##### Table of Contents

---

Form 10-QSB

UNITED STATES

SECURITIES AND
EXCHANGE COMMISSION

Washington, D.C. 20549



|x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
|- | ----------------------------------------------------------------------------------------



| | For the quarterly period ended September 30, 2005
| | -------------------------------------------------



| ̈ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
|- | -----------------------------------------------------------------------------------------



| | For the transition period from              to
| | ----------------------------------------------

Commission File number 000-28368

ATEL Cash Distribution Fund VI, L.P.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                       
|-------------------------------------------------------------- |  | --------------------------------------
|California                                                     |  | 94-3207229                            
|(State or other jurisdiction of Incorporation or organization) |  | (I. R. S. Employer Identification No.)

600 California Street, 6th Floor, San Francisco, California 94108-2733

(Address of principal executive offices)

Registrants telephone number, including area code (415) 989-8800

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 ̈No 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 issuers revenues for the most recent fiscal year: $5,068,771.

The number of Limited Partnership Units outstanding as of September 30, 2005 was 12,490,076.

DOCUMENTS INCORPORATED BY
REFERENCE

None



---



---

##### Table of Contents

ATEL CASH DISTRIBUTION FUND VI, L.P.

Index



|         |  |                                                                                                                                         |  |   
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------- |  | --
|         |  |                                                                                                                                        
|Part I.  |  | Financial Information                                                                                                                   |  | 3 
|         |  |                                                                                                                                        
|Item 1.  |  | Financial Statements (Unaudited)                                                                                                        |  | 3 
|         |  |                                                                                                                                        
|         |  | Balance Sheets, September 30, 2005                                                                                                      |  | 3 
|         |  |                                                                                                                                        
|         |  | Statements of Operations for the three and nine month periods ended September 30, 2005 and 2004.                                        |  | 4 
|         |  |                                                                                                                                        
|         |  | Statements of Changes in Partners Capital for the year ended December 31, 2004 and for the nine month period ended September 30, 2005. |  | 5 
|         |  |                                                                                                                                        
|         |  | Statements of Cash Flows for the three and nine month periods ended September 30, 2005 and 2004.                                        |  | 6 
|         |  |                                                                                                                                        
|         |  | Notes to the Financial Statements                                                                                                       |  | 7 
|         |  |                                                                                                                                        
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                   |  | 16
|         |  |                                                                                                                                        
|Item 3.  |  | Controls and Procedures                                                                                                                 |  | 18
|         |  |                                                                                                                                        
|Part II. |  | Other Information                                                                                                                       |  | 19
|         |  |                                                                                                                                        
|Item 1.  |  | Legal Proceedings                                                                                                                       |  | 19
|         |  |                                                                                                                                        
|Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                             |  | 19
|         |  |                                                                                                                                        
|Item 3.  |  | Defaults Upon Senior Securities                                                                                                         |  | 19
|         |  |                                                                                                                                        
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                                                     |  | 19
|         |  |                                                                                                                                        
|Item 5.  |  | Other Information                                                                                                                       |  | 19
|         |  |                                                                                                                                        
|Item 6.  |  | Exhibits                                                                                                                                |  | 19



Page 2 of 24



---

##### Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited).

ATEL CASH DISTRIBUTION FUND VI, L.P.

BALANCE SHEET

SEPTEMBER 30, 2005

(Unaudited)



|                                                                        |  |   |           
|----------------------------------------------------------------------- |  | - | ----------
|ASSETS                                                                  |  |   |           
|Cash and cash equivalents                                               |  | $ | 1,405,314 
|Accounts receivable, net of allowance for doubtful accounts of $248,699 |  |   | 346,091   
|Prepaid expenses                                                        |  |   | 231,133   
|Investments in equipment and leases, net                                |  |   | 12,192,544
|                                                                        |  |   |           
|Total assets                                                            |  | $ | 14,175,082
|                                                                        |  |   |           
|LIABILITIES AND PARTNERS CAPITAL                                       |  |   |           
|Non-recourse debt                                                       |  | $ | 201,901   
|Accounts payable and accruals:                                          |  |   |           
|General Partner                                                         |  |   | 97,506    
|Lessees and other                                                       |  |   | 304,552   
|Accrued interest payable                                                |  |   | 1,408     
|Unearned operating lease income                                         |  |   | 36,854    
|                                                                        |  |   |           
|Total liabilities                                                       |  |   | 642,221   
|Partners capital:                                                      |  |   |           
|General Partner                                                         |  |   |          
|Limited Partners                                                        |  |   | 13,532,861
|                                                                        |  |   |           
|Total Partners capital                                                 |  |   | 13,532,861
|                                                                        |  |   |           
|Total liabilities and Partners capital                                 |  | $ | 14,175,082
|                                                                        |  |   |           





See accompanying notes.



Page 3 of 24



---

##### Table of Contents

ATEL CASH DISTRIBUTION FUND VI, L.P.

STATEMENTS OF OPERATIONS

THREE AND NINE MONTH PERIODS ENDED

SEPTEMBER 30, 2005 AND 2004

(Unaudited)



