**Form 10-QSB**

 

**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C.  20549**

 

| **ý** | ** ** | **Quarterly Report  Pursuant to Section 13 or 15(d)**                                                                                                    |
|------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** ** | **of the Securities  Exchange Act of 1934.**                                                                                                                  |
|       |       |                                                                                                                                                          |
| ** ** | ** ** | **For the quarterly period  ended June 30, 2005**                                                                                                        |
|       |       |                                                                                                                                                          |
| **o**      | ** ** | **Transition Report  Pursuant to Section 13 or 15(d)**                                                                                                   |
| ** ** | ** ** | **of the Securities  Exchange Act of 1934.**                                                                                                                  |
|       |       |                                                                                                                                                          |
| ** ** | ** ** | **For the transition  period from          to          ** |

 

**CommissionFile number 000-23842**

 

**ATEL CashDistribution Fund V, L.P.**

(Exact name of registrant as specified in its charter)

 
| **California**                                                   | ** ** | **94-3165807**                           |
|------------------------------------------------------------------|------------|------------------------------------------|
| (State  or other jurisdiction of  Incorporation or organization) |       | (I.  R. S. Employer  Identification No.) |

 

 

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

(Address of principal executive offices)

 

Registrant’s telephone number, including areacode **(415) 989-8800**

 

Securities registered pursuant to section 12(b) ofthe Act:  **None**

 

Securities registered pursuant to section 12(g) ofthe Act:  **LimitedPartnership Units**

 

Indicateby a check mark whether the registrant (1) has filed all reports requiredto 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 filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.  Yes ý No o

 

Indicateby check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2of the Act). Yes o No ý

 

State the issuer’s revenues for the most recentfiscal year: $3,364,344.

 

The number of Limited Partnership Units outstandingas of June 30, 2005 was 12,471,600.

 

**DOCUMENTSINCORPORATED BY REFERENCE**

 

None

 

 

----

 

**ATEL CASH DISTRIBUTION FUND V, L.P.**

 

**Index**

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

 

2

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**Part I.  FINANCIALINFORMATION**

 

**Item 1.  Financial Statements (unaudited).**

 

**ATEL CASH DISTRIBUTION FUND V, L.P.**

 

**BALANCESHEET**

 

**JUNE 30, 2005(Unaudited)**

 
| **ASSETS**                                                               | ** ** | ** ** | ** ** |
|--------------------------------------------------------------------------|------------|------------|------------|
| ** **                                                               | ** ** | ** ** | ** ** |
| Cash and cash equivalents                                                |       | $          | 1,302,491  |   |
|                                                                     |       |       |       |
| Accounts receivable, net of allowance for  doubtful accounts of $139,318 |       | 175,751    |       |
|                                                                     |       |       |       |
| Investments in equipment and leases, net                                 |       | 12,005,507 |       |
|                                                                     |       |       |       |
| Total assets                                                             |       | $          | 13,483,749 |   |
|                                                                     |       |       |       |
| **LIABILITIES  AND PARTNERS’ CAPITAL**                              | ** ** | ** ** | ** ** |
| ** **                                                               | ** ** | ** ** | ** ** |
| Non-recourse debt                                                        |       | $          | 3,765,508  |   |
|                                                                     |       |       |       |
| Accounts payable and accruals:                                           |       |       |       |
| General Partner                                                          |       | 55,752     |       |
| Other                                                                    |       | 494,268    |       |
|                                                                     |       |       |       |
| Accrued interest payable                                                 |       | 16,005     |       |
|                                                                     |       |       |       |
| Unearned operating lease income                                          |       | 34,365     |       |
| Total liabilities                                                        |       | 4,365,898  |       |
|                                                                     |       |       |       |
| Partners’ capital                                                   |       |       |       |
| General Partner                                                          |       | 199,083    |       |
| Limited Partners                                                         |       | 8,918,768  |       |
| Total Partners’ capital                                             |       | 9,117,851  |       |
|                                                                     |       |       |       |
| Total liabilities and Partners’ capital                             |       | $          | 13,483,749 |   |

 

See accompanying notes.

 

3

----

 

**ATEL CASH DISTRIBUTION FUND V, L.P.**

 

**STATEMENTS OF OPERATIONS**

 

