Form 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|X| Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 (no fee required)
For the Year Ended December 31, 2003
OR
|_| Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 (no fee required)
For the transition period from ____ to ____
Commission File number 0-23842
ATEL Cash Distribution Fund V, L.P.
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
(Address of principal executive offices)
Registrant's telephone number, including area code (415) 989-8800
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Limited Partnership
Units
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. |X|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes |_| No |X|
State the aggregate market value of voting stock held by non-affiliates of the
registrant. Inapplicable
The number of Limited Partnership Units outstanding as of December 31, 2003 was
12,471,600.
DOCUMENTS INCORPORATED BY REFERENCE
Prospectus dated February 22, 1993, filed pursuant to Rule 424(b) (Commission
File No. 33-53162) is hereby incorporated by reference into Part IV hereof.
1
PART I
Item 1: BUSINESS
General Development of Business
ATEL Cash Distribution Fund V, L.P. (the Partnership) was formed under the laws
of the state of California in September 1992. The Partnership was formed for the
purpose of acquiring equipment to engage in equipment leasing and sales
activities. The General Partner of the Partnership is ATEL Financial Services
LLC (AFS). Prior to converting to a limited liability company structure, AFS was
formerly known as ATEL Financial Corporation.
The Partnership conducted a public offering of 12,500,000 units of Limited
Partnership interest (Units) at a price of $10 per Unit. As of November 15,
1994, the Partnership had received and accepted subscriptions for 12,500,000
($125,000,000) Limited Partnership Units in addition to the Initial Limited
Partners' Units and the offering was terminated. Of those Units, 12,471,600 were
issued and outstanding as of December 31, 2003.
The Partnership's principal objectives were to invest in a diversified portfolio
of equipment that would (i) preserve, protect and return the Partnership's
invested capital; (ii) generate substantial distributions to the partners of
cash from operations and cash from sales or refinancing, with any balance
remaining after certain minimum distributions to be used to purchase additional
equipment during the reinvestment period ("Reinvestment Period") and (iii)
provide significant distributions following the reinvestment period and until
all equipment has been sold. The Partnership is governed by its Limited
Partnership Agreement.
The Reinvestment Period ended December 31, 2000 and the Partnership is now in
the final stages of its liquidation phase.
Narrative Description of Business
The Partnership acquired various types of equipment and leases such equipment
pursuant to "Operating" leases and "Full Payout" leases, whereby "Operating"
leases are defined as being leases in which the minimum lease payments during
the initial lease term do not recover the full cost of the equipment and "Full
Payout" leases recover such cost. It was the intention of AFS that no more than
25% of the aggregate purchase price of equipment would be subject to "Operating"
leases upon final investment of the Net Proceeds of the Offering and that no
more than 20% of the aggregate purchase price of equipment would be invested in
equipment acquired from a single manufacturer.
The Partnership only purchased equipment for which a lease existed or for which
a lease would be entered into at the time of the purchase. The Partnership has
completed its initial acquisition stage with the investment of the net proceeds
from the public offering of Units.
As of December 31, 2003, the Partnership had purchased equipment with a total
acquisition price of $186,995,157.
The Partnership's objective was to lease a minimum of 75% of the equipment
acquired with the net proceeds of the offering to lessees that (i) had an
aggregate credit rating by Moody's Investor Service, Inc. of Baa or better, or
the credit equivalent as determined by AFS, with the aggregate rating weighted
to account for the original equipment cost for each item leased or (ii) were
established hospitals with histories of profitability or municipalities. The
balance of the original equipment portfolio could include equipment leased to
lessees, which although deemed creditworthy by AFS, would not satisfy the
general credit rating criteria for the portfolio. In excess of 75% of the
equipment acquired with the net proceeds of the offering (based on original
purchase cost) was leased to lessees with an aggregate credit rating of Baa or
better or to such hospitals or municipalities as described in (ii) above.
AFS sought to limit the amount invested in equipment to any single lessee to not
more than 20% of the aggregate purchase price of equipment owned at any time
during the Reinvestment Period.
As set forth below, during 2003, 2002 and 2001, certain lessees generated
significant portions of the Partnership's total lease revenues as follows:
Percentage of Total Lease Revenues
Lessee Type of Equipment 2003 2002 2001
- ------ ----------------- ---- ---- ----
Florida Canyon Mining Mining 22% 18% 13%
Southern Pacific Railroad Railroad Auto Racks 13% * *
Burlington Northern Railroad Locomotives * 19% 13%
Tarmac America Construction * 14% 16%
Union Carbide Corporation Rail tank cars * 10% *
* Less than 10%
These percentages are not expected to be comparable in future periods.
2
The equipment leasing industry is highly competitive. Equipment manufacturers,
corporations, partnerships and others offer users an alternative to the purchase
of most types of equipment with payment terms that vary widely depending on the
lease term and type of equipment. The ability of the Partnership to keep the
equipment leased and/or operating and the terms of the acquisitions, leases and
dispositions of equipment depends on various factors (many of which are not in
the control of AFS or the Partnership), such as general economic conditions,
including the effects of inflation or recession, and fluctuations in supply and
demand for various types of equipment resulting from, among other things,
technological and economic obsolescence.
The business of the Partnership is not seasonal.
The Partnership has no full time employees.
Equipment Leasing Activities
The Partnership has acquired a diversified portfolio of equipment. The equipment
has been leased to lessees in various industries. The following tables set forth
the types of equipment acquired by the Partnership through December 31, 2003 and
the industries to which the assets have been leased.
Purchase Price Excluding Percentage of Total
Asset Types Acquisition Fees Acquisitions
- ----------- ---------------- ------------
Transportation, over-the-road
tractors and trailers $34,546,518 18.47%
Furniture, fixtures and
office equipment 24,145,180 12.91%
Transportation, other 18,454,853 9.87%
Mining equipment 15,986,308 8.55%
Transportation, intermodal
containers 15,484,688 8.28%
Construction 15,335,327 8.20%
Materials handling 14,469,358 7.74%
Railroad locomotives 12,350,000 6.60%
Earth moving 11,943,745 6.39%
Transportation, rail cars 7,180,000 3.84%
Printing 4,707,508 2.52%
Other * 12,391,672 6.63%
---------------- ----------------
$186,995,157 100.00%
================ ================
* Individual amounts included in "Other" represent less than 2.5% of the total.
Purchase Price Excluding Percentage of Total
Industry of Lessee Acquisition Fees Acquisitions
- ------------------ ---------------- ------------
Transportation, rail $45,670,556 24.42%
Mining 29,823,055 15.95%
Oil & gas 21,301,523 11.39%
Retail, foods 11,215,586 6.00%
Food processing 9,828,623 5.26%
Construction 9,410,789 5.03%
Chemicals 9,075,487 4.85%
Retail, restaurant 8,528,067 4.56%
Transportation, other 8,311,346 4.44%
Primary metals 7,526,037 4.02%
Manufacturing, other 6,815,862 3.64%
Manufacturing, auto/truck 6,690,185 3.58%
Printing 4,707,508 2.52%
Other * 8,090,533 4.34%
---------------- ----------------
$186,995,157 100.00%
================ ================
* Individual amounts included in "Other" represent less than 2.5% of the total.
Through December 31, 2003, the Partnership has disposed of certain leased assets
as set forth below:
Original
Equipment Cost, Excess of
Excluding Rents Over
Asset Types Acquisition Fees Sales Price Expenses *
- ----------- ---------------- ----------- ----------
Transportation $62,045,050 $32,715,022 $48,689,152
Furniture, fixtures and office equipment 22,209,670 8,314,618 18,925,245
Mining equipment 20,717,330 7,796,573 16,430,409
Materials handling 13,108,989 2,570,725 13,977,788
Office automation 4,593,822 970,163 4,813,683
Other 18,838,253 6,909,600 20,427,449
---------------- --------------------------------
$141,513,114 $59,276,701 $123,263,726
================ ================================
* Includes only those expenses directly related to the production of the related
rents.
3
For further information regarding the Partnership's equipment lease portfolio as
of December 31, 2003, see Note 3 to the financial statements, Investments in
equipment and leases, as set forth in Part II, Item 8, Financial Statements and
Supplementary Data.
Item 2. PROPERTIES
The Partnership does not own or lease any real property, plant or material
physical properties other than the equipment held for lease as set forth in Item
1.
Item 3. LEGAL PROCEEDINGS
In the ordinary course of conducting business, there may be certain claims,
suits, and complaints filed against the Partnership. In the opinion of
management, the outcome of such matters, if any, will not have a material impact
on the Partnership's consolidated financial position or results of operations.
There are no material legal proceedings currently pending against the
Partnership or against any of its assets.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
Item 5. MARKET FOR REGISTRANT'S LIMITED PARTNERSHIP UNITS AND RELATED
MATTERS
Market Information
The Units are transferable subject to restrictions on transfers that have been
imposed under the securities laws of certain states. However, as a result of
such restrictions, the size of the Partnership and its investment objectives, to
AFS's knowledge, no established public secondary trading market has developed
and it is unlikely that a public trading market will develop in the future. As a
result, there is no currently ascertainable market value for the Units.
Holders
As of December 31, 2003, a total of 7,159 investors were holders of record of
Units in the Partnership.
ERISA Valuation
In order to permit ERISA fiduciaries who hold Units to satisfy their annual
reporting requirements, AFS estimated the value per Unit of the Partnership's
assets as of September 30, 2003. AFS calculated the estimated liquidation
proceeds that would be realized by the Partnership, assuming an orderly
disposition of all of the Partnership's assets as of January 1, 2004. The
estimates were based on the amount of remaining lease payments on existing
Partnership leases, and the estimated residual values of the equipment held by
the Partnership upon the termination of those leases. This valuation was based
solely on AFS's perception of market conditions and the types and amounts of the
Partnership's assets. No independent valuation was sought.
After calculating the aggregate estimated disposition proceeds, AFS then
calculated the portion of the aggregate estimated value of the Partnership
assets that would be distributed to Unit holders on liquidation of the
Partnership, and divided the total so distributable by the number of outstanding
Units. As of September 30, 2003, the value of the Partnership's assets,
calculated on this basis, was approximately $1.27 per Unit. The foregoing
valuation was performed solely for the ERISA purposes described above. There is
no market for the Units, and, accordingly, this value does not represent an
estimate of the amount a Unit holder would receive if he were to seek to sell
his Units. Furthermore, there can be no assurance as to the amount the
Partnership may actually receive if and when it seeks to liquidate its assets,
or the amount of lease payments and equipment disposition proceeds it will
actually receive over the remaining term of the Partnership.
