10-Q 1 f810q2q2001.txt REPORT FOR THE SIX MONTHS ENDED JUNE 30, 2001 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, 2001 |_| 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 Part I. FINANCIAL INFORMATION Item 1. Financial Statements. 2 ATEL CAPITAL EQUIPMENT FUND VIII, LLC BALANCE SHEETS JUNE 30, 2001 AND DECEMBER 31, 2000 (Unaudited) ASSETS 2001 2000 ---- ---- Cash and cash equivalents $ 2,211,941 $ 2,484,785 Accounts receivable 4,368,450 5,339,569 Other assets 100,000 115,000 Investments in leases 196,796,952 190,893,298 ---------------- ----------------- Total assets $203,477,343 $198,832,652 ================ ================= LIABILITIES AND MEMBERS' CAPITAL Long-term debt $ 87,520,000 $86,668,000 Non-recourse debt 6,159,963 7,325,744 Line of credit 9,223,497 - Accounts payable: Managing member 509,889 695,548 Other 378,695 485,895 Accrued interest payable 208,781 267,823 Unearned operating lease income 1,646,108 2,051,141 ---------------- ----------------- Total liabilities 105,646,933 97,494,151 Members' capital: Managing member - - Other members 97,830,410 101,338,501 ---------------- ----------------- Total members' capital 97,830,410 101,338,501 ---------------- ----------------- Total liabilities and members' capital $203,477,343 $198,832,652 ================ ================= See accompanying notes. 3 ATEL CAPITAL EQUIPMENT FUND VIII, LLC STATEMENTS OF OPERATIONS SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2001 AND 2000 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, -------------- -------------- Revenues: 2001 2000 2001 2000 ---- ---- ---- ---- Leasing activities: Operating leases $23,023,666 $12,814,850 $ 9,205,063 $ 7,082,819 Direct financing leases 508,142 269,128 247,516 135,212 Gain on sales of assets 1,788,113 1,453 3,463 - Interest 109,824 73,988 28,653 39,404 Other 25,909 2,573 9,306 1,763 ----------------- ----------------- ---------------- ----------------- 25,455,654 13,161,992 9,494,001 7,259,198 Expenses: Depreciation and amortization 14,781,124 10,183,852 7,645,706 5,457,430 Interest expense 5,574,861 3,310,610 2,009,316 1,788,270 Asset management fees to Managing Member 1,009,978 592,977 407,013 290,525 Cost reimbursements to Managing Member 526,265 540,582 284,993 304,630 Other 163,722 66,929 102,367 43,545 Professional fees 185,430 40,910 55,506 40,910 ----------------- ----------------- ---------------- ----------------- 22,241,380 14,735,860 10,504,901 7,925,310 ----------------- ----------------- ---------------- ----------------- Net income (loss) $ 3,214,274 $ (1,573,868) $(1,010,900) $ (666,112) ================= ================= ================ ================= Net income (loss): Managing member $ 503,448 $ 333,878 $ 146,237 $ (23,333) Other members 2,710,826 (1,907,746) (1,157,137) (642,779) ----------------- ----------------- ---------------- ----------------- $ 3,214,274 $ (1,573,868) $(1,010,900) $ (666,112) ================= ================= ================ ================= Net income (loss) per Limited Liability Company Unit $ 0.20 $ (0.21) $ (0.09) $ (0.07) Weighted average number of Units outstanding 13,570,188 9,143,454 13,570,188 9,867,140
STATEMENT OF CHANGES IN MEMBERS' CAPITAL SIX MONTH PERIOD ENDED JUNE 30, 2001 (Unaudited)
Other Members Managing ------------- Units Amount Member Total Balance December 31, 2000 13,570,188 $101,338,501 $ - $101,338,501 Distributions to members (6,218,917) (503,448) (6,722,365) Net income 2,710,826 503,448 3,214,274 ----------------- ----------------- ---------------- ----------------- ----------------- ----------------- ---------------- ----------------- Balance June 30, 2001 13,570,188 $97,830,410 $ - $97,830,410 ================= ================= ================ =================
See accompanying notes. 4 ATEL CAPITAL EQUIPMENT FUND VIII, LLC STATEMENTS OF CASH FLOWS SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2001 AND 2000 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, -------------- -------------- 2001 2000 2001 2000 ---- ---- ---- ---- Operating activities: Net income (loss) $ 3,214,274 $ (1,573,868) $(1,010,900) $ (666,112) Adjustments to reconcile net income (loss) to cash provided by operating activities: Depreciation and amortization 14,781,124 10,183,852 7,645,706 5,457,430 Gain on sales of assets (1,788,113) (1,453) (3,463) - Changes in operating assets and liabilities: Accounts receivable 971,119 (355,264) (304,565) (1,240,942) Other assets 15,000 15,000 7,500 7,500 Accounts payable, Managing Member (185,659) (259,703) (102,817) (287,003) Accounts