Form 10-Q
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, 1998
|_| 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 333-08879
ATEL Capital Equipment Fund VII, L.P.
(Exact name of registrant as specified in its charter)
California 94-3248318
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
235 Pine Street, 6th Floor, San Francisco, California 94104
(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 989-8800
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 |_|
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(Unaudited)
ASSETS
1998 1997
---- ----
Cash and cash equivalents $2,003,334 $2,014,706
Accounts receivable 2,084,731 917,219
Other assets 200,000 200,000
Investments in leases 110,232,834 101,284,861
----------------- ------------------
Total assets $114,520,899 $104,416,786
================= ==================
LIABILITIES AND PARTNERS' CAPITAL
Lines of credit $37,254,961 $40,390,460
Non-recourse debt 7,945,141 8,127,374
Accounts payable:
General Partner 245,704 334,256
Other 268,026 535,621
Accrued interest expense 256,690 197,664
Unearned operating lease income 1,025,730 930,997
----------------- ------------------
Total liabilities 46,996,252 50,516,372
Partners' capital:
General Partner (338,699) (247,461)
Limited Partners 67,863,346 54,147,875
----------------- ------------------
Total partners' capital 67,524,647 53,900,414
----------------- ------------------
Total liabilities and partners' capital $114,520,899 $104,416,786
================= ==================
See accompanying notes.
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
STATEMENT OF OPERATIONS
THREE MONTH PERIODS ENDED
MARCH 31, 1998 AND 1997
(Unaudited)
1998 1997
---- ----
Revenues:
Leasing activities:
Operating leases $5,392,236 $1,515,545
Direct financing leases 262,173 -
Leveraged leases 32,879 -
Gain on sales of assets 878 -
Interest 6,567 2,646
Other 723 117
----------------- ------------------
5,695,456 1,518,308
Expenses:
Depreciation 2,913,361 1,018,723
Interest expense 846,237 303,983
Administrative cost reimbursements
to General Partner 247,691 87,163
Equipment and incentive management
fees to General Partner 295,546 57,329
Other 145,296 52,694
Provision for losses 56,954 -
Professional fees 8,751 8,345
----------------- ------------------
4,513,836 1,528,237
----------------- ------------------
Net income (loss) $1,181,620 ($9,929)
================= ==================
Net income (loss):
General Partner $88,622 ($745)
Limited Partners 1,092,998 (9,184)
================= ==================
$1,181,620 ($9,929)
================= ==================
Net income (loss) per Limited Partnership Unit $0.15 ($0.01)
Weighted average number of Units outstanding 7,504,449 788,645
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
THREE MONTH PERIOD ENDED
MARCH 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners General
Units Amount Partner Total
<S> <C> <C> <C> <C>
Balance December 31, 1996 6,716,896 $54,147,875 ($247,461) $53,900,414
Capital contributions 1,649,064 16,490,640 - 16,490,640
Less selling commissions to affiliates (1,566,611) - (1,566,611)
Other syndication costs to affiliates (595,950) - (595,950)
Distributions to partners (1,705,606) (179,860) (1,885,466)
Net income 1,092,998 88,622 1,181,620
----------------- ----------------- ----------------- ------------------
Balance March 31, 1997 8,365,960 $67,863,346 ($338,699) $67,524,647
================= ================= ================= ==================
</TABLE>
See accompanying notes.
