Form 10-Q

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 March 31, 2013


o		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 000-54356

ATEL 14, LLC

(Exact name of registrant as specified in its charter)


California		26-4695354
(State or other jurisdiction of Incorporation or organization)		(I. R. S. Employer Identification No.)

The Transamerica Pyramid, 600 Montgomery Street, 9th Floor, San Francisco, California 94111
(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 Liability Company Units

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer, large accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The number of Limited Liability Company Units outstanding as of April 30, 2013 was 8,395,515.

DOCUMENTS INCORPORATED BY REFERENCE

None.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

ATEL 14, LLC

BALANCE SHEETS

MARCH 31, 2013 AND DECEMBER 31, 2012
(In Thousands)


	March 31, 2013		December 31, 2012
	(Unaudited)
ASSETS
Cash and cash equivalents	$	3,488	$	9,438
Accounts receivable, net of allowance for doubtful accounts of $5 at March 31, 2013 and $0 at December 31, 2012		215		197
Notes receivable, net of unearned interest income of $1,090 and allowance for credit losses of $0 at March 31, 2013 and net of unearned interest income of $1,307 and allowance for credit losses of $54 at December 31, 2012		7,162		8,060
Investment in securities		33		33
Investments in equipment and leases, net of accumulated depreciation of $16,817 at March 31, 2013 and $14,251 at December 31, 2012		52,934		53,311
Prepaid expenses and other assets		125		146
Total assets	$	63,957	$	71,185
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Managing Member	$	69	$	71
Affiliates		366		108
Accrued distributions to Other Members		816		816
Other		231		426
Deposits due lessees		105		105
Non-recourse debt		13,502		14,057
Acquisition facility obligation		—		4,220
Unearned operating lease income		320		310
Total liabilities		15,409		20,113
Commitments and contingencies
Members’ capital:
Managing Member		—		—
Other Members		48,548		51,072
Total Members’ capital		48,548		51,072
Total liabilities and Members’ capital	$	63,957	$	71,185

See accompanying notes.

ATEL 14, LLC

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED
MARCH 31, 2013 AND 2012
(In Thousands Except Units and Per Unit Data)
(Unaudited)


	Three Months Ended March 31,
	2013			2012
Revenues:
Leasing and lending activities:
Operating lease income	$	3,374		$	2,291
Direct financing leases		19			22
Notes receivable interest income		224			76
Gain on sales of lease assets and early termination of notes receivable		100			17
Other		7			8
Total revenues		3,724			2,414
Expenses:
Depreciation of operating lease assets		2,725			1,788
Asset management fees to Managing Member		181			114
Acquisition expense		361			389
Cost reimbursements to Managing Member and/or affiliates		357			259
Provision (reversal of) for credit losses		5			(21	)
Amortization of initial direct costs		36			32
Interest expense		81			41
Professional fees		103			88
Outside services		31			15
Taxes on income and franchise fees		18			15
Bank charges		53			57
Railcar maintenance		175			134
Other		80			63
Total operating expenses		4,206			2,974
Net loss	$	(482	)	$	(560	)
Net income (loss):
Managing Member	$	153		$	153
Other Members		(635	)		(713	)
	$	(482	)	$	(560	)
Net loss per Limited Liability Company Unit (Other Members)	$	(0.08	)	$	(0.08	)
Weighted average number of Units outstanding		8,395,515			8,402,515

See accompanying notes.

ATEL 14, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2012
AND FOR THE THREE MONTHS ENDED
MARCH 31, 2013
(In Thousands Except Per Unit Data)


	Other Members						Managing Member
	Units			Amount			Managing Member			Total
Balance December 31, 2011		8,402,515		$	61,235		$	—		$	61,235
Repurchase of Units		(7,000	)		(50	)		—			(50	)
Syndication costs		—			(14	)		—			(14	)
Distributions to Other Members ($0.90 per Unit)		—			(7,557	)		—			(7,557	)
Distributions to Managing Member		—			—			(613	)		(613	)
Net (loss) income		—			(2,542	)		613			(1,929	)
Balance December 31, 2012		8,395,515			51,072			—			51,072
Distributions to Other Members ($0.23 per Unit)		—			(1,889	)		—			(1,889	)
Distributions to Managing Member		—			—			(153	)		(153	)
Net (loss) income		—			(635	)		153			(482	)
Balance March 31, 2013 (Unaudited)		8,395,515		$	48,548		$	—		$	48,548

See accompanying notes.

ATEL 14, LLC

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED
MARCH 31, 2013 AND 2012
(In Thousands)
(Unaudited)


	Three Months Ended March 31,
	2013			2012
Operating activities:
Net loss	$	(482	)	$	(560	)
Adjustment to reconcile net loss to cash provided by operating activities:
Gain on sales of assets and early termination of notes		(100	)		(17	)
Depreciation of operating lease assets		2,725			1,788
Amortization of initial direct costs		36			32
Provision (reversal of) for credit losses		5			(21	)
Accounts receivable		(23	)		(70	)
Prepaid expenses and other assets		21			17
Accounts payable, Managing Member		(2	)		(9	)
Accounts payable, other		(8	)		232
Accrued liabilities, affiliates		258			120
Unearned operating lease income		10			(21	)
Net cash provided by operating activities		2,440			1,491
Investing activities:
Purchases of equipment on operating leases		(2,703	)		(2,635	)
Purchases of equipment on direct financing leases		—			(550	)
Proceeds from sales of lease assets and early termination of notes receivable		390			76
Payments of initial direct costs		(19	)		(46	)
Principal payments received on direct financing leases		67			71
Note receivable advances		(112	)		(300	)
Principal payments received on notes receivable		804			271
Net cash used in investing activities		(1,573	)		(3,113	)
Financing activities:
Borrowings under non-recourse debt		859			—
Repayments under non-recourse debt		(1,414	)		(249	)
Repayments under acquisition facility		(4,220	)		—
Syndication costs paid to Managing Member		—			(36	)
Distributions to Other Members		(1,889	)		(1,891	)
Distributions to Managing Member		(153	)		(153	)
Net cash used in financing activities		(6,817	)		(2,329	)
Net decrease in cash and cash equivalents		(5,950	)		(3,951	)
Cash and cash equivalents at beginning of period		9,438			24,307
Cash and cash equivalents at end of period	$	3,488		$	20,356
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	81		$	42
Cash paid during the period for taxes	$	1		$	—
Schedule of non-cash transactions:
Distributions payable to Other Members at period-end	$	816		$	821
Distributions payable to Managing Member at period-end	$	66		$	67

See accompanying notes.

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

1. Organization and Limited Liability Company matters:

ATEL 14, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on April 1, 2009 (“Date of Inception”) for the purpose of equipment financing and acquiring equipment to engage in equipment leasing and sales activities. The Managing Member of the Company is ATEL Managing Member, LLC (the “Managing Member” or “Manager”), a Nevada limited liability corporation. Prior to May 9, 2011, the Manager was named ATEL Associates 14, LLC. The Fund may continue until December 31, 2030. Contributions in the amount of $500 were received as of May 8, 2009, which represented the initial member’s capital investment. As a limited liability company, the liability of any individual member for the obligations of the Fund is limited to the extent of capital contributions to the Fund by the individual member.

