10-Q 1 0001.txt REPORT FOR THE SECOND QUARTER OF 2000 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 Part I. FINANCIAL INFORMATION Item 1. Financial Statements. 2 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 ATEL CAPITAL EQUIPMENT FUND VII, L.P. STATEMENT OF OPERATIONS SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2000 AND 1999 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, -------------- -------------- 2000 1999 2000 1999 ---- ---- ---- ---- Revenues: Leasing activities: 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
See accompanying notes. 4 ATEL CAPITAL EQUIPMENT FUND VII, L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL SIX MONTH PERIOD ENDED JUNE 30, 2000 (Unaudited)
Limited Partners General Units Amount Partner Total 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 ================= ================= ================== ==================
See accompanying notes. STATEMENTS OF CASH FLOWS SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2000 AND 1999 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, -------------- -------------- Operating activities: 2000 1999 2000 1999 ---- ---- ---- ---- 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 ================= ================= ================== ==================
5 ATEL CAPITAL EQUIPMENT FUND VII, L.P. STATEMENTS OF CASH FLOWS (Continued) SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2000 AND 1999 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, -------------- -------------- 2000 1999 2000 1999 ---- ---- ---- ---- 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 ================= ================= ================== ==================
See accompanying notes. 6 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:
Depreciation Balance Expense or Reclassi- Balance December 31, Amortization fications or June 30, 1999 of Leases Dispositions 2000 ---- --------- - ------------- ---- 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 ================= ================= ================== ==================
7 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:
Balance Dispositions & Balance December 31, Reclassifications June 30, 1999 1st Quarter 2nd Quarter 2000 ---- ----------- ----------- ---- 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 ================= ================= ================== ==================
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 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 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 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:
2000 1999 ---- ---- 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 ================== ==================
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 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 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 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 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 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 -------------------------------------- Paritosh K. Choksi Principal financial officer of registrant By: /s/ DONALD E. CARPENTER -------------------------------------- Donald E. Carpenter Principal accounting officer of registrant