Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|X| Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
For the quarterly period ended September 30, 2003
|_| Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
For the transition period from _______ to _______
Commission File Number 000-23842
ATEL Cash Distribution Fund V, L.P.
(Exact name of registrant as specified in its charter)
California 94-3165807
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
600 California Street, 6th Floor, San Francisco, California 94108-2733
(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 989-8800
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes |_| No |X|
The number of Limited Partnership Units outstanding as of September 30, 2003 was
12,471,600.
DOCUMENTS INCORPORATED BY REFERENCE
None
1
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited).
2
ATEL CASH DISTRIBUTION FUND V, L.P.
BALANCE SHEETS
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
(Unaudited)
ASSETS
September 30, December 31,
2003 2002
(Unaudited)
Cash and cash equivalents $ 2,050,244 $ 3,806,560
Accounts receivable, net of allowance for
doubtful accounts of $91,285 in
2003 and $75,285 in 2002 475,584 420,737
Investments in leases 13,039,224 15,647,718
---------------- ----------------
Total assets $15,565,052 $19,875,015
================ ================
LIABILITIES AND PARTNERS' CAPITAL
Non-recourse debt $ 581,015 $ 667,460
Accounts payable:
General Partner 26,691 115,390
Other 201,627 195,877
Accrued interest expense 2,516 3,603
Unearned operating lease income 24,104 27,680
---------------- ----------------
Total liabilities 835,953 1,010,010
Partners' capital:
General Partner 195,923 202,907
Limited Partners 14,533,176 18,662,098
---------------- ----------------
Total partners' capital 14,729,099 18,865,005
---------------- ----------------
Total liabilities and partners' capital $15,565,052 $19,875,015
================ ================
See accompanying notes.
3
ATEL CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF OPERATIONS
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2003 AND 2002
(Unaudited)
Nine Months Three Months
Ended September 30, Ended September 30,
Revenues: 2003 2002 2003 2002
Leasing activities:
Operating leases $ 2,043,925 $ 3,352,121 $ 662,915 $ 593,767
Direct financing leases 235,244 251,064 68,658 32,354
Gain (loss) on sales of assets 46,809 1,242,774 (47,178) 1,145,826
Leverage leases 2,356 10,668 - 718
Interest income 17,071 6,333 4,227 3,596
Other 10,413 1,997,889 114 38,438
----------------- ---------------- ---------------- ----------------
2,355,818 6,860,849 688,736 1,814,699
Expenses:
Depreciation and amortization 1,127,554 3,000,360 374,298 969,433
Impairment losses 543,426 - - -
Cost reimbursements to General Partner 465,684 537,098 107,961 187,547
Railcar maintenance 375,862 87,285 99,833 26,368
Equipment and incentive management fees
to General Partner 90,731 163,718 26,690 42,315
Professional fees 78,282 105,024 15,281 6,609
Provision for (recovery of) doubtful accounts 19,000 20,000 (21,000) 20,000
Interest expense 23,949 568,728 7,028 63,781
Other 329,737 304,837 106,097 88,590
----------------- ---------------- ---------------- ----------------
3,054,225 4,787,050 716,188 1,404,643
----------------- ---------------- ---------------- ----------------
Net (loss) income $ (698,407) $ 2,073,799 $ (27,452) $ 410,056
================= ================ ================ ================
Net (loss) income:
General Partner $ (6,984) $ 20,738 $ (274) $ 4,101
Limited Partners (691,423) 2,053,061 (27,178) 405,955
----------------- ---------------- ---------------- ----------------
$ (698,407) $ 2,073,799 $ (27,452) $ 410,056
================= ================ ================ ================
Net (loss) income per Limited Partnership Unit $ (0.06) $ 0.16 $ (0.00) $ 0.03
Weighted average number of Units outstanding 12,471,600 12,481,067 12,471,600 12,473,100
See accompanying notes.