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
STATEMENT OF CASH FLOWS
THREE MONTH PERIODS ENDED
MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Operating activities:
Net income (loss) $1,181,620 ($9,929)
Adjustments to reconcile net income to cash provided by operating activities:
Leveraged lease income (32,879) -
Gain on sales of assets (878)
Depreciation 2,913,361 1,018,723
Provision for losses 56,954 -
Changes in operating assets and liabilities:
Accounts receivable (1,167,512) (216,218)
Accounts payable, General Partner (88,552) 54,079
Accounts payable, other (267,595) 53,979
Accrued interest expense 59,026 -
Unearned lease income 94,733 125,214
----------------- ------------------
Net cash provided by operations 2,748,278 1,025,848
----------------- ------------------
Investing activities:
Purchases of equipment on operating leases (11,560,028) (21,146,051)
Purchases of equipment held for sale or lease (441,187) -
Purchases of equipment on direct financing leases - (760,000)
Reduction of net investment in direct financing leases 106,076
Proceeds from sales of assets 10,608 -
----------------- ------------------
Net cash used in investing activities (11,884,531) (21,906,051)
----------------- ------------------
Financing activities:
Borrowings under line of credit - 9,273,690
Repayments of borrowings under line of credit (3,135,499) (485,000)
Repayments of non-recourse debt (182,233) -
Capital contributions received 16,490,640 15,567,090
Payment of syndication costs to General Partner (2,162,561) (2,281,544)
Distributions to limited partners (1,705,606) (76,227)
Distributions to general partner (179,860) -
----------------- ------------------
Net cash provided by financing activities 9,124,881 21,998,009
----------------- ------------------
Net increase in cash and cash equivalents (11,372) 1,117,806
Cash and cash equivalents at beginning of period 2,014,706 600
----------------- ------------------
Cash and cash equivalents at end of period $2,003,334 $1,118,406
================= ==================
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $303,983
==================
</TABLE>
See accompanying notes.
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(Unaudited)
1. Summary of significant accounting policies:
Interim financial statements:
The unaudited interim financial statements reflect all adjustments which are, in
the opinion of the general partners, necessary to a fair statement of financial
position and results of operations for the interim periods presented. All such
adjustments are of a normal recurring nature. These unaudited interim financial
statements should be read in conjunction with the most recent report on Form
10K.
2. Organization and partnership matters:
ATEL Capital Equipment Fund VII, L.P. (the Fund), was formed under the laws of
the State of California on July 17 , 1996, for the purpose of acquiring
equipment to engage in equipment leasing and sales activities. Contributions in
the amount of $600 were received as of July 17, 1996, $100 of which represented
the General Partner's (ATEL Financial Corporation's) continuing interest, and
$500 of which represented the Initial Limited Partners' capital investment.
Upon the sale of the minimum amount of Units of Limited Partnership interest
(Units) of $1,200,000 and the receipt of the proceeds thereof on January 7,
1997, the Partnership commenced operations.
The Partnership does not make a provision for income taxes since all income and
losses will be allocated to the Partners for inclusion in their individual tax
returns.
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(Unaudited)
3. Investment in leases:
The Partnership's investment in leases consists of the following:
<TABLE>
<CAPTION>
Depreciation
Balance Expense or Reclassi- Balance
December 31, Amortization fications or March 31,
1997 Additions of Leases Dispositions 1998
---- --------- --------- - ------------- ----
<S> <C> <C> <C> <C> <C>
Net investment in operating
leases $83,268,573 11,560,028 (2,900,278) ($9,730) $91,918,593
Net investment in direct
financing leases 16,609,199 - (106,076) - 16,503,123
Net investment in leveraged
leases 1,449,068 - 32,879 - 1,481,947
Assets held for sale or lease 441,187 (11,763) - 429,424
Reserve for losses (74,277) (56,954) - - (131,231)
Initial direct costs, net of
accumulated amortization 32,298 - (1,320) - 30,978
------------------- ----------------- ----------------- ----------------- ------------------
$101,284,861 $11,944,261 ($2,986,558) ($9,730) $110,232,834
=================== ================= ================= ================= ==================
