Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | ATEL CAPITAL EQUIPMENT FUND VII LP | |
Entity Central Index Key | 1,019,542 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Units Outstanding | 14,985,550 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $ 334 | $ 261 |
Accounts receivable, net of allowance for doubtful accounts of $2 as of June 30, 2015 and $8 as of December 31, 2014 | 155 | 186 |
Investments in equipment and leases, net of accumulated depreciation of $33,040 as of June 30, 2015 and $32,996 as of December 31, 2014 | 5,288 | 5,378 |
Prepaid expenses and other assets | 16 | 17 |
Total assets | 5,793 | 5,842 |
Accounts payable and accrued liabilities: | ||
General Partner | 132 | 114 |
Other | 304 | 326 |
Unearned operating lease income | 26 | 26 |
Total liabilities | $ 462 | $ 466 |
Commitments and contingencies | ||
Partners' capital: | ||
General Partner | ||
Limited Partners | $ 5,331 | $ 5,376 |
Total Partners' capital | 5,331 | 5,376 |
Total liabilities and Partners' capital | $ 5,793 | $ 5,842 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Balance Sheets [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 2 | $ 8 |
Investments in equipment and leases, accumulated depreciation | $ 33,040 | $ 32,996 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Leasing activities: | ||||
Operating leases | $ 579 | $ 601 | $ 1,151 | $ 1,213 |
Gain (loss) on sales of assets | 3 | (19) | 6 | 45 |
Other | 1 | 1 | ||
Total revenues | 582 | 583 | 1,157 | 1,259 |
Expenses: | ||||
Depreciation of operating lease assets | 42 | 34 | 84 | 68 |
Cost reimbursements to General Partner | 125 | 49 | 225 | 95 |
Equipment and incentive management fees to General Partner | 22 | 13 | 43 | 28 |
Railcar and equipment maintenance | 230 | 185 | 483 | 378 |
Professional fees | 20 | 17 | 84 | 80 |
Insurance | 30 | 38 | 60 | 66 |
Outside services | 24 | 23 | 53 | 51 |
Other management fees | 24 | 24 | 48 | 48 |
Equipment storage | 18 | 5 | 40 | 8 |
Franchise fees and state taxes | 45 | 57 | ||
Freight and shipping | 5 | 5 | 12 | 9 |
Provision (reversal of provision) for credit losses | 2 | (2) | (6) | (5) |
Property taxes | 6 | 6 | 7 | |
Postage | 4 | 3 | 8 | 7 |
Printing and photocopying | 6 | 9 | 11 | 16 |
Other | 23 | 28 | 51 | 58 |
Total expenses | 581 | 476 | 1,202 | 971 |
Net income (loss) | $ 1 | $ 107 | $ (45) | $ 288 |
Net income (loss): | ||||
General Partner | ||||
Limited Partners | $ 1 | $ 107 | $ (45) | $ 288 |
Net income (loss) | $ 1 | $ 107 | $ (45) | $ 288 |
Net income (loss) per Limited Partnership Unit | $ 0 | $ 0.01 | $ 0 | $ 0.02 |
Weighted average number of Units outstanding | 14,985,550 | 14,985,550 | 14,985,550 | 14,985,550 |
Statements of Changes in Partne
Statements of Changes in Partners' Capital - USD ($) $ in Thousands | Limited Partner [Member] | General Partner [Member] | Total |
Beginning Balance (in units) at Dec. 31, 2013 | 14,985,550 | ||
Beginning Balance at Dec. 31, 2013 | $ 6,929 | $ 6,929 | |
Distributions to Limited Partners | (1,874) | (1,874) | |
Distributions to General Partner | $ (152) | (152) | |
Net income (loss) | $ 321 | $ 152 | 473 |
Ending Balance (in units) at Dec. 31, 2014 | 14,985,550 | ||
Ending Balance at Dec. 31, 2014 | $ 5,376 | 5,376 | |
Net income (loss) | $ (45) | (45) | |
Ending Balance (in units) at Jun. 30, 2015 | 14,985,550 | ||
Ending Balance at Jun. 30, 2015 | $ 5,331 | $ 5,331 |
Statements of Changes in Partn6
Statements of Changes in Partners' Capital (Parenthetical) | 12 Months Ended |
Dec. 31, 2014$ / shares | |
Statements of Changes in Partners' Capital [Abstract] | |
Distributions to Limited Partners, per unit | $ 0.13 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities: | ||||
Net income (loss) | $ 1 | $ 107 | $ (45) | $ 288 |
Adjustments to reconcile net (loss) income to cash provided by operating activities: | ||||
(Gain) loss on sales of assets | (3) | 19 | (6) | (45) |
Depreciation of operating lease assets | 42 | 34 | 84 | 68 |
Provision (reversal of provision) for credit losses | 2 | (2) | (6) | (5) |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 7 | 6 | 37 | 13 |
Prepaid expenses and other assets | (2) | 1 | 5 | |
Accounts payable, General Partner | 3 | (49) | 18 | (104) |
Accounts payable, Other | (43) | (53) | (22) | (68) |
Unearned lease income | (9) | 1 | (1) | |
Net cash (used in) provided by operating activities | (2) | 63 | 61 | 151 |
Investing activities: | ||||
Proceeds from sales of lease assets | 6 | 47 | 12 | 138 |
Net cash provided by investing activities | $ 6 | $ 47 | $ 12 | $ 138 |
Financing activities: | ||||
Net cash provided by financing activities | ||||
Net increase in cash and cash equivalents | $ 4 | $ 110 | $ 73 | $ 289 |
Cash and cash equivalents at beginning of period | 330 | 1,841 | 261 | 1,662 |
Cash and cash equivalents at end of period | 334 | 1,951 | 334 | 1,951 |
Supplemental disclosures of cash flow information: | ||||
Cash paid during the period for taxes | $ 26 | $ 72 | $ 26 | $ 74 |
Organization and Limited Partne