**SIX AND THREE MONTH PERIODS ENDEDJUNE 30, 2005 AND 2004(Unaudited)**

 
| ** **                                                  | ** ** | **Six Months  Ended June 30,** | ** ** | **Three Months  Ended June 30,** | ** ** |
|-------------------------------------------------------------|------------|-------------------------------------|------------|---------------------------------------|------------|
| ** **                                                  | ** ** | **2005**                            | ** ** | **2004**                              | ** ** | **2005** | ** ** | **2004** | ** ** |
| Revenues:                                                   |       |                                |       |                                  |       |   |   |   |   |
| Leasing activities:                                         |       |                                |       |                                  |       |   |   |   |   |
| Operating leases                                            |       | $                                   | 1,409,106  |                                  | $          | 1,374,884 |   | $ | 702,164 |   | $ | 749,774 |   |
| Direct financing leases                                     |       | —                              |       | 80,368                                |       | — |   | 33,887 |   |
| Gain on sales of assets                                     |       | 136,622                             |       | 3,736                                 |       | 67,403 |   | (5,089 | ) |
| Interest income                                             |       | 17,226                              |       | 6,497                                 |       | 6,026 |   | 2,509 |   |
| Other                                                       |       | 6,001                               |       | 1,019                                 |       | 4,759 |   | 103 |   |
|                                                        |       | 1,568,955                           |       | 1,466,504                             |       | 780,352 |   | 781,184 |   |
|                                                        |       |                                |       |                                  |       |   |   |   |   |
| Expenses:                                                   |       |                                |       |                                  |       |   |   |   |   |
| Depreciation of operating lease assets                      |       | 574,760                             |       | 604,616                               |       | 295,751 |   | 298,535 |   |
| Cost reimbursements to General Partner                      |       | 252,698                             |       | 278,773                               |       | 132,935 |   | 118,633 |   |
| Remarketing fees                                            |       | —                              |       | 250,000                               |       | — |   | 250,000 |   |
| Other management fees                                       |       | 31,065                              |       | 85,465                                |       | 6,355 |   | 37,185 |   |
| Railcar maintenance                                         |       | 104,860                             |       | 134,393                               |       | 66,749 |   | 90,589 |   |
| Equipment and incentive management fees to General  Partner |       | 52,563                              |       | 62,912                                |       | 24,980 |   | 31,269 |   |
| Professional fees                                           |       | 144,524                             |       | 40,958                                |       | 70,292 |   | 13,104 |   |
| Interest expense                                            |       | 100,117                             |       | 36,671                                |       | 48,891 |   | 14,806 |   |
| Provision for doubtful accounts                             |       | 29,288                              |       | 3,393                                 |       | 29,288 |   | 5,393 |   |
| Amortization of initial direct costs                        |       | 2,573                               |       | 2,573                                 |       | 1,287 |   | 1,287 |   |
| Other                                                       |       | 95,977                              |       | 69,193                                |       | 59,519 |   | 37,575 |   |
|                                                        |       | 1,388,425                           |       | 1,568,947                             |       | 736,047 |   | 898,376 |   |
| Net income (loss)                                           |       | $                                   | 180,530    |                                  | $          | (102,443 | ) | $ | 44,305 |   | $ | (117,192 | ) |
|                                                        |       |                                |       |                                  |       |   |   |   |   |
| Net income (loss):                                          |       |                                |       |                                  |       |   |   |   |   |
| General Partner                                             |       | $                                   | 1,805      |                                  | $          | (1,024 | ) | $ | 443 |   | $ | (1,172 | ) |
| Limited Partners                                            |       | 178,725                             |       | (101,419                              | )          | 43,862 |   | (116,020 | ) |
|                                                        |       | $                                   | 180,530    |                                  | $          | (102,443 | ) | $ | 44,305 |   | $ | (117,192 | ) |
|                                                        |       |                                |       |                                  |       |   |   |   |   |
| Net income (loss) per Limited Partnership  unit             |       | $                                   | 0.01       |                                  | $          | (0.01 | ) | $ | — |   | $ | (0.01 | ) |
| Weighted average number of units  outstanding               |       | 12,471,600                          |       | 12,471,600                            |       | 12,471,600 |   | 12,471,600 |   |

 

See accompanying notes.

 

4

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**ATEL CASH DISTRIBUTION FUND V, L.P.**

 

**STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL**

 

**FOR THE YEAR ENDED DECEMBER 31, 2004AND FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2005(Unaudited)**

 
| ** **                                          | ** ** | **Limited Partners** | ** ** | **General** | ** ** | ** **  | ** ** |
|-----------------------------------------------------|------------|----------------------|------------|-------------|------------|-------------|------------|
| ** **                                          | ** ** | **Units**            | ** ** | **Amount**  | ** ** | **Partner** | ** ** | **Total** | ** ** |
|                                                |       |                 |       |        |       |        |       |   |   |
| Balance December 31, 2003                      |       | 12,471,600           |       | $           | 14,317,260 |        | $          | 193,742 |   | $ | 14,511,002 |   |
| Distributions to Limited Partners ($0.28  per Unit) |       | —               |       | (3,433,577  | )          | —      |       | (3,433,577 | ) |
| Net income                                          |       | —               |       | 350,080     |       | 3,536       |       | 353,616 |   |
| Balance December 31, 2004                      |       | 12,471,600           |       | 11,233,763  |       | 197,278     |       | 11,431,041 |   |
| Distributions to Limited Partners ($0.20  per Unit) |       | —               |       | (2,493,720  | )          | —      |       | (2,493,720 | ) |
| Net income                                          |       | —               |       | 178,725     |       | 1,805       |       | 180,530 |   |
| Balance June 30, 2005                          |       | 12,471,600           |       | $           | 8,918,768  |        | $          | 199,083 |   | $ | 9,117,851 |   |

 

See accompanying notes.

 

5

----

 

**ATEL CASH DISTRIBUTION FUND V, L.P.**

 

**STATEMENTS OF CASH FLOWS**

 