</TABLE>
Property on operating leases consists of the following:
<TABLE>
<CAPTION>
Balance Balance
December 31, March 31,
1997 Additions Dispositions 1998
---- --------- ------------ ----
<S> <C> <C> <C> <C>
Transportation $51,120,754 $4,648,781 ($10,255) $55,759,280
Manufacturing 14,342,104 709,848 - 15,051,952
Mining 6,275,273 1,286,210 - 7,561,483
Motor vehicles 5,454,671 - - 5,454,671
Office automation 1,624,385 3,328,775 - 4,953,160
Aircraft 3,430,000 - 3,430,000
Materials handling 3,127,344 216,900 - 3,344,244
Other 2,601,605 220,887 - 2,822,492
Furniture and fixtures 1,132,479 1,148,627 - 2,281,106
----------------- ----------------- ----------------- ------------------
89,108,615 11,560,028 (10,255) 100,658,388
Less accumulated depreciation (5,840,042) (2,900,278) 525 (8,739,795)
----------------- ----------------- ----------------- ------------------
$83,268,573 $8,659,750 ($9,730) $91,918,593
================= ================= ================= ==================
</TABLE>
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(Unaudited)
3. Investment in leases (continued):
As of March 31, 1998, investment in direct financing leases consists of fuel
trucks. The following lists the components of the Partnership's investment in
direct financing leases as of March 31, 1998:
Total minimum lease payments receivable $14,225,842
Estimated residual values of leased equipment (unguaranteed) 7,106,748
--------------
Investment in direct financing leases 21,332,590
Less unearned income (4,829,467)
--------------
Net investment in direct financing leases $16,503,123
==============
All of the property on leases was acquired in 1997 and 1998. There were no
significant dispositions of such property.
At March 31, 1998, the aggregate amounts of future minimum lease payments are as
follows:
Direct
Year ending Operating Financing
December 31, Leases Leases Total
1998 $12,202,121 $1,892,635 $14,094,756
1999 17,842,529 2,523,513 20,366,042
2000 14,761,168 2,523,513 17,284,681
2001 12,206,797 2,523,513 14,730,310
2002 8,843,965 2,116,959 10,960,924
Thereafter 6,580,933 2,645,709 9,226,642
----------------- ----------------- -----------------
$72,437,513 $14,225,842 $86,663,355
================= ================= =================
4. Non-recourse debt:
Notes payable to financial institutions are due in varying monthly, quarterly
and semi-annual installments of principal and interest. The notes are secured by
assignments of lease payments and pledges of the assets which were purchased
with the proceeds of the particular notes. Interest rates on the notes vary from
8.3% to 10.0%.
Future minimum payments of non-recourse debt are as follows:
Year ending
December 31, Principal Interest Total
1998 $569,893 $216,809 $786,702
1999 1,258,792 984,894 2,243,686
2000 1,703,036 540,650 2,243,686
2001 1,861,393 382,293 2,243,686
2002 1,466,096 219,272 1,685,368
Thereafter 1,085,931 108,819 1,194,750
----------------- ----------------- -----------------
$7,945,141 $2,452,737 $10,397,878
================= ================= =================
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(Unaudited)
5. Related party transactions:
The terms of the Limited Partnership Agreement provide that the General Partner
and/or Affiliates are entitled to receive certain fees for equipment
acquisition, management and resale and for management of the Partnership.
The Limited Partnership Agreement allows for the reimbursement of costs incurred
by the General Partner in providing administrative services to the Partnership.
Administrative services provided include Partnership accounting, investor
relations, legal counsel and lease and equipment documentation. The General
Partner is not reimbursed for services where it is entitled to receive a
separate fee as compensation for such services, such as acquisition and
management of equipment. Reimbursable costs incurred by the General Partner are
allocated to the Partnership based upon actual time incurred by employees
working on Partnership business and an allocation of rent and other costs based
on utilization studies.
Substantially all employees of the General Partner record time incurred in
performing administrative services on behalf of all of the Partnerships serviced
by the General Partner. The General Partner believes that the costs reimbursed
are the lower of (i) actual costs incurred on behalf of the Partnership or (ii)
the amount the Partnership would be required to pay independent parties for
comparable administrative services in the same geographic location and are
reimbursable in accordance with the Limited Partnership Agreement.
