on Financing Receivables				Total Allowance for Credit Losses
		Notes Receivable		Finance Leases		Operating Leases		Notes Receivable		Finance Leases
Balance December 31, 2011	$	-	$	-	$	58	$	2	$	-	$	60
(Reversal of) provision for credit losses		-		-		(52)		8		-		(44)
Balance December 31, 2012		-		-		6		10		-		16
Reversal of provision for credit losses		-		-		(5)		-		-		(5)
Balance June 30, 2013	$	-	$	-	$	1	$	10	$	-	$	11

4.  Allowance for credit losses (continued):

Accounts receivable

Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company.

Allowances for doubtful accounts are typically established based upon their aging and historical charge off and collection experience and the creditworthiness of specifically identified lessees and borrowers, and invoiced amounts. Accounts receivable deemed uncollectible are generally charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received. Accounts 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 lease or note payments outstanding less than 90 days. Based upon management’s judgment, such leases or notes may be placed in non-accrual status. Leases or 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, revenues on operating leases are recognized on a cash basis. All payments received on amounts billed under direct financing leases and notes receivable are applied only against outstanding principal balances.

Financing receivables

In addition to the allowance established for delinquent accounts receivable, the total allowance related solely to financing receivables also includes anticipated impairment charges on notes receivable and direct financing leases.

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 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 as they are deemed uncollectible.

The asset underlying a direct financing lease contract is considered impaired if the estimated undiscounted future cash flows of the asset are less than its net book value. The estimated undiscounted future cash flows are the sum of the estimated residual value of the asset at the end of the asset’s expected holding period and estimates of undiscounted future rents. 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.

4.  Allowance for credit losses (continued):

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.

As of June 30, 2013 and December 31, 2012, the Company’s allowance for credit losses (related solely to financing receivables) and its recorded investment in financing receivables were as follows (in thousands):

June 30, 2013		Notes Receivable		Finance Leases		Total
Allowance for credit losses:
Ending balance	$	10	$	-	$	10
Ending balance: individually evaluated for impairment	$	10	$	-	$	10
Ending balance: collectively evaluated for impairment	$	-	$	-	$	-
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-
Financing receivables:
Ending balance	$	651	$	201	$	852
Ending balance: individually evaluated for impairment	$	651	$	201	$	852
Ending balance: collectively evaluated for impairment	$	-	$	-	$	-
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-
December 31, 2012		Notes Receivable		Finance Leases		Total
Allowance for credit losses:
Ending balance	$	10	$	-	$	10
Ending balance: individually evaluated for impairment	$	10	$	-	$	10
Ending balance: collectively evaluated for impairment	$	-	$	-	$	-
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-
Financing receivables:
Ending balance	$	769	$	300	$	1,069
Ending balance: individually evaluated for impairment	$	769	$	300	$	1,069
Ending balance: collectively evaluated for impairment	$	-	$	-	$	-
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-

The Company evaluates the credit quality of its financing receivables on a scale equivalent to the following quality indicators related to corporate risk profiles:

Pass – Any account whose lessee/debtor, co-lessee/debtor or any guarantor has a credit rating on publicly traded or privately placed debt issues as rated by Moody’s or S&P for either Senior Unsecured debt, Long Term Issuer rating or Issuer rating that are in the tiers of ratings generally recognized by the investment community as constituting an Investment Grade credit rating; or, has been determined by the Manager to be an Investment Grade Equivalent or High Quality Corporate Credit per its Credit Policy or has a Not Rated internal rating by the Manager and the account is not considered by the Chief Credit Officer of the Manager to fall into one of the three risk profiles below.

4.  Allowance for credit losses (continued):

Special Mention – Any traditional corporate type account with potential weaknesses (e.g. large net losses or major industry downturns) or, any growth capital account that has less than three months of cash as of the end of the calendar quarter to fund their continuing operations. These accounts deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the Fund’s receivable at some future date.

Substandard – Any account that is inadequately protected by the current worth and paying capacity of the borrower or of the collateral pledged, if any. Accounts that are so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Fund will sustain some loss as the likelihood of fully collecting all receivables may be questionable if the deficiencies are not corrected. Such accounts are on the Manager’s Credit Watch List.

Doubtful – Any account where the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Accordingly, an account that is so classified is on the Manager’s Credit Watch List, and has been declared in default and the Manager has repossessed, or is attempting to repossess, the equipment it financed. This category includes impaired notes and leases as applicable.

At June 30, 2013 and December 31, 2012, the Company’s financing receivables by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands):

		Notes Receivable				Finance Leases
		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
Pass	$	641	$	-	$	201	$	274
Special mention		-		769		-		26
Substandard		-		-		-		-
Doubtful		10		-		-		-
Total	$	651	$	769	$	201	$	300

As of June 30, 2013 and December 31, 2012, the Company’s impaired loans were as follows (in thousands):

			Impaired Loans
June 30, 2013			Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
	Notes receivable	$	-	$	-	$	-	$	-	$	-
With an allowance recorded
	Notes receivable		10		10		10		10		-
Total		$	10	$	10	$	10	$	10	$	-

			Impaired Loans
December 31, 2012			Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
	Notes receivable	$	-	$	-	$	-	$	-	$	-
With an allowance recorded
	Notes receivable		10		10		10		14		4
Total		$	10	$	10	$	10	$	14	$	4

4.  Allowance for credit losses (continued):

At June 30, 2013 and December 31, 2012, investment in financing receivables is aged as follows (in thousands):

June 30, 2013		31-60 Days Past Due		61-90 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
Notes receivable	$	-	$	-	$	-	$	-	$	651	$	651	$	-
Finance leases		-		-		1		1		200		201		1
Total	$	-	$	-	$	1	$	1	$	851	$	852	$	1

December 31, 2012		31-60 Days Past Due		61-90 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
Notes receivable	$	-	$	-	$	-	$	-	$	769	$	769	$	-
Finance leases		-		33		-		33		267		300		-
Total	$	-	$	33	$	-	$	33	$	1,036	$	1,069	$	-

The Company had no notes in non-accrual status at both June 30, 2013 and December 31, 2012. As of December 31, 2012, the Company did, however, have a note receivable that was deemed impaired. Such impaired note remained outstanding as of June 30, 2013.See Note 3 for further discussion.