The Company conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. As of December 2, 2009, subscriptions for the minimum number of Units (120,000, representing $1.2 million), excluding subscriptions from Pennsylvania investors, had been received and the Fund requested subscription proceeds to be released from escrow. On that date, the Company commenced initial operations and continued in its development stage activities until transitioning to an operating enterprise during the first quarter of 2010. Pennsylvania subscriptions are subject to a separate escrow and are released to the Fund only when aggregate subscriptions for all investors equal to at least $7.5 million. Total contributions to the Fund exceeded $7.5 million on February 12, 2010, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering was terminated on October 6, 2011.

As of March 31, 2013, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $84.0 million (inclusive of the $500 initial member’s capital investment) have been received. As of the same date, 8,395,515 Units were issued and outstanding.

The Fund, or Managing Member on behalf of the Fund, has incurred costs in connection with the organization, registration and issuance of the limited liability company units (Units). The amount of such costs to be borne by the Fund is limited by certain provisions of the ATEL 14, LLC amended and restated limited liability company operating agreement dated October 7, 2009 (the “Operating Agreement”).

The Company’s principal objectives are to invest in a diversified portfolio of investments that will (i) preserve, protect and return the Company’s invested capital; (ii) generate regular cash distributions to Unitholders, with any balance remaining after required minimum distributions to be used to purchase additional investments during the Reinvestment Period (ending six calendar years after the completion of the Company’s public offering of Units) and (iii) provide additional cash distributions following the Reinvestment Period and until all investment portfolio assets has been sold or otherwise disposed. The Company is governed by its Operating Agreement, as amended.

Pursuant to the terms of the Operating Agreement, the Managing Member and/or its affiliates receives compensation for services rendered and reimbursements for costs incurred on behalf of the Company (See Note 6). The Company is required to maintain reasonable cash reserves for working capital, the repurchase of Units and contingencies. The repurchase of Units is solely at the discretion of the Managing Member.

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission.

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 the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

2. Summary of significant accounting policies: - (continued)

financial statements reflect all adjustments which are, in the opinion of the Managing Member, 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. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results to be expected for the full year.

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data.

In preparing the accompanying unaudited financial statements, the Managing Member has reviewed events that have occurred after March 31, 2013, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements, or adjustments thereto.

Use of estimates:

The preparation of financial statements in conformity with GAAP 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 for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

Segment reporting:

The Company is organized into one operating segment for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States.

The primary geographic regions in which the Company seeks leasing opportunities are North America and Europe. All of the Company’s current operating revenues and long-lived assets relate to customers domiciled in North America.

Investment in securities:

Purchased securities

Purchased securities are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $33 thousand of purchased securities at both March 31, 2013 and December 31, 2012.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair value on the balance sheet at the end of the period, as determined by the Managing Member. At March 31, 2013 and December 31, 2012, the Managing Member estimated the fair value of the warrants to be nominal in amount.

Per Unit data:

Net loss and distributions per Unit are based upon the weighted average number of Other Members Units outstanding during the period.

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

2. Summary of significant accounting policies: - (continued)

Recent Accounting Pronouncements

Recent accounting standards updates as issued by the Financial Accounting Standards Board (FASB) were evaluated and determined to be not applicable to the Company.

3. Notes receivable, net:

The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. The original terms of the notes receivable are 17 to 42 months and bear interest at rates ranging from 5.80% to 18.00%. The notes are generally secured by the equipment financed. The notes mature from 2013 through 2016.

No notes receivable were impaired or in non-accrual status as of March 31, 2013. As of December 31, 2012, the Company had an impaired note which was deemed impaired during the second quarter of 2012. As such, the Fund recorded a $54 thousand fair value adjustment during the second quarter of 2012 to reduce the cost basis of the impaired note. As of December 31, 2012, the estimated impairment remained unchanged. As of the same date, the note reflected a principal balance and net investment balance outstanding of $171 thousand and $117 thousand, respectively.

Prior to the end of the third quarter of 2012, past due amounts associated with the impaired note were received bringing the note receivable outstanding current at September 30, 2012. The note was returned to accrual status effective October 1, 2012.

The note was subsequently settled during the first quarter of 2013 prior to its scheduled termination. This resulted in a gain of $54 thousand.

As of March 31, 2013, the minimum future payments receivable are as follows (in thousands):


Nine months ending December 31, 2013	$	2,541
Year ending December 31, 2014		3,446
2015		1,796
2016		434
		8,217
Less: portion representing unearned interest income		(1,090	)
		7,127
Unamortized initial direct costs		35
Notes receivable, net	$	7,162

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating and direct finance leases for the three months ended March 31, 2013 and 2012 are as follows (in thousands):


	Three Months Ended March 31,
	2013		2012
IDC amortization – notes receivable	$	9	$	3
IDC amortization – lease assets		27		29
Total	$	36	$	32

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

4. Allowance for credit losses:

The Company’s allowance for credit losses are as follows (in thousands):


	Accounts Receivable Allowance for Doubtful Accounts							Valuation Adjustments on Financing Receivables					Total Allowance for Credit Losses
	Notes Receivable		Finance Leases		Operating Leases			Notes Receivable			Finance Leases
Balance December 31, 2011	$	—	$	—	$	27		$	—		$	—	$	27
(Reversal of) provision for credit losses		—		—		(27	)		54			—		27
Balance December 31, 2012		—		—		—			54			—		54
Provision for credit losses		—		—		5			—			—		5
Asset disposal		—		—		—			(54	)		—		(54	)
Balance March 31, 2013	$	—	$	—	$	5		$	—		$	—	$	5

Accounts receivable

Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company.

Allowances for doubtful accounts are typically established based upon their aging and historical charge off and collection experience and the creditworthiness of specifically identified lessees and borrowers, and invoiced amounts. Accounts receivable deemed uncollectible are generally charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received.

Accounts receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the creditworthiness of companies with lease or note payments outstanding less than 90 days. Based upon management’s judgment, such leases or notes may be placed in non-accrual status. Leases or notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable. Until such time, revenues on operating leases are recognized on a cash basis. All payments received on amounts billed under direct financing leases contracts and notes receivable are applied only against outstanding principal balances.

Financing receivables

In addition to the allowance established for delinquent accounts receivable, the total allowance related solely to financing receivables also includes anticipated impairment charges on notes receivable and direct financing leases.

Notes are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the note agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest when due. If it is determined that a loan is impaired with regard to scheduled payments, the Company will perform an analysis of the note to determine if an impairment valuation reserve is necessary. This analysis considers the estimated cash flows from the note, or the collateral value of the property underlying the note when note repayment is collateral dependent. Any required valuation reserve is charged to earnings when determined; and notes are charged off to the allowance as they are deemed uncollectible.

The asset underlying a direct financing lease contract is considered impaired if the estimated undiscounted future cash flows of the asset are less than its net book value. The estimated undiscounted future cash flows

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

4. Allowance for credit losses: - (continued)

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 marketplace 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 a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date.

As of March 31, 2013 and December 31, 2012, the Company’s allowance for credit losses (related solely to financing receivables) and its recorded investment in financing receivables were as follows (in thousands):


March 31, 2013	Notes Receivable		Finance Leases		Total
Allowance for credit losses:
Ending balance	$	—	$	—	$	—
Ending balance: individually evaluated for impairment	$	—	$	—	$	—
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—
Financing receivables:
Ending balance	$	7,162¹	$	706²	$	7,868
Ending balance: individually evaluated for impairment	$	7,162	$	706	$	7,868
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—

Includes $35 of unamortized initial direct costs.