Dividends
The Partnership does not make dividend distributions. However, the Limited
Partners of the Partnership are entitled to certain distributions as provided
under the Limited Partnership Agreement.
AFS has sole discretion in determining the amount of distributions; provided,
however, that AFS will not reinvest in equipment, but will distribute, subject
to payment of any obligations of the Partnership, such available cash from
operations and cash from sales or refinancing as may be necessary to cause total
distributions to the Limited Partners for each year during the Reinvestment
Period to equal the following amounts per unit: $1.05 in 1995 and 1996; $1.10 in
1997 and 1998; and $1.20 in 1999 and 2000. The Reinvestment Period ended
December 31, 2000.
4
Two distributions were made from cash generated from 2003 operations. The first
distribution was made in May 2003. The rate was $0.13 per Unit. The second
distribution was made in January 2004 and the rate was $0.15 per Unit.
A single distribution was paid from 2002 operations. The distribution was paid
in January 2003 and the rate was $0.15 per Unit.
The rate for monthly distributions from 2001 operations was $0.10 per Unit for
distributions paid in February through July 2001 and $0.0667 for distributions
paid in August through December 2001 and in January 2002. For quarterly
distributions, the rate was $0.30 per Unit for distributions paid in April and
July 2001 and $0.20 per Unit for distributions paid in October 2001 and in
January 2002. Distributions were from 2001 cash flows from operations. The
amounts paid to holders of Units were adjusted based on the length of time
within the previous calendar month or quarter that the Units were outstanding.
The following table presents summarized information regarding distributions to
Limited Partners:
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Net (loss) income per Unit, based on
weighted average Units outstanding $ (0.07) $ 0.12 $ 0.01 $ 0.13 $ 0.41
Return of investment 0.35 (0.03) 1.03 1.08 0.79
--------------- ---------------- -------------------------------- ----------------
Distributions per Unit, based on
weighted average Units outstanding 0.28 0.09 1.04 1.21 1.20
Differences due to timing of
distributions - 0.06 (0.04) (0.01) -
--------------- ---------------- -------------------------------- ----------------
Actual distribution rates per
Unit $ 0.28 $ 0.15 $ 1.00 $ 1.20 $ 1.20
=============== ================ ================================ ================
Owners of 1,000 or more units may make the election without charge to receive
distributions on a monthly basis. Owners of less than 1,000 units may make the
election upon payment of a $20.00 annual fee.
Item 6. SELECTED FINANCIAL DATA
The following table presents selected financial data of the Partnership for the
years ended December 31, 2003, 2002, 2001, 2000 and 1999 and for the years then
ended. This financial data should be read in conjunction with the financial
statements and related notes included under Part II, Item 8.
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Gross Revenues $ 3,019,440 $ 7,541,282 $ 7,939,473 $11,138,639 $ 17,064,600
Net (loss) income $ (916,504) $ 1,455,267 $ 170,758 $ 1,682,730 $ 5,198,570
Weighted average Units 12,471,600 12,478,700 12,497,000 12,497,000 12,497,000
Net (loss) income per Unit, based on
weighted average Units outstanding $ (0.07) $ 0.12 $ 0.01 $ 0.13 $ 0.41
Distributions per Unit, based on
weighted average Units outstanding $ 0.28 $ 0.09 $ 1.04 $ 1.21 $ 1.20
Total Assets $15,339,294 $19,875,015 $37,160,843 $50,000,894 $ 67,961,144
Non-recourse Debt $ 463,614 $ 667,460 $11,663,273 $16,389,312 $ 22,138,639
Total Partners' Capital $14,511,002 $18,865,005 $18,546,425 $31,416,576 $ 44,820,397
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Statements contained in this Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and elsewhere in this Form 10-K,
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-K. 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-K or to reflect the occurrence of
unanticipated events, other than as required by law.
5
Capital Resources and Liquidity
The Partnership's public offering provided for a total maximum capitalization of
$125,000,000.
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 asset sales.
Through December 31, 2000, the Partnership anticipated reinvesting a portion of
lease payments from assets owned in new leasing transactions. Such reinvestment
would occur only after the payment of all obligations, including debt service
(both principal and interest), the payment of management and acquisition fees to
AFS and providing for cash distributions to the Limited Partners.
The Partnership participates with AFS and certain of its affiliates in a
$58,627,656 revolving line of credit (comprised of an acquisition facility and a
warehouse facility) with a financial institution that includes certain financial
covenants. As of December 31, 2003, the Partnership was no longer a qualified
borrower under the line of credit as the Partnership's equity had fallen below
the $15,000,000 minimum required in order to borrow. The Partnership was still
contingently liable for any borrowings under the warehouse facility. As of
December 31, 2003, there were no borrowings under the warehouse facility by any
of the Partnership's affiliates. The line of credit expires on June 28, 2004. As
of December 31, 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 theacquisition facility 23,000,000
-------------
Total borrowings under the acquisition facility 23,000,000
Amounts borrowed by AFS and its sister corporation under the
warehouse facility -
-------------
Total outstanding balance $ 23,000,000
=============
Total available under the line of credit $ 58,627,656
Total outstanding balance 23,000,000)
-------------
Remaining availability $ 35,627,656
=============
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 AFS.
Effective January 2004, the revolving line of credit was extended. The revolving
line of credit now expires on June 28, 2005. In addition, the total amount
available under the revolving line of credit has been increased to $65,700,000.
As of December 31, 2003, cash balances consisted of working capital and amounts
reserved for distributions in January 2004, generated from operations in 2003.
The Partnership currently has available adequate reserves to meet its immediate
cash requirements and those of the next twelve months, but in the event those
reserves were found to be inadequate, the Partnership would likely be in a
position to borrow against its current portfolio to meet such requirements. AFS
envisions no such requirements for operating purposes.
Through the term of the Partnership, the Partnership had borrowed $58,317,911 of
non-recourse debt. As of December 31, 2003, the remaining unpaid balance as of
that date was $463,614. The Partnership's long-term borrowings are non-recourse
to the Partnership, that is, the only recourse of the lender is to the equipment
or corresponding lease acquired with the loan proceeds.
See Note 4 to the financial statements, Non-recourse debt, as set forth in Part
II, Item 8, Financial Statements and Supplementary Data, for additional
information regarding non-recourse debt.
The Partnership commenced regular distributions, based on cash flows from
operations, beginning with the second quarter of 1993. See Items 5 and 6 for
additional information regarding the distributions.
If inflation in the general economy becomes significant, it may affect the
Partnership inasmuch as the residual (resale) values of the Partnership's leased
assets may increase as the costs of similar assets increase. However, the
Partnership's revenues from existing leases would not increase, as such rates
are generally fixed for the terms of the leases without adjustment for
inflation.
In future periods, cash flows from operating leases are expected to be the
Partnership's primary source of cash flows from operations.
6
Cash Flows
2003 vs. 2002:
In 2003 and 2002, operating lease rents were the Partnership's primary source of
cash flows from operating activities. Cash flows from operations decreased from
$5,223,621 in 2002 to $988,239 in 2003, a decrease of $4,235,382. This decrease
was mainly due to two factors; (i) operating lease revenues decreased from
$4,254,501 in 2002 to $2,563,288 in 2003, a decrease of $1,691,213 and (ii) in
2002, the Partnership received a bankruptcy settlement in the amount of
$1,954,952. There was no similar settlement in 2003.
Sources of cash from investing activities consisted of rents from direct
financing leases and proceeds from sales of lease assets. Financing lease rents
decreased from $1,402,177 in 2002 to $465,430 in 2003, a decrease of $936,747.
Proceeds from the sales of lease assets are not expected to be consistent from
one period to another as the sales of lease assets is subject to various factors
such as the timing of lease terminations, the timing of market demand and the
condition and uniqueness of the assets subject to sale. Proceeds from sales of
lease assets decreased from $15,369,490 in 2002 to $821,919 in 2003, a decrease
of $14,547,571. Sales in 2002 included approximately $23,789,000 of equipment
that had been on operating leases. In 2003, fewer leases matured and the amount
of operating lease assets sold decreased to approximately $4,558,000. In both
years, transportation equipment constituted a majority of the assets sold.
In 2002 the main items of cash flows used in financing activities were the
repayment of the line of credit of $7,000,000 and the repayment of the
non-recourse debt of $10,995,813. The repayment of non-recourse debt was funded
in part ($8,300,000) by the sale of lease assets. Cash provided by financing
activities in 2003 consisted of a new non-recourse note payable of $217,596.
Cash provided by financing activities in 2002 was $500,000 borrowed under the
line of credit. Effective in 2001, the amounts of distributions are based on the
amounts of cash available for distribution after retaining sufficient balances
for working capital. In prior periods the distributions were at a predetermined
rate, subject only to the availability of sufficient cash balances. As a result,
distributions are expected to fluctuate from one period to another.
2002 vs. 2001:
In 2002 and 2001, operating lease rents were the Partnership's primary source of
cash flows from operating activities. Cash flows from operations decreased from
$5,779,190 in 2001 to $5,223,621 in 2002, a decrease of $555,569. This decrease
was primarily due to decreases in operating lease revenues from $5,850,367 in
2001 to $4,254,501 in 2002, a decrease of $1,595,866.
Sources of cash from investing activities consisted of rents from direct
financing leases and proceeds from sales of lease assets. Financing lease rents
decreased from $1,625,595 in 2001 to $1,402,177 in 2002, a decrease of $223,418.
Proceeds from the sales of lease assets are not expected to be consistent from
one period to another as the sales of lease assets is subject to various factors
such as the timing of lease terminations, the timing of market demand and the
condition and uniqueness of the assets subject to sale. Proceeds from sales of
lease assets increased from $3,733,992 in 2001 to $15,369,490 in 2002, an
increase of $11,635,498. Approximately $8,300,000 of the sales proceeds was used
to repay non-recourse debt associated with assets that were sold in 2002.
In 2002 and 2001, the only source of cash flows from financing activities was
the amounts borrowed on the line of credit. Repayments of debt increased as a
result of additional debt payments noted above.
Results of Operations
As of December 31, 2003, 2002 and 2001, significant amounts of the Partnership's
assets were leased to lessees in certain industries as follows.
2003 2002 2001
---- ---- ----
Rail transportation 67% 53% 41%
Mining 18% 21% 10%
Manufacturing, other * 15% 26%
Construction * * 13%
* Less than 10%.
Substantially all employees of AFS track time incurred in performing
administrative services on behalf of the Partnership. AFS 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 administrative services in the same
geographic location.