|                                                           |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|---------------------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------------------ | - | ---------- | ---- |  | ---- | ---------- |  | - | ---------- | -
|                                                           |  | Three Months EndedSeptember 30, |            |   | Nine Months EndedSeptember 30, |  
|                                                           |  | 2005                            |            |   | 2004                           |   |            | 2005 |  | 2004 |           
|Revenues:                                                  |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|Leasing activities:                                        |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|Operating leases                                           |  | $                               | 802,478    |   |                                | $ | 951,597    |      |  | $    | 2,415,557  |  | $ | 3,324,957  |  
|Direct financing leases                                    |  |                                 | 6,456      |   |                                |   | 294,620    |      |  |      | 106,350    |  |   | 921,307    |  
|Gain (loss) on sales of assets                             |  |                                 | 196,707    |   |                                |   | (181,344   | )    |  |      | 95,351     |  |   | (431,889   | )
|Interest income                                            |  |                                 | 11,417     |   |                                |   | 5,747      |      |  |      | 42,723     |  |   | 11,944     |  
|Other                                                      |  |                                 | 39,249     |   |                                |   | 126,809    |      |  |      | 77,775     |  |   | 226,969    |  
|                                                           |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|                                                           |  |                                 | 1,056,307  |   |                                |   | 1,197,429  |      |  |      | 2,737,756  |  |   | 4,053,288  |  
|Expenses:                                                  |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|Depreciation of operating lease assets                     |  |                                 | 409,001    |   |                                |   | 369,689    |      |  |      | 1,189,997  |  |   | 1,858,088  |  
|Cost reimbursements to General Partner                     |  |                                 | 137,156    |   |                                |   | 165,719    |      |  |      | 381,548    |  |   | 414,429    |  
|Impairment losses                                          |  |                                 |           |   |                                |   |           |      |  |      |           |  |   | 1,238,137  |  
|Interest expense                                           |  |                                 | 4,366      |   |                                |   | 6,484      |      |  |      | 14,348     |  |   | 41,609     |  
|Other management fees                                      |  |                                 | 31,256     |   |                                |   | 34,860     |      |  |      | 103,644    |  |   | 135,452    |  
|Railcar maintenance                                        |  |                                 | 118,838    |   |                                |   | 91,334     |      |  |      | 283,061    |  |   | 296,308    |  
|Equipment and incentive management fees to General Partner |  |                                 | 70,095     |   |                                |   | 132,065    |      |  |      | 126,905    |  |   | 212,798    |  
|Outside services                                           |  |                                 | 21,904     |   |                                |   | 25,530     |      |  |      | 51,998     |  |   | 40,875     |  
|Professional fees                                          |  |                                 | 22,046     |   |                                |   | 6,683      |      |  |      | 57,954     |  |   | 63,527     |  
|Provision for (reversal of) doubtful accounts              |  |                                 | (8,050     | ) |                                |   | 28,000     |      |  |      | 60,950     |  |   | 30,076     |  
|Taxes on income and franchise fees                         |  |                                 | 390        |   |                                |   |           |      |  |      | 55,828     |  |   | 22,390     |  
|Other                                                      |  |                                 | 45,623     |   |                                |   | 71,348     |      |  |      | 115,894    |  |   | 155,646    |  
|                                                           |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|                                                           |  |                                 | 852,625    |   |                                |   | 931,712    |      |  |      | 2,442,127  |  |   | 4,509,335  |  
|                                                           |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|Net income (loss)                                          |  | $                               | 203,682    |   |                                | $ | 265,717    |      |  | $    | 295,629    |  | $ | (456,047   | )
|                                                           |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|Net income (loss):                                         |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|General Partner                                            |  | $                               | 12,755     |   |                                | $ | 28,138     |      |  | $    | 65,190     |  | $ | 33,993     |  
|Limited Partners                                           |  |                                 | 190,927    |   |                                |   | 237,579    |      |  |      | 230,439    |  |   | (490,040   | )
|                                                           |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|                                                           |  | $                               | 203,682    |   |                                | $ | 265,717    |      |  | $    | 295,629    |  | $ | (456,047   | )
|                                                           |  |                                 |            |   |                                |   |            |      |  |      |            |  |   |            |  
|Net income (loss) per Limited Partnership unit             |  | $                               | 0.02       |   |                                | $ | 0.02       |      |  | $    | 0.02       |  | $ | (0.04      | )
|Weighted average number of units outstanding               |  |                                 | 12,490,076 |   |                                |   | 12,490,076 |      |  |      | 12,490,076 |  |   | 12,490,076 |  



See accompanying notes.



Page 4 of 24



---

##### Table of Contents

ATEL CASH DISTRIBUTION FUND VI, L.P.

STATEMENTS OF CHANGES IN PARTNERS CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2004

AND FOR THE NINE MONTH PERIOD

ENDED SEPTEMBER 30, 2005

(Unaudited)



|                                                    |  |                      |  |        |            |   |                |   |         |       |  |   |            |  
|--------------------------------------------------- |  | -------------------- |  | ------ | ---------- | - | -------------- | - | ------- | ----- |  | - | ---------- | -
|                                                    |  | LimitedPartnersUnits |  | Amount |            |   | GeneralPartner |   |         | Total | 
|Balance December 31, 2003                           |  | 12,490,076           |  | $      | 23,655,674 |   |                | $ |        |       |  | $ | 23,655,674 |  
|Distributions to Limited Partners ($0.275 per Unit) |  |                     |  |        | (3,435,269 | ) |                |   |         |       |  |   | (3,435,269 | )
|Distributions to General Partner                    |  |                     |  |        |           |   |                |   | (33,993 | )     |  |   | (33,993    | )
|Net income (loss)                                   |  |                     |  |        | (672,945   | ) |                |   | 33,993  |       |  |   | (638,952   | )
|                                                    |  |                      |  |        |            |   |                |   |         |       |  |   |            |  
|Balance December 31, 2004                           |  | 12,490,076           |  |        | 19,547,460 |   |                |   |        |       |  |   | 19,547,460 |  
|Distributions to Limited Partners ($0.50) per Unit  |  |                     |  |        | (6,245,038 | ) |                |   |        |       |  |   | (6,245,038 | )
|Distributions to General Partner                    |  |                     |  |        |           |   |                |   | (65,190 | )     |  |   | (65,190    | )
|Net income (loss)                                   |  |                     |  |        | 230,439    |   |                |   | 65,190  |       |  |   | 295,629    |  
|                                                    |  |                      |  |        |            |   |                |   |         |       |  |   |            |  
|Balance September 30, 2005                          |  | 12,490,076           |  | $      | 13,532,861 |   |                | $ |        |       |  | $ | 13,532,861 |  
|                                                    |  |                      |  |        |            |   |                |   |         |       |  |   |            |  







See accompanying notes.



Page 5 of 24



---

##### Table of Contents

ATEL CASH DISTRIBUTION FUND VI, L.P.