Includes $1 of unamortized initial direct costs.


December 31, 2012	Notes Receivable		Finance Leases		Total
Allowance for credit losses:
Ending balance	$	54	$	—	$	54
Ending balance: individually evaluated for impairment	$	54	$	—	$	54
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—
Financing receivables:
Ending balance	$	8,114³	$	774⁴	$	8,888
Ending balance: individually evaluated for impairment	$	8,114	$	774	$	8,888
Ending balance: collectively evaluated for impairment	$	—	$	—	$	—
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—

Includes $31 of unamortized initial direct costs.

⁴

Includes $2 of unamortized initial direct costs.

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

4. Allowance for credit losses: - (continued)

The Company evaluates the credit quality of its financing receivables on a scale equivalent to the following quality indicators related to corporate risk profiles:

Pass – Any account whose lessee/debtor, co-lessee/debtor or any guarantor has a credit rating on publicly traded or privately placed debt issues as rated by Moody’s or S&P for either Senior Unsecured debt, Long Term Issuer rating or Issuer rating that are in the tiers of ratings generally recognized by the investment community as constituting an Investment Grade credit rating; or, has been determined by the Manager to be an Investment Grade Equivalent or High Quality Corporate Credit per its Credit Policy or has a Not Rated internal rating by the Manager and the account is not considered by the Chief Credit Officer of the Manager to fall into one of the three risk profiles below.

Special Mention – Any traditional corporate type account with potential weaknesses (e.g. large net losses or major industry downturns) or, any growth capital account that has less than three months of cash as of the end of the calendar quarter to fund their continuing operations. These accounts deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the Fund’s receivable at some future date.

Substandard – Any account that is inadequately protected by the current worth and paying capacity of the borrower or of the collateral pledged, if any. Accounts that are so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Fund will sustain some loss as the likelihood of fully collecting all receivables may be questionable if the deficiencies are not corrected. Such accounts are on the Manager’s Credit Watch List.

Doubtful – Any account where the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Accordingly, an account that is so classified is on the Manager’s Credit Watch List, and has been declared in default and the Manager has repossessed, or is attempting to repossess, the equipment it financed. This category includes impaired notes and leases as applicable.

At March 31, 2013 and December 31, 2012, the Company’s financing receivables by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands):


	Notes Receivable				Finance Leases
	March 31, 2013		December 31, 2012		March 31, 2013		December 31, 2012
Pass	$	5,933	$	6,567	$	705	$	772
Special mention		1,194		1,516		—		—
Substandard		—		—		—		—
Doubtful		—		—		—		—
Total	$	7,127	$	8,083	$	705	$	772

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

4. Allowance for credit losses: - (continued)

At March 31, 2013 and December 31, 2012, the investment in financing receivables is aged as follows (in thousands):


March 31, 2013	30 – 59 Days Past Due		60 – 89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment>90 Days and Accruing
Notes receivable	$	—	$	—	$	—	$	—	$	7,127	$	7,127	$	—
Finance leases		—		—		—		—		705		705		—
Total	$	—	$	—	$	—	$	—	$	7,832	$	7,832	$	—


December 31, 2012	30 – 59 Days Past Due		60 – 89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment>90 Days and Accruing
Notes receivable	$		$	—	$	—	$	—	$	8,083	$	8,083	$	—
Finance leases		—		—		—		—		772		772		—
Total	$	—	$	—	$	—	$	—	$	8,855	$	8,855	$	—

The Company had no investment in financing receivables in non-accrual status at both March 31, 2013 and December 31, 2012. As of December 31, 2012, the Company did, however, have a note receivable that was deemed impaired during the second quarter of 2012. As such, the Fund recorded a $54 thousand fair value adjustment during the second quarter of 2012 to reduce the cost basis of the impaired note. During the first quarter of 2013, the note was settled prior to its scheduled termination. This resulted in a gain of $54 thousand. See Note 3 for further discussion.

5. Investments in equipment and leases, net:

The Company’s investment in leases consists of the following (in thousands):


	Balance December 31, 2012		Reclassifications & Additions/ Dispositions		Depreciation/Amortization Expense or Amortization of Leases			Balance March 31, 2013
Net investment in operating leases	$	52,257	$	2,435	$	(2,725	)	$	51,967
Net investment in direct financing leases		772		—		(67	)		705
Initial direct costs, net of accumulated amortization of $211 at March 31, 2013 and $185 at December 31, 2012		282		7		(27	)		262
Total	$	53,311	$	2,442	$	(2,819	)	$	52,934

Impairment of investments in leases:

Management periodically reviews the carrying values of its lease assets for impairment. Impairment losses are recorded as an adjustment to the net investment in operating leases. No impairment losses were recorded for the three months ended March 31, 2013 and 2012.

The Company utilizes a straight line depreciation method over the term of the equipment lease for equipment on operating leases currently in its portfolio. Depreciation expense on the Company’s equipment totaled $2.7 million and $1.8 million for the respective three months ended March 31, 2013 and 2012.

All of the Company’s leased property was acquired starting from December 2009 through March 2013.

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

5. Investments in equipment and leases, net: - (continued)

Operating leases:

Property on operating leases consists of the following (in thousands):


	Balance December 31, 2012			Additions			Reclassifications or Dispositions			Balance March 31, 2013
Transportation, rail	$	21,322		$	720		$	(77	)	$	21,965
Manufacturing		12,283			1,462			—			13,745
Materials handling		11,602			—			—			11,602
Transportation		7,820			—			—			7,820
Construction		5,558			—			(164	)		5,394
Mining		4,830			—			—			4,830
Research		2,391			—			—			2,391
Agriculture		588			—			—			588
Office Automation		—			322			—			322
Computers		—			12			—			12
Other		113			—			—			113
		66,507			2,516			(241	)		68,782
Less accumulated depreciation		(14,250	)		(2,725	)		160			(16,815	)
Total	$	52,257		$	(209	)	$	(81	)	$	51,967

The average estimated residual value for assets on operating leases was 38% of the assets’ original cost at both March 31, 2013 and December 31, 2012.

There were no operating leases in non-accrual status at both March 31, 2013 and December 31, 2012.

Direct financing leases:

As of March 31, 2013 and December 31, 2012, investment in direct financing leases consists of various types of computer-related, research and materials handling equipment. The components of the Company’s investment in direct financing leases as of March 31, 2013 and December 31, 2012 are as follows (in thousands):


	March 31, 2013			December 31, 2012
Total minimum lease payments receivable	$	780		$	867
Estimated residual values of leased equipment (unguaranteed)		17			17
Investment in direct financing leases		797			884
Less unearned income		(92	)		(112	)
Net investment in direct financing leases	$	705		$	772

As of March 31, 2013 and December 31, 2012, there were no investments in direct financing leases in non-accrual status.