2003 vs. 2002:
Operations in 2003 resulted in a net loss of $916,504 compared to net income of
$1,455,267 in 2002. In 2002, revenues included $1,954,952 received as a partial
settlement of the bankruptcy of a former lessee. The payment in 2002 was the
final payment of the settlement.
7
Operating lease revenues have decreased by $1,691,213 from 2002 to 2003. The
Partnership is the liquidation phase of its life cycle. As leases mature, the
assets are returned to inventory. Most of the assets have been sold. This
reduces the amounts of equipment actually on lease and producing revenue. This
trend of decreasing operating lease revenues is expected to continue in future
periods.
Proceeds from the sales of lease assets are not expected to be consistent from
one period to another as the sales of lease assets is subject to various factors
such as the timing of lease terminations, the timing of market demand and the
condition and uniqueness of the assets subject to sale. As a result, gains and
losses recognized on the sales of lease assets are not expected to be consistent
from one year to another, however, such gains decreased by $813,050 from 2002 to
2003.
Interest expense has decreased as a result of scheduled debt payments (and the
early repayments of debt in 2002) and the consequent reductions of the
outstanding balances.
Equipment management fees are based on the revenues of the Partnership. As those
revenues have declined, the management fees have decreased as well.
Railcar maintenance costs increased from $230,683 in 2002 to $497,751 in 2003.
The Partnership owns a fleet of railcars managed by a third party. The
maintenance related to that fleet of cars increased from $230,683 in 2002 to
$367,611 in 2003. As of December 31, 2002 and during the year then ended, a
portion of those cars were off lease. Early in 2003, the remainder of the off
lease railcars were placed on new leases as the demand for the cars had
improved. As a result of increased usage of the managed railcars in 2003, the
amounts of ongoing maintenance has also increased. In addition, the Partnership
owns other railcars that are managed directly by AFS. In 2003, maintenance costs
of $130,140 were incurred in order to place these assets on new leases and to
maintain them once on lease. The assets had previously been on net leases with
other lessees.
Management periodically reviews the carrying values of its assets on leases and
assets held for lease or sale. As a result of that review, management determined
that the value of a fleet of jumbo covered hopper cars had declined in value to
the extent that the carrying values had become impaired. This decline is the
result of decreased long-term demand for these types of assets and a
corresponding reduction in the amounts of rental payments that these assets
currently command. Management has recorded a provision for the decline in value
of those assets in the amount of $543,426 for the year ended December 31, 2003
as more fully described in Note 12 in the financial statements included in Part
I, Item 8 of this report. 2002 vs. 2001:
Operations in 2002 resulted in net income of $1,455,267 compared to $170,758 in
2001. The increase is primarily due to an increase in other revenues related to
the amounts received from the settlement of the bankruptcy of Schwegmann's Giant
Supermarkets (a former lessee of the partnership). Such amounts increased from
$1,234,542 in 2001 to $1,954,952 in 2002. Operating lease revenues decreased as
a result of the maturing of operating leases, the subsequent sales of the
related lease assets and lower lease rates realized on lease renewals. This
resulted in decreased operating lease rents in 2002 compared to 2001. Such rents
decreased from $5,850,367 in 2001 to $4,254,501 in 2002. Assets sales also
resulted in decreased depreciation expense in 2002. Depreciation decreased by
$1,113,516 compared to 2001.
Proceeds from the sales of lease assets are not expected to be consistent from
one period to another as the sales of lease assets is subject to various factors
such as the timing of lease terminations, the timing of market demand and the
condition and uniqueness of the assets subject to sale. As a result, gains and
losses recognized on the sales of these lease assets are not expected to be
consistent from one year to another, however, such gains increased by $551,961
compared to 2001. This also contributed to the increase in net income.
Interest expense has decreased as a result of scheduled debt payments and the
early repayments of non-recourse debt noted above and the related reductions of
the outstanding balances.
Equipment management fees are based on the revenues of the Partnership. As those
revenues have declined, the management fees have decreased as well.
As a result of management's periodic of review of the carrying values of its
assets on leases and assets held for lease or sale, management determined that
the value of a fleet of jumbo covered hopper cars had declined in value to the
extent that the carrying values had become impaired. This decline is the result
of decreased long-term demand for these types of assets and a corresponding
reduction in the amounts of rental payments that these assets currently command.
Management has recorded a provision for the decline in value of those assets in
the amount of $397,872 for the year ended December 31, 2002.
8
Recent Accounting Pronouncement
In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities, an interpretation of ARB 51." The
primary objectives of this interpretation are to provide guidance on the
identification of entities for which control is achieved through means other
than through voting rights ("variable interest entities") and how to determine
when and which business enterprise (the "primary beneficiary") should
consolidate the variable interest entity. This new model for consolidation
applies to an entity in which either (i) the equity investors (if any) do not
have a controlling financial interest; or (ii) the equity investment at risk is
insufficient to finance that entity's activities without receiving additional
subordinated financial support from other parties. In addition, FIN 46 requires
that the primary beneficiary, as well as all other enterprises with a
significant variable interest in a variable interest entity, make additional
disclosures. Certain disclosure requirements of FIN 46 were effective for
financial statements issued after January 31, 2003.
In December 2003, the FASB issued FIN No. 46 (revised December 2003),
"Consolidation of Variable Interest Entities" ("FIN 46-R") to address certain
FIN 46 implementation issues. The effective dates and impact of FIN 46 and FIN
46-R are as follows:
(i) Special purpose entities ("SPEs") created prior to February 1, 2003. The
company must apply either the provisions of FIN 46 or early adopt the provisions
of FIN 46-R at the end of the first interim or annual reporting period ending
after December 15, 2003.
(ii) Non-SPEs created prior to February 1, 2003. The company is required to
adopt FIN 46-R at the end of the first interim or annual reporting period ending
after March 15, 2004.
(iii) All entities, regardless of whether a SPE, that were created subsequent to
January 31, 2003. The provisions of FIN 46 were applicable for variable
interests in entities obtained after January 31, 2003.
The Partnership is required to adopt FIN 46-R at the end of the first interim or
annual reporting period ending after March 15, 2004. The adoption of the
provisions applicable to SPEs and all other variable interests obtained after
January 31, 2003 did not have a material impact on the Partnership's financial
statements. The Partnership is currently evaluating the impact of adopting FIN
46-R applicable to Non-SPEs created prior to February 1, 2003 but does not
expect a material impact.
In April 2002, the FASB issued FASB Statement No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (Statement No. 145). Among other things, Statement No. 145 rescinds
Statement No. 4, which required that all gains and losses from extinguishment of
debt be reported as an extraordinary item. The adoption of Statement No. 145,
effective January 1, 2003, did not have any effect on the Partnership's
consolidated financial position, consolidated results of operations, or
liquidity.
Critical Accounting Policies
The policies discussed below are considered by management of the Partnership to
be critical to an understanding of the Partnership's financial statements
because their application requires significant complex or subjective judgments,
decisions, or assessments, with financial reporting results relying on
estimation about the effect of matters that are inherently uncertain. Specific
risks for these critical accounting policies are described in the following
paragraphs. The Partnership also states these accounting policies in the notes
to the financial statements and in relevant sections in this discussion and
analysis. For all of these policies, management cautions that future events
rarely develop exactly as forecast, and the best estimates routinely require
adjustment.
Equipment on operating leases:
Equipment on operating leases is stated at cost. Depreciation is being provided
by use of the straight-line method over the terms of the related leases to the
equipment's estimated residual values at the end of the leases. Revenues from
operating leases are recognized evenly over the lives of the related leases.
Direct financing leases:
Income from direct financing lease transactions is reported using the financing
method of accounting, in which the Partnership's investment in the leased
property is reported as a receivable from the lessee to be recovered through
future rentals. The income portion of each rental payment is calculated so as to
generate a constant rate of return on the net receivable outstanding.
Allowances for losses on direct financing leases are typically established based
on historical charge offs and collections experience and are usually determined
by specifically identified lessees and billed and unbilled receivables.
Direct financing leases are placed in a non-accrual status based on specifically
identified lessees. Such leases are only returned to an accrual status based on
a case by case review of AFS. Direct financing leases are charged off on
specific identification by AFS.
9
Use of Estimates:
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.
Asset Valuation:
Recorded values of the Company's asset portfolio are periodically reviewed for
impairment in accordance with Statement of Financial Accounting Standards (SFAS)
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. An
impairment loss is measured and recognized only 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 market place 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 the discounted estimated future cash flows) of the asset and its carrying
value on the measurement date.
The Partnership adopted SFAS 144 as of January 1, 2002. The adoption of the
Statement did not have a significant impact on the Partnership's financial
position and results of operations.
Item 7a. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT 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. Nevertheless, the Partnership
frequently funds leases with its floating rate line of credit and is, therefore,
exposed to interest rate risk until fixed rate financing is arranged, or the
floating rate line of credit is repaid. As of December 31, 2003, there was no
outstanding balance on the floating rate line of credit.
To hedge its interest rate risk related to this variable rate debt, the
Partnership may enter into interest rate swaps. As of December 31, 2003, no
swaps or other derivative financial instruments were held by the Partnership.
The Partnership does not hold or issue derivative financial instruments for
speculative purposes.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the Report of Independent Auditors, Financial Statements and Notes to
Financial Statements attached hereto at pages 11 through 27.
10
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Partners
ATEL Cash Distribution Fund V, L.P.
We have audited the accompanying balance sheets of ATEL Cash Distribution Fund
V, L.P. (Partnership) as of December 31, 2003 and 2002, and the related
statements of operations, changes in partners' capital, and cash flows for each
of the three years in the period ended December 31, 2003. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ATEL Cash Distribution Fund V,
L.P. at December 31, 2003 and 2002, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2003, in
conformity with accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
San Francisco, California
February 20, 2004
11
ATEL CASH DISTRIBUTION FUND V, L.P.
BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
ASSETS
2003 2002
---- ----
Cash and cash equivalents $ 2,440,803 $ 3,806,560
Accounts receivable, net of allowance for
doubtful accounts of $99,285 in 2003
and $75,285 in 2002 378,720 420,737
Investments in equipment and leases 12,519,771 15,647,718
---------------- ----------------
Total assets $15,339,294 $ 19,875,015
================ ================
LIABILITIES AND PARTNERS' CAPITAL
Non-recourse debt $ 463,614 $ 667,460
Accounts payable and accruals:
General Partner 171,952 115,390
Other 166,626 195,877
Accrued interest payable 2,561 3,603
Unearned lease income 23,539 27,680
---------------- ----------------
Total liabilities 828,292 1,010,010
Partners' capital:
General Partner 193,742 202,907
Limited Partners 14,317,260 18,662,098
---------------- ----------------
Total Partners' capital 14,511,002 18,865,005
---------------- ----------------
Total liabilities and Partners' capital $15,339,294 $ 19,875,015
================ ================
See accompanying notes.