4
ATEL CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF CHANGES IN MEMBERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2002
AND FOR THE
NINE MONTH PERIOD
ENDED SEPTEMBER 30, 2003
(Unaudited)
Limited Partners General
Units Amount Partner Total
Balance December 31, 2001 12,497,000 $18,358,071 188,354 18,546,425
Distributions to Limited Partners (1,088,393) - (1,088,393)
Units repurchased (25,400) (48,294) - (48,294)
Net Income 1,440,714 14,553 1,455,267
----------------- ---------------- ---------------- ----------------
Balance December 31, 2002 12,471,600 $18,662,098 $ 202,907 $18,865,005
Distributions to Limited Partners - (3,437,499) - (3,437,499)
Net loss - (691,423) (6,984) (698,407)
----------------- ---------------- ---------------- ----------------
Balance September 30, 2003 12,471,600 $14,533,176 $ 195,923 $14,729,099
================= ================ ================ ================
See accompanying notes.
STATEMENTS OF CASH FLOWS
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2003 AND 2002
(Unaudited)
Nine Months Three Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
Operating activities:
Net (loss) income $ (698,407) $ 2,073,799 $ (27,452) $ 410,056
Adjustment to reconcile net (loss) income to
cash provided by (used in) operating activities:
(Gain) loss on sales of lease assets (46,809) (1,242,774) 47,178 (1,145,826)
Leveraged lease income (2,356) (10,668) - (718)
Depreciation and amortization 1,127,554 3,000,360 374,298 969,433
Impairment losses 543,426 - - -
Provision for (recovery of) doubtful accounts 19,000 20,000 (21,000) 20,000
Changes in operating assets and liabilities:
Accounts receivable (73,847) 769,556 160,381 153,347
Accounts payable, General Partner (88,699) (134,389) (26,336) (579,645)
Accounts payable, Other 5,750 49,948 (32,630) 91,730
Accrued interest expense (1,087) (18,622) 156 (13,112)
Unearned operating lease income (3,576) (92,319) (50,036) (39,929)
----------------- ---------------- ---------------- ----------------
Net cash provided by (used in) operations 780,949 4,414,891 424,559 (134,664)
----------------- ---------------- ---------------- ----------------
STATEMENTS OF CASH FLOWS
(Continued)
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2003 AND 2002
(Unaudited)
Nine Months Three Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
Investing activities:
Proceeds from sales of lease assets 604,338 14,539,026 245,461 14,081,023
Reduction of net investment in direct
financing leases 335,973 1,096,439 118,842 301,696
Reduction of net investment in leveraged leases 46,368 - - -
----------------- ---------------- ---------------- ----------------
Net cash provided by investing activities 986,679 15,635,465 364,303 14,382,719
----------------- ---------------- ---------------- ----------------
Financing activities:
Distributions to Limited Partners (3,437,499) (1,088,393) - -
(Repayments) of non-recourse debt (304,041) (11,640,865) (35,495) (9,198,252)
Borrowings of non-recourse debt 217,596 759,436 217,596
Repayments of borrowings under line of credit - (7,000,000) - -
Repurchase of Limited Partnership units - (44,036) - -
Borrowings under line of credit - 500,000 - (4,000,000)
----------------- ---------------- ---------------- ----------------
Net cash (used in) provided by
financing activities (3,523,944) (18,513,858) 182,101 (13,198,252)
----------------- ---------------- ---------------- ----------------
Net (decrease) increase in cash and
cash equivalents (1,756,316) 1,536,498 970,963 1,049,803
Cash and cash equivalents at
beginning of period 3,806,560 443,772 1,079,281 930,467
----------------- ---------------- ---------------- ----------------
Cash and cash equivalents at
end of period $ 2,050,244 $ 1,980,270 $ 2,050,244 $ 1,980,270
================= ================ ================ ================
Supplemental disclosures of cash
flow information:
Cash paid during the period for interest $ 25,036 $ 587,350 $ 8,115 $ 76,893
================= ================ ================ ================
See accompanying notes.
5
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
1. 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 instructions to Form 10-Q and Article 10
of Regulation S-X. The unaudited interim financial statements reflect all
adjustments which are, in the opinion of the General Partner, necessary to a
fair statement of financial position and results of operations for the interim
periods presented. All such adjustments are of a normal recurring nature. The
preparation of financial statements in accordance with GAAP requires management
to make estimates and assumptions that effect reported amounts in the financial
statements and accompanying notes. Therefore, actual results could differ from
those estimates. Operating results for the three and nine months ended September
30, 2003 are not necessarily indicative of the results for the year ending
December 31, 2003.