**SIX AND THREE MONTH PERIODS ENDEDJUNE 30, 2005 AND 2004(Unaudited)**

 
| ** **                                                                           | ** ** | **Six Months  Ended June 30,** | ** ** | **Three Months  Ended June 30,** | ** ** |
|--------------------------------------------------------------------------------------|------------|-------------------------------------|------------|---------------------------------------|------------|
| ** **                                                                           | ** ** | **2005**                            | ** ** | **2004**                              | ** ** | **2005** | ** ** | **2004** | ** ** |
| **Operating activities:**                                                            |       |                                |       |                                  |       |   |   |   |   |
| Net income (loss)                                                                    |       | $                                   | 180,530    |                                  | $          | (102,443 | ) | $ | 44,305 |   | $ | (117,192 | ) |
| Adjustment to reconcile net income (loss)  to cash provided by operating activities: |       |                                |       |                                  |       |   |   |   |   |
| Depreciation of operating lease assets                                               |       | 574,760                             |       | 604,616                               |       | 295,751 |   | 298,535 |   |
| Amortization of initial direct costs                                                 |       | 2,573                               |       | 2,573                                 |       | 1,287 |   | 1,287 |   |
| Provision for doubtful accounts                                                      |       | 29,288                              |       | 3,393                                 |       | 29,288 |   | 5,393 |   |
| (Gain) loss on sales of lease assets                                                 |       | (136,622                            | )          | (3,736                                | )          | (67,403 | ) | 5,089 |   |
| Changes in operating assets and  liabilities:                                        |       |                                |       |                                  |       |   |   |   |   |
| Accounts receivable, net                                                             |       | 93,608                              |       | 169,691                               |       | (8,323 | ) | 32,895 |   |
| Accounts payable, General Partner                                                    |       | (38,245                             | )          | (100,134                              | )          | (37,253 | ) | 31 |   |
| Accounts payable, other                                                              |       | (131,587                            | )          | 279,981                               |       | 34,423 |   | 368,187 |   |
| Accrued interest payable                                                             |       | (1,572                              | )          | 8,902                                 |       | (818 | ) | 9,493 |   |
| Unearned operating lease income                                                      |       | 33,476                              |       | 36,296                                |       | (3,349 | ) | 32,506 |   |
| **Net cash provided by operating activities**                                        |       | 606,209                             |       | 899,139                               |       | 287,908 |   | 636,224 |   |
|                                                                                 |       |                                |       |                                  |       |   |   |   |   |
| **Investing activities:**                                                            |       |                                |       |                                  |       |   |   |   |   |
| Reduction of net investment in direct  financing leases                              |       | —                              |       | 295,031                               |       | — |   | 154,013 |   |
| Proceeds from sales of lease assets                                                  |       | 343,772                             |       | 254,450                               |       | 178,131 |   | 212,988 |   |
| Investment in equipment on operating lease                                           |       | (234,495                            | )          | (742,281                              | )          | (198,166 | ) | (742,281 | ) |
| **Net cash provided by (used in) investing  activities**                             |       | 109,277                             |       | (192,800                              | )          | (20,035 | ) | (375,280 | ) |
|                                                                                 |       |                                |       |                                  |       |   |   |   |   |
| **Financing activities:**                                                            |       |                                |       |                                  |       |   |   |   |   |
| Proceeds of non-recourse debt                                                        |       | —                              |       | 4,180,667                             |       | — |   | 4,180,667 |   |
| Distributions to Limited Partners                                                    |       | (2,493,720                          | )          | (1,875,000                            | )          | — |   | — |   |
| Repayments of non-recourse debt                                                      |       | (341,201                            | )          | (210,530                              | )          | (178,132 | ) | (92,336 | ) |
| **Net cash (used in) provided by financing  activities**                             |       | (2,834,921                          | )          | 2,095,137                             |       | (178,132 | ) | 4,088,331 |   |
|                                                                                 |       |                                |       |                                  |       |   |   |   |   |
| **Net (decrease) increase in cash and cash  equivalents**                            |       | (2,119,435                          | )          | 2,801,476                             |       | 89,741 |   | 4,349,275 |   |
|                                                                                 |       |                                |       |                                  |       |   |   |   |   |
| **Cash and cash equivalents at beginning of  period**                                |       | 3,421,926                           |       | 2,440,803                             |       | 1,212,750 |   | 893,004 |   |
|                                                                                 |       |                                |       |                                  |       |   |   |   |   |
| **Cash and cash equivalents at end of period**                                       |       | $                                   | 1,302,491  |                                  | $          | 5,242,279 |   | $ | 1,302,491 |   | $ | 5,242,279 |   |
|                                                                                 |       |                                |       |                                  |       |   |   |   |   |
| **Supplemental disclosures of cash flow  information:**                              |       |                                |       |                                  |       |   |   |   |   |
| Cash paid during the period for interest                                             |       | $                                   | 101,689    |                                  | $          | 27,769 |   | $ | 49,709 |   | $ | 5,313 |   |

 

See accompanying notes.

 

6

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**ATEL CASH DISTRIBUTION FUND V, L.P.**

 

**NOTES TO FINANCIAL STATEMENTS**

 

**JUNE 30, 2005(Unaudited)**

 

**1.  Organization and partnership matters:**

 

ATEL Cash Distribution FundV, L.P. (the Partnership) was formed under the laws of the state of Californiaon September 23, 1992, for the purpose of acquiring equipment to engage inequipment leasing and sales activities. The Partnership may continue until December 31, 2013.

 

Upon the sale of the minimumamount of Units of Limited Partnership interest (120,000 Units) of $1,200,000and the receipt of the proceeds thereof on March 19, 1993, the Partnershipcommenced operations.

 

The Partnership does notmake a provision for income taxes since all income and losses will be allocatedto the Partners for inclusion in their individual tax returns.

 

ATEL Financial Services, LLC(AFS), an affiliated entity, acts as the General Partner of the Partnership.

 

The Partnership is in thefinal stage of its liquidation and is making distributions on an annual basis.

 

**2.  Summary of significant accounting policies:**

 

Basis of presentation:

 

The accompanying unaudited financialstatements have been prepared in accordance with accounting principlesgenerally accepted in the United States (GAAP) for interim financialinformation and with instructions to Form 10-QSB and Article 10  of Regulation S-X.   The unaudited interim financial statementsreflect all adjustments which are, in the opinion of the General Partner,necessary to a fair statement of financial position and results of operationsfor the interim periods presented.   Allsuch adjustments are of a normal recurring nature.  The preparation of financial statements inaccordance with GAAP requires management to make estimates and assumptions thateffect reported amounts in the financial statements and accompanyingnotes.   Therefore, actual results coulddiffer from those estimates.   Operatingresults for the six and three months ended June 30,  2005 are not necessarily indicative of the results for the year ending December 31,2005.

