Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | ATEL CAPITAL EQUIPMENT FUND XI, LLC | ||
Entity Central Index Key | 1,297,667 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 0 | ||
Entity Units Outstanding | 5,209,307 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 586 | $ 1,932 |
Accounts receivable, net of allowance for doubtful accounts of $33 as of December 31, 2017 and $1 as of December 31, 2016 | 66 | 111 |
Investment in securities | 11 | 22 |
Investments in equipment and leases, net of accumulated depreciation of $10,716 as of December 31, 2017 and $11,215 as of December 31, 2016 | 1,633 | 2,004 |
Prepaid expenses and other assets | 33 | 32 |
Total assets | 2,329 | 4,101 |
Accounts payable and accrued liabilities: | ||
Managing Member | 16 | 31 |
Affiliates | 36 | |
Other | 82 | 78 |
Unearned operating lease income | 14 | 13 |
Total liabilities | 148 | 122 |
Commitments and contingencies | ||
Members' capital: | ||
Managing Member | ||
Other Members | 2,181 | 3,979 |
Total Members' capital | 2,181 | 3,979 |
Total liabilities and Members' capital | $ 2,329 | $ 4,101 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheets [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 33 | $ 1 |
Investments in equipment and leases, accumulated depreciation | $ 10,716 | $ 11,215 |
Statements of Income
Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Leasing activities: | ||
Operating leases | $ 1,001 | $ 1,205 |
Direct financing leases | 2 | |
Gain on sales of lease assets | 61 | 470 |
Unrealized loss on fair value adjustment for warrants | (27) | |
Other | 8 | 7 |
Total revenues | 1,070 | 1,657 |
Expenses: | ||
Depreciation of operating lease assets | 306 | 390 |
Asset management fees to Managing Member | 49 | 88 |
Cost reimbursements to Managing Member and/or affiliates | 183 | 140 |
Provision for credit losses | 33 | |
Provision for losses on investment in securities | 11 | 16 |
Amortization of initial direct costs | 6 | 8 |
Professional fees | 143 | 125 |
Outside services | 88 | 52 |
Taxes on income and franchise fees | 30 | |
Printing and photocopying | 17 | 9 |
Other | 29 | 33 |
Total operating expenses | 895 | 861 |
Other income (loss), net | 3 | (2) |
Net income | 178 | 794 |
Net income: | ||
Managing Member | 148 | 105 |
Other Members | 30 | 689 |
Net income | $ 178 | $ 794 |
Net income per Limited Liability Company Unit (Other Members) | $ 0.01 | $ 0.13 |
Weighted average number of Units outstanding | 5,209,307 | 5,209,307 |
Statements of Changes in Member
Statements of Changes in Members' Capital - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Beginning Balance (in Units) | 5,209,307 | |
Beginning Balance | $ 3,979 | $ 4,593 |
Distributions to Other Members | (1,828) | (1,303) |
Distributions to Managing Member | (148) | (105) |
Net income | $ 178 | $ 794 |
Ending Balance (in Units) | 5,209,307 | 5,209,307 |
Ending Balance | $ 2,181 | $ 3,979 |
Other Members [Member] | ||
Beginning Balance (in Units) | 5,209,307 | 5,209,307 |
Beginning Balance | $ 3,979 | $ 4,593 |
Distributions to Other Members | (1,828) | (1,303) |
Net income | $ 30 | $ 689 |
Ending Balance (in Units) | 5,209,307 | 5,209,307 |
Ending Balance | $ 2,181 | $ 3,979 |
Managing Member [Member] | ||
Distributions to Managing Member | (148) | (105) |
Net income | $ 148 | $ 105 |
Statements of Changes in Membe6
Statements of Changes in Members' Capital (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Statements of Changes in Members' Capital [Abstract] | ||
Weighted average distributions per Unit | $ 0.35 | $ 0.25 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | ||
Net income | $ 178 | $ 794 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Gain on sales of lease assets | (61) | (470) |
Depreciation of operating lease assets | 306 | 390 |
Amortization of initial direct costs | 6 | 8 |
Provision for credit losses | 33 | |
Provision for losses on investment in securities | 11 | 16 |
Unrealized loss on fair value adjustment for warrants | 27 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 12 | 45 |
Prepaid expenses and other assets | (1) | (1) |
Accounts payable, Managing Member | (15) | 30 |
Accounts payable, affiliates | 36 | |
Accounts payable, other | 4 | (2) |
Unearned operating lease income | 1 | (1) |
Net cash provided by operating activities | 510 | 836 |
Investing activities: | ||
Proceeds from sales of lease assets | 120 | 772 |
Principal payments received on direct financing leases | 8 | |
Net cash provided by investing activities | 120 | 780 |
Financing activities: | ||
Net cash used in financing activities | (1,976) | (2,816) |
Net decrease in cash and cash equivalents | (1,346) | (1,200) |
Cash and cash equivalents at beginning of year | 1,932 | 3,132 |
Cash and cash equivalents at end of year | 586 | 1,932 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the year for taxes | 26 | 21 |
Other Members [Member] | ||
Operating activities: | ||
Net income | 30 | 689 |
Financing activities: | ||
Distributions to Members | (1,828) | (2,606) |
Managing Member [Member] | ||
Operating activities: | ||
Net income | 148 | 105 |
Financing activities: | ||
Distributions to Members | $ (148) | $ (210) |
Organization and Limited Liabil
Organization and Limited Liability Company Matters | 12 Months Ended |
Dec. 31, 2017 | |
Organization and Limited Liability Company Matters [Abstract] | |
Organization and Limited Liability Company Matters | 1. Organization and Limited Liability Company matters: ATEL Capital Equipment Fund XI, LLC (the “Company” or the “Fund”) was formed under the laws of the State of California on June 25, 2004. The Company was formed for the purpose of acquiring equipment to engage in equipment leasing, lending and sales activities. Also, from time to time, the Company would purchase securities of its borrowers or receive warrants to purchase securities in connection with its lending arrangements. The Managing Member or Manager of the Company is ATEL Financial Services, LLC (“AFS”), a California limited liability company. The Company may continue until December 31, 2025 . Each Member’s personal liability for obligations of the Company generally will be limited to the amount of their respective contributions and rights to undistributed profits and assets of the Company. The Company conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”), at a price of $ 10 per Unit. On May 31, 2005, subscriptions for the minimum number of Units ( 120,000 , representing $ 1.2 million) had been received and AFS requested that the subscriptions be released to the Company. On that date, the Company commenced operations in its primary business (acquiring equipment to engage in equipment leasing, lending and sales activities). As of July 13, 2005, the Company had received subscriptions for 958,274 Units ($ 9.6 million), thus exceeding the $ 7.5 million minimum requirement for Pennsylvania, and AFS requested that the remaining funds in escrow (from Pennsylvania investors) be released to the Company. The Company terminated sales of Units effective April 30, 2006. As of December 31, 2017, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $ 52.2 million ( inclusive of the $500 initial Member’s capital investment) have been received. As of the same date, 5,209,307 Units were issued and outstanding . The Company’s principal objectives have been to invest in a diversified portfolio of equipment that (i) preserves, protects and returns the Company’s invested capital; (ii) generates regular distributions to the Members of cash from operations and cash from sales or refinancing, with any balance remaining after certain minimum distributions to be used to purchase additional equipment during the reinvestment period (“Reinvestment Period”) ( defined as six full years following the year the offering was terminated ), which ended December 31, 2012, and (iii) provides additional distributions following the Reinvestment Period and until all equipment has been sold. The Company is governed by its Limited Liability Company Operating Agreement (“Operating Agreement”), as amended. On January 1, 2013, the Company commenced liquidation phase activities pursuant to the guidelines of the Operating Agreement. Prior thereto , the Company was in its acquisition phase and was making distributions on a monthly and quarterly basis. Periodic distributions commenced in June 2005. Pursuant to the terms of the Operating Agreement, AFS and its affiliates receives compensation for services rendered and reimbursements for costs incurred on behalf of the Company (See Note 5). The Company is required to maintain reasonable cash reserves for working capital, the repurchase of Units and contingencies. The repurchase of Units is solely at the discretion of AFS. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2 . Summary of significant accounting policies: Basis of presentation: The accompanying balance sheets as of December 31, 2017 and 2016, and the related statements of income, changes in members’ capital, and cash flows for the years then ended, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts may have been reclassified to conform to the current year presentation. These reclassifications had no significant effect on the reported financial position or results of operations. Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data. In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after December 31, 2017, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements. Cash and cash equivalents: Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities of ninety days or less. Use of estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes and for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable. Accounts receivable: Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company. Allowances for doubtful accounts are established based on historical charge off and collection experience and the collectability of specifically identified lessees and invoiced amounts. Accounts receivable deemed uncollectible are charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received. Credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company places the majority of its cash deposits in noninterest-bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Funds’ cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating and direct financing leases or notes receivable. Equipment on operating leases and related revenue recognition: Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with ASC 840-20-35-3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell. The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized. Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet. Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis. Direct financing leases and related revenue recognition: Income from direct financing lease transactions is reported using the financing method of accounting, in which the Company’s investment in the leased property is reported as a receivable from the lessee to be recovered through future rentals. The interest income portion of each rental payment is calculated so as to generate a constant rate of return on the net receivable outstanding. Allowances for losses on direct financing leases are typically established based on historical charge off and collection experience and the collectability of specifically identified lessees and billed and unbilled receivables. Direct financing leases are charged off to the allowance as they are deemed uncollectible. Direct financing leases are generally placed in a non-accrual status (i.e., no revenue is recognized) and deemed impaired when payments are more than 90 days past due. Additionally, management periodically reviews the credit worthiness of all direct finance lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related direct financing leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, all payments received are applied only against outstanding principal balances. Initial direct costs: The Company capitalizes initial direct costs (“IDC”) associated with the origination and funding of lease assets and investments in notes receivable . IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease and loan originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease (or note by note) basis based on actual contract term using a straight-line method for operating leases and the effective interest rate method for direct financing leases and notes receivable. Upon disposal of the underlying lease or loan assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases or notes receivable that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense. Acquisition expense: Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses and miscellaneous expenses related to the selection and acquisition of equipment which are reimbursable to the Managing Member under the terms of the Operating Agreement. As the costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred. Asset valuation: Recorded values of the Company’s leased asset portfolio are reviewed each quarter to confirm the reasonableness of established residual values and to determine whether there is indication that an asset impairment might have taken place. The Company uses a variety of sources and considers many factors in evaluating whether the respective book values of its assets are appropriate. In addition, the Company may direct a residual value review at any time if it becomes aware of issues regarding the ability of a lessee to continue to make payments on its lease contract. An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than the 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 . Segment reporting: The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States. The Company’s principal decision makers are the Managing Member’s Chief Executive Officer and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas. The primary geographic regions in which the Company seeks leasing and financing opportunities are North America and Europe. The table below summarizes geographic information relating to the sources, by nation, of the Company’s total revenues for the years ended December 31, 2017 and 2016 and long-lived assets as of December 31, 2017 and 2016 (dollars in thousands): For The Year Ended December 31, 2017 % of Total 2016 % of Total Revenue United States $ 1,070 100% $ 1,639 99% United Kingdom - 0% 18 1% Total $ 1,070 100% $ 1,657 100% As of December 31, 2017 % of Total 2016 % of Total Long-lived assets United States $ 1,633 100% $ 2,002 100% United Kingdom - 0% 2 0% Total $ 1,633 100% $ 2,004 100% Investment in securities: From time to time, the Company may purchase securities of its borrowers or receive warrants to purchase securities in connection with its lending arrangements. Purchased securities Purchased securities are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. Based upon the Company’s review of its portfolio, fair value adjustments of $11 thousand and $16 thousand were recorded during 2017 and 2016, respectively, relative to an impaired investment. There were no sales or dispositions of securities during 2017 and 2016. Warrants Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair value on the balance sheet at the end of the period, as determined by the Managing Member. During 2017 and 2016, respectively, the Company recorded unrealized losses of $0 and $27 thousand on fair value adjustment of its warrants. As of December 31, 2017 and 2016, the Managing Member estimated the fair value of the warrants to be $0 . There were no net exercises of warrants during 2017 and 2016. Foreign currency transactions: Foreign currency transaction gains and losses are reported in the results of operations as “other income” or “other loss” in the period in which they occur. Currently, the Company does not use derivative instruments to hedge its economic exposure with respect to assets, liabilities and firm commitments as the foreign currency transactions risks to date have not been significant. The Company’s foreign currency translations gains and losses were nominal during 2017 and 2016. Unearned operating lease income: The Company records prepayments on operating leases as a liability under the caption of unearned operating lease income. The liability is recorded when prepayments are received and recognized as operating lease revenue over the period to which the prepayments relate using a straight-line method. Income taxes: The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Review Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current income taxes for only those states, which levy income taxes on partnerships. For the years ended December 31, 2017 and 2016, the current provision for state income taxes was approximately $30 thousand and $0, respectively. The Company does not have any entity level uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions and is generally subject to examination by U.S. federal (or state and local) income tax authorities for three years from the filing of a tax return. The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2017 and 2016 as follows (in thousands): 2017 2016 Financial statement basis of net assets $ 2,181 $ 3,979 Tax basis of net assets (unaudited) 8,325 9,821 Difference $ (6,144) $ (5,842) The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for syndication costs and differences between the depreciation methods used in the financial statements and the Company’s tax returns. The following reconciles the net income reported in these financial statements to the income reported on the Company’s federal tax returns (unaudited) for the years ended December 31, 2017 and 2016, respectively (in thousands): 2017 2016 Net income per financial statements $ 178 $ 794 Tax adjustments (unaudited): Adjustment to depreciation expense 259 226 Provision for doubtful accounts 33 - Adjustments to revenues 1 (154) Adjustments to gain on sales of assets 59 289 Other 10 16 Income per federal tax return (unaudited) $ 540 $ 1,171 Other income (loss), net: Other income (loss), net is solely comprised of net gains and losses on foreign currency transactions. Per unit data: Net income and distributions per Unit are based upon the weighted average number of Other Members Units outstanding during the year. Recent accounting pronouncements: In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-15 — Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This guidance is effective for the Company beginning on January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on its financial statements and disclosures. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new standard will require lessees to recognize lease assets and lease liabilities arising from operating leases with lease terms greater than 12 months in the statement of financial position. Lessor accounting per ASU 2016-02 is mostly unchanged from the previous lease accounting under GAAP. Certain changes were made to the lessor accounting guidance in order to align the lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. Similar to the previous guidance, lessors will classify leases as operating, direct financing, or sales-type. Lessors in operating leases will continue to recognize the underlying asset and recognize income on a straight-line basis. Lessors determine whether a lease is a sale of the underlying asset based on whether the lessee effectively obtains control of the underlying assets. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. While early adoption is permitted, the Company does not expect to elect that option. The Company expects to adopt the guidance in the first quarter 2019 using the modified retrospective method. Management is currently evaluating the impact of this standard on the financial statements and its operational and related disclosure requirements, including the impact on the Company’s current lease portfolio from a lessor perspective. Given the limited changes to lessor accounting, Management does not expect material changes to recognition or measurement, but the Company is early in the implementation process and will continue to evaluate the impact. In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016- 01”). The new standard provides guidance related to accounting for equity investments and financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, and (v) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. This guidance is effective for the Company beginning on January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on its financial statements and disclosures. In May 2014, the FASB issued Accounting Standards Update 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 and in August 2015, issued Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”). ASU 2015-14 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. 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. This guidance is effective for the Company beginning on January 1, 2018. Management’s evaluation of the impact of such adoption on the financial statements of the Fund indicates that such impact is non-material as the new revenue guideline does not affect revenues from leases and loans, which comprise the majority of the Company’s revenues . |
Concentration of Credit Risk an
Concentration of Credit Risk and Major Customers | 12 Months Ended |
Dec. 31, 2017 | |
Concentration of Credit Risk and Major Customers [Abstract] | |
Concentration of Credit Risk and Major Customers | 3. Concentration of credit risk and major customers: The Company leases equipment to lessees and provides debt financing to borrowers in diversified industries. Leases and notes receivable are subject to AFS’s credit committee review. The leases and notes receivable provide for the return of the equipment to the Company upon default. As of December 31, 2017 and 2016, there were concentrations (greater than or equal to 10% as a percentage of total equipment cost) of equipment leased to lessees and/or financed for borrowers in certain industries as follows: 2017 2016 Transportation, rail 65% 65% Manufacturing 25% 25% During 2017 and 2016, certain lessees and/or financial borrowers generated significant portions (defined as greater than or equal to 10%) of the Company’s total leasing revenues, excluding gains or losses on disposition of assets, as follows: Percentage of Total Leasing Revenues Lessee Type of Equipment 2017 2016 Union Pacific Transportation, rail 34% 31% Kirby Inland Marine, LP Marine vessels 19% 21% Aircraft Service International, Inc. Aviation 18% 15% Tyson Foods, Inc. Transportation, other 16% 13% |
Investment in Equipment and Lea
Investment in Equipment and Leases, Net | 12 Months Ended |
Dec. 31, 2017 | |
Investment in Equipment and Leases, Net [Abstract] | |
Investment in Equipment and Leases, Net | 4. Investments in equipment and leases, net: The Company’s investment in leases consists of the following (in thousands): Balance December 31, 2016 Reclassifications, Additions/ Dispositions Depreciation/ Amortization Expense or Amortization of Leases Balance December 31, 2017 Net investment in operating leases $ 1,996 $ (58) $ (306) $ 1,632 Assets held for sale or lease, net 1 (1) - - Initial direct costs, net of accumulated amortization of $2 at December 31, 2017 and $36 at December 31, 2016 7 - (6) 1 Total $ 2,004 $ (59) $ (312) $ 1,633 Impairment of investments in leases and assets held for sale or lease: Management determined that no impairment losses existed during the years ended December 31, 2017 and 2016 . The Company utilizes a straight line depreciation method for equipment in all of the categories currently in its portfolio of operating lease transactions. Depreciation expense on the Company’s equipment was approximately $306 thousand and $390 thousand for the respective years ended December 31, 2017 and 2016 . IDC amortization expense related to the Company’s operating and direct financing leases totaled $6 thousand and $8 thousand for the respective years ended December 31, 2017 and 2016. All of the leased property was acquired during the years 2005 through 2011. Operating leases: Property on operating leases consists of the following (in thousands): Balance December 31, 2016 Additions Reclassifications or Dispositions Balance December 31, 2017 Transportation, rail $ 8,499 $ - $ (484) $ 8,015 Aviation 1,658 - - 1,658 Marine vessels 1,415 - - 1,415 Transportation, other 1,349 - (126) 1,223 Materials handling 156 - (129) 27 Manufacturing 10 - - 10 13,087 - (739) 12,348 Less accumulated depreciation (11,091) (306) 681 (10,716) Total $ 1,996 $ (306) $ (58) $ 1,632 The average estimated residual value for assets on operating leases was 8.0% and 7.7 % of the assets’ original