STATEMENTS OF CASH FLOWS

NINE AND THREE MONTH PERIODS ENDED

SEPTEMBER 30, 2005 AND 2004

(Unaudited)



|                                                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|--------------------------------------------------------------------------------------- |  | -------------------------------- | ---------- | - | ------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                                                        |  | Three Months Ended September 30, |            |   | Nine Months Ended September 30, |  
|                                                                                        |  | 2005                             |            |   | 2004                            |   |            | 2005 |  |   | 2004       |  
|Operating activities:                                                                   |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss)                                                                       |  | $                                | 203,682    |   |                                 | $ | 265,717    |      |  | $ | 295,629    |   |  | $ | (456,047   | )
|Adjustment to reconcile net income (loss) to net cash provided by operating activities: |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Impairment losses                                                                       |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   | 1,238,137  |  
|Depreciation of operating lease assets                                                  |  |                                  | 409,001    |   |                                 |   | 369,689    |      |  |   | 1,189,997  |   |  |   | 1,858,088  |  
|Provision for (recovery of) doubtful accounts                                           |  |                                  | (8,050     | ) |                                 |   | 28,000     |      |  |   | 60,950     |   |  |   | 30,076     |  
|(Gain) loss on sales of lease assets                                                    |  |                                  | (196,707   | ) |                                 |   | 181,344    |      |  |   | (95,351    | ) |  |   | 431,890    |  
|Changes in operating assets and liabilities:                                            |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Accounts receivable                                                                     |  |                                  | 24,960     |   |                                 |   | (3,192     | )    |  |   | 188,972    |   |  |   | 163,409    |  
|Prepaid expenses                                                                        |  |                                  | (51,458    | ) |                                 |   |           |      |  |   | (231,134   | ) |  |   |           |  
|Accounts payable and accruals, General Partner                                          |  |                                  | 28,255     |   |                                 |   | (1,696     | )    |  |   | (612,028   | ) |  |   | (97,639    | )
|Accounts payable and accruals, lessees and other                                        |  |                                  | (45,224    | ) |                                 |   | 24,904     |      |  |   | 304,552    |   |  |   | (269,526   | )
|Accrued interest payable                                                                |  |                                  | (141       | ) |                                 |   | 45         |      |  |   | (414       | ) |  |   | (856       | )
|Unearned operating lease income                                                         |  |                                  | (9,099     | ) |                                 |   | 12,454     |      |  |   | (45,549    | ) |  |   | (653       | )
|                                                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Net cash provided by operating activities                                               |  |                                  | 355,219    |   |                                 |   | 877,265    |      |  |   | 1,055,624  |   |  |   | 2,896,879  |  
|                                                                                        |  |                                  |            |  
|Investing activities:                                                                   |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Reduction of net investment in direct financing leases                                  |  |                                  | 40,470     |   |                                 |   | 3,213,448  |      |  |   | 255,933    |   |  |   | 3,399,108  |  
|Proceeds from sales of lease assets                                                     |  |                                  | 499,941    |   |                                 |   | 203,748    |      |  |   | 698,742    |   |  |   | 1,007,177  |  
|                                                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Cash provided by investing activities                                                   |  |                                  | 540,411    |   |                                 |   | 3,417,196  |      |  |   | 954,675    |   |  |   | 4,406,285  |  
|                                                                                        |  |                                  |            |  
|Financing activities:                                                                   |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Distributions to Limited Partners                                                       |  |                                  | (1,249,008 | ) |                                 |   | (2,810,269 | )    |  |   | (6,245,038 | ) |  |   | (3,435,269 | )
|Distributions to General Partner                                                        |  |                                  | (12,755    | ) |                                 |   | (28,138    | )    |  |   | (65,190    | ) |  |   | (33,993    | )
|Repayments of non-recourse debt                                                         |  |                                  | (20,184    | ) |                                 |   | (27,542    | )    |  |   | (59,308    | ) |  |   | (522,807   | )
|                                                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Cash used in financing activities                                                       |  |                                  | (1,281,947 | ) |                                 |   | (2,865,949 | )    |  |   | (6,369,536 | ) |  |   | (3,992,069 | )
|                                                                                        |  |                                  |            |  
|Net increase (decrease) in cash and cash equivalents                                    |  |                                  | (386,317   | ) |                                 |   | 1,428,512  |      |  |   | (4,359,237 | ) |  |   | 3,311,095  |  
|Cash and cash equivalents at beginning of period                                        |  |                                  | 1,791,631  |   |                                 |   | 3,547,546  |      |  |   | 5,764,551  |   |  |   | 1,664,963  |  
|                                                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Cash and cash equivalents at end of period                                              |  | $                                | 1,405,314  |   |                                 | $ | 4,976,058  |      |  | $ | 1,405,314  |   |  | $ | 4,976,058  |  
|                                                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|                                                                                        |  |                                  |            |  
|Supplemental disclosures of cash flow information:                                      |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Cash paid during the period for interest                                                |  | $                                | 4,366      |   |                                 | $ | 6,484      |      |  | $ | 14,348     |   |  | $ | 41,609     |  



See accompanying notes.



Page 6 of 24



---

##### Table of Contents

ATEL CASH DISTRIBUTION FUND VI, L.P.

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2005

(Unaudited)

1. Organization and partnership matters:

ATEL
Cash Distribution Fund VI, L.P. (the Partnership) was formed under the laws of the state of California on May 17, 1996 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, 2017.

Upon the sale of the minimum amount of Units of Limited Partnership interest (Units) (120,000
Units) ($1,200,000) and the receipt of the proceeds thereof on January 7, 1997, 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.

The Partnerships business consists of leasing various types of equipment. As of September 30, 2005, the original terms of the leases ranged from nine months to ten years.

Pursuant to the Limited Partnership Agreement, AFS receives compensation and reimbursements for services rendered on behalf of the Partnership. AFS is required to
maintain in the Partnership reasonable cash reserves for working capital, the repurchase of Units and contingencies.

The Partnerships principal
objectives are to invest in a diversified portfolio of equipment that will (i) preserve, protect and return the Partnerships invested capital; (ii) generate regular 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, which ended December 31, 2004 and (iii) provide additional distributions
following the Reinvestment Period and until all equipment has been sold. The Partnership is governed by its Limited Partnership Agreement.

The Partnership
is in its liquidation phase and is making distributions.

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying unaudited financial
statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with instructions to Form 10-QSB and Article 10 of Regulation S-X. The unaudited interim
financial statements reflect all adjustments which are, in the opinion of the General Partner , necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal
recurring nature. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that effect reported amounts in the financial statements and accompanying notes. Therefore, actual results could
differ from those estimates. Operating results for the nine months ended September 30, 2005 are not necessarily indicative of the results for the year ending December 31, 2005. Certain prior year amounts have been reclassified to conform
to the current year presentation.

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 and expected future cash flows used for impairment analysis purposes and determination of provisions for doubtful accounts.



Page 7 of 24



---

##### Table of Contents

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 established based on historical charge offs and collection experience and are usually determined by specifically identified lessees and invoiced amounts. Accounts receivable are charged off on specific identification by AFS. Amounts
recovered previously written-off are recorded as other income in the period received.

Equipment on operating leases and related revenue recognition:

Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related
leases to the equipments estimated residual values at the end of the leases.