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, 2002, filed with the Securities and Exchange
Commission.
2. Organization and partnership matters:
ATEL Cash Distribution Fund V, L.P. (the Partnership) was formed under the laws
of the state of California on September 23, 1992, for the purpose of acquiring
equipment to engage in equipment leasing and sales activities.
Upon the sale of the minimum amount of Units of Limited Partnership interest
(Units) of $1,200,000 and the receipt of the proceeds thereof on March 19, 1993,
the Partnership commenced operations.
The Partnership does not make a provision for income taxes since all income and
losses will be allocated to the Partners for inclusion in their individual tax
returns.
ATEL Financial Services, LLC, an affiliated entity, acts as the General Partner
of the Partnership.
Certain prior year balances have been reclassified to conform to the current
year presentation.
6
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
3. Investment in leases:
The Partnership's investment in leases consists of the following:
Depreciation /
Amortization
Expense or
Balance Amortization of Reclassi- Balance
December 31, Impairment Direct Financing fications or September 30,
2002 Losses Leases Dispositions 2003
Net investment in operating
leases $ 10,771,761 $ (543,426) $(1,107,322) $ 2,141,934 $11,262,947
Assets held for sale or lease 3,523,627 - - (2,533,463) 990,164
Net investment in direct
financing lease 1,180,081 - (335,973) (70,000) 774,108
Net investment in leveraged
leases 140,012 - (44,012) (96,000) -
Initial direct costs, net of accumulated
amortization of $214,469 in 2003 and
$544,354 in 2002 32,237 - (20,232) - 12,005
------------------- ----------------- ---------------- ---------------- ----------------
$ 15,647,718 $ (543,426) $(1,507,539) $ (557,529) $13,039,224
=================== ================= ================ ================ ================
Operating leases:
Property subject to operating leases consists of the following:
Depreciation
Balance Expense & Reclassi- Balance
December 31, Impairment fications or September 30,
2002 Losses Dispositions 2003
Transportation $ 20,593,171 $ - $ 2,515,294 $23,108,465
Construction 2,172,807 - (594,719) 1,578,088
Manufacturing 2,666,354 - (1,196,354) 1,470,000
Materials handling 49,550 - (49,550) -
----------------- ---------------- ---------------- ----------------
25,481,882 - 674,671 26,156,553
Less accumulated depreciation, including impairment
losses (14,710,121) (1,650,748) 1,467,263 (14,893,606)
----------------- ---------------- ---------------- ----------------
$ 10,771,761 $(1,650,748) $ 2,141,934 $11,262,947
================= ================ ================ ================
7
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
3. Investment in leases (continued):
Impairment losses are recorded as an addition to accumulated depreciation of the
impaired assets. Depreciation expense and impairment losses consist of the
following:
Depreciation expense $ 1,107,322
Impairment losses 543,426
----------------
$ 1,650,748
================
All of the property on leases was acquired in 1993, 1994, 1995, 1996 and 1997.
At September 30, 2003, the aggregate amounts of future minimum lease payments
are as follows:
Direct
Operating Financing
Leases Leases Total
Three months ending December 31, 2003 $ 410,369 $ 187,500 $ 597,869
Year ending December 31, 2004 784,661 750,000 1,534,661
2005 224,987 - 224,987
2006 14,122 - 14,122
---------------- ---------------- ----------------
$ 1,434,139 $ 937,500 $ 2,371,639
================ ================ ================
Direct financing leases:
As of September 30, 2003, investment in direct financing leases consists of
mining equipment. The following lists the components of the Company's investment
in direct financing leases:
September 30, December 31,
2003 2002
Total minimum lease payments receivable $ 937,500 $ 33,510
Estimated residual values of leased equipment (unguaranteed) 401 1,148,968
---------------- ----------------
Investment in direct financing leases 937,901 1,182,478
Less unearned income (163,793) (2,397)
---------------- ----------------
Net investment in direct financing leases $ 774,108 $ 1,180,081
================ ================
Impairments of investments in leases:
During the first nine months of 2003, the Company recognized impairment losses
on covered grain hopper cars in the amount of $543,246. The impairment resulted
from decreased estimated cash flows expected to be generated by the assets over
their remaining lives.
