UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
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o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
(Exact name of registrant as specified in its charter)
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California | 94-3165807 | |
(State or other jurisdiction of Incorporation or organization) |
(I. R. S. Employer Identification No.) |
600 California Street, 6th Floor, San Francisco, California 94108-2733
(Address of principal executive offices)
Registrants telephone number, including area code (415) 989-8800
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Limited Partnership Units
Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of accelerated filer, large accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The number of Limited Partnership Units outstanding as of October 31, 2012 was 12,471,600.
None.
2
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September 30, 2012 | December 31, 2011 | |||||||
ASSETS |
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Cash and cash equivalents | $ | | $ | 249 | ||||
Accounts receivable | | 261 | ||||||
Prepaid expenses and other assets | | 2 | ||||||
Investments in equipment and leases, net of accumulated depreciation of $0 at September 30, 2012 and $13,789 at December 31, 2011 | | 2,843 | ||||||
Total assets | $ | | $ | 3,355 | ||||
LIABILITIES AND PARTNERS CAPITAL |
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Accounts payable and accrued liabilities: |
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General Partner | $ | | $ | 113 | ||||
Other | | 225 | ||||||
Unearned operating lease income | | 21 | ||||||
Total liabilities | | 359 | ||||||
Commitments and contingencies |
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Partners capital: |
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General Partner | | 215 | ||||||
Limited Partners | | 2,781 | ||||||
Total Partners capital | | 2,996 | ||||||
Total liabilities and Partners capital | $ | | $ | 3,355 |
See accompanying notes.
3
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Three Months Ended September 30, | Nine Months Ended September 30, |
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2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenues: |
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Leasing activities: |
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Operating leases | $ | 462 | $ | 631 | $ | 1,856 | $ | 1,916 | ||||||||
Gain on sales of assets | 5,051 | 7 | 5,060 | 197 | ||||||||||||
Other | 1 | | 1 | 1 | ||||||||||||
Total revenues | 5,514 | 638 | 6,917 | 2,114 | ||||||||||||
Expenses: |
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Depreciation of operating lease assets | 55 | 190 | 188 | 602 | ||||||||||||
Cost reimbursements to General Partner | 54 | 60 | 170 | 188 | ||||||||||||
Professional fees | 8 | 3 | 24 | 21 | ||||||||||||
Railcar maintenance | 50 | 111 | 345 | 274 | ||||||||||||
Equipment and incentive management fees to General Partner | 58 | 18 | 89 | 57 | ||||||||||||
Other management fees | 15 | 22 | 57 | 62 | ||||||||||||
Outside services | 21 | 17 | 58 | 44 | ||||||||||||
Postage | 1 | | 19 | 17 | ||||||||||||
Printing and photocopying | 2 | | 28 | 22 | ||||||||||||
Other | 11 | 12 | 35 | 38 | ||||||||||||
Total expenses | 275 | 433 | 1,013 | 1,325 | ||||||||||||
Net income | $ | 5,239 | $ | 205 | $ | 5,904 | $ | 789 | ||||||||
Net income: |
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General Partner | $ | 52 | $ | 2 | $ | 59 | $ | 8 | ||||||||
Limited Partners | 5,187 | 203 | 5,845 | 781 | ||||||||||||
$ | 5,239 | $ | 205 | $ | 5,904 | $ | 789 | |||||||||
Net income per Limited Partnership Unit | $ | 0.42 | $ | 0.02 | $ | 0.47 | $ | 0.06 | ||||||||
Weighted average number of Units outstanding |
12,471,600 | 12,471,600 | 12,471,600 | 12,471,600 |
See accompanying notes.
4
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Limited Partners | General Partner |
Total | ||||||||||||||
Units | Amount | |||||||||||||||
Balance December 31, 2010 | 12,471,600 | $ | 3,695 | $ | 205 | $ | 3,900 | |||||||||
Distributions to Limited Partners ($0.15 per Unit) | | (1,870 | ) | | (1,870 | ) | ||||||||||
Net income | | 956 | 10 | 966 | ||||||||||||
Balance December 31, 2011 | 12,471,600 | 2,781 | 215 | 2,996 | ||||||||||||
Distributions to Limited Partners accrued pursuant to Fund Liquidation ($0.50 per Unit) | | (6,236 | ) | | (6,236 | ) | ||||||||||
Net income | | 5,845 | 59 | 5,904 | ||||||||||||
Net assets transferred to liquidating trust | (12,471,600 | ) | (2,664 | ) | | (2,664 | ) | |||||||||
Transfer of Unitholder interests to liquidating trust | | 274 | (274 | ) | | |||||||||||
Balance September 30, 2012 | | $ | | $ | | $ | |
See accompanying notes.