cost at December 31, 2017 and 2016, respectively. There were no operating lease contracts placed in non-accrual status at December 31, 2017 and 2016. At December 31, 2017, the aggregate amounts of future minimum operating lease payments receivable are as follows (in thousands): Operating Leases Year ending December 31, 2018 $ 675 2019 310 2020 256 2021 76 $ 1,317 The useful lives for each category of leases is reviewed at a minimum of once per quarter. At both December 31, 2017 and 2016, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years): Equipment category Useful Life Transportation, rail 35-40 Marine vessels 20-30 Aviation 15-20 Manufacturing 10-15 Materials handling 7-10 Transportation, other 7-10 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 5. Related party transactions: The terms of the Operating Agreement provide that AFS and/or affiliates are entitled to receive certain fees for equipment management and resale, and for management of the Company. The Operating Agreement allows for the reimbursement of costs incurred by AFS in providing administrative services to the Company. Administrative services provided include Company accounting, finance/treasury, investor relations, legal counsel, and lease and equipment documentation. AFS is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of equipment. Each of ATEL Leasing Corporation (“ALC”) and AFS is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; and investor relations, communications services and general administrative services are performed by AFS. Cost reimbursements to the Managing Member are based on its costs incurred in performing administrative services for the Company. These costs are allocated to each managed entity based on certain criteria such as total assets, number of investors or contributed capital based upon the type of cost incurred. The Operating Agreement places an annual limit and a cumulative limit for cost reimbursements to AFS and/or affiliates. Any reimbursable costs incurred by AFS and/or affiliates during the year exceeding the annual and/or cumulative limits cannot be reimbursed in the current year, though such costs may be reimbursable in future years to the extent of the cumulative limit. As of December 31 , 2017, the Company has not exceeded the annual and/or cumulative limitations discussed above. AFS and/or affiliates earned fees and billed for reimbursements pursuant to the Operating Agreement as follows during each of the years ended December 31, 2017 and 2016 (in thousands): 2017 2016 Costs reimbursed to Managing Member and/or affiliates $ 183 $ 140 Asset management fees to Managing Member 49 88 $ 232 $ 228 |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments [Abstract] | |
Commitments | 6 . Commitments: At December 31, 2017, the Company had no commitments to either purchase lease assets or to fund loans. |
Guarantees
Guarantees | 12 Months Ended |
Dec. 31, 2017 | |
Guarantees [Abstract] | |
Guarantees | 7. Guarantees: The Company enters into contracts that contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. The Managing Member knows of no facts or circumstances that would make the Company’s contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Company believes that these indemnification obligations are made in the ordinary course of business as part of standard commercial and industry practice, and that any potential liability under the Company’s similar commitments is remote. Should any such indemnification obligation become payable, the Company would separately record and/or disclose such liability in accordance with GAAP. |
Members' Capital
Members' Capital | 12 Months Ended |
Dec. 31, 2017 | |
Members' Capital [Abstract] | |
Members' Capital | 8. Members’ capital: Units issued and outstanding were 5,209,307 at both December 31, 2017 and 2016. The Company was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial members ( 50 Units). The Company terminated sales of Units effective April 30, 2006. The Company has the right, exercisable in the Manager’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 Company is otherwise permitted, but not required, to repurchase Units upon a holder’s request. The repurchase of Fund Units is made in accordance with Section 13 of the Amended and Restated Limited Liability Company Operating Agreement. The repurchase would be at the discretion of the Manager on terms it determines to be appropriate under given circumstances, in the event that the Manager deems such repurchase to be in the best interest of the Company; provided, the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units are cancelled. Units repurchased in prior periods were repurchased at amounts representing the original investment less cumulative distributions made to the Unitholder with respect to the Units. All Units repurchased during a quarter are deemed to be repurchased effective the last day of the preceding quarter, and are not deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs. There were no Units repurchased during 2017 and 2016. During the years ended December 31, 2017 and 2016, distributions to the Other Members were as follows (in thousands, except as to Units and per Unit data): 2017 2016 Distributions $ 1,828 $ 1,303 Weighted average number of Units outstanding 5,209,307 5,209,307 Weighted average distributions per Unit $ 0.35 $ 0.25 The rates and frequency of periodic distributions paid by the Fund during its liquidation phase are solely at the discretion of the Manager. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 9. Fair value measurements: Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, generally on a national exchange. Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market. Level 3 – Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company's own estimates of assumptions that market participants would use in pricing the asset or liability. At December 31, 2017 and 2016, only the Company’s warrants were measured on a recurring basis. During the same comparative years, the Company recorded non-recurring adjustments to reduce the cost basis of certain impaired investment securities. The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources. Such fair value adjustments utilized the following methodology: Warrants (recurring) Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried on the balance sheet at an estimated fair value at the end of the period. The valuation of the warrants was determined using a Black-Scholes formulation of value based upon the stock price(s), the exercise price(s), the volatility of comparable venture companies, and a risk free interest rate for the term(s) of the warrant exercise(s). As of December 31, 2017 and 2016, the calculated fair value of the Fund’s warrant portfolio was $0 . Such valuations are classified within Level 3 of the valuation hierarchy. The following table reconciles the beginning and ending balances of the Company’s Level 3 recurring assets (in thousands): Level 3 Assets 2016 Fair value of warrants at beginning of year $ 27 Unrealized loss on fair value adjustment for warrants (27) Fair value of warrants at end of year $ - Impaired investment securities (non-recurring) The Company’s investment securities are not registered for public sale and are carried at cost. The investment securities are adjusted for impairment, if any, based upon factors which include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. During 2017 and 2016, the Company recorded fair value adjustment s of $11 thousand and $16 thousand, respectively, to reduce the cost basis of an impaired investment security to zero. The reduction in value was based on a market approach technique and uses inputs that reflect qualitative and quantitative information provided by the management of the investee, which indicated reduced growth opportunity and eventual reduction in cash flows and revenues. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the aforementioned impaired investment securities were classified within Level 3 of the valuation hierarchy . The following disclosure of the estimated fair value of financial instruments is made in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification. Fair value estimates, methods and assumptions, set forth below for the Company’s financial instruments, are made solely to comply with the requirements of the Financial Instruments Topic and should be read in conjunction with the Company’s financial statements and related notes. The Company has determined the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Cash and cash equivalents The recorded amounts of the Company’s cash and cash equivalents approximate fair value because of the liquidity and short-term maturity of these instruments. Investment in securities The Company’s investment securities are not registered for public sale and are carried at cost which management believes approximates fair value, as appropriately adjusted for impairment. Commitments and Contingencies Management has determined that no recognition for the fair value of the Company’s loan commitments is necessary because their terms are made on a market rate basis and require borrowers to be in compliance with the Company’s credit requirements at the time of funding. The fair value of contingent liabilities (or guarantees) is not considered material because management believes there has been no event that has occurred wherein a guarantee liability has been incurred or will likely be incurred. The following table presents estimated fair values of the Company’s financial instruments at December 31, 2017 and 2016 (in thousands): Fair Value Measurements at December 31, 2017 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 586 $ 586 $ - $ - $ 586 Investment in securities 11 - - 11 11 Fair Value Measurements at December 31, 2016 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 1,932 $ 1,932 $ - $ - $ 1,932 Investment in securities 22 - - 22 22 |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation: The accompanying balance sheets as of December 31, 2017 and 2016, and the related statements of income, changes in members’ capital, and cash flows for the years then ended, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts may have been reclassified to conform to the current year presentation. These reclassifications had no significant effect on the reported financial position or results of operations. Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data. In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after December 31, 2017, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements. |
Cash and Cash Equivalents | Cash and cash equivalents: Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities of ninety days or less. |
Use of Estimates | Use of estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes and for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable. |
Accounts Receivable | Accounts receivable: Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company. Allowances for doubtful accounts are established based on historical charge off and collection experience and the collectability of specifically identified lessees and invoiced amounts. Accounts receivable deemed uncollectible are charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received. |
Credit Risk | Credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company places the majority of its cash deposits in noninterest-bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Funds’ cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating and direct financing leases or notes receivable. |
Equipment on Operating Leases and Related Revenue Recognition | Equipment on operating leases and related revenue recognition: Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with ASC 840-20-35-3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell. The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized. Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet. Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis. |
Direct Financing Leases and Related Revenue Recognition | Direct financing leases and related revenue recognition: Income from direct financing lease transactions is reported using the financing method of accounting, in which the Company’s investment in the leased property is reported as a receivable from the lessee to be recovered through future rentals. The interest income portion of each rental payment is calculated so as to generate a constant rate of return on the net receivable outstanding. Allowances for losses on direct financing leases are typically established based on historical charge off and collection experience and the collectability of specifically identified lessees and billed and unbilled receivables. Direct financing leases are charged off to the allowance as they are deemed uncollectible. Direct financing leases are generally placed in a non-accrual status (i.e., no revenue is recognized) and deemed impaired when payments are more than 90 days past due. Additionally, management periodically reviews the credit worthiness of all direct finance lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related direct financing leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, all payments received are applied only against outstanding principal balances. |
Initial Direct Costs | Initial direct costs: The Company capitalizes initial direct costs (“IDC”) associated with the origination and funding of lease assets and investments in notes receivable . IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease and loan originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease (or note by note) basis based on actual contract term using a straight-line method for operating leases and the effective interest rate method for direct financing leases and notes receivable. Upon disposal of the underlying lease or loan assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases or notes receivable that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense. |
Acquisition Expense | Acquisition expense: Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses and miscellaneous expenses related to the selection and acquisition of equipment which are reimbursable to the Managing Member under the terms of the Operating Agreement. As the costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred. |
Asset Valuation | Asset valuation: Recorded values of the Company’s leased asset portfolio are reviewed each quarter to confirm the reasonableness of established residual values and to determine whether there is indication that an asset impairment might have taken place. The Company uses a variety of sources and considers many factors in evaluating whether the respective book values of its assets are appropriate. In addition, the Company may direct a residual value review at any time if it becomes aware of issues regarding the ability of a lessee to continue to make payments on its lease contract. An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than the 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 . |
Segment Reporting | Segment reporting: The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States. The Company’s principal decision makers are the Managing Member’s Chief Executive Officer and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas. The primary geographic regions in which the Company seeks leasing and financing opportunities are North America and Europe. The table below summarizes geographic information relating to the sources, by nation, of the Company’s total revenues for the years ended December 31, 2017 and 2016 and long-lived assets as of December 31, 2017 and 2016 (dollars in thousands): For The Year Ended December 31, 2017 % of Total 2016 % of Total Revenue United States $ 1,070 100% $ 1,639 99% United Kingdom - 0% 18 1% Total $ 1,070 100% $ 1,657 100% As of December 31, 2017 % of Total 2016 % of Total Long-lived assets United States $ 1,633 100% $ 2,002 100% United Kingdom - 0% 2 0% Total $ 1,633 100% $ 2,004 100% |
