Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | ATEL 14, LLC | |
Entity Central Index Key | 0001463389 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Smaller Reporting Company | true | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Units Outstanding | 8,246,919 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 1,953 | $ 1,056 |
Accounts receivable, net | 42 | 152 |
Notes receivable, net | 35 | 70 |
Investment in securities | 105 | 112 |
Warrants, fair value | 215 | 229 |
Equipment under operating leases, net | 16,791 | 19,684 |
Prepaid expenses and other assets | 64 | 83 |
Total assets | 19,205 | 21,386 |
Accounts payable and accrued liabilities: | ||
Managing Member | 2 | |
Affiliates | 22 | 11 |
Other | 359 | 678 |
Non-recourse debt | 4,716 | 996 |
Senior long-term debt | 2,068 | |
Credit facility | 1,200 | |
Unearned operating lease income | 46 | 26 |
Unearned interest income | 35 | 70 |
Total liabilities | 5,178 | 5,051 |
Commitments and contingencies | ||
Members' capital: | ||
Managing Member | ||
Other Members | 14,027 | 16,335 |
Total Members' capital | 14,027 | 16,335 |
Total liabilities and Members' capital | $ 19,205 | $ 21,386 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Leasing and lending activities: | ||||
Operating leases | $ 729 | $ 1,600 | $ 1,864 | $ 3,258 |
Direct financing leases | 1 | 3 | ||
Interest on notes receivable | 18 | 18 | 35 | 20 |
Gain on sales of operating lease assets and early termination of notes receivable | 19 | 51 | 424 | 149 |
Unrealized (loss) gain on fair value adjustment for warrants | (15) | (3) | (15) | 10 |
Unrealized gain (loss) for marketable securities | 1 | (10) | (7) | 20 |
Other | 469 | 140 | 473 | 144 |
Total revenues | 1,221 | 1,797 | 2,774 | 3,604 |
Expenses: | ||||
Depreciation of operating lease assets | 533 | 812 | 1,182 | 1,664 |
Asset management fees to Managing Member | 33 | 73 | 89 | 148 |
Cost reimbursements to Managing Member and/or affiliates | 119 | 207 | 266 | 421 |
Provision for (reversal of) credit losses | 4 | 5 | (13) | |
Impairment losses on investment in securities | 17 | 17 | ||
Impairment losses on equipment | 801 | 801 | ||
Amortization of initial direct costs | 3 | 6 | ||
Interest expense | 33 | 61 | 66 | 126 |
Professional fees | 38 | 32 | 124 | 97 |
Outside services | 17 | 21 | 43 | 59 |
Taxes on income and franchise fees | 43 | 22 | 80 | 48 |
Bank charges | 2 | 30 | 5 | 61 |
Storage fees | 28 | 50 | ||
Railcar maintenance | 39 | 68 | 54 | 93 |
Freight and shipping | 11 | 24 | ||
Other | 20 | 38 | 63 | 82 |
Total expenses | 1,721 | 1,384 | 2,852 | 2,809 |
Net (loss) income | (500) | 413 | (78) | 795 |
Net (loss) income: | ||||
Managing Member | 167 | 167 | ||
Other Members | (667) | 413 | (245) | 795 |
Net (loss) income | $ (500) | $ 413 | $ (78) | $ 795 |
Net (loss) per Limited Liability Company Unit (Other Members) | $ (0.08) | $ 0.05 | $ (0.03) | $ 0.10 |
Weighted average number of Units outstanding | 8,246,919 | 8,247,151 | 8,246,919 | 8,250,191 |
Statements of Changes in Member
Statements of Changes in Members' Capital - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Beginning Balance | $ 16,758 | $ 15,286 | $ 16,335 | $ 14,924 |
Repurchase of Units | (1) | (21) | ||
Distributions to Other Members | (2,063) | (5) | (2,063) | (5) |
Distributions to Managing Member | (167) | (167) | ||
Net income (loss) | $ (500) | 413 | $ (78) | 795 |
Ending Balance (in Units) | 8,246,919 | 8,246,919 | ||
Ending Balance | $ 14,027 | $ 15,693 | $ 14,027 | $ 15,693 |
Other Members [Member] | ||||
Beginning Balance (in Units) | 8,246,919 | 8,247,599 | 8,246,919 | 8,257,599 |
Beginning Balance | $ 16,758 | $ 15,286 | $ 16,335 | $ 14,924 |
Repurchase of Units (in Units) | (680) | (10,680) | ||
Repurchase of Units | $ (1) | $ (21) | ||
Distributions to Other Members | (2,063) | (5) | (2,063) | (5) |
Net income (loss) | $ (667) | $ 413 | $ (245) | $ 795 |
Ending Balance (in Units) | 8,246,919 | 8,246,919 | 8,246,919 | 8,246,919 |
Ending Balance | $ 14,027 | $ 15,693 | $ 14,027 | $ 15,693 |
Managing Member [Member] | ||||
Distributions to Managing Member | (167) | (167) | ||
Net income (loss) | $ 167 | $ 167 |
Statements of Changes in Memb_2
Statements of Changes in Members' Capital (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Other Members [Member] | ||||
Distributions to Other Members, per Unit | $ 0.25 | $ 0 | $ 0.25 | $ 0 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities: | ||||
Net (loss) income | $ (500) | $ 413 | $ (78) | $ 795 |
Adjustment to reconcile net income to cash provided by operating activities: | ||||
Gain on sales of operating lease assets and early termination of notes receivable | (19) | (51) | (424) | (149) |
Depreciation of operating lease assets | 533 | 812 | 1,182 | 1,664 |
Amortization of initial direct costs | 3 | 6 | ||
Provision for (reversal of) credit losses | 4 | 5 | (13) | |
Impairment losses on investment in securities | 17 | 17 | ||
Impairment losses on equipment | 801 | 801 | ||
Unrealized gain on fair value adjustment for warrants | 15 | 3 | 15 | (10) |
Unrealized gain (loss) on fair value adjustment for marketable securities | (1) | 10 | 7 | (20) |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 70 | 11 | 105 | 14 |
Prepaid expenses and other assets | 9 | 19 | (30) | |
Due from Managing Member and affiliates | (34) | 1 | 9 | 3 |
Accounts payable, other | (311) | (59) | (319) | (64) |
Accrued liabilities, affiliates | (30) | (182) | ||
Unearned operating lease income | (35) | (27) | 20 | (27) |
Net cash provided by operating activities | 532 | 1,103 | 1,342 | 2,004 |
Investing activities: | ||||
Purchase of securities | (2) | (2) | ||
Proceeds from sales of lease assets and early termination of notes receivable | 819 | 197 | 1,333 | 401 |
Principal payments received on direct financing leases | 5 | 10 | ||
Principal payments received on notes receivable | 15 | |||
Net cash provided by investing activities | 819 | 200 | 1,333 | 424 |
Financing activities: | ||||
Repayments under non-recourse debt | (323) | (820) | (903) | (1,675) |
Borrowings under non-recourse debt | 4,623 | 4,623 | ||
Repayments under senior long term debt | (2,068) | (2,068) | ||
Repayments under credit facility | (600) | (1,200) | ||
Repurchase of Units | (1) | (21) | ||
Net cash used in financing activities | (598) | (826) | (1,778) | (2,563) |
Net increase (decrease) in cash and cash equivalents | 753 | 477 | 897 | (135) |
Cash and cash equivalents at beginning of period | 1,200 | 654 | 1,056 | 1,266 |
Cash and cash equivalents at end of period | 1,953 | 1,131 | 1,953 | 1,131 |
Supplemental disclosures of cash flow information: | ||||
Cash paid during the period for interest | 21 | 41 | 34 | 42 |
Cash paid during the period for taxes | 160 | 52 | 166 | 3 |
Other Members [Member] | ||||
Operating activities: | ||||
Net (loss) income | (667) | 413 | (245) | 795 |
Financing activities: | ||||
Distributions to Members | (2,063) | $ (5) | (2,063) | (802) |
Managing Member [Member] | ||||
Operating activities: | ||||
Net (loss) income | 167 | 167 | ||
Financing activities: | ||||
Distributions to Members | $ (167) | $ (167) | (65) | |
Schedule of non-cash transactions: | ||||
Distributions payable to Managing Member at period-end | $ 3 |
Organization and Limited Liabil
Organization and Limited Liability Company Matters | 6 Months Ended |
Jun. 30, 2019 | |
Organization and Limited Liability Company Matters [Abstract] | |
Organization and Limited Liability Company Matters | 1. Organization and Limited Liability Company matters: ATEL 14, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on April 1, 2009 (“Date of Inception”) for the purpose of equipment financing and acquiring equipment to engage in equipment leasing and sales activities. The Managing Member of the Company is ATEL Managing Member, LLC (the “Managing Member” or “Manager”), a Nevada limited liability company. Prior to May 9, 2011, the Manager was named ATEL Associates 14, LLC. The Managing Member is controlled by ATEL Financial Services, LLC (“AFS”), a wholly-owned subsidiary of ATEL Capital Group. The Fund may continue until December 31, 2030. Contributions in the amount of $500 were received as of May 8, 2009, which represented the initial member’s capital investment. As a limited liability company, the liability of any individual member for the obligations of the Fund is limited to the extent of capital contributions to the Fund by the individual member. As of June 30, 2019, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $83.5 million (inclusive of the $500 initial Member’s capital investment) have been received. As of the same date, 8,246,919 Units were issued and outstanding. The Company is governed by the ATEL 14, LLC amended and restated limited liability company operating agreement dated October 7, 2009 (the “Operating Agreement”). On January 1, 2018, the Company commenced liquidation phase activities pursuant to the guidelines of the operating agreement. Pursuant to the terms of the Operating Agreement, the Managing Member and/or its affiliates receives compensation for services rendered and reimbursements for costs incurred on behalf of the Company (See Note 6). The Company is required to maintain reasonable cash reserves for working capital, the repurchase of Units and contingencies. The repurchase of Units is solely at the discretion of the Managing Member. These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10‑K for the year ended December 31, 2018, filed with the Securities and Exchange Commission. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies: Basis of presentation: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10‑Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations. Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data. In preparing the accompanying unaudited financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after June 30, 2019, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements, or adjustments thereto. 