8
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
4. Non-recourse debt:
Notes payable to financial institutions are due in varying monthly, quarterly
and semi-annual installments of principal and interest. The notes are secured by
assignments of lease payments and pledges of the assets which were purchased
with the proceeds of the particular notes. Interest rates on the notes vary from
5.5% to 10.5%.
Future minimum principal payments of non-recourse debt are as follows:
Principal Interest Total
Three months ending December 31, 2003 $ 117,400 $ 7,890 $ 125,290
Year ending December 31, 2004 287,409 20,264 307,673
2005 162,167 7,301 169,468
2006 14,039 83 14,122
---------------- ---------------- ----------------
$ 581,015 $ 35,538 $ 616,553
================ ================ ================
5. Related party transactions:
The terms of the Limited Partnership Agreement provide that the General Partner
and/or Affiliates are entitled to receive certain fees for equipment
acquisition, management and resale and for management of the Partnership.
The Limited Partnership Agreement allows for the reimbursement of costs incurred
by the General Partner in providing services to the Partnership. Services
provided include Partnership accounting, investor relations, legal counsel and
lease and equipment documentation. The General Partner is not reimbursed for
services where it is entitled to receive a separate fee as compensation for such
services, such as acquisition and management of equipment. Reimbursable costs
incurred by the General Partner are allocated to the Partnership based upon
estimated time incurred by employees working on Partnership business and an
allocation of rent and other costs based on utilization studies.
Substantially all employees of the General Partner record time incurred in
performing services on behalf of all of the Partnerships serviced by the General
Partner. The General Partner believes that the costs reimbursed are the lower of
(i) actual costs incurred on behalf of the Partnership or (ii) the amount the
Partnership would be required to pay independent parties for comparable services
in the same geographic location and are reimbursable in accordance with the
Limited Partnership Agreement.
9
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
5. Related party transactions (continued):
During the nine and three months ended September 30, 2003 and 2002, the General
Partner and/or Affiliates earned fees, commissions and reimbursements, pursuant
to the Limited Partnership Agreement, as follows:
Nine Months Three Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
Costs reimbursed to General Partner $ 465,684 $ 537,098 $ 107,961 $ 187,547
Incentive management fees and
equipment management 90,731 163,718 26,690 42,315
----------------- ---------------- ---------------- ----------------
$ 556,415 $ 700,816 $ 134,651 $ 229,862
================= ================ ================ ================
6. Partners' capital:
As of September 30, 2003, 12,471,600 Units ($124,716,000) were issued and
outstanding (including the 50 Units issued to the Initial Limited Members).
The Company's Net Income, Net Losses, and Distributions, as defined, are to be
allocated 99% to the Limited Partners and 1% to the General Partner.
Distributions to the Limited Partners were as follows in 2003 and 2002:
Nine Months Three Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
Distributions $ 3,437,499 $ 1,088,393 $ - $ -
Weighted average number of Units outstanding 12,471,600 12,481,067 12,471,600 12,473,100
Weighted average distributions per Unit $ 0.28 $ 0.09 $ - $ -
10
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(Unaudited)
7. Line of credit:
The Partnership participates with the General Partner and certain of its
affiliates in a $56,282,201 revolving line of credit (comprised of an
acquisition facility and a warehouse facility) with a financial institution that
includes certain financial covenants. The line of credit expires on June 28,
2004. As of September 30, 2003, borrowings under the facility were as follows:
Amount borrowed by the Partnership under the acquisition facility $ -
Amounts borrowed by affiliated partnerships and limited liability
companies under the acquisition facility 24,300,000
--------------
Total borrowings under the acquisition facility 24,300,000
Amounts borrowed by the General Partner and its sister
corporation under the warehouse facility -
--------------
Total outstanding balance $24,300,000
==============
Total available under the line of credit $56,282,201
Total outstanding balance (24,300,000)
--------------
Remaining availability $31,982,201
==============
Draws on the acquisition facility by any individual borrower are secured only by
that borrower's assets, including equipment and related leases. Borrowings on
the warehouse facility are recourse jointly to certain of the affiliated
partnerships and limited liability companies, the Partnership and the General
Partner.