12
ATEL CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
2003 2002 2001
---- ---- ----
Revenues:
Leasing activities:
Operating leases $ 2,563,288 $ 4,254,501 $ 5,850,367
Direct financing leases 293,287 307,915 384,516
Leveraged leases 2,356 11,387 51,029
Gain on sales of assets 127,423 940,473 388,512
Interest income 22,516 15,392 23,678
Other 10,570 2,011,614 1,241,371
---------------- --------------- ----------------
3,019,440 7,541,282 7,939,473
Expenses:
Depreciation of operating lease assets 1,405,433 3,114,722 4,228,238
Cost reimbursements to General Partner 609,519 688,441 845,318
Impairment losses 543,426 487,872 -
Railcar maintenance 497,751 230,683 233,989
Equipment and incentive management fees to General Partner 195,683 301,303 485,965
Other management fees 106,639 69,650 83,563
Provision for (recovery of) doubtful accounts 102,000 (90,000) 64,680
Professional fees 100,656 115,178 260,007
Interest expense 32,249 583,106 1,144,360
Amortization of initial direct costs 21,518 397,549 203,908
Other 321,070 187,511 218,687
---------------- --------------- ----------------
3,935,944 6,086,015 7,768,715
---------------- --------------- ----------------
Net (loss) income $ (916,504) $ 1,455,267 $ 170,758
================ =============== ================
Net (loss) income:
General Partner $ (9,165) $ 14,553 $ 1,708
Limited Partners (907,339) 1,440,714 169,050
---------------- --------------- ----------------
$ (916,504) $ 1,455,267 $ 170,758
================ =============== ================
Net (loss) income per Limited Partnership unit $ (0.07) $ 0.12 $ 0.01
Weighted average number of units outstanding 12,471,600 12,478,700 12,497,000
See accompanying notes.
13
ATEL CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
Limited Partners General
Units Amount Partner Total
Balance December 31, 2000 12,497,000 $31,229,930 $ 186,646 $ 31,416,576
Distributions to Limited Partners ($1.04 per Unit) (13,040,909) - (13,040,909)
Net income 169,050 1,708 170,758
---------------- ---------------- --------------- ----------------
Balance December 31, 2001 12,497,000 18,358,071 188,354 18,546,425
Distributions to Limited Partners ($0.09 per Unit) (1,088,393) - (1,088,393)
Limited Partnership 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 ($0.28 per Unit) (3,437,499) - (3,437,499)
Net loss (907,339) (9,165) (916,504)
---------------- ---------------- --------------- ----------------
Balance December 31, 2003 12,471,600 $14,317,260 $ 193,742 $ 14,511,002
================ ================ =============== ================
See accompanying notes.
14
ATEL CASH DISTRIBUTION FUND V, L.P.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
2003 2002 2001
---- ---- ----
Operating activities:
Net income $ (916,504) $ 1,455,267 $ 170,758
Adjustment to reconcile net income to net cash provided by
operating activities:
Depreciation of operating lease assets 1,405,433 3,114,722 4,228,238
Amortization of initial direct costs 21,518 397,549 203,908
Leveraged lease income (2,356) (11,387) (51,029)
Gain on sales of assets (127,423) (940,473) (388,512)
Impairment losses 543,426 487,872 -
Provision for (recovery of) doubtful accounts 102,000 (90,000) 64,680
Changes in operating assets and liabilities:
Accounts receivable (59,983) 918,666 985,225
Other receivables - - 1,309,783
Accounts payable, General Partner 56,562 (30,690) 67,842
Accounts payable, other (29,251) 39,469 (704,241)
Accrued interest payable (1,042) (17,998) (40,265)
Unearned lease income (4,141) (99,376) (67,197)
---------------- --------------- ----------------
Net cash provided by operating activities 988,239 5,223,621 5,779,190
Investing activities:
Proceeds from sales of assets 821,919 15,369,490 3,733,992
Reduction of net investment in direct financing leases 465,430 1,402,177 1,625,595
---------------- --------------- ----------------
Net cash provided by investing activities 1,287,349 16,771,667 5,359,587
Financing activities:
Distributions to Limited Partners (3,437,499) (1,088,393) (13,040,909)
Repayments of non-recourse debt (421,442) (10,995,813) (4,726,039)
Proceeds of non-recourse debt 217,596 - -
Repayments of borrowings under line of credit - (7,000,000) (2,700,000)
Borrowings under line of credit - 500,000 8,200,000
Repurchases of limited partnership units - (48,294) -
---------------- --------------- ----------------
Net cash used in financing activities (3,641,345) (18,632,500) (12,266,948)
---------------- --------------- ----------------
Net (decrease) increase in cash and cash equivalents (1,365,757) 3,362,788 (1,128,171)
Cash and cash equivalents at beginning of year 3,806,560 443,772 1,571,943
---------------- --------------- ----------------
Cash and cash equivalents at end of year $ 2,440,803 $ 3,806,560 $ 443,772
================ =============== ================
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $ 33,291 $ 601,104 $ 1,184,625
================ =============== ================
See accompanying notes.
15
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
1. Organization and Partnership matters:
ATEL Cash Distribution Fund V, L.P. (the Partnership) was formed under the laws
of the state of California in September 1992 for the purpose of acquiring
equipment to engage in equipment leasing and sales activities, primarily in the
United States. The Partnership may continue until December 31, 2013.
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 General Partner of the Partnership is ATEL Financial Services LLC (AFS).
Prior to converting to a limited liability company structure, AFS was formerly
known as ATEL Financial Corporation. AFS is a wholly owned subsidiary of ATEL
Capital Group.
The Partnership's business consists of leasing various types of equipment. As of
December 31, 2003, the original terms of the leases ranged from one to ten
years. The Reinvestment Period ended December 31, 2000 and the Partnership is
now in the final stages of its liquidation phase.
Pursuant to the Limited Partnership Agreement, AFS receives compensation and
reimbursements for services rendered on behalf of the Partnership (See Notes 5
and 6). AFS is required to maintain in the Partnership reasonable cash reserves
for working capital, the repurchase of Units and contingencies.
2. Summary of significant accounting policies:
Cash and cash equivalents:
Cash and cash equivalents include cash in banks and cash equivalent investments
with original maturities of ninety days or less.
Accounts receivable:
Accounts receivable represent the amounts billed under lease contracts and
currently due to the Partnership. Allowances for doubtful accounts are typically
established based on historical charge offs and collection experience and are
usually determined by specifically identified lessees and invoiced amounts.
Equipment on operating leases:
Equipment on operating leases is stated at cost. Depreciation is being provided
by use of the straight-line method over the terms of the related leases to the
equipment's estimated residual values at the end of the leases. Revenues from
operating leases are recognized evenly over the lives of the related leases.
16
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
2. Summary of significant accounting policies (continued):
Direct financing leases:
Income from direct financing lease transactions is reported using the financing
method of accounting, in which the Partnership's investment in the leased
property is reported as a receivable from the lessee to be recovered through
future rentals. The income portion of each rental payment is calculated so as to
generate a constant rate of return on the net receivable outstanding.
Allowances for losses on direct financing leases are typically established based
on historical charge offs and collections experience and are usually determined
by specifically identified lessees and billed and unbilled receivables.
Direct financing leases are placed in a non-accrual status based on specifically
identified lessees. Such leases are only returned to an accrual status based on
a case by case review of AFS. Direct financing leases are charged off on
specific identification by AFS.
Investment in leveraged leases:
Leases that are financed principally with non-recourse debt at lease inception
and that meet certain other criteria are accounted for as leveraged leases.
Leveraged lease contracts receivable are stated net of the related non-recourse
debt service (which includes unpaid principal and aggregate interest on such
debt) plus estimated residual values. Unearned income represents the excess of
anticipated cash flows (after taking into account the related debt service and
residual values) over the investment in the lease and is amortized using a
constant rate of return applied to the net investment when such investment is
positive.
Initial direct costs:
The Partnership capitalizes initial direct costs associated with the acquisition
of lease assets. The costs are amortized over a five year period using a
straight line method.
Income taxes:
The Partnership does not provide for income taxes since all income and losses
are the liability of the individual partners and are allocated to the partners
for inclusion in their individual tax returns.
The tax basis of the Partnership's net assets and liabilities varies from the
amounts presented in these financial statements at December 31 (unaudited):
2003 2002
---- ----
Financial statement basis of net assets $14,511,002 $ 18,865,005
Tax basis of net assets 17,765,499 23,293,593
---------------- ----------------
Difference $ 3,254,497 $ 4,428,588
================ ================
The primary differences between the tax basis of net assets and the amounts
recorded in the financial statements are the result of differences in accounting
for syndication costs and differences between the depreciation methods used in
the financial statements and the Partnership's tax returns.
17
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
2. Summary of significant accounting policies (continued):
The following reconciles the net income reported in these financial statements
to the loss reported on the Partnership's federal tax return (unaudited) for
each of the years ended December 31:
2003 2002 2001
---- ---- ----
Net (loss) income per financial statements $ (916,504) $ 1,455,267 $ 170,758
Adjustment to depreciation expense 323,733 2,160,483 (379,786)
Provisions for losses and doubtful accounts 645,426 487,872 64,680
Adjustments to revenues (2,143,250) 3,631,306 4,963,156
---------------- --------------- ----------------
Net income per federal tax return $(2,090,595) $ 7,734,928 $ 4,818,808
================ =============== ================
Per unit data:
Net income and distributions per unit are based upon the weighted average number
of units outstanding during the period.
Asset valuation:
Recorded values of the Company's asset portfolio are periodically reviewed for
impairment in accordance with Statement of binancial Accounting Standards (SFAS)
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. 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 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 market place 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 the discounted estimated future cash flows) of the asset and its carrying
value on the measurement date.
The Partnership adopted SFAS 144 as of January 1, 2002. The adoption of the
Statement did not have a significant impact on the Partnership's financial
position and results of operations.
Credit risk:
Financial instruments that potentially subject the Partnership to concentrations
of credit risk include cash and cash equivalents, accounts receivable, direct
finance lease receivables and other receivables. The Partnership places its cash
deposits and temporary cash investments with creditworthy, high quality
financial institutions. The concentration of such deposits and temporary cash
investments is not deemed to create a significant risk to the Partnership.