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. Segment reporting: The Company is organized into one operating segment for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States. The primary geographic region in which the Company seeks leasing opportunities is North America. For the three and six months ended June 30, 2019 and 2018, and as of June 30, 2019 and December 31, 2018, all of the Company’s operating revenues and long-lived assets relate to customers domiciled in the United States. Accounts receivable Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company. Allowances for doubtful accounts are typically established based upon their aging and historical charge off and collection experience and the creditworthiness of specifically identified lessees and borrowers, and invoiced amounts. Accounts receivable deemed uncollectible are generally charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received. Accounts receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with lease or note payments outstanding less than 90 days. Based upon management’s judgment, such leases or notes may be placed in non-accrual status. Leases or notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable. Until such time, revenues on operating leases are recognized on a cash basis. All payments received on amounts billed under direct financing leases and notes receivable are applied only against outstanding principal balances. Financing receivables In addition to the allowance established for delinquent accounts receivable, the total allowance related solely to financing receivables also includes anticipated impairment charges on notes receivable and direct financing leases. Notes are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the note agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest when due. If it is determined that a loan is impaired with regard to scheduled payments, the Company will perform an analysis of the note to determine if an impairment valuation reserve is necessary. This analysis considers the estimated cash flows from the note, or the collateral value of the property underlying the note when note repayment is collateral dependent. Any required valuation reserve is charged to earnings when determined; and notes are charged off to the allowance as they are deemed uncollectible. The Fund’s investment in direct financing leases are included in other assets, with related revenues reflected on the statement of operations under other revenues. Direct financing lease amounts, and related disclosures, are immaterial as of and for the quarter ended June 30, 2019 and 2018. The asset underlying a direct financing lease contract is considered impaired if the estimated undiscounted future cash flows of the asset are less than its net book value. The estimated undiscounted future cash flows are the sum of the estimated residual value of the asset at the end of the asset’s expected holding period and estimates of undiscounted future rents. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. 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. Investment in securities: From time to time, the Company may purchase securities of its borrowers or receive warrants in connection with its lending arrangements. Purchased securities The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. 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. The Company had $105 thousand and $112 thousand of purchased securities at June 30, 2019 and December 31, 2018 respectively. Fair value adjustments of $1 thousand unrealized gain and $10 thousand unrealized loss were recorded during the three months ended June 30, 2019 and 2018, respectively and adjustments of a $7 thousand unrealized loss and $20 thousand unrealized gain were recorded for the six months ended June 30, 2019 and 2018. Warrants Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet as determined by the Managing Member. During the respective six months ended June 30, 2019 and 2018, the Company recorded an unrealized loss of $15 thousand and an unrealized gain of $10 thousand respectively, to adjust its warrants to fair value. For the three month period ending June 30, 2019 and 2018, the Company recorded unrealized losses of $15 thousand and $3 thousand for the respective periods. As of June 30, 2019 and December 31, 2018, the estimated fair value of the Company’s portfolio of warrants were $215 thousand and $229 thousand, respectively. There were no exercises of warrants, net or otherwise, during the three and six months ended June 30, 2019 and 2018. 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 non-interest 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 Company’s 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 receivable represent amounts due from in various industries, related to equipment on operating leases. Equipment under operating leases, net 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 360‑10‑35‑3, 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 (ASC 360‑10‑35‑43). 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. Initial direct costs: With the adoption of ASU No. 2016-02 certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. In 2018 and prior, the Company capitalized initial direct costs (“IDC”) associated with the origination of lease assets. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease basis based on actual contract term using a straight-line method for operating leases. Upon disposal of the underlying lease assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense. Per Unit data: The Company issues only one class of Units, none of which are considered dilutive. Net (loss) income and distributions per Unit are based upon the weighted average number of Other Members Units outstanding during the period. Fair Value: 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. 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. Recent Accounting Pronouncements: In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors. In March 2019, the FASB issued ASU No. 2019-01, Leases: Codification Improvements. Collectively referred to hereafter as ASU No. 2016-02, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract to control an asset (i.e., lessees and lessors). The Company does not have any non-cancelable leases where it is a lessee. ASU No. 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards were effective as of January 1, 2019. Upon adoption, the Company applied the package of practical expedients that has allowed us to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, the Company applied the optional transition method in ASU No. 2018-11, which has allowed the Company to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the adoption period, although the Company did not have an adjustment. Additionally, the Company’s leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in the Company’s financial statements. Upon adoption, (i) amounts previously recognized as lessee reimbursements and other income, for the three months ended June 30, 2019, have been classified as lease or financing income, (ii) allowances for bad debts are now recognized as a direct reduction of operating lease income, and (iii) certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. Subsequent to January 1, 2019, provisions for credit losses relating to operating leases are now included in lease income in the Company’s financial statements. Provisions for credit losses prior to January 1, 2019 were previously included in operating expenses in our financial statements and prior periods are not reclassified to conform to the current presentation. 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 November 2018, the FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses (“ASU 2018-19”). The new standard clarifies certain aspects of the new current expected credit losses (CECL) impairment model in ASU 2016-13. The amendment clarifies that receivables arising from operating leases are within the scope of ASC 842, rather than ASC 326; however, it will be applicable to the Companies note receivables and direct financing leases, if any. The effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. Management is currently evaluating the impact of this standard on the financial statements and related disclosure requirements. |
Notes Receivable, Net
Notes Receivable, Net | 6 Months Ended |
Jun. 30, 2019 | |
Notes Receivable [Abstract] | |
Notes Receivable, Net | 3. Notes receivable, net: The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. The notes are generally secured by the equipment financed. As of June 30, 2019, the original terms of the notes receivable are from 84 to 90 months and have interest rates ranging from 16.91% to 18% per annum. The notes had a net outstanding balance of $35 thousand and $70 thousand at June 30, 2019 and December 31, 2018, respectively. All of the notes mature in 2020. As of June 30, 2019, two of the Company’s notes receivable previously on non-accrual status as of December 31, 2018 were removed from said status. Details are as follows (dollars in thousands): Notes receivable Non-accrual December 31, 2018 Number of notes 2 Net investment value $ 15 Annual interest rate 18 % Fair value adjustments $ 15 Fair value amount $ — Interest income not recorded relative to original terms $ 8 |
Allowance for Credit Losses
Allowance for Credit Losses | 6 Months Ended |
Jun. 30, 2019 | |
Allowance for Credit Losses [Abstract] | |