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

5. Investments in equipment and leases, net: - (continued)

At March 31, 2013, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):


	Operating Leases		Direct Financing Leases		Total
Nine months ending December 31, 2013	$	10,359	$	250	$	10,609
Year ending December 31, 2014		10,470		309		10,779
2015		5,827		221		6,048
2016		2,504		—		2,504
2017		1,850		—		1,850
2018		957		—		957
Thereafter		589		—		589
	$	32,556	$	780	$	33,336

6. Related party transactions:

The terms of the Operating Agreement provide that the Managing Member and/or affiliates are entitled to receive certain fees for equipment management and resale and for management of the Company.

The Operating Agreement allows for the reimbursement of costs incurred by the Managing Member and/or affiliates for providing administrative services to the Company. Administrative services provided include Company accounting, investor relations, legal counsel and lease and equipment documentation. The Managing Member is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of investments.

Each of ATEL Financial Services, LLC (“AFS”) and ATEL Leasing Corporation (“ALC”) is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company on behalf of the Managing Member. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations, communications and general administrative services are performed by AFS.

Cost reimbursements to the Managing Member or its affiliates are based on its costs incurred in performing administrative services for the Company. These costs are allocated to each managed entity based on certain criteria such as managed assets, number of investors or contributed capital based upon the type of cost incurred. The Managing Member believes that the costs reimbursed are the lower of (i) actual costs incurred on behalf of the Company or (ii) the amount the Company would be required to pay independent parties for comparable administrative services in the same geographic location.

The Managing Member and/or affiliates earned commissions and received cost reimbursements, pursuant to the Operating Agreement, during the three months ended March 31, 2013 and 2012 (in thousands):


	Three Months Ended March 31,
	2013		2012
Reimbursement of other syndication costs to Managing Member and/or affiliates, deducted from Other Members capital	$	—	$	14
Administrative costs reimbursed to Managing Member and/or affiliates		357		259
Asset management fees to Managing Member		181		114
Acquisition and initial direct costs paid to Managing Member		380		401
	$	918	$	788

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

7. Non-recourse debt:

At March 31, 2013, non-recourse debt consists of notes payable to financial institutions. The notes are due in monthly installments. Interest on the notes is at fixed rates ranging from 1.33% to 4.40% per annum. The notes are secured by assignments of lease payments and pledges of assets. At March 31, 2013, gross operating lease rentals totaled approximately $14.1 million over the remaining lease terms; and the carrying value of the pledged assets is $20.6 million. The notes mature at various dates from 2013 through 2019.

The non-recourse debt does not contain any material financial covenants. The debt is secured by a lien granted by the Company to the non-recourse lender on (and only on) the discounted lease transactions. The lender has recourse only to the following collateral: the specific leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. The non-recourse obligation is payable solely out of the respective specific security and the Company does not guarantee (nor is the Company otherwise contractually responsible for) the payment of the non-recourse debt as a general obligation or liability of the Company. Although the Company does not have any direct or general liability in connection with the non-recourse debt apart from the security granted, the Company is directly and generally liable and responsible for certain representations, warranties, and covenants made to the lender, such as warranties as to genuineness of the transaction parties' signatures, as to the genuineness of the respective lease chattel paper or the transaction as a whole, or as to the Company's good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants typically provided by non-recourse borrowers and customary in the equipment finance industry, and are viewed by such industry as being consistent with non-recourse discount financing obligations. Accordingly, as there are no financial covenants or ratios imposed on the Company in connection with the non-recourse debt, the Company has determined that there are no material covenants with respect to the non-recourse debt that warrant footnote disclosure.

Future minimum payments of non-recourse debt are as follows (in thousands):


	Principal		Interest		Total
Nine months ending December 31, 2013	$	4,345	$	198	$	4,543
Year ending December 31, 2014		3,976		156		4,132
2015		1,558		99		1,657
2016		1,267		69		1,336
2017		1,114		41		1,155
2018		659		22		681
Thereafter		583		6		589
	$	13,502	$	591	$	14,093

8. Borrowing facilities:

The Company participates with AFS and certain of its affiliates in a revolving credit facility (the “Credit Facility”) comprised of a working capital facility to AFS, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”) to AFS, the Company and affiliates, and a venture facility available to an affiliate with a syndicate of financial institutions which Credit Facility includes certain financial covenants. The Credit Facility is for an amount up to $60 million and expires in June 2014. The lending syndicate providing the Credit Facility has a blanket lien on all of the Company’s assets as collateral for any and all borrowings under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility.

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

8. Borrowing facilities: - (continued)

As of March 31, 2013 and December 31, 2012, borrowings under the facility were as follows (in thousands):


	March 31, 2013			December 31, 2012
Total available under the financing arrangement	$	60,000		$	60,000
Amount borrowed by the Company under the acquisition facility		—			(4,220	)
Amounts borrowed by affiliated partnerships and Limited Liability Companies under the venture, acquisition and warehouse facilities		(1,255	)		(1,270	)
Total remaining available under the venture, acquisition and warehouse facilities	$	58,745		$	54,510

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of March 31, 2013, the aggregate amount of the Credit Facility is potentially available to the Company, subject to certain sub-facility and borrowing-base limitations. However, as amounts are drawn on the Credit Facility by each of the Company and the affiliates who are borrowers under the Credit Facility, the amount remaining available to all borrowers to draw under the Credit Facility is reduced. As the Warehousing Facility is a short term bridge facility, any amounts borrowed under the Warehousing Facility, and then repaid by the affiliated borrowers (including the Company) upon allocation of an acquisition to a specific purchaser, become available under the Warehouse Facility for further short term borrowing.

As of March 31, 2013, the Company’s Tangible Net Worth requirement under the Credit Facility was $10.0 million, the permitted maximum leverage ratio was not to exceed 1.25 to 1, and the required minimum interest coverage ratio was not to be less than 2 to 1. The Company was in compliance with these financial covenants under the Credit Facility with a minimum Tangible Net Worth, leverage ratio and interest coverage ratio, as calculated per the Credit Facility agreement of $48.5 million, 0.28 to 1, and 51.00 to 1, respectively, as of March 31, 2013. As such, as of March 31, 2013, the Company was in compliance with all material financial covenants, and with all other material conditions of the Credit Facility. The Company does not anticipate any covenant violations nor does it anticipate that any of these covenants will restrict its operations or its ability to procure additional financing.

Fee and interest terms

The interest rate on the Credit Facility is based on either the LIBOR/Eurocurrency rate of 1-, 2-, 3- or 6-month maturity plus a lender designated spread, or the bank’s Prime rate, which re-prices daily. Principal amounts of loans made under the Credit Facility that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Credit Facility. There were no borrowings outstanding at March 31, 2013 as all outstanding borrowings under the Credit Facility had been repaid in January 2013. At December 31, 2012, outstanding borrowings under the Acquisition Facility totaled $4.2 million. The weighted average rate of borrowings was 3.25% during the three months ended March 31, 2013. There were no borrowings outstanding during the three months ended March 31, 2012.

Warehouse facility

To hold the assets under the Warehousing Facility prior to allocation to specific investor programs, a Warehousing Trust has been entered into by the Company, AFS, ALC, and certain of the affiliated partnerships and limited liability companies. The Warehousing Trust is used by the Warehouse Facility borrowers to acquire and hold, on a short-term basis, certain lease transactions that meet the investment objectives of each of such entities. Each of the leasing programs sponsored by AFS and ALC is a pro rata participant in the Warehousing Trust, as described below. When a program no longer has a need for short term financing provided by the Warehousing Facility, it is removed from participation, and as new leasing investment entities are formed by AFS and ALC and commence their acquisition stages, these new entities are added.

