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
September 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 333-62477
ATEL Capital Equipment Fund VIII, LLC
(Exact name of registrant as specified in its charter)
California 94-3307404
---------- ----------
(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 VIII, LLC
BALANCE SHEETS
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(Unaudited)
ASSETS
2000 1999
---- ----
Cash and cash equivalents $ 2,676,152 $ 3,973,342
Accounts receivable 3,813,129 2,124,786
Other assets 122,500 145,000
Investments in leases 183,727,836 139,420,208
----------------- ------------------
Total assets $190,339,617 $145,663,336
================= ==================
LIABILITIES AND MEMBERS' CAPITAL
Long-term debt $ 83,596,000 $ 64,674,000
Non-recourse debt 5,106,764 7,174,617
Line of credit 6,592,627 7,500,000
Accounts payable:
Managing member 516,675 811,287
Other 285,902 1,123
Accrued interest payable 233,512 114,602
Unearned operating lease income 1,994,961 1,257,697
----------------- ------------------
Total liabilities 98,326,441 81,533,326
Members' capital:
Managing member - -
Other members 92,013,176 64,130,010
----------------- ------------------
Total members' capital 92,013,176 64,130,010
----------------- ------------------
Total liabilities and members' capital $190,339,617 $145,663,336
================= ==================
See accompanying notes.
3
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
INCOME STATEMENTS
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Three Months
Ended September 30, Ended September 30,
------------------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Leasing activities:
<S> <C> <C> <C> <C>
Operating leases $21,367,986 $ 4,359,539 $ 8,553,136 $ 2,878,064
Direct financing leases 553,989 212,286 284,861 86,798
Gain on sales of assets 1,453 - - -
Interest 126,961 72,585 52,973 53,496
Other 10,729 372 8,156 165
------------------ ------------------ ----------------- ------------------
22,061,118 4,644,782 8,899,126 3,018,523
Expenses:
Depreciation and amortization 16,078,770 2,792,084 5,894,918 1,748,864
Interest expense 5,208,362 764,541 1,897,752 341,959
Administrative cost reimbursements to Managing
Member 935,437 516,568 394,855 240,445
Asset management fees to Managing Member 973,761 232,387 380,784 153,399
Professional fees 102,055 29,213 61,145 1,602
Other 341,126 40,006 274,197 23,700
------------------ ------------------ ----------------- ------------------
23,639,511 4,374,799 8,903,651 2,509,969
------------------ ------------------ ----------------- ------------------
Net (loss) income $ (1,578,393) $ 269,983 $ (4,525) $ 508,554
================== ================== ================= ==================
Net (loss) income:
Managing member $ 536,365 $ 20,249 $ 202,487 $ 38,142
Other members (2,114,758) 249,734 (207,012) 470,412
------------------ ------------------ ----------------- ------------------
$ (1,578,393) $ 269,983 $ (4,525) $ 508,554
================== ================== ================= ==================
Net (loss) income per Limited Liability Company
Unit $ (0.21) $ 0.08 $ (0.02) $ 0.09
Weighted average number of Units outstanding 9,887,359 3,014,585 11,359,758 4,998,549
</TABLE>
4
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
STATEMENT OF CHANGES IN MEMBERS' CAPITAL
NINE MONTH PERIOD ENDED
SEPTEMBER 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Other Members
------------- Managing
Units Amount Member Total
<S> <C> <C> <C> <C>
Balance December 31, 1999 7,744,326 $64,130,010 $ - $ 64,130,010
Capital contributions 4,266,202 42,662,020 - 42,662,020
Less selling commissions to affiliates (4,052,892) - (4,052,892)
Other syndication costs to affiliates (1,996,437) - (1,996,437)
Distributions to members (6,614,767) (536,365) (7,151,132)
Net (loss) income (2,114,758) 536,365 (1,578,393)
------------------ ------------------ ----------------- ------------------
Balance September 30, 2000 12,010,528 $92,013,176 $ - $ 92,013,176
================== ================== ================= ==================
</TABLE>
See accompanying notes.