The credit agreement includes certain financial covenants applicable to each
borrower. The Partnership was in compliance with its covenants as of September
30, 2003.
11
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Statements contained in this Item 2, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and elsewhere in this Form 10-Q,
which are not historical facts, may be forward-looking statements. Such
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Investors are cautioned not
to attribute undue certainty to these forward-looking statements, which speak
only as of the date of this Form 10-Q. We undertake no obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this Form 10-Q or to reflect the occurrence of
unanticipated events, other than as required by law.
Capital Resources and Liquidity
In 2003 and 2002, the Partnership's primary source of cash was operating lease
rents. The liquidity of the Partnership will vary in the future, increasing to
the extent cash flows from leases and proceeds from asset sales exceed expenses,
and decreasing as distributions are made to the limited partners and to the
extent expenses exceed cash flows from leases and proceeds from sales of assets.
As another source of liquidity, the Partnership has contractual obligations with
a diversified group of lessees for fixed lease terms at fixed rental amounts. As
the initial lease terms expire, the Partnership will re-lease or sell the
equipment. The future liquidity beyond the contractual minimum rentals will
depend on the General Partner's success in re-leasing or selling the equipment
as it comes off lease.
The Partnership participates with the General Partner and certain of its
affiliates in a $56,282,201 revolving line of credit (comprised of an
acquisition facility and a warehouse facility) with a financial institution that
includes certain financial covenants. The line of credit expires on June 28,
2004. As of September 30, 2003, borrowing under the facility were as follows:
Amount borrowed by the Partnership under the acquisition facility $ -
Amounts borrowed by affiliated partnerships and limited liability
companies under the acquisition facility 24,300,000
--------------
Total borrowings under the acquisition facility 24,300,000
Amounts borrowed by the General Partner and its sister
corporation under the warehouse facility -
--------------
Total outstanding balance $24,300,000
==============
Total available under the line of credit $56,282,201
Total outstanding balance (24,300,000)
--------------
Remaining availability $31,982,201
==============
Draws on the acquisition facility by any individual borrower are secured only by
that borrower's assets, including equipment and related leases. Borrowings on
the warehouse facility are recourse jointly to certain of the affiliated
partnerships and limited liability companies, the Partnership and the General
Partner.
The credit agreement includes certain financial covenants applicable to each
borrower. The Partnership was in compliance with its covenants as of September
30, 2003.
The Partnership anticipates reinvesting a portion of lease payments from assets
owned in new leasing transactions. Such reinvestment will occur only after the
payment of all obligations, including debt service (both principal and
interest), the payment of management and acquisition fees to the General Partner
and providing for cash distributions to the Limited Partners.
The Partnership currently has available adequate reserves to meet contingencies,
but in the event those reserves were found to be inadequate, the Partnership
would likely be in a position to borrow against its current portfolio to meet
such requirements. The General Partner envisions no such requirements for
operating purposes.
As of September 30, 2003, the Partnership had borrowings outstanding on a
non-recourse basis with remaining unpaid balances of $581,015. Borrowings are to
be generally non-recourse to the Partnership, that is, the only recourse of the
lender upon a default by the lessee on the underlying lease will be to the
equipment or corresponding lease acquired with the loan proceeds. The General
Partner does not anticipate any future non-recourse borrowings.
If inflation in the general economy becomes significant, it may affect the
Partnership inasmuch as the residual (resale) values and rates on re-leases of
the Partnership's leased assets may increase as the costs of similar assets
increase. However, the Partnership's revenues from existing leases would not
increase, as such rates are generally fixed for the terms of the leases without
adjustment for inflation.
12
If interest rates increase significantly, the lease rates that the Partnership
can obtain on future leases will be expected to increase as the cost of capital
is a significant factor in the pricing of lease financing. Leases already in
place, for the most part, would not be affected by changes in interest rates.
Cash Flows
In 2003 and 2002, the Partnership's primary operating source of cash was
operating lease rents. Operating lease revenues decreased by $1,308,196 for the
nine month period in 2003 compared to 2002, primarily as a result of sales of
operating lease assets over the last year. The average asset cost on operating
leases for the nine month period in 2003 was $27,597,803 compared to $44,647,904
in 2002. Operating lease revenues increased by $69,148 for the three month
period in 2003 compared to 2002 as a result of placing previously off lease
equipment on an income earning lease.