Allowance for Credit Losses | 4. Allowance for credit losses: The Company’s allowance for credit losses are as follows (in thousands): Allowance for Valuation Adjustments on Doubtful Financing Accounts Receivables Operating Notes Total Allowance Leases Receivable for Credit Losses Balance December 31, 2017 $ — $ 15 $ 15 Reversal of provision for credit losses 2 (15) (13) Balance June 30, 2018 $ 2 $ — $ 2 Balance December 31, 2018 $ — $ — $ — Provision for credit losses 5 — 5 Balance June 30, 2019 $ 5 $ — $ 5 As of December 31, 2018, the Company has no allowance for credit losses. The Company evaluates the credit quality of its financing receivables on a scale equivalent to the following quality indicators related to corporate risk profiles: Pass – Any account whose lessee/debtor, co-lessee/debtor or any guarantor has a credit rating on publicly traded or privately placed debt issues as rated by Moody’s or S&P for either Senior Unsecured debt, Long Term Issuer rating or Issuer rating that are in the tiers of ratings generally recognized by the investment community as constituting an Investment Grade credit rating; or, has been determined by the Manager to be an Investment Grade Equivalent or High Quality Corporate Credit per its Credit Policy or has a Not Rated internal rating by the Manager and the account is not considered by the Chief Credit Officer of the Manager to fall into one of the three risk profiles below. Special Mention – Any traditional corporate type account with potential weaknesses (e.g. large net losses or major industry downturns) or, any growth capital account that has less than three months of cash as of the end of the calendar quarter to fund their continuing operations. These accounts deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the Fund’s receivable at some future date. Substandard – Any account that is inadequately protected by the current worth and paying capacity of the borrower or of the collateral pledged, if any. Accounts that are so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Fund will sustain some loss as the likelihood of fully collecting all receivables may be questionable if the deficiencies are not corrected. Such accounts are on the Manager’s Credit Watch List. Doubtful – Any account where the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Accordingly, an account that is so classified is on the Manager’s Credit Watch List, and has been declared in default and the Manager has repossessed, or is attempting to repossess, the equipment it financed. This category includes impaired notes and leases as applicable. At June 30, 2019, and December 31, 2018, the Company’s investment in notes receivables by credit quality indicator and by class of notes receivables are as follows (excludes initial direct costs) (in thousands): Notes Receivable June 30, December 31, 2019 2018 Pass $ — $ — Special mention 35 70 Substandard — — Doubtful — — Total $ 35 $ 70 At June 30, 2019 and December 31, 2018, the investment in financing receivables is aged as follows (in thousands): Recorded Greater Total Investment>90 31-60 Days 61-90 Days Than Total Notes Days and June 30, 2019 Past Due Past Due 90 Days Past Due Current Receivables Accruing Notes receivable $ — $ — $ — $ — $ 35 $ 35 $ — Recorded Greater Total Investment>90 31-60 Days 61-90 Days Than Total Notes Days and December 31, 2018 Past Due Past Due 90 Days Past Due Current Receivables Accruing Notes receivable $ — $ — $ — $ — $ 70 $ 70 $ — At December 31, 2018, the Company had two notes receivable which were on non-accrual status (See Note 3). These same notes were removed from non-accrual status as of June 30, 2019. |
Equipment Under Operating Lease
Equipment Under Operating Leases, Net | 6 Months Ended |
Jun. 30, 2019 | |
Equipment Under Operating Leases, Net [Abstract] | |
Equipment Under Operating Leases, Net | 5. Equipment under operating leases, net: The Company’s equipment under operating leases consists of the following (in thousands): Depreciation/ Reclassifications, Amortization Balance Improvements/ Expense or Balance December 31, Dispositions and Amortization June 30, 2018 Impairment Losses of Leases 2019 Equipment under operating leases, net $ 17,005 $ (3,303) $ (1,182) $ 12,520 Assets held for sale or lease, net 2,677 1,592 — 4,269 Initial direct costs, net of accumulated amortization of $9 at June 30, 2019 and $9 at December 31, 2018 2 — — 2 Total $ 19,684 $ (1,711) $ (1,182) $ 16,791 Impairment of equipment under operating leases, net 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 their net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract, if any. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date. Upward adjustments for impairments recognized in prior periods are not made in any circumstances. As a result of these reviews, the Company recorded impairment losses of $801 thousand and $0 for the respective three and six months ended June 30, 2019. The Company utilizes a straight line depreciation method over the term of the equipment lease for equipment on operating leases currently in its portfolio. Depreciation expense on the Company’s equipment totaled $533 thousand and $812 thousand for the respective three months ended June 30, 2019 and 2018. Depreciation for the six months ended June 30, 2019 and 2018 totaled $1.2 million and $1.7 million . IDC amortization expense related to operating leases totaled $0 and $3 thousand for the respective three months ended June 30, 2019 and 2018 while the expense for the six months ended June 30, 2019 and 2018 was $0 thousand and $6 thousand, respectively . Operating leases: Property on operating leases consists of the following (in thousands): Balance Balance December 31, Reclassifications June 30, 2018 Additions or Dispositions 2019 Marine vessel $ 19,410 $ — $ — $ 19,410 Transportation, rail 5,823 — (1,723) 4,100 Transportation 7,467 — (7,259) 208 Manufacturing 6,317 — (1,026) 5,291 Materials handling 1,399 — (52) 1,347 Construction 919 — — 919 Agriculture 542 — — 542 Air support equipment 120 — (80) 40 Other 83 — (83) — 42,080 — (10,223) 31,857 Less accumulated depreciation (25,075) (1,182) 6,920 (19,337) Total $ 17,005 $ (1,182) $ (3,303) $ 12,520 The average estimated residual value for assets on operating leases was 26% and 38% of the assets’ original cost at June 30, 2019 and December 31, 2018, respectively. There were no operating leases in non-accrual status at both June 30, 2019 and December 31, 2018. All of the Company’s lease asset purchases and capital improvements were made during the years from 2009 through 2015. At June 30, 2019, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands): Operating Leases Six months ending December 31, 2019 $ 1,067 Year ending December 31, 2020 1,555 2021 1,262 2022 1,179 2023 1,164 2024 211 $ 6,438 The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of June 30, 2019, 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 - 50 Marine vessel 20 - 30 Air support equipment 15 - 20 Manufacturing 10 -15 Agriculture 7 - 10 Construction 7 - 10 Materials handling 7 - 10 Transportation 7 - 10 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. Related party transactions: The terms of the Operating Agreement provide that the Managing Member 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 the Managing Member and/or affiliates for providing administrative services to the Company. Administrative services provided include Company accounting, investor relations, legal counsel, and lease and equipment documentation. The Managing Member is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of investments. Each of ATEL Financial Services, LLC (“AFS”) and ATEL Leasing Corporation (“ALC”) is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company on behalf of the Managing Member. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations, communications and general administrative services are performed by AFS. Cost reimbursements to the Managing Member or its affiliates 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 Managing Member believes that the costs reimbursed are the lower of (i) actual costs incurred on behalf of the Company or (ii) the amount the Company would be required to pay independent parties for comparable administrative services in the same geographic location. The Managing Member and/or affiliates earned fees and billed for reimbursements of costs and expenses, pursuant to the Operating Agreement, during the three and six months ended June 30, 2019 and 2018 as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Administrative costs reimbursed to Managing Member and/or affiliates $ 119 $ 207 $ 266 $ 421 Asset management fees to Managing Member 33 73 89 148 $ 152 $ 280 $ 355 $ 569 |
Non-Recourse Debt
Non-Recourse Debt | 6 Months Ended |
Jun. 30, 2019 | |
Non-Recourse Debt [Abstract] | |
Non-Recourse Debt | 7. Non-recourse debt: At June 30, 2019, non-recourse debt consists of notes payable to financial institutions. The notes are due in monthly installments. Interest on the notes is at fixed rates ranging from 2.23% to 3.40% per annum. The notes are secured by assignments of lease payments and pledges of assets used to secure the notes. At June 30, 2019, gross operating lease rentals totaled $5.1 million over the remaining lease terms. Around 95% of this amount relates to a loan for a vessel rented to Halliburton that was previously categorized as senior long-term debt (see Note 8). In May 2019, this loan was renegotiated into non-recourse debt. The carrying value of the pledged assets is $10.8 million. The vessel note matures in February 2024 with the remaining notes maturing at various dates through 2019. The non-recourse debt does not contain any material financial covenants. The debt is secured by a specific lien granted by the Company to the non-recourse lenders on (and only on) the discounted lease transactions. The lenders have recourse only to the following collateral: the leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. The non-recourse obligation is payable solely out of the respective specific security and the Company does not guarantee (nor is the Company otherwise contractually responsible for) the payment of the non-recourse debt as a general obligation or liability of the Company. Although the Company does not have any direct or general liability in connection with the non-recourse debt apart from the security granted, the Company is directly and generally liable and responsible for certain representations, warranties, and covenants made to the lenders, such as warranties as to genuineness of the transaction parties’ signatures, as to the genuineness of the respective lease chattel paper or the transaction as a whole, or as to the Company’s good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants typically provided by non-recourse borrowers and customary in the equipment finance industry, and are viewed by such industry as being consistent with non-recourse discount financing obligations. Accordingly, as there are no financial covenants or ratios imposed on the Company in connection with the non-recourse debt, the Company has determined that there are no material covenants with respect to the non-recourse debt that warrant footnote disclosure. Future minimum payments of non-recourse debt are as follows (in thousands): Principal Interest Total Six months ending December 31, 2019 $ 694 $ 74 $ 768 Year ending December 31, 2020 914 123 1,037 946 91 1,037 978 58 1,036 1,012 25 1,037 172 — 172 $ 4,716 $ 371 $ 5,087 |