payable, other (107,200) 1,328,534 22,363 907,672 Accrued interest expense (59,042) 166,279 (6,586) 74,818 Unearned lease income (405,033) (81,284) (739,215) (537,209) ----------------- ----------------- ---------------- ----------------- Net cash provided by operations 16,436,470 9,422,093 5,508,023 3,716,154 ----------------- ----------------- ---------------- ----------------- Investing activities: Purchases of equipment on operating leases (27,938,716) (35,627,046) (313,309) (30,006,710) Purchases of equipment on direct financing leases (810,271) (1,079,153) (636,064) (859,141) Reduction of net investment in direct financing leases 1,396,835 899,922 1,191,935 427,579 Payment of initial direct costs to managing member (145,831) (479,818) (37,841) (145,571) Proceeds from sales of assets 8,601,318 9,520 46,056 - ----------------- ----------------- ---------------- ----------------- Net cash (used in) provided by investing activities (18,896,665) (36,276,575) 250,777 (30,583,843) ----------------- ----------------- ---------------- ----------------- Financing activities: Borrowings on line of credit 16,756,335 20,908,796 5,532,838 18,908,796 Repayments of line of credit (7,532,838) (17,308,796) (7,532,838) (9,808,796) Proceeds of long-term debt 10,000,000 8,400,000 2,000,000 8,400,000 Repayments of long-term debt (9,148,000) (4,923,000) (4,895,000) (3,009,000) Repayments of non-recourse debt (1,165,781) (1,086,473) (138,094) 20,923 Distributions to other members (6,218,917) (4,117,831) (3,121,917) (2,172,999) Distributions to managing member (503,448) (333,878) (253,128) 23,333 Capital contributions received - 29,725,990 - 16,063,990 Payment of syndication costs to managing member - (4,159,539) - (2,355,400) ----------------- ----------------- ---------------- ----------------- Net cash provided by (used in) financing activities 2,187,351 27,105,269 (8,408,139) 26,070,847 ----------------- ----------------- ---------------- ----------------- Net (decrease) increase in cash and cash equivalents (272,844) 250,787 (2,649,339) (796,842) Cash and cash equivalents at beginning of period 2,484,785 3,973,342 4,861,280 5,020,971 ----------------- ----------------- ---------------- ----------------- Cash and cash equivalents at end of period $ 2,211,941 $ 4,224,129 $ 2,211,941 $ 4,224,129 ================= ================= ================ ================= Supplemental disclosures of cash flow information: Cash paid during the period for interest $ 5,633,903 $ 3,144,331 $ 2,015,902 $ 1,713,452 ================= ================= ================ =================
See accompanying notes. 5 ATEL CAPITAL EQUIPMENT FUND VIII, LLC NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 AND 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:
Depreciation Balance Expense or Reclassi- Balance December 31, Amortization fications or June 30, 2000 Additions of Leases Dispositions 2001 ---- --------- --------- -------------- ---- Net investment in operating leases $173,395,247 $27,938,716 $ (14,593,990) $ (6,813,205) $179,926,768 Net investment in direct financing leases 16,253,263 810,271 (1,396,835) - 15,666,699 Initial direct costs, net of accumulated amortization 1,244,788 145,831 (187,134) - 1,203,485 ----------------- ----------------- ----------------- ---------------- ----------------- $190,893,298 $28,894,818 $ (16,177,959) $(6,813,205) $196,796,952 ================= ================= ================= ================ =================
6 ATEL CAPITAL EQUIPMENT FUND VIII, LLC NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 AND 2000 (Unaudited) 3. Investment in leases (continued): Operating leases: Property on operating leases consists of the following:
Acquisitions, Dispositions & Balance Reclassifications Balance December 31, ----------------- June 30, 2000 1st Quarter 2nd Quarter 2001 ---- ----------- ----------- ---- Transportation, rail $ 39,634,498 $ 9,741,779 $ 49,376,277 Manufacturing 48,027,279 533,851 $ 618,173 49,179,303 Aircraft 31,614,874 6,920,565 130,563 38,666,002 Transportation, other 23,583,472 (144,316) (1,000) 23,438,156 Containers 21,228,750 - - 21,228,750 Natural gas compressors 14,045,134 6,467 - 14,051,601 Other 12,711,963 8,901 - 12,720,864 Materials handling 5,858,081 2,613,347 (760,907) 7,710,521 Marine vessel 4,314,031 - - 4,314,031 ----------------- ----------------- ---------------- ----------------- 201,018,082 19,680,594 (13,171) 220,685,505 Less accumulated depreciation (27,622,835) (5,588,036) (7,547,866) (40,758,737) ----------------- ----------------- ---------------- ----------------- $173,395,247 $ 14,092,558 $ (7,561,037) $179,926,768 ================= ================= ================ =================