Accounts receivable represent amounts due from lessees in various industries,
related to equipment on operating and direct financing leases. See Note 7 for a
description of lessees by industry as of December 31, 2003.
18
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
2. Summary of significant accounting policies (continued):
Derivative financial instruments:
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities, which established new accounting and
reporting standards for derivative instruments. SFAS No. 133 has been amended by
SFAS No. 137, issued in June 1999, and by SFAS No. 138, issued in June 2000.
SFAS No. 133, as amended, requires the Partnership to recognize all derivatives
as either assets or liabilities in the balance sheet and measure those
instruments at fair value. It further provides criteria for derivative
instruments to be designated as fair value, cash flow, or foreign currency
hedges, and establishes accounting standards for reporting changes in the fair
value of the derivative instruments.
The Partnership does not utilize derivative financial instruments.
Use of estimates:
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.
Basis of presentation:
The accompanying financial statements as of December 31, 2003 and 2002 and for
the three years ended December 31, 2003 have been prepared in accordance with
accounting principles generally accepted in the United States. Certain prior
year amounts have been reclassified to conform to the current year presentation.
Recent accounting pronouncements:
In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities, an interpretation of ARB 51." The
primary objectives of this interpretation are to provide guidance on the
identification of entities for which control is achieved through means other
than through voting rights ("variable interest entities") and how to determine
when and which business enterprise (the "primary beneficiary") should
consolidate the variable interest entity. This new model for consolidation
applies to an entity in which either (i) the equity investors (if any) do not
have a controlling financial interest; or (ii) the equity investment at risk is
insufficient to finance that entity's activities without receiving additional
subordinated financial support from other parties. In addition, FIN 46 requires
that the primary beneficiary, as well as all other enterprises with a
significant variable interest in a variable interest entity, make additional
disclosures. Certain disclosure requirements of FIN 46 were effective for
financial statements issued after January 31, 2003.
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
2. Summary of significant accounting policies (continued):
Recent accounting pronouncements (continued):
In December 2003, the FASB issued FIN No. 46 (revised December 2003),
"Consolidation of Variable Interest Entities" ("FIN 46-R") to address certain
FIN 46 implementation issues. The effective dates and impact of FIN 46 and FIN
46-R are as follows:
(i) Special purpose entities ("SPEs") created prior to February 1, 2003. The
company must apply either the provisions of FIN 46 or early adopt the provisions
of FIN 46-R at the end of the first interim or annual reporting period ending
after December 15, 2003.
(ii) Non-SPEs created prior to February 1, 2003. The company is required to
adopt FIN 46-R at the end of the first interim or annual reporting period ending
after March 15, 2004.
(iii) All entities, regardless of whether a SPE, that were created subsequent to
January 31, 2003. The provisions of FIN 46 were applicable for variable
interests in entities obtained after January 31, 2003.
The Partnership is required to adopt FIN 46-R at the end of the first interim or
annual reporting period ending after March 15, 2004. The adoption of the
provisions applicable to SPEs and all other variable interests obtained after
January 31, 2003 did not have a material impact on the Partnership's financial
statements. The Partnership is currently evaluating the impact of adopting FIN
46-R applicable to Non-SPEs created prior to February 1, 2003 but does not
expect a material impact.
In April 2002, the FASB issued FASB Statement No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (Statement No. 145). Among other things, Statement No. 145 rescinds
Statement No. 4, which required that all gains and losses from extinguishment of
debt be reported as an extraordinary item. The adoption of Statement No. 145,
effective January 1, 2003, did not have any effect on the Partnership's
consolidated financial position, consolidated results of operations, or
liquidity.
19
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
3. Investments in equipment and leases:
The Partnership's investments in equipment and leases consist of the following:
Depreciation /
Amortization
Expense or
Amortization of Reclassi-
December 31, Impairment Direct Financing fications or December 31,
2002 Losses Leases Dispositions 2003
---- ------ ------ -------------- ----
Net investment in operating leases $10,771,761 (225,427) $(1,405,433) $ 1,886,560 $ 11,027,461
Net investment in direct financing
leases 1,180,081 - (465,430) (70,000) 644,651
Net investment in leveraged leases 140,012 - 2,356 (142,368) -
Assets held for sale or lease, net of
accumulated depreciation of
$719,138 in 2003 and $3,080,643 in
2002 3,523,627 (317,999) - (2,368,688) 836,940
Initial direct costs, net of
accumulated amortization of
$99,285 in 2003 and $544,354 in
2002 32,237 - (21,518) - 10,719
--------------- ---------------- ---------------- --------------- ----------------
$15,647,718 $ (543,426) $(1,890,025) $ (694,496) $ 12,519,771
=============== ================ ================ =============== ================
Management periodically reviews the carrying values of its assets on leases and
assets held for lease or sale. As a result of that review, management determined
that the value of a fleet of jumbo covered hopper cars had declined in value to
the extent that the carrying values had become impaired. This decline is the
result of decreased long-term demand for these types of assets and a
corresponding reduction in the amounts of rental payments that these assets
currently command. Management has recorded provisions for the declines in value
of those assets in the amounts of $543,426 and $487,872 for the years ended
December 31, 2003 and 2002, respectively.
Impairment losses are recorded as an addition to accumulated depreciation of the
impaired assets. Depreciation expense and impairment losses on property subject
to operating leases and assets held for lease or sale consist of the following
for the years ended December 31:
2003 2002
---- ----
Depreciation of operating lease assets $ 1,405,433 $3,114,722
Impairment losses 543,426 487,872
---------------- ----------------
$ 1,948,859 $ 3,602,594
================ ================
All of the property on leases was acquired in the years 1993 through 1997.
20
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
3. Investments in equipment and leases (continued):
Operating leases:
Property on operating leases consists of the following:
Reclassi-
December 31, Impairment fications or December 31,
2002 Losses Additions Dispositions 2003
---- ------ --------- -------------- ----
Transportation $20,593,171 $ - $ - $ 2,385,244 $ 22,978,415
Manufacturing 2,666,354 - - (1,196,354) 1,470,000
Construction 2,172,807 - - (594,719) 1,578,088
Materials handling 49,550 - - (13,926) 35,624
--------------- ---------------- ---------------- --------------- ----------------
25,481,882 - - 580,245 26,062,127
Less accumulated depreciation (14,710,121) (225,427) (1,405,433) 1,306,315 (15,034,666)
--------------- ---------------- ---------------- --------------- ----------------
$10,771,761 $ (225,427) $(1,405,433) $ 1,886,560 $ 11,027,461
=============== ================ ================ =============== ================
Direct financing leases:
As of December 31, 2003, investment in direct financing leases consists of
mining and materials handling equipment. As of December 31, 2002, investment in
direct financing leases consists of railroad auto racks, railroad tank cars and
retail store fixtures. The following lists the components of the Partnership's
investment in direct financing leases as of December 31, 2003 and 2002:
2003 2002
---- ----
Total minimum lease payments receivable $ 750,000 $ 33,510
Estimated residual values of leased equipment (unguaranteed) 401 1,148,968
---------------- ---------------
Investment in direct financing leases 750,401 1,182,478
Less unearned income (105,750) (2,397)
---------------- ---------------
Net investment in direct financing leases $ 644,651 $ 1,180,081
================ ===============
At December 31, 2003, the aggregate amounts of future minimum lease payments
under operating and direct financing leases are as follows:
Direct
Year ending Operating Financing
December 31, Leases Leases Total
------------ ------ ------ -----
2004 $ 1,198,804 $ 750,000 $ 1,948,804
2005 580,887 - 580,887
2006 263,322 - 263,322
--------------- ---------------- ----------------
$ 2,043,013 $ 750,000 $ 2,793,013
=============== ================ ================
21
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
3. Investments in equipment and leases (continued):
Leveraged leases:
As of December 31, 2003, the Partnership had no investments in leveraged leases.
As of December 31, 2002, investment in leveraged leases consists of materials
handling equipment. The following lists the components of the Partnership's
investment in leveraged leases as of December 31, 2002:
2002
----
Aggregate rentals receivable $ 46,368
Less aggregate principal and interest payable on non-recourse loans -
Estimated residual value of leased assets 96,000
Less unearned income (2,356)
------------
Net investment in leveraged leases $ 140,012
============
4. Non-recourse debt:
At December 31, 2003, non-recourse debt consists of notes payable to financial
institutions. The notes are due in varying monthly and quarterly payments.
Interest on the notes is at fixed rates ranging from 5.5% to 7.1%. The notes are
secured by assignments of lease payments and pledges of assets. At December 31,
2003, the carrying value of the pledged assets is approximately $687,747. The
notes mature from 2004 through 2006.
As of December 31, 2002, future minimum payments of non-recourse debt are as
follows:
Year ending
December 31, Principal Interest Total
2004 $ 287,409 $ 20,264 $ 307,673
2005 162,167 7,301 169,468
2006 14,038 83 14,121
--------------- ---------------- ----------------
$ 463,614 $ 27,648 $ 491,262
=============== ================ ================
22
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
5. Related party transactions:
The terms of the Limited Partnership Agreement provide that AFS and/or
affiliates are entitled to receive certain fees for equipment acquisition,
management and resale and for management of the Partnership.
The Limited Partnership Agreement allows for the reimbursement of costs incurred
by AFS in providing administrative services to the Partnership. Administrative
services provided include Partnership accounting, investor relations, legal
counsel and lease and equipment documentation. AFS is not reimbursed for
services whereby it is entitled to receive a separate fee as compensation for
such services, such as acquisition and disposition of equipment. Reimbursable
costs incurred by AFS 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.
Each of ATEL Leasing Corporation ("ALC"), ATEL Equipment Corporation ("AEC"),
ATEL Investor Services ("AIS") and ATEL Financial Services LLC is a wholly-owned
subsidiary of ATEL Capital Group and performs services for the Partnership.
Acquisition services are performed for the Partnership by ALC, equipment
management, lease administration and asset disposition services are performed by
AEC, investor relations and communications services are performed by AIS and
general administrative services for the Partnership are performed by AFS.
Substantially all employees of AFS record time incurred in performing
administrative services on behalf of all of the Partnerships serviced by AFS.
AFS 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 administrative services in
the same geographic location and are reimbursable in accordance with the Limited
Partnership Agreement.
Incentive management fees are computed as 5% of distributions of cash from
operations, as defined in the Limited Partnership Agreement. Equipment
management fees are computed as 5% of gross revenues from operating leases, as
defined in the Limited Partnership Agreement plus 2% of gross revenues from full
payout leases, as defined in the Limited Partnership Agreement.