Senior Long-Term Debt
Senior Long-Term Debt | 6 Months Ended |
Jun. 30, 2019 | |
Senior Long-Term Debt [Abstract] | |
Senior Long-Term Debt | 8. Senior long-term debt: As of December 31, 2018, $2.1 million of senior long-term debt consisted of a note payable to a lender. Such debt was utilized during the fourth quarter of 2013 to partially fund the marine vessel and related bareboat charter purchased by the Fund and its affiliate, ATEL 15, LLC. The note bore interest at a fixed-rate of 3.5% per annum, to accrue in arrears on a monthly basis. On May 20, 2019, a |
Borrowing Facilities
Borrowing Facilities | 6 Months Ended |
Jun. 30, 2019 | |
Borrowing Facilities [Abstract] | |
Borrowing Facilities | 9. Borrowing facilities: The Company was party, with ATEL Capital Group and certain subsidiaries and affiliated funds, in a $75 million revolving credit facility (the “Credit Facility”) with a syndicate of financial institutions as lenders that expired on June 30, 2019. The joint Credit Facility was comprised of a working capital facility, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”), the Company and affiliates, and a venture facility. As of 3/31/19 the Fund no longer participated in the Warehouse Facility. During the second quarter of 2019, the Company repaid its amounts of outstanding borrowings under the Credit Facility and made no additional borrowings. It will not participate in any negotiated extension or renewal of the Credit Facility, which is to take effect without interruption of the syndicate’s support and is anticipated to be for a two-year term. The lending syndicate providing the Credit Facility has a blanket lien on all of the participant’s assets as collateral for any and all borrowings under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility. Such Credit Facility includes certain financial covenants. As of June 30, 2019 and December 31, 2018, the total ATEL Capital Group and subsidiaries and affiliated funds borrowings under the Credit Facility were as follows (in thousands): June 30, December 31, 2019 2018 Total available under the financing arrangement $ 75,000 $ 75,000 Amount borrowed by the Company under the acquisition facility — (1,200) Amount borrowed by affiliated partnerships and limited liability companies under the venture, acquisition, and warehouse facilities (880) (910) Total remaining available under the venture, acquisition and warehouse facilities $ 74,120 $ 72,890 T he Company and its affiliates paid an annual commitment fee to have access to this line of credit. As of June 30, 2019, the Company’s commitment to debt covenants expired with its removal from participation in the Credit Facility. The Company was in compliance with all material financial covenants, and with all other material conditions of the Credit Facility during the tenure of participation. Fee and interest terms The interest rate on the Credit Facility is based on either the LIBOR/Eurocurrency rate of 1‑, 2‑, 3‑ or 6‑month maturity plus a lender designated spread, or the bank’s Prime rate, which re-prices daily. Principal amounts of loans made under the Credit Facility that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Credit Facility. The Company’s outstanding balance under the Acquisition Facility was $1.2 million as of December 31, 2018, with no outstanding bal ance at June 30, 2019 . |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2019 | |
Commitments [Abstract] | |
Commitments | 10 . Commitments: At June 30, 2019, there were no commitments to purchase lease assets and to fund investments in notes receivable. |
Members' Capital
Members' Capital | 6 Months Ended |
Jun. 30, 2019 | |
Members' Capital [Abstract] | |
Members' Capital | 11. Members’ capital: A total of 8,246,919 Units were issued and outstanding as of both June 30, 2019 and December 31, 2018. These amounts included the 50 Units issued to the initial Member (Managing Member). The Fund was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial Member. Distributions to the Other Members for the three and six months ended June 30, 2019 and 2018 were as follows (in thousands except Units and per Unit data): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Distributions declared $ 2,063 $ 5 $ 2,063 $ 5 Weighted average number of Units outstanding 8,246,919 8,247,151 8,246,919 8,250,191 Weighted average distributions per Unit $ 0.25 $ — $ 0.25 $ — |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 12. Fair value measurements: Under applicable accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. At June 30, 2019, the Company’s investment in securities registered for public sale and warrants were measured on a recurring basis. At December 31, 2018, both the Company’s warrants and equipment under operating leases were measured on a recurring basis . For the six month period ending June 30, 2019, assets that had reached their residual value were impaired and measured at fair value. 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, time to maturity, and a risk free interest rate for the term(s) of the warrant exercise(s). As of June 30, 2019 and December 31, 2018, the calculated fair value of the Fund’s warrant portfolio approximated $215 thousand and $229 thousand, respectively. Such valuations are classified within Level 3 of the valuation hierarchy. The fair value of warrants that were accounted for on a recurring basis for the three months and six months ended June 30, 2019 and 2018 classified as Level 3 are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Fair value of warrants at beginning of period $ 230 $ 245 $ 229 $ 232 Unrealized (loss) gain on fair value adjustment for warrants (15) (3) (15) 10 Fair value of warrants at end of period $ 215 $ 242 $ 215 $ 242 Investment securities (recurring) The Company’s investment securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The fair value of investment securities that were accounted for on a recurring basis as of the three and six months ended June 30, 2019 classified as Level 1 are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Fair value of securities at beginning of period $ 20 $ 51 $ 27 $ 21 Unrealized gain (loss) on fair value of securities — (10) (7) 20 Fair value of investment securities at end of period $ 20 $ 41 $ 20 $ 41 Impaired lease and off-lease equipment (non-recurring) At June 30, 2019, and December 31, 2018, the Company deemed certain off lease equipment (assets) to be impaired and recorded $801 thousand and $4 thousand of fair value adjustments to reduce the cost basis of the equipment. Level 1 Level 2 Level 3 June 30, Estimated Estimated Estimated 2019 Fair Value Fair Value Fair Value Assets measured at fair value on a non-recurring basis: Impaired lease and off-lease equipment $ 752 $ — $ $ 752 Level 1 Level 2 Level 3 December 31, Estimated Estimated Estimated 2018 Fair Value Fair Value Fair Value Assets measured at fair value on a non-recurring basis: Impaired lease and off-lease equipment $ 4 $ — $ — $ 4 Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of impaired lease assets were classified within Level 3 of the valuation hierarchy as the data sources utilized for the valuation of such assets reflect significant inputs that are unobservable in the market. Such valuation utilizes a market approach technique and uses inputs that reflect the sales price of similar assets sold by affiliates and/or information from third party remarketing agents not readily available in the market. The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy at June 30, 2019 and December 31, 2018: June 30, 2019 Valuation Valuation Unobservable Range of Name Frequency Technique Inputs Input Values Warrants Recurring Black-Scholes formulation Stock price $0.60 - $12.92 Exercise price $0.41 - $38.64 Time to maturity (in years) 1.49 - 3.51 Risk-free interest rate 1.74% - 1.86% Annualized volatility 60.35% - 67.53% Off-lease equipment Non-recurring Market Approach Third Party Agents' Pricing $0 - $8,000 Quotes - per equipment (total of $752,000) Equipment Condition Poor to Average December 31, 2018 Valuation Valuation Unobservable Range of Name Frequency Technique Inputs Input Values Warrants Recurring Black-Scholes formulation Stock price $0.00 - $9.98 Exercise price $0.1 - $1,000.00 Time to maturity (in years) 1.62 - 7.08 Risk-free interest rate 2.46% - 2.59% Annualized volatility 47.58% - 91.94% 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 determines 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. Notes receivable The fair value of the Company’s notes receivable is generally estimated based upon various methodologies deployed by financial and credit management including, but not limited to, credit analysis, third party appraisal and/or discounted cash flow analysis based upon current market valuation techniques and market rates for similar types of lending arrangements, which may consider adjustments for impaired loans as deemed necessary. Non-recourse debt and Senior long-term debt The fair value of the Company’s non-recourse and senior long-term debt is estimated using discounted cash flow analyses, based upon current market borrowing rates for similar types of borrowing arrangements. Credit facility The credit facility includes the outstanding amounts on the Company’s credit facility. The carrying amount of these variable rate obligations approximate fair value based on current borrowing rates for similar types of borrowings. Commitments and Contingencies Management has determined that no recognition for the fair value of the Company’s loan commitments is necessary because their terms are made on a market rate basis and require borrowers to be in compliance with the Company’s credit requirements at the time of funding. The fair value of contingent liabilities (or guarantees) is not considered material because management believes there has been no event that has occurred wherein a guarantee liability has been incurred or will likely be incurred. The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at June 30, 2019 and December 31, 2018 (in thousands): Fair Value Measurements at June 30, 2019 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 1,953 $ 1,953 $ — $ — $ 1,953 Notes receivable 35 — — 33 33 Investment in securities 20 20 — — 20 Warrants, fair value 215 — — 215 215 Financial liabilities: Non-recourse debt 4,716 — — 4,721 4,721 Fair Value Measurements at December 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 1,056 $ 1,056 $ — $ — $ 1,056 Notes receivable 70 — — 63 63 Investment in securities 27 27 — — 27 Warrants, fair value 229 — — 229 229 Financial liabilities: Non-recourse debt 996 — — 991 991 Senior long-term debt 2,068 — — 2,456 2,456 Acquisition credit facility 1,200 — — 1,200 1,200 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policy) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10‑Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations. Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data. In preparing the accompanying unaudited financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after June 30, 2019, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements, or adjustments thereto. |