Operating lease revenue is recognized on a straight-line basis over the
term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally be from 36 to 120 months. The difference
between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet.

Direct financing leases and
related revenue recognition:

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 (no revenue recognized) based on specifically identified lessees. Such leases are only returned to an accrual status based on a case by case review by AFS. Direct financing leases are charged off on specific identification by AFS.

Unearned operating lease income:

The Partnership
records prepayments on operating leases as a liability, unearned operating lease income. The liability is recorded when the prepayments are received and recognized as Operating lease revenue ratably over the period to which the prepayments relate.

Income taxes:

Pursuant to the provisions of
Section 701 of the Internal Revenue Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current income and franchise taxes for only those states which levy taxes on partnerships.



Page 8 of 24



---

##### Table of Contents

Per unit data:

Net
income (loss) and distributions per unit are based upon the weighted average number of units outstanding during the period.

Asset valuation:

Recorded values of the Partnership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
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 assets and its carrying value on the measurement date.

Credit risk:

Financial instruments that potentially subject the Partnership to concentrations of credit risk include cash and cash equivalents, direct finance lease
receivables and accounts receivable. 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.

Segment reporting:

The Partnership adopted the provisions of SFAS No. 131 Disclosures about Segments of
an Enterprise and Related Information. SFAS No. 131 establishes annual and interim standards for operating segments of a Partnership. It also requires entity-wide disclosures about the products and services an entity provides, the
material countries in which it holds assets and reports revenue, and its major customers. The Partnership is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly the
Partnership operates in one reportable operating segment in the United States.

The Partnerships chief operating decision makers are the General
Partner s Chief Operating Officer and its Chief Executive Officer. The Partnership believes that its equipment leasing business operates as one reportable segment because: a) the Partnership measures profit and loss at the equipment portfolio
level as a whole; b) the chief operating decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Partnership does not maintain discrete financial information on any
specific segment other than its equipment financing operations; d) the Partnership has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Partnership has not chosen to organize
its business around geographic areas.

The primary geographic regions in which the Partnership seeks leasing opportunities are the North America and
Europe. The table below summarizes geographic information relating to the sources, by nation, of the Partnerships operating revenues for the nine month period ended September 30, 2005:



|                |  |            |  
|--------------- |  | ---------- | -
|Geographic area |  | Percentage |  
|United States   |  | 96         | %
|United Kingdom  |  | 4          | %



Page 9 of 24



---

##### Table of Contents

Recent accounting pronouncements:

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards No. 157, Fair Value Measurements (FAS 157). This standard clarifies the definition
of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007 and interim periods within those fiscal years. As of December 31, 2005, the Fund does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures
will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the statement of operations for a fiscal period.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FAS 109, Accounting for Income
Taxes (FIN 48), to create a single model to address accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet
before being recognized in the financial statements. FIN 48 also provides guidance on deregulation, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years
beginning after December 15, 2006. The Company will adopt FIN 48 as of January 1, 2007, as required. The cumulative effect of adopting FIN 48 will be recorded in partners capital and other accounts as applicable. The Company has not
determined the effect, if any, the adoption of FIN 48 will have on the Companys financial position and results of operations.

In May 2005, the FASB
issued SFAS No. 154, Accounting Changes and Error Corrections which replaces Accounting Principles Board Opinion (APB) No. 20, Accounting Changes, and SFAS No. 3, Reporting Changes in Interim
Financial Statements. SFAS 154 changes the accounting for and reporting of a change in accounting principle. SFAS 154 requires retrospective application to prior periods financial statements of voluntary changes in accounting principle
and changes required by new accounting standards when the standard does not include specific transition provisions, unless it is impracticable to do so. SFAS 154 is effective for accounting changes and corrections of errors in fiscal years beginning
after December 15, 2005 and will only affect the Partnerships financial statements upon adoption of a voluntary change in accounting principle by the Partnership.



Page 10 of 24



---

##### Table of Contents

3. Investment in equipment and leases:

The Partnerships Investments in equipment and leases consists of the following:



|                                                                                                          |  |                         |            |                                                                         |   |            |                                            |  |   |                          |   |  |   |           
|--------------------------------------------------------------------------------------------------------- |  | ----------------------- | ---------- | ----------------------------------------------------------------------- | - | ---------- | ------------------------------------------ |  | - | ------------------------ | - |  | - | ----------
|                                                                                                          |  | BalanceDecember 31,2004 |            | Depreciation/AmortizationExpense orAmortizationof DirectFinancingLeases |   |            | Reclassfications& Additions/(Dispositions) |  |   | BalanceSeptember 30,2005
|Net investment in operating leases                                                                        |  | $                       | 13,516,446 |                                                                         | $ | (1,170,553 | )                                          |  | $ | (728,624                 | ) |  | $ | 11,617,269
|Net investment in direct financing leases                                                                 |  |                         | 588,214    |                                                                         |   | (255,933   | )                                          |  |   |                         |   |  |   | 332,281   
|Assets held for sale or lease, net of accumulated depreciation of $854,764 in 2005 and $2,879,419 in 2004 |  |                         | 137,204    |                                                                         |   | (19,444    | )                                          |  |   | 125,234                  |   |  |   | 242,994   
|                                                                                                          |  |                         |            |                                                                         |   |            |                                            |  |   |                          |   |  |   |           
|                                                                                                          |  | $                       | 14,241,864 |                                                                         | $ | (1,445,930 | )                                          |  | $ | (603,390                 | ) |  | $ | 12,192,544

Management periodically reviews the carrying values of its assets on leases and assets held for lease or sale. As
a result of the review during the nine month period ended September 30, 2004, management determined that the value of certain refuse and other vehicles 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 could command. Management recorded provisions for the declines in value of those assets
in the amounts of $1,238,137. No assets were identified as impaired during managements review for the nine month period ended September 30, 2005.

