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 June 30, 2000
|_| 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 0-24175
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
1
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
2
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999
(Unaudited)
ASSETS
2000 1999
---- ----
Cash and cash equivalents $ 3,188,917 $ 1,674,372
Accounts receivable 7,412,271 5,626,105
Other assets 110,009 130,007
Investments in leases 164,233,222 183,993,816
------------------ ------------------
Total assets $174,944,419 $ 191,424,300
================== ==================
LIABILITIES AND PARTNERS' CAPITAL
Long-term debt $53,074,000 $ 53,181,000
Non-recourse debt 18,662,463 21,780,420
Lines of credit 2,050,000 11,150,000
Accounts payable:
General Partner 799,931 1,435,651
Other 1,269,406 425,896
Accrued interest payable 431,430 714,697
Unearned operating lease income 1,313,301 1,422,852
------------------ ------------------
Total liabilities 77,600,531 90,110,516
Partners' capital:
General Partner (1,514,601) (1,514,601)
Limited Partners 98,858,489 102,828,385
------------------ ------------------
Total partners' capital 97,343,888 101,313,784
------------------ ------------------
Total liabilities and partners' capital $174,944,419 $ 191,424,300
================== ==================
See accompanying notes.
3
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
STATEMENT OF OPERATIONS
SIX AND THREE MONTH PERIODS ENDED
JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Six Months Three Months
Ended June 30, Ended June 30,
-------------- --------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Leasing activities:
<S> <C> <C> <C> <C>
Operating leases $20,792,446 $18,050,016 $10,814,256 $ 9,034,907
Direct financing 610,067 976,134 412,149 481,711
Leveraged leases 195,693 71,744 - 35,872
Gain on sales of assets 250,312 747,194 (436,239) 29,597
Interest 36,938 33,904 23,730 21,249
Other 36,997 12,805 31,462 8,933
----------------- ----------------- ------------------ ------------------
21,922,453 19,891,797 10,845,358 9,612,269
Expenses:
Depreciation 13,252,126 12,164,056 8,747,938 6,177,819
Interest expense 2,826,516 3,102,801 1,392,121 1,591,989
Equipment and incentive management fees to
General Partner 878,788 884,588 337,944 391,434
Other 450,674 695,398 213,674 339,094
Administrative cost reimbursements to General
Partner 304,605 250,078 180,755 171,865
Professional fees 76,944 119,416 57,528 81,035
----------------- ----------------- ------------------ ------------------
17,789,653 17,216,337 10,929,960 8,753,236
----------------- ----------------- ------------------ ------------------
Net income (loss) $ 4,132,800 $ 2,675,460 $ (84,602) $ 859,033
================= ================= ================== ==================
Net income (loss):
General Partner $ 604,645 $ 200,660 $ 303,981 $ 64,427
Limited Partners 3,528,155 2,474,800 (388,583) 794,606
----------------- ----------------- ------------------ ------------------
$ 4,132,800 $ 2,675,460 $ (84,602) $ 859,033
================= ================= ================== ==================
Net income (loss) per Limited Partnership Unit $0.24 $0.17 ($0.03) $0.05
Weighted average number of Units outstanding 14,996,050 14,996,050 14,996,050 14,996,050
</TABLE>
See accompanying notes.
4
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
SIX MONTH PERIOD ENDED
JUNE 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners General
Units Amount Partner Total
<S> <C> <C> <C> <C>
Balance December 31, 1999 14,996,050 102,828,385 $(1,514,601) $ 101,313,784
Distributions to partners (7,498,051) (604,645) (8,102,696)
Net income 3,528,155 604,645 4,132,800
----------------- ----------------- ------------------ ------------------
Balance June 30, 2000 14,996,050 $98,858,489 $(1,514,601) $ 97,343,888
================= ================= ================== ==================
</TABLE>
See accompanying notes.
