PINX:ZZEFB Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

 

 

 

  

Form 10-Q

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

 
x   Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.

For the quarterly period ended June 30, 2012

 
o   Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.

For the transition period from          to         

Commission File number 000-23842

ATEL Cash Distribution Fund V, L.P.

(Exact name of registrant as specified in its charter)

 
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)

Registrant’s telephone number, including area code (415) 989-8800

Securities registered pursuant to section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act: Limited 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 July 31, 2012 was 12,471,600.

DOCUMENTS INCORPORATED BY REFERENCE

None.

 


 
 

TABLE OF CONTENTS

Table of Contents

ATEL CASH DISTRIBUTION FUND V, L.P.
  
Index

 

Part I.

Financial Information

    3  

Item 1.

Financial Statements (Unaudited)

    3  
Balance Sheets, June 30, 2012 and December 31, 2011     3  
Statements of Income for the three and six months ended June 30, 2012 and 2011     4  
Statements of Changes in Partners’ Capital for the year ended December 31, 2011 and for the six months ended June 30, 2012     5  
Statements of Cash Flows for the three and six months ended June 30, 2012 and 2011     6  
Notes to the Financial Statements     7  

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

    12  

Item 4.

Controls and Procedures

    15  

Part II.

Other Information

    16  

Item 1.

Legal Proceedings

    16  

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

    16  

Item 3.

Defaults Upon Senior Securities

    16  

Item 4.

Mine Safety Disclosures

    16  

Item 5.

Other Information

    16  

Item 6.

Exhibits

    16  

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TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ATEL CASH DISTRIBUTION FUND V, L.P.
  
BALANCE SHEETS
  
JUNE 30, 2012 AND DECEMBER 31, 2011
(In Thousands)
(Unaudited)

   
  June 30,
2012
  December 31, 2011
ASSETS
                 
Cash and cash equivalents   $ 947     $ 249  
Accounts receivable     216       261  
Prepaid expenses and other assets     6       2  
Investments in equipment and leases, net of accumulated depreciation of $13,896 at June 30, 2012 and $13,789 at December 31, 2011     2,707       2,843  
Total assets   $ 3,876     $ 3,355  
LIABILITIES AND PARTNERS’ CAPITAL
                 
Accounts payable and accrued liabilities:
                 
General Partner   $ 9     $ 113  
Other     187       225  
Unearned operating lease income     19       21  
Total liabilities     215       359  
Commitments and contingencies
                 
Partners’ capital:
                 
General Partner     222       215  
Limited Partners     3,439       2,781  
Total Partners’ capital     3,661       2,996  
Total liabilities and Partners’ capital   $     3,876     $     3,355  

See accompanying notes.

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ATEL CASH DISTRIBUTION FUND V, L.P.
  
STATEMENTS OF INCOME
  
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2012 AND 2011
(In Thousands Except for Units and Per Unit Data)
(Unaudited)

       
  Three Months Ended June 30,   Six Months Ended June 30,
     2012   2011   2012   2011
Revenues:
                                   
Leasing activities:
                                   
Operating leases   $ 686     $ 652     $ 1,394     $ 1,285  
Gain on sales of assets     3       29       9       190  
Other                       1  
Total revenues     689       681       1,403       1,476  
Expenses:
                                   
Depreciation of operating lease assets     66       203       133       412  
Cost reimbursements to General Partner     60       60       116       128  
Professional fees     4       3       16       18  
Railcar maintenance     147       88       295       163  
Equipment and incentive management fees to General Partner     15       20       31       39  
Other management fees     20       21       42       40  
Outside services     17       14       37       27  
Postage     11       9       18       17  
Printing and photocopying     13       20       26       22  
Other     10       11       24       26  
Total expenses     363       449       738       892  
Net income   $ 326     $ 232     $ 665     $ 584  
Net income:
                                   
General Partner   $ 4     $ 3     $ 7     $ 6  
Limited Partners     322       229       658       578  
     $ 326     $ 232     $ 665     $ 584  
Net income per Limited Partnership Unit   $ 0.03     $ 0.02     $ 0.05     $ 0.05  
Weighted average number of Units outstanding     12,471,600       12,471,600       12,471,600       12,471,600  

See accompanying notes.

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ATEL CASH DISTRIBUTION FUND V, L.P.
  
STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL
  
FOR THE YEAR ENDED DECEMBER 31, 2011
AND FOR THE SIX MONTHS ENDED
JUNE 30, 2012
(In Thousands Except for Units and Per Unit Data)
(Unaudited)

       
  Limited Partners   General
Partner
  Total
     Units   Amount
Balance December 31, 2010     12,471,600     $     3,695     $       205     $       3,900  
Distributions to Limited Partners ($0.10 per Unit)           (1,870 )            (1,870 ) 
Net income           956       10       966  
Balance December 31, 2011     12,471,600       2,781       215       2,996  
Net income           658       7       665  
Balance June 30, 2012     12,471,600     $ 3,439     $ 222     $ 3,661  

See accompanying notes.

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ATEL CASH DISTRIBUTION FUND V, L.P.
  
STATEMENTS OF CASH FLOWS
  
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2012 AND 2011
(In Thousands)
(Unaudited)

       
  Three Months Ended
June 30,
  Six Months Ended
June 30,
     2012   2011   2012   2011
Operating activities:
                                   
Net income   $      326     $       232     $      665     $      584  
Adjustment to reconcile net income to cash provided by operating activities:
                                   
Depreciation of operating lease assets     66       203       133       412  
Gain on sales of assets     (3 )      (29 )      (9 )      (190 ) 
Changes in operating assets and liabilities:
                                   
Accounts receivable     (55 )      6       45       (19 ) 
Prepaid expenses and other assets     (3 )      1       (4 )      3  
Accounts payable and accruals:
                                   
General Partner     (26 )      14       (104 )      (57 ) 
Other     (14 )      (3 )      (38 )      (23 ) 
Unearned operating lease income     (1 )      (76 )      (2 )      (83 ) 
Net cash provided by operating activities     290       348       686       627  
Investing activities:
                                   
Proceeds from sales of assets     4       33       12       204  
Net cash provided by investing activities     4       33       12       204  
Financing activities:
                                   
Net cash provided by financing activities                        
Net increase in cash and cash equivalents     294       381       698       831  
Cash and cash equivalents at beginning of period     653       946       249       496  
Cash and cash equivalents at end of period   $ 947     $ 1,327     $ 947     $ 1,327  
Supplemental disclosures of cash flow information:
                                   
Cash paid during the period for taxes   $ 3     $ 3     $ 3     $ 3  

See accompanying notes.

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ATEL CASH DISTRIBUTION FUND V, L.P.
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

1. Organization and partnership matters:

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 for the purpose of engaging in the sale of limited partnership investment units and acquiring equipment to engage in equipment leasing and sales activities. The Partnership may continue until December 31, 2013. The General Partner of the Partnership is 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. At June 30, 2012, 12,471,600 Units remained issued and outstanding.

The Partnership’s principal objectives have been to invest in a diversified portfolio of equipment that (i) preserves, protects and returns the Partnership’s 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 June 30, 2012, the Partnership is in the liquidation phase of its life cycle as defined in the Partnership Agreement and is making distributions on an annual basis or at the discretion of the General Partner.

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission.

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the 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. Operating results for the three and six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the full year.

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 June 30, 2012, up until the issuance of the financial statements. In July 2012, pursuant to an ongoing liquidation of portfolio assets, the Fund completed the sale of approximately a third of its June 30, 2012 portfolio of assets to two third party lessors. It is the General Partner’s intent to complete an orderly liquidation of the Fund’s remaining portfolio of assets as soon as reasonably practicable.

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ATEL CASH DISTRIBUTION FUND V, L.P.
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

2. Summary of significant accounting policies: - (continued)

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, expected future cash flows used for impairment analysis purposes, and determination of the allowance for doubtful accounts.

Segment reporting:

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

Certain of the Partnership’s lessee customers may have international operations. In these instances, the Partnership is aware that certain equipment, primarily railcars, may periodically exit the country. However, these lessee customers are based in the United States, and it is impractical for the Partnership to track, on an asset-by-asset, day-by-day basis, where these assets are 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 six months ended June 30, 2012 and 2011, and long-lived tangible assets as of June 30, 2012 and December 31, 2011 (dollars in thousands):

       
  For the six months ended June 30,
     2012   % of Total   2011   % of Total
Revenue
                                   
United States   $     1,033            74 %    $     1,476            100 % 
Canada     370       26 %            0 % 
Total International     370       26 %            0 % 
Total   $ 1,403       100 %    $ 1,476       100 % 

       
  As of June 30,   As of December 31,
     2012   % of Total   2011   % of Total
Long-lived assets
                                   