 

Certain prior year balanceshave been reclassified to conform to the current period presentation.

 

These unaudited interim financialstatements should   be read in conjunctionwith the financial statements and notes thereto contained in the report on Form 10-KSB for the year ended December  31,  2004, filed with the Securities and Exchange Commission.

 

Equipment on operatingleases:

 

Equipment on operatingleases is stated at cost.  Depreciationis being provided by use of the straight-line method over the terms of therelated leases to the equipment’s estimated residual values at the end of theleases.

 

7

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Asset Valuation:

 

Recorded values of thePartnership’s asset portfolio are periodically reviewed for impairment inaccordance with Statement of Financial Accounting Standards (SFAS) No. 144,  Accounting for the Impairment or Disposalof Long-Lived Assets.   An impairment lossis measured and recognized only if the estimated undiscounted future cash flowsof the asset are less than their net book value.   The estimated undiscounted future cash flowsare the sum of the estimated residual value of the asset at the end of theasset’s expected holding period and estimates of undiscounted futurerents.  The residual value assumes, amongother things, that the asset is utilized normally in an open, unrestricted andstable market.  Short-term fluctuationsin the market place are disregarded and it is assumed that there is nonecessity either to dispose of a significant number of the assets, if held inquantity, simultaneously or to dispose of the asset quickly.   Impairment is measured as the difference betweenthe fair value  (as determined by the discountedestimated future cash flows) of the assets and its carrying value on themeasurement date.

 

Revenue recognition:

 

Operating leases

Operating lease revenue isrecognized on a straight-line basis over the term of the underlyingleases.  The initial lease terms willvary as to the type of equipment subject to the leases, the needs of thelessees and the terms to be negotiated, but initial leases are generallyexpected to be for 36 to 84 months. Income from step rent provisions,escalation clauses, capital improvement funding provisions or other leaseconcessions in lease contracts, and lease rates subject to variation based onchanges in market indexes or interest rates are recognized on a straight linebasis.

 

Direct finance leases

Income from direct financinglease transactions is reported using the financing method of accounting,  in which the Partnership’s investment in the leasedproperty is reported as a receivable from the lessee to be recovered through futurerentals.   The income portion of eachrental payment is calculated so as to generate a constant rate of return on thenet receivable outstanding.

 

Notes receivable

Income from notes receivableis reported using the financing method of accounting.  The Partnership’s investment in notesreceivable is reported as the present value of the future note payments.  The income portion of each note payment iscalculated so as to generate a constant rate of return on the net balanceoutstanding.

 

Initial direct costs:

 

Initial direct cost ofleases are deferred and amortized over the lease term, either as an adjustmentto the yield for direct finance leases, or on a straight-line basis foroperating leases.

 

8

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Segment Reporting:

 

The Partnership adopted theprovisions of SFAS No. 131 Disclosures about Segments of an Enterprise andRelated Information. SFAS No. 131 establishes annual and interim standardsfor operating segments of a Partnership. It also requires entity-widedisclosures about the products and services an entity provides, the materialcountries in which it holds assts and reports revenue, and its major customers.The Partnership is not organized by multiple operating segments for the purposeof making operating decisions or assessing performance. Accordingly, thePartnership operates in one reportable operating segment in the United States.

 

**3.  Investment in equipment leases:**

 

The Partnership’s investmentin equipment leases consists of the following:

 
| ** **                                                                                                | ** ** | **Balance**           | ** ** | ** **    | ** ** | **Depreciation/** | ** ** | **Reclassifi-**        | ** ** | **Balance**       | ** ** |
|-----------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|---------------|------------|-------------------|------------|------------------------|------------|-------------------|------------|
| ** **                                                                                                | ** ** | **December 31,** | ** ** | ** **    | ** ** | **Amortization**  | ** ** | **cations &** | ** ** | **June 30,** | ** ** |
| ** **                                                                                                | ** ** | **2004**              | ** ** | **Additions** | ** ** | **Expense**       | ** ** | **Dispositions**       | ** ** | **2005**          | ** ** |
|                                                                                                      |       |                  |       |          |       |              |       |                   |       |              |       |
| Net investment in operating leases                                                                        |       | $                     | 12,146,968 |          | $          | 234,495           |       | $                      | (574,760   | )                 | $          | (122,683 | ) | $ | 11,684,020 |   |
| Assets held for sale or lease, net of  accumulated depreciation of $789,146 in 2005 and $306,133 in 2004. |       | 402,953               |       | —        |       | —            |       | (84,467                | )          | 318,486           |       |
| Initial direct costs, net of accumulated  amortization of $223,473 in 2005 and $220,900 in 2004.          |       | 5,574                 |       | —        |       | (2,573            | )          | —                 |       | 3,001             |       |
|                                                                                                      |       | $                     | 12,555,495 |          | $          | 234,495           |       | $                      | (577,333   | )                 | $          | (207,150 | ) | $ | 12,005,507 |   |

 

9

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Management periodicallyreviews the carrying values of its assets on leases and assets held for leaseor sale.  Impairment losses arerecorded as an addition to accumulated depreciationof the impaired assets.  No impairmentlosses have been recognized for the three and six month periods ending June 30,2005 and 2004. Depreciation expense on property subject to operating leases andassets held for lease or sale consist of the following for the six and three monthperiods ended June 30:

 
| ** **            | ** ** | **Six Months  Ended June 30,** | ** ** | **Three Months  Ended June 30,** | ** ** |
|-----------------------|------------|-------------------------------------|------------|---------------------------------------|------------|
| ** **            | ** ** | **2005**                            | ** ** | **2004**                              | ** ** | **2005** | ** ** | **2004** | ** ** |
| Depreciation  expense |       | $                                   | 574,760    |                                  | $          | 604,616 |   | $ | 295,751 |   | $ | 298,535 |   |
|                       |            |                                     |            |                                       |            |  |  |  |  |  |  |  |  |

