UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended June 30, 2007

¨ 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 000-50687

ATEL Capital Equipment Fund X, LLC

(Exact name of registrant as specified in its charter)

California	68-0517690
(State or other jurisdiction of Incorporation or organization)	(I. R. S. Employer Identification No.)

600 California Street, 6th Floor, San Francisco, California 94108-2733

(Address of principal executive offices)

Registrant’s telephone number, including area code (415) 989-8800

Securities registered pursuant to section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act: Limited Liability Company Units

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  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The number of Limited Liability Company Units outstanding as of June 30, 2007 was 13,987,486.

DOCUMENTS INCORPORATED BY REFERENCE

None

ATEL CAPITAL EQUIPMENT FUND X, LLC

Index

		Page
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)	3
	Balance Sheets, June 30, 2007 and December 31, 2006.	3
	Statements of Operations for the three and six months ended June 30, 2007 and 2006.	4
	Statement of Changes in Members’ Capital for the year ended December 31, 2006 and for the six months ended June 30, 2007.	5
	Statements of Cash Flows for the three and six months ended June 30, 2007 and 2006.	6
	Notes to the Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	25
Part II. Other Information
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Submission of Matters to a Vote of Security Holders	26
Item 5.	Other Information	26
Item 6.	Exhibits	26
	EXHIBIT 31.1
	EXHIBIT 31.2
	EXHIBIT 32.1
	EXHIBIT 32.2

2

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

ATEL CAPITAL EQUIPMENT FUND X, LLC

BALANCE SHEETS

JUNE 30, 2007 AND DECEMBER 31, 2006

(in thousands)

	June 30, 2007		December 31, 2006
	(Unaudited)
ASSETS
Cash and cash equivalents	$	4,296	$	5,957
Accounts receivable, net of allowance for doubtful accounts of $32 at June 30, 2007 and $51 at December 31, 2006		1,827		1,472
Notes receivable, net of unearned interest income and allowance for losses of $1,875 at June 30, 2007 and $2,372 at December 31, 2006		8,710		10,377
Interest rate swap contracts		13		—
Prepaids and other assets		69		77
Investment in securities		279		216
Investments in equipment and leases, net of accumulated depreciation of $29,670 at June 30, 2007 and $22,679 at December 31, 2006		88,714		86,833
Total assets	$	103,908	$	104,932
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Managing Member	$	421	$	418
Accrued distributions to Other Members		1,314		1,314
Other		1,148		3,015
Accrued interest payable		26		11
Deposits due lessees		119		119
Acquisition facility obligation		7,000		10,000
Receivables funding program obligation		10,977		—
Unearned operating lease income		1,509		1,597
Total liabilities		22,514		16,474
Commitments and contingencies
Total Members’ capital		81,394		88,458
Total liabilities and Members’ capital	$	103,908	$	104,932

See accompanying notes.

3

ATEL CAPITAL EQUIPMENT FUND X, LLC

STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED

JUNE 30, 2007 AND 2006

(in thousands, except per unit data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
Revenues:
Leasing activities:
Operating leases	$	5,000		$	3,343		$	9,891		$	6,375
Direct financing leases		20			32			44			68
Interest on notes receivable		244			277			502			507
Gain on sales of assets and early termination of notes		76			7			232			7
Gain on sales of securities		—			—			9			8
Other interest		29			244			72			478
Other		2			27			21			30
Total revenues		5,371			3,930			10,771			7,473
Expenses:
Depreciation of operating lease assets		4,156			2,759			8,167			5,286
Asset management fees to Managing Member		221			156			436			295
Acquisition expense		212			230			420			462
Cost reimbursements to Managing Member		394			204			763			403
Amortization of initial direct costs		88			69			177			130
Interest expense		333			8			583			19
Adjustment of provision for doubtful accounts		(83	)		(3	)		(19	)		—
Professional fees		258			234			711			444
Franchise fees and taxes		69			132			69			157
Outside services		189			111			470			191
Other		33			4			91			18
Total operating expenses		5,870			3,904			11,868			7,405
Other income, net		148			17			81			1
Net (loss) income	$	(351	)	$	43		$	(1,016	)	$	69
Net (loss) income:
Managing Member	$	227		$	231		$	454		$	454
Other Members		(578	)		(188	)		(1,470	)		(385	)
	$	(351	)	$	43		$	(1,016	)	$	69
Net loss per Limited Liability Company Unit (Other Members)	$	(0.04	)	$	(0.01	)	$	(0.11	)	$	(0.03	)
Weighted average number of Units outstanding		13,987,486			14,005,986			13,987,486			14,005,986

See accompanying notes.

4

ATEL CAPITAL EQUIPMENT FUND X, LLC

STATEMENT OF CHANGES IN MEMBERS’ CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2006

AND FOR THE

THREE AND SIX MONTHS ENDED

JUNE 30, 2007

(in thousands, except per unit data)

(Unaudited)

	Other Members					Managing Member			Total
	Units		Amount
Balance December 31, 2005	14,005,986		$	102,022		$	—		$	102,022
Syndication costs allocation adjustment	—			(37	)		—			(37	)
Repurchase of units	(18,500	)		(141	)		—			(141	)
Distributions to Other Members ($0.80 per Unit)	—			(11,203	)		—			(11,203	)
Distributions to Managing Member	—			—			(909	)		(909	)
Net income (loss)	—			(2,183	)		909			(1,274	)
Balance December 31, 2006	13,987,486			88,458			—			88,458
Distributions to Other Members ($0.40 per Unit)	—			(5,594	)		—			(5,594	)
Distributions to Managing Member	—			—			(454	)		(454	)
Net income (loss)	—			(1,470	)		454			(1,016	)
Balance June 30, 2007	13,987,486		$	81,394		$	—		$	81,394

See accompanying notes.