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
STATEMENTS OF CASH FLOWS
NINE AND THREE MONTH PERIODS ENDED
SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Three Months
Ended September 30, Ended September 30,
------------------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
Operating activities:
<S> <C> <C> <C> <C>
Net (loss) income $ (1,578,393) $ 269,983 $ (4,525) $ 508,554
Adjustments to reconcile net (loss) income to
cash provided by operating activities:
Depreciation 16,078,770 2,792,084 5,894,918 1,748,864
Gain on sales of assets (1,453) - - -
Changes in operating assets and liabilities:
Accounts receivable (1,688,343) (1,966,818) (1,333,079) (975,723)
Other assets 22,500 (150,000) 7,500 (150,000)
Accounts payable, Managing Member (294,612) 128,459 (34,909) 128,459
Accounts payable, other 284,779 1,740,870 (1,043,755) 1,498,035
Accrued interest payable 118,910 - (47,369) -
Unearned lease income 737,264 41,768 818,548 (7,998)
------------------ ------------------ ----------------- ------------------
Net cash provided by operations 13,679,422 2,856,346 4,257,329 2,750,191
------------------ ------------------ ----------------- ------------------
Investing activities:
Purchases of equipment on operating leases (51,934,271) (49,378,065) (16,307,225) (24,739,628)
Purchases of equipment on direct financing leases (8,322,910) (9,951,981) (7,243,757) (4,610,893)
Proceeds from sales of assets 9,520 - - -
Reduction of net investment in direct financing leases 553,989 675,100 (345,933) 334,231
Payment of initial direct costs (691,273) (33,373) (211,455) -
------------------ ------------------ ----------------- ------------------
Net cash used in investing activities (60,384,945) (58,688,319) (24,108,370) (29,016,290)
------------------ ------------------ ----------------- ------------------
</TABLE>
5
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
STATEMENTS OF CASH FLOWS
(Continued)
STATEMENT OF CHANGES IN MEMBERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Three Months
Ended September 30, Ended September 30,
------------------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
Financing activities:
<S> <C> <C> <C> <C>
Capital contributions received 42,662,020 60,176,840 12,936,030 19,591,390
Payment of syndication costs to managing member (6,049,329) (8,504,898) (1,889,790) (2,691,935)
Borrowings under line of credit 21,908,796 8,000,000 1,000,000 8,000,000
Repayments of line of credit (22,816,169) - (5,507,373) -
Proceeds of long-term debt 27,400,000 - 19,000,000 -
Repayments of long-term debt (8,478,000) - (3,555,000) -
Repayments of non-recourse debt (2,067,853) - (981,380) -
Distributions to managing member (536,365) - (202,487) -
Distributions to members (6,614,767) (1,342,454) (2,496,936) (913,033)
------------------ ------------------ ----------------- ------------------
Net cash provided by financing activities 45,408,333 58,329,488 18,303,064 23,986,422
------------------ ------------------ ----------------- ------------------
Net (decrease) increase in cash and cash
equivalents (1,297,190) 2,497,515 (1,547,977) (2,279,677)
Cash and cash equivalents at beginning of
period 3,973,342 600 4,224,129 4,777,792
------------------ ------------------ ----------------- ------------------
Cash and cash equivalents at end of period $ 2,676,152 $ 2,498,115 $ 2,676,152 $ 2,498,115
================== ================== ================= ==================
Supplemental disclosures of cash flow
information:
Cash paid during the period for interest $ 5,208,362 $ 764,541 $ 4,785,780 $ 341,959
================== ================== ================= ==================
</TABLE>
See accompanying notes.