At June 30, 2013, certain investments in financing receivables with related accounts receivable past due more than90 days were still on an accrual basis based on management’s assessment of the collectability of such receivables. However, these accounts receivable were fully reserved and included in the allowance for doubtful accounts presented above.As of December 31, 2012, there were no investments in financing receivables with related accounts receivable past due more than 90 days which were still on an accrual basis.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

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 six months ended June 30, 2013 are not necessarily indicative of the results to be expected for the full year. 

2.  Summary of significant accounting policies (continued):

Certain prior period amounts 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 June 30, 2013 up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements, or adjustments thereto.

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 for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

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 regions in which the Company seeks leasing 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 six months ended June 30, 2013 and 2012 and long-lived assets as of June 30, 2013 and December 31, 2012 (dollars in thousands):

		For The Six Months Ended June 30,
		2013	% of Total		2012	% of Total
Revenue
United States	$	2,438	97%	$	3,253	94%
United Kingdom		73	3%		201	6%
Total International		73	3%		201	6%
Total	$	2,511	100%	$	3,454	100%
		As of June 30,			As of December 31,
		2013	% of Total		2012	% of Total
Long-lived assets
United States	$	9,286	100%	$	11,090	99%
United Kingdom		6	0%		155	1%
Total International		6	0%		155	1%
Total	$	9,292	100%	$	11,245	100%

2.  Summary of significant accounting policies (continued):

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 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. Based upon the Company’s review of its portfolio, no fair value adjustment was deemed necessary for the three and six months ended June 30, 2013. By comparison, $32 thousand of fair value adjustments relative to impaired investments were recorded during the first six months of 2012, all of which were recorded during the first quarter.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair value, as determined by the Managing Member, on the balance sheet as assets or liabilities. At June 30, 2013 and December 31, 2012, the Managing Member estimated the fair value of the warrants to be nominal in amount. During the three and six months ended June 30, 2012, the Company recorded unrealized gains of $6 thousand and $59 thousand, respectively, relative to the conversion of warrants associated with shares of certain venture companies.  There were no unrealized gains recorded during the three and six months ended June 30, 2013. Gains and/or losses recognized on the net exercise of certain warrants were nominal for the three and six months ended June 30, 2013 and 2012.

Foreign currency transactions:

Foreign currency transaction gains and losses are reported in the results of operations as “other income” or “other loss” 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. The Company’s net foreign currency translation gains and losses were nominal during both the three- and six-month periods ended June 30, 2013 and 2012.

Per Unit data:

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

Recent accounting pronouncements:

Recent accounting standards updates as issued by the Financial Accounting Standards Board (FASB) were evaluated and determined to be not applicable to the Company.

XML

Investments in Equipment and Leases, Net (Investment in Leases) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Leases Disclosure [Line Items]
Balance December 31, 2012	$ 11,245
Reclassifications, Additions/ Dispositions	(639)
Depreciation/ Amortization Expense or Amortization of Leases	(1,314)
Balance June 30, 2013	9,292
Initial direct costs, accumulated amortization	78	80
Operating Leases [Member]
Leases Disclosure [Line Items]
Balance December 31, 2012	10,515
Reclassifications, Additions/ Dispositions	(463)
Depreciation/ Amortization Expense or Amortization of Leases	(1,206)
Balance June 30, 2013	8,846
Direct Financing Leases [Member]
Leases Disclosure [Line Items]
Balance December 31, 2012	300
Reclassifications, Additions/ Dispositions	(1)
Depreciation/ Amortization Expense or Amortization of Leases	(98)
Balance June 30, 2013	201
Assets Held-for-sale or Lease[Member]
Leases Disclosure [Line Items]
Balance December 31, 2012	371
Reclassifications, Additions/ Dispositions	(175)
Balance June 30, 2013	196
Initial Direct Cost [Member]
Leases Disclosure [Line Items]
Balance December 31, 2012	59
Depreciation/ Amortization Expense or Amortization of Leases	(10)
Balance June 30, 2013	$ 49

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Measurements [Abstract]

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

The following table presents the fair value measurement of impaired assets measured at fair value on a non-recurring basis and the level within the hierarchy in which the fair value measurements fall at June 30, 2013 and December 31, 2012 (in thousands):

		June 30, 2013		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	$	7	$	-	$	-	$	7
		December 31, 2012		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 lease and off-lease equipment	$	405	$	-	$	-	$	405
Impaired investment securities		24		-		-		24

Summary 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 June 30, 2013:

Name	Valuation Frequency	Valuation Technique	Unobservable Inputs	Range of Input Values
Lease Equipment	Non-recurring	Market Approach	Third Party Agents' Pricing      Quotes - per equipment	$400 - $700 (total of $7,400)
			Equipment Condition	Poor to Average

Estimated Fair Values of Financial Instruments

The following tables present a summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company’s balance sheet at June 30, 2013 and December 31, 2012 (in thousands):

		Fair Value Measurements at June 30, 2013
		Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	488	$	488	$	-	$	-	$	488
Notes receivable, net		641		-		-		641		641
Investment in securities		219		-		-		219		219
Financial liabilities:
Non-recourse debt		2,807		-		-		2,907		2,907

		Fair Value Measurements at December 31, 2012
		Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,502	$	1,502	$	-	$	-	$	1,502
Notes receivable, net		759		-		-		759		759
Investment in securities		219		-		-		219		219
Financial liabilities:
Non-recourse debt		3,651		-		-		3,807		3,807