5

ATEL CAPITAL EQUIPMENT FUND X, LLC

STATEMENTS OF CASH FLOWS

THREE AND SIX MONTHS ENDED

JUNE 30, 2007 AND 2006

(in thousands)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
Operating activities:
Net (loss) income	$	(351	)	$	43		$	(1,016	)	$	69
Adjustment to reconcile net (loss) income to cash provided by operating activities:
Gain on sales of lease assets and early termination of notes		(76	)		(7	)		(232	)		(7	)
Depreciation of operating lease assets		4,156			2,759			8,167			5,286
Amortization of initial direct costs		88			69			177			130
Provision for losses and doubtful accounts		(83	)		(3	)		(19	)		—
Change in fair value of interest rate swap contracts		(78	)		—			(13	)		—
Gain on sale of securities		—			—			(9	)		(8	)
Changes in operating assets and liabilities:
Accounts receivable		(351	)		(560	)		(336	)		(1,166	)
Due from Managing Member		—			—			—			—
Prepaids and other assets		(10	)		11			8			36
Accounts payable, Managing Member		(173	)		(888	)		3			185
Accounts payable, other		269			2,320			(1,867	)		2,680
Accrued interest payable		16			1			15			8
Deposits due lessees		—			(19	)		—			(30	)
Unearned operating lease income		12			170			(88	)		198
Net cash provided by operating activities		3,419			3,896			4,790			7,381
Investing activities:
Purchases of equipment on operating leases		(3,857	)		(9,887	)		(10,582	)		(14,924	)
Proceeds from sales of lease assets		283			23			1,670			33
Payments of initial direct costs		(54	)		(166	)		(198	)		(236	)
Reduction of net investment in direct financing leases		125			136			259			289
Note receivable advances		(79	)		(1,979	)		(921	)		(2,445	)
Purchase of investment securities		(63	)		—			(63	)		(70	)
Proceeds from sale of investment securities		—			—			9			8
Payments received on notes receivable		715			712			1,446			1,211
Net cash used in investing activities		(2,930	)		(11,161	)		(8,380	)		(16,134	)
Financing activities:
Borrowings under acquisition facility		5,000			3,500			10,000			3,500
Repayments under acquisition facility		(500	)		—			(13,000	)		—
Borrowings under receivables funding program		—			—			12,365			—
Repayments under receivables funding program		(885	)		—			(1,388	)		—
Distributions to Other Members		(2,797	)		(2,801	)		(5,594	)		(5,606	)
Distributions to Managing Member		(227	)		(231	)		(454	)		(454	)
Net cash provided by (used in) financing activities		591			468			1,929			(2,560	)
Net increase (decrease) in cash and cash equivalents		1,080			(6,797	)		(1,661	)		(11,313	)
Cash and cash equivalents at beginning of period		3,216			32,754			5,957			37,270
Cash and cash equivalents at end of period	$	4,296		$	25,957		$	4,296		$	25,957
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	344		$	—		$	587		$	11
Cash paid during the period for taxes	$	69		$	132		$	69		$	157
Schedule of non-cash transactions:
Distributions declared and payable to Managing Member at period-end	$	107		$	107		$	107		$	107
Distributions declared and payable to Other Members at period-end	$	1,314		$	1,315		$	1,314		$	1,315

See accompanying notes.

6

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

1. Organization and Limited Liability Company matters:

ATEL Capital Equipment Fund X, LLC (the “Company”) was formed under the laws of the State of California on August 12, 2002 for the purpose of engaging in the sale of limited liability company investment units and acquiring equipment to engage in equipment leasing, lending and sales activities, primarily in the United States. The Managing Member of the Company is ATEL Financial Services, LLC (“AFS”), a California limited liability corporation. The Company may continue until December 31, 2021.

The Company conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. On April 9, 2003, subscriptions for the minimum number of Units (120,000, representing $1.2 million) had been received (excluding subscriptions from Pennsylvania investors) and AFS requested that the subscriptions be released to the Company. On that date, the Company commenced operations in its primary business (leasing and lending activities). Contributions in the amount of approximately $140 million were received as of June 30, 2007, consisting of $140.6 million of gross contributions from Other Members purchasing Units under the public offering less rescissions and repurchases of Units totaling $632 thousand. The offering was terminated on March 11, 2005.

As of June 30, 2007, 13,987,486 Units were issued and outstanding.

As a limited liability company, the liability of any individual member for the obligations of the Fund is limited to the extent of capital contributions to the Fund by the individual member.

Pursuant to the Company Operating Agreement, AFS receives compensation and reimbursements for services rendered on behalf of the Company (Note 5). AFS is required to maintain in the Company reasonable cash reserves for working capital, the repurchase of Units and contingencies. The repurchase of Units is solely at the discretion of the Managing Member.