5
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Operating activities: |
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Net income | $ | 5,239 | $ | 205 | $ | 5,904 | $ | 789 | ||||||||
Adjustments to reconcile net income to cash provided by operating activities: |
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Depreciation of operating lease assets | 55 | 190 | 188 | 602 | ||||||||||||
Gain on sales of assets | (5,051 | ) | (7 | ) | (5,060 | ) | (197 | ) | ||||||||
Changes in operating assets and liabilities: |
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Accounts receivable | (162 | ) | 26 | (117 | ) | 7 | ||||||||||
Prepaid expenses and other assets | 6 | (3 | ) | 2 | | |||||||||||
Accounts payable and accruals: |
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General Partner | 45 | (5 | ) | (59 | ) | (62 | ) | |||||||||
Other | (22 | ) | | (60 | ) | (23 | ) | |||||||||
Unearned operating lease income | (19 | ) | 71 | (21 | ) | (12 | ) | |||||||||
Net cash provided by operating activities | 91 | 477 | 777 | 1,104 | ||||||||||||
Investing activities: |
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Proceeds from sales of assets | 5,802 | 10 | 5,814 | 214 | ||||||||||||
Net cash provided by investing activities | 5,802 | 10 | 5,814 | 214 | ||||||||||||
Financing activities: |
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Cash transferred to liquidating trust | (6,840 | ) | | (6,840 | ) | | ||||||||||
Net cash used in financing activities | (6,840 | ) | | (6,840 | ) | | ||||||||||
Net (decrease) increase in cash and cash equivalents | (947 | ) | 487 | (249 | ) | 1,318 | ||||||||||
Cash and cash equivalents at beginning of period | 947 | 1,327 | 249 | 496 | ||||||||||||
Cash and cash equivalents at end of period | $ | | $ | 1,814 | $ | | $ | 1,814 | ||||||||
Supplemental disclosures of cash flow information: |
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Cash paid during the period for taxes | $ | | $ | | $ | 3 | $ | 3 | ||||||||
Supplemental disclosures of non-cash transactions: |
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Distributions to Limited Partners accrued pursuant to Fund Liquidation | $ | 6,236 | $ | | $ | 6,236 | $ | | ||||||||
Net non-cash assets and liabilities transferred to Trust | $ | 4,176 | $ | | $ | 4,176 | $ | |
See accompanying notes.
6
ATEL Cash Distribution Fund V, L.P. (the Partnership or the Fund) was formed under the laws of the State of California in September 1992. The Partnership was formed to engage in the sale of limited partnership investment units and the acquisition of equipment to utilize in equipment leasing and sales activities. The General Partner of the Partnership was ATEL Financial Services, LLC (AFS), a California limited liability company. Prior to converting to a limited liability company structure, AFS was formerly known as ATEL Financial Corporation.
The Partnership conducted a public offering of 12,500,000 Limited Partnership Units (Units) at a price of $10 per Unit. On March 19, 1993, subscriptions for the minimum number of Units, 120,000, or $1.2 million, had been received. On that date, the Partnership commenced operations in its primary business (acquiring equipment to engage in equipment leasing and sales activities). As of November 15, 1994, the Partnership had received and accepted subscriptions for 12,500,000, or $125 million in addition to the Initial Limited Partners Units and the offering was terminated.
The Partnerships principal objectives have been to invest in a diversified portfolio of equipment that (i) preserves, protects and returns the Partnerships invested capital; (ii) generates distributions to the partners 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, 2000; and (iii) provides additional distributions following the Reinvestment Period and until all equipment has been sold. The Partnership is governed by its Limited Partnership Agreement (Partnership Agreement).
Pursuant to the Partnership Agreement, AFS receives compensation for services rendered and reimbursements for costs incurred on behalf of the Partnership (Note 4). The Partnership 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.