XML

Notes Receivable, Net (Narrative) (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
Notes receivable, allowance for credit losses	$ 10,000	$ 10,000
Outstanding principal impaired note receivable	10,000
Fair value of impaired note receivable	0
Fair value adjustments which reduced the cost basis of impaired loans	$ 10,000	$ 10,000
Minimum [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Terms of the notes receivable	17 months
Notes receivable, interest rate	8.42%
Notes maturity period	2013
Maximum [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Terms of the notes receivable	120 months
Notes receivable, interest rate	11.58%
Notes maturity period	2016

XML

Allowance for Credit Losses (Financing Receivables by Credit Quality Indicator and Class) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Finance Leases	$ 201	$ 300
Notes Receivable	651	769
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Finance Leases	201	274
Notes Receivable	641
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Finance Leases		26
Notes Receivable		769
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Finance Leases
Notes Receivable
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Finance Leases
Notes Receivable	$ 10

XML

Members' Capital (Distributions to Other Members) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Members' Capital [Abstract]
Distributions	$ 1,205	$ 1,204	$ 2,409	$ 2,409	$ 4,819
Weighted average number of Units outstanding	5,209,307	5,209,307	5,209,307	5,209,307
Weighted average distributions per Unit	$ 0.23	$ 0.23	$ 0.46	$ 0.46	$ 0.93

XML

Related Party Transactions (Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Disclosure Managing Member And Or Affiliates Earned Commissions And Billed For Reimbursements Pursuant To Operating Agreement [Abstract]
Costs reimbursed to Managing Member and/or affiliates	$ 77	$ 103	$ 161	$ 216
Asset management fees to Managing Member and/or affiliates	61	84	130	172
Acquisition and initial direct costs paid to Managing Member				12
Related Party Transaction, Expenses from Transactions with Related Party, Total	$ 138	$ 187	$ 291	$ 400

XML

Balance Sheets (Parenthetical) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Balance Sheets [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 1	$ 6
Notes receivable, unearned interest income	81	110
Notes receivable, allowance for credit losses	10	10
Investments in equipment and leases, accumulated depreciation	$ 19,909	$ 22,758

XML

Non-Recourse Debt

6 Months Ended

Jun. 30, 2013

Non-Recourse Debt [Abstract]

Non-Recourse Debt

7.  Non-recourse debt:

At June 30, 2013, non-recourse debt consists of notes payable to financial institutions. The notes are due in monthly installments. Interest on the notes is at fixed rates ranging from 4.40% to 5.95%. The notes are secured by assignments of lease payments and pledges of assets. At June 30, 2013,gross lease rentals totaled approximately $2.9 million over the remaining lease terms; and the carrying value of the pledged assets is approximately $5.5million. The notes mature from 2014 through 2015.

The non-recourse debt does not contain any material financial covenants. The debt is secured by liens granted by the Company to the non-recourse lenders on (and only on) the discounted lease transactions. The lenders have 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 is payable solely out of the respective specific security and the Company does 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 does not have any direct or general liability in connection with the non-recourse debt apart from the security granted, the Company is 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 in the equipment finance industry, and are viewed by such industry as being consistent with non-recourse discount financing obligations. Accordingly, as there are no financial covenants or ratios imposed on the Company in connection with the non-recourse debt, the Company has determined that there are no material covenants with respect to the non-recourse debt that warrant footnote disclosure.

Future minimum payments of non-recourse debt are as follows (in thousands):

		Principal		Interest		Total
Six months ending December 31, 2013	$	855	$	66	$	921
Year ending December 31, 2014		1,313		73		1,386
2015		639		17		656
	$	2,807	$	156	$	2,963

XML

Statements of Changes in Members' Capital (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Beginning Balance		$ 9,013	$ 12,585	$ 12,585
Distributions to Other Members	(1,205)	(2,409)	(2,409)	(4,819)
Distributions to Managing Member		(195)		(391)
Net income	494	764	1,099	1,638
Ending Balance	7,173	7,173		9,013
Other Members [Member]
Beginning Balance (in units)		5,209,307	5,209,307	5,209,307
Beginning Balance		9,013	12,585	12,585
Distributions to Other Members		(2,409)		(4,819)
Net income		569		1,247
Ending Balance (in units)	5,209,307	5,209,307		5,209,307
Ending Balance	7,173	7,173		9,013
Managing Member [Member]
Distributions to Managing Member		(195)		(391)
Net income		$ 195		$ 391

XML

Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 488	$ 1,502
Accounts receivable, net of allowance for doubtful accounts of $1 as of June 30, 2013 and $6 as of December 31, 2012	185	179
Notes receivable, net of unearned interest income of $81 and allowance for credit losses of $10 at June 30, 2013 and net of unearned interest income of $110 and allowance for credit losses of $10 at December 31, 2012	641	759
Investment in securities	219	219
Investments in equipment and leases, net of accumulated depreciation of $19,909 as of June 30, 2013 and $22,758 as of December 31, 2012	9,292	11,245
Prepaid expenses and other assets	26	32
Total assets	10,851	13,936
Accounts payable and accrued liabilities:
Managing Member	74	155
Accrued distributions to Other Members	551	551
Other	188	404
Non-recourse debt	2,807	3,651
Unearned operating lease income	58	162
Total liabilities	3,678	4,923
Commitments and contingencies
Members' capital:
Managing Member
Other Members	7,173	9,013
Total Members' capital	7,173	9,013
Total liabilities and Members' capital	$ 10,851	$ 13,936

XML

Fair Value Measurements (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended			12 Months Ended	3 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2013	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Dec. 31, 2012 Fair Value, Measurements, Nonrecurring [Member]	Mar. 31, 2012 Fair Value, Measurements, Nonrecurring [Member]
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Impairment losses on equipment	$ 13	$ 34		$ 34	$ 13	$ 34	$ 395
Percentage of fair value adjustments			66.00%
Impairment losses on investment securities			$ 32			$ 32	$ 40	$ 8	$ 8