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 property held for lease or sale consist of the
following for the nine and three month periods ended September 30:



|                                       |  |                                 |         |                                |   |         |  |      |           |  |   |          
|-------------------------------------- |  | ------------------------------- | ------- | ------------------------------ | - | ------- |  | ---- | --------- |  | - | ---------
|                                       |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30,
|                                       |  | 2005                            |         | 2004                           |   | 2005    |  | 2004
|Depreciation of operating lease assets |  | $                               | 409,001 |                                | $ | 369,689 |  | $    | 1,189,997 |  | $ | 1,858,088
|Impairment losses                      |  |                                 |        |                                |   |        |  |      |          |  |   | 1,238,137
|                                       |  |                                 |         |                                |   |         |  |      |           |  |   |          
|                                       |  | $                               | 409,001 |                                | $ | 369,689 |  | $    | 1,189,997 |  | $ | 3,096,225
|                                       |  |                                 |         |                                |   |         |  |      |           |  |   |          



Page 11 of 24



---

##### Table of Contents

Net investment in operating leases:

Property on operating leases consists of the following:



|                              |  |                         |             |   |                                                                    |   |            |                                            |  |   |                          |   |  |   |             |  
|----------------------------- |  | ----------------------- | ----------- | - | ------------------------------------------------------------------ | - | ---------- | ------------------------------------------ |  | - | ------------------------ | - |  | - | ----------- | -
|                              |  | BalanceDecember 31,2004 |             |   | Depreciation /AmortizationExpense orAmortizationof OperatingLeases |   |            | Reclassifications& Additions/Dispositions) |  |   | BalanceSeptember 30,2005 |  
|Transportation                |  | $                       | 34,466,300  |   |                                                                    | $ |           |                                            |  | $ | (2,917,121               | ) |  | $ | 31,549,179  |  
|Construction                  |  |                         | 88,647      |   |                                                                    |   |           |                                            |  |   |                         |   |  |   | 88,647      |  
|Manufacturing                 |  |                         |            |   |                                                                    |   |           |                                            |  |   |                         |   |  |   |            |  
|Materials handling            |  |                         | 4,610,321   |   |                                                                    |   |           |                                            |  |   | (157,947                 | ) |  |   | 4,452,374   |  
|Office automation             |  |                         | 156,860     |   |                                                                    |   |           |                                            |  |   | (588,115                 | ) |  |   | (431,255    | )
|Other                         |  |                         | 366,203     |   |                                                                    |   |           |                                            |  |   | (10,365                  | ) |  |   | 355,838     |  
|                              |  |                         |             |   |                                                                    |   |            |                                            |  |   |                          |   |  |   |             |  
|                              |  |                         | 39,688,331  |   |                                                                    |   |           |                                            |  |   | (3,673,548               | ) |  |   | 36,014,783  |  
|Less accumulated depreciation |  |                         | (26,171,885 | ) |                                                                    | $ | (1,170,553 | )                                          |  |   | 2,944,924                |   |  |   | (24,397,514 | )
|                              |  |                         |             |   |                                                                    |   |            |                                            |  |   |                          |   |  |   |             |  
|                              |  | $                       | 13,516,446  |   |                                                                    | $ | (1,170,553 | )                                          |  | $ | (728,624                 | ) |  | $ | 11,617,269  |  
|                              |  |                         |             |   |                                                                    |   |            |                                            |  |   |                          |   |  |   |             |  



Page 12 of 24



---

##### Table of Contents

The Partnership utilizes a straight line depreciation method for equipment in all of the categories currently in its
portfolio of lease transactions. The useful lives for investment in leases by category are as follows:



|                     |  |            
|-------------------- |  | -----------
|Equipment category   |  | Useful Life
|                     | 
|Materials Handling   |  | 7-10       
|Transportation, Rail |  | 7-10       
|Construction         |  | 5-7        
|Office automation    |  | 7-10       

Net investment in direct financing leases:

Investment in direct financing leases consist of various transportation, manufacturing and medical equipment. The following lists the components of the Partnerships investment in direct financing leases as of
September 30, 2005:



|                                                             |  |   |         |  
|------------------------------------------------------------ |  | - | ------- | -
|Total minimum lease payments receivable                      |  | $ | 222,210 |  
|Estimated residual values of leases equipment (unguaranteed) |  |   | 151,421 |  
|                                                             |  |   |         |  
|Investment in direct financing leases                        |  |   | 373,631 |  
|Less unearned income                                         |  |   | (41,350 | )
|                                                             |  |   |         |  
|Net investment in direct financing leases                    |  | $ | 332,281 |  
|                                                             |  |   |         |  

At September 30, 2005, the aggregate amounts of future minimum lease payments under operating and direct
financing leases are as follows:



|                                      |  |  |  |                 |           |                       |   |         |  |   |          
|------------------------------------- |  |  |  | --------------- | --------- | --------------------- | - | ------- |  | - | ---------
|                                      |  |  |  | OperatingLeases |           | DirectFinancingLeases |   | Total  
|Three months ending December 31, 2005 |  |  |  | $               | 503,110   |                       | $ | 24,690  |  | $ | 527,800  
|Year ending December 31, 2006         |  |  |  |                 | 1,856,470 |                       |   | 98,760  |  |   | 1,955,230
|2007                                  |  |  |  |                 | 1,082,240 |                       |   | 98,760  |  |   | 1,181,000
|2008                                  |  |  |  |                 | 376,555   |                       |   |        |  |   | 376,555  
|                                      |  |  |  |                 |           |                       |   |         |  |   |          
|                                      |  |  |  | $               | 3,818,375 |                       | $ | 222,210 |  | $ | 4,040,585
|                                      |  |  |  |                 |           |                       |   |         |  |   |          



Page 13 of 24



---

##### Table of Contents

All of the equipment on leases was acquired in 1996, 1997, 1998, 1999, 2001 and 2002.

4. Non-recourse debt:

At September 30, 2005, non-recourse debt
consists of a note payable to a financial institution. The note is due in monthly payments. Interest on the note is at a fixed rate of 8.37%. The note is secured by an assignment of lease payments and pledges of assets. At September 30, 2005,
the carrying value of the pledged assets is $232,442. The note matures in 2007.

Future minimum payments of non-recourse debt are as follows:



|                                     |  |           |         |          |   |        |  |   |        
|------------------------------------ |  | --------- | ------- | -------- | - | ------ |  | - | -------
|                                     |  | Principal |         | Interest |   | Total 
|Three months ending December 31,2005 |  | $         | 20,609  |          | $ | 4,082  |  | $ | 24,691 
|Year ending December 31, 2006        |  |           | 86,868  |          |   | 11,892 |  |   | 98,760 
|Year ending December 31, 2007        |  |           | 94,424  |          |   | 4,336  |  |   | 98,760 
|                                     |  |           |         |          |   |        |  |   |        
|Totals                               |  | $         | 201,901 |          | $ | 20,310 |  | $ | 222,211
|                                     |  |           |         |          |   |        |  |   |        

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 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
disposition of equipment. Reimbursable costs incurred by AFS are allocated to the Partnership based upon actual 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 AFS 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.