As of September 30, 2012, the Partnership ceased operations and transferred its net assets (the Trust Assets) to a liquidating trust (the Trust). The Trust is governed and operated by all the terms and conditions of the Partnership Agreement. The Trust is irrevocable and was formed and will be operated for the sole purpose of liquidating the remaining Trust Assets, paying or otherwise satisfying any remaining or contingent liabilities of the Partnership, including payment of the administrative costs of the Trust, and distributing any remaining balance to the Trust Interest Holders (the former Unitholders of the Partnership in direct proportion to their respective former Unit holdings) upon termination of the Trust. In connection with the administration of the Trust Assets, the Trustee (AFS), as a fiduciary, shall have and may exercise the powers, authority and discretion, consistent with the powers of the General Partner under the Partnership Agreement. The Trustee shall make distributions to the Trust Interest Holders in the same manner, with the same allocations and priorities, as distributions would have been affected to Unitholders under the Partnership Agreement had the Trust Assets remained in the Partnership.
The Partnership assets and liabilities transferred to the Trust at September 30, 2012 were as follows (in thousands):
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Cash | $ | 6,840 | ||||||
Non-cash assets and liabilities: |
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Accounts receivable | $ | 378 | ||||||
Investments in equipment and leases, net of accumulated depreciation of $12,896 at September 30, 2012 | 1,901 | |||||||
Accounts payable and accrued liabilities | (219 | ) | ||||||
Accrued distribution to Limited Partners | (6,236 | ) | ||||||
Net non-cash assets and liabilities transferred to Trust | (4,176 | ) | ||||||
Net assets transferred to the Trust | $ | 2,664 |
7
These unaudited interim financial statements, to be filed with the Securities and Exchange Commission on Form 10-Q pursuant to mandatory quarterly reporting requirements, represent the Funds final public filing as the Partnership has terminated its operations and transferred its net assets to the Trust. Nonetheless, these unaudited 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, 2011, filed with the Securities and Exchange Commission.
The Trust will continue to provide periodic financial statements to the Trust Interest Holders, as it finalizes the liquidation of Trust assets, settlement of accounts and makes liquidating distributions to Trust Interest Holders. The trust will prepare and have audited combined financial statements for the full year 2012 reflecting twelve months of combined Partnership and Trust operations.
On or about December 1, 2012, the offices of the Trust and the Trustee will be relocated to The Transamerica Pyramid, 600 Montgomery Street, 9th Floor, San Francisco, California 94111. The telephone number for the Trustee will be (415) 989-8800 at the new location.
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 General Partner, 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.
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 from 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 General Partner has reviewed events that have occurred after September 30, 2012, the date the Partnership ceased operations and transferred its net assets to the Trust, up until the date of issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to these financial statements, or adjustments hereto.
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.
The Partnership was not organized to operate in multiple segments for the purpose of making operating decisions or assessing performance. Accordingly, the Partnership operated in one reportable operating segment in the United States.
Certain of the Partnerships lessee customers may have had international operations. In those instances, the Partnership was aware that certain equipment, primarily railcars, may periodically exit the country. However, those lessee customers were based in the United States, and it was impractical for the Partnership to track, on an asset-by-asset, day-by-day basis, where these assets were deployed.
The primary geographic region in which the Partnership sought leasing opportunities was North America.
8
The table below summarizes geographic information relating to the sources, by nation, of the total net revenues for the nine months ended September 30, 2012 and 2011, and long-lived tangible assets as of September 30, 2012 and December 31, 2011 (dollars in thousands):
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For the nine months ended September 30, | ||||||||||||||||
2012 | % of Total | 2011 | % of Total | |||||||||||||
Revenue |
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United States | $ | 6,547 | 95 | % | $ | 2,114 | 100 | % | ||||||||
Canada | 370 | 5 | % | | 0 | % | ||||||||||
Total International | 370 | 5 | % | | 0 | % | ||||||||||
Total | $ | 6,917 | 100 | % | $ | 2,114 | 100 | % |
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As of September 30, | As of December 31, | |||||||||||||||
2012 | % of Total | 2011 | % of Total | |||||||||||||
Long-lived assets |
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United States | $ | | 0 | % | $ | 2,066 | 73 | % | ||||||||
Canada | | 0 | % | 777 | 27 | % | ||||||||||
Total International | | 0 | % | 777 | 27 | % | ||||||||||
Total | $ | | 0 | % | $ | 2,843 | 100 | % |
As of September 30, 2012, the Fund ceased operations and transferred its net assets to the Trust.