Direct financing leases: As of June 30, 2001, investment in direct financing leases consists primarily office automation equipment. The following lists the components of the Company's investment in direct financing leases as of June 30, 2001: Total minimum lease payments receivable $ 13,946,504 Estimated residual values of leased equipment (unguaranteed) 4,908,381 ---------------- Investment in direct financing leases 18,854,885 Less unearned income (3,188,186) ---------------- Net investment in direct financing leases $ 15,666,699 ================ All of the property on leases was acquired in 1999, 2000 and 2001. 7 ATEL CAPITAL EQUIPMENT FUND VIII, LLC NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 AND 2000 (Unaudited) 3. Investment in leases (continued): At June 30, 2001, the aggregate amounts of future minimum lease payments are as follows: Direct Year ending Operating Financing December 31, Leases Leases Total ------------ ------ ------ ----- 2001 $17,659,911 $ 1,821,285 $ 19,481,196 2002 31,377,921 3,260,750 34,638,671 2003 25,091,726 2,953,693 28,045,419 2004 15,627,523 1,989,108 17,616,631 2005 11,262,132 1,901,705 13,163,837 Thereafter 16,411,609 2,019,963 18,431,572 ----------------- ----------------- ---------------- $117,430,822 $13,946,504 $131,377,326 ================= ================= ================ 4. Non-recourse debt: At June 30, 2001, 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 2006. Future minimum payments of non-recourse debt are as follows: Year ending December 31, Principal Interest Total ------------ --------- -------- ----- 2001 $ 144,998 $ 269,315 $ 414,313 2002 312,109 515,608 827,717 2003 397,915 486,617 884,532 2004 4,425,556 170,437 4,595,993 2005 418,256 77,737 495,993 Thereafter 461,129 34,866 495,995 ----------------- ----------------- ---------------- $ 6,159,963 $ 1,554,580 $ 7,714,543 ================= ================= ================ 8 ATEL CAPITAL EQUIPMENT FUND VIII, LLC NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 AND 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 (4.4994% at June 30, 2001). 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 June 30, 2001, the Company receives or pays interest on a notional principal of $87,520,000, based on the difference between nominal rates ranging from 5.04% 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 June 30, Interest Swap Date Borrowed Borrowed 2001 Agreement ------------- -------- ---- --------- 11/11/1999 $ 20,000,000 $12,650,000 6.840% 12/21/1999 20,000,000 17,527,000 7.410% 12/24/1999 25,000,000 17,824,000 7.440% 4/17/2000 6,500,000 5,385,000 7.450% 4/28/2000 1,900,000 1,342,000 7.720% 8/3/2000 19,000,000 16,570,000 7.500% 10/31/2000 7,500,000 6,610,000 7.130% 1/29/2001 8,000,000 7,636,000 5.910% 6/1/2001 2,000,000 1,976,000 5.040% ----------------- ----------------- $109,900,000 $87,520,000 ================= ================= Other long-term debt borrowings mature from 2004 through 2009. Future minimum principal payments of long-term debt are as follows: Year ending December 31, Principal Interest Total --------- -------- ----- 2001 $10,566,000 $ 2,966,928 $ 13,532,928 2002 20,905,000 4,823,462 25,728,462 2003 18,790,000 3,394,329 22,184,329 2004 13,267,000 2,234,800 15,501,800 2005 9,486,000 1,428,010 10,914,010 Thereafter 14,506,000 1,529,552 16,035,552 ----------------- ----------------- ---------------- $87,520,000 $16,377,081 $103,897,081 ================= ================= ================ 9 ATEL CAPITAL EQUIPMENT FUND VIII, LLC NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 AND 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 (i) actual costs incurred on behalf of the Company or (ii) the amount the Company would be required to pay independent parties for comparable administrative services in the same geographic location 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 during the six month periods ended June 30, 2000 and 1999 as follows:
2001 2000 ---- ---- Asset management fees to Managing Member $ 1,009,978 $ 592,977 Administrative costs reimbursed to Managing Member 526,265 540,582 Selling commissions (equal to 9.5% of the selling price of the Limited Liability Company units, deducted from Other Members' capital) - 3,855,618 Reimbursement of other syndication costs to Managing Member - 1,957,345 ---------------- ----------------- $ 1,536,243 $ 6,946,522 ================ =================