Cost
reimbursements to the General Partner are based on costs incurred by AFS in performing administrative services for the Partnership that are allocated to each Partnership that AFS manages based on certain criteria such as existing or new leases,
number of investors or equity depending on the type of cost incurred.

Incentive management fees are computed as 3.25% of distributions of cash from
operations, as defined in the Limited Partnership Agreement and 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.

During the nine and three month periods ended September 30, 2005 and 2004, AFS and/or affiliates
earned fees, commissions and reimbursements, pursuant to the Limited Partnership Agreement as follows:



|                                               |  |                                 |         |                                |   |         |  |      |         |  |   |        
|---------------------------------------------- |  | ------------------------------- | ------- | ------------------------------ | - | ------- |  | ---- | ------- |  | - | -------
|                                               |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30,
|                                               |  | 2005                            |         | 2004                           |   | 2005    |  | 2004
|Costs reimbursements to AFS                    |  | $                               | 137,156 |                                | $ | 165,719 |  | $    | 381,548 |  | $ | 414,429
|Equipment and incentive management fees to AFS |  |                                 | 70,095  |                                |   | 132,065 |  |      | 126,905 |  |   | 212,798
|                                               |  |                                 |         |                                |   |         |  |      |         |  |   |        
|                                               |  | $                               | 207,251 |                                | $ | 297,784 |  | $    | 508,453 |  | $ | 627,227
|                                               |  |                                 |         |                                |   |         |  |      |         |  |   |        



Page 14 of 24



---

##### Table of Contents

The General Partner makes certain payments to third parties on behalf of the Partnership for convenience purposes. During
the nine month periods ended September 30, 2005 and 2004, the General Partner made such payments of $212,573 and $202,313, respectively. During the three month periods ended September 30, 2005 and 2004, the General Partner made such
payments of $110,533 and $88,847, respectively.

6. Partners Capital:

As of September 30, 2005, 12,490,076 Units were issued and outstanding. The Partnership is authorized to issue up to 12,500,000 Units, including the 50 Units issued to the Initial Limited Partners, as defined.

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. The Limited Partnership Agreement allows the Partnership to make an allocation of income to AFS in order to maintain the capital account of AFS at zero. In accordance with the terms of the Limited Partnership Agreement,
additional allocations of income were made to AFS in 2005 and 2004. The amounts allocated were determined so as to bring AFSs ending capital account balance to zero at the end of each year.

As defined in the Limited Partnership Agreement, available Cash from Operations and Cash from Sales and Refinancing are to be distributed as follows:

First, 95.75% of Distributions of Cash from Operations to the Limited Partners, 1% of Distributions of Cash from Operations to AFS and 3.25% to an
affiliate of AFS as an Incentive Management Fee, 99% of Distributions of Cash from Sales or Refinancing to the Limited Partners and 1% of Cash from Sales or Refinancing to AFS.

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, an affiliate of AFS will receive as an Incentive Management Fee, 4% of remaining Cash from Sales or Refinancing.

Fourth, the balance to the Limited Partners.

Distributions to the Limited Partners were as follows:



|                                             |  |                                 |            |                                |   |            |  |      |            |  |   |           
|-------------------------------------------- |  | ------------------------------- | ---------- | ------------------------------ | - | ---------- |  | ---- | ---------- |  | - | ----------
|                                             |  | Three Months EndedSeptember 30, |            | Nine Months EndedSeptember 30,
|                                             |  | 2005                            |            | 2004                           |   | 2005       |  | 2004
|Distributions                                |  | $                               | 1,249,008  |                                | $ | 2,810,269  |  | $    | 6,245,038  |  | $ | 3,435,269 
|Weighted average number of Units outstanding |  |                                 | 12,490,076 |                                |   | 12,490,076 |  |      | 12,490,076 |  |   | 12,490,076
|Weighted average distributions per Unit      |  | $                               | 0.10       |                                | $ | 0.23       |  | $    | 0.50       |  | $ | 0.28      

7. Guarantees:

The Partnership enters into contracts that contain a variety of indemnifications. The Partnerships maximum exposure under these arrangements is unknown. However, the Partnership has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.

In the normal course of business, the Partnership enters into contracts of various types, including
lease contracts, contracts for the sale or purchase of lease assets, management contracts, loan agreements, credit lines and other debt facilities. It is prevalent industry practice for most contracts of any significant value to include provisions
that each of the contracting partiesin addition to assuming liability for breaches of the representations, warranties, and covenants that are part of the underlying contractual obligationsalso assume an obligation to indemnify and hold
the other contracting party harmless for such breaches, for harm caused by such partys gross negligence and willful misconduct, including, in certain instances, certain costs and expenses arising from the contract. The General Partner has
substantial experience in managing similar leasing programs subject to similar contractual commitments in similar transactions, and the losses and claims arising from these commitments have been insignificant, if any. Generally, to the extent these
contracts are performed in the ordinary course of business under the reasonable business judgment of the General Partner, no liability



Page 15 of 24



---

##### Table of Contents

will arise as a result of these provisions. The General Partner has no reason to believe that the facts and circumstances relating to the Partnerships
contractual commitments differ from those it has entered into on behalf of the prior programs it has managed. The General Partner knows of no facts or circumstances that would make the Partnerships contractual commitments outside standard
mutual covenants applicable to commercial transactions between businesses. Accordingly, the Partnership believes that these indemnification obligations are made in the ordinary course of business as part of standard commercial and industry practice,
and that any potential liability under the Partnerships similar commitments is remote. Should any such indemnification obligation become payable, the Partnership would separately record and/or disclose such liability in accordance with GAAP.

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Statements
contained in this Item 2, Managements Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Form 10-QSB, 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-QSB. 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-QSB or to reflect the occurrence of unanticipated events,
other than as required by law.

Capital Resources and Liquidity

In 2004 and 2005, the Partnerships primary source of cash was operating lease rents and proceeds from sale of lease assets.

The Partnership is in its liquidation phase therefore the primary source of cash flows for the Partnership going forward is expected to be from rents from operating leases and proceeds from sales of equipment. The liquidity of the
Partnership will vary in the future, increasing to the extent cash flows from leases and proceeds from asset sales exceed expenses, and decreasing as distributions are made to the limited partners and to the extent expenses exceed cash flows from
leases and proceeds from sales of assets.