6
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 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 managing member, 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 Company matters:
ATEL Capital Equipment Fund VIII, LLC. (the Company), was formed under the laws
of the State of California on July 31 , 1998, for the purpose of acquiring
equipment to engage in equipment leasing and sales activities. Contributions in
the amount of $600 were received as of October 7, 1998, $100 of which
represented the Managing Member's (ATEL Financial Corporation's) continuing
interest, and $500 of which represented the Initial Members' capital investment.
Upon the sale of the minimum amount of Units of Limited Liability Company
interest (Units) of $1,200,000 and the receipt of the proceeds thereof on
January 13, 1999, the Company commenced operations.
The Company 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 Company's investment in leases consists of the following:
<TABLE>
<CAPTION>
Depreciation
Balance Expense or Reclassi- Balance
December 31, Amortization fications or September 30,
1999 Additions of Leases Dispositions 2000
---- --------- --------- ------------ ----
<S> <C> <C> <C> <C> <C>
Net investment in operating leases $129,689,456 $ 51,934,271 $ (15,914,655) $ (8,067) $165,701,005
Net investment in direct financing
leases 9,040,460 8,322,910 (553,989) - 16,809,381
Initial direct costs, net of
accumulated amortization 690,292 691,273 (164,115) - 1,217,450
----------------- ------------------ ------------------ ----------------- ------------------
$139,420,208 $ 60,257,181 $ (16,468,644) $ (8,067) $183,727,836
================= ================== ================== ================= ==================
</TABLE>
7
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
3. Investment in leases (continued):
Operating leases:
Property on operating leases consists of the following:
<TABLE>
<CAPTION>
Balance Balance
December 31, Acquisitions, Dispositions & Reclassifications September 30,
----------------------------------------------
1999 1st Quarter 2nd Quarter 3rd Quarter 2000
---- ----------- ----------- ----------- ----
<S> <C> <C> <C> <C> <C>
Manufacturing $ 25,561,287 $ 2,365,847 $ 12,354,201 $ 3,279,604 $ 43,560,939
Transportation, rail 34,613,356 - 4,797,067 224,075 39,634,498
Aircraft 24,411,837 - - 7,203,037 31,614,874
Containers 21,228,750 - - - 21,228,750
Transportation, other 10,247,265 - 5,932,595 2,146,488 18,326,348
Natural gas compressors 7,863,922 275,085 5,094,356 582,262 13,815,625
Other 4,950,434 2,441,297 20,452 1,562,875 8,975,058
Materials handling 2,187,570 528,455 1,808,040 1,308,883 5,832,948
Marine vessel 3,952,500 - - - 3,952,500
----------------- ------------------ ------------------ ----------------- ------------------
135,016,921 5,610,684 30,006,711 16,307,224 186,941,540
Less accumulated depreciation (5,327,465) (4,677,684) (5,403,558) (5,831,828) (21,240,535)
----------------- ------------------ ------------------ ----------------- ------------------
$129,689,456 $ 933,000 $ 24,603,153 $ 10,475,396 $165,701,005
================= ================== ================== ================= ==================
</TABLE>
Direct financing leases:
As of September 30, 2000, investment in direct financing leases consists office
automation equipment. The following lists the components of the Company's
investment in direct financing leases as of September 30, 2000:
Total minimum lease payments receivable $ 15,868,612
Estimated residual values of leased equipment (unguaranteed) 4,774,302
-----------------
Investment in direct financing leases 20,642,914
Less unearned income (3,833,533)
-----------------
Net investment in direct financing leases $ 16,809,381
=================
All of the property on leases was acquired in 1999 and 2000. There were no
significant dispositions of such property.