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. |
Segment Reporting | Segment reporting: The Company is organized into one operating segment for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States. The primary geographic region in which the Company seeks leasing opportunities is North America. For the three and six months ended June 30, 2019 and 2018, and as of June 30, 2019 and December 31, 2018, all of the Company’s operating revenues and long-lived assets relate to customers domiciled in the United States. |
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 typically established based upon their aging and historical charge off and collection experience and the creditworthiness of specifically identified lessees and borrowers, and invoiced amounts. Accounts receivable deemed uncollectible are generally charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received. Accounts receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with lease or note payments outstanding less than 90 days. Based upon management’s judgment, such leases or notes may be placed in non-accrual status. Leases or notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable. Until such time, revenues on operating leases are recognized on a cash basis. All payments received on amounts billed under direct financing leases and notes receivable are applied only against outstanding principal balances. |
Financing Receivables | Financing receivables In addition to the allowance established for delinquent accounts receivable, the total allowance related solely to financing receivables also includes anticipated impairment charges on notes receivable and direct financing leases. Notes are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the note agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest when due. If it is determined that a loan is impaired with regard to scheduled payments, the Company will perform an analysis of the note to determine if an impairment valuation reserve is necessary. This analysis considers the estimated cash flows from the note, or the collateral value of the property underlying the note when note repayment is collateral dependent. Any required valuation reserve is charged to earnings when determined; and notes are charged off to the allowance as they are deemed uncollectible. The Fund’s investment in direct financing leases are included in other assets, with related revenues reflected on the statement of operations under other revenues. Direct financing lease amounts, and related disclosures, are immaterial as of and for the quarter ended June 30, 2019 and 2018. The asset underlying a direct financing lease contract is considered impaired if the estimated undiscounted future cash flows of the asset are less than its net book value. The estimated undiscounted future cash flows are the sum of the estimated residual value of the asset at the end of the asset’s expected holding period and estimates of undiscounted future rents. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. 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. |
Investment in Securities | Investment in securities: From time to time, the Company may purchase securities of its borrowers or receive warrants in connection with its lending arrangements. Purchased securities The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. 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. The Company had $105 thousand and $112 thousand of purchased securities at June 30, 2019 and December 31, 2018 respectively. Fair value adjustments of $1 thousand unrealized gain and $10 thousand unrealized loss were recorded during the three months ended June 30, 2019 and 2018, respectively and adjustments of a $7 thousand unrealized loss and $20 thousand unrealized gain were recorded for the six months ended June 30, 2019 and 2018. Warrants Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet as determined by the Managing Member. During the respective six months ended June 30, 2019 and 2018, the Company recorded an unrealized loss of $15 thousand and an unrealized gain of $10 thousand respectively, to adjust its warrants to fair value. For the three month period ending June 30, 2019 and 2018, the Company recorded unrealized losses of $15 thousand and $3 thousand for the respective periods. As of June 30, 2019 and December 31, 2018, the estimated fair value of the Company’s portfolio of warrants were $215 thousand and $229 thousand, respectively. There were no exercises of warrants, net or otherwise, during the three and six months ended June 30, 2019 and 2018. |
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 non-interest 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 Company’s 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 receivable represent amounts due from in various industries, related to equipment on operating leases. |
Equipment under Operating Leases, net and Related Revenue Recognition | Equipment under operating leases, net 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 360‑10‑35‑3, 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 (ASC 360‑10‑35‑43). 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. |
Initial Direct Costs | Initial direct costs: With the adoption of ASU No. 2016-02 certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. In 2018 and prior, the Company capitalized initial direct costs (“IDC”) associated with the origination of lease assets. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease basis based on actual contract term using a straight-line method for operating leases. Upon disposal of the underlying lease assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense. |
Per Unit Data | Per Unit data: The Company issues only one class of Units, none of which are considered dilutive. Net (loss) income and distributions per Unit are based upon the weighted average number of Other Members Units outstanding during the period. |
Fair Value | Fair Value: 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. 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors. In March 2019, the FASB issued ASU No. 2019-01, Leases: Codification Improvements. Collectively referred to hereafter as ASU No. 2016-02, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract to control an asset (i.e., lessees and lessors). The Company does not have any non-cancelable leases where it is a lessee. ASU No. 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards were effective as of January 1, 2019. Upon adoption, the Company applied the package of practical expedients that has allowed us to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, the Company applied the optional transition method in ASU No. 2018-11, which has allowed the Company to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the adoption period, although the Company did not have an adjustment. Additionally, the Company’s leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in the Company’s financial statements. Upon adoption, (i) amounts previously recognized as lessee reimbursements and other income, for the three months ended June 30, 2019, have been classified as lease or financing income, (ii) allowances for bad debts are now recognized as a direct reduction of operating lease income, and (iii) certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. Subsequent to January 1, 2019, provisions for credit losses relating to operating leases are now included in lease income in the Company’s financial statements. Provisions for credit losses prior to January 1, 2019 were previously included in operating expenses in our financial statements and prior periods are not reclassified to conform to the current presentation. 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 November 2018, the FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses (“ASU 2018-19”). The new standard clarifies certain aspects of the new current expected credit losses (CECL) impairment model in ASU 2016-13. The amendment clarifies that receivables arising from operating leases are within the scope of ASC 842, rather than ASC 326; however, it will be applicable to the Companies note receivables and direct financing leases, if any. The effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. Management is currently evaluating the impact of this standard on the financial statements and related disclosure requirements. |
Notes Receivable, Net (Tables)
Notes Receivable, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Notes Receivable [Abstract] | |
Schedule of Notes Receivable on Non-Accrual Status | As of June 30, 2019, two of the Company’s notes receivable previously on non-accrual status as of December 31, 2018 were removed from said status. Details are as follows (dollars in thousands): Notes receivable Non-accrual December 31, 2018 Number of notes 2 Net investment value $ 15 Annual interest rate 18 % Fair value adjustments $ 15 Fair value amount $ — Interest income not recorded relative to original terms $ 8 |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Allowance for Credit Losses [Abstract] | |