XML

Organization and Limited Liability Company Matters (Narrative) (Details) (USD $)	0 Months Ended		1 Months Ended		86 Months Ended
	Jul. 13, 2005	Apr. 11, 2005	Jun. 30, 2010	May 31, 2005	Jun. 30, 2013	Dec. 31, 2012
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Public offering of Limited Liability Company Units		15,000,000
Public offering of Limited Liability Company Units, price per unit		$ 10
Sale of Limited Liability Company Units, number of units	958,274			120,000
Proceeds from sale of Limited Liability Company Units	$ 9,600,000			$ 1,200,000
Contribution of rescissions			52,200,000
Gross contributions from Other Members			52,800,000
Repurchase of units, value			636,000
Units issued					5,209,307	5,209,307
Units outstanding					5,209,307	5,209,307
Reinvestment period					6 years
Minimum [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Amount of aggregate subscriptions for Pennsylvania subscriptions to be released to the Fund	$ 7,500,000

XML

Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2013

Allowance for Credit Losses [Abstract]

Activity in Allowance for Doubtful Accounts

The Company’s allowance for credit losses are as follows (in thousands):

		Accounts Receivable Allowance for Doubtful Accounts						Valuation Adjustments on Financing Receivables				Total Allowance for Credit Losses
		Notes Receivable		Finance Leases		Operating Leases		Notes Receivable		Finance Leases
Balance December 31, 2011	$	-	$	-	$	58	$	2	$	-	$	60
(Reversal of) provision for credit losses		-		-		(52)		8		-		(44)
Balance December 31, 2012		-		-		6		10		-		16
Reversal of provision for credit losses		-		-		(5)		-		-		(5)
Balance June 30, 2013	$	-	$	-	$	1	$	10	$	-	$	11

Recorded Investment in Financing Receivables

As of June 30, 2013 and December 31, 2012, the Company’s allowance for credit losses (related solely to financing receivables) and its recorded investment in financing receivables were as follows (in thousands):

June 30, 2013		Notes Receivable		Finance Leases		Total
Allowance for credit losses:
Ending balance	$	10	$	-	$	10
Ending balance: individually evaluated for impairment	$	10	$	-	$	10
Ending balance: collectively evaluated for impairment	$	-	$	-	$	-
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-
Financing receivables:
Ending balance	$	651	$	201	$	852
Ending balance: individually evaluated for impairment	$	651	$	201	$	852
Ending balance: collectively evaluated for impairment	$	-	$	-	$	-
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-
December 31, 2012		Notes Receivable		Finance Leases		Total
Allowance for credit losses:
Ending balance	$	10	$	-	$	10
Ending balance: individually evaluated for impairment	$	10	$	-	$	10
Ending balance: collectively evaluated for impairment	$	-	$	-	$	-
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-
Financing receivables:
Ending balance	$	769	$	300	$	1,069
Ending balance: individually evaluated for impairment	$	769	$	300	$	1,069
Ending balance: collectively evaluated for impairment	$	-	$	-	$	-
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-

Financing Receivables by Credit Quality Indicator and by Class

At June 30, 2013 and December 31, 2012, the Company’s financing receivables by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands):

		Notes Receivable				Finance Leases
		June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
Pass	$	641	$	-	$	201	$	274
Special mention		-		769		-		26
Substandard		-		-		-		-
Doubtful		10		-		-		-
Total	$	651	$	769	$	201	$	300

Schedule of Impaired Loans

As of June 30, 2013 and December 31, 2012, the Company’s impaired loans were as follows (in thousands):

			Impaired Loans
June 30, 2013			Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
	Notes receivable	$	-	$	-	$	-	$	-	$	-
With an allowance recorded
	Notes receivable		10		10		10		10		-
Total		$	10	$	10	$	10	$	10	$	-

			Impaired Loans
December 31, 2012			Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
	Notes receivable	$	-	$	-	$	-	$	-	$	-
With an allowance recorded
	Notes receivable		10		10		10		14		4
Total		$	10	$	10	$	10	$	14	$	4

Net Investment in Financing Receivables by age

At June 30, 2013 and December 31, 2012, investment in financing receivables is aged as follows (in thousands):

June 30, 2013		31-60 Days Past Due		61-90 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
Notes receivable	$	-	$	-	$	-	$	-	$	651	$	651	$	-
Finance leases		-		-		1		1		200		201		1
Total	$	-	$	-	$	1	$	1	$	851	$	852	$	1

December 31, 2012		31-60 Days Past Due		61-90 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
Notes receivable	$	-	$	-	$	-	$	-	$	769	$	769	$	-
Finance leases		-		33		-		33		267		300		-
Total	$	-	$	33	$	-	$	33	$	1,036	$	1,069	$	-

XML

Investments in Equipment and Leases, Net (Future Minimum Lease Payments Receivable) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Operating Leases
Six months ending December 31, 2013	$ 1,385
Year ending December 31, 2014	2,142
2015	1,134
2016	463
2017	441
2018	105
Operating Leases, Future Minimum Payments Receivable, Total	5,670
Direct Financing Leases
Six months ending December 31, 2013	88
Year ending December 31, 2014	80
2015	31
2016
2017
2018
Capital Leases, Future Minimum Payments Receivable, Total	199
Total
Six months ending December 31, 2013	1,473
Year ending December 31, 2014	2,222
2015	1,165
2016	463
2017	441
2018	105
Operating and Capital Leases, Future Minimum Payments, Receivable, Total	$ 5,869

XML

Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Financial assets:
Cash and cash equivalents	$ 488	$ 1,502
Notes receivable, net	641	759
Investment in securities	219	219
Financial liabilities:
Non-recourse debt	2,907	3,807
Level 1 Estimated Fair Value [Member]
Financial assets:
Cash and cash equivalents	488	1,502
Notes receivable, net
Investment in securities
Financial liabilities:
Non-recourse debt
Level 2 Estimated Fair Value [Member]
Financial assets:
Cash and cash equivalents
Notes receivable, net
Investment in securities
Financial liabilities:
Non-recourse debt
Level 3 Estimated Fair Value [Member]
Financial assets:
Notes receivable, net	641	759
Investment in securities	219	219
Financial liabilities:
Non-recourse debt	2,907	3,807
Carrying Amount [Member]
Financial assets:
Cash and cash equivalents	488	1,502
Notes receivable, net	641	759
Investment in securities	219	219
Financial liabilities:
Non-recourse debt	$ 2,807	$ 3,651