 

*Netinvestment in operating leases:*

 

Property on operating leasesconsists of the following:

 
| ** **                    | ** ** | **Balance**           | ** ** | ** **    | ** ** | **Reclassifi-**        | ** ** | **Balance**       | ** ** |
|-------------------------------|------------|-----------------------|------------|---------------|------------|------------------------|------------|-------------------|------------|
| ** **                    | ** ** | **December 31,** | ** ** | ** **    | ** ** | **cations &** | ** ** | **June 30,** | ** ** |
| ** **                    | ** ** | **2004**              | ** ** | **Additions** | ** ** | **Dispositions**       | ** ** | **2005**          | ** ** |
| Transportation                |       | $                     | 23,848,859 |          | $          | 234,495                |       | $                 | (1,141,316 | ) | $ | 22,942,038 |   |
| Manufacturing                 |       | 1,470,000             |       | —        |       | —                 |       | 1,470,000         |       |
| Materials handling            |       | 36,024                |       | —        |       | —                 |       | 36,024            |       |
|                          |       | 25,354,883            |       | 234,495       |       | (1,141,316             | )          | 24,448,062        |       |
| Less accumulated depreciation |       | (13,207,915           | )          | (574,760      | )          | 1,018,633              |       | (12,764,042       | )          |
|                          |       | $                     | 12,146,968 |          | $          | (340,265               | )          | $                 | (122,683   | ) | $ | 11,684,020 |   |

 

At June 30, 2005, theaggregate amounts of future minimum lease payments under operating leases areas follows:

 
| Six months  ending December 31, 2005 |   | $         | 1,095,873 |   |
|-------------------------------------------|--------|-----------|-----------|--------|
| Year ending  December 31, 2006       |   | 1,923,542 |      |
| 2007                                      |   | 1,481,929 |      |
| 2008                                      |   | 1,145,899 |      |
| 2009                                      |   | 1,142,749 |      |
| 2010                                      |   | 483,698   |      |
|                                      |   | $         | 7,273,690 |   |

 

All of the property onleases was acquired in the years 1993 through 1997.

 

10

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The Partnership utilizes a straight line depreciation method forequipment in all of the categories currently in its portfolio of leasetransactions. The useful lives for investment in leases by category are asfollows:

 
| **Equipment category** | ** ** | **Useful Life** | ** ** |
|------------------------|------------|-----------------|------------|
| Manufacturing          |       | 10 – 20    |       |
| Materials Handling     |       | 7 – 10     |       |
| Transportation         |       | 7 – 10     |       |

 

**4.  Non-recourse debt:**

 

Notes payable to financialinstitutions are due in varying monthly, quarterly and semi-annual installmentsof principal and interest.  The notes aresecured by assignments of lease payments and pledges of the assets which werepurchased with the proceeds of the particular notes. Interest rates on thenotes vary from 5.048% to 7.1%.  As of June 30,2005, the carrying value of the pledged assets was approximately $3,815,128.   The notes mature from 2006 to 2010.

 

As of June 30, 2005, futureminimum payments of non-recourse debt are as follows:

 
| ** **                                | ** ** | **Principal** | ** ** | **Interest** | ** ** | **Total** | ** ** |
|-------------------------------------------|------------|---------------|------------|--------------|------------|-----------|------------|
| Six months  ending December 31, 2005 |       | $             | 415,507    |         | $          | 91,336    |       | $ | 506,843 |   |
| Year ending  December 31, 2006       |       | 705,716       |       | 152,625      |       | 858,341   |       |
| 2007                                      |       | 727,412       |       | 116,807      |       | 844,219   |       |
| 2008                                      |       | 764,994       |       | 79,226       |       | 844,220   |       |
| 2009                                      |       | 804,517       |       | 39,702       |       | 844,219   |       |
| 2010                                      |       | 347,362       |       | 4,396        |       | 351,758   |       |
|                                      |       | $             | 3,765,508  |         | $          | 484,092   |       | $ | 4,249,600 |   |

 

**5.  Related party transactions:**

 

The terms of the LimitedPartnership Agreement provide that AFS and/or affiliates are entitled toreceive certain fees for equipment acquisition, management and resale and formanagement of the Partnership.

 

The Limited PartnershipAgreement allows for the reimbursement of costs incurred by AFS in providingadministrative 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 wherebyit is entitled to receive a separate fee as compensation for such services,such as acquisition and disposition of equipment.  Reimbursable costs incurred by AFS are allocatedto the Partnership based upon an actual time incurred by employees working onPartnership business and an allocation of rent and other costs based onutilization studies.

 

11

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Eachof ATEL Leasing Corporation (“ALC”), ATEL Equipment Corporation (“AEC”), ATELInvestor Services (“AIS”) and ATEL Financial Services LLC is a wholly-owned subsidiaryof ATEL Capital Group and performs services for the Partnership.   Acquisition services are performed for thePartnership by ALC, equipment management, lease administration and assetdisposition services are performed by AEC, investor relations andcommunications services are performed by AIS and general administrativeservices for the Partnership are performed by AFS.

 

Cost reimbursements to the GeneralPartner are based on costs incurred by AFS in performing administrativeservices for the Partnership that are allocated to each Partnership that AFSmanages based on certain criteria such as existing or new leases, number ofinvestors or equity depending on the type of cost incurred. AFS believes thatthe costs reimbursed are the lower of (i) actual costs incurred on behalfof the Partnership or (ii) the amount the Partnership would be required topay independent parties for comparable administrative services in the samegeographic location.