United States   $     1,955            72 %    $     2,066            73 % 
Canada     752       28 %      777       27 % 
Total International     752       28 %      777       27 % 
Total   $ 2,707       100 %    $ 2,843       100 % 

Per Unit data:

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

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ATEL CASH DISTRIBUTION FUND V, L.P.
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

3. Investment in equipment and leases, net:

The Partnership’s investments in equipment and leases consist of the following (in thousands):

       
  Balance
December 31,
2011
  Reclassifications
&
Additions/
Dispositions
  Depreciation/
Amortization
Expense or
Amortization
of Leases
  Balance
June 30,
2012
Net investment in operating leases   $      2,829     $         (3 )    $       (133 )    $       2,693  
Assets held for sale or lease, net of accumulated depreciation of $5 at June 30, 2012 and December 31, 2011     14                   14  
Total   $ 2,843     $ (3 )    $ (133 )    $ 2,707  

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 sale or lease. As a result of these reviews, management determined that no impairment losses existed during the respective six months ended June 30, 2012 and 2011.

The Partnership utilizes a straight-line depreciation method for equipment in all of the categories currently in its portfolio of lease transactions. Depreciation expense on the Partnership’s equipment was $66 thousand and $203 thousand for the respective three months ended June 30, 2012 and 2011, and was $133 thousand and $412 thousand for the respective six months ended June 30, 2012 and 2011.

All of the leased property was acquired in the years 1993 through 2004.

Operating leases:

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

       
  Balance
December 31,
2011
  Additions   Reclassifications
or Dispositions
  Balance
June 30,
2012
Transportation, rail   $      16,379     $         —     $        (29 )    $       16,350  
Containers     234                   234  
       16,613             (29 )      16,584  
Less accumulated depreciation     (13,784 )      (133 )      26       (13,891 ) 
Total   $ 2,829     $ (133 )    $ (3 )    $ 2,693  

The average estimated residual value for assets on operating leases was 13% and 14% of the assets’ original cost at June 30, 2012 and December 31, 2011, respectively.

In July 2012, pursuant to an ongoing liquidation of portfolio assets, the Fund completed the sale of approximately a third of its June 30, 2012 portfolio of assets to two third party lessors. It is the General Partner’s intent to complete an orderly liquidation of the Fund’s remaining portfolio of assets as soon as reasonably practicable.

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ATEL CASH DISTRIBUTION FUND V, L.P.
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

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

At June 30, 2012, the aggregate amounts of future minimum lease payments under operating leases are as follows (in thousands):

 
  Operating Leases
Six months ending December 31, 2012   $      844  
Year ending December 31, 2013     961  
2014     807  
2015     106  
2016     36  
2017     36  
Thereafter     69  
     $ 2,859  

As indicated in Note 1, the Partnership is scheduled to terminate no later than December 31, 2013. In the event that any assets remain at such date, the Fund will venture to dispose of such assets in an orderly manner within a reasonable timeframe.

4. Related party transactions:

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

The Partnership Agreement allows 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 is not reimbursed for services whereby it is 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. 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 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, as defined in the Partnership Agreement plus 2% of gross revenues from full payout leases, as defined in the Partnership Agreement.

During the three and six months ended June 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):

       
  Three Months Ended
June 30,
  Six Months Ended
June 30,
     2012   2011   2012   2011
Cost reimbursements to General Partner   $      60     $      60     $     116     $     128  
Equipment and incentive management fees to General Partner     15       20       31       39  
     $ 75     $ 80     $ 147     $ 167  

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ATEL CASH DISTRIBUTION FUND V, L.P.
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

5. Guarantees:

The Partnership enters into contracts that contain a variety of indemnifications. The Partnership’s 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 Partnership’s contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Partnership 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 Partnership’s similar commitments is remote. Should any such indemnification obligation become payable, the Partnership would separately record and/or disclose such liability in accordance with GAAP.

6. Partners’ capital:

As of June 30, 2012 and December 31, 2011, 12,471,600 Units remained issued and outstanding (including the 50 Units issued to the Initial Limited Partners).

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

As defined in the Limited Partnership Agreement, the Partnership’s Net Income, Net Losses, and Tax Credits are to be allocated 99% to the Limited Partners and 1% to AFS. The Limited Partnership Agreement allows the Partnership to make an allocation of income to AFS in order to maintain the capital account of AFS at zero. There were no such allocations made during the respective three and six months periods ended June 30, 2012 and 2011.