Net income and distributions per Unit were based upon the weighted average number of Limited Partners Units outstanding during the periods presented.
The Partnerships investments in equipment and leases consist of the following (in thousands):
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Balance December 31, 2011 |
Reclassifications & Additions/ Dispositions |
Depreciation/ Amortization Expense or Amortization of Leases |
Balance September 30, 2012 |
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Net investment in operating leases | $ | 2,829 | $ | (2,642 | ) | $ | (187 | ) | $ | | ||||||
Assets held for sale or lease, net of accumulated depreciation of $0 at September 30, 2012 and $5 at December 31, 2011 | 14 | (13 | ) | (1 | ) | | ||||||||||
Total | $ | 2,843 | $ | (2,655 | ) | $ | (188 | ) | $ | |
Management periodically reviewed the carrying values of its assets on leases and assets held for sale or lease. As a result of those reviews, management determined that no impairment losses existed during the respective nine months ended September 30, 2012 and 2011.
The Partnership utilized a straight-line depreciation method for equipment in all of the categories currently in its portfolio of lease transactions. Depreciation expense on the Partnerships equipment was $55 thousand and $190 thousand for the respective three months ended September 30, 2012 and 2011, and was $188 thousand and $602 thousand for the respective nine months ended September 30, 2012 and 2011.
All of the leased property was acquired in the years 1993 through 2004.
9
Equipment on operating leases consists of the following (in thousands):
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Balance December 31, 2011 |
Additions | Reclassifications or Dispositions |
Balance September 30, 2012 |
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Transportation, rail | $ | 16,379 | $ | | $ | (16,379 | ) | $ | | |||||||
Containers | 234 | | (234 | ) | | |||||||||||
16,613 | | (16,613 | ) | | ||||||||||||
Less accumulated depreciation | (13,784 | ) | (187 | ) | 13,971 | | ||||||||||
Total | $ | 2,829 | $ | (187 | ) | $ | (2,642 | ) | $ | |
The average estimated residual value for assets on operating leases was 14% of the assets original cost at December 31, 2011.
As of September 30, 2012, the Fund ceased operations and transferred its net assets to the Trust. During the third quarter of 2012, the Company continued its liquidation of assets with multiple sales of railcars. Year-to-date, lease asset sales proceeds approximated $5.8 million with a related gain on such sales of $5.1 million primarily from the third quarter transaction. By comparison, sales of lease assets resulted in realized gains of $7 thousand and $197 thousand for the three and nine months ended September 30, 2011, respectively.
The terms of the Partnership Agreement provided that AFS and/or affiliates were entitled to receive certain fees for equipment acquisition, management and resale and for management of the Partnership. In connection with the administration of the Trust Assets, the Trustee, as a fiduciary, shall have and may exercise the powers, authority and discretion, consistent with the powers of the General Partner under the Partnership Agreement.
The Partnership Agreement allowed for the reimbursement of costs incurred by AFS in providing administrative services to the Partnership. Administrative services provided include Partnership accounting, investor relations, legal counsel and lease and equipment documentation. AFS was not reimbursed for services whereby it was entitled to receive a separate fee as compensation for such services, such as acquisition and disposition of equipment.
Each of ATEL Leasing Corporation (ALC) and AFS is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Partnership and successor Trust. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations, communications and general administrative services are performed by AFS.
Cost reimbursements to the General Partner and successor Trustee are based on its costs incurred in performing administrative services for the Partnership. 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.
Incentive management fees are computed as 5% of distributions of cash from operations, as defined in the Partnership Agreement and equipment management fees are computed as 5% of gross revenues from operating leases plus 2% of gross revenues from full payout leases both as defined in the Partnership Agreement.