Organization and Limited Partnership Matters | 6 Months Ended |
Jun. 30, 2015 | |
Organization and Limited Partnership Matters [Abstract] | |
Organization and Limited Partnership Matters | 1. Organization and Limited Partnership matters: ATEL Capital Equipment Fund VII, L.P. (the “Partnership” or the “Fund”) was formed under the laws of the State of California on May 17, 1996 for the purpose of acquiring equipment to engage in equipment leasing and sales activities, primarily in the United States. The Partnership may continue until December 31, 2017 . 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 15,000,000 Units of Limited Partnership Interest (“Units”), at a price of $ 10 per Unit. On January 7, 1997, subscriptions for the minimum number of Units ( 120,000 , $ 1.2 million) had been received (excluding subscriptions from Pennsylvania investors) and AFS requested that the subscriptions be released to the Partnership. On that date, the Partnership commenced operations in its primary business (acquiring equipment to engage in equipment leasing and sales activities) . Gross contributions in the amount of $ 150 million ( 15,000,000 units) were received as of November 27, 1998, exclusive of $ 500 of i nitial Partners’ capital investment and $ 100 of AFS’ capital investment. The offering was terminated on November 27, 1998. As of June 30, 2015 , 14,985,550 Units were 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 regular 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, 2004 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 and reimbursements for services rendered and costs incurred on behalf of the Partnership ( See Note 5 ). 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, 2015, the Partnership continues in the liquidation phase of its life cycle as defined in the Partnership Agreement. 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, 2014, filed with the Securities and Exchange Commission. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies: Basis of presentation: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the 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 , 2015 are not necessarily indicative of the results to be expected for the full year . Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results 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 , 2015, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements, or adjustments thereto. 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. However, certain of the Partnership’s lessee customers may have international operations. In these instances, the Partnership is aware that certain equipment, primarily rail and transportation, may periodically exit the country. However, these lessee customers are US-based, and it is impractical for the Partnership to track, on an asset-by-asset and day-by-day basis, where these assets are deployed. The primary geographic regions in which the Partnership sought leasing opportunities were North America and Europe. The table below summarizes geographic information relating to the sources, by nation, of the Partnership’s total revenues for the six months ended June 30, 2015 and 2014 and long-lived tangible assets as of June 30, 2015 and December 31, 2014 (dollars in thousands): For The Six Months Ended June 30, 2015 % of Total 2014 % of Total Revenue United States $ $ Canada Total International Total $ $ As of June 30, As of December 31, 2015 % of Total 2014 % of Total Long-lived assets United States $ $ Canada Total International Total $ $ Per Unit data: Net income (loss) and distributions per Unit are based upon the weighted average number of Limited Partnership Units outstanding during the period. Recent accounting pronouncements: In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The board will also allow companies to adopt the standard as of the original effective date, which is January 2017, if they are inclined to do so. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Partnership has evaluated the impact of the new standard on its financial statements and has determined that such impact is virtually non-existent as the new revenue guideline does not affect revenues from leases, which comprise the majority of the Partnership’s revenues. In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements – Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new standard provides guidance relative to management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. Management is currently evaluating the standard and its operational and related disclosure requirements. |
Allowance for Credit Losses
Allowance for Credit Losses | 6 Months Ended |
Jun. 30, 2015 | |
Allowance for Credit Losses [Abstract] | |
Allowance for Credit Losses | 3 . Allowance for credit losses: The Partnership’s allowance for credit losses totaled $2 thousand and $8 thousand as of June 30, 2015 and December 31, 2014, respectively, all of which were related to delinquent operating lease receivables. As of the same respective dates, the Fund had no financing receivables. |