7. Member's capital: As of June 30, 2001, 13,570,188 Units ($135,701,880) were issued and outstanding. The Company's registration statement with the Securities and Exchange Commission became effective December 7, 1998. The offering was concluded on November 30, 2000. 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. 10 ATEL CAPITAL EQUIPMENT FUND VIII, LLC NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 AND 2000 (Unaudited) 8. Line of credit: The Partnership participates with the General Partner and certain of its Affiliates in a $62,000,000 revolving credit agreement with a group of financial institutions which expires on April 12, 2002. 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. The Partnership had $9,223,497 of borrowings under the agreement at June 30, 2001. The credit agreement includes certain financial covenants applicable to each borrower. The Partnership was in compliance with its covenants as of June 30, 2001. 9. Commitments: As of June 30, 2001, the Company had no outstanding commitments to purchase lease equipment. 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Capital Resources and Liquidity During the first half of 2001, the Company's primary activity was engaging in equipment leasing activities. During the first half of 2000, the Company's primary activities were raising funds through its offering of Limited Liability Company Units (Units) and engaging in equipment leasing activities. During 2001, the Company's primary source of liquidity was rents from operating leases. 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 Company participates with the Managing Member and certain of its affiliates in a $62,000,000 revolving line of credit with a group of financial institutions. The line of credit expires on April 12, 2002. 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. There were no such commitments as of June 30, 2001. 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 half of 2001, the Company's primary source of liquidity was operating lease rents. During the first two quarters of 2000, 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. 12 In 2001, the most significant source of cash flows from investing activities was proceeds from the sales of lease assets. Rents from direct financing leases were the only significant source of cash from investing activities in 2000. 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. In 2001, sources of cash from financing activities consisted of borrowings on the line of credit and proceeds of long-term debt. In 2000, financing sources of cash consisted of the proceeds of the Company's offering, funds borrowed on the line of credit and proceeds of long-term debt. Financing uses of cash included payments of syndication costs associated with the offering, repayments of long-tern debt, repayments of non-recourse debt, repayments of borrowings under the line of credit and distributions to the members. Results of operations In 2000, operations resulted in a net loss of $1,573,868 for the six month period and a net loss of $666,112 for the three month period. In 2001, operations resulted in net income of $3,214,274 for the first half of the year and a net loss of $1,010,900 for the second quarter. 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. 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. Interest expense has increased compared to 2000 due to borrowings since June 30, 2000, particularly long-term and non-recourse debt borrowings. 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. Inapplicable. 13 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, 2001 and December 31, 2000. Statements of operations for the six and three month periods ended June 30, 2001 and 2000. Statement of changes in partners' capital for the six month period ended June 30, 2001. Statements of cash flows for the six and three month periods ended June 30, 2001 and 2000. 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 14 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 8, 2001 ATEL CAPITAL EQUIPMENT FUND VIII, LLC (Registrant) By: ATEL Financial Services, LLC Managing Member of Registrant By: /s/ DEAN L. CASH ----------------------------------- Dean L. Cash President and Chief Executive Officer of Managing Member By: /s/ PARITOSH K. CHOKSI ----------------------------------- Paritosh K. Choksi Executive Vice President of Managing Member, Principal financial officer of registrant By: /s/ DONALD E. CARPENTER ------------------------------------ Donald E. Carpenter Principal accounting officer of registrant 15