AFS and/or affiliates earned fees, commissions and reimbursements pursuant to
the Limited Partnership Agreement as follows during 2003, 2002 and 2001:
2003 2002 2001
---- ---- ----
Costs reimbursed to General Partner $ 609,519 $ 688,441 $ 845,318
Incentive and equipment management fees to General Partner 195,683 301,303 485,965
---------------- --------------- ----------------
$ 805,202 $ 989,744 $ 1,331,283
================ =============== ================
23
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
6. Partners' capital:
As of December 31, 2003 and 2002, 12,471,600 Units were issued and outstanding
(in addition to the Units issued to the Initial Limited Partners). The
Partnership is authorized to issue up to 12,500,000 Units of Limited Partnership
interest in addition to those issued to the initial Limited Partners.
As defined in the Limited Partnership Agreement, the Partnership's Net Profits,
Net Losses, and Tax Credits are to be allocated 99% to the Limited Partners and
1% to AFS.
Available Cash from Operations and Cash from Sales and Refinancing are to be
distributed as follows:
First, 5% of Distributions of Cash from Operations to AFS as Incentive
Management Fee.
Second, the balance to the Limited Partners until the Limited Partners have
received Aggregate Distributions in an amount equal to their Original Invested
Capital, as defined, plus a 10% per annum cumulative (compounded daily) return
on their Adjusted Invested Capital.
Third, AFS will receive as Incentive Management Compensation, the following:
(A) 10% of remaining Cash from Operations and
(B) 15% of remaining Cash from Sales or Refinancing.
Fourth, the balance to the Limited Partners.
7. Concentration of credit risk and major customers:
The Partnership has leased equipment to lessees in diversified industries.
Leases are subject to AFS's credit committee review. The leases provide for the
return of the equipment upon default.
The Partnership is no longer acquiring equipment. As assets have been sold upon
maturity of the related leases, concentrations have arisen in certain industries
due to the decreasing number of remaining leases and assets.
As of December 31, 2003, 2002 and 2001, there were concentrations (defined as
greater than 10%) of equipment leased to lessees in certain industries (as a
percentage of total equipment cost) as follows:
2003 2002 2001
---- ---- ----
Rail transportation 67% 53% 41%
Mining 18% 21% 10%
Manufacturing, other * 15% 26%
Construction * * 13%
* Less than 10%.
24
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
7. Concentration of credit risk and major customers (continued):
During 2003, two customers each comprised 22% and 13% of the Partnership's
revenues from leases. During 2002, four customers each comprised 19%, 18%, 14%
and 10% of the Partnership's revenues from leases. During 2001, three customers
each comprised 16%, 13% and 13% of the Partnership's revenues from leases.
8. Fair value of financial instruments:
The recorded amounts of the Company's cash and cash equivalents, accounts
receivable, accounts payable and accruals at December 31, 2003 approximate fair
value because of the liquidity and short-term maturity of these instruments.
Non-recourse debt:
The fair value of the Partnership's non-recourse debt is estimated using
discounted cash flow analyses, based on the Partnership's current incremental
borrowing rates for similar types of borrowing arrangements. The estimated fair
value of the Partnership's non-recourse debt at December 31, 2003 is $468,360.
9. Contingencies:
On September 11, 2000, Republic Transportation Finance, Inc. and its parent,
Republic Financial Corporation (collectively, "Republic"), filed suit against
the Partnership, claiming relief in the amount of $1,110,770, representing
Republic's interpretation of their share of the proceeds to a residual sharing
arrangement. The Partnership did not dispute that sums were owed to Republic,
merely the amount. The Partnership believed that Republic was only entitled to
$587,317 (which amount was included in accounts payable in the Partnership's
financial statements at December 31, 2000), based upon the Partnership's
interpretation of the underlying contract. Although the Partnership believed it
had a reasonable basis for prevailing, it settled this matter for a total of
$750,000 in 2001. The additional $162,683 is included in other expenses in 2001.
10. Selected quarterly data (unaudited):
March 31, June 30, September 30, December 31,
Quarter ended 2002 2002 2002 2002
---- ---- ---- ----
Total revenues $ 1,615,661 $ 3,430,489 $ 1,814,699 $ 680,433
Net Income (loss) $ (98,057) $ 1,761,800 $ 410,056 $ (618,532)
Net income (loss) per limited partnership unit $ (0.01) $ 0.14 $ 0.03 $ (0.04)
March 31, June 30, September 30, December 31,
Quarter ended 2003 2003 2003 2003
---- ---- ---- ----
Total revenues $ 757,866 $ 909,216 $ 688,736 $ 663,622
Net loss $ (635,616) $ (35,339) $ (27,452) $ (218,097)
Net loss per limited partnership unit $ (0.05) $ (0.00) $ (0.00) $ (0.02)
25
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
11. Revolving line of credit:
The Partnership participates with AFS and certain of its affiliates in a
$58,627,656 revolving line of credit (comprised of an acquisition facility and a
warehouse facility) with a financial institution that includes certain financial
covenants. As of December 31, 2003, the Partnership was no longer a qualified
borrower under the line of credit as the Partnership's equity had fallen below
the $15,000,000 minimum required in order to borrow. The Partnership was still
contingently liable for any borrowings under the warehouse facility. As of
December 31, 2003, there were no borrowings under the warehouse facility by any
of the Partnership's affiliates. The line of credit expires on June 28, 2004. As
of December 31, 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 theacquisition facility 23,000,000
-------------
Total borrowings under the acquisition facility 23,000,000
Amounts borrowed by AFS and its sister corporation under the
warehouse facility -
-------------
Total outstanding balance $ 23,000,000
=============
Total available under the line of credit $ 58,627,656
Total outstanding balance 23,000,000)
-------------
Remaining availability $ 35,627,656
=============
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 AFS.
Effective January 2004, the revolving line of credit was extended. The revolving
line of credit now expires on June 28, 2005. In addition, the total amount
available under the revolving line of credit has been increased to $65,700,000.
26
ATEL CASH DISTRIBUTION FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
12. Reserves, impairment losses and provisions for doubtful accounts:
Allowance for Allowance for
doubtful doubtful
Reserve for accounts - accounts -
losses and Other Accounts
impairments Receivables Receivables
Balance December 31, 2000 $ 2,224,816 $ 100,605 $ -
Charge offs (100,605) 100,605
Provision - - 64,680
---------------- ---------------- ---------------
Balance December 31, 2001 2,224,816 - 165,285
Provision (recovery) 487,872 - (90,000)
Charge offs (2,712,688) - -
---------------- ---------------- ---------------
Balance December 31, 2002 - - 75,285
Provision 543,426 - 102,000
Charge offs (543,426) (78,000)
---------------- ---------------- ---------------
Balance December 31, 2003 $ - $ - $ 99,285
================ ================ ===============
In 2003 it came to the Company's attention that the amounts recorded for
impairments of covered rail hopper cars as of December 31, 2002 was understated
by $539,000. During the three months ended March 31, 2003, the Company recorded
additional impairment losses of $539,000 to correct the accounting for the
transaction. The Company does not believe that this amount is material to the
period in which it should have been recorded, nor that it is material to the
Company's operating results for the year ending December 31, 2003.
The impact on 2002 would be a reduction of members' equity and of net income of
$539,000 ($0.04 per Limited Liability Company unit). Net loss for the year ended
December 31, 2003 would be decreased by $539,000 ($0.04 per Limited Liability
Company unit).
27
Item 9. CHANGES IN AND DISAGREEMENTS WITH AUDITORS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
None.
Item 9A. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
Under the supervision and with the participation of our management (ATEL
Financial Services, LLC as General Partner of the registrant, including the
chief executive officer and chief financial officer), 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) under the Securities
Exchange Act of 1934] was performed as of a date within ninety days before the
filing date of this annual report. Based upon this evaluation, the chief
executive officer and the chief financial officer concluded that, as of the
evaluation date, except as noted below, 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.
Due to the increased scrutiny and reporting requirements of Sarbanes-Oxley, it
came to the attention of the chief executive officer and the chief financial
officer of the Partnership in connection with the audit of the Partnership for
the year ended December 31, 2003, that enhanced internal controls were needed to
facilitate a more effective closing of the Partnership's financial statements,
and that this would require additional skilled personnel. To address this issue
the Partnership has taken steps to upgrade the accounting staff and will take
additional steps in 2004 to add personnel to its accounting department to ensure
that the Partnership's ability to execute internal controls in accounting and
reconciliation in the closing process will be adequate in all respects. It
should be noted that the control issues affecting the closing process and
disclosure did not materially affect the accuracy and completeness of the
Partnership's financial reporting and disclosure reflected in this report, and
the audited financial statements included herein contain no qualification or
limitation on the scope of the auditor's opinion.
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, except as described in the prior
paragraphs.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS
The registrant is a Limited Partnership and, therefore, has no officers or
directors.
All of the outstanding capital stock of ATEL Financial Services LLC (the General
Partner) is held by ATEL Capital Group ("ACG"), a holding company formed to
control ATEL and affiliated companies. The outstanding voting capital stock of
ATEL Capital Group is owned 5% by A. J. Batt and 95% by Dean Cash.
Each of ATEL Leasing Corporation ("ALC"), ATEL Equipment Corporation ("AEC"),
ATEL Investor Services ("AIS") and ATEL Financial Services LLC ("AFS") is a
wholly-owned subsidiary of ATEL Capital Group and performs services for the
Company. Acquisition services are performed for the Company by ALC, equipment
management, lease administration and asset disposition services are performed by
AEC, investor relations and communications services are performed by AIS and
general administrative services for the Company are performed by AFS. ATEL
Securities Corporation ("ASC") is a wholly-owned subsidiary of AFS.
The officers and directors of ATEL Capital Group and its affiliates are as
follows:
Dean L. Cash Chairman of the Board of Directors of ACG, AFS, ALC, AEC,
AIS and ASC; President and Chief Executive Officer of
ACG, AFS and AEC
Paritosh K. Choksi Director, Executive Vice President, Chief Operating
Officer and Chief Financial Officer of ACG, AFS, ALC,
AEC and AIS
Donald E. Carpenter Vice President and Controller of ACG, AFS, ALC, AEC and
AIS; Chief Financial Officer of ASC
Vasco H. Morais Senior Vice President, Secretary and General Counsel for
ACG, AFS, ALC, AIS and AEC
28
Dean L. Cash, age 53, joined ATEL as director of marketing in 1980 and has been
a vice president since 1981, executive vice president since 1983 and a director
since 1984. He has been President and CEO since April 2001. Prior to joining
ATEL, Mr. Cash was a senior marketing representative for Martin Marietta
Corporation, data systems division, from 1979 to 1980. From 1977 to 1979, he was
employed by General Electric Corporation, where he was an applications
specialist in the medical systems division and a marketing representative in the
information services division. Mr. Cash was a systems engineer with Electronic
Data Systems from 1975 to 1977, and was involved in maintaining and developing
software for commercial applications. Mr. Cash received a B.S. degree in
psychology and mathematics in 1972 and an M.B.A. degree with a concentration in
finance in 1975 from Florida State University. Mr. Cash is an arbitrator with
the American Arbitration Association.