Investments in Equipment and Le
Investments in Equipment and Leases | 6 Months Ended |
Jun. 30, 2015 | |
Investments in Equipment and Leases [Abstract] | |
Investments in Equipment and Leases | 4 . Investment in equipment and leases , net : The Partnership’s investments in equipment and leases consist of the following (in thousands): Balance December 31, 2014 Reclassifications & Additions / Dispositions Depreciation/ Amortization Expense or Amortization of Leases Balance June 30, 2015 Net investment in operating leases $ $ $ $ Assets held for sale or lease, net - Total $ $ $ $ Impairment of investments in leases and assets held for sale or lease: Recorded values of the Partnership’s leased asset portfolio are reviewed each quarter to confirm the reasonableness of established residual values and to determine whether there is indication that an asset impairment might have taken place. The Partnership uses a variety of sources and considers many factors in evaluating whether the respective book values of its assets are appropriate. In addition, the Partnership may direct a residual value review at any time if it becomes aware of issues regarding the ability of a lessee to continue to make payments on its lease contract. An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than their net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date. Upward adjustments for impairments recognized in prior periods are not made in any circumstances. As a result of these reviews, management determined that n o impairment losses existed during the three and six months ended June 30, 2015 and 2014. The Partnership utilizes a straight line depreciation method for equipment in all of the categories currently in its portfolio of operating lease transactions . Depreciation expense on the Partnership’s equipment was approximately $ 42 thousand and $ 34 thousand for the respective three months ended June 30 , 201 5 and 201 4, and $84 thousand and $68 thousand for the respective six months ended June 30, 2015 and 2014. All of the remaining property subject to leases was acquired in the years 1997 to 1998. Operating leases: Property on operating leases consists of the following (in thousands): Balance December 31, 2014 Additions Reclassifications or Dispositions Balance June 30, 2015 Transportation $ $ - $ $ Materials handling - - - Less accumulated depreciation Total $ $ $ $ The average estimated residual value for assets on operating leases was 13% of the assets’ original cost at both June 30 , 201 5 and December 31, 2014. There were no operating leases in non-accrual status at June 30, 2015 and December 31, 2014. The Partnership earns revenues from its marine vessels and certain lease assets based on utilization of such assets or through fixed term leases. Contingent rentals (i.e., short-term, operating charter hire payments) and the associated expenses are recorded when earned and/or incurred. The revenues associated with these rentals are included as a component of operating lease r evenues and totaled $ 6 thousand and $ 2 thousand for the respective three months ended June 30 , 2015 and 2014, and $12 thousand for each of the six months ended June 30, 2015 and 2014. At June 30 , 201 5 , the aggregate amounts of future minimum lease payments are as follows (in thousands): Operating Leases Six months ending December 31, 2015 $ Year ending December 31, 2016 $ As indicated in Note 1, the Partnership is scheduled to terminate no later than December 31, 2017. 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. The useful lives for each category of lease assets in the Partnership’s portfolio is reviewed at a minimum of once per quarter. As of June 30 , 2015, the respective useful lives of each category of lease assets in the Partnership ’s portfolio are as follows (in years): Equipment category Useful Life Transportation 35 -40 Materials handling 7 -10 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 5 . Related party transactions: The terms of the Partnership Agreement provide that AFS and/or affiliates are entitled to receive certain fees for equipment 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 disposition of equipment. The Partnership will be liable for certain future costs to be incurred by AFS to manage the administrative services provided to the Partnership. 