 

Incentive management fees arecomputed as  5%  of distributions of cash from operations,  as defined in the Limited Partnership Agreement.   Equipment management fees are computed as  5% of   gross revenues from operatingleases,  as defined in the LimitedPartnership Agreement plus 2% of gross revenues from full payout leases, asdefined in the Limited Partnership Agreement.

 

During the six and three monthperiods ended June 30, 2005 and 2004, AFS and/or affiliates earned fees,commissions and reimbursements, pursuant to the Limited Partnership Agreement,as follows:

 
| ** **                                                             | ** ** | **Six Months**          | ** ** | **Three Months**        | ** ** |
|------------------------------------------------------------------------|------------|-------------------------|------------|-------------------------|------------|
| ** **                                                             | ** ** | **Ended June 30,** | ** ** | **Ended June 30,** | ** ** |
| ** **                                                             | ** ** | **2005**                | ** ** | **2004**                | ** ** | **2005** | ** ** | **2004** | ** ** |
| Costs reimbursed to General Partner                                    |       | $                       | 252,698    |                    | $          | 278,773 |   | $ | 132,935 |   | $ | 118,633 |   |
| Incentive and equipment management fees reimbursed  to General Partner |       | 52,563                  |       | 62,912                  |       | 24,980 |   | 31,269 |   |
|                                                                   |       | $                       | 305,261    |                    | $          | 341,685 |   | $ | 157,915 |   | $ | 149,902 |   |

 

The General Partner makescertain payments to third parties on behalf of the Partnership for conveniencepurposes. During the six month periods ended June 30, 2005 and 2004, theGeneral Partner made such payments of $92,667, $87,935, respectively.  During the three month periods ended June 30,2005 and 2004, the General Partner made such payments of $46,957 and $58,187, respectively.

 

**6.  Partners’ Capital:**

 

As of June 30, 2005,12,471,600 Units ($124,716,000) were issued and outstanding (in addition to theUnits issued to the Initial Limited Partners).

 

As defined in the LimitedPartnership Agreement, the Partnership’s Net Income, Net Losses, and TaxCredits are to be allocated 99% to the Limited Partners and 1% to AFS.

 

Available Cash fromOperations and Cash from Sales and Refinancing are to be distributed asfollows:

 

First, 5% of Distributionsof Cash from Operations to AFS as Incentive Management Fee.

 

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Second, the balance to the Limited Partners until the Limited Partnershave received Aggregate Distributions in an amount equal to their OriginalInvested Capital, as defined, plus a 10% per annum cumulative (compounded daily)return on their Adjusted Invested Capital.

 

Third, AFS will receive asIncentive Management Compensation, the following:

 

(A) 10% of remaining Cash from Operations and

 

(B) 15% of remaining Cash from Sales or Refinancing.

 

Fourth, the balance to theLimited Partners.

 

Distributions to the LimitedPartners were as follows:

 
| ** **                                    | ** ** | **Six Months**          | ** ** | **Three Months**        | ** ** |
|-----------------------------------------------|------------|-------------------------|------------|-------------------------|------------|
| ** **                                    | ** ** | **Ended June 30,** | ** ** | **Ended June 30,** | ** ** |
| ** **                                    | ** ** | **2005**                | ** ** | **2004**                | ** ** | **2005** | ** ** | **2004** | ** ** |
| Distributions                                 |       | $                       | 2,493,720  |                    | $          | 1,875,000 |   | $ | — |   | $ | — |   |
| Weighted average number of Units  outstanding |       | 12,471,600              |       | 12,471,600              |       | 12,471,600 |   | 12,471,600 |   |
| Weighted average distributions per Unit       |       | 0.20                    |       | 0.15                    |       | — |   | — |   |
|                                               |            |                         |            |                         |            |  |  |  |  |  |  |  |  |

 

**7. Guarantees**

 

The Partnership enters intocontracts that contain a variety of indemnifications.  The Partnership’s maximum exposure underthese arrangements is unknown.  However,the Partnership has not had prior claims or losses pursuant to these contractsand expects the risk of loss to be remote.

 

In the normal course ofbusiness, the Partnership enters into contracts of various types, includinglease contracts, contracts for the sale or purchase of lease assets, managementcontracts, loan agreements, credit lines and other debt facilities.  It is prevalent industry practice for most contracts of anysignificant 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 contractualobligations - also assume an obligation to indemnify and hold the othercontracting party harmless for such breaches, for harm caused by such party’sgross negligence and willful misconduct, including, in certain instances,certain costs and expenses arising from the contract.  The General Partner has substantialexperience in managing similar leasing programs subject to similar contractualcommitments in similar transactions, and the losses and claims arising fromthese commitments have been insignificant, if any.  Generally, to the extent these contracts areperformed in the ordinary course of business under the reasonable businessjudgment of the General Partner, no liability will arise as a result of theseprovisions.  The General Partner has noreason to believe that the facts and circumstances relating to the Partnership’scontractual commitments differ from those it has entered into on behalf of theprior programs it has managed.  TheGeneral Partner knows of no facts or circumstances that would make thePartnership’s contractual commitments outside standard mutual covenantsapplicable to commercial transactions between businesses.  Accordingly, the Partnership believes thatthese indemnification obligations are made in the ordinary course of businessas part of standard commercial and industry practice, and that any potentialliability under

 

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the Partnership’s similarcommitments is remote.  Should any such indemnification obligation becomepayable, the Partnership would separately record and/or disclose such liabilityin accordance with GAAP.