STATEMENTS OF CASH FLOWS
SIX AND THREE MONTH PERIODS ENDED
JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Six Months Three Months
Ended June 30, Ended June 30,
-------------- --------------
Operating activities: 2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) $4,132,800 $2,675,460 ($84,602) $ 859,033
Adjustments to reconcile net income (loss) to
cash provided by operating activities:
Leveraged lease income (195,693) (71,744) - (35,872)
Depreciation 13,252,126 12,164,056 8,747,938 6,177,819
Gain on sales of assets (250,312) (747,194) 436,239 (29,597)
Changes in operating assets and liabilities:
Accounts receivable (1,786,166) 2,407,278 (1,904,644) 874,239
Other assets 19,998 19,998 9,999 9,999
Accounts payable, General Partner (635,720) (39,118) 323,165 98,786
Accounts payable, other 843,510 (250,984) 547,244 (385,145)
Accrued interest expense (283,267) (243,252) (135,180) (428,027)
Unearned lease income (109,551) 243,228 (86,406) (373,351)
----------------- ----------------- ------------------ ------------------
Net cash provided by operations 14,987,725 16,157,728 7,853,753 6,767,884
----------------- ----------------- ------------------ ------------------
Investing activities:
Proceeds from sales of assets 4,368,359 1,273,870 824,680 (768,273)
Reduction in net investment in direct financing
leases 2,586,114 1,742,303 1,561,713 1,328,152
Purchases of equipment on operating leases - (4,692,878) - (120,145)
Purchases of equipment on direct financing
leases - (777,942) - (222,754)
----------------- ----------------- ------------------ ------------------
Net cash (used in) provided by investing
activities 6,954,473 (2,454,647) 2,386,393 216,980
================= ================= ================== ==================
</TABLE>
5
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
STATEMENTS OF CASH FLOWS
(Continued)
SIX AND THREE MONTH PERIODS ENDED
JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Six Months Three Months
Ended June 30, Ended June 30,
-------------- --------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Financing activities:
Distributions to partners (8,102,696) (8,104,753) (4,053,075) (4,065,391)
Proceeds of long-term debt 11,700,000 9,000,000 - 9,000,000
Repayments of long-term debt (11,807,000) (9,270,000) (4,003,000) (3,700,000)
Repayments of borrowings under line of credit (9,100,000) (16,454,531) - (16,172,824)
Borrowings under line of credit - 4,672,824 - 1,500,000
Repayments of non-recourse debt (3,117,957) (2,230,218) (1,721,145) (1,309,155)
Proceeds of non-recourse debt - 9,520,748 - 9,520,748
----------------- ----------------- ------------------ ------------------
Net cash (used in) provided by financing
activities (20,427,653) (12,865,930) (9,777,220) (5,226,622)
----------------- ----------------- ------------------ ------------------
Net increase in cash and cash equivalents 1,514,545 837,151 462,926 1,758,242
Cash and cash equivalents at beginning of
period 1,674,372 1,576,029 2,725,991 654,938
----------------- ----------------- ------------------ ------------------
Cash and cash equivalents at end of period $ 3,188,917 $ 2,413,180 $ 3,188,917 $ 2,413,180
================= ================= ================== ==================
Supplemental disclosures of cash flow
information:
Cash paid during the period for interest $ 3,109,783 $ 3,346,053 $ 1,527,301 $ 2,020,016
================= ================= ================== ==================
</TABLE>
See accompanying notes.
6
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(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.
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.
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 June 30,
1999 of Leases Dispositions 2000
---- --------- - ------------- ----
<S> <C> <C> <C> <C>
Net investment in operating leases $164,971,672 $ (13,158,634) $(1,546,274) $ 150,266,764
Net investment in direct financing leases 22,388,627 (2,586,114) (329,579) 19,472,934
Net investment in leveraged leases 1,724,071 195,693 (1,919,764) -
Assets held for sale or lease 491,758 - (322,430) 169,328
Reserve for losses (6,185,366) - - (6,185,366)
Initial direct costs, net of accumulated
amortization 603,054 (93,492) - 509,562
----------------- ----------------- ------------------ ------------------
$183,993,816 $ (15,642,547) $(4,118,047) $ 164,233,222
================= ================= ================== ==================
</TABLE>
7
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
3. Investment in leases (continued):
Property on operating leases consists of the following:
<TABLE>
<CAPTION>
Balance Dispositions & Balance
December 31, Reclassifications June 30,
1999 1st Quarter 2nd Quarter 2000
---- ----------- ----------- ----
<S> <C> <C> <C> <C>
Transportation $100,584,087 $ 3,575,639 $ (514,038) $ 103,645,688
Marine vessels / barges 27,609,897 (333,418) - 27,276,479
Construction 23,002,563 - - 23,002,563
Manufacturing 22,508,006 - (2,093,102) 20,414,904
Office automation 11,100,543 - - 11,100,543
Mining 8,536,249 - - 8,536,249
Other 7,855,730 (1,589,844) 665,164 6,931,050
Materials handling 5,907,524 (95,598) (212,836) 5,599,090
Communications 7,740,986 (3,235,940) (3,370) 4,501,676
----------------- ----------------- ------------------ ------------------
214,845,585 (1,679,161) (2,158,182) 211,008,242
Less accumulated depreciation (49,873,913) (3,496,378) (7,371,187) (60,741,478)
----------------- ----------------- ------------------ ------------------
$164,971,672 $ (5,175,539) $(9,529,369) $ 150,266,764
================= ================= ================== ==================
</TABLE>
All of the property on leases was acquired in 1997, 1998 and 1999.
