SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 5, 2005
---------------
ATEL Capital Equipment Fund IX, LLC
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 000-50210 94-3375584
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
600 California Street, 6th Floor, San Francisco, California 94108-2733
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 989-8800
--------------
N/A
-------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 2.02 Results of Operation and Financial Condition
The registrant is currently assessing the need to restate financial
statements for the years ended December 31, 2004 and 2003 and the first two
fiscal quarters of 2005, as described in more detail under Item 4.02 below,
which is incorporated herein by reference.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On October 5, 2005, the registrant's manager determined that the methods
used to accumulate and amortize the initial direct costs ("IDCs") incurred in
acquiring its portfolio of leases were not in accordance with generally accepted
accounting principles ("GAAP"). The registrant's manager is in the process of
analyzing the potential impact of changing the methods used to accumulate and
amortize the IDC's incurred. The registrant's manager, including the officers of
the manager acting as the registrant's audit committee, have discussed the
matters in this report and will continue to discuss this matter with its
registered public accounting firm. Accordingly, the registrant's financial
statements for the years ended December 31, 2004 and 2003, and the first two
fiscal quarters of 2005 should no longer be relied upon.
If the registrant deems any resulting difference in previously reported
information to be material to its financial statements, the registrant will
prepare and file an amended annual report on Form 10-K with restated audited
financial statements and amended Management Discussion and Analysis for the
years ended December 31, 2004 and 2003, with footnote disclosure on the
cumulative changes to prior years, as well as amended quarterly reports on Form
10-Q for the first two fiscal quarters of 2005. The registrant anticipates that
it will complete its analysis and file any required amended reports within 45
days from the date of this report.
The registrant has historically calculated its amortization of IDCs over a
period of 60 months which it estimated to approximate the average of the lease
terms in its portfolio of equipment lease investments. Statement of Financial
Accounting Standards No. 13 - "Accounting for Leases" requires that the IDCs
incurred in connection with each lease be determined and amortized on a lease by
lease basis, with respect to operating leases, and using an effective interest
rate method, with respect to direct financing leases. The registrant has
previously determined that the impact of changing the method used to amortize
the IDC's was less than .12% of total assets and .15% of members' equity for any
one year; and results in a minimum decrease in net income of approximately
$6,000 and a maximum decrease in net income of approximately $115,000 for any
one year. The above calculations indicating the change in method of amortizing
the IDC costs exclude the impact of changes in the cost accumulated if any, as
discussed below.
In addition to the change in amortization methodology, the registrant's
manager is reviewing and analyzing its procedures, methods and documentation for
calculating those costs which may appropriately be characterized, capitalized
and amortized as IDCs, and those which must instead be recognized as expenses
for the periods in which they are incurred, and its methods for allocating IDCs
and expenses incurred by the manager and its affiliates in connection with
portfolio acquisition activities. If any amounts previously characterized as
IDCs are instead recharacterized as expenses, it would result in a reduction in
net income (or increase in net loss) during the period the recharacterized
expense was incurred, and a corresponding increase in net income (or reduction
in net loss) during any subsequent period during which the expense had
previously been amortized.In other words, any change in the characterization of
certain expenditures as expenses rather than IDCs to be capitalized will result
in a shift in the timing of the registrant's recognition of the impact of the
cost incurred on its net income or loss. If the registrant determines that any
recharacterization of costs as IDCs or expenses or any reallocation of such
costs would result in a material change to its previously reported financial
statements it will adjust the financial statements accordingly.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: October 11, 2005
ATEL Cash Distribution Fund IX, LLC
By ATEL Financial Services, LLC,
Manager of Registrant
By: /s/ Paritosh K, Choksi
--------------------------------
Paritosh K. Choksi, Executive Vice
President, Chief Financial Officer and
Chief Operating Officer