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 services 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 total assets, number of investors or contributed capital based upon the type of cost incurred, subject to limitations as described below. Incentive management fees are computed as 4.0 % of distributions of cash from operations, as defined in the Partnership Agreement and equipment management fees are computed as 3.5 % of gross revenues from operating leases, as defined in the Partnership Agreement plus 2.0 % of gross revenues from full payout leases, as defined in the Partnership Agreement. During the three and six months ended June 30 , 2015 and 2014 , AF S and/or affiliates earned fees and billed for reimbursements of costs and expenses pursuant to the Partnership Agreement as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Cost reimbursements to General Partner $ $ $ $ Equipment and incentive management fees to General Partner $ $ $ $ The Fund’s Limited Partnership Agreement places an annual and cumulative limit for cost reimbursements to AFS and/or its affiliates. Any reimbursable costs incurred by AFS and/or affiliates during the year exceeding the annual and/or cumulative limits cannot be reimbursed in the current year, though such costs may be reimbursable in future years to the extent such amounts may be payable if within the annual and cumulative limits in such future years. The Fund is a finite life and self-liquidating entity, and AFS and its affiliates have no recourse against the Fund for the amount of any unpaid excess reimbursable administrative expenses. The Fund will continue to require administrative services from AFS and its affiliates through the end of its term, and will therefore continue to incur reimbursable administrative expenses in each year. The Fund has determined that payment of any amounts in excess of the annual and cumulative limits is not probable, and the date any portion of such amount may be paid, if ever, is uncertain. When the Fund completes its liquidation stage and terminates, any unpaid amount will expire unpaid, with no claim by AFS or its affiliates against any liquidation proceeds or any party for the unpaid balance. For the year ending December 31, 2015, it is not anticipated that the amount of reimbursable expenses billed to the Fund will exceed either the annual or the cumulative limitations. Such is reflective of the continued diminishing Fund asset base over which reimbursements are calculated. |
Gain Contingencies
Gain Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Gain Contingencies [Abstract] | |
Gain Contingencies | 6 . Gain contingencies: The Partnership’s vessel activity in the Gulf of Mexico was severely impacted by the British Petroleum (“BP”) “Deep Water Horizon” oil spill of 2010 which severely adversely impacted charter activity in the Gulf region. BP established a program to compensate those businesses and individuals suffering economic hardship and loss as a result of the Deep Water Horizon oil spill. The Partnership submitted a claim to the BP program administrator seeking an approximate $ 2.8 million for loss of revenues during the period of the vessel’s diminished activity commencing at the time of the oil spill and continuing through 2010. The BP claim administrator denied the Partnership’s claim on the basis that the Partnership suffered damages as a result of the President’s moratorium on oil drilling subsequent to the Deep Water Horizon accident. The Partnership believes its claim continues to be of merit, and has opted out of the BP claims fund, and is pursuing a claim in a collective action with other similarly situated plaintiffs. Currently, the amount of any compensation or award from BP cannot be determine d . As such, the potential for compensation or award has not been recorded on the Partnership’s books and records. |
Guarantees
Guarantees | 6 Months Ended |
Jun. 30, 2015 | |
Guarantees [Abstract] | |
Guarantees | 7. 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. |
Partners' Capital
Partners' Capital | 6 Months Ended |
Jun. 30, 2015 | |
Partners' capital: | |
Partners' Capital | 8 . Partners’ capital: As of June 30, 2015 and December 31, 2014 , 14,985,550 Units were issued and outstanding . The Partnership was authorized to issue up to 15,000,0 0 0 Units, in addition to the 50 Units issued to the initial 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 r equest. The repurchase of Fund U nits 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 a llocations of net income, net loss or distributions for the quarter in which such repurchase occurs. As defined in the Par tnership Agreement, the Partnership’s Net Income, Net Losses, and Distributions are to be allocated 92.5 % to the Limited Partners and 7.5 % to AFS. As defined in the Partnership Agreement, A vailable Cash from Operations shall be distributed as follows: First, Distributions of Cash from Operations shall be 88.5 % to the Limited Partners, 7.5 % to AFS and 4 % to AFS or its affiliate designated as the recipient of the Incentive Management Fee, 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, as defined in the Partnership Agreement. Second, 85 % to the Limited Partners, 7.5 % to AFS and 7.5 % to AFS or its affiliate designated as the recipient of the Incentive Management Fee. As defined in the Partnership Agreement, A vailable Cash from Sales or Refinancing are to be distributed as follows: First, Distributions of Sales or Refinancing shall be 92.5 % to the Limited Partners and 7.5 % to AFS, 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. Second, 85 % to the Limited Partners, 7.5 % to AFS and 7.5 % to AFS or its affiliate designated as the recipient of the Incentive Management Fee. There were no distributions declared or paid during the three and six months ended June 30 , 2015 and 2014. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policy) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the 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 , 2015 are not necessarily indicative of the results to be expected for the full year . Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results 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 , 2015, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements, or adjustments thereto. |