At June 30, 2000, the aggregate amounts of future minimum lease payments are as
follows:
Direct
Year ending Operating Financing
December 31, Leases Leases Total
------------ ------ ------ -----
2000 $17,020,229 $ 2,179,236 $19,199,465
2001 28,598,381 4,194,298 32,792,679
2002 20,693,002 3,246,945 23,939,947
2003 12,370,559 2,151,982 14,522,541
2004 8,028,876 1,966,213 9,995,089
Thereafter 7,597,615 3,256,053 10,853,668
----------------- ----------------- ------------------
$94,308,662 $16,994,727 $111,303,389
================= ================= ==================
8
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
4. Non-recourse debt:
Notes payable to financial institutions are due in varying monthly and quarterly
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 7.40% to 8.828%.
Future minimum principal payments of non-recourse debt are as follows:
Year ending
December 31, Principal Interest Total
------------ --------- -------- -----
2000 $ 2,475,892 $ 677,729 $ 3,153,621
2001 6,244,536 1,360,960 7,605,496
2002 6,129,675 783,828 6,913,503
2003 3,175,482 250,880 3,426,362
2004 203,561 38,209 241,770
Thereafter 433,317 40,374 473,691
----------------- ----------------- ------------------
$18,662,463 $ 3,151,980 $21,814,443
================= ================= ==================
5. Long-term debt:
In 1998, the Partnership entered into a $65 million receivables funding program
(the Program) with a receivables financing company that issues commercial paper
rated A1 by Standard and Poors and P1 by Moody's Investor Services. Under the
Program, the receivables financing company receives a general lien against all
of the otherwise unencumbered assets of the Partnership. The Program provides
for borrowing at a variable interest rate (6.0571% at March 31, 2000).
The Program requires the General Partner to enter into various interest rate
swaps with a financial institution (also rated A1/P1) to manage interest rate
exposure associated with variable rate obligations under the Program by
effectively converting the variable rate debt to fixed rates. As of June 30,
2000, the Partnership receives or pays interest on a notional principal of
$55,983,000, based on the difference between nominal rates ranging from 5.55% to
7.58% and the variable rate under the Program. No actual borrowing or lending is
involved. The last of the swaps terminates in 2008. The differential to be paid
or received is accrued as interest rates change and is recognized currently as
an adjustment to interest expense related to the debt.
9
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
5. Long-term debt (continued):
Borrowings under the Program are as follows:
Original Balance Rate on
Date Amount June 30, Interest Swap
Borrowed Borrowed 2000 Agreement
-------- -------- ---- ---------
4/1/1998 $ 21,770,000 $11,161,000 6.220%
7/1/1998 25,000,000 12,685,000 6.155%
10/1/1998 20,000,000 13,611,000 5.550%
4/16/1999 9,000,000 4,595,000 5.890%
1/26/2000 11,700,000 11,022,000 7.580%
------------------- -----------------
$ 87,470,000 $53,074,000
=================== =================
The long-term debt borrowings mature from 2004 through 2008. Future minimum
principal payments of long-term debt are as follows:
Year ending
December 31, Principal Interest Total
------------ --------- -------- -----
2000 $ 8,197,000 $ 1,578,638 $ 9,775,638
2001 13,724,000 2,410,467 16,134,467
2002 11,131,000 1,640,179 12,771,179
2003 7,200,000 1,075,640 8,275,640
2004 5,422,000 676,854 6,098,854
Thereafter 7,400,000 701,275 8,101,275
----------------- ----------------- ------------------
$53,074,000 $ 8,083,053 $61,157,053
================= ================= ==================
6. 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 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.