 

**Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations**

 

Statementscontained in this Item  2,  “Management’s Discussion and Analysis of FinancialCondition and Results of Operations,” and elsewhere in this Form 10-QSB,  which are not historical facts, may beforward-looking statements. Such statements are subject to risks anduncertainties that could cause actual results to differ materially form thoseprojected.   In particular, economicrecession and changes in general economic conditions, including, fluctuationsin demand for equipment, lease rates,  andinterest rates,  may result in delays in investmentand reinvestment,  delays in leasing,  re-leasing, and disposition of equipment, and reduced returns on investedcapital.  The Partnership’s performanceis subject to risks relating to lessee defaults and the creditworthiness of itslessees.  The Fund’s performance is alsosubject to risks relating to the value of its equipment at the end of itsleases, which may be affected by the condition of the equipment, technologicalobsolescence and the markets for new and used equipment at the end of lease terms.   Investors are cautioned not to attributeundue certainty to these forward-looking statements, which speak only as of thedate of this Form 10-QSB. We undertake no obligation to publiclyrelease any revisions to these forward-looking statements to reflect events orcircumstances after the date of this Form 10-QSB or to reflect theoccurrence of unanticipated events, other than as required by law.

 

**Capital Resources and Liquidity**

 

In2005, the Partnership’s primary source of cash was operating lease rents andproceeds from sale of lease assets.  In2004, the Partnership’s primary source of cash was the proceeds of a newnon-recourse note payable. The Partnership is in its liquidation phasetherefore the primary source of cash flows for the Partnership going forward isexpected to be from rents from operating leases and proceeds from sales ofequipment. The liquidity of the Partnership will vary in the future, increasingto the extent cash flows from leases and proceeds from asset sales exceedexpenses, and decreasing as distributions are made to the limited partners and tothe extent expenses exceed cash flows from leases and proceeds from sales ofassets.

 

Asanother source of liquidity, the Partnership has contractual obligations with adiversified group of lessees for fixed lease terms at fixed rental amounts.   As the initial lease terms expire,  the Partnership will re-lease or sell theequipment.  The future liquidity beyondthe contractual minimum rentals will depend on AFS’s success in re-leasing orselling the equipment as it comes off lease.

 

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

 

Asof June  30,  2005,  the Partnership had cumulatively borrowed  $62,498,578 on a non-recourse basis with a remaining unpaid balance of $3,765,508. Non-recoursedebt payments match the rental income received from the underlying leases andtherefore do not represent cash outflows for the Partnership. Borrowings aregenerally non-recourse to the Partnership, that is, the only recourse of thelender upon a default by the lessee on the underlying lease will be to theequipment or corresponding lease acquired with the loan proceeds. The GeneralPartner does not anticipate any future non-recourse borrowings.  Refer to Note 4 in the notes to the financialstatements in Item 1.

 

Ifinflation in the general economy becomes significant, it may affect thePartnership inasmuch as the residual (resale) values and rates on re-leases ofthe Partnership’s leased assets may increase as the costs of similar assetsincrease. However, the Partnership’s revenues from existing leases would notincrease; as such rates are generally fixed for the terms of the leases withoutadjustment for inflation.

 

Ifinterest rates increase significantly, the lease rates that the Partnership canobtain on future leases will be expected to increase as the cost of capital isa 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.

 

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**Cash Flows**

 

In2005 and 2004, the Partnership’s primary operating source of cash was operatinglease rents.  Operating lease revenues increasedby $34,222 for the six month period ended June 30, 2005 as compared to June 30,2004, due to month to month rent receipts and decreased by $47,610 for thethree month period ended June 30, 2005 as compared to June 30, 2004, primarilyas a result of sales of operating lease assets over the last year.

 

Sourcesof cash from investing activities in the three and six month periods in 2005 and2004 consisted mainly of proceeds from sales of lease assets.   In 2004,  there were also direct financinglease payments.  All direct financingleases expired by the end of 2004. Proceeds from the sales of lease assets arenot expected to be consistent from one period to another.  Asset sales are made as leases expire,  as purchasers can be found and as the sales canbe negotiated and completed.

 

Cashused in financing activities consisted of distributions to limited partners andrepayment of non-recourse debt for the six month period ended June  30,  2005.  During the three month period ended June  30,  2004, the Partnership borrowed an additional $4,180,667 on a non-recourse notepayable.  The Partnership entered into along- term lease renewal for certain rail car assets in the second quarter of2004.  As the Partnership is in itsliquidation phase, the Partnership borrowed on a non-recourse basis against therenewal rents in order to be able to distribute the cash to the limitedpartners in the near term rather than over a period of up to six years.  There were no similar borrowings in 2005.

 

**Results of operations**

 

Operationsresulted in a net income of $180,530 and $44,305 for the six and three month periodsended June 30, 2005.  In 2004,operations resulted in a net loss of $102,443 for the six month period and$117,192 for the three month period.  ThePartnership’s primary source of revenue is from operating leases.  Operating lease revenues in 2005 were largelyunchanged from the same periods in 2004. There are no direct financing lease revenues in 2005 since the lastdirect finance lease was terminated in 2004.

 

Operatinglease revenues have increased slightly due to month to month rent receipts but therelated depreciation expense have decreased as a result of sales of leaseassets over the last year.  The originalcost of assets on operating leases has declined from $24,704,191 at June 30,2004 to $24,448,062 at June 30, 2005.

 

Duringthe second quarter of 2004, the Partnership borrowed an additional $4,180,667on a non-recourse basis.  There were nosuch borrowings in 2005. As a result of this borrowing in 2004, interestexpense increased for both the three and six month periods in 2005 compared tothe same periods in 2004.