Use of Estimates | Use of estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term, expected future cash flows used for impairment analysis purposes, and determination of the allowance for doubtful accounts. |
Segment Reporting | 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. However, certain of the Partnership’s lessee customers may have international operations. In these instances, the Partnership is aware that certain equipment, primarily rail and transportation, may periodically exit the country. However, these lessee customers are US-based, and it is impractical for the Partnership to track, on an asset-by-asset and day-by-day basis, where these assets are deployed. The primary geographic regions in which the Partnership sought leasing opportunities were North America and Europe. The table below summarizes geographic information relating to the sources, by nation, of the Partnership’s total revenues for the six months ended June 30, 2015 and 2014 and long-lived tangible assets as of June 30, 2015 and December 31, 2014 (dollars in thousands): For The Six Months Ended June 30, 2015 % of Total 2014 % of Total Revenue United States $ $ Canada Total International Total $ $ As of June 30, As of December 31, 2015 % of Total 2014 % of Total Long-lived assets United States $ $ Canada Total International Total $ $ |
Per Unit Data | Per Unit data: Net income (loss) and distributions per Unit are based upon the weighted average number of Limited Partnership Units outstanding during the period. |
Recent Accounting Pronouncements | Recent accounting pronouncements: In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The board will also allow companies to adopt the standard as of the original effective date, which is January 2017, if they are inclined to do so. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Partnership has evaluated the impact of the new standard on its financial statements and has determined that such impact is virtually non-existent as the new revenue guideline does not affect revenues from leases, which comprise the majority of the Partnership’s revenues. In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements – Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new standard provides guidance relative to management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. Management is currently evaluating the standard and its operational and related disclosure requirements. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Geographic Information Relating to Sources, by Nation, of Partnership's Total Revenue and Long-Lived Assets | The table below summarizes geographic information relating to the sources, by nation, of the Partnership’s total revenues for the six months ended June 30, 2015 and 2014 and long-lived tangible assets as of June 30, 2015 and December 31, 2014 (dollars in thousands): For The Six Months Ended June 30, 2015 % of Total 2014 % of Total Revenue United States $ $ Canada Total International Total $ $ As of June 30, As of December 31, 2015 % of Total 2014 % of Total Long-lived assets United States $ $ Canada Total International Total $ $ |
Investments In Equipment And 18
Investments In Equipment And Leases (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Investments in Equipment and Leases [Abstract] | |
Investment in Leases | The Partnership’s investments in equipment and leases consist of the following (in thousands): Balance December 31, 2014 Reclassifications & Additions / Dispositions Depreciation/ Amortization Expense or Amortization of Leases Balance June 30, 2015 Net investment in operating leases $ $ $ $ Assets held for sale or lease, net - Total $ $ $ $ |
Property on Operating Leases | Property on operating leases consists of the following (in thousands): Balance December 31, 2014 Additions Reclassifications or Dispositions Balance June 30, 2015 Transportation $ $ - $ $ Materials handling - - - Less accumulated depreciation Total $ $ $ $ |
Future Minimum Lease Payments Receivable | At June 30 , 201 5 , the aggregate amounts of future minimum lease payments are as follows (in thousands): Operating Leases Six months ending December 31, 2015 $ Year ending December 31, 2016 $ |