The Company, or AFS on behalf of the Company, has incurred costs in connection with the organization, registration and issuance of the Limited Liability Company Units (Note 5). The amount of such costs to be borne by the Company is limited by certain provisions of the Company’s Operating Agreement. The Company will pay AFS and affiliates of AFS substantial fees which may result in a conflict of interest. The Company will pay substantial fees to AFS and its affiliates before distributions are paid to investors even if the Company does not produce profits. Therefore, the financial position of the Company could change significantly.

The Company’s principal objectives are to invest in a diversified portfolio of equipment that will (i) preserve, protect and return the Company’s invested capital; (ii) generate regular distributions to the members of cash from operations and cash from sales or refinancing, with any balance remaining after certain minimum distributions to be used to purchase additional equipment during the Reinvestment Period, and (iii) provide additional distributions following the Reinvestment Period and until all equipment has been sold. The Company is governed by its Limited Liability Company Operating Agreement (Operating Agreement).

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10-K for the year ended December 31, 2006, filed with the Securities and Exchange Commission.

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States, (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that effect reported amounts in the financial statements and accompanying notes. Therefore, actual results could differ from those estimates. Operating results for the six months ended June 30, 2007 are not necessarily indicative of the results for the year ending December 31, 2007.

Certain prior period amounts have been reclassified to conform to the current period presentation. Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data.

7

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued):

Use of estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes and determination of the allowance for doubtful accounts and notes receivable.

Cash and cash equivalents:

Cash and cash equivalents include cash in banks and cash equivalent investments with original maturities of ninety days or less.

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, direct finance lease receivables, notes receivable and accounts receivable. The Company places its cash deposits and temporary cash investments with creditworthy, high quality financial institutions and, therefore, believes that such concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts receivable represent amounts due from lessees in various industries, related to equipment on operating and direct financing leases.

Accounts receivable:

Accounts receivable represent the amounts billed under operating and direct financing lease and notes receivable contracts which are currently due to the Company. Allowances for doubtful accounts are typically established based on historical charge offs and collection experience and are usually determined by specifically identified lessees and invoiced amounts. Accounts receivable deemed uncollectible are charged off to the allowance on specific identification basis. Amounts recovered that were previously written-off are recorded as other income in the period received.

Direct financing leases and related revenue recognition:

Income from direct financing lease transactions is reported using the financing method of accounting in which the Company’s investment in the leased property is reported as a receivable from the lessee to be recovered through future rentals. The interest income portion of each rental payment is calculated so as to generate a constant rate of return on the net receivable outstanding.

Allowances for losses on direct financing leases are typically established based on historical charge offs and collections experience and are usually determined by specifically identified lessees and unbilled receivables. Direct financing leases are charged off to the allowance when they are deemed uncollectible.

Direct financing leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the credit worthiness of all direct finance lessees with payments outstanding less than 90 days. Based upon management’s judgment, direct finance lessees with balances less than 90 days delinquent may be placed in a non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable.

Equipment on operating leases and related revenue recognition:

Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values at the end of the leases.

Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally from 24 to 96 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet.

8

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued):

Notes receivable, unearned interest income and related revenue recognition:

The Company records all future payments of principal and interest on notes as notes receivable which is then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports only the net amount of principal due on the balance sheet. The unearned interest is recognized over the term of the note and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Any fees or costs related to notes receivable are recorded as part of the net investment in notes receivable and amortized over the term of the loan.

Allowances for losses on notes receivable are typically established based on historical charge offs and collections experience and are usually determined by specifically identified borrowers and unbilled receivables. Notes are charged off to the allowance as they are deemed uncollectible.

Notes receivable are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management periodically reviews the credit worthiness of companies with note payments outstanding less than 90 days. Based upon management’s judgment, notes may be placed in a non-accrual status. Notes placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid receivable is probable.

Initial direct costs:

The Company capitalizes initial direct costs (“IDC”) associated with the origination and funding of lease assets and investments in notes receivable as defined in Statement of Financial Accounting Standards (“SFAS”) No. 91 (“SFAS No. 91”) “Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases.” IDC includes both internal costs (e.g., labor and overhead) and external broker fees incurred with the origination. The costs are amortized on a lease by lease (or note by note) basis based on actual contract term using a straight-line method for operating leases and the effective interest rate method for direct finance leases and notes receivable. Upon disposal of the underlying lease assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases or notes receivable that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense.

Acquisition expense:

Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses and miscellaneous expenses related to the selection and acquisition of equipment which are reimbursable to the Managing Member under the terms of the Operating Agreement. As the costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred.

Asset valuation:

Recorded values of the Company’s asset portfolio are periodically reviewed for impairment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than their net book value. The estimated undiscounted future cash flows are the sum of the estimated residual value of the asset at the end of the asset’s expected holding period and estimates of undiscounted future rents. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the market place are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows) of the asset and its carrying value on the measurement date.

Segment reporting:

The Company reports segment information in accordance with SFAS No. 131 “Disclosures about Segments of an Enterprise and Related Information.” SFAS No. 131 establishes annual and interim standards for operating segments of a company. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenue, and its major customers. The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States.