As another source of liquidity, the Partnership has contractual obligations with a diversified group of lessees
for fixed lease terms at fixed rental amounts. As the initial lease terms expire, the Partnership will re-lease or sell the equipment. The future liquidity beyond the contractual minimum rentals will depend on AFSs success in re-leasing or
selling the equipment as it comes off lease.

The Partnership currently has available adequate reserves to meet contingencies, but in the event those
reserves were found to be inadequate, the Partnership would likely be in a position to borrow against its current portfolio to meet such requirements. The General Partner envisions no such requirements for operating purposes.

As of September 30, 2005, the Partnership had cumulatively borrowed $ 65,164,309 on a non-recourse basis with a remaining unpaid balance of $201,901 . Non-recourse
debt payments match the rental income received from the underlying leases and therefore do not represent cash outflows for the Partnership. Borrowings are generally non-recourse to the Partnership, that is, the only recourse of the lender upon a
default by the lessee on the underlying lease will be to the equipment or corresponding lease acquired with the loan proceeds. The General Partner does not anticipate any future non-recourse borrowings. Refer to Note 4 in the notes to the financial
statements in Item 1.

If inflation in the general economy becomes significant, it may affect the Partnership inasmuch as the residual (resale) values
and rates on re-leases of the Partnerships leased assets may increase as the costs of similar assets increase. However, the Partnerships revenues from existing leases would not increase; as such rates are generally fixed for the terms of
the leases without adjustment for inflation.

If interest rates increase significantly, the lease rates that the Partnership can obtain on future leases
will be expected to increase as the cost of capital is a significant factor in the pricing of lease financing. Leases already in place, for the most part, would not be affected by changes in interest rates.

Cash Flows

The three months ended September 30, 2005
versus the three months ended September 30, 2004

In 2005 and 2004, the Partnerships primary source of cash from operations was the rents
from operating leases activities. However, cash flow from operations decreased by $522,046 from $877,265 in 2004, to $355,219 in 2005. The decrease was primarily due to decreases in operating lease and



Page 16 of 24



---

##### Table of Contents

direct financing lease of $437,283 to $808,934 in 2005 compared to $1,246,217 in 2004. This decrease was partially offset by an increase in a gain on sales
of assets of $378,051 to a gain of $196,707 in 2005 from a loss of $181,344 in 2004.

In 2005, cash provided from investing activities decreased by
$2,876,785 to $540,411 in 2005 from $3,417,196 in 2004. The decrease was primarily due to a decrease in net investments in direct financing leases as a result of the Company being in liquidations stage and not financing any new leases. Reduction of
investment in direct financing leased decreased $3,172,978 to $40,470 in 2005 from $3,213,448 in 2004.

In 2005, the Partnership had no new sources of cash
from financing activities. Cash used in financing activities decreased by $1,584,003 to $1,281,946 in 2005 from $2,865,949 in 2004. Cash used in financing activities decreased primarily as a result of a decrease in distributions to Limited Partners
of $1,561,261 to $1,249,008 in 2005 from $2,810,269 in 2004. This decrease in accrued distributions payable was added to by a decrease in repayments of non-recourse debt of $7,359 to $20,183 in 2005 from $27,542 in 2004.

The nine months ended September 30, 2005 versus the nine months ended September 30, 2004

In 2005 and 2004, the Partnerships primary source of cash from operations was the rents from operating leases activities. However, cash flow from operations decreased by $1,841,255 from $2,896,879 in 2004, to
$1,055,624 in 2005. The decrease was primarily due to decreases in operating lease and direct financing lease of $1,724,357 to $2,521,907 in 2005 compared to $4,246,264 in 2004. This decrease was partially offset by an increase in a gain on sales of
assets of $527,240 to a gain of $95,351 in 2005 from a loss of $431,889 in 2004.

In 2005, cash provided from investing activities decreased by $3,451,610
to $954,675 in 2005 from $4,406,285 in 2004. The decrease was primarily due to a decrease in net investments in direct financing leases as a result of the Company being in liquidations stage and not financing any new leases. Reduction in investment
in direct financing leased decreased $3,143,175 to $255,933 in 2005 from $3,399,108 in 2004.

In 2005, the Partnership had no new sources of cash from
financing activities. Cash used in financing activities increased by $2,377,467 to $6,369,536 in 2005 from $3,992,069 in 2004. Cash used in financing activities increased primarily as a result of an increase in distributions to Limited Partners of
$2,809,769 to $6,245,038 in 2005 from $3,435,269 in 2004. This increase in accrued distributions payable was partially offset by a decrease in repayments of non-recourse debt of $463,499 to $59,308 in 2005 from $522,807 in 2004.

Results of operations

The three months ended
September 30, 2005 versus the three months ended September 30, 2004

In 2005, revenues decreased by $141,122 to $1,056,307 in 2005 from
$1,197,429 in 2004. This decrease in revenues was primarily due to decrease in operating and financing leases of $437,283 to $808,934 in 2005 from $1,246,217 in 2004. This decrease in operating and direct financing leases was partially offset by an
increase in gain on sales of assets. Gain on sales of assets increased by $378,051 to a gain of $196,707 in 2005 from a loss of $181,344 in 2004. The primary sources of the Partnerships revenues are generated from rents from operating leases.
The Partnership is in the liquidation phase of its life cycle. As leases mature, the assets were returned to inventory, and subsequently, most of the assets have been sold. This reduces the amount of equipment actually on lease and producing
revenue. This trend of decreasing operating and direct financing leases revenues is expected to continue in future periods. Gains or losses on sales of lease assets are not expected to be consistent between periods.

Operating results decreased by $62,035 from a net income of $265,717 in 2004 to net income of $203,682 in 2005. This decrease in operating results was primarily a result
of decreases in total revenue and increases in certain operating expenses including: (1) Depreciation of operating lease assets, (2) Railcar maintenance, and (3) Professional fees. In 2005, these expenses increased by $82,179 from
$467,706 in 2004 to $549,885 in 2005. In 2005, cost reimbursements to General Partner, equipment and incentive management fees to General Partner, and provision for (recovery of) doubtful accounts decreased by $126,583 to $199,201 in 2005 from
$325,784 in 2004, which is consistent with a fund in the liquidation phase of its lifecycle.