Schedule of Useful Lives of Assets | The useful lives for each category of lease assets in the Partnership’s portfolio is reviewed at a minimum of once per quarter. As of June 30 , 2015, the respective useful lives of each category of lease assets in the Partnership ’s portfolio are as follows (in years): Equipment category Useful Life Transportation 35 -40 Materials handling 7 -10 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement | During the three and six months ended June 30 , 2015 and 2014 , AF S and/or affiliates earned fees and billed for reimbursements of costs and expenses pursuant to the Partnership Agreement as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Cost reimbursements to General Partner $ $ $ $ Equipment and incentive management fees to General Partner $ $ $ $ |
Organization and Limited Part20
Organization and Limited Partnership Matters (Narrative) (Details) - USD ($) | Nov. 27, 1998 | Jan. 07, 1997 | Nov. 29, 1996 | Dec. 31, 2004 | Jun. 30, 2015 | Dec. 31, 2014 |
Organization and Limited Partnership Matters [Abstract] | ||||||
Partnership business cessation date | Dec. 31, 2017 | |||||
Public offering of Limited Partnership Units | 15,000,000 | |||||
Public offering price per Units | $ 10 | |||||
Sale of Limited Partnership Units, number of Units | 120,000 | |||||
Proceeds from sale of Limited Partners Units | $ 1,200,000 | |||||
Gross contributions | $ 150,000,000 | |||||
Gross contributions, number of Units | 15,000,000 | |||||
Initial Partners' capital investment | $ 500 | |||||
AFS' capital investment | $ 100 | |||||
Units issued | 14,985,550 | 14,985,550 | ||||
Units outstanding | 14,985,550 | 14,985,550 | ||||
Reinvestment period | 6 years |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2015segment | |
Summary of Significant Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Summary of Geographic Information Relating to Sources, by Nation, of Partnership's Total Revenue and Long-Lived Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | $ 582 | $ 583 | $ 1,157 | $ 1,259 | |
Percentage of total revenue | 100.00% | 100.00% | |||
Long-lived assets receivables | $ 5,288 | $ 5,288 | $ 5,378 | ||
Percentage of long lived assets | 100.00% | 100.00% | 100.00% | ||
United States [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | $ 997 | $ 1,152 | |||
Percentage of total revenue | 86.00% | 92.00% | |||
Long-lived assets receivables | $ 5,048 | $ 5,048 | $ 5,138 | ||
Percentage of long lived assets | 95.00% | 95.00% | 96.00% | ||
Canada [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | $ 160 | $ 107 | |||
Percentage of total revenue | 14.00% | 8.00% | |||
Long-lived assets receivables | $ 240 | $ 240 | $ 240 | ||
Percentage of long lived assets | 5.00% | 5.00% | 4.00% | ||
Total International [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | $ 160 | $ 107 | |||
Percentage of total revenue | 14.00% | 8.00% | |||
Long-lived assets receivables | $ 240 | $ 240 | $ 240 | ||
Percentage of long lived assets | 5.00% | 5.00% | 4.00% |
Allowance for Credit Losses (Na
Allowance for Credit Losses (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Allowance for Credit Losses [Abstract] | |||||
Provision for Loan and Lease Losses | $ 2 | $ (2) | $ (6) | $ (5) | $ 8 |
Investments in Equipment and 24
Investments in Equipment and Leases (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Investments in Equipment and Leases [Abstract] | |||||
Depreciation of operating lease assets | $ 42 | $ 34 | $ 84 | $ 68 | |
Average estimated residual value for assets on operating leases | 13.00% | 13.00% | |||
Impairment losses | $ 0 | $ 0 | |||
Contingent rental revenue | $ 6 | $ 2 | $ 12 | $ 12 |
Investments in Equipment and 25
Investments in Equipment and Leases (Investment in Leases) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Leases Disclosure [Line Items] | |
Balance December 31, 2014 | $ 5,378 |
Reclassifications, Additions/ Dispositions | (6) |
Depreciation/ Amortization Expense or Amortization of Leases | (84) |
Balance June 30, 2015 | 5,288 |
Operating Leases [Member] | |
Leases Disclosure [Line Items] | |
Balance December 31, 2014 | 2,900 |
Reclassifications, Additions/ Dispositions | (16) |
Depreciation/ Amortization Expense or Amortization of Leases | (84) |
Balance June 30, 2015 | 2,800 |
Assets Held For Sale or Lease [Member] | |
Leases Disclosure [Line Items] | |
Balance December 31, 2014 | 2,478 |
Reclassifications, Additions/ Dispositions | $ 10 |
Depreciation/ Amortization Expense or Amortization of Leases | |
Balance June 30, 2015 | $ 2,488 |
Investments in Equipment and 26
Investments in Equipment and Leases (Property on Operating Leases) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Property Subject to or Available for Operating Lease [Line Items] | |
Balance December 31, 2014 | $ 2,900 |
Additions | (84) |
Reclassifications & Additions / Dispositions | (16) |
Balance June 30, 2015 | 2,800 |
Transportation [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Balance December 31, 2014 | $ 20,818 |
Additions | |
Reclassifications & Additions / Dispositions | $ (382) |
Balance June 30, 2015 | 20,436 |
Materials Handling [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Balance December 31, 2014 | $ 83 |
Additions | |
Reclassifications & Additions / Dispositions | |
Balance June 30, 2015 | $ 83 |