8
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
3. Investment in leases (continued):
At September 30, 2000, the aggregate amounts of future minimum lease payments
are as follows:
<TABLE>
<CAPTION>
Direct
Year ending Operating Financing
December 31, Leases Leases Total
<S> <C> <C> <C>
Three months ending December 31, 2000 $ 6,879,134 $ 822,791 $ 7,701,925
Year ending December 31, 2001 28,649,363 3,543,814 32,193,177
2002 25,648,080 3,021,377 28,669,457
2003 19,630,282 2,714,320 22,344,602
2004 11,642,642 1,903,003 13,545,645
Thereafter 21,958,581 3,863,307 25,821,888
------------------ ------------------ -----------------
$114,408,082 $ 15,868,612 $130,276,694
================== ================== =================
</TABLE>
4. Non-recourse debt:
At September 30, 2000, non-recourse debt consists of notes payable to financial
institutions. The notes are due in varying quarterly and semi-annual payments.
Interest on the notes is at rates from 7.98% to 14.0%. The notes are secured by
assignments of lease payments and pledges of assets. The notes mature from 2001
through 2004.
Future minimum payments of non-recourse debt are as follows:
<TABLE>
<CAPTION>
Year ending
December 31, Principal Interest Total
<S> <C> <C> <C>
Three months ending December 31, 2000 $ - $ 82,704 $ 82,704
Year ending December 31, 2001 1,006,764 403,662 1,410,426
2002 - 331,724 331,724
2003 53,814 331,724 385,538
2004 4,046,186 53,814 4,100,000
------------------ ------------------ -----------------
$ 5,106,764 $ 1,203,628 $ 6,310,392
================== ================== =================
</TABLE>
9
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
5. Other long-term debt:
In 1999, the Company entered into a $70 million receivables funding program (the
Program) (which has been increased to $125 million) 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
Company. The Program provides for borrowing at a variable interest rate (6.7087%
at September 30, 2000).
The Program requires the Managing Member 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 September
30, 2000, the Company receives or pays interest on a notional principal of
$68,151,000, based on the difference between nominal rates ranging from 6.84% to
7.72% and the variable rate under the Program. No actual borrowing or lending is
involved. The last of the swaps terminates in 2009. 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.
Borrowings under the Program are as follows:
Original Balance Rate on
Amount September 30, Interest Swap
Date Borrowed Borrowed 2002 Agreement
------------- -------- ---- ---------
11/11/1999 $20,000,000 $16,245,000 6.84%
12/21/1999 20,000,000 18,792,000 7.41%
12/24/1999 25,000,000 22,079,000 7.44%
4/17/2000 6,500,000 6,125,000 7.45%
4/28/2000 1,900,000 1,721,000 7.72%
8/3/2000 19,000,000 18,634,000 7.50%
------------------ ------------------
$92,400,000 $83,596,000
================== ==================
Other long-term debt borrowings mature from 2004 through 2009. Future minimum
principal payments of long-term debt are as follows:
<TABLE>
<CAPTION>
Year ending
December 31, Principal Interest Total
<S> <C> <C> <C>
Three months ending December 31, 2000 $ 4,212,000 $ 1,482,648 $ 5,694,648
Year ending December 31, 2001 16,570,000 5,199,001 21,769,001
2002 16,799,000 3,989,929 20,788,929
2003 14,693,000 2,834,448 17,527,448
2004 9,959,000 1,921,310 11,880,310
Thereafter 21,363,000 2,697,007 24,060,007
------------------ ------------------ -----------------
$83,596,000 $18,124,343 $101,720,343
================== ================== =================
</TABLE>
10
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
6. Related party transactions:
The terms of the Limited Company Operating Agreement provide that the Managing
Member and/or Affiliates are entitled to receive certain fees for equipment
acquisition, management and resale and for management of the Company.
The Limited Liability Company Operating Agreement allows for the reimbursement
of costs incurred by the Managing Member in 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 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 Managing Member are
allocated to the Company based upon actual time incurred by employees working on
Company business and an allocation of rent and other costs based on utilization
studies.
Substantially all employees of the Managing Member record time incurred in
performing administrative services on behalf of all of the Companies serviced by
the Managing Member. The Managing Member believes that the costs reimbursed are
the lower of actual costs incurred on behalf of the Company or the amount the
Company would be required to pay independent parties for comparable
administrative services in the same geographic location and are reimbursable in
accordance with the Limited Liability Company Operating Agreement.