Activity in Allowance for Doubtful Accounts | The Company’s allowance for credit losses are as follows (in thousands): Allowance for Valuation Adjustments on Doubtful Financing Accounts Receivables Operating Notes Total Allowance Leases Receivable for Credit Losses Balance December 31, 2017 $ — $ 15 $ 15 Reversal of provision for credit losses 2 (15) (13) Balance June 30, 2018 $ 2 $ — $ 2 Balance December 31, 2018 $ — $ — $ — Provision for credit losses 5 — 5 Balance June 30, 2019 $ 5 $ — $ 5 |
Financing Receivables by Credit Quality Indicator and by Class | At June 30, 2019, and December 31, 2018, the Company’s investment in notes receivables by credit quality indicator and by class of notes receivables are as follows (excludes initial direct costs) (in thousands): Notes Receivable June 30, December 31, 2019 2018 Pass $ — $ — Special mention 35 70 Substandard — — Doubtful — — Total $ 35 $ 70 |
Net Investment in Financing Receivables by Age | At June 30, 2019 and December 31, 2018, the investment in financing receivables is aged as follows (in thousands): Recorded Greater Total Investment>90 31-60 Days 61-90 Days Than Total Notes Days and June 30, 2019 Past Due Past Due 90 Days Past Due Current Receivables Accruing Notes receivable $ — $ — $ — $ — $ 35 $ 35 $ — Recorded Greater Total Investment>90 31-60 Days 61-90 Days Than Total Notes Days and December 31, 2018 Past Due Past Due 90 Days Past Due Current Receivables Accruing Notes receivable $ — $ — $ — $ — $ 70 $ 70 $ — |
Equipment Under Operating Lea_2
Equipment Under Operating Leases, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equipment Under Operating Leases, Net [Abstract] | |
Investment in Leases | The Company’s equipment under operating leases consists of the following (in thousands): Depreciation/ Reclassifications, Amortization Balance Improvements/ Expense or Balance December 31, Dispositions and Amortization June 30, 2018 Impairment Losses of Leases 2019 Equipment under operating leases, net $ 17,005 $ (3,303) $ (1,182) $ 12,520 Assets held for sale or lease, net 2,677 1,592 — 4,269 Initial direct costs, net of accumulated amortization of $9 at June 30, 2019 and $9 at December 31, 2018 2 — — 2 Total $ 19,684 $ (1,711) $ (1,182) $ 16,791 |
Property on Operating Leases | Property on operating leases consists of the following (in thousands): Balance Balance December 31, Reclassifications June 30, 2018 Additions or Dispositions 2019 Marine vessel $ 19,410 $ — $ — $ 19,410 Transportation, rail 5,823 — (1,723) 4,100 Transportation 7,467 — (7,259) 208 Manufacturing 6,317 — (1,026) 5,291 Materials handling 1,399 — (52) 1,347 Construction 919 — — 919 Agriculture 542 — — 542 Air support equipment 120 — (80) 40 Other 83 — (83) — 42,080 — (10,223) 31,857 Less accumulated depreciation (25,075) (1,182) 6,920 (19,337) Total $ 17,005 $ (1,182) $ (3,303) $ 12,520 |
Future Minimum Lease Payments Receivable | At June 30, 2019, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands): Operating Leases Six months ending December 31, 2019 $ 1,067 Year ending December 31, 2020 1,555 2021 1,262 2022 1,179 2023 1,164 2024 211 $ 6,438 |
Schedule of Useful Lives of Lease Assets | The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of June 30, 2019, 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 - 50 Marine vessel 20 - 30 Air support equipment 15 - 20 Manufacturing 10 -15 Agriculture 7 - 10 Construction 7 - 10 Materials handling 7 - 10 Transportation 7 - 10 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Managing Member and/or Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement | The Managing Member and/or affiliates earned fees and billed for reimbursements of costs and expenses, pursuant to the Operating Agreement, during the three and six months ended June 30, 2019 and 2018 as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Administrative costs reimbursed to Managing Member and/or affiliates $ 119 $ 207 $ 266 $ 421 Asset management fees to Managing Member 33 73 89 148 $ 152 $ 280 $ 355 $ 569 |
Non-Recourse Debt (Tables)
Non-Recourse Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Non-Recourse Debt [Abstract] | |
Future Minimum Payments of Non-Recourse Debt | Future minimum payments of non-recourse debt are as follows (in thousands): Principal Interest Total Six months ending December 31, 2019 $ 694 $ 74 $ 768 Year ending December 31, 2020 914 123 1,037 946 91 1,037 978 58 1,036 1,012 25 1,037 172 — 172 $ 4,716 $ 371 $ 5,087 |
Borrowing Facilities (Tables)
Borrowing Facilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Borrowing Facilities [Abstract] | |
Borrowings under Credit Facility | June 30, December 31, 2019 2018 Total available under the financing arrangement $ 75,000 $ 75,000 Amount borrowed by the Company under the acquisition facility — (1,200) Amount borrowed by affiliated partnerships and limited liability companies under the venture, acquisition, and warehouse facilities (880) (910) Total remaining available under the venture, acquisition and warehouse facilities $ 74,120 $ 72,890 |
Members' Capital (Tables)
Members' Capital (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Members' Capital [Abstract] | |
Distributions to Other Members | Distributions to the Other Members for the three and six months ended June 30, 2019 and 2018 were as follows (in thousands except Units and per Unit data): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Distributions declared $ 2,063 $ 5 $ 2,063 $ 5 Weighted average number of Units outstanding 8,246,919 8,247,151 8,246,919 8,250,191 Weighted average distributions per Unit $ 0.25 $ — $ 0.25 $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Measurements [Abstract] | |
Fair Value, Warrants Measured on Recurring Basis | The fair value of warrants that were accounted for on a recurring basis for the three months and six months ended June 30, 2019 and 2018 classified as Level 3 are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Fair value of warrants at beginning of period $ 230 $ 245 $ 229 $ 232 Unrealized (loss) gain on fair value adjustment for warrants (15) (3) (15) 10 Fair value of warrants at end of period $ 215 $ 242 $ 215 $ 242 |
Fair Value, Investment Securities Measured on Recurring Basis | The fair value of investment securities that were accounted for on a recurring basis as of the three and six months ended June 30, 2019 classified as Level 1 are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Fair value of securities at beginning of period $ 20 $ 51 $ 27 $ 21 Unrealized gain (loss) on fair value of securities — (10) (7) 20 Fair value of investment securities at end of period $ 20 $ 41 $ 20 $ 41 |
Fair Value Measurement of Impaired Assets at Fair Value on Non-Recurring Basis | At June 30, 2019, and December 31, 2018, the Company deemed certain off lease equipment (assets) to be impaired and recorded $801 thousand and $4 thousand of fair value adjustments to reduce the cost basis of the equipment. Level 1 Level 2 Level 3 June 30, Estimated Estimated Estimated 2019 Fair Value Fair Value Fair Value Assets measured at fair value on a non-recurring basis: Impaired lease and off-lease equipment $ 752 $ — $ $ 752 Level 1 Level 2 Level 3 December 31, Estimated Estimated Estimated 2018 Fair Value Fair Value Fair Value Assets measured at fair value on a non-recurring basis: Impaired lease and off-lease equipment $ 4 $ — $ — $ 4 |
Summary of Valuation Techniques and Significant Unobservable Inputs Used | The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy at June 30, 2019 and December 31, 2018: June 30, 2019 Valuation Valuation Unobservable Range of Name Frequency Technique Inputs Input Values Warrants Recurring Black-Scholes formulation Stock price $0.60 - $12.92 Exercise price $0.41 - $38.64 Time to maturity (in years) 1.49 - 3.51 Risk-free interest rate 1.74% - 1.86% Annualized volatility 60.35% - 67.53% Off-lease equipment Non-recurring Market Approach Third Party Agents' Pricing $0 - $8,000 Quotes - per equipment (total of $752,000) Equipment Condition Poor to Average December 31, 2018 Valuation Valuation Unobservable Range of Name Frequency Technique Inputs Input Values Warrants Recurring Black-Scholes formulation Stock price $0.00 - $9.98 Exercise price $0.1 - $1,000.00 Time to maturity (in years) 1.62 - 7.08 Risk-free interest rate 2.46% - 2.59% Annualized volatility 47.58% - 91.94% |
Estimated Fair Values of Financial Instruments | The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at June 30, 2019 and December 31, 2018 (in thousands): Fair Value Measurements at June 30, 2019 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 1,953 $ 1,953 $ — $ — $ 1,953 Notes receivable 35 — — 33 33 Investment in securities 20 20 — — 20 Warrants, fair value 215 — — 215 215 Financial liabilities: Non-recourse debt 4,716 — — 4,721 4,721 Fair Value Measurements at December 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 1,056 $ 1,056 $ — $ — $ 1,056 Notes receivable 70 — — 63 63 Investment in securities 27 27 — — 27 Warrants, fair value 229 — — 229 229 Financial liabilities: Non-recourse debt 996 — — 991 991 Senior long-term debt 2,068 — — 2,456 2,456 Acquisition credit facility 1,200 — — 1,200 1,200 |
Organization and Limited Liab_2
Organization and Limited Liability Company Matters (Narrative) (Details) - USD ($) | 6 Months Ended | 123 Months Ended | ||||||
Jun. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | May 08, 2009 | |
Business activities, description | equipment financing and acquiring equipment to engage in equipment leasing and sales activities | |||||||
Business formation date | Apr. 1, 2009 | |||||||
Business formation State | California | |||||||
Business termination date | Dec. 31, 2030 | |||||||
Contributions received, net of rescissions | $ 83,500,000 | $ 83,500,000 | ||||||
Units issued | 8,246,919 | 8,246,919 | ||||||
Units outstanding | 8,246,919 | 8,246,919 | ||||||
Other Members [Member] | ||||||||
Units issued | 8,246,919 | 8,246,919 | 8,246,919 | |||||
Units outstanding | 8,246,919 | 8,246,919 | 8,246,919 | 8,246,919 | 8,246,919 | 8,247,599 | 8,257,599 | |
Initial Member [Member] | ||||||||