10
During the three and nine months ended September 30, 2012 and 2011, AFS and/or affiliates earned fees and commissions, and billed for reimbursements pursuant to the Partnership Agreement as follows (in thousands):
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2012 | 2011 | 2012 | 2011 | |||||||||||||
Cost reimbursements to General Partner | $ | 54 | $ | 60 | $ | 170 | $ | 188 | ||||||||
Equipment and incentive management fees to General Partner |
58 | 18 | 89 | 57 | ||||||||||||
$ | 112 | $ | 78 | $ | 259 | $ | 245 |
The Partnership entered into contracts that contain a variety of indemnifications. The Partnerships maximum exposure under these arrangements is unknown. However, the Partnership has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
The General Partner knows of no facts or circumstances that would make the Partnerships, and successor Trusts, contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Partnership believes that these indemnification obligations were made in the ordinary course of business as part of standard commercial and industry practice, and that any potential liability under the Partnerships similar commitments is remote. With the transfer of the Funds net assets to the Trust, any indemnification obligation which may become payable will be borne by the Trust, separately recorded and/or disclosed as a liability in accordance with GAAP.
At December 31, 2011, 12,471,600 Units remained issued and outstanding (including the 50 Units issued to the Initial Limited Partners). Effective with the transfer of net assets to the Trust, all Unitholder interests were transferred thereto.
The Partnership had the right, exercisable at the General Partners discretion, but not the obligation, to repurchase Units of a Unitholder who ceases to be a U.S. Citizen, for a price equal to 100% of the holders capital account. The Partnership was otherwise permitted, but not required, to repurchase Units upon a holders request. The repurchase of Fund Units was made in accordance with Section 13 of the Amended and Restated Agreement of Limited Partnership. The repurchase would have been at the discretion of the General Partner on terms it determined to be appropriate under given circumstances, in the event that the General Partner deemed such repurchase to be in the best interest of the Partnership; provided, the Partnership was never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units were 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 were deemed to be repurchased effective the last day of the preceding quarter, and were not deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs.
As defined in the Limited Partnership Agreement, the Partnerships Net Income, Net Losses, and Tax Credits were to be allocated 99% to the Limited Partners and 1% to AFS. The Limited Partnership Agreement allowed the Partnership to make an allocation of income to AFS in order to maintain the capital account of AFS at zero.
11
As defined in the Limited Partnership Agreement, available Cash from Operations and Cash from Sales and Refinancing were to be distributed as follows:
First, 5% of Distributions of Cash from Operations to AFS as Incentive Management Fee;
Second, the balance to the Limited Partners until the Limited Partners have received Aggregate Distributions in an amount equal to their Original Invested Capital, as defined, plus a 10% per annum cumulative (compounded daily) return on their Adjusted Invested Capital;
Third, AFS was to receive as Incentive Management Compensation, the following:
(A) 10% of remaining Cash from Operations and
(B) 15% of remaining Cash from Sales or Refinancing; and
Fourth, the balance to the Limited Partners.
There were no distributions paid to the Limited Partners during the three and nine months ended September 30, 2012 and 2011.
As discussed in Note 1, as of September 30, 2012, the Partnership ceased operations and transferred its net assets to a liquidating trust (the Trust). The Trust was formed to liquidate the remaining Trust Assets, pay or otherwise satisfy any remaining or contingent liabilities of the Partnership, including payment of the administrative costs of the Trust, and distribute any balance to the Unitholders (as Trust Interest Holders) upon termination of the Trust.
A distribution of $6.2 million, or $.50 per Unit, was accrued at September 30, 2012 and will be paid to Unitholder interests during the fourth quarter of 2012 pursuant to the ongoing liquidation of the Trust.
12
Statements contained in this Item 2, Managements Discussion and Analysis of Financial Condition and Results of Operations, (MD&A) and elsewhere in this Form 10-Q, which are not historical facts, may be forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. In particular, the economic recession and changes in general economic conditions, including, fluctuations in demand for equipment, lease rates, and interest rates, may result in delays in leasing, re-leasing, and disposition of equipment, and reduced returns on invested capital. The Partnerships performance is subject to risks relating to lessee defaults and the creditworthiness of its lessees. The Partnerships performance is also subject to risks relating to the value of its equipment at the end of its leases, which may be affected by the condition of the equipment, technological obsolescence and the markets for new and used equipment at the end of lease terms. Investors are cautioned not to attribute undue certainty to these forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events, other than as required by law.
ATEL Cash Distribution Fund V, L.P. (the Partnership or the Fund) was formed under the laws of the State of California in September 1992. The Partnership was formed to engage in the sale of limited partnership investment units and the acquisition of equipment to utilize in equipment leasing and sales activities. The General Partner of the Partnership was ATEL Financial Services, LLC (AFS), a California limited liability company. Prior to converting to a limited liability company structure, AFS was formerly known as ATEL Financial Corporation.