9

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued):

The Company’s chief operating decision makers are the Managing Member’s Chief Operating Officer and its Chief Executive Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the chief operating decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas.

The primary geographic regions in which the Company seeks leasing opportunities are North America and Europe. The table below summarizes geographic information relating to the sources, by nation, of the Company’s total revenues for the six months ended June 30, 2007 and 2006 and long-lived tangible assets as of June 30, 2007 and December 31, 2006 (in thousands):

	For the six months ended June 30,
	2007		% of Total		2006		% of Total
Revenue:
United States	$	9,663	90	%	$	6,781	91	%
United Kingdom		986	9	%		560	7	%
Canada		122	1	%		132	2	%
Total International		1,108	10	%		692	9	%
Total	$	10,771	100	%	$	7,473	100	%
	As of June 30,				As of December 31,
	2007		% of Total		2006		% of Total
Long-lived tangible assets:
United States	$	81,237	92	%	$	78,539	90	%
United Kingdom		7,477	8	%		8,294	10	%
Total International		7,477	8	%		8,294	10	%
Total	$	88,714	100	%	$	86,833	100	%

Derivative financial instruments:

In June 1998, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” which established new accounting and reporting standards for derivative instruments. SFAS No. 133 has been amended by SFAS No. 137, issued in June 1999, by SFAS No. 138, issued in June 2000 and by SFAS No. 149, issued in June 2003.

The Company records all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. It further provides criteria as to when derivative instruments can be designated as fair value, cash flow, or foreign currency hedges, and establishes accounting standards for reporting changes in the fair value of the derivative instruments. The Company records derivative instruments at fair value in the balance sheet and recognizes the offsetting gains or losses as adjustments to net income.

Credit exposure from derivative financial instruments, which are assets, arises from the risk of a counterparty default on the derivative contract. The amount of the loss created by the default is the replacement cost or current positive fair value of the defaulted contract. SFAS No. 133, as amended, had no impact on the Company’s financial statements for periods prior to the first quarter of 2007 as the Company did not utilize derivatives in those periods.

Foreign currency transactions:

Foreign currency transaction gains and losses are reported in the results of operations as other income in the period in which they occur. Currently, the Company does not use derivative instruments to hedge its economic exposure with respect to assets, liabilities and firm commitments as the foreign currency transactions and risks to date have not been significant. During the three months ended June 30, 2007

10

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued):

and 2006, the Company recognized foreign currency gains of $70 thousand and $17 thousand, respectively. During the six months ended June 30, 2007 and 2006, the Company recognized foreign currency gains of $68 thousand and $1 thousand, respectively. Foreign currency transaction gains and losses are included in other income (expense), net.

Investment in securities

Purchased securities

Purchased securities are not registered for public sale and are carried at lower of cost or market at the end of the period as determined by the Managing Member. Factors considered by the Managing Member in determining fair value include cost, the type of investment, subsequent purchases of the same or similar investments by the Company or other investors, the current financial position and operating results of the company issuing the securities and such other factors as may be deemed relevant. The Managing Member’s estimate and assumption of fair value of the private securities may differ significantly from the values that would have been used had a ready market existed, and the differences could be material.

Warrants

Warrants owned by the Company are not registered for public sale and are carried at an estimated fair value on the balance sheet at the end of the period, as determined by the Managing Member. Factors considered by the Managing Member in determining fair value include cost, the type of investment, subsequent purchases of the same or similar investments by the Company or other investors, the current financial position and operating results of the company issuing the securities and such other factors as may be deemed relevant. The Managing Member’s estimate and assumption of fair value of the private securities may differ significantly from the values that would have been used had a ready market existed, and the differences could be material. At June 30, 2007 and December 31, 2006, the Managing Member the estimated fair value of the warrants to be nominal in amount.

Unearned operating lease income:

The Company records prepayments on operating leases as a liability, unearned operating lease income. The liability is recorded when the prepayments are received and recognized as operating lease revenue ratably over the period to which the prepayments relate.

Income taxes:

The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Revenue Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current franchise income taxes for only those states which levy income taxes on partnerships.

Other income, net:

The Company’s other income consists of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Foreign currency gain	$	70	$	17	$	68	$	1
Change in fair value of interest rate swap contracts		78		—		13		—
	$	148	$	17	$	81	$	1

Per Unit data:

Net income (loss) and distributions per Unit are based upon the weighted average number of Other Members’ Units outstanding during the period.

11

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued):

Recent accounting pronouncements:

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement No.159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115”. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. SFAS 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007 (January 1, 2008). The standard is not applicable to direct financing and operating leases. The Company does not presently anticipate any significant impact on its consolidated financial position, results of operations or cash flows.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. As of June 30, 2007, the Fund does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the statement of operations for a fiscal period.

In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FAS 109, Accounting for Income Taxes” (“FIN 48”), to create a single model to address accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on deregulation, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted the provisions of FIN 48 on January 1, 2007. The adoption of FIN 48 did not have a significant effect on the Company’s financial position and results of operations for the three and six months ended June 30, 2007.