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

8. Borrowing facilities: - (continued)

As of March 31, 2013, the investment program participants were ATEL 12, LLC, the Company and ATEL 15, LLC. Pursuant to the Warehousing Trust, the benefit of the lease transaction assets, and the corresponding liabilities under the Warehouse Facility, inure to each of such entities based upon each entity’s pro-rata share in the Warehousing Trust estate. The “pro-rata share” is calculated as a ratio of the net worth of each entity over the aggregate net worth of all entities benefiting from the Warehousing Trust estate, excepting that the trustees, AFS and ALC, are both jointly and severally liable for the pro rata portion of the obligations of each of the affiliated partnerships and limited liability companies participating under the Warehouse Facility. Transactions are financed through this Warehouse Facility only until the transactions are allocated to a specific program for purchase or are otherwise disposed by AFS and ALC. When a determination is made to allocate the transaction to a specific program for purchase by the program, the purchaser repays the debt associated with the asset, either with cash or by means of proceeds of a draw under the Acquisition Facility, and the asset is removed from the Warehouse Facility collateral, and ownership of the asset and any debt obligation associated with the asset are assumed solely by the purchasing entity.

There were no borrowings under the Warehouse Facility at March 31, 2013 and December 31, 2012.

9. Commitments:

At March 31, 2013, there were commitments to purchase lease assets and to fund investments in notes receivable totaling approximately $2.1 million and $388 thousand, respectively. These amounts represent contract awards which may be canceled by the prospective borrower/investee or may not be accepted by the Company.

10. Guarantees:

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

The Managing Member knows of no facts or circumstances that would make the Company’s contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Company 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 Company’s similar commitments is remote. Should any such indemnification obligation become payable, the Company would separately record and/or disclose such liability in accordance with GAAP.

11. Members’ capital:

A total of 8,395,515 Units were issued and outstanding at both March 31, 2013 and December 31, 2012, including the 50 Units issued to the Initial Member (Managing Member). The Fund was authorized to issue up to 15,000,000 Units in addition to the Units issued to the Initial Member.

The Company has the right, exercisable at the Managing Member’s discretion, but not the obligation, to repurchase Units of a Unitholder who ceases to be a U.S. Citizen, for a price equal to 100% of the holder’s capital account. The Company is otherwise permitted, but not required, to repurchase Units upon a holder’s request. The repurchase of Fund Units is made in accordance with Section 13 of the Amended and Restated Limited Liability Company Operating Agreement. The repurchase would be at the discretion of the Managing Member on terms it determines to be appropriate under given circumstances, in the event that the Managing Member deems such repurchase to be in the best interest of the Company; provided, the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units are cancelled. Units repurchased in prior periods were repurchased at amounts representing the original investment

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

11. Members’ capital: - (continued)

less cumulative distributions made to the Unitholder with respect to the Units. All Units repurchased during a quarter are deemed to be repurchased effective the last day of the preceding quarter, and are not deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs.

The Fund’s net income or net losses are to be allocated 100% to the Members. From the commencement of the Fund until the initial closing date, net income and net loss were allocated 99% to the Managing Member and 1% to the initial Other Members. Commencing with the initial closing date, net income and net loss are to be allocated 92.5% to the Other Members and 7.5% to the Managing Member.

Fund distributions are to be allocated 7.5% to the Managing Member and 92.5% to the Other Members. Distributions to the Other Members for the three months ended March 31, 2013 and 2012 were as follows (in thousands except Units and per Unit data):


	Three Months Ended March 31,
	2013		2012
Distributions declared	$	1,889	$	1,891
Weighted average number of Units outstanding		8,395,515		8,402,515
Weighted average distributions per Unit	$	0.23	$	0.23

Cash distributions were based on current and anticipated gross revenues from the leases and loans acquired. During the Fund's acquisition and operating stages, the Fund may incur short term borrowing to fund regular distributions of such gross revenues to be generated by newly acquired transactions during their respective initial fixed terms. As such, all Fund periodic cash distributions made during these stages have been, and are expected in the future to be, based on the Fund's actual and anticipated gross revenues to be generated from the binding initial terms of the leases and loans acquired.

12. Fair value measurements:

Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, generally on a national exchange.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market.

Level 3 – Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company's own estimates of assumptions that market participants would use in pricing the asset or liability.

The Company had no assets or liabilities requiring measurement at fair value on a recurring or non-recurring basis at March 31, 2013. No assets or liabilities required measurement at fair value on a recurring basis at December 31, 2012; however, the Company recorded a non-recurring adjustment to reflect the fair value of an impaired note receivable during 2012. Amounts at December 31, 2012 reflect the fair value of the then existing impaired asset.

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

12. Fair value measurements: - (continued)

values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

Such fair value adjustments utilized the following methodology:

Impaired notes receivable

The fair value of the Company’s notes receivable, when impairment adjustments are required, is estimated using either third party appraisals or estimations of the value of collateral (for collateral dependent loans) or discounted cash flow analyses (by discounting estimated future cash flows) using the effective interest rate contained in the terms of the original loan. The Company had no fair value adjustments relative to impaired notes receivable during the three months ended March 31, 2013 and 2012.

During the second quarter of 2012, the Company had recorded a $54 thousand of fair value adjustment to reduce the cost basis of an impaired note. The fair value adjustment was non-recurring and was based upon an estimated valuation of underlying collateral. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the impaired notes receivable is classified within Level 3 of the valuation hierarchy. The valuation utilizes a market approach technique and uses inputs from third party appraisers that utilize current market transactions as adjusted for certain factors specific to the underlying collateral. Such estimated impairment remained unchanged through December 31, 2012. The note was subsequently settled during the first quarter of 2013 prior to its scheduled termination.

The following table presents the fair value measurement of impaired assets measured at fair value on a non-recurring basis and the level within the hierarchy in which the fair value measurements fall at December 31, 2012 (in thousands):


	December 31, 2012		Level 1 Estimated Fair Value		Level 2 Estimated Fair Value		Level 3 Estimated Fair Value
Assets measured at fair value on a non-recurring basis:
Impaired notes receivable, net	$	117	$	—	$	—	$	117

The following disclosure of the estimated fair value of financial instruments is made in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification. Fair value estimates, methods and assumptions, set forth below for the Company’s financial instruments, are made solely to comply with the requirements of the Financial Instruments Topic and should be read in conjunction with the Company’s financial statements and related notes.

The Company determines the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

12. Fair value measurements: - (continued)

Cash and cash equivalents

The recorded amounts of the Company’s cash and cash equivalents approximate fair value because of the liquidity and short-term maturity of these instruments.

Notes receivable

The fair value of the Company’s notes receivable is estimated using either third party appraisals of collateral or discounted cash flow analyses based upon current market rates for similar types of lending arrangements, with adjustments for impaired loans as deemed necessary.

Investment in securities

The Company’s investment securities are not registered for public sale and are carried at cost which management believes approximates fair value, as appropriately adjusted for impairment.