Contributions of capital | $ 500 | |||||||
Units issued | 50 | 50 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Equipment on operating leases , depreciation method | straight-line | ||||
Impairment losses on investment in securities | $ 17 | $ 17 | |||
Warrants, fair value | $ 215 | $ 215 | $ 229 | ||
Number of operating segments | segment | 1 | ||||
Number of reportable segments | segment | 1 | ||||
Investment in securities | 105 | $ 105 | 112 | ||
Unrealized gain (loss) on fair value adjustment for warrants | (15) | (3) | (15) | 10 | |
Unrealized gain (loss) for marketable securities | 1 | (10) | (7) | $ 20 | |
Gain (loss) on exercises of warrants | 0 | $ 0 | |||
Financing Receivable, Recorded Investment, Nonaccrual Status | $ 0 | $ 0 | $ 0 | ||
Practical expedients package | true | ||||
Minimum [Member] | |||||
Required assets value of financial institutions for cash deposits | $ 10,000,000 | ||||
Operating leases, initial terms | 36 months | 36 months | |||
Operating leases, period for non-accrual status | 90 days | ||||
Accounts receivable, period for non-accrual status | 90 days | ||||
Maximum [Member] | |||||
U.S. Treasury instruments maturity period | 90 days | ||||
Cash deposits, insured amount | $ 250 | $ 250 | |||
Operating leases, initial terms | 120 months | 120 months | |||
Accounts receivable, period for review of impairment | 90 days | ||||
Equipment and lessee period of review for impairment | 90 days |
Notes Receivable, Net (Narrativ
Notes Receivable, Net (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 35 | $ 70 |
Notes Receivable maturity date, description | All of the notes mature in 2020 | |
Minimum [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Terms of the notes receivable | 84 months | |
Notes receivable, interest rate | 16.91% | |
Maximum [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Terms of the notes receivable | 90 months | |
Notes receivable, interest rate | 18.00% |
Notes Receivable, Net (Schedule
Notes Receivable, Net (Schedule of Notes Receivable on Non-Accrual Status) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)contract | |
Notes Receivable [Abstract] | |
Number of notes receivable | contract | 2 |
Net investment value | $ 15 |
Annual interest rate | 18.00% |
Fair value adjustments | $ 15 |
Fair value amount | |
Interest income not recorded relative to original terms | $ 8 |
Allowance for Credit Losses (Ac
Allowance for Credit Losses (Activity in Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Beginning Balance | $ 15 | ||
Reversal of provision for credit losses | $ 4 | 5 | (13) |
Ending Balance | 5 | 5 | 2 |
Allowance For Doubtful Accounts [Member] | Operating Leases [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Beginning Balance | |||
Reversal of provision for credit losses | 5 | 2 | |
Ending Balance | $ 5 | 5 | 2 |
Valuation Adjustments on Financing Receivables [Member] | Notes Receivable [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Beginning Balance | 15 | ||
Reversal of provision for credit losses | $ (15) |
Allowance for Credit Losses (Fi
Allowance for Credit Losses (Financing Receivables by Credit Quality Indicator and by Class) (Details) - Notes Receivable [Member] - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment [Line Items] | ||
Notes Receivable | $ 35 | $ 70 |
Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Notes Receivable | $ 35 | $ 70 |
Allowance for Credit Losses (Ne
Allowance for Credit Losses (Net Investment in Financing Receivables by Age) (Details) - Notes Receivable [Member] - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | ||
Current | $ 35 | 70 |
Total financing receivables | 35 | 70 |
Recorded Investment > 90 Days and Accruing | ||
31-60 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | ||
61-90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | ||
Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due |
Equipment Under Operating Lea_3
Equipment Under Operating Leases, Net (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Equipment Under Operating Leases, Net [Abstract] | |||||
Depreciation of operating lease assets | $ 533 | $ 812 | $ 1,182 | $ 1,664 | |
Average estimated residual value of assets on operating leases | 26.00% | 26.00% | 38.00% | ||
Impairment losses on equipment | $ 801 | $ 801 | |||
Amortization of initial direct costs | $ 3 | $ 6 | |||
Impaired lease and off-lease equipment Fair value disclosure | 801 | 801 | $ 4 | ||
Operating leases in non-accrual status | $ 0 | $ 0 | $ 0 |
Equipment Under Operating Lea_4
Equipment Under Operating Leases, Net (Investment in Leases) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Lessor, Lease, Description [Line Items] | ||
Balance December 31, 2018 | $ 19,684 | |
Reclassifications, Improvements/ Dispositions and Impairment Losses | (1,711) | |
Depreciation/Amortization Expense or Amortization of Leases | (1,182) | |
Balance June 30, 2019 | 16,791 | |
Initial direct costs, accumulated amortization | 9 | $ 9 |
Operating Leases [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Balance December 31, 2018 | 17,005 | |
Reclassifications, Improvements/ Dispositions and Impairment Losses | (3,303) | |
Depreciation/Amortization Expense or Amortization of Leases | (1,182) | |
Balance June 30, 2019 | 12,520 | |
Assets Held for Sale or Lease, Net [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Balance December 31, 2018 | 2,677 | |
Reclassifications, Improvements/ Dispositions and Impairment Losses | 1,592 | |
Balance June 30, 2019 | 4,269 | |
Initial Direct Cost [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Balance December 31, 2018 | 2 | |
Balance June 30, 2019 | $ 2 |
Equipment Under Operating Lea_5
Equipment Under Operating Leases, Net (Property on Operating Leases) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | $ 31,857 | $ 42,080 |
Less accumulated depreciation | (19,337) | (25,075) |
Property on operating leases, net | 12,520 | 17,005 |
Additions, less accumulated depreciation | (1,182) | |
Additions, net | (1,182) | |
Reclassifications or dispositions, gross | (10,223) | |
Reclassifications or dispositions, less accumulated depreciation | 6,920 | |
Reclassifications or dispositions, net | (3,303) | |
Marine Vessel [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 19,410 | 19,410 |
Reclassifications or dispositions, gross | ||
Transportation, Rail [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 4,100 | 5,823 |
Reclassifications or dispositions, gross | (1,723) | |
Transportation [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 208 | 7,467 |
Reclassifications or dispositions, gross | (7,259) | |
Manufacturing [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 5,291 | 6,317 |
Reclassifications or dispositions, gross | (1,026) | |
Materials Handling [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 1,347 | 1,399 |
Reclassifications or dispositions, gross | (52) | |
Construction [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 919 | 919 |
Reclassifications or dispositions, gross | ||
Agriculture [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 542 | 542 |
Reclassifications or dispositions, gross | ||
Air Support Equipment [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | 40 | 120 |
Reclassifications or dispositions, gross | (80) | |
Other [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Property on operating leases, gross | $ 83 | |
Reclassifications or dispositions, gross | $ (83) |
Equipment Under Operating Lea_6
Equipment Under Operating Leases, Net (Future Minimum Lease Payments Receivable) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
Six months ending December 31, 2019 | $ 1,067 |
Year ending December 31, 2020 | 1,555 |
2021 | 1,262 |
2022 | 1,179 |
2023 | 1,164 |
2024 | 211 |
Operating leases, future minimum payments receivable, total | $ 6,438 |
Equipment Under Operating Lea_7
Equipment Under Operating Leases, Net (Schedule of Useful Lives of Lease Assets) (Details) | 6 Months Ended |
Jun. 30, 2019 | |
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 Vessel [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 20 years |
Minimum [Member] | Air Support Equipment [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] | Agriculture [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 7 years |
Minimum [Member] | Construction [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 7 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 [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 | 50 years |
Maximum [Member] | Marine Vessel [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 30 years |
Maximum [Member] | Air Support Equipment [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] | Agriculture [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 10 years |
Maximum [Member] | Construction [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 10 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 [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Useful lives of lease assets | 10 years |
Related Party Transactions (Man
Related Party Transactions (Managing Member and/or Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transactions [Abstract] | ||||
Administrative costs reimbursed to Managing Member and/or affiliates | $ 119 | $ 207 | $ 266 | $ 421 |
Asset management fees to Managing Member | 33 | 73 | 89 | 148 |
Related party transaction, total | $ 152 | $ 280 | $ 355 | $ 569 |
Non-Recourse Debt (Narrative) (
Non-Recourse Debt (Narrative) (Details) - Non-Recourse Debt [Member] $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Debt Instrument [Line Items] | |
Gross operating lease rentals and future payments on direct financing leases | $ 5.1 |
Carrying value of pledged assets | $ 10.8 |
Note maturity date, description | The vessel note matures in February 2024 with the remaining notes maturing at various dates through 2019. |
Percentage of loan related to Equipment leased to Halliburton | 95.00% |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Fixed interest rate on note | 2.23% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Fixed interest rate on note | 3.40% |
Non-Recourse Debt (Future Minim
Non-Recourse Debt (Future Minimum Payments of Non-Recourse Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Principal | ||