 

In 2004, a company that wasengaged by the Partnership to perform remarketing of certain rail car assets fileda claim against the Partnership in relation to amounts due under theremarketing contract.   The GeneralPartner believes, as a result of a cross-complaint for breach of fiduciaryduty, that the amount owed under the contract is approximately $250,000 and hasrecorded a liability in the financial statements in 2004. Legal fees have alsoincreased from 2004 to 2005 due to this claim.

 

**Item 3. Controls and procedures.**

 

**Evaluationof disclosure controls and procedures**

 

Under the supervision and with the participation of our management(ATEL Financial Services, LLC as General Partner of the registrant, includingthe chief executive officer and chief financial officer), an evaluation of theeffectiveness of the design and operation of the Partnership’s disclosurecontrols and procedures [as defined in Rules 13a-15(e) and 15d-15(e) underthe Securities Exchange Act of 1934] was performed as of June 30,2005.  Based upon this evaluation, thechief executive officer and the chief financial officer concluded that, as ofthe evaluation date, our disclosure controls and procedures were effective forthe purposes of recording, processing, summarizing, and timely reportinginformation

 

15

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required to be disclosed by us in the reports that we file under theSecurities Exchange Act of 1934; and that such information is accumulated andcommunicated to our management in order to allow timely decisions regardingrequired disclosure.

 

As disclosed in the Partnership’s annual report on Form 10-Kfor the year ended December 31, 2003, the chief executive and chieffinancial officer of the General Partner had identified certain enhancedcontrols needed to facilitate a more effective closing of the Partnership’sfinancial statements.  Specifically, the Partnership’s auditors advisedmanagement of a material weakness surrounding the financial statement closingprocess that they believe arose because ATEL’s accounting resources were notadequate to complete the closing of the books and preparation of financialstatements in a timely manner.  However, it should be noted that thefinancial statements for that period were nevertheless issued with anunqualified opinion.  Since the beginning of 2004, ATEL hired a new corporatecontroller, added two assistant controllers and additional accounting staff personnel,and has instituted new procedures or revised existing procedures to ensure thatthe Partnership’s ability to execute internal controls in accounting and reconciliationin the closing process is adequate in all respects.  In connection withmanagement’s review of the effectiveness of internal disclosure controls and proceduresof the Partnership as of June 30, 2005, including communication with itsauditors regarding the audit process, ATEL management has determined that ithas successfully taken all steps necessary to resolve any outstanding issueswith respect to its annual financial statement closing process and that itsaccounting resources are adequate to perform this process in a timely andaccurate manner.  In connection with their audit of the Partnership andrelated programs for the year ended December 31, 2004, the independentaccountants issued a no material weakness letter which indicates that nomatters were noted involving internal control and its operation that theauditor considered to be material weaknesses as defined by the Public Company AccountingOversight Board (United States).  Furthermore, all financial statementsfor the Partnership and related programs for 2004 were issued with unqualifiedopinions of the independent accountants. The General Partner will continue to review its accounting procedures andpractices to determine their effectiveness and adequacy and will take any stepsdeemed necessary in the opinion of the General Partner’s chief executive andchief financial officers to ensure the adequacy of the Partnership’s disclosureand accounting controls and procedures.

 

The General Partner’s chiefexecutive officer and chief financial officer have determined that no weaknessin financial and accounting controls and procedures had any material effect onthe accuracy and completeness of the Partnership’s financial reporting anddisclosure included in this report.

 

**Changes ininternal controls**

 

There have been no significantchanges in our internal controls or in other factors that could significantly affectour disclosure controls and procedures subsequent to the evaluation date nor werethere any significant deficiencies or material weaknesses in our internalcontrols, except as described in the prior paragraphs.

 

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**PART II. OTHER INFORMATION**

 

**Item1.  Legal Proceedings.**

 

In the ordinary course of conductingbusiness, there may be certain claims, suits, and complaints filed against thePartnership.  In the opinion ofmanagement, the outcome of such matters, if any, will not have a materialimpact on the Partnership’s financial position or results of operations.  No material legal proceedings are currentlypending against the Partnership or against any of its assets except as notedbelow.

 

Railroad TechnologyCorporation (“RTC”) was engaged by the Partnership to perform remarketing ofcertain rail car assets.  The disputeinvolves the amount that is due under the contract and how that amount is to bedetermined.  RTC has filed a claim for$1,131,254.   The General Partnerbelieves, as a result of a cross-complaint for breach of fiduciary duty, thatthe amount owed under the contract is approximately $0 to $250,000 and has recordeda liability in the financial statements in 2004.

 

**Item 2.  Unregistered Sales ofEquity 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.**

 

Documentsfiled as a part of this report

 

1.     Financial StatementSchedules

 

Allother schedules for which provision is made in the applicable accountingregulations of the Securities and Exchange Commission are not required under therelated instructions or are inapplicable, and therefore have been omitted.

 

2.     Other Exhibits

 

31.1Certification of Paritosh K. Choksi

31.2Certification of Dean L. Cash

32.1Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash

32.2Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi

 

17

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**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 

Date:August 15, 2005

 
| **ATEL CASH DISTRIBUTION FUND V, L.P.** |
|-----------------------------------------|
| **(Registrant)**                        |
|                                    |   |
|                                    |   |
|                                    | By: ATEL Financial  Services LLC |
|                                    | General Partner of  Registrant |
|                                    |   |
|                                    |   |
| By:                                     | /s/ Dean L. Cash |   |   |
|                                    | Dean L. Cash |   |
|                                    | President and Chief  Executive Officer |   |
|                                    | of General Partner |   |
|                                    |   |   |
|                                    |   |   |
| By:                                     | /s/ Paritosh K. Choksi |   |   |
|                                    | Paritosh K. Choksi |   |
|                                    | Principal Financial  Officer |   |
|                                    | Of Registrant |   |

 

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