Non-recourse debt

The fair value of the Company’s non-recourse debt is estimated using discounted cash flow analyses, based upon current market borrowing rates for similar types of borrowing arrangements.

Borrowings

Borrowings include the outstanding amounts on the Company’s acquisition facility. The carrying amount of these variable rate obligations approximate fair value based on current borrowing rates for similar types of borrowings.

Commitments and Contingencies

Management has determined that no recognition for the fair value of the Company’s loan commitments is necessary because their terms are made on a market rate basis and require borrowers to be in compliance with the Company’s credit requirements at the time of funding.

The fair value of contingent liabilities (or guarantees) is not considered material because management believes there has been no event that has occurred wherein a guarantee liability has been incurred or will likely be incurred.

The following table presents a summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company’s balance sheet at March 31, 2013 and December 31, 2012 (in thousands):


	Fair Value Measurements at March 31, 2013
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	3,488	$	3,488	$	—	$	—	$	3,488
Notes receivable, net		7,162		—		—		7,162		7,162
Investment in securities		33		—		—		33		33
Financial liabilities:
Non-recourse debt		13,502		—		—		13,519		13,519

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statements contained in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Form 10-Q, which are not historical facts, may be forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. In particular, the economic recession and changes in general economic conditions, including, fluctuations in demand for equipment, lease rates, and interest rates, may result in delays in investment and reinvestment, delays in leasing, re-leasing, and disposition of equipment, and reduced returns on invested capital. The Company’s performance is subject to risks relating to lessee defaults and the creditworthiness of its lessees. The Company’s performance is also subject to risks relating to the value of its equipment at the end of its leases, which may be affected by the condition of the equipment, technological obsolescence and the market for new and used equipment at the end of lease terms. Investors are cautioned not to attribute undue certainty to these forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events, other than as required by law.

Overview

The Company is in the process of completing its initial acquisition stage with the investment of the net proceeds from the public offering of Units. Subsequently, during the reinvestment period (“Reinvestment Period”) (defined as six full years following the year the offering was terminated), the Company will reinvest cash flow in excess of certain amounts required to be distributed to the Other Members and/or utilize its credit facilities to acquire additional equipment. Throughout the Reinvestment Period, which ends December 31, 2017, the Company anticipates continued reinvestment of cash flow in excess of minimum distributions and other obligations. The Company is governed by its Limited Liability Company Operating Agreement (“Operating Agreement”), as amended.

The Company may continue until December 31, 2030. Periodic distributions are paid at the discretion of the Managing Member.

Results of Operations

The three months ended March 31, 2013 versus the three months ended March 31, 2012

The Company had net losses of $482 thousand and $560 thousand for the three months ended March 31, 2013 and 2012, respectively. Results for the first quarter of 2013 reflect an increase in total revenues offset, in part, by an increase in total operating expenses when compared to the prior year period.

Revenues

Total revenues for the first quarter of 2013 increased by $1.3 million, or 54%, as compared to the prior year period. The increase was largely due to the growth in operating lease revenues and interest income on notes receivable, and an increase in gain on sales of lease assets and early termination of notes receivable.

Operating lease revenues increased by $1.1 million largely due to income derived from approximately $23.3 million of operating lease assets acquired since March 31, 2012; and, interest income on notes receivable increased by $148 thousand as a result of revenues derived from $6.9 million of loans funded since March 31, 2012. Furthermore, gain on sales of lease assets and early termination of notes receivable increased by $83 thousand due to a period over period increase in volume and a change in mix of assets sold.

Expenses

Total expenses for the first quarter of 2013 increased by $1.2 million, or 41%, as compared to the prior year period. Such increase is consistent with the growth in total revenues and was largely a result of increases in depreciation expense, costs reimbursed to the Manager, asset management fees paid to the Manager, railcar maintenance costs and interest expense.

Depreciation expense increased by $937 thousand largely due to the increment of approximately $23.3 million of net equipment purchases for operating leases made since March 31, 2012. Cost reimbursed to the Manager increased by $98 thousand primarily due to an increase in costs allocated by the Manager consistent with the Fund’s expanded operations. In addition, asset management fees paid to the Manager increased by $67 thousand mainly as a result of the increase in managed assets and related rents. Railcar maintenance costs increased by $41 thousand due to an approximate $8.2 million growth in the Fund’s railcar portfolio since March 31, 2012; and, interest expense increased by $40 thousand due to the $14.5 million of new borrowings since March 31, 2012.

Capital Resources and Liquidity

At March 31, 2013 and December 31, 2012, the Company’s cash and cash equivalents totaled $3.5 million and $9.4 million, respectively. The liquidity of the Company will vary in the future, increasing to the extent cash flows from subscriptions, leases and proceeds of asset sales exceed expenses and decreasing as lease assets are acquired, as distributions are made to the Members and to the extent expenses exceed cash flows from leases and proceeds from asset sales.

The Company currently believes it has adequate reserves available to meet its immediate cash requirements and those of the next twelve months, but in the event those reserves were found to be inadequate, the Company would likely be in a position to borrow against its current portfolio to meet such requirements. The Managing Member envisions no such requirements for operating purposes.

Cash Flows

The following table sets forth summary cash flow data (in thousands):


	Three Months Ended March 31,
	2013			2012
Net cash provided by (used in):
Operating activities	$	2,440		$	1,491
Investing activities		(1,573	)		(3,113	)
Financing activities		(6,817	)		(2,329	)
Net decrease in cash and cash equivalents	$	(5,950	)	$	(3,951	)

The three months ended March 31, 2013 versus the three months ended March 31, 2012

Prior to the termination of the offering on October 6, 2011, the Company’s primary source of liquidity had been subscription proceeds from the sale of Units. Subsequently, the Company’s primary source of liquidity has been cash flows from its portfolio of operating and direct financing lease contracts, and its investments in

notes receivable. Moreover, the Company utilized borrowings totaling $859 thousand during the first quarter of 2013, and realized $390 thousand and $76 thousand of proceeds from sales of lease assets and/or the early termination of notes receivable during the first quarters of 2013 and 2012, respectively.

During the same comparative periods, cash was primarily used to purchase equipment for long-term operating and direct financing leases, and to fund investments in notes receivable. Total equipment purchased amounted to $2.7 million and $3.2 million for the respective first quarters of 2013 and 2012; while total loans funded amounted to $112 thousand for the first quarter of 2013 and $300 thousand for the prior year period.

Cash was also used to pay $5.6 million and $249 thousand of debt during the respective first quarters of 2013 and 2012. Moreover, cash was used to pay distributions to both Other Members and the Managing Member totaling $2.0 million for each of the first quarters of 2013 and 2012; and, to pay invoices related to management fees and expenses.

Revolving credit facility

Effective June 15, 2010, the Company participated with AFS and certain of its affiliates in a revolving credit facility (the “Credit Facility”) comprised of a working capital facility to AFS, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”) to AFS, the Company and affiliates, and a venture facility available to an affiliate, with a syndicate of financial institutions as lenders. The Credit Facility is for an amount up to $60 million and expires in June 2014. During the third quarter of 2010, the Company amended its Credit Facility with respect to the Warehouse Facility to suspend its participation in such Warehouse Facility while retaining its ability to borrow from time to time under the Acquisition Facility on the condition that it maintains with the lender (subject to certain provisions) cash collateral on deposit in an amount not less than the principal amount of loans outstanding from time to time. At March 31, 2013, the Company has no outstanding borrowings under the acquisition facility. At December 31, 2012, the Company had $4.2 million of outstanding borrowings under the Acquisition Facility. Commencing with the second quarter of 2011, the Company gained eligibility for full unrestricted participation under the Warehouse Facility as it was in compliance with all relevant financial covenants.