3. Notes receivable, net:

The Company has various notes receivable from parties who have financed the purchase of equipment through the Company. The terms of the notes receivable are 13 to 120 months and bear interest at rates ranging from 9% to 23%. The notes are secured by the equipment financed. There was one impaired note of $144 thousand at June 30, 2007 and December 31, 2006, and the Company has established a 100% reserve against it.

As of June 30, 2007, the minimum future payments receivable are as follows (in thousands):

Six months ending December 31, 2007	$	1,900
Year ending December 31, 2008		3,136
2009		3,369
2010		493
2011		393
2012		393
Thereafter		870
		10,554
Less: portion representing unearned interest income		(1,731	)
		8,823
Unamortized indirect costs		31
Less: allowance for losses		(144	)
Notes receivable, net	$	8,710

12

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

3. Notes receivable, net (continued):

For the respective three month periods ended June 30, 2007 and 2006, IDC amortization expense related to notes receivable was $8 thousand and $14 thousand. Together with IDC amortization expense related to operating leases and direct finance leases (discussed in footnote 4) of $80 thousand and $55 thousand, respectively, total IDC amortization expense was $88 thousand and $69 thousand for the three months ended June 30, 2007 and 2006, respectively.

For the respective six month periods ended June 30, 2007 and 2006, IDC amortization expense related to notes receivable was $22 thousand and $27 thousand. Together with IDC amortization expense related to operating leases and direct finance leases (discussed in footnote 4) of $155 thousand and $103 thousand, respectively, total IDC amortization expense was $177 thousand and $130 thousand for the six months ended June 30, 2007 and 2006, respectively.

4. Investment in equipment and leases, net:

The Company’s investment in equipment leases consists of the following (in thousands):

	Balance December 31, 2006		Reclassifications & Additions/ Dispositions		Depreciation/ Amortization Expense or Amortization of Leases			Balance June 30, 2007
Net investment in operating leases	$	84,270	$	10,273	$	(8,167	)	$	86,376
Net investment in direct financing leases		1,617		—		(259	)		1,358
Initial direct costs, net of accumulated amortization of $526 at June 30, 2007 and $397 at December 31, 2006		946		189		(155	)		980
Total	$	86,833	$	10,462	$	(8,581	)	$	88,714

Additions to net investment in operating leases are stated at cost and include amounts accrued at June 30, 2007 related to asset purchase obligations.

For the three and six month periods ended June 30, 2007, IDC amortization expense related to operating leases and direct finance leases was $80 thousand and $155 thousand, respectively. For the three and six month periods ended June 30, 2006, IDC amortization expense related to operating leases and direct finance leases was $55 thousand and $103 thousand, respectively.

Impairment of investments in leases and assets held for sale or lease:

Impairment losses are recorded as an addition to accumulated depreciation of the impaired assets. Depreciation expense on property subject to operating leases and property held for lease or sale was approximately $4.2 million and $2.8 million for the three months ended June 30, 2007 and 2006, respectively, and approximately $8.2 million and $5.3 million for the six months ended June 30, 2007. There were no lease assets held for sale at June 30, 2007 and December 31, 2006. There were no impairment losses for the three or six months ended June 30, 2007 and 2006.

All of the leased property was acquired in years beginning with 2003 through 2007.

13

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

4. Investment in equipment and leases, net (continued):

Operating leases:

Property on operating leases consists of the following (in thousands):

	Balance December 31, 2006			Additions			Reclassifications or Dispositions			Balance June 30, 2007
Mining	$	18,467		$	168		$	—		$	18,635
Transportation		18,048			1,023			—			19,071
Materials handling		20,999			8,896			(835	)		29,060
Manufacturing		13,526			329			—			13,855
Data processing		650			166			(650	)		166
Transportation, rail		17,909			—			—			17,909
Construction		9,524			—			—			9,524
Logging & lumber		4,480			—			—			4,480
Furniture & fixtures		320			—			—			320
Aircraft		3,026			—			—			3,026
		106,949			10,582			(1,485	)		116,046
Less accumulated depreciation		(22,679	)		(8,167	)		1,176			(29,670	)
Total	$	84,270		$	2,415		$	(309	)	$	86,376

The average estimated residual value for assets on operating leases at June 30, 2007 and December 31, 2006 was 22% of the assets’ original cost, respectively.

Direct financing leases:

As of June 30, 2007, investment in direct financing leases consists of materials handling equipment and office furniture. The following lists the components of the Company’s investment in direct financing leases as of June 30, 2007 and December 31, 2006 (in thousands):

	June 30, 2007			December 31, 2006
Total minimum lease payments receivable	$	1,138		$	1,441
Estimated residual values of leased equipment (unguaranteed)		325			325
Investment in direct financing leases		1,463			1,766
Less unearned income		(105	)		(149	)
Net investment in direct financing leases	$	1,358		$	1,617

At June 30, 2007, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating Leases		Direct Financing Leases		Total
Nine months ending December 31, 2007	$	11,369	$	249	$	11,618
Year ending December 31, 2008		19,440		485		19,925
2009		16,890		401		17,291
2010		11,030		2		11,032
2011		6,155		1		6,156
2012		4,466		—		4,466
Thereafter		3,154		—		3,154
	$	72,504	$	1,138	$	73,642

14

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

4. Investment in equipment and leases, net (continued):

The Company utilizes a straight line depreciation method for equipment in all of the categories currently in its portfolio of lease transactions. The useful lives for investment in leases by category are as follows (in years):

Equipment category	Useful Life
Mining	30 - 40
Transportation, rail	30 - 35
Aircraft	20 - 30
Manufacturing	10 - 20
Materials handling	7 - 10
Transportation	7 - 10
Logging & lumber	7 - 10
Construction	7 - 10
Data processing	3 - 5
Furniture & fixtures	3 - 5

5. Related party transactions:

The terms of the Operating Agreement provide that AFS and/or affiliates are entitled to receive certain fees for equipment management and resale and for management of the Company.