Paritosh K. Choksi, age 50, joined ATEL in 1999 as a director, senior vice
president and its chief financial officer. He became its executive vice
president and COO in April 2001. Prior to joining ATEL, Mr. Choksi was chief
financial officer at Wink Communications, Inc. from 1997 to 1999. From 1977 to
1997, Mr. Choksi was with Phoenix American Incorporated, a financial services
and management company, where he held various positions during his tenure, and
was senior vice president, chief financial officer and director when he left the
company. Mr. Choksi was involved in all corporate matters at Phoenix and was
responsible for Phoenix's capital market needs. He also served on the credit
committee overseeing all corporate investments, including its venture lease
portfolio. Mr. Choksi was a part of the executive management team which caused
Phoenix's portfolio to increase from $50 million in assets to over $2 billion.
Mr. Choksi received a bachelor of technology degree in mechanical engineering
from the Indian Institute of Technology, Bombay; and an M.B.A. degree from the
University of California, Berkeley.
Donald E. Carpenter, age 55, joined ATEL in 1986 as controller. Prior to joining
ATEL, Mr. Carpenter was an audit supervisor with Laventhol & Horwath, certified
public accountants in San Francisco, California, from 1983 to 1986. From 1979 to
1983, Mr. Carpenter was an audit senior with Deloitte, Haskins & Sells,
certified public accountants, in San Jose, California. From 1971 to 1975, Mr.
Carpenter was a Supply Corp officer in the U. S. Navy. Mr. Carpenter received a
B.S. degree in mathematics (magna cum laude) from California State University,
Fresno in 1971 and completed a second major in accounting in 1978. Mr. Carpenter
has been a California certified public accountant since 1981.
Vasco H. Morais, age 45, joined ATEL in 1989 as general counsel to provide legal
support in the drafting and reviewing of lease documentation, advising on
general corporate law matters, and assisting on securities law issues. From 1986
to 1989, Mr. Morais was employed by the BankAmeriLease Companies, Bank of
America's equipment leasing subsidiaries, providing in-house legal support on
the documentation of tax-oriented and non-tax oriented direct and leveraged
lease transactions, vendor leasing programs and general corporate matters. Prior
to the BankAmeriLease Companies, Mr. Morais was with the Consolidated Capital
Companies in the corporate and securities legal department involved in drafting
and reviewing contracts, advising on corporate law matters and securities law
issues. Mr. Morais received a B.A. degree in 1982 from the University of
California in Berkeley, a J.D. degree in 1986 from Golden Gate University Law
School and an M.B.A. (Finance) in 1997 from Golden Gate University. Mr. Morais
has been an active member of the State Bar of California since 1986.
Audit Committee
ATEL Leasing Corporation is the managing member of ATEL Financial Services, LLC.
ATEL Financial Services LLC is the General Partner of the registrant. The board
of directors of ATEL Leasing Corporation acts as the audit committee of the
registrant. Dean L. Cash and Paritosh K. Choksi are members of the board of
directors of ALC and are deemed to be financial experts. They are not
independent of the Partnership.
Code of Ethics
ACG on behalf of AFS and ALC has adopted a code of ethics for its Chief
Executive Officer, Chief Financial Officer and Chief Accounting Officer. The
Code of Ethics is included as Exhibit 14.1 to this report.
Item 11. EXECUTIVE COMPENSATION
The registrant is a Limited Partnership and, therefore, has no officers or
directors.
Set forth hereinafter is a description of the nature of remuneration paid and to
be paid to AFS and its Affiliates. The amount of such remuneration paid for the
years ended December 31, 2003, 2002 and 2001 is set forth in Item 8 of this
report under the caption "Financial Statements and Supplementary Data - Notes to
the Financial Statements - Related party transactions," at Note 5 thereof, which
information is hereby incorporated by reference.
Selling Commissions
The Partnership paid selling commissions in the amount of 9.5% of Gross
Proceeds, as defined, ($11,875,000) to ATEL Securities Corporation, an affiliate
of AFS. Of this amount, $10,170,534 was reallowed to other broker/dealers. None
have been paid since 1994, nor will any additional amounts be paid in future
periods.
29
Acquisition Fees
Acquisition fees were paid to AFS for services rendered in finding, reviewing
and evaluating equipment to be purchased by the Partnership and rejecting
equipment not to be purchased by the Partnership. The total amount of
acquisition fees to be paid to AFS or their Affiliates was not to exceed 3.5% of
the aggregate purchase piece of equipment acquired, not to exceed approximately
4.75% of the Gross Proceeds of the Offering.
The maximum amount of such fees to be paid was $5,929,583, all of which had been
paid as of December 31, 1996. No such fees have been paid subsequent to that
date.
Equipment Management Fees
As compensation for its services rendered generally in managing or supervising
the management of the Partnership's equipment and in supervising other ongoing
services and activities including, among others, arranging for necessary
maintenance and repair of equipment, collecting revenue, paying operating
expenses, determining the equipment is being used in accordance with all
operative contractual arrangements, property and sales tax monitoring and
preparation of financial data, AFS or its affiliates are entitled to receive
management fees which are payable for each fiscal quarter and are to be in an
amount equal to (i) 5% of the gross lease revenues from "operating" leases and
(ii) 2% of gross lease revenues from "full payout" leases which contain net
lease provisions. See Note 5 to the financial statements included at Item 8 of
this report for amounts paid.
Incentive Management Fees
As compensation for its services rendered in establishing and maintaining the
composition of the Partnership's equipment portfolio and its acquisition and
debt strategies and supervising fund administration including supervising the
preparation of reports and maintenance of financial and operating data of the
Partnership, Securities and Exchange Commission and Internal Revenue Service
filings, returns and reports, AFS is entitled to receive the Partnership
management fee which shall be payable for each fiscal quarter and shall be an
amount equal to 5% of distributions of cash from operations until such time as
the Limited Partners have received aggregate distributions of cash from
operations in an amount equal to their original invested capital plus a 10% per
annum return on their average adjusted invested capital (as defined in the
Limited Partnership Agreement). Thereafter, the incentive management fee shall
be 15% of all distributions of cash from operations, sales or refinancing. See
Notes 5 and 6 to the financial statements included at Item 8 of this report for
amounts paid.
Equipment Resale Fees
As compensation for services rendered in connection with the sale of equipment,
AFS is entitled to receive an amount equal to the lesser of (i) 3% of the sales
price of the equipment, or (ii) one-half the normal competitive equipment sales
commission charged by unaffiliated parties for such services. Such fee is
payable only after the Limited Partners have received a return of their adjusted
invested capital (as defined in the Limited Partnership Agreement) plus 10% of
their adjusted invested capital per annum calculated on a cumulative basis,
compounded daily, commencing the last day of the quarter in which the limited
partner was admitted to the Partnership. To date, none have been accrued or
paid.
Equipment Re-lease Fee
As compensation for providing re-leasing services, AFS is entitled to receive
fees equal to 2% of the gross rentals or the comparable competitive rate for
such services relating to comparable equipment, whichever is less, derived from
the re-lease provided that (i) AFS or their affiliates have and will maintain
adequate staff to render such services to the Partnership, (ii) no such re-lease
fee is payable in connection with the re-lease of equipment to a previous lessee
or its affiliates, (iii) AFS or its affiliates have rendered substantial
re-leasing services in connection with such re-lease and (iv) AFS or its
affiliates are compensated for rendering equipment management services. To date,
none have been accrued or paid.
General Partner's Interest in Operating Proceeds
Net income, net loss and investment tax credits are allocated 99% to the Limited
Partners and 1% to AFS. See the statements of income included in Item 8 of this
report for the amounts allocated to the General and Limited Partners in 2003,
2002 and 2001.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Security Ownership of Certain Beneficial Owners
At December 31, 2003, no investor is known to the Partnership to hold
beneficially more than 5% of the issued and outstanding Units.
30
Security Ownership of Management
The ultimate shareholders of AFS are beneficial owners of Limited Partnership
Units as follows:
(1) (2) (3) (4)
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
Limited Partnership Units A. J. Batt Initial Limited Partner Units 0.0002%
600 California Street, 6th Floor 25 Units ($250)
San Francisco, CA 94108 (owned by wife)
Limited Partnership Units Dean Cash Initial Limited Partner Units 0.0002%
600 California Street, 6th Floor 25 Units ($250)
San Francisco, CA 94108 (owned by wife)
Changes in Control
The Limited Partners have the right, by vote of the Limited Partners owning more
than 50% of the outstanding limited Partnership units, to remove a General
Partner.
AFS may at any time call a meeting of the Limited Partners or a vote of the
Limited Partners without a meeting, on matters on which they are entitled to
vote, and shall call such meeting or for vote without a meeting following
receipt of a written request therefore of Limited Partners holding 10% or more
of the total outstanding Limited Partnership units.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The responses to Item 1 of this report under the caption "Equipment Leasing
Activities," Item 8 of this report under the caption "Financial Statements and
Supplemental Data - Notes to the Financial Statements - Related party
transactions" at Note 5 thereof, and Item 11 of this report under the caption
"Executive Compensation," are hereby incorporated by reference.
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
During the most recent two years, the Partnership incurred audit, audit related,
tax and other fees with its principal auditors as follows:
2003 2002
---- ----
Audit fees $ 30,302 $ 25,017
Audit related fees - -
Tax fees 32,550 31,561
Other - -
--------------- ----------------
$ 62,852 $ 56,578
=============== ================
ATEL Leasing Corporation is the managing member of ATEL Financial Services, LLC.
ATEL Financial Services LLC is the General Partner of the registrant. The board
of directors of ATEL Leasing Corporation acts as the audit committee of the
registrant. Engagements for audit services, audit related services and tax
services are approved in advance by the Chief Financial Officer of ATEL Leasing
Corporation acting as a member of the board of directors of that company.
31
PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) Financial Statements and Schedules
1. Financial Statements
Included in Part II of this report:
Report of Independent Auditors
Balance Sheets at December 31, 2003 and 2002
Statements of Operations for the years ended December 31, 2003, 2002
and 2001
Statements of Changes in Partners' Capital for the years ended
December 31, 2003, 2002 and 2001
Statements of Cash Flows for the years ended December 31, 2003, 2002
and 2001
Notes to Financial Statements
2. Financial Statement Schedules
All 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.