Compliance with covenants

The Credit Facility includes certain financial and non-financial covenants applicable to each borrower, including the Company. Such covenants include covenants typically found in credit facilities of the size and nature of the Credit Facility, such as accuracy of representations, good standing, absence of liens and material litigation, etc. The Company was in compliance with all applicable covenants under the Credit Facility as of March 31, 2013. The Company considers certain financial covenants to be material to its ongoing use of the Credit Facility and these covenants are described below.

Material financial covenants

Under the Credit Facility, the Company is required to maintain a specific tangible net worth, to comply with a leverage ratio and an interest coverage ratio, and to comply with other terms expressed in the Credit Facility, including limitation on the incurrence of additional debt and guaranties, defaults, and delinquencies.

As of March 31, 2013, the material financial covenants are summarized as follows:

Minimum Tangible Net Worth: $10.0 million
Leverage Ratio (leverage to Tangible Net Worth): Not to exceed 1.25 to 1
Collateral Value: Collateral value under the Warehouse Facility must be no less than the outstanding borrowings under that facility
EBITDA to Interest Ratio: Not to be less than 2 to 1 for the four fiscal quarters just ended

“EBITDA” is defined under the Credit Facility as, for the relevant period of time (1) gross revenues (all payments from leases and notes receivable) for such period minus (2) expenses deducted in determining net income for such period plus (3) to the extent deducted in determining net income for such period (a) provision for income taxes and (b) interest expense, and (c) depreciation, amortization and other non-cash charges. Extraordinary items and gains or losses on (and proceeds from) sales or dispositions of

assets outside of the ordinary course of business are excluded in the calculation of EBITDA. “Tangible Net Worth” is defined as, as of the date of determination, (i) the net worth of the Company, after deducting therefrom (without duplication of deductions) the net book amount of all assets of the Company, after deducting any reserves and other amounts for assets which would be treated as intangibles under accounting principles generally accepted in the United States of America (“GAAP”), and after certain other adjustments permitted under the agreements.

The financial covenants referred to above are applicable to the Company only to the extent that the Company has borrowings outstanding under the Credit Facility. As of March 31, 2013, the Company’s Tangible Net Worth requirement under the Credit Facility was $10.0 million, the permitted maximum leverage ratio was not to exceed 1.25 to 1, and the required minimum interest coverage ratio (EBITDA/interest expense) was not to be less than 2 to 1. The Company was in compliance with these financial covenants under the Credit Facility with a minimum Tangible Net Worth, leverage ratio and (EBITDA) interest coverage ratio, as calculated per the Credit Facility agreement of $48.5 million, 0.28 to 1, and 51.00 to 1, respectively, as of March 31, 2013. As such, as of March 31, 2013, the Company was in compliance with all such material financial covenants.

Reconciliation to GAAP of EBITDA

For purposes of compliance with the Credit Facility covenants, the Company uses a financial calculation of EBITDA, as defined therein, which is a non-GAAP financial performance measure. The EBITDA is utilized by the Company to calculate its debt covenant ratios.

The following is a reconciliation of net loss to EBITDA, as defined in the loan agreement, for the twelve months ended March 31, 2013 (in thousands):


Net loss – GAAP basis	$	(1,851	)
Interest expense		215
Depreciation and amortization		9,818
Amortization of initial direct costs		137
Provision for credit losses		53
Principal payments received on direct financing leases		259
Principal payments received on notes receivable		2,333
EBITDA (for Credit Facility financial covenant calculation only)	$	10,964

Events of default, cross-defaults, recourse and security

The terms of the Credit Facility include standard events of default by the Company which, if not cured within applicable grace periods, could give lenders remedies against the Company, including the acceleration of all outstanding borrowings and a demand for repayment in advance of their stated maturity. If a breach of any material term of the Credit Facility should occur, the lenders may, at their option, increase borrowing rates, accelerate the obligations in advance of their stated maturities, terminate the facility, and exercise rights of collection available to them under the express terms of the facility, or by operation of law. The lenders also retain the discretion to waive a violation of any covenant at the Company’s request.

The Company is currently in compliance with its obligations under the Credit Facility. In the event of a technical default (e.g., the failure to timely file a required report, or a one-time breach of a financial covenant), the Company believes it has ample time to request and be granted a waiver by the lenders, or, alternatively, cure the default under the existing provisions of its debt agreements, including, if necessary, arranging for additional capital from alternate sources to satisfy outstanding obligations.

The lending syndicate providing the Credit Facility has a blanket lien on all of the Company’s assets as collateral for any and all borrowings under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility.

The Acquisition Facility is generally recourse solely to the Company, and is not cross-defaulted to any other obligations of affiliated companies under the Credit Facility, except as described in this paragraph.

The Credit Facility is cross-defaulted to a default in the payment of any debt (other than non-recourse debt) or any other agreement or condition beyond the period of grace (not exceeding 30 days), the effect of which would entitle the lender under such agreement to accelerate the obligations prior to their stated maturity in an individual or aggregate principal amount in excess of 15% of the Company’s consolidated Tangible Net Worth. Also, a bankruptcy of AFS will trigger a default for the Company under the Credit Facility.

Non-Recourse Long-Term Debt

As of March 31, 2013, the Company had non-recourse long-term debt totaling $13.5 million. Such non-recourse note payable does not contain any material financial covenants. The note is secured by a lien granted by the Company to the non-recourse lender on (and only on) the discounted lease transactions. The lender has recourse only to the following collateral: the specific leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. For detailed information on the Company’s debt obligations, see Notes 7 and 8 to the financial statements as set forth in Part I, Item 1, Financial Statements (Unaudited).

Distributions

The Unitholders of record are entitled to certain distributions as provided under the Operating Agreement. The Company commenced periodic distributions beginning with the month of December 2009. Additional distributions have been consistently made through March 31, 2013.

Cash distributions were paid by the Fund to Unitholders of record as of February 28, 2013, and paid through March 31, 2013. Distributions may be characterized for tax, accounting and economic purposes as a return of capital, a return on capital (including escrow interest) or a portion of each. Generally, the portion of each cash distribution by a company which exceeds its net income for the fiscal period would constitute a return of capital. The Fund is required by the terms of its Operating Agreement to distribute the net cash flow generated by its investments in certain minimum amounts during the Reinvestment Period before it can reinvest its operating cash flow in additional portfolio assets. See the discussion in the Prospectus under “Income, Losses and Distributions-Reinvestment.” Accordingly, the amount of cash flow from Fund investments distributed to Unitholders will not be available for reinvestment in additional portfolio assets.