The Managing Member and/or Affiliates earned fees, commissions and
reimbursements, pursuant to the Limited Liability Company Agreement as follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Selling commissions (equal to 9.5% of the selling price of the Limited Liability
Company units, deducted from Other Members' capital) $ 4,052,892 $ 5,716,800
Reimbursement of other syndication costs to Managing Member 1,996,437 2,788,098
Asset management fees to Managing Member 973,761 232,387
Administrative costs reimbursed to Managing Member 935,437 516,568
----------------- ------------------
$ 7,958,527 $ 9,253,853
================= ==================
</TABLE>
11
<PAGE>
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
7. Member's capital:
As of September 30, 1999, 12,010,528 Units ($120,105,280) were issued and
outstanding. The Company's registration statement with the Securities and
Exchange Commission became effective December 7, 1998. The Company is authorized
to issue up to 15,000,050 Units, including the 50 Units issued to the initial
members.
The Company's Net Income, Net Losses, and Distributions are to be allocated
92.5% to the Members and 7.5% to the Managing Member.
8. Line of credit:
The Company participates with the Managing Member 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 Company and the Managing Member.
At September 30, 2000, the Company had $6,592,627 of borrowings under the line
of credit.
The credit agreement includes certain financial covenants applicable to each
borrower. The Company was incompliance with its covenants as of September 30,
2000.
9. Commitments:
As of September 30, 2000, the Company had outstanding commitments to purchase
lease equipment totaling approximately $23,400,000.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Capital Resources and Liquidity
During the first nine months of 2000 and 1999, the Company's primary activities
were raising funds through its offering of Limited Liability Company Units
(Units) and engaging in equipment leasing activities. Through September 30,
2000, the Company had received subscriptions for 12,010,528 Units ($120,105,280)
all of which were issued and outstanding.
During the funding period, the Company's primary source of liquidity is
subscription proceeds from the public offering of Units. The liquidity of the
Company 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 members and to the extent expenses exceed cash flows from
leases.
As another source of liquidity, the Company has contractual obligations with a
diversified group of lessees for fixed lease terms at fixed rental amounts. As
the initial lease terms expire the Company will re-lease or sell the equipment.
The future liquidity beyond the contractual minimum rentals will depend on the
Managing Member'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 Company 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 Managing Member
and providing for cash distributions to the Limited Partners.
The Company currently has available adequate reserves to meet contingencies, 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.
No commitments of capital have been or are expected to be made other than for
the acquisition of additional equipment. Such commitments totaled approximately
$23,400,000 as of September 30, 2000.
If inflation in the general economy becomes significant, it may affect the
Company inasmuch as the residual (resale) values and rates on re-leases of the
Company's leased assets may increase as the costs of similar assets increase.
However, the Company'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 Company can
obtain on future leases will be expected to increase as the cost of capital is a
significant factor in the pricing of lease financing. Leases already in place,
for the most part, would not be affected by changes in interest rates.
Cash Flows
During the first nine months of 2000 and 1999, the Company's primary source of
liquidity was the proceeds of its offering of Units.
Sources of cash flows from operating activities consisted primarily of operating
lease revenues.
13
<PAGE>
Rents from direct financing leases were the only significant source of cash from
investing activities. Uses of cash for investing activities consisted of cash
used to purchase operating and direct financing lease assets and payment of
initial direct costs related to lease asset purchases.
The primary source of cash from financing activities was the proceeds of the
Company's public offering of Units of Limited Liability Company interest.
Borrowings under the line of credit and proceeds of long-term debt were the only
other financing sources of cash. Financing uses of cash included payments of
syndication costs associated with the offering, repayment of debt and
distributions to the members. Repayments of debt have increased due to
borrowings after the third quarter of 1999.