The Partnership conducted a public offering of 12,500,000 Limited Partnership Units (Units) at a price of $10 per Unit. On March 19, 1993, subscriptions for the minimum number of Units, 120,000, or $1.2 million, had been received. On that date, the Partnership commenced operations in its primary business (acquiring equipment to engage in equipment leasing and sales activities). As of November 15, 1994, the Partnership had received and accepted subscriptions for 12,500,000, or $125 million in addition to the Initial Limited Partners Units and the offering was terminated.
As of September 30, 2012, the Partnership ceased operations and transferred its net assets (the ``Trust Assets'') to a liquidating trust (the ``Trust''). The Trust is governed and operated by all the terms and conditions of the Partnership Agreement. The Trust is irrevocable and was formed and will be operated for the sole purpose of liquidate the remaining Trust Assets, paying or otherwise satisfying any remaining or contingent liabilities of the Partnership, including payment of the administrative costs of the Trust, and distributing any remaining balance to the Trust Interest Holders (the former Partnership Unitholders in
direct proportion to their respective former Unit holdings) upon termination of the Trust. In connection with the administration of the Trust Assets, the Trustee (AFS), as a fiduciary, shall have and may exercise the powers, authority and discretion, consistent with the powers of the General Partner under the Partnership Agreement. AFS shall make distributions to the Trust Interest Holders in the same manner, with the same allocations and priorities, as distributions would have been affected to Unitholders under the Partnership Agreement had the Trust Assets remained in the Partnership.
The Partnership assets and liabilities transferred to the Trust at September 30, 2012 are as follows (in thousands):
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Cash | $ | 6,840 | ||||||
Non-cash assets and liabilities: |
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Accounts receivable | $ | 378 | ||||||
Investments in equipment and leases, net of accumulated depreciation of $12,896 at September 30, 2012 | 1,901 | |||||||
Accounts payable and accrued liabilities | (219 | ) | ||||||
Accrued distribution to Limited Partners | (6,236 | ) | ||||||
Net non-cash assets and liabilities transferred to Trust |
(4,176 | ) | ||||||
Net assets transferred to the Trust | $ | 2,664 |
These unaudited interim financial statements, to be filed with the Securities and Exchange Commission on Form 10-Q pursuant to mandatory quarterly reporting requirements, represent the Funds final public filing as the Partnership has terminated its operations and transferred its net assets to the Trust. The Trust will continue to provide periodic financial
13
statements to the Trust Interest Holders, as it finalizes the liquidation of Fund assets, settlement of accounts and makes liquidating distributions to Trust Interest Holders. The Trust will have prepared and audited combined Fund and Trust financial statements reflecting a full year twelve months of combined Fund and Trust operations for 2012.
The Partnership had net income of $5.2 million and $205 thousand for the three months ended September 30, 2012 and 2011, respectively. The results for the third quarter of 2012 reflect a significant increase in total revenues coupled with a decrease in total operating expenses when compared to the prior year period.
Total revenues for the third quarter of 2012 increased by $4.9 million compared to the prior year period. The increase was a result of an increase in gains recognized on sales of leased assets partially offset by a decline in operating lease revenues.
Gain on sales of lease assets increased by $5.0 million largely due to the volume of equipment sold. Pursuant to an ongoing liquidation of portfolio assets, the Fund completed the sale of 270 railcars and 39 containers during the current year period. This compares to sales of 6 containers during the prior year period. As of September 30, 2012, the Fund transferred all of its remaining assets to the Trust.
Operating lease revenues decreased mainly due to the impact of continued run-off and sales of lease assets.
Total expenses for the third quarter of 2012 decreased by $158 thousand compared to the prior year period. The 36% net reduction in expenses was primarily a result of decreases in depreciation expense and railcar maintenance costs offset, in part, by an increase in incentive fees payabe to AFS.
The decrease in depreciation expense totaled $135 thousand and was primarily due to an increase in the number of assets that have been fully depreciated since the third quarter of 2011 and the sale of 270 railcars during the third quarter, of which 196 were sold on July 2, 2012. The decrease in railcar maintenance costs totaled $61 thousand and was largely due to continued sales of railcars pursuant to the Funds ongoing liquidation.