The General Partner and/or Affiliates earned fees, commissions and
reimbursements, pursuant to the Limited Partnership Agreement as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Selling commissions (equal to 9.5% of the selling price of the Limited
Partnership units, deducted from Limited Partners' capital) $1,566,611 $1,478,874
Reimbursement of other syndication costs 595,950 802,670
Incentive management fees (computed as 4% of distributions of cash from
operations, as defined in the Limited Partnership Agreement) and equipment
management fees (computed as 3.5% of gross revenues from operating leases, as
defined in the Limited Partnership Agreement plus 2% of gross revenues from full
payout leases, as defined in the Limited Partnership Agreement). 295,546 57,329
Administrative costs reimbursed to General Partner 247,691 87,163
----------------- ------------------
$2,705,798 $2,426,036
================= ==================
</TABLE>
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(Unaudited)
6. Partner's capital:
As of March 31, 1998, 8,365,960 Units ($83,659,600) were issued and outstanding.
The Fund's registration statement with the Securities and Exchange Commission
became effective November 29, 1996. The Fund is authorized to issue up to
15,000,050 Units, including the 50 Units issued to the initial limited partners.
Available Cash from Operations, as defined in the Limited Partnership Agreement,
shall be distributed as follows:
First, Distributions of Cash from Operations shall be 88.5% to the Limited
Partners, 7.5% to the General Partner and 4% to the General Partner or its
affiliate designated as the recipient of the Incentive Management Fee, until the
Limited Partners have received Aggregate Distributions in an amount equal to
their Original Invested Capital, as defined, plus a 10% per annum cumulative
(compounded daily) return on their Adjusted Invested Capital, as defined in the
Limited Partnership Agreement.
Second, 85% to the Limited Partners, 7.5% to the General Partner and 7.5% to the
General Partner or its affiliate designated as the recipient of the Incentive
Management Fee.
Available Cash from Sales or Refinancing, as defined in the Limited Partnership
Agreement, shall be distributed as follows:
First, Distributions of Sales or Refinancings shall be 92.5% to the Limited
Partners and 7.5% to the General Partner, until the Limited Partners have
received Aggregate Distributions in an amount equal to their Original Invested
Capital, as defined, plus a 10% per annum cumulative (compounded daily) return
on their Adjusted Invested Capital.
Second, 85% to the Limited Partners, 7.5% to the General Partner and 7.5% to the
General Partner or its affiliate designated as the recipient of the Incentive
Management Fee.
7. Line of credit:
The Partnership participates with the General Partner and certain of its
Affiliates in a $90,000,000 revolving credit agreement with a group of financial
institutions which expires on October 28, 1998. The agreement includes an
acquisition facility and a warehouse facility which are used to provide bridge
financing for assets on leases. Draws on the acquisition facility by any
individual borrower are secured only by that borrower's assets, including
equipment and related leases. Borrowings on the warehouse facility are recourse
jointly to certain of the Affiliates, the Partnership and the General Partner.
At March 31, 1998, the Partnership had $37,254,961 of borrowings under the line
of credit.
The credit agreement includes certain financial covenants applicable to each
borrower. The Partnership was in compliance with its covenants as of March 31,
1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Capital Resources and Liquidity
During the first quarter of 1998 and 1997, the Partnership's primary activities
were raising funds through its offering of Limited Partnership Units (Units) and
engaging in equipment leasing activities. Through March 31, 1998, the
Partnership had received subscriptions for 8,365,960 Units ($83,659,600) all of
which were issued and outstanding.
During the funding period, the Partnership's primary source of liquidity is
subscription proceeds from the public offering of Units. The liquidity of the
Partnership will vary in the future, increasing to the extent cash flows from
leases exceed expenses, and decreasing as lease assets are acquired, as
distributions are made to the limited partners and to the extent expenses exceed
cash flows from leases.