10
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
6. Related party transactions (continued):
The General Partner and/or Affiliates earned fees, commissions and
reimbursements, pursuant to the Limited Partnership Agreement during the six
month periods ended June 30, 2000 and 1999 as follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
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). $ 878,788 $ 884,588
Administrative costs reimbursed to General Partner 304,605 250,078
------------------ ------------------
$ 1,183,393 $ 1,134,666
================== ==================
</TABLE>
7. Partner's capital:
As of June 30, 2000, 14,996,050 Units ($149,960,500) were issued and
outstanding.
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.
11
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VII, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
8. Line of credit:
The Partnership participates with the General Partner and certain of its
Affiliates in a $77,500,000 revolving credit agreement with a group of financial
institutions which expires on July 28, 2001. 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 June 30, 2000, the Partnership had $2,050,000 of borrowings under the line of
credit.
The credit agreement includes certain financial covenants applicable to each
borrower. The Partnership was incompliance with its covenants as of June 30,
2000.
9. Commitments:
As of June 30, 2000, the Partnership had no outstanding commitments to purchase
lease equipment.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Capital Resources and Liquidity
During the first and second quarters of 2000, the Partnership's primary activity
was engaging in equipment leasing activities.
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 $77,500,000 revolving line of credit with a group of financial
institutions. The line of credit expires on July 28, 2001.
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 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. There were no such commitments as of
June 30, 2000.
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.
13
<PAGE>
Cash Flows, 2000 vs. 1999:
During the first half of 2000, the Partnership's primary sources of liquidity
was rents from assets on operating leases.
Cash from operating activities was almost entirely from operating lease rents in
both 2000 and in 1999 for both the three and six month periods.
Sources of cash from investing activities consisted of proceeds from sales of
assets and direct financing lease rents. Proceeds from sales of lease assets
increased significantly compared to 1999. Cash was used in investing activities
to purchase assets on operating and direct financing leases in 1999.
Cash from financing sources consisted of borrowings of other long-term debt.
Borrowings in 2000 were used to repay amounts due on the line of credit.
Repayments of debt have increased as a result of borrowings over the last year.
Distributions to partners were almost unchanged compared to 1999.
Results of operations:
Operations in 2000 resulted in a net income of $4,132,800 (six months) and a net
loss of $84,602 (three months). Operations in 1999 resulted in a net income of
$2,675,337 (six months) and $859,033 (three months). The Partnership's primary
source of revenues is from operating leases. This is expected to remain true in
future periods. Operating lease revenues for the six month periods increased
from $18,050,016 in 1999 to $20,792,446 in 2000. For the three month periods,
they increased from $9,034,907 in 1999 to $10,814,256 in 2000. The increases
were the result of asset acquisitions in 1999.
Depreciation expense is the single largest expense of the Partnership and is
expected to remain so in future periods. Total debt has decreased from about
$85,200,000 at June 30, 1999 to about $73,800,000 at June 30, 2000. This has
resulted in decreases in interest expense compared to 1999. For the six month
periods, interest decreased by $276,285. For the three month period, the
decrease was $199,868.
14
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
In January 2000, Applied Magnetics Corporation, a lessee of the Partnership,
filed for protection from creditors under Chapter 11 of the U. S. Bankruptcy
Act. The Partnership has assets with a total net book value of $8,048,095 leased
to Applied Magnetics Corporation. On January 31, 2000, the General Partner was
appointed to the Official Committee of Unsecured Creditors. Procedures are under
way for the liquidation of the Partnership's leased equipment. Recoveries by the
Partnership, resulting from this default, are fairly certain in the range of 10%
to 20% due to the liquidation of the Partnership's equipment. Recoveries above
this amount are more uncertain; however, the Partnership anticipates an
additional 6% to 15% to be recoverable through the liquidation or reorganization
of the lessee's business. Any recoveries above these amounts are highly
uncertain and speculative. As of June 30, 2000, liquidation of the assets was
under way.
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.
Inapplicable.
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, June 30, 2000 and December 31, 1999.
Statement of changes in partners' capital for the six
months ended June 30, 2000.
Statements of operations for the six and three month
periods ended June 30, 2000 and 1999.
Statement of cash flows for the six and three month
periods ended June 30, 2000 and 1999.
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
15
<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:
August 11, 2000
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/ PARITOSH K. CHOKSI
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Paritosh K. Choksi
Principal financial officer
of registrant
By: /s/ DONALD E. CARPENTER
--------------------------------------
Donald E. Carpenter
Principal accounting
officer of registrant