Results of operations
On January 13, 1999, the Company commenced operations. Operations in 2000
resulted in a net loss of $1,578,3933 for the nine month period and $4,525 for
the three month period. Operations in 1999 resulted in net income of $269,983
for the nine month period and $508,554 for the three month period. The Company's
primary source of revenues is from operating leases. In future periods,
operating leases are also expected to be the most significant source of
revenues. Depreciation is related to operating lease assets and thus, to
operating lease revenues. It is expected to increase in future periods as
acquisitions continue. Lease rents and depreciation have increased compared to
1999 as a result of acquisitions over the last year.
Asset management fees are based on the gross lease rents of the Company plus
proceeds from the sales of lease assets. They are limited to certain percentages
of lease rents, distributions to members and certain other items. As assets are
acquired, lease rents are collected and distributions are made to the members,
these fees are expected to increase. These factors gave rise to the increase in
fees compared to 1999.
Interest expense for the first nine months of 1999 related largely to the
borrowings under the line of credit incurred by an affiliate of the Managing
Member. It included all amounts related to those borrowings, going back as far
as November 1998 when the Managing Member started to fund the related
transactions on behalf of the Company. All of the revenues and related carrying
costs for these transactions were attributed to the Company in the first nine
months of 1999.
In 2000, interest relates to long-term debt, non-recourse debt and to borrowings
under the line of credit. The borrowings have increased compared to 1999 and
have caused the increase in interest expense.
Results of operations in 1999 and 2000 are not comparable and are not expected
to be comparable. Results of operations in future periods are expected to vary
considerably from those of the first nine months of 2000 and 1999 as the Company
continues to acquire significant amounts of lease assets.
14
<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.
15
<PAGE>
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: December 7, 1998; File Number: 333-62477
(2) Offering commenced: December 7, 1998
(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
Liability Company interest". (7) Aggregate amount and offering price of
securities registered and sold as of October 31, 2000.
<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> <C>
Limited Company units 15,000,000 $150,000,000 12,534,463 $125,344,630
(8) Costs incurred for the issuers account in connection with the issuance and
distribution of the securities registered for each category listed below:
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; and to affiliates of payments to
the issuer others Total
---------- ------ -----
Underwriting discounts and
commissions $ - $ 11,907,740 $ 11,907,740
Other expenses - 5,890,508 5,890,508
------------------ ----------------- -----------------
Total expenses $ - $ 17,798,248 $ 17,798,248
================== ================= =================
(9) Net offering proceeds to the issuer after the total expenses in item 8: $107,546,382
(10) The amount of net offering proceeds to the issuer used for each of the
purposes listed below:
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; and to affiliates of payments to
the issuer others Total
---------- ------ -----
Purchase and installation of
machinery and equipment $ - $106,919,659 $106,919,659
Working capital - 626,723 626,723
------------------ ----------------- -----------------
$ - $107,546,382 $107,546,382
================== ================= =================
</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.
16
<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, September 30, 2000 and December
31, 1999.
Income statements for the nine and three month
periods ended September 30, 2000 and 1999.
Statement of changes in partners' capital for the
nine month period ended September 30, 2000.
Statements of cash flows for the nine and three
month periods ended September 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
17
<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:
November 9, 2000
ATEL CAPITAL EQUIPMENT FUND VIII, LLC
(Registrant)
By: ATEL Financial Corporation
Managing Member of Registrant
By: /s/ A. J. BATT
-------------------------------------
A. J. Batt
President and Chief Executive Officer
of Managing Member
By: /s/ DEAN L. CASH
-------------------------------------
Dean L. Cash
Executive Vice President
of Managing Member
By: /s/ PARITOSH K. CHOKSI
-------------------------------------
Paritosh K. Choksi
Principal financial officer
of registrant
By: /s/ DONALD E. CARPENTER
-------------------------------------
Donald E. Carpenter
Principal accounting
officer of registrant
18