Investment in Securities | Investment in securities: From time to time, the Company may purchase securities of its borrowers or receive warrants to purchase securities in connection with its lending arrangements. Purchased securities Purchased securities are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. Based upon the Company’s review of its portfolio, fair value adjustments of $11 thousand and $16 thousand were recorded during 2017 and 2016, respectively, relative to an impaired investment. There were no sales or dispositions of securities during 2017 and 2016. Warrants Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair value on the balance sheet at the end of the period, as determined by the Managing Member. During 2017 and 2016, respectively, the Company recorded unrealized losses of $0 and $27 thousand on fair value adjustment of its warrants. As of December 31, 2017 and 2016, the Managing Member estimated the fair value of the warrants to be $0 . There were no net exercises of warrants during 2017 and 2016. |
Foreign Currency Transactions | Foreign currency transactions: Foreign currency transaction gains and losses are reported in the results of operations as “other income” or “other loss” in the period in which they occur. Currently, the Company does not use derivative instruments to hedge its economic exposure with respect to assets, liabilities and firm commitments as the foreign currency transactions risks to date have not been significant. The Company’s foreign currency translations gains and losses were nominal during 2017 and 2016. |
Unearned Operating Lease Income | Unearned operating lease income: The Company records prepayments on operating leases as a liability under the caption of unearned operating lease income. The liability is recorded when prepayments are received and recognized as operating lease revenue over the period to which the prepayments relate using a straight-line method. |
Income Taxes | Income taxes: The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Review Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current income taxes for only those states, which levy income taxes on partnerships. For the years ended December 31, 2017 and 2016, the current provision for state income taxes was approximately $30 thousand and $0, respectively. The Company does not have any entity level uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions and is generally subject to examination by U.S. federal (or state and local) income tax authorities for three years from the filing of a tax return. The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2017 and 2016 as follows (in thousands): 2017 2016 Financial statement basis of net assets $ 2,181 $ 3,979 Tax basis of net assets (unaudited) 8,325 9,821 Difference $ (6,144) $ (5,842) The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for syndication costs and differences between the depreciation methods used in the financial statements and the Company’s tax returns. The following reconciles the net income reported in these financial statements to the income reported on the Company’s federal tax returns (unaudited) for the years ended December 31, 2017 and 2016, respectively (in thousands): 2017 2016 Net income per financial statements $ 178 $ 794 Tax adjustments (unaudited): Adjustment to depreciation expense 259 226 Provision for doubtful accounts 33 - Adjustments to revenues 1 (154) Adjustments to gain on sales of assets 59 289 Other 10 16 Income per federal tax return (unaudited) $ 540 $ 1,171 |
Other Income (Loss), Net | Other income (loss), net: Other income (loss), net is solely comprised of net gains and losses on foreign currency transactions. |
Per Unit Data | Per unit data: Net income and distributions per Unit are based upon the weighted average number of Other Members Units outstanding during the year. |
Recent Accounting Pronouncements | Recent accounting pronouncements: In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-15 — Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This guidance is effective for the Company beginning on January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on its financial statements and disclosures. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new standard will require lessees to recognize lease assets and lease liabilities arising from operating leases with lease terms greater than 12 months in the statement of financial position. Lessor accounting per ASU 2016-02 is mostly unchanged from the previous lease accounting under GAAP. Certain changes were made to the lessor accounting guidance in order to align the lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. Similar to the previous guidance, lessors will classify leases as operating, direct financing, or sales-type. Lessors in operating leases will continue to recognize the underlying asset and recognize income on a straight-line basis. Lessors determine whether a lease is a sale of the underlying asset based on whether the lessee effectively obtains control of the underlying assets. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. While early adoption is permitted, the Company does not expect to elect that option. The Company expects to adopt the guidance in the first quarter 2019 using the modified retrospective method. Management is currently evaluating the impact of this standard on the financial statements and its operational and related disclosure requirements, including the impact on the Company’s current lease portfolio from a lessor perspective. Given the limited changes to lessor accounting, Management does not expect material changes to recognition or measurement, but the Company is early in the implementation process and will continue to evaluate the impact. In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016- 01”). The new standard provides guidance related to accounting for equity investments and financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, and (v) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. This guidance is effective for the Company beginning on January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on its financial statements and disclosures. In May 2014, the FASB issued Accounting Standards Update 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 and in August 2015, issued Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”). ASU 2015-14 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. 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. This guidance is effective for the Company beginning on January 1, 2018. Management’s evaluation of the impact of such adoption on the financial statements of the Fund indicates that such impact is non-material as the new revenue guideline does not affect revenues from leases and loans, which comprise the majority of the Company’s revenues . |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Geographic Information Relating to Sources, by Nation, of Partnership's Total Revenue and Long-Lived Assets | The table below summarizes geographic information relating to the sources, by nation, of the Company’s total revenues for the years ended December 31, 2017 and 2016 and long-lived assets as of December 31, 2017 and 2016 (dollars in thousands): For The Year Ended December 31, 2017 % of Total 2016 % of Total Revenue United States $ 1,070 100% $ 1,639 99% United Kingdom - 0% 18 1% Total $ 1,070 100% $ 1,657 100% As of December 31, 2017 % of Total 2016 % of Total Long-lived assets United States $ 1,633 100% $ 2,002 100% United Kingdom - 0% 2 0% Total $ 1,633 100% $ 2,004 100% |
Schedule of Differences Between Book Value and Tax Basis of Net Assets | The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2017 and 2016 as follows (in thousands): 2017 2016 Financial statement basis of net assets $ 2,181 $ 3,979 Tax basis of net assets (unaudited) 8,325 9,821 Difference $ (6,144) $ (5,842) |
Reconciliation of Net Income (Loss) Reported in Financial Statements and Federal Tax Return | The following reconciles the net income reported in these financial statements to the income reported on the Company’s federal tax returns (unaudited) for the years ended December 31, 2017 and 2016, respectively (in thousands): 2017 2016 Net income per financial statements $ 178 $ 794 Tax adjustments (unaudited): Adjustment to depreciation expense 259 226 Provision for doubtful accounts 33 - Adjustments to revenues 1 (154) Adjustments to gain on sales of assets 59 289 Other 10 16 Income per federal tax return (unaudited) $ 540 $ 1,171 |
Concentration of Credit Risk 19
Concentration of Credit Risk and Major Customers (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Concentration of Credit Risk and Major Customers [Abstract] | |