As another source of liquidity, the Partnership has contractual obligations with
a diversified group of lessees for fixed lease terms at fixed rental amounts. As
the initial lease terms expire the Partnership will re-lease or sell the
equipment. The future liquidity beyond the contractual minimum rentals will
depend on the General Partner's success in re-leasing or selling the equipment
as it comes off lease.
The Partnership participates with the General Partner and certain of its
affiliates in a $90,000,000 revolving line of credit with a financial
institution. The line of credit expires on October 28, 1998.
The Partnership anticipates reinvesting a portion of lease payments from assets
owned in new leasing transactions. Such reinvestment will occur only after the
payment of all obligations, including debt service (both principal and
interest), the payment of management and acquisition fees to the General Partner
and providing for cash distributions to the Limited Partners.
The Partnership currently has available adequate reserves to meet contingencies,
but in the event those reserves were found to be inadequate, the Partnership
would likely be in a position to borrow against its current portfolio to meet
such requirements. The General Partner envisions no such requirements for
operating purposes.
No commitments of capital have been or are expected to be made other than for
the acquisition of additional equipment. Such commitments totaled approximately
$7,020,000 as of March 31, 1998.
If inflation in the general economy becomes significant, it may affect the
Partnership inasmuch as the residual (resale) values and rates on re-leases of
the Partnership's leased assets may increase as the costs of similar assets
increase. However, the Partnership's revenues from existing leases would not
increase, as such rates are generally fixed for the terms of the leases without
adjustment for inflation.
If interest rates increase significantly, the lease rates that the Partnership
can obtain on future leases will be expected to increase as the cost of capital
is a significant factor in the pricing of lease financing. Leases already in
place, for the most part, would not be affected by changes in interest rates.
<PAGE>
Cash Flows
During the first quarters of 1998 and 1997, the Partnership's primary sources of
liquidity were the proceeds of its offering of Units.
Cash from operating activities was almost entirely from operating lease rents in
both years. Once the Partnership's offering is completed, operating leases are
expected to be the primary source of cash.
In the first quarter of 1998, the only sources of cash from investing activities
was proceeds from sales of assets and rents from direct financing leases.
Neither was significant compared to the Partnership's other sources of cash.
There were no sources of cash from investing activities during the first quarter
of 1997. The primary investing use of cash was the purchase of assets on
operating leases.
Cash from financing sources consisted of cash received for subscriptions for
Units. Distributions to Partners has increased as the offering has continued and
the number of outstanding Units has increased compared to 1997.
Results of operations
Operations resulted in a net income of $1,181,620 in 1998 compared to a net loss
of $9,929 in the same period in 1997. The Partnership's primary source of
revenues is from operating leases. This is expected to remain true in future
periods although the amounts are expected to increase as a result of additional
equipment acquisitions. Depreciation expense is the single largest expense of
the Partnership. Depreciation is related to operating lease assets and thus, to
operating lease revenues. It is expected to increase in future periods as
acquisitions continue.
Equipment management fees are based on the Partnership's rental revenues and are
expected to increase in relation to expected increases in the Partnership's
revenues from leases. Incentive management fees are based on the levels of
distributions to limited partners.
As the number of units outstanding increases (as a result of the continuing
offering of such units), the incentive management fee is expected to increase.
Interest expense in the first quarter of 1998 relates primarily to the
borrowings under the line of credit. Interest expense for the first quarter of
1997 related to the borrowings under the line of credit. It included all amounts
related to those borrowings, going back as far as November 1996 when the General
Partner started to fund the related transactions on behalf of the Partnership.
All of the revenues and related carrying costs for these transactions were
attributed to the Partnership in the first quarter of 1997.
Results of operations in future periods are expected to vary considerably from
those of the first quarter of 1998 as the Partnership continues to acquire
significant amount of lease assets.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Inapplicable.
Item 2. Changes In Securities.
Inapplicable.
Item 3. Defaults Upon Senior Securities.
Inapplicable.
Item 4. Submission Of Matters To A Vote Of Security Holders.
Inapplicable.
Item 5. Other Information.