The Operating Agreement allows for the reimbursement of costs incurred by AFS for providing administrative services to the Company. Administrative services provided include Company accounting, finance/treasury, investor relations, legal counsel and lease and equipment documentation. AFS is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of equipment. Reimbursable costs incurred by AFS are allocated to the Company based upon estimated time incurred by employees working on Company business and an allocation of rent and other costs based on utilization studies. The Company would be liable for certain future costs to be incurred by AFS to manage the administrative services provided to the Company.

Each of ATEL Leasing Corporation (“ALC”); ATEL Equipment Corporation (“AEC”); ATEL Investor Services (“AIS”); and AFS is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company. Acquisition services are performed for the Company by ALC; equipment management, lease administration and asset disposition services are performed by AEC; investor relations and communications services are performed by AIS; and general administrative services for the Company are performed by AFS.

Cost reimbursements to Managing Member are based on costs incurred by AFS in performing administrative services for the Company that are allocated to each fund that AFS manages based on certain criteria such as existing or new leases, number of investors or equity depending on the type of cost incurred.

During the three and six months ended June 30, 2007 and 2006, AFS and/or affiliates earned fees, commissions and reimbursements, pursuant to the Operating Agreement as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Costs reimbursed to Managing Member	$	394	$	204	$	763	$	403
Asset management fees to Managing Member		221		156		436		295
Acquisition and initial direct costs paid to Managing Member		257		315		608		579
	$	872	$	675	$	1,807	$	1,277

15

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

6. Borrowing facilities:

The Company participates with AFS and certain of its affiliates in a financing arrangement ((the “Master Terms Agreement”) comprised of a working capital facility to AFS, an acquisition facility and a warehouse facility to AFS, the Company and affiliates and a venture facility available to an affiliate) with a group of financial institutions that includes certain financial and non-financial covenants. The financial arrangement was originally $75 million and expired on June 28, 2007. The facility was renewed for an additional two years with an availability of $65 million pending redefinition of the lender base. On July 28, 2007, with a redefinition of the lender base, the facility was amended to reset availability to $75 million. The arrangement expires in June 2009. The availability of borrowings available to the Company under this financing arrangement is reduced by the amount outstanding on any of the above mentioned facilities.

As of June 30, 2007, borrowings under the facility were as follows (in thousands):

Total amount available under the financing arrangement	$	65,000
Amount borrowed by the Company under the acquisition facility		(7,000	)
Amounts borrowed by affiliated partnerships and limited liability companies under the acquisition facility		(6,500	)
Total remaining available under the acquisition and warehouse facilities	$	51,500

The Company is contingently liable for principal payments under the warehouse facility as borrowings are recourse jointly and severally to the extent of the pro-rata share of the Company’s net worth as compared to the aggregate net worth of certain of the affiliated partnerships and limited liability companies of the Company and including AFS and ALC (which latter two entities are 100% liable). The Company and its affiliates pay an annual commitment fee to have access to this line of credit. There were no borrowings under the warehouse facility as of June 30, 2007. As of December 31, 2006, borrowings of $3.1 million were outstanding under the warehouse facility. The Company’s maximum obligation on the outstanding warehouse balance at December 31, 2006 was approximately $1.2 million.

The interest rate on the Master Terms Agreement is based on either the LIBOR/Eurocurrency rate of 1-, 2-, 3- or 6-month maturity plus a lender designated spread, or the bank’s Prime rate, which re-prices daily. Principal amounts of loans made under the Master Terms Agreement that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Master Terms Agreement. The Company had outstanding balances of $7 million and $10 million under the acquisition facility as of June 30, 2007 and December 31, 2006, respectively.

Draws on the acquisition facility by any affiliated partnership and/or limited liability company borrower are secured by a blanket lien on that borrower’s assets, including but not limited to equipment and related leases.

To manage the warehousing facility for the holding of assets prior to allocation to specific investor programs, a Warehousing Trust Agreement has been entered into by the Company, AFS, ALC, and certain of the affiliated partnerships and limited liability companies.