Total Property Subject to or Available For Operating Lease [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Balance December 31, 2014 | 20,901 |
Reclassifications & Additions / Dispositions | (382) |
Balance June 30, 2015 | 20,519 |
Less Accumulated Depreciation [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Balance December 31, 2014 | (18,001) |
Additions | (84) |
Reclassifications & Additions / Dispositions | 366 |
Balance June 30, 2015 | $ (17,719) |
Investments in Equipment and 27
Investments in Equipment and Leases (Future Minimum Lease Payments Receivable) (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Operating Leases | |
Six months ending December 31, 2015 | $ 729 |
Year ending December 31, 2016 | 1,100 |
2,017 | 861 |
2,018 | 157 |
2,019 | 46 |
Future minimum lease payments receivable | $ 2,893 |
Investments in Equipment and 28
Investments in Equipment and Leases (Schedule of Useful Lives of Assets) (Details) | 6 Months Ended |
Jun. 30, 2015 | |
Maximum [Member] | Transportation [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Useful lives of lease assets | 40 years |
Maximum [Member] | Materials Handling [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Useful lives of lease assets | 10 years |
Minimum [Member] | Transportation [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Useful lives of lease assets | 35 years |
Minimum [Member] | Materials Handling [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Useful lives of lease assets | 7 years |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transaction [Line Items] | |
Incentive management fees as a percentage of cash distributions from operations | 4.00% |
Operating Leases [Member] | |
Related Party Transaction [Line Items] | |
Equipment management fees as a percentage of gross revenue | 3.50% |
Full Payout Leases [Member] | |
Related Party Transaction [Line Items] | |
Equipment management fees as a percentage of gross revenue | 2.00% |
Related Party Transactions (Aff
Related Party Transactions (Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ||||
Cost reimbursements to General Partner | $ 125 | $ 49 | $ 225 | $ 95 |
Equipment and incentive management fees to General Partner | 22 | 13 | 43 | 28 |
Related party transaction, total | $ 147 | $ 62 | $ 268 | $ 123 |
Gain Contingencies (Narrative)
Gain Contingencies (Narrative) (Details) $ in Millions | Jun. 30, 2015USD ($) |
Gain Contingencies [Abstract] | |
Gain contingency, unrecorded amount | $ 2.8 |
Partners' Capital (Narrative) (
Partners' Capital (Narrative) (Details) - shares | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Limited Partners' Capital Account [Line Items] | ||
Limited Partners' capital account, units issued | 14,985,550 | 14,985,550 |
Limited Partners' capital account, units outstanding | 14,985,550 | 14,985,550 |
Limited Partners' capital account, units authorized | 15,000,000 | 15,000,000 |
Partnership right to repurchase units of a unitholder | 100.00% | |
Percentage of cash distributions from operations as incentive management fee | 4.00% | |
First [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of cash distributions from sales or refinancing as annual return on invested capital | 10.00% | |
Initial Limited Partners [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Limited Partners' capital account, units issued | 50 | 50 |
Limited Partner [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Allocation of net income, net losses, and distributions | 92.50% | |
Limited Partner [Member] | First [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of cash distributions from operations | 88.50% | |
Percentage of cash distribution from sales or refinancing | 92.50% | |
Limited Partner [Member] | Second [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of cash distributions from operations | 85.00% | |
Percentage of cash distribution from sales or refinancing | 85.00% | |
Limited Partner [Member] | Thereafter [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of cash distributions from sales or refinancing as annual return on invested capital | 10.00% | |
General Partner [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Allocation of net income, net losses, and distributions | 7.50% | |
General Partner [Member] | First [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of cash distributions from operations | 7.50% | |
Percentage of cash distribution from sales or refinancing | 7.50% | |
General Partner [Member] | Second [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of cash distributions from operations as incentive management fee | 7.50% | |
Percentage of cash distribution from sales or refinancing | 7.50% | |
Affiliated Entity [Member] | First [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of cash distributions from operations | 4.00% | |
Affiliated Entity [Member] | Second [Member] | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of cash distributions from operations as incentive management fee | 7.50% | |
Percentage of cash distribution from sales or refinancing | 7.50% |