Information provided pursuant to ss. 228.701 (Item 701(f))(formerly
included in Form SR):
(1) Effective date of the offering: November 29, 1996; File Number: 33388
(2)
Offering commenced: November 29, 1996 (
3) The offering did not terminate before any securities were sold.
(4) The offering has not been terminated prior to the sale of all of the
securities.
(5) The managing underwriter is ATEL Securities Corporation.
(6) The title of the registered class of securities is "Units of limited
partnership interest"
(7) Aggregate amount and offering price of securities registered and sold as of
March 31, 1998
<TABLE>
<CAPTION>
Aggregate Aggregate
price of price of
offering offering
Amount amount Amount amount
Title of Security Registered registered sold sold
<S> <C> <C> <C> <C>
Limited Partnership units 15,000,000 $150,000,000 8,365,910 $83,659,100
(8) Costs incurred for the issuers account in connection with the issuance and
distribution of the securities registered for each category listed below:
<PAGE>
Direct or indirect
payments to directors,
officers, general
partners of the issuer
or their associates;
to persons owning ten
percent or more of any
Direct or class of
equity securities of
indirect the issuer; Direct or indirect
and to affiliates of payments to
the issuer others Total
<S> <C> <C> <C>
Underwriting discounts and
commissions $3,736,447 $4,211,168 $7,947,615
Other expenses - 4,014,660 4,014,660
----------------- ----------------- ------------------
Total expenses $3,736,447 $8,225,828 $11,962,274
================= ================= ==================
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(9) Net offering proceeds to the issuer after the total expenses in item 8: $71,696,826
</TABLE>
(10) The amount of net offering proceeds to the issuer
used for each of the purposes listed below:
<TABLE>
<CAPTION>
Direct or indirect
payments to directors,
officers, general
partners of the issuer
or their associates;
to persons owning ten
percent or more of any
Direct or class of
equity securities of
indirect the issuer; Direct or indirect
and to affiliates of payments to
the issuer others Total
<S> <C> <C> <C>
Purchase and installation of
machinery and equipment $ - $71,278,531 $71,278,531
Working capital - 418,296 418,296
----------------- ----------------- ------------------
$ - $71,696,826 $71,696,826
================= ================= ==================
</TABLE>
(11) The use of the proceeds in Item 10 does not represent a material change in
the uses of proceeds described in the prospectus.
<PAGE>
Item 6. Exhibits And Reports On Form 8-K.
(a) Documents filed as a part of this report
1. Financial Statements
Included in Part I of this report:
Balance Sheets, March 31, 1998 and December 31, 1997.
Statements of operations for the three month periods ended
March 31, 1998 and 1997.
Statement of changes in partners' capital for the three
months ended March 31, 1998.
Statements of cash flows for the three month periods ended
March 31, 1998 and 1997.
Notes to the Financial Statements
2. 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.
(b) Report on Form 8-K
None
<PAGE>
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 12, 1998
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
(Registrant)
By: ATEL Financial Corporation
General Partner of Registrant
By: /s/ A. J. Batt
-----------------------------------
A. J. Batt
President and Chief Executive Officer
of General Partner
By: /s/ Dean L. Cash
-----------------------------------
Dean L. Cash
Executive Vice President
of General Partner
By: /s/ F. Randall Bigony
-------------------------------------
F. Randall Bigony
Principal financial officer
of registrant
By: /s/ Donald E. Carpenter
-------------------------------------
Donald E. Carpenter
Principal accounting
officer of registrant
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,003,334
<SECURITIES> 0
<RECEIVABLES> 2,084,731
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 114,520,899
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 67,524,647
<TOTAL-LIABILITY-AND-EQUITY> 114,520,899
<SALES> 0
<TOTAL-REVENUES> 5,695,456
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,610,645
<LOSS-PROVISION> 56,954
<INTEREST-EXPENSE> 846,237
<INCOME-PRETAX> 1,181,620
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,181,620
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,181,620
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