XML

Allowance for Credit Losses (Net Investment in Financing Receivables by Age) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Financing Receivable Recorded Investment Past Due [Line Items]
31-60 Days Past Due
61-90 Days Past Due		33
Greater Than 90 Days	1
Total Past Due	1	33
Current	851	1,036
Total financing receivable	852	1,069
Recorded Investment > 90 Days and Accruing	1
Notes Receivable [Member]
Financing Receivable Recorded Investment Past Due [Line Items]
31-60 Days Past Due
61-90 Days Past Due
Greater Than 90 Days
Total Past Due
Current	651	769
Total financing receivable	651	769
Recorded Investment > 90 Days and Accruing
Finance Leases [Member]
Financing Receivable Recorded Investment Past Due [Line Items]
31-60 Days Past Due
61-90 Days Past Due		33
Greater Than 90 Days	1
Total Past Due	1	33
Current	200	267
Total financing receivable	201	300
Recorded Investment > 90 Days and Accruing	$ 1

XML

Allowance for Credit Losses (Activity in Allowance for Doubtful Accounts) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance			$ 16	$ 60	$ 60
(Reversal of) provision for credit losses	(3)	(59)	(5)	(49)	(44)
Ending Balance	11		11		16
Allowance For Doubtful Accounts [Member] | Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance
(Reversal of) provision for credit losses
Ending Balance
Allowance For Doubtful Accounts [Member] | Direct Financing Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance
(Reversal of) provision for credit losses
Ending Balance
Allowance For Doubtful Accounts [Member] | Operating Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance			6	58	58
(Reversal of) provision for credit losses			(5)		(52)
Ending Balance	1		1		6
Valuation Adjustments on Financing Receivables [Member] | Notes Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance				2	2
(Reversal of) provision for credit losses					8
Ending Balance	10		10		10
Valuation Adjustments on Financing Receivables [Member] | Direct Financing Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning Balance
(Reversal of) provision for credit losses
Ending Balance

XML

Allowance for Credit Losses (Recorded Investment in Financing Receivables) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Allowances for credit losses:
Ending balance	$ 10	$ 10
Ending balance: individually evaluated for impairment	10	10
Ending balance: collectively evaluated for impairment
Ending balance: loans acquired with deteriorated credit quality
Notes Receivable, Net
Ending balance	852	1,069
Ending balance: individually evaluated for impairment	852	1,069
Ending balance: collectively evaluated for impairment
Ending balance: loans acquired with deteriorated credit quality
Notes Receivable [Member]
Allowances for credit losses:
Ending balance	10	10
Ending balance: individually evaluated for impairment	10	10
Ending balance: collectively evaluated for impairment
Ending balance: loans acquired with deteriorated credit quality
Notes Receivable, Net
Ending balance	651	769
Ending balance: individually evaluated for impairment	651	769
Ending balance: collectively evaluated for impairment
Ending balance: loans acquired with deteriorated credit quality
Finance Leases [Member]
Allowances for credit losses:
Ending balance
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment
Ending balance: loans acquired with deteriorated credit quality
Notes Receivable, Net
Ending balance	201	300
Ending balance: individually evaluated for impairment	201	300
Ending balance: collectively evaluated for impairment
Ending balance: loans acquired with deteriorated credit quality

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

6.  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.

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; and investor relations, communications services and general administrative services 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 managed 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 reimbursable in future years to the extent of the cumulative limit. As of June 30, 2013, the Company has not exceeded the annual and/or cumulative limitations discussed above.

AFS and/or affiliates earned fees and commissions, and billed for reimbursements, pursuant to the Operating Agreement as follows during each of the three months ended June 30, 2013 and 2012 (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Costs reimbursed to Managing Member and/or affiliates	$	77	$	103	$	161	$	216
Asset management fees to Managing Member and/or affiliates		61		84		130		172
Acquisition and initial direct costs paid to Managing Member and/or affiliates		-		-		-		12
	$	138	$	187	$	291	$	400

XML

Summary of Significant Accounting Policies (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Jun. 30, 2013 segment	Jun. 30, 2012	Dec. 31, 2012
Summary of Significant Accounting Policies [Abstract]
Number of reportable segments			1
Impairment losses on investment securities		$ 32		$ 32	$ 40
Unrealized gain relative to the conversion of warrants	$ 6			$ 59

XML

Investments in Equipment and Leases, Net (Property on Operating Leases) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	$ 10,515
Additions	(1,206)
Reclassifications, Dispositions and Impairment Losses	(463)
Balance June 30, 2013	8,846
Transportation, Rail [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	11,626
Additions
Reclassifications, Dispositions and Impairment Losses	(103)
Balance June 30, 2013	11,523
Transportation, Other [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	6,086
Additions
Reclassifications, Dispositions and Impairment Losses	(1,677)
Balance June 30, 2013	4,409
Materials Handling [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	6,089
Additions
Reclassifications, Dispositions and Impairment Losses	(2,294)
Balance June 30, 2013	3,795
Mining [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	2,893
Additions
Reclassifications, Dispositions and Impairment Losses
Balance June 30, 2013	2,893
Aviation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	1,658
Additions
Reclassifications, Dispositions and Impairment Losses
Balance June 30, 2013	1,658
Marine Vessels [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	1,415
Additions
Reclassifications, Dispositions and Impairment Losses
Balance June 30, 2013	1,415
Manufacturing [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	953
Additions
Reclassifications, Dispositions and Impairment Losses	(123)
Balance June 30, 2013	830
Construction [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	898
Additions
Reclassifications, Dispositions and Impairment Losses
Balance June 30, 2013	898
Other Properties [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	4
Additions
Reclassifications, Dispositions and Impairment Losses	1
Balance June 30, 2013	5
Total Property Subject To Or Available For Operating Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	31,622
Additions
Reclassifications, Dispositions and Impairment Losses	(4,196)
Balance June 30, 2013	27,426
Less Accumulated Depreciation [Member]
Property Subject to or Available for Operating Lease [Line Items]
Balance December 31, 2012	(21,107)
Additions	(1,206)
Reclassifications, Dispositions and Impairment Losses	3,733
Balance June 30, 2013	$ (18,580)

XML

Commitments

6 Months Ended

Jun. 30, 2013

Commitments [Abstract]

Commitments

9. Commitments:

At June 30, 2013, the Company had nocommitments to either purchase lease assets or fund loans.