Partially offsetting the aforementioned decreases in expenses was a $40 thousand increase in incentive fees relative to the distributions accrued at September 30, 2012 which will be paid to Unitholder interests during the fourth quarter of 2012 pursuant to the ongoing liquidation of the Trust.
The Partnership had net income of $5.9 million and $789 thousand for the nine months ended September 30, 2012 and 2011, respectively. The results for the first nine months of 2012 reflect an increase in total revenues coupled with a decrease in total operating expenses when compared to the prior year period.
Total revenues for the first nine months of 2012 increased by $4.8 million compared to the prior year period. The increase was a result of an increase in gains recognized on sales of leased assets partially offset by a decline in operating lease revenues.
Gain on sales of lease assets increased by $4.9 million largely due to the volume of equipment sold. The Fund completed the sale of 270 railcars and 45 containers during the first nine months of 2012 as compared to sales of 30 containers and 16 railcars during the prior year period.
Operating lease revenue decreased mainly due to the impact of continued run-off and sales of lease assets.
14
Total expenses for the first nine months of 2012 decreased by $312 thousand compared to the prior year period. The 24% net reduction in expenses was mainly due to a decrease in depreciation expense offset, in part, by increases in railcar maintenance costs and management fees payable to AFS.
Depreciation expense was reduced by $414 thousand, or 69%, largely due to an increase in the number of assets that have been fully depreciated since September 30, 2011 and asset sales and dispositions.
The increase in railcar maintenance expense totaled $71 thousand and was mainly associated with costs of preparing certain railcars for deployment under a new lease term, and higher overall material and labor costs partially offset by the impact of continued sales of railcars as the Fund liquidates its asset portfolio. The increase in incentive fees payable to AFS totaled $32 thousand and was associated with the distributions accrued at September 30, 2012 which will be paid to Unitholder interests during the fourth quarter of 2012 pursuant to the ongoing liquidation of the Trust.
As of September 30, 2012, the Fund ceased operations and transferred its net assets to the Trust.
Prior to the transfer of net assets, the liquidity of the Partnership varied, increasing to the extent cash flows from leases and proceeds from lease asset sales exceed expenses and decreasing as distributions are made to the partners and to the extent expenses exceed cash flows from leases and proceeds from asset sales.
The primary source of liquidity for the Partnership has been its cash flow from leasing activities and sales of lease assets.
The following table sets forth summary cash flow data (in thousands):
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net cash provided by (used in): |
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Operating activities | $ | 91 | $ | 477 | $ | 777 | $ | 1,104 | ||||||||
Investing activities | 5,802 | 10 | 5,814 | 214 | ||||||||||||
Financing activities | (6,840 | ) | | (6,840 | ) | | ||||||||||
Net (decrease) increase in cash and cash equivalents | $ | (947 | ) | $ | 487 | $ | (249 | ) | $ | 1,318 |
During the three and nine months ended September 30, 2012 and 2011, the Partnerships primary sources of liquidity were cash flows from its portfolio of operating lease contracts and proceeds from lease asset sales. During the same periods, cash was primarily used to pay invoices related to General Partner fees and expenses, and other payables. As of September 30, 2012, the Fund ceased operations and cash totaling $6.8 million was transferred to the Trust.
The Partnership commenced periodic distributions, based on cash flows from operations, beginning with the second quarter of 1993. A distribution of $6.2 million was accrued at September 30, 2012 and will be paid to Trust Interest Holders during the fourth quarter of 2012 pursuant to the ongoing liquidation of the Trust.
None.
None.
15
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the Partnership evaluates its estimates, which are based upon historical experiences, market trends and financial forecasts, and upon various other assumptions that management believes to be reasonable under the circumstances and at that certain point in time. Actual results may differ, significantly at times, from these estimates under different assumptions or conditions.
The Partnerships critical accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2011. There have been no material changes to the Partnerships critical accounting policies since December 31, 2011.
The Partnerships General Partners President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer and Chief Operating Officer (Management), evaluated the effectiveness of the Partnerships disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based on the evaluation of the Partnerships disclosure controls and procedures, Management concluded that as of the end of the period covered by this report, the design and operation of these disclosure controls and procedures were effective.
The Partnership does not control the financial reporting process, and is solely dependent on the Management of the General Partner, which is responsible for providing the Partnership with financial statements in accordance with generally accepted accounting principles in the United States. The General Partners disclosure controls and procedures, as applicable to the Partnership, were effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.