Schedule of Equipment Leased | As of December 31, 2017 and 2016, there were concentrations (greater than or equal to 10% as a percentage of total equipment cost) of equipment leased to lessees and/or financed for borrowers in certain industries as follows: 2017 2016 Transportation, rail 65% 65% Manufacturing 25% 25% |
Schedule of Major Customers Credit Risk Concentration | During 2017 and 2016, certain lessees and/or financial borrowers generated significant portions (defined as greater than or equal to 10%) of the Company’s total leasing revenues, excluding gains or losses on disposition of assets, as follows: Percentage of Total Leasing Revenues Lessee Type of Equipment 2017 2016 Union Pacific Transportation, rail 34% 31% Kirby Inland Marine, LP Marine vessels 19% 21% Aircraft Service International, Inc. Aviation 18% 15% Tyson Foods, Inc. Transportation, other 16% 13% |
Investment in Equipment and L20
Investment in Equipment and Leases, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investment in Equipment and Leases, Net [Abstract] | |
Investment in Leases | The Company’s investment in leases consists of the following (in thousands): Balance December 31, 2016 Reclassifications, Additions/ Dispositions Depreciation/ Amortization Expense or Amortization of Leases Balance December 31, 2017 Net investment in operating leases $ 1,996 $ (58) $ (306) $ 1,632 Assets held for sale or lease, net 1 (1) - - Initial direct costs, net of accumulated amortization of $2 at December 31, 2017 and $36 at December 31, 2016 7 - (6) 1 Total $ 2,004 $ (59) $ (312) $ 1,633 |
Property on Operating Leases | Property on operating leases consists of the following (in thousands): Balance December 31, 2016 Additions Reclassifications or Dispositions Balance December 31, 2017 Transportation, rail $ 8,499 $ - $ (484) $ 8,015 Aviation 1,658 - - 1,658 Marine vessels 1,415 - - 1,415 Transportation, other 1,349 - (126) 1,223 Materials handling 156 - (129) 27 Manufacturing 10 - - 10 13,087 - (739) 12,348 Less accumulated depreciation (11,091) (306) 681 (10,716) Total $ 1,996 $ (306) $ (58) $ 1,632 |
Future Minimum Lease Payments Receivable | At December 31, 2017, the aggregate amounts of future minimum operating lease payments receivable are as follows (in thousands): Operating Leases Year ending December 31, 2018 $ 675 2019 310 2020 256 2021 76 $ 1,317 |
Schedule of Useful Lives of Assets | The useful lives for each category of leases is reviewed at a minimum of once per quarter. At both December 31, 2017 and 2016, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years): Equipment category Useful Life Transportation, rail 35-40 Marine vessels 20-30 Aviation 15-20 Manufacturing 10-15 Materials handling 7-10 Transportation, other 7-10 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement | AFS and/or affiliates earned fees and billed for reimbursements pursuant to the Operating Agreement as follows during each of the years ended December 31, 2017 and 2016 (in thousands): 2017 2016 Costs reimbursed to Managing Member and/or affiliates $ 183 $ 140 Asset management fees to Managing Member 49 88 $ 232 $ 228 |
Members' Capital (Tables)
Members' Capital (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Members' Capital [Abstract] | |
Distributions to Other Members | During the years ended December 31, 2017 and 2016, distributions to the Other Members were as follows (in thousands, except as to Units and per Unit data): 2017 2016 Distributions $ 1,828 $ 1,303 Weighted average number of Units outstanding 5,209,307 5,209,307 Weighted average distributions per Unit $ 0.35 $ 0.25 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Reconciliation of Level 3 Assets | The following table reconciles the beginning and ending balances of the Company’s Level 3 recurring assets (in thousands): Level 3 Assets 2016 Fair value of warrants at beginning of year $ 27 Unrealized loss on fair value adjustment for warrants (27) Fair value of warrants at end of year $ - |
Estimated Fair Values of Financial Instruments | The following table presents estimated fair values of the Company’s financial instruments at December 31, 2017 and 2016 (in thousands): Fair Value Measurements at December 31, 2017 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 586 $ 586 $ - $ - $ 586 Investment in securities 11 - - 11 11 Fair Value Measurements at December 31, 2016 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 1,932 $ 1,932 $ - $ - $ 1,932 Investment in securities 22 - - 22 22 |
Organization and Limited Liab24
Organization and Limited Liability Company Matters (Narrative) (Details) - USD ($) | Jul. 13, 2005 | Apr. 11, 2005 | May 31, 2005 | Dec. 31, 2012 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||
Business cessation date | Dec. 31, 2025 | ||||||
Public offering of Limited Liability Company Units | 15,000,000 | ||||||
Public offering of Limited Liability Company Units, price per Unit | $ 10 | ||||||
Sale of Limited Liability Company Units, number of Units | 958,274 | 120,000 | |||||
Proceeds from sale of Limited Liability Company Units | $ 9,600,000 | $ 1,200,000 | |||||
Gross contributions from Members | $ 52,200,000 | ||||||
Units issued | 5,209,307 | 5,209,307 | 5,209,307 | ||||
Units outstanding | 5,209,307 | 5,209,307 | 5,209,307 | ||||
Reinvestment period | 6 years | ||||||
Managing Member [Member] | |||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||
Gross contributions from Members | $ 500 | ||||||
Minimum [Member] | |||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | |||||||
Amount of aggregate subscriptions for Pennsylvania subscriptions to be released to the Fund | $ 7,500,000 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | |
U.S. Treasury instruments maturity period | 90 days | |
Cash deposits, insured amount | $ 250 | |
Number of operating segments | segment | 1 | |
Number of reportable segments | segment | 1 | |
Provision for losses on investment in securities | $ 11 | $ 16 |
Unrealized losses (gains) relative to the revaluation of the warrants | (27) | |
Gain (loss) on exercise of warrants | 0 | 0 |
Securities sold or disposed of | 0 | 0 |
Provision for state income taxes | 30 | |
Estimated fair value of warrants | $ 0 | $ 0 |
Period subject to income tax examination | 3 years | |
Minimum [Member] | ||
Required assets value of financial institutions for cash deposits | $ 10,000,000 | |
Operating leases, initial terms | 36 months | |
Operating leases, period for non accrual status | 90 days | |
Direct financing leases, period for non accrual status | 90 days | |
Maximum [Member] | ||
Operating leases, initial terms | 120 months | |
Equipment and lessee period of review for impairment | 90 days | |
Direct financing leases, period of review for impairment | 90 days |
Summary of Significant Accoun26
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 | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 1,070 | $ 1,657 |
Percentage of total revenue | 100.00% | 100.00% |
Long-lived assets | $ 1,633 | $ 2,004 |
Percentage of long lived assets | 100.00% | 100.00% |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 1,070 | $ 1,639 |
Percentage of total revenue | 100.00% | 99.00% |
Long-lived assets | $ 1,633 | $ 2,002 |
Percentage of long lived assets | 100.00% | 100.00% |
United Kingdom [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 18 | |
Percentage of total revenue | 0.00% | 1.00% |
Long-lived assets | $ 2 | |
Percentage of long lived assets | 0.00% | 0.00% |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Schedule of Differences Between Book Value and Tax Basis of Net Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of Significant Accounting Policies [Abstract] | |||
Financial statement basis of net assets | $ 2,181 | $ 3,979 | $ 4,593 |
Tax basis of net assets (unaudited) | 8,325 | 9,821 | |
Difference | $ (6,144) | $ (5,842) |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Reconciliation of Net Income Loss Reported in Financial Statements and Federal Tax Return) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | ||
Net income per financial statements | $ 178 | $ 794 |
Adjustment to depreciation expense | 259 | 226 |
Provision for losses and doubtful accounts | 33 | |