As defined in the Limited Partnership Agreement, available Cash from Operations and Cash from Sales and Refinancing are 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 will 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 six months ended June 30, 2012 and 2011.

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

Statements contained in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (“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 Partnership’s performance is subject to risks relating to lessee defaults and the creditworthiness of its lessees. The Partnership’s performance is also subject to risks relating to the value of its equipment at the end of its leases, which may be affected by the condition of the equipment, technological obsolescence and the 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.

Overview

ATEL Cash Distribution Fund V, L.P. (the “Partnership”) is a California partnership that was formed in September 1992 for the purpose of engaging in the sale of limited liability investment units and acquiring equipment to generate revenues from equipment leasing and sales activities, primarily in the United States. The General Partner of the Partnership is ATEL Financial Services, LLC (“AFS”), a California limited liability company.

The Partnership conducted a public offering of 12,500,000 Limited Partnership Units (“Units”), at a price of $10 per Unit. The offering was terminated in November 1994. During early 1995, the Partnership completed its initial acquisition stage with the investment of the net proceeds from the public offering of Units. Subsequently, throughout the reinvestment period (“Reinvestment Period”) (defined as six full years following the year the offering was terminated), the Partnership reinvested cash flow in excess of certain amounts required to be distributed to the Limited Partners and/or utilized its credit facilities to acquire additional equipment.

The Partnership may continue until December 31, 2013. However, pursuant to the guidelines of the Limited Partnership Agreement (“Partnership Agreement”), the Partnership began to liquidate its assets and distribute the proceeds thereof after the end of the Reinvestment Period which ended in December 2000.

As of June 30, 2012, the Partnership remains in its liquidation phase. Accordingly, assets that mature will be returned to inventory and most likely will be subsequently sold, which will result in decreasing revenue as earning assets decrease. The Partnership continues to generally make distributions on an annual basis or at the discretion of the General Partner.

Results of Operations

The three months ended June 30, 2012 versus the three months ended June 30, 2011

The Partnership had net income of $326 thousand and $232 thousand for the three months ended June 30, 2012 and 2011, respectively. The results for the second quarter of 2012 reflect a decrease in total operating expenses and a slight increase in total revenues when compared to the prior year period.

Revenues

Total revenues for the second quarter of 2012 increased by $8 thousand, or 1%, as compared to the prior year period. The increase was largely due to a $34 thousand increase in operating lease revenue offset by a $26 thousand decrease in gain on sales of leased assets.

Operating lease revenue increased mainly due to higher rates realized on certain leased assets and a period over period increase in usage-based rental revenue offset, in part, by the impact of continued sales of lease assets during the liquidation stage of the Partnership.

The decrease in gain on sales of lease assets was largely a result of the lower volume of equipment sold during the second quarter of 2012. A total of 2 containers were sold during the current year period as compared to sales of 8 containers and 2 railcars during the prior year period.

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Expenses

Total expenses for the second quarter of 2012 decreased by $86 thousand, or 19%, as compared to the prior year period. The net reduction in expenses was primarily a result of a decrease in depreciation expense offset, in part, by an increase in railcar maintenance.

Depreciation expense was reduced by $137 thousand, or 67%, largely due to an increase in the number of assets that have been fully depreciated since the second quarter of 2011, combined with asset sales and dispositions. Railcar maintenance expense was higher by $59 thousand primarily due to increased material and labor costs.

The six months ended June 30, 2012 versus the six months ended June 30, 2011

The Partnership had net income of $665 thousand and $584 thousand for the six months ended June 30, 2012 and 2011, respectively. The results for the first half of 2012 reflect decreases in both total operating expenses and total revenues when compared to the prior year period.

Revenues

Total revenues for the first half of 2012 decreased by $73 thousand, or 5%, as compared to the prior year period. The decrease was largely due to a $181 thousand decrease in gains on sales of lease assets offset, in part, by a $109 thousand increase in operating lease revenue.

The decrease in gain on sales of lease assets was largely a result of the lower volume of equipment sold during the first half of 2012. A total of 6 containers were sold during the current year period as compared to sales of 24 containers and 16 railcars during the prior year period.

Operating lease revenue increased mainly due to a period over period increase in usage-based rental revenue and higher rates realized on certain leased assets offset, in part, by the impact of continued sales of lease assets during the liquidation stage of the Partnership.

Expenses

Total expenses for the first half of 2012 decreased by $154 thousand, or 17%, as compared to the prior year period. The net reduction in expenses was mainly due to a decrease in depreciation expense offset, in part, by an increase in railcar maintenance.