The following table summarizes distribution activity for the Fund from inception through March 31, 2013 (in thousands except for Units and Per Unit Data):



Distribution Period⁽¹⁾	Paid		Return of Capital				Distribution of Income				Total Distribution				Total Distribution per Unit⁽²⁾		Weighted Average Units Outstanding⁽³⁾
Monthly and quarterly distributions
Oct 2009 – Feb 2010 (Distribution of escrow interest)		Jan – Mar 2010	$	—			$	—			$	—				n/a		n/a
Dec 2009 – Dec 2010		Jan 2010 – Jan 2011		2,003				—				2,003			$	0.90		2,214,171
Jan 2011 – Nov 2011		Feb 2011 – Dec 2011		4,855				—				4,855				0.87		5,597,722
Dec 2011 – Nov 2012		Jan 2012 – Dec 2012		7,562				—				7,562				0.90		8,400,238
Dec 2012 – Feb 2013		Jan 2013 – Mar 2013		1,889				—				1,889				0.23		8,395,515
			$	16,309			$	—			$	16,309			$	2.90
Source of distributions
Lease and loan payments received			$	14,309	87.74	%	$	—	0.00	%	$	14,309	87.74	%
Interest Income				—	0.00	%		—	0.00	%		—	0.00	%
Debt against non-cancellable firm term payments on leases and loans				2,000	12.26	%		—	0.00	%		2,000	12.26	%
			$	16,309	100.00	%	$	—	0.00	%	$	16,309	100.00	%

(1)

Investors may elect to receive their distributions either monthly or quarterly (See “Timing and Method of Distributions” on Page 73 of the Prospectus).

(2)

Total distributions per Unit represents the per Unit distribution rate for those units which were outstanding for all of the applicable period.

(3)

Balances shown represent weighted average units for the year ended December 31, 2010, and the periods from January 1 – November 30, 2011, December 1, 2011 – November 30, 2012, and December 1, 2012 – February 28, 2013, respectively.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

Off-Balance Sheet Transactions

None.

Recent Accounting Pronouncements

Recent accounting standards updates as issued by the Financial Accounting Standards Board (FASB) were evaluated and determined to be not applicable to the Company.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America 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. On an on-going

basis, the Company evaluates its estimates, which are based upon historical experiences, market trends and financial forecasts, and upon various other assumptions that management believes to be reasonable under the circumstances and at that certain point in time. Actual results may differ, significantly at times, from these estimates under different assumptions or conditions.

The Company’s critical accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2012. There have been no material changes to the Company’s critical accounting policies since December 31, 2012.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures

The Company’s Managing Member’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer and Chief Operating Officer (“Management”), evaluated the effectiveness of the Company’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 the evaluation of the Company’s disclosure controls and procedures, Management concluded that as of the end of the period covered by this report, the design and operation of these disclosure controls and procedures were effective.

The Company does not control the financial reporting process, and is solely dependent on the Management of the Managing Member, which is responsible for providing the Company with financial statements in accordance with generally accepted accounting principles in the United States. The Managing Member’s disclosure controls and procedures, as applicable to the Company, were effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Changes in internal control

There were no changes in the Managing Member’s internal control over financial reporting, as it is applicable to the Company, during the quarter ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, the Managing Member’s internal control over financial reporting, as it is applicable to the Company.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

(a)

Documents filed as a part of this report

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.

Other Exhibits

31.1        Rule 13a-14(a)/15d-14(a) Certification of Dean L. Cash
31.2        Rule 13a-14(a)/15d-14(a) Certification of Paritosh K. Choksi
32.1        Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash
32.2        Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi
101.INS*    XBRL Instance Document
101.SCH*   XBRL Taxonomy Extension Schema Document
101. CAL*  XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*   XBRL Taxonomy Extension Label Linkbase Document
101.PRE*    XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*    XBRL Taxonomy Extension Definition Linkbase Document

* In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”

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: May 14, 2013

ATEL 14, LLC
(Registrant)


		By: ATEL Managing Member, LLC Managing Member of Registrant
By: /s/ Dean L. Cash Dean L. Cash Chairman of the Board, President and Chief Executive Officer of ATEL Managing Member, LLC (Managing Member)
By: /s/ Paritosh K. Choksi Paritosh K. Choksi Director, Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Managing Member, LLC (Managing Member)
By: /s/ Samuel Schussler Samuel Schussler Vice President and Chief Accounting Officer of ATEL Managing Member, LLC (Managing Member)


Part I. Financial Information			3
Item 1. Financial Statements (Unaudited)			3
Balance Sheets, March 31, 2013 and December 31, 2012			3
Statements of Operations for the three months ended March 31, 2013 and 2012			4
Statements of Changes in Members’ Capital for the year ended December 31, 2012 and for the three months ended March 31, 2013			5
Statements of Cash Flows for the three months ended March 31, 2013 and 2012			6
Notes to the Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 4. Controls and Procedures			29
Part II. Other Information			30
Item 1. Legal Proceedings			30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 3. Defaults Upon Senior Securities			30
Item 4. Mine Safety Disclosures			30
Item 5. Other Information			30
Item 6. Exhibits			30


	Fair Value Measurements at December 31, 2012
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	9,438	$	9,438	$	—	$	—	$	9,438
Notes receivable, net		8,060		—		—		8,060		8,060
Investment in securities		33		—		—		33		33
Financial liabilities:
Non-recourse debt		14,057		—		—		14,079		14,079
Borrowings		4,220		—		—		4,220		4,220

Form 10-Q

For the quarterly period ended March 31, 2013

For the transition period from to

Commission File number 000-54356

ATEL 14, LLC

DOCUMENTS INCORPORATED BY REFERENCE

ATEL 14, LLC Index

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

1. Organization and Limited Liability Company matters:

2. Summary of significant accounting policies:

Basis of presentation:

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

2. Summary of significant accounting policies: - (continued)

Use of estimates:

Segment reporting:

Investment in securities:

Purchased securities

Warrants

Per Unit data:

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

2. Summary of significant accounting policies: - (continued)

Recent Accounting Pronouncements

3. Notes receivable, net:

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

4. Allowance for credit losses:

Accounts receivable

Financing receivables

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

4. Allowance for credit losses: - (continued)

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

4. Allowance for credit losses: - (continued)

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

4. Allowance for credit losses: - (continued)

5. Investments in equipment and leases, net:

Impairment of investments in leases:

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

5. Investments in equipment and leases, net: - (continued)

Operating leases:

Direct financing leases:

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

5. Investments in equipment and leases, net: - (continued)

6. Related party transactions:

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

7. Non-recourse debt:

8. Borrowing facilities:

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

8. Borrowing facilities: - (continued)

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

8. Borrowing facilities: - (continued)

9. Commitments:

10. Guarantees:

11. Members’ capital:

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

11. Members’ capital: - (continued)

12. Fair value measurements:

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

12. Fair value measurements: - (continued)

Impaired notes receivable

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

12. Fair value measurements: - (continued)

Cash and cash equivalents

Notes receivable

Investment in securities

Non-recourse debt

Borrowings

Commitments and Contingencies

ATEL 14, LLC NOTES TO FINANCIAL STATEMENTS (Unaudited)

12. Fair value measurements: - (continued)

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Results of Operations

The three months ended March 31, 2013 versus the three months ended March 31, 2012

Revenues

Expenses

Capital Resources and Liquidity

Cash Flows

The three months ended March 31, 2013 versus the three months ended March 31, 2012

Revolving credit facility

ATEL 14, LLC

Index

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

ATEL 14, LLC
(Registrant)