Adjustments to revenues | 1 | (154) |
Adjustments to gain on sales of assets | 59 | 289 |
Other | 10 | 16 |
Income per federal tax return (unaudited) | $ 540 | $ 1,171 |
Concentration of Credit Risk 29
Concentration of Credit Risk and Major Customers (Schedule of Leasing and Lending Revenues) (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Transportation, Rail [Member] | Equipment Cost [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 65.00% | 65.00% |
Transportation, Rail [Member] | Union Pacific [Member] | Operating Revenues [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 34.00% | 31.00% |
Manufacturing Facility [Member] | Equipment Cost [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 25.00% | 25.00% |
Marine Vessels [Member] | Kirby Inland Marine, LP [Member] | Operating Revenues [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 19.00% | 21.00% |
Aviation [Member] | Aircraft Service International, Inc. [Member] | Operating Revenues [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 18.00% | 15.00% |
Transportation, Other [Member] | Tyson Foods, Inc. [Member] | Operating Revenues [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 16.00% | 13.00% |
Investment in Equipment and L30
Investment in Equipment and Leases, Net (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Investment in Equipment and Leases, Net [Abstract] | ||
Depreciation of operating lease assets | $ 306 | $ 390 |
Amortization of initial direct costs | $ 6 | $ 8 |
Average estimated residual value of assets on operating leases | 8.00% | 7.70% |
Investment in Equipment and L31
Investment in Equipment and Leases, Net (Investment in Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Leases Disclosure [Line Items] | ||
Balance December 31, 2016 | $ 2,004 | |
Reclassifications, Additions/Dispositions | (59) | |
Depreciation/Amortization Expense or Amortization of Leases | (312) | |
Balance December 31, 2017 | 1,633 | |
Initial direct costs, accumulated amortization | 2 | $ 36 |
Operating Leases [Member] | ||
Leases Disclosure [Line Items] | ||
Balance December 31, 2016 | 1,996 | |
Reclassifications, Additions/Dispositions | (58) | |
Depreciation/Amortization Expense or Amortization of Leases | (306) | |
Balance December 31, 2017 | 1,632 | |
Assets Held-for-Sale or Lease[Member] | ||
Leases Disclosure [Line Items] | ||
Balance December 31, 2016 | 1 | |
Reclassifications, Additions/Dispositions | (1) | |
Initial Direct Cost [Member] | ||
Leases Disclosure [Line Items] | ||
Balance December 31, 2016 | 7 | |
Depreciation/Amortization Expense or Amortization of Leases | (6) | |
Balance December 31, 2017 | $ 1 |
Investment in Equipment and L32
Investment in Equipment and Leases, Net (Property on Operating Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | $ 12,348 | $ 13,087 |
Less accumulated depreciation | (10,716) | (11,091) |
Property on operating leases, net | 1,632 | 1,996 |
Additions, gross | ||
Additions, less accumulated depreciation | (306) | |
Additions, net | (306) | |
Reclassifications or dispositions, gross | (739) | |
Reclassifications or dispositions, less accumulated depreciation | 681 | |
Reclassifications or dispositions, net | (58) | |
Transportation, Rail [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 8,015 | 8,499 |
Additions, gross | ||
Reclassifications or dispositions, gross | (484) | |
Aviation [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 1,658 | 1,658 |
Additions, gross | ||
Reclassifications or dispositions, gross | ||
Transportation, Other [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 1,223 | 1,349 |
Additions, gross | ||
Reclassifications or dispositions, gross | (126) | |
Marine Vessels [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 1,415 | 1,415 |
Additions, gross | ||
Reclassifications or dispositions, gross | ||
Manufacturing [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 10 | 10 |
Additions, gross | ||
Reclassifications or dispositions, gross | ||
Materials Handling [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 27 | $ 156 |
Additions, gross | ||
Reclassifications or dispositions, gross | $ (129) |
Investment in Equipment and L33
Investment in Equipment and Leases, Net (Future Minimum Lease Payments Receivable) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Operating Leases | |
Year ending December 31, 2018 | $ 675 |
2,019 | 310 |
2,020 | 256 |
2,021 | 76 |
Operating leases, future minimum payments receivable, total | $ 1,317 |
Investment in Equipment and L34
Investment in Equipment and Leases, Net (Schedule of Useful Lives of Lease Assets) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum [Member] | Transportation, Rail [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 35 years |
Minimum [Member] | Marine Vessels [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 20 years |
Minimum [Member] | Aviation [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 15 years |
Minimum [Member] | Manufacturing [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 10 years |
Minimum [Member] | Materials Handling [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 7 years |
Minimum [Member] | Transportation, Other [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 7 years |
Maximum [Member] | Transportation, Rail [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 40 years |
Maximum [Member] | Marine Vessels [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 30 years |
Maximum [Member] | Aviation [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 20 years |
Maximum [Member] | Manufacturing [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 15 years |
Maximum [Member] | Materials Handling [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 10 years |
Maximum [Member] | Transportation, Other [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 10 years |
Related Party Transactions (Aff
Related Party Transactions (Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
Cost reimbursements to Managing Member and/or affiliates | $ 183 | $ 140 |
Asset management fees to Managing Member | 49 | 88 |
Related party transaction, total | $ 232 | $ 228 |
Commitments (Narrative) (Detail
Commitments (Narrative) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments [Abstract] | |
Commitments to purchase lease assets or fund loans | $ 0 |
Members' Capital (Narrative) (D
Members' Capital (Narrative) (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Members' Capital [Abstract] | ||
Units issued | 5,209,307 | 5,209,307 |
Units outstanding | 5,209,307 | 5,209,307 |
Managing members account, units issued | 50 | 50 |
Other Members capital account, Units authorized | 15,000,000 | 15,000,000 |
Potential repurchase price of Units as percentage of holder's capital account | 100.00% | 100.00% |
Members' Capital (Distributions
Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Members' Capital [Abstract] | ||
Distributions | $ 1,828 | $ 1,303 |
Weighted average number of Units outstanding | 5,209,307 | 5,209,307 |
Weighted average distributions per Unit | $ 0.35 | $ 0.25 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurements [Abstract] | ||
Fair value adjustments which reduced the cost basis of impaired loans | $ 11 | $ 16 |
Fair Value Measurements (Reconc
Fair Value Measurements (Reconciliation of Level 3 Assets) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Fair Value Measurements [Abstract] | |
Fair value of warrants at beginning of year | $ 27 |
Unrealized loss on fair value adjustment for warrants | (27) |
Fair value of warrants at end of year |
Fair Value Measurements (Estima
Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial assets: | ||
Cash and cash equivalents | $ 586 | $ 1,932 |
Investment in securities | 11 | 22 |
Level 1 Estimated Fair Value [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 586 | 1,932 |
Investment in securities | ||
Level 2 Estimated Fair Value [Member] | ||
Financial assets: | ||
Cash and cash equivalents | ||
Investment in securities | ||
Level 3 Estimated Fair Value [Member] | ||
Financial assets: | ||
Investment in securities | 11 | 22 |
Carrying Amount [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 586 | 1,932 |
Investment in securities | $ 11 | $ 22 |