In 2003, the Partnership's primary source of cash flows from investing
activities was proceeds from sales of lease assets. Such sales proceeds are not
expected to be consistent from one period to another. This also holds true for
the three and nine month periods.
The largest financing uses of cash were distributions to limited partners and
repayment of non-recourse debt for the nine and three month periods ended
September 30, 2003. Comparatively, the largest financing use of cash in 2002 was
repayments of borrowings under the line of credit and non-recourse debt.
In 2002, the Partnership sold a large lease to a third party. The acquisition of
the lease was financed primarily with non-recourse debt. The assets under the
lease were sold subject to the existing debt. Upon the sale of the assets, the
Partnership was relieved of its obligation under the non-recourse debt
agreement. There were no similar sales in 2003. As a result of this, the amounts
of asset sales proceeds and the amounts of debt repayments were much reduced in
2003, compared to 2002.
Results of operations
In 2003, operations resulted in a net loss of $698,407 for the nine month period
and a net loss of $27,452 for the three month period. In 2002, operations
resulted in net income of $2,073,799 for the nine month period and $410,056 for
the three month period. The Partnership's primary source of revenue is from
operating leases.
Operating lease revenues (and the related depreciation expense) have decreased
as a result of sales of assets over the last year. The original cost of assets
on operating leases has declined from $33,498,832 at September 30, 2002 to
$26,156,553 at September 30, 2003. The decrease in direct financing lease
revenues is also the result of sales of assets related to direct finance leases
over the year.
As scheduled debt payments have been made, debt balances have been reduced. The
average debt balance for the nine month period ended September 30, 2002 was
$7,470,819 compared to an average balance of $485,608 for the nine month period
in 2003. This decrease in indebtedness for 2003 caused interest expense to
decrease by $544,779 in the nine month period compared to the same period in
2002 and by $56,753 for the three month period ended September 30, 2003 as
compared to the same period in 2002.
In 2003, there were charges to net income for impairments of operating lease
assets in the amount of $543,426. The charges related to covered grain hopper
cars on lease to various lessees. The impairment resulted from decreased
estimated cash flows expected to be generated by the assets over their remaining
lives.
For the nine month period ended September 30, 2003, railcar maintenance
increased by $288,577 over the same period in 2002. This expense also increased
for the three month period ended September 30, 2003 by $73,465 over the same
period last year. These increases were a result of one time repairs required on
boxcars in order to place them back in service.
Item 3. Quantitative and Qualitative Disclosures of Market Risk.
The Partnership, like most other companies, is exposed to certain market risks,
including primarily changes in interest rates. The Partnership believes its
exposure to other market risks including foreign currency exchange rate risk,
commodity risk and equity price risk are insignificant to both its financial
position and results of operations.
In general, the Partnership manages its exposure to interest rate risk by
obtaining fixed rate debt. The fixed rate debt is structured so as to match the
cash flows required to service the debt to the payment streams under fixed rate
lease receivables. The payments under the leases are assigned to the lenders in
satisfaction of the debt. Furthermore, the Partnership has historically been
able to maintain a stable spread between its cost of funds and lease yields in
both periods of rising and falling rates.
13
Item 4. Controls and procedures.
Internal Controls
As of September 30, 2003, an evaluation was performed under the supervision and
with the participation of the Partnership's management, including the CEO and
CFO of the General Partner, of the effectiveness of the design and operation of
the Partnership's disclosure controls and procedures. Based on that evaluation,
the Partnership's management, including the CEO and CFO of the General Partner,
concluded that the Partnership's disclosure controls and procedures were
effective as of September 30, 2003. There have been no significant changes in
the Partnership's internal controls or in other factors that could significantly
affect internal controls subsequent to September 30, 2003.
Changes in internal controls
There have been no significant changes in our internal controls or in other
factors that could significantly affect our disclosure controls and procedures
subsequent to the evaluation date, nor were there any significant deficiencies
or material weaknesses in our internal controls.