XML

Investments in Equipment and Leases, Net

6 Months Ended

Jun. 30, 2013

Investments in Equipment and Leases, Net [Abstract]

Investments in Equipment and Leases, Net

5.  Investment in equipment and leases, net:

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

		Balance December 31, 2012		Reclassifications, Additions/ Dispositions and Impairment Losses		Depreciation/ Amortization Expense or Amortization of Leases		Balance June 30, 2013
Net investment in operating leases	$	10,515	$	(463)	$	(1,206)	$	8,846
Net investment in direct financing leases		300		(1)		(98)		201
Assets held for sale or lease, net		371		(175)		-		196
Initial direct costs, net of accumulated   amortization of $78 at June 30, 2013 and $80 at December 31, 2012		59		-		(10)		49
Total	$	11,245	$	(639)	$	(1,314)	$	9,292

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

Management periodically reviews the carrying values of its assets on leases and assets held for lease or sale. Impairment losses are recorded as an adjustment to the net investment in operating leases. During the respective three months ended June 30, 2013 and 2012, the Company recorded $13 thousand and $34 thousand of fair value adjustments to reduce the cost basis of certain impaired off-lease equipment. Such amounts also represent the total fair value adjustments for the six months ended June 30, 2013 and 2012.

5.  Investment in equipment and leases, net (continued):

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 $548 thousand and $793thousand for the respective three months ended June 30, 2013 and 2012, and was approximately $1.2 million and $1.6 million for the respective six months ended June 30, 2013 and 2012. Initial direct costs amortization expense related to the Company’s operating and direct financing leases totaled $5 thousand and $6 thousand for the respective three months ended June 30,2013 and 2012 and $10 thousand and $13 thousand for the respective six months ended June 30, 2013 and 2012.

All of the leased property was acquired during the years 2005 through 2011.

Operating leases:

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

		Balance December 31, 2012		Additions		Reclassifications, Dispositions and Impairment Losses		Balance June 30, 2013
Transportation, rail	$	11,626	$	-	$	(103)	$	11,523
Transportation, other		6,086		-		(1,677)		4,409
Materials handling		6,089		-		(2,294)		3,795
Mining		2,893		-		-		2,893
Aviation		1,658		-		-		1,658
Marine vessels		1,415		-		-		1,415
Construction		898		-		-		898
Manufacturing		953		-		(123)		830
Other		4		-		1		5
		31,622		-		(4,196)		27,426
Less accumulated depreciation		(21,107)		(1,206)		3,733		(18,580)
Total	$	10,515	$	(1,206)	$	(463)	$	8,846

The average estimated residual value for assets on operating leases was 22% and 21% of the assets’ original cost at June 30, 2013 and December 31, 2012 respectively. There were no operating lease contracts placed in non-accrual status at June 30, 2013 and December 31, 2012.  However, as of June 30, 2013 and December 31, 2012, the Company had certain other leases that have related accounts receivables aged 90 days or more that have not been placed on non-accrual status. In accordance with Company policy, such receivables are fully reserved. Management continues to closely monitor these leases for any actual change in collectability status and indication of necessary valuation adjustments.

Direct financing leases:

As of June 30, 2013 and December 31, 2012, investment in direct financing leases primarily consists of materials handling, furniture and fixtures, and research equipment. The components of the Company’s investment in direct financing leases as of June 30, 2013 and December 31, 2012 are as follows (in thousands):

		June 30, 2013		December 31, 2012
Total minimum lease payments receivable	$	199	$	325
Estimated residual values of leased equipment (unguaranteed)		47		60
Investment in direct financing leases		246		385
Less unearned income		(45)		(85)
Net investment in direct financing leases	$	201	$	300

There were no investments in direct financing lease assets in non-accrual status at June 30, 2013 and December 31, 2012.  

5.  Investment in equipment and leases, net (continued):

At June 30, 2013, the aggregate amounts of future minimum lease payments to be received are as follows (in thousands):

		Operating Leases		Direct Financing Leases		Total
Six months ending December 31, 2013	$	1,385	$	88	$	1,473
Year ending December 31, 2014		2,142		80		2,222
2015		1,134		31		1,165
2016		463		-		463
2017		441		-		441
2018		105		-		105
	$	5,670	$	199	$	5,869

XML

Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Operating activities:
Net income	$ 494	$ 448	$ 764	$ 1,099
Adjustment to reconcile net income to cash provided by operating activities:
Gain on sales of lease assets and early termination of notes	(64)	(77)	(96)	(200)
Depreciation of operating lease assets	548	793	1,206	1,596
Amortization of initial direct costs	5	6	10	13
Impairment losses on equipment	13	34	13	34
Reversal of provision for credit losses	(3)	(59)	(5)	(49)
Provision for losses on investment in securities				32
Gain on sales or dispositions of securities	(2)	(1)	(3)	(1)
Unrealized gain on securities		(6)		(59)
Changes in operating assets and liabilities:
Accounts receivable	163	200	(1)	313
Prepaid expenses and other assets	3	(68)	6	(65)
Accounts payable, Managing Member	(4)	(65)	(81)	(61)
Accounts payable, other	(34)	123	(216)	117
Unearned operating lease income	(144)	25	(104)	33
Net cash provided by operating activities	975	1,353	1,493	2,802
Investing activities:
Purchase of securities			(8)
Proceeds from sales of lease assets and early termination of notes	254	418	722	927
Proceeds from sales or dispositions of securities	11	1	11	1
Principal payments received on direct financing leases	40	43	98	86
Principal payments received on notes receivable	60	79	118	159
Net cash provided by investing activities	365	541	941	1,173
Financing activities:
Repayments under non-recourse debt	(423)	(484)	(844)	(997)
Net cash used in financing activities	(1,726)	(1,786)	(3,448)	(3,601)
Net (decrease) increase in cash and cash equivalents	(386)	108	(1,014)	374
Cash and cash equivalents at beginning of period	874	1,682	1,502	1,416
Cash and cash equivalents at end of period	488	1,790	488	1,790
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	42	74	89	156
Cash paid during the period for taxes	29	45	32	45
Schedule of non-cash transactions:
Securities acquired through conversion of warrants		6		59
Other Members [Member]
Financing activities:
Distributions to Members	(1,205)	(1,204)	(2,409)	(2,409)
Schedule of non-cash transactions:
Distributions payable at period-end	551	551	551	551
Managing Member [Member]
Financing activities:
Distributions to Members	(98)	(98)	(195)	(195)
Schedule of non-cash transactions:
Distributions payable at period-end	$ 45	$ 45	$ 45	$ 45