(b) Reports on Form 8-K for the fourth quarter of 2003 None
(c) Exhibits
(3) and (4) Agreement of Limited Partnership, included as Exhibit B to
Prospectus (Exhibit 28.1), is incorporated herein by reference to the
Report on Form 10K for the period ended December 31, 1993 (File No.
33-53162)
(14.1) Code of Ethics
(31.1) Certification of Paritosh K. Choksi
(31.2) Certification of Dean L. Cash
(32.1) Certification Pursuant to 18 U.S.C. section 1350 of Dean L.
Cash
(32.2) Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K.
Choksi
32
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: 3/26/2004
ATEL Cash Distribution Fund V, L.P.
(Registrant)
By: ATEL Financial Services, LLC
General Partner of Registrant
By: /s/ Dean Cash
-------------------------------------------
Dean Cash,
President and Chief Executive Officer of
ATEL Financial Services, LLC (General
Partner)
By: /s/ Paritosh K. Choksi
-------------------------------------------
Paritosh K. Choksi,
Executive Vice President of ATEL
Financial Services, LLC (General Partner)
33
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the persons in the capacities and on the dates
indicated.
SIGNATURE CAPACITIES DATE
/s/ Dean Cash President, Chairman and Chief Executive 3/26/2004
- ----------------------- Officer of ATEL Financial Services, LLC
Dean Cash
/s/ Paritosh K. Chok Executive Vice President and director of 3/26/2004
- ----------------------- ATEL Financial Services, LLC, Principal
Paritosh K. Choksi financial officer of registrant;
principal financial officer and director
of ATEL Financial Services, LLC
/s/ Donald E. Carpent Principal accounting officer of 3/26/2004
- ----------------------- registrant; principal accounting officer
Donald E. Carpenter of ATEL Financial Services, LLC
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act:
No proxy materials have been or will be sent to security holders. An annual
report will be furnished to security holders subsequent to the filing of this
report on Form 10-K, and copies thereof will be furnished supplementally to the
Commission when forwarded to the security holders.
34
EXHIBIT 14.1
ATEL CAPITAL GROUP
CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND CHIEF
ACCOUNTING OFFICER
A. SCOPE.
This ATEL Capital Group Code of Ethics is applicable to the ATEL Capital Group's
Chief Executive Officer, Chief Financial Officer and the Chief Accounting
Officer, or persons acting in such capacity (collectively the "Covered
Officers"), each of whom acts in such capacity on behalf of its affiliate, ATEL
Financial Services, LLC, which is the general partner or manager, as the case
may be, of each of the public limited partnerships and limited liability
companies sponsored by the Company. ATEL Capital Group is referred to herein as
the "Company," ATEL Financial Services, LLC is referred to as "AFS" and the
sponsored limited partnerships and limited liability companies are referred to
herein as the "Funds" and each of them as a "Fund." The board of directors of
ATEL Leasing Corporation ("ALC"), an affiliate of the Company that serves as the
managing member of ATEL Financial Services, LLC, ("AFS") the manager or general
partner of each of the Funds, is the first board of directors in management
succession for each Fund.
Accordingly, under the Securities and Exchange Commission's interpretation of
its disclosure rules, the ATEL Leasing Corporation board of directors functions
as the de facto audit committee for each Fund with respect to all procedural and
disclosure requirements applicable to audit committees under Securities and
Exchange Commission rules. The Company's Board of Directors shall have oversight
responsibility over the activities of ALC's Board of Directors for purposes of
this Code of Ethics.
B. PURPOSE.
The Company is proud of the values with which it and its subsidiaries and
affiliates conduct business. It has and will continue to uphold the highest
levels of business ethics and personal integrity in all types of transactions
and interactions. To this end, this Code of Ethics serves to (1) emphasize the
Company's commitment to ethics and compliance with the law; (2) set forth basic
standards of ethical and legal behavior; (3) provide reporting mechanisms for
known or suspected ethical or legal violations; and (4) help prevent and detect
wrongdoing. This Code of Ethics is intended to augment and supplement the
standard of ethics and business conduct expected of all Company employees, and
its limitation to Covered Officers is not intended to limit the obligation of
all Company employees to adhere to the highest standards of business ethics and
integrity in all transactions and interactions conducted while in the Company's
employ.
Given the variety and complexity of ethical questions that may arise in the
course of business of the Company and its subsidiaries, this Code of Ethics
serves only as a rough guide. Confronted with ethically ambiguous situations,
the Covered Officers should remember the Company's commitment to the highest
ethical standards and seek independent advice, where necessary, to ensure that
all actions they take on behalf of the Company and its subsidiaries honor this
commitment.
C. ETHICS STANDARDS.
1. Honest and Ethical Conduct.
The Covered Officers shall behave honestly and ethically at all times and with
all people. They shall act in good faith, with due care, and shall engage only
in fair and open competition, by treating ethically competitors, suppliers,
customers, and colleagues. They shall not misrepresent facts or engage in
illegal, unethical, or anti-competitive practices for personal or professional
gain.
2. Conflicts of Interest.
This fundamental standard of honest and ethical conduct extends to the handling
of conflicts of interest. The Covered Officers shall avoid any actual,
potential, or apparent conflicts of interest with the Company and its
subsidiaries and affiliates, including the Funds, and any personal activities,
investments, or associations that might give rise to such conflicts. They shall
not compete with or use the Company, any of its subsidiaries or a Fund for
personal gain, self-deal, or take advantage of corporate or Fund opportunities.
They shall act on behalf of the Company, its subsidiaries and the Funds free
from improper influence or the appearance of improper influence on their
judgment or performance of duties. A Covered Officer shall disclose any material
transaction or relationship that reasonably could be expected to give rise to
such a conflict to the Company's General Counsel or a member of the Company's
Board of Directors. No action may be taken with respect to such transaction or
party unless and until the Company's Board of Directors has approved such
action.
35
Notwithstanding the foregoing, it is understood, as fully disclosed in the
offering documents for each Fund, that AFS as manager or general partner of the
Fund has certain inherent conflicts of interest. The provisions of each Fund's
Operating Agreement or Limited Partnership Agreement have been drafted to
address the obligations, restrictions and limitations on the power and authority
of AFS to manage each Fund's affairs, including restrictions prohibiting or
limiting the terms of any transactions in which conflicts of interest may arise.
Furthermore, AFS has a fiduciary duty to each Fund as its manager or general
partner. It is therefore expressly understood by the Company and the Covered
Officers that any and all actions by AFS and its personnel that comply with the
provisions of a Fund's Operating Agreement or Limited Partnership Agreement, as
the case may be, and are consistent with AFS's fiduciary duty to the Fund, will
not be considered material transactions or relationships which require
disclosure or reporting under this Code of Ethics.
3. Timely and Truthful Disclosure.
In reports and documents filed with or submitted to the Securities and Exchange
Commission and other regulators by the Company, its subsidiaries or affiliates
or a Fund, and in other public communications made by the Company, its
subsidiaries or affiliates or a Fund, the Covered Officers shall make
disclosures that are full, fair, accurate, timely, and understandable. The
Covered Officers shall provide thorough and accurate financial and accounting
data for inclusion in such disclosures. The Covered Officers shall not knowingly
conceal or falsify information, misrepresent material facts, or omit material
facts necessary to avoid misleading the Company's, any of its subsidiaries' or
affiliates' or a Fund's independent public auditors or investors.
4. Legal Compliance.
In conducting the business of the Company, its subsidiaries and affiliates and
the Funds, the Covered Officers shall comply with applicable governmental laws,
rules, and regulations at all levels of government in the United States and in
any non-U.S. jurisdiction in which the Company, any of its affiliates or
subsidiaries or a Fund does business, as well as applicable rules and
regulations of self-regulatory organizations of which the Company, any of its
affiliates or subsidiaries or a Fund is a member. If the Covered Officer is
unsure whether a particular action would violate an applicable law, rule, or
regulation, he or she should seek the advice of inside counsel (if available),
and, where necessary, outside counsel before undertaking it.
D. VIOLATIONS OF ETHICAL STANDARDS.
1. Reporting Known or Suspected Violations.
The Covered Officers will promptly bring to the attention of the Company's
General Counsel or the Board of Directors any information concerning a material
violation of any of the laws, rules or regulations applicable to the Company and
the operation of its businesses, by the Company or any agent thereof, or of
violation of this Code of Ethics. The Company's General Counsel will investigate
reports of violations and the findings communicated to the Company's Board of
Directors.
2. Accountability for Violations.
If the Company's Board of Directors determines that this Code of Ethics has been
violated, either directly, by failure to report a violation, or by withholding
information related to a violation, it may discipline the offending Covered
Officer for non-compliance with penalties up to and including termination of
employment. Violations of this Code of Ethics may also constitute violations of
law and may result in criminal penalties and civil liabilities for the offending
Covered Officer and the Company, its subsidiaries, affiliates or a Fund.
36
Exhibit 31.1
CERTIFICATIONS
I, Paritosh K. Choksi, certify that:
1. I have reviewed this annual report on Form 10-K of ATEL Cash Distribution
Fund V, LP;
2. Based on my knowledge, this annual 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 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: 3/26/2004
/s/ Paritosh K. Choksi
- ---------------------------
Paritosh K. Choksi
Principal financial officer of registrant, Executive
Vice President of General Partner
37
Exhibit 31.2
CERTIFICATIONS
I, Dean L. Cash, certify that:
1. I have reviewed this annual report on Form 10-K of ATEL Cash Distribution
Fund V, LP;
2. Based on my knowledge, this annual 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 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: 3/26/2004
/s/ Dean Cash
- --------------------
Dean L. Cash
President and Chief Executive
Officer of General Partner
38
Exhibit 32.1
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 Annual report on Form 10K of ATEL Cash Distribution Fund
V, LP, (the "Partnership") for the period ended December 31, 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: 3/26/2004
/s/ Dean Cash
- -----------------
Dean L. Cash
President and Chief Executive
Officer of General Partner
39
Exhibit 32.2
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 Annual report on Form 10K of ATEL Cash Distribution Fund
V, LP, (the "Partnership") for the period ended December 31, 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, Paritosh K. Choksi, Chief Financial 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: 3/26/2004
/s/ Paritosh K. Choksi
- ------------------------
Paritosh K. Choksi
Executive Vice President of General
Partner, Principal financial officer of registrant
40