Evaluation of disclosure controls and procedures
Under the supervision and with the participation of our management, including
the CEO and CFO, an evaluation of the effectiveness of the design and operation
of the Partnership's disclosure controls and procedures, as defined in Rules
240.13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 was
performed as of a date within ninety days before the filing date of this
quarterly report. Based upon this evaluation, the CEO and CFO of the General
Partner concluded that, as of the evaluation date, our disclosure controls and
procedures were effective for the purposes of recording, processing, summarizing
and timely reporting information required to be disclosed by us in the reports
that we file under the Securities Exchange Act of 1934 and that such information
is accumulated and communicated to our management in order to allow timely
decisions regarding required disclosure.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Inapplicable.
Item 2. Changes In Securities.
Inapplicable.
Item 3. Defaults Upon Senior Securities.
Inapplicable.
Item 4. Submission Of Matters To A Vote Of Security Holders.
Inapplicable.
Item 5. Other Information.
Inapplicable.
Item 6. Exhibits And Reports On Form 8-K.
(a) Documents filed as a part of this report
1. Financial Statements
Included in Part I of this report:
Balance Sheets, September 30, 2003 and December 31, 2002.
Statements of Operations for the nine and three month periods
ended September 30, 2003 and 2002.
Statements of changes in partners' capital for the year ended
December 31, 2002 and for nine month period ended September 30,
2003.
Statements of Cash Flows for the nine and three month periods
ended September 30, 2003 and 2002.
Notes to the Financial Statements
2. Financial Statement Schedules
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission
are not required under the related instructions or are
inapplicable, and therefore have been omitted.
3. Other Exhibits
99.1 Certification of Paritosh K. Choksi
99.2 Certification of Dean L. Cash
99.3 Certification Pursuant to 18 U.S.C. section 1350 of Dean L.
Cash
99.4 Certification Pursuant to 18 U.S.C. section 1350 of Paritosh
K. Choksi
(b) Report on Form 8-K
None
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date:
November 12, 2003
ATEL CASH DISTRIBUTION FUND V, L.P.
(Registrant)
By: ATEL Financial Corporation
General Partner of Registrant
By: /s/ DEAN L. CASH
---------------------
Dean L. Cash
President and Chief Executive Officer
of General Partner
By: /s/ PARITOSH K. CHOKSI
---------------------------
Paritosh K. Choksi
Principal Financial Officer
of Registrant
By: /s/ DONALD E. CARPENTER
---------------------------
Donald E. Carpenter
Principal Accounting
Officer of Registrant
15
Exhibit 99.1
CERTIFICATIONS
I, Paritosh K. Choksi, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ATEL Cash Distribution
Fund V, LP;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date:
November 12, 2003
/s/ PARITOSH K. CHOKSI
- --------------------------
Paritosh K. Choksi
Principal Financial Officer of Registrant, Executive
Vice President of General Partner
16
Exhibit 99.2
CERTIFICATIONS
I, Dean L. Cash, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ATEL Cash Distribution
Fund V, LP;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date:
November 12, 2003
/s/ DEAN L. CASH
- ----------------------
Dean L. Cash
President and Chief Executive
Officer of General Partner
17
Exhibit 99.3
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of ATEL Cash Distribution
Fund V, LP, (the "Partnership") for the period ended September 30, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
and pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the
Sarbanes-Oxley Act of 2002, I, Dean L. Cash, Chief Executive Officer of ATEL
Financial Services, LLC, general partner of the Partnership, hereby certify
that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Partnership.
Date:
November 12, 2003
/s/ DEAN L. CASH
- ------------------------
Dean L. Cash
President and Chief Executive
Officer of General Partner
18
Exhibit 99.4
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of ATEL Cash Distribution
Fund V, LP, (the "Partnership") for the period ended September 30, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
and pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the
Sarbanes-Oxley Act of 2002, I, Dean L. Cash, Chief Executive Officer of ATEL
Financial Services, LLC, general partner of the Partnership, hereby certify
that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Partnership.
Date:
November 12, 2003
/s/ PARITOSH K. CHOKSI
- ---------------------------
Paritosh K. Choksi
Executive Vice President of General
Partner, Principal Financial Officer of Registrant
19