The warehousing facility is used to acquire and hold, on a short-term basis, certain lease transactions that meet the investment objectives of each of such entities. Each of the leasing programs sponsored by AFS and ALC currently in its acquisition stage is a pro rata participant in the Warehousing Trust Agreement, as described below. When a program no longer has a need for short term financing provided by the warehousing facility, it is removed from participation, and as new leasing investment entities are formed by AFS and ALC and commence their acquisition stages, these new entities will be added. As of June 30, 2007, the investment program participants were ATEL Capital Equipment Fund IX, LLC, the Company and ATEL Capital Equipment Fund XI, LLC. Pursuant to the Warehousing Trust Agreement, the benefit of the lease transaction assets, and the corresponding liabilities under the warehouse borrowing facility, inure to each of such entities based upon each entity’s pro-rata share in the warehousing trust estate. The “pro-rata share” is calculated as a ratio of the net worth of each entity over the aggregate net worth of all entities benefiting from the warehouse trust estate, excepting that the trustees, AFS and ALC, are both liable for their pro-rata shares of the obligations based on their respective net worth, and jointly liable for the pro rata portion of the obligations of each of the affiliated partnerships and limited liability companies participating under the borrowing facility. Transactions are financed through this warehousing facility only until the transactions are allocated to a specific program for purchase or are otherwise disposed by AFS and ALC. When a determination is made to allocate the transaction to a specific program for purchase by the program, the purchaser repays the debt associated with the asset, either with cash or by means of the acquisition facility financing, the asset is removed from the warehouse facility collateral, and ownership of the asset and any debt obligation associated with the asset are assumed solely by the purchasing entity.

The financing arrangement discussed above includes certain financial and non-financial covenants applicable to each borrower. The Company and affiliates were in compliance with all covenants as of June 30, 2007.

16

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

7. Receivables funding program:

As of December 31, 2006, the Company had a $60 million receivables funding program with a receivables financing company that issues commercial paper rated A1 from Standard and Poor’s and P1 from Moody’s Investor Services. In this receivables funding program, the lenders would receive liens against the Company’s assets. The lender will be in a first position against certain specified assets and will be in either a subordinated or shared position against the remaining assets. The receivables funding program expires August 2011.

The receivable funding program provides for borrowing at a variable interest rate and requires AFS, on behalf of the Company, to enter into interest rate swap agreements with certain hedge counterparties (also rated A1/P1) to mitigate the interest rate risk associated with a variable interest rate note. AFS anticipates that this program will allow the Company to have a more cost effective means of obtaining debt financing than available for individual non-recourse debt transactions.

The Company had approximately $11 million outstanding under this program at June 30, 2007. There was no outstanding balance at December 31, 2006. In order to maintain the availability of the program, the Company is required to make payments of standby fees. These fees totaled approximately $78 thousand and $155 thousand for the three and six months ended June 30, 2007, and are included in interest expense in the Company’s statement of operations. There was no such expense for the three and six months ended June 30, 2006.

As of June 30, 2007, the Company has entered into interest rate swap agreements to receive or pay interest on a notional principal of approximately $18.2 million based on the difference between nominal rates ranging from of 5.15% to 5.39% and a variable rates ranging from 5.58% to 5.61% under the receivables funding program. No actual borrowing or lending is involved. The termination of the swaps coincides with the maturity or termination of the debt. Through the swap agreements, the interest rates have been effectively fixed. 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. The interest rate swaps are carried at fair value on the balance sheet with unrealized gain/loss included in the statement of operations in other income/(expense).

Borrowings under the program are as follows (in thousands):

Date Borrowed	Original Amount Borrowed		Balance June 30, 2006		Notional Balance June 30, 2007		Swap Value June 30, 2007			Payment Rate On Interest Swap Agreement
January 16, 2007	$	12,365	$	10,977	$	10,977	$	28		5.15	%
**		—		—		7,222		(15	)	5.39	%
	$	12,365	$	10,977	$	18,199	$	13

** The notional balance at June 30, 2007 includes $7.2 million of interest rate swap contracts entered into by the Company as a requirement to a borrowing that was funded on July 2, 2007.

At June 30, 2007, the minimum repayment schedule under the accounts receivable funding program is as follows (in thousands):

Six months ending December 31, 2007	$	1,366
Year ending December 31, 2008		2,893
2009		2,664
2010		1,935
2011		1,125
2012		994
	$	10,977

At June 30, 2007, there were specific leases that were identified as collateral under the receivables funding program with expected future lease receivables of approximately $11 million at their discounted present value.

8. Commitments:

At June 30, 2007, there were commitments to purchase lease assets totaling approximately $20.7 million. This amount represents contract awards which may be cancelled by the prospective lessee or may not be accepted by the Company.

17

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

9. Guarantees:

The Company enters into contracts that contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

In the normal course of business, the Company enters into contracts of various types, including lease contracts, contracts for the sale or purchase of lease assets, management contracts, loan agreements, credit lines and other debt facilities. It is prevalent industry practice for most contracts of any significant value to include provisions that each of the contracting parties—in addition to assuming liability for breaches of the representations, warranties, and covenants that are part of the underlying contractual obligations—also assume an obligation to indemnify and hold the other contracting party harmless for such breaches, for harm caused by such party’s gross negligence and willful misconduct, including, in certain instances, certain costs and expenses arising from the contract. The Managing Member has substantial experience in managing similar leasing programs subject to similar contractual commitments in similar transactions, and the losses and claims arising from these commitments have been insignificant, if any. Generally, to the extent these contracts are performed in the ordinary course of business under the reasonable business judgment of the Managing Member, no liability will arise as a result of these provisions. The Managing Member has no reason to believe that the facts and circumstances relating to the Company’s contractual commitments differ from those it has entered into on behalf of the prior programs it has managed. The Managing Member knows of no facts or circumstances that would make the Company’s contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Company believes that these indemnification obligations are made in the ordinary course of business as part of standard commercial and industry practice, and that any potential liability under the Company’s similar commitments is remote. Should any such indemnification obligation become payable, the Company would separately record and/or disclose such liability in accordance with GAAP.