There were no changes in the General Partners internal control over financial reporting, as it is applicable to the Partnership, during the quarter ended September 30, 2012 that have materially affected, or were reasonably likely to materially affect, the General Partners internal control over financial reporting, as it is applicable to the Partnership.
16
In the ordinary course of conducting business, there may be certain claims, suits, and complaints filed against the Partnership. In the opinion of management, the outcome of such matters, if any, will not have a material impact on the Partnerships financial position or results of operations.
None.
None.
Not Applicable.
None.
Documents filed as a part of this report:
1. Financial Statement Schedules
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are not applicable, and therefore have been omitted.
2. | Other Exhibits |
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31.1 | Rule 13a-14(a)/ 15d-14(a) Certification of Dean L. Cash | |
31.2 | Rule 13a-14(a)/ 15d-14(a) Certification of Paritosh K. Choksi | |
32.1 | Certification Pursuant to 18U.S.C. section 1350 of Dean L. Cash | |
32.2 | Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi | |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema Document | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
* | In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be furnished and not filed. |
17
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 13, 2012
ATEL CASH DISTRIBUTION FUND V, L.P.
(Registrant)
By: | ATEL Financial Services, LLC General Partner of Registrant |
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By: /s/ Dean L. Cash | ||
By: /s/ Paritosh K. Choksi | ||
By: /s/ Samuel Schussler |
18
Exhibit 31.1
I, Dean L. Cash, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of ATEL Cash Distribution Fund V, L.P.; |
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: November 13, 2012
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/s/ Dean L. Cash![]() President and Chief Executive Officer of ATEL Financial Services, LLC (General Partner) |
Exhibit 31.2
I, Paritosh K. Choksi, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of ATEL Cash Distribution Fund V, L.P.; |
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 registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: November 13, 2012
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/s/ Paritosh K. Choksi![]() Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Financial Services, LLC (General Partner) |
Exhibit 32.1
In connection with the Quarterly Report of ATEL Cash Distribution Fund V, L.P. (the Partnership) on Form 10-Q for the period ended September 30, 2012 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, General Partner of the Partnership, 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 Partnership. |
Date: November 13, 2012
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/s/ Dean L. Cash![]() President and Chief Executive Officer of ATEL Financial Services, LLC (General Partner) |
A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
In connection with the Quarterly Report of ATEL Cash Distribution Fund V, L.P. (the Partnership) on Form 10-Q for the period ended September 30, 2012 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, General Partner of the Partnership, 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 Partnership. |
Date: November 13, 2012
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/s/ Paritosh K. Choksi![]() Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Financial Services, LLC (General Partner) |
A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.
Investments in Equipment and Leases (Parenthetical) (Detail) (Assets Held-For-Sale and Lease, USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
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Dec. 31, 2011
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Assets Held-For-Sale and Lease
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Leases Disclosure [Line Items] | ||
Assets held for sale or lease, accumulated depreciation | $ 0 | $ 5 |
Summary of Significant Accounting Policies
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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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 General Partner, 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. 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 from 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 General Partner has reviewed events that have occurred after September 30, 2012, the date the Partnership ceased operations and transferred its net assets to the Trust, up until the date of issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to these financial statements, or adjustments hereto. 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. Segment reporting:The Partnership was not organized to operate in multiple segments for the purpose of making operating decisions or assessing performance. Accordingly, the Partnership operated in one reportable operating segment in the United States. Certain of the Partnership’s lessee customers may have had international operations. In those instances, the Partnership was aware that certain equipment, primarily railcars, may periodically exit the country. However, those lessee customers were based in the United States, and it was impractical for the Partnership to track, on an asset-by-asset, day-by-day basis, where these assets were deployed. The primary geographic region in which the Partnership sought leasing opportunities was North America. The table below summarizes geographic information relating to the sources, by nation, of the total net revenues for the nine months ended September 30, 2012 and 2011, and long-lived tangible assets as of September 30, 2012 and December 31, 2011 (dollars in thousands):
As of September 30, 2012, the Fund ceased operations and transferred its net assets to the Trust. Per Unit data:Net income and distributions per Unit were based upon the weighted average number of Limited Partners’ Units outstanding during the periods presented. |