XML

Fair Value Measurements (Fair Value Measurement of Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired lease and off-lease equipment	$ 7	$ 405
Impaired investment securities		24
Level 1 Estimated Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired lease and off-lease equipment
Impaired investment securities
Level 2 Estimated Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired lease and off-lease equipment
Impaired investment securities
Level 3 Estimated Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired lease and off-lease equipment	7	405
Impaired investment securities		$ 24

XML

Non-Recourse Debt (Future Minimum Payments of Non-Recourse Debt) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Principal
Six months ending December 31, 2013	$ 855
Year ending December 31, 2014	1,313
2015	639
Long-term Debt, Total	2,807
Interest
Six months ending December 31, 2013	66
Year ending December 31, 2014	73
2015	17
Long Term Debt Interest, Total	156
Total
Six months ending December 31, 2013	921
Year ending December 31, 2014	1,386
2015	656
Long Term Debt Principal and Interest, Total	$ 2,963

XML

Notes Receivable, Net (Minimum Future Payments Receivable) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Notes Receivable, Net
Six months ending December 31, 2013	$ 157
Year ending December 31, 2014	221
2015	166
2016	188
Financing receivable, gross	732
Less: portion representing unearned interest income	(81)	(110)
Notes receivable	651	769
Less: Reserve for impairment	(10)	(10)
Notes receivable, net	$ 641	$ 759

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2013

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.

12. Fair value measurements (continued):

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 basis as ofJune 30, 2013 and December 31, 2012; however, the Company recorded non-recurring adjustments to reflect the fair values of certain impaired off-lease equipment during the second quarter of 2013, and those of certain impaired lease and off-lease equipment, notes receivable and investment securities during 2012. Balances shown at June 30, 2013 and December 31, 2012 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.

Such fair value adjustments utilized the following methodology:

Impaired operating lease and off-lease equipment

During the second quarter of 2013, the Company recorded fair value adjustments of $13 thousand to reduce the cost basis of certain impaired off-lease equipment. Such amount also represents the total fair value adjustments for the six months ended June 30, 2013. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of impaired lease assets are classified within Level 3 of the valuation hierarchy as the data sources utilized for the valuation of such 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.

During the three and six months ended June 30, 2012, fair value adjustments relative to impaired lease and off-lease equipment amounted to $34 thousand. The fair values of the impaired equipment were classified within Level 3 of the valuation hierarchy. An additional $395 thousand of fair value adjustments were recorded through December 31, 2012.

Impaired notes receivable

The fair value of the Company’s notes receivable, when impairment adjustments are required, is estimated using either third party appraisals or estimations of the value of collateral (for collateral dependent loans) or discounted cash flow analyses (by discounting estimated future cash flows) using the effective interest rate contained in the terms of the original loan. The Company had no fair value adjustments relative to impaired notes receivable during the first six months of 2013.

12. Fair value measurements (continued):

During the first quarter of 2012, the Company recorded an additional $8 thousand adjustment to reflect the fair value of a note deemed impaired in 2011. Such amount also represents the total fair value adjustments for the six months ended June 30, 2012. The incremental adjustment was based upon an independent appraisal of the underlying collateral. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the impaired notes receivable was classified within Level 3 of the valuation hierarchy. Such valuation utilized a market approach technique and used inputs from third party appraisers that utilize current market transactions as adjusted for certain factors specific to the underlying collateral. There was no additional fair value adjustment through December 31, 2012. 

Impaired investment securities

The Company’s investment securities are not registered for public sale and are carried at cost. The investment securities are adjusted for impairment, if any, based upon factors which 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 Company had no fair value adjustments to investment securities during first six months of 2013.

During 2012, the Company recorded $40 thousand of non-recurring fair value adjustments which reduced the cost basis of two investment securities. Of the total adjustment, $32 thousand was recorded during the first quarter of 2012 and was based on an approximate 66% reduction in the valuation of one of the securities. Such reduction considered the investee’s current liquidity, rate of cash burn and potential for additional capital infusion. The remaining $8 thousand, which was recorded during the fourth quarter of 2012, represents an additional adjustment to an investment which was originally deemed impaired in March 2011.Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair values of the impaired investment securities were classified within Level 3 of the valuation hierarchy due to the significant inputs that are unobservable in the market.

The following table presents the fair value measurement of impaired assets measured at fair value on a non-recurring basis and the level within the hierarchy in which the fair value measurements fall at June 30, 2013 and December 31, 2012 (in thousands):

		June 30, 2013		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	$	7	$	-	$	-	$	7
		December 31, 2012		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 lease and off-lease equipment	$	405	$	-	$	-	$	405
Impaired investment securities		24		-		-		24

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 June 30, 2013:

Name	Valuation Frequency	Valuation Technique	Unobservable Inputs	Range of Input Values
Lease Equipment	Non-recurring	Market Approach	Third Party Agents' Pricing      Quotes - per equipment	$400 - $700 (total of $7,400)
			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 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.