Depreciation expense was reduced by $279 thousand, or 68%, largely due to an increase in the number of assets that have been fully depreciated since June 30, 2011, combined with asset sales and dispositions. The increase in railcar maintenance expense totaled $132 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.

Capital Resources and Liquidity

At June 30, 2012 and December 31, 2011, the Partnership’s cash and cash equivalents totaled $947 thousand and $249 thousand, respectively. The liquidity of the Partnership varies, 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. As the initial lease terms have expired, the Partnership ventured to re-lease or sell the equipment. Future liquidity will depend on the Partnership’s success in remarketing or selling the equipment as it comes off rental.

If inflation in the general economy becomes significant, it may affect the Partnership in as much as the residual (resale) values of the Partnership’s leased assets may increase as the costs of similar assets increase. However, the Partnership’s revenues from existing leases would not increase as such rates are generally fixed for the terms of the leases without adjustment for inflation. In addition, if interest rates increase significantly under such circumstances, the lease rates that the Partnership can obtain on future leases will be expected to increase as the cost of capital is a significant factor in the pricing of lease financing. Leases already in place, for the most part, would not be affected by changes in interest rates.

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The Partnership currently believes it has available adequate reserves to meet its immediate cash requirements and those of the next twelve months, but in the event those reserves were found to be inadequate, the Partnership would likely be in a position to borrow against its current portfolio to meet such requirements. AFS envisions no such requirements for operating purposes.

Cash Flows

The following table sets forth summary cash flow data (in thousands):

       
  Three Months Ended
June 30,
  Six Months Ended
June 30,
     2012   2011   2012   2011
Net cash provided by:
                                   
Operating activities   $     290     $     348     $     686     $     627  
Investing activities     4       33       12       204  
Financing activities                        
Net increase in cash and cash equivalents   $ 294     $ 381     $ 698     $ 831  

The three months ended June 30, 2012 versus the three months ended June 30, 2011

During the three months ended June 30, 2012 and 2011, the Partnership’s 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.

The Partnership had no financing activity during the second quarters of 2012 and 2011. As the Fund is in its liquidation phase, any future financing activity is anticipated to only include distributions to Partners.

The six months ended June 30, 2012 versus the six months ended June 30, 2011

During the six months ended June 30, 2012 and 2011, the Partnership’s 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. The Partnership had no financing activity during the first six months of 2012 and 2011.

Distributions

The Partnership commenced periodic distributions, based on cash flows from operations, beginning with the second quarter of 1993. During its liquidation phase, the rates and frequency of periodic distributions paid by the Fund are solely at the discretion of the General Partner.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At June 30, 2012, the Partnership had no commitments to purchase lease assets and pursuant to the Partnership Agreement, the Partnership will no longer purchase any new lease assets.

Off-Balance Sheet Transactions

None.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the 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.

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The Partnership’s 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 Partnership’s critical accounting policies since December 31, 2011.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures

The Partnership’s General Partner’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer and Chief Operating Officer (“Management”), evaluated the effectiveness of the Partnership’s 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 Partnership’s disclosure controls and procedures, Management concluded that as of the end of the period covered by this report, the design and operation of these disclosure controls and procedures were effective.

The 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 Partner’s 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.

Changes in internal control

There were no changes in the General Partner’s internal control over financial reporting, as it is applicable to the Partnership, during the quarter ended June 30, 2012 that have materially affected, or are reasonably likely to materially affect, the General Partner’s internal control over financial reporting, as it is applicable to the Partnership.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

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 Partnership’s financial position or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

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

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 18 U.S.C. section 1350 of Dean L. Cash
32.2 Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 13, 2012

ATEL CASH DISTRIBUTION FUND V, L.P.
(Registrant)

By: ATEL Financial Services, LLC
General Partner of Registrant

 

By:

/s/ Dean L. Cash

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

    

By:

/s/ Paritosh K. Choksi

Paritosh K. Choksi,
Executive Vice President and Chief Financial Officer and
Chief Operating Officer of ATEL Financial Services, LLC
(General Partner)

    

By:

/s/ Samuel Schussler

Samuel Schussler,
Vice President and Chief Accounting Officer of
ATEL Financial Services, LLC (General Partner)

    

17


PINX:ZZEFB Quarterly Report 10-Q Filling

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PINX:ZZEFB Quarterly Report 10-Q Filing - 6/30/2012
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