Six months ending December 31, 2019 | $ 694 | |
Year ending December 31, 2020 | 914 | |
2021 | 946 | |
2022 | 978 | |
2023 | 1,012 | |
2024 | 172 | |
Non-recourse debt | 4,716 | $ 996 |
Interest | ||
Six months ending December 31, 2019 | 74 | |
Year ending December 31, 2020 | 123 | |
2021 | 91 | |
2022 | 58 | |
2023 | 25 | |
Long-term debt interest, total | 371 | |
Total | ||
Six months ending December 31, 2019 | 768 | |
Year ending December 31, 2020 | 1,037 | |
2021 | 1,037 | |
2022 | 1,036 | |
2023 | 1,037 | |
2024 | 172 | |
Long-term debt principal and interest, total | $ 5,087 |
Senior Long-Term Debt (Narrativ
Senior Long-Term Debt (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2019 | May 20, 2019 | |
Debt Instrument [Line Items] | |||
Senior long-term debt | $ 2,068 | ||
Long-term debt interest | $ 371 | ||
Principal and interest, total | $ 5,087 | ||
Marine Vessel [Member] | Atel 15, LLC [Member] | |||
Debt Instrument [Line Items] | |||
Senior long-term debt | $ 2,100 | ||
Long-term debt, description | The note bore interest at a fixed-rate of 3.5% per annum | ||
Non-recourse promissory note | $ 9,200 | ||
Senior notes, interest rate per annum | 3.50% | 3.40% |
Borrowing Facilities (Narrative
Borrowing Facilities (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Maximum amount of Credit Facility | $ 75,000 | $ 75,000 |
Credit facility, expiration date | Jun. 30, 2019 | |
Outstanding borrowings under facility | 1,200 | |
Acquisition Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Outstanding borrowings under facility | $ 0 | $ 1,200 |
Borrowings Facilities (Borrowin
Borrowings Facilities (Borrowings Under Facility) (Details) - Revolving Credit Facility [Member] - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Total available under the financing arrangement | $ 75,000 | $ 75,000 |
Amount borrowed by the Company under the acquisition facility | (1,200) | |
Amounts borrowed by affiliated partnerships and limited liability companies under the venture, acquisition and warehouse facilities | (880) | (910) |
Total remaining available under the venture, acquisition and warehouse facilities | $ 74,120 | $ 72,890 |
Commitments (Narrative) (Detail
Commitments (Narrative) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Commitments [Abstract] | |
Commitments to purchase lease assets and fund investments in notes receivable | $ 0 |
Members' Capital (Narrative) (D
Members' Capital (Narrative) (Details) - shares | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Other Members Capital Account [Line Items] | ||||||
Members capital account, units issued | 8,246,919 | |||||
Members capital account, units outstanding | 8,246,919 | |||||
Other Members [Member] | ||||||
Other Members Capital Account [Line Items] | ||||||
Members capital account, units issued | 8,246,919 | 8,246,919 | ||||
Members capital account, units outstanding | 8,246,919 | 8,246,919 | 8,246,919 | 8,246,919 | 8,247,599 | 8,257,599 |
Initial Member [Member] | ||||||
Other Members Capital Account [Line Items] | ||||||
Members capital account, units issued | 50 | |||||
Maximum [Member] | Other Members [Member] | ||||||
Other Members Capital Account [Line Items] | ||||||
Members capital account, units authorized | 15,000,000 | 15,000,000 |
Members' Capital (Distributions
Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Distributions declared | $ 2,063 | $ 5 | $ 2,063 | $ 5 |
Weighted average number of Units outstanding | 8,246,919 | 8,247,151 | 8,246,919 | 8,250,191 |
Other Members [Member] | ||||
Distributions declared | $ 2,063 | $ 5 | $ 2,063 | $ 5 |
Weighted average number of Units outstanding | 8,246,919 | 8,247,151 | 8,246,919 | 8,250,191 |
Weighted average distributions per Unit | $ 0.25 | $ 0 | $ 0.25 | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Fair Value Measurements [Abstract] | |||||
Impairment losses on investment in securities | $ 17 | $ 17 | |||
Warrants, fair value | $ 215 | $ 215 | $ 229 | ||
Fair value adjustments recorded on equipment | 801 | 801 | |||
Impaired lease and off-lease equipment Fair value disclosure | $ 801 | $ 801 | $ 4 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value, Warrants Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Fair value of warrants at beginning of period | $ 229 | |||
Unrealized gain (loss) on fair value adjustment for warrants | $ (15) | $ (3) | (15) | $ 10 |
Fair value of warrants at end of period | 215 | 215 | ||
Level 3 Estimated Fair Value [Member] | ||||
Fair value of warrants at beginning of period | 230 | 245 | 229 | 232 |
Unrealized gain (loss) on fair value adjustment for warrants | (15) | (3) | (15) | 10 |
Fair value of warrants at end of period | $ 215 | $ 242 | $ 215 | $ 242 |
Fair Value Measurements (Fair_2
Fair Value Measurements (Fair Value, Investment Securities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Unrealized loss on fair value of securities | $ 1 | $ (10) | $ (7) | $ 20 |
Level 1 Estimated Fair Value [Member] | ||||
Fair value of securities at beginning of period | 20 | 51 | 27 | 21 |
Unrealized loss on fair value of securities | (10) | (7) | 20 | |
Fair value of securities at end of period | $ 20 | $ 41 | $ 20 | $ 41 |
Fair Value Measurements (Fair_3
Fair Value Measurements (Fair Value Measurement of Impaired Assets at Fair Value on Non-Recurring Basis) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired lease and off-lease equipment | $ 801 | $ 4 |
Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired lease and off-lease equipment | 752 | 4 |
Nonrecurring [Member] | Level 3 Estimated Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired lease and off-lease equipment | $ 752 | $ 4 |
Fair Value Measurements (Summar
Fair Value Measurements (Summary of Valuation Techniques and Significant Unobservable Inputs Used) (Details) | Jun. 30, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Impaired lease and off-lease equipment | $ 801,000 | $ 4,000 |
Nonrecurring [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Impaired lease and off-lease equipment | 752,000 | 4,000 |
Level 3 Estimated Fair Value [Member] | Nonrecurring [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Impaired lease and off-lease equipment | $ 752,000 | $ 4,000 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Impaired Lease Equipment [Member] | Market Approach [Member] | Measurement Inputs, Third Party Agents' Estimate of the Value of Collateral [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Lease equipment, Range of Input Values | 0 | |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Stock Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 0.60 | 0 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Exercise Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 0.41 | 0.10 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Time to maturity (in years) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 1.49 | 1.62 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Risk Free Interest Rate [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 0.0174 | 0.0246 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Annualized Volatility [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 0.6035 | 0.4758 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Impaired Lease Equipment [Member] | Market Approach [Member] | Measurement Inputs, Third Party Agents' Estimate of the Value of Collateral [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Lease equipment, Range of Input Values | 8,000 | |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Stock Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 12.92 | 9.98 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Exercise Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 38.64 | 1,000 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Time to maturity (in years) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 3.51 | 7.08 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Risk Free Interest Rate [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 0.0186 | 0.0259 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Annualized Volatility [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 0.6753 | 0.9194 |
Fair Value Measurements (Estima
Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Financial assets: | ||||||
Warrants, fair value | $ 215 | $ 229 | ||||
Level 1 Estimated Fair Value [Member] | ||||||
Financial assets: | ||||||
Investment in securities | 20 | $ 20 | 27 | $ 41 | $ 51 | $ 21 |
Level 3 Estimated Fair Value [Member] | ||||||
Financial assets: | ||||||
Warrants, fair value | 215 | $ 230 | 229 | $ 242 | $ 245 | $ 232 |
Carrying Amount [Member] | ||||||
Financial assets: | ||||||
Cash and cash equivalents | 1,953 | 1,056 | ||||
Notes receivable | 35 | 70 | ||||
Investment in securities | 20 | 27 | ||||
Warrants, fair value | 215 | 229 | ||||
Financial liabilities: | ||||||
Non-recourse debt | 4,716 | 996 | ||||
Senior long-term debt | 2,068 | |||||
Acquisition credit facility | 1,200 | |||||
Estimate of Fair Value [Member] | ||||||
Financial assets: | ||||||
Cash and cash equivalents | 1,953 | 1,056 | ||||
Notes receivable | 33 | 63 | ||||
Investment in securities | 20 | 27 | ||||
Warrants, fair value | 215 | 229 | ||||
Financial liabilities: | ||||||
Non-recourse debt | 4,721 | 991 | ||||
Senior long-term debt | 2,456 | |||||
Acquisition credit facility | 1,200 | |||||
Estimate of Fair Value [Member] | Level 1 Estimated Fair Value [Member] | ||||||
Financial assets: | ||||||
Cash and cash equivalents | 1,953 | 1,056 | ||||
Investment in securities | 20 | 27 | ||||
Estimate of Fair Value [Member] | Level 2 Estimated Fair Value [Member] | ||||||
Financial assets: | ||||||
Cash and cash equivalents | ||||||
Notes receivable | ||||||
Investment in securities | ||||||
Warrants, fair value | ||||||
Financial liabilities: | ||||||
Non-recourse debt | ||||||
Estimate of Fair Value [Member] | Level 3 Estimated Fair Value [Member] | ||||||
Financial assets: | ||||||
Notes receivable | 33 | 63 | ||||
Warrants, fair value | 215 | 229 | ||||
Financial liabilities: | ||||||
Non-recourse debt | $ 4,721 | 991 | ||||
Senior long-term debt | 2,456 | |||||
Acquisition credit facility | $ 1,200 |