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.

12. Fair value measurements (continued):

Notes receivable

The fair value of the Company’s notes receivable is estimated using either third party appraisals of collateral or discounted cash flow analyses based upon current market rates for similar types of lending arrangements, with adjustments for impaired loans as deemed necessary.

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 is estimated using discounted cash flow analyses, based upon the current market borrowing rates for similar types of borrowing arrangements.

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.

The following tables present a summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company’s balance sheet at June 30, 2013 and December 31, 2012 (in thousands):

		Fair Value Measurements at June 30, 2013
		Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	488	$	488	$	-	$	-	$	488
Notes receivable, net		641		-		-		641		641
Investment in securities		219		-		-		219		219
Financial liabilities:
Non-recourse debt		2,807		-		-		2,907		2,907

		Fair Value Measurements at December 31, 2012
		Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	1,502	$	1,502	$	-	$	-	$	1,502
Notes receivable, net		759		-		-		759		759
Investment in securities		219		-		-		219		219
Financial liabilities:
Non-recourse debt		3,651		-		-		3,807		3,807

XML

Borrowing Facilities

6 Months Ended

Jun. 30, 2013

Borrowing Facilities [Abstract]

Borrowing Facilities

8. Borrowing facilities:

Effective as of December 31, 2012, the Company’s participation in a revolving credit facility (the “Credit Facility”) with AFS and certain of its affiliates was terminated. The Company had no related balances outstanding at the time.

Prior to December 31, 2012, the Company participated with AFS and certain of its affiliates in the Credit Facility comprised of a working capital facility to AFS, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”) to AFS, the Company and affiliates, and a venture facility available to an affiliate, with a syndicate of financial institutions as lenders. The Credit Facility was for an amount up to $60 million and included certain financial covenants. The interest rate on the Credit Facility was based on either the LIBOR/Eurocurrency rate of 1-, 2-, 3- or 6-month maturity plus a lender designated spread, or the bank’s Prime rate, which re-priced daily. Principal amounts of loans made under the Credit Facility that were prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Credit Facility.

XML

Notes Receivable, Net (Tables)

6 Months Ended

Jun. 30, 2013

Notes Receivable, Net

Minimum Future Payments Receivable

The minimum future payments receivable as of June 30, 2013 are as follows (in thousands):

Six months ending December 31, 2013	$	157
Year ending December 31, 2014		221
2015		166
2016		188
		732
Less: portion representing unearned interest income		(81)
		651
Less: Reserve for impairment		(10)
Notes receivable, net	$	641

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

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 six months ended June 30, 2013 are not necessarily indicative of the results to be expected for the full year. 

2.  Summary of significant accounting policies (continued):

Certain prior period amounts 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 June 30, 2013 up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements, or adjustments thereto.

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 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 for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

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 primary geographic regions in which the Company seeks leasing 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 six months ended June 30, 2013 and 2012 and long-lived assets as of June 30, 2013 and December 31, 2012 (dollars in thousands):

		For The Six Months Ended June 30,
		2013	% of Total		2012	% of Total
Revenue
United States	$	2,438	97%	$	3,253	94%
United Kingdom		73	3%		201	6%
Total International		73	3%		201	6%
Total	$	2,511	100%	$	3,454	100%
		As of June 30,			As of December 31,
		2013	% of Total		2012	% of Total
Long-lived assets
United States	$	9,286	100%	$	11,090	99%
United Kingdom		6	0%		155	1%
Total International		6	0%		155	1%
Total	$	9,292	100%	$	11,245	100%

Investment in Securities

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 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. Based upon the Company’s review of its portfolio, no fair value adjustment was deemed necessary for the three and six months ended June 30, 2013. By comparison, $32 thousand of fair value adjustments relative to impaired investments were recorded during the first six months of 2012, all of which were recorded during the first quarter.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair value, as determined by the Managing Member, on the balance sheet as assets or liabilities. At June 30, 2013 and December 31, 2012, the Managing Member estimated the fair value of the warrants to be nominal in amount. During the three and six months ended June 30, 2012, the Company recorded unrealized gains of $6 thousand and $59 thousand, respectively, relative to the conversion of warrants associated with shares of certain venture companies.  There were no unrealized gains recorded during the three and six months ended June 30, 2013. Gains and/or losses recognized on the net exercise of certain warrants were nominal for the three and six months ended June 30, 2013 and 2012.

Foreign Currency Transactions

Foreign currency transactions:

Foreign currency transaction gains and losses are reported in the results of operations as “other income” or “other loss” 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. The Company’s net foreign currency translation gains and losses were nominal during both the three- and six-month periods ended June 30, 2013 and 2012.

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 period.

Recent Accounting Pronouncements

Recent accounting pronouncements:

Recent accounting standards updates as issued by the Financial Accounting Standards Board (FASB) were evaluated and determined to be not applicable to the Company.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 31, 2013
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Registrant Name	ATEL CAPITAL EQUIPMENT FUND XI, LLC
Entity Central Index Key	0001297667
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Units Outstanding		5,209,307

XML

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Summary of Geographic Information Relating to Sources, by Nation, of Partnership's Total Revenue and Long-Lived Assets) (Details

The table below summarizes geographic information relating to the sources, by nation, of the Company’s total revenues for the six months ended June 30, 2013 and 2012 and long-lived assets as of June 30, 2013 and December 31, 2012 (dollars in thousands):

		For The Six Months Ended June 30,
		2013	% of Total		2012	% of Total
Revenue
United States	$	2,438	97%	$	3,253	94%
United Kingdom		73	3%		201	6%
Total International		73	3%		201	6%
Total	$	2,511	100%	$	3,454	100%
		As of June 30,			As of December 31,
		2013	% of Total		2012	% of Total
Long-lived assets
United States	$	9,286	100%	$	11,090	99%
United Kingdom		6	0%		155	1%
Total International		6	0%		155	1%
Total	$	9,292	100%	$	11,245	100%