Management periodically reviews the carrying values of its
assets on leases and assets held for lease or sale. As a result of the review, management determined that the fair value of assets on lease to one particular lessee had declined in value to the extent that carrying value had become impaired. In
2005, the Partnership did not recognize any impairment losses. Impairment losses are not expected to be consistent between periods.

The nine months
ended September 30, 2005 versus the nine months ended September 30, 2004

In 2005, revenues decreased by $1,315,532 to $2,737,756 in 2005 from
$4,053,288 in 2004. This decrease in revenues was primarily due to decrease in operating and financing leases of $1,724,357 to $2,521,907 in 2005 from $4,246,264 in 2004. This decrease in operating and direct financing leases was partially offset by
an increase in gain on sales of assets. Gain on sales of assets increased by $527,240 to a gain of $95,351 in 2005 from a loss of $431,889 in 2004. The primary sources of the Partnerships revenues are generated from rents from operating
leases. The Partnership is in the liquidation phase of its life cycle. As leases mature, the assets were returned to inventory, and subsequently, most of the assets



Page 17 of 24



---

##### Table of Contents

have been sold. This reduces the amount of equipment actually on lease and producing revenue. This trend of decreasing operating and direct financing leases
revenues is expected to continue in future periods. Gains or losses on sales of lease assets are not expected to be consistent between periods.

Although
total revenues decreased from 2004 to 2005, operating results increased during the same period. Operating results increased by $751,676 from a net loss of $456,047 in 2004 to net income of $295,629 in 2005. This increase in operating results was
primarily a result of decreases in certain operating expenses, which more than offset the revenue decrease discussed above. In 2005, depreciation of operating lease assets, cost reimbursements to General Partner, interest expense, other management
fees, equipment and incentive management fees to General Partner and other decreased by $885,686 to $1,932,336 in 2005 from $2,818,022 in 2004, which is consistent with a fund in the liquidation phase of its lifecycle. Additionally during 2005, the
provision for impairment losses decreased by $1,238,137 from $1,238,137 in 2004 to a nominal amount in 2005.

Management periodically reviews the carrying
values of its assets on leases and assets held for lease or sale. As a result of the review, management determined that the fair value of assets on lease to one particular lessee had declined in value to the extent that carrying value had become
impaired. In 2005, the Partnership did not recognize any impairment losses while in 2004, there was an impairment loss of $1,238,137 on write down of the residual values of assets on lease to this one particular lessee. Impairment losses are not
expected to be consistent between periods.

Item 3. Controls and procedures.

Evaluation of disclosure controls and procedures

The Partnerships General Partners Chief Executive Officer, and Executive Vice President and Chief Financial and Operating Officer, evaluated the effectiveness
of the Partnerships disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and Executive Vice President and Chief
Financial and Operating Officer concluded that at September 30, 2005 certain material weaknesses existed in the Partnerships internal control over financial reporting.

The Partnership does not control the financial reporting process, and is dependent on the General Partner, who is responsible for providing the Partnership with financial statements in accordance with generally
accepted accounting principles. The General Partners disclosure controls and procedures over the: a) application of generally accepted accounting principles for leasing transactions (specifically, timely identification and recording of
impairment in leased assets, accumulating and capitalizing costs for initiating leases (IDC), and properly amortizing costs associated with the initiation of a lease); b) allocation of costs incurred by the General Partner on behalf of
the Partnership; c) process of identifying and estimating liabilities in the correct period; and d) financial statement close process, including evaluating the relative significance of misstatements, and preparation of financial statements and
related disclosures were determined to be ineffective and constitute material weaknesses in internal control over financial reporting.

Changes in
internal controls

The General Partner has reviewed the material weaknesses believes that the following corrective actions taken as a whole will
address the material weaknesses in its disclosure controls and procedures described above. These corrective actions are as follows:

With regard to the
timely identification and recording of impairment of leased assets, the General Partner has strengthened its quarterly impairment analysis through additional management review of the analysis.

With regard to IDC, the accounting guidance has been reviewed, and a standard cost model (the Model) has been developed that includes quarterly reviews from
management. Information from the model drives the rates to be capitalized on a lease by lease basis. IDC is amortized over the term of the lease based on a straight-line basis for operating leases and on the effective interest method for direct
finance leases.

With regard to the allocations of costs and expenses incurred by the General Partner, the allocation process has been reviewed and the
costs and expenses have been properly allocated in accordance with the Limited Partnership Operating Agreement.

With regard to identifying and estimating
liabilities in the correct period the General Partner has performed a detailed review to identify and record the liabilities, in the correct period. A standardized quarterly review process has been implemented to ensure the identification and
estimation of the liabilities.

The General Partner has taken the following steps to mitigate the weakness regarding its financial statement close process:
a Chief Accounting Officer and an SEC reporting manager have been hired; the controller position has been split into two separate roles to ensure proper management of the General Partner and the managed Funds accounting operations; and a
financial reporting supervisor has been added to the team. Controls and job functions are being redesigned to increase the documentation of processes and transparency of procedures going forward.



Page 18 of 24



---

##### Table of Contents

PART II. OTHER INFORMATION

Item 1. 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 financial position or results of operations. No material legal proceedings are currently pending
against the Partnership or against any of its assets.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Inapplicable.

Item 3. Defaults Upon Senior Securities.

Inapplicable.

Item 4. Submission Of Matters To A Vote Of Security Holders.

Inapplicable.

Item 5. Other Information.

Inapplicable.

Item 6. Exhibits.

Documents filed as a part of this report



| | 1. | Financial Statement Schedules
| | -- | -----------------------------



| |  | All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or
are inapplicable, and therefore have been omitted.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Other Exhibits
| | -- | --------------



31.1

Certification of Paritosh K. Choksi31.2

Certification of Dean L. Cash32.1

Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash32.2

Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi




Page 19 of 24



---

##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: June 1, 2007

ATEL CASH DISTRIBUTION FUND VI, L.P.

(Registrant)



By:

ATEL Financial Services LLCGeneral Partner of Registrant




|    |  |                                                         
|--- |  | --------------------------------------------------------
|    | 
|By: |  | /s/ Dean L. Cash                                        
|    |  |                                                         
|    |  | Dean L. Cash                                            
|    |  | President and Chief Executive Officer of General Partner
|    | 
|By: |  | /s/ Paritosh K. Choksi                                  
|    |  |                                                         
|    |  | Paritosh K. Choksi                                      
|    |  | Principal Financial Officer of Registrant               



Page 20 of 24