10. Member’s capital:

Units issued and outstanding were 13,987,486 at June 30, 2007 and December 31, 2006. The Company was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial members (50 Units). The Company ceased offering Units on March 11, 2005.

As defined in the Operating Agreement, the Company’s Net Income, Net Losses, and Distributions, are to be allocated 92.5% to the Other Members and 7.5% to AFS. In accordance with the terms of the Operating Agreement, additional allocations of income were made to AFS in 2007 and 2006. The amounts allocated were determined to bring AFS’s ending capital account balance to zero at the end of the period.

Distributions to the Other Members were as follows (in thousands, except as to Units and per Unit data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Distributions declared	$	2,797	$	2,801	$	5,594	$	5,606
Weighted average number of Units outstanding		13,987,486		14,005,986		13,987,486		14,005,986
Weighted average distributions per Unit	$	0.20	$	0.20	$	0.40	$	0.40

18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Statements contained in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Form 10-Q, which are not historical facts, may be forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Investors are cautioned not to attribute undue certainty to these forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events, other than as required by law.

Capital Resources and Liquidity

The Company’s public offering provided for a total maximum capitalization of $150 million. As of March 12, 2005, the offering was concluded. As of that date, subscriptions for 14,059,136 Units had been received, of which 71,650 Units were rescinded or repurchased by the Company through June 30, 2007. The liquidity of the Company will vary in the future, increasing to the extent cash flows from leases and proceeds of asset sales 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 and proceeds from asset sales.

The Company participates with ATEL Financial Services, LLC (“AFS”) and certain of its affiliates, as defined in the Operating Agreement, in a financing arrangement ((the “Master Terms Agreement”) comprised of a working capital facility to AFS, an acquisition facility and a warehouse facility to AFS, the Company and affiliates, and a venture facility available to an affiliate) with a group of financial institutions that includes certain financial and non-financial covenants. The financial arrangement was originally $75 million and expired on June 28, 2007. The facility was renewed for an additional two years with an availability of $65 million pending redefinition of the lender base. On July 28, 2007, with a redefinition of the lender base, the facility was amended to reset availability to $75 million. The arrangement expires in June 2009. The availability of borrowings available to the Company under this financing arrangement is reduced by the amount outstanding on any of the above mentioned facilities.

Borrowings under the facility as of June 30, 2007 were as follows (in thousands):

Total amount available under the financing arrangement	$	65,000
Amount borrowed by the Company under the acquisition facility		(7,000	)
Amounts borrowed by affiliated partnerships and limited liability companies under the acquisition facility		(6,500	)
Total remaining available under the acquisition and warehouse facilities	$	51,500

The Company is contingently liable for principal payments under the warehouse facility as borrowings are recourse jointly and severally to the extent of the pro-rata share of the Company’s net worth as compared to the aggregate net worth of certain of the affiliated partnerships and limited liability companies of the Company and including AFS and ATEL Leasing Corporation (“ALC”) (which latter two entities are 100% liable). The Company and its affiliates pay an annual commitment fee to have access to this line of credit. There were no borrowings under the warehouse facility as of June 30, 2007.

The interest rate on the Master Terms Agreement is based on either the LIBOR/Eurocurrency rate of 1-, 2-, 3- or 6-month maturity plus a lender designated spread, or the bank’s Prime rate, which re-prices daily. Principal amounts of loans made under the Master Terms Agreement that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Master Terms Agreement. The effective interest rate on borrowings at June 30, 2007 was 6.57%.

Draws on the acquisition facility by any affiliated partnership and/or limited liability company borrower are secured only by that borrower’s assets, including but not limited to equipment and related leases.

To manage the warehousing facility for the holding of assets prior to allocation to specific investor programs, a Warehousing Trust Agreement has been entered into by the Company, AFS, ALC, and certain of the affiliated partnerships and limited liability companies. The warehousing facility is used to acquire and hold, on a short-term basis, certain lease transactions that meet the investment objectives of each of such entities. Each of the leasing programs sponsored by AFS and ALC currently in its acquisition stage is a pro rata participant in the Warehousing Trust Agreement, as described below. When a program no longer has a need for short term financing provided by the warehousing facility, it is removed from participation, and as new leasing investment entities are formed by AFS and ALC and commence their acquisition stages, these new entities will be added. As of June 30, 2007, the investment program participants were ATEL Capital Equipment Fund IX, LLC, the Company and ATEL Capital Equipment Fund XI, LLC. Pursuant to the Warehousing Trust Agreement, the benefit of the lease transaction assets, and the corresponding liabilities under the warehouse borrowing facility, inure to each of such entities based upon each entity’s pro-rata share in the warehousing trust estate.

The “pro-rata share” is calculated as a ratio of the net worth of each entity over the aggregate net worth of all entities benefiting from the warehouse trust estate, excepting that the trustees, AFS and ALC, are both liable for their pro-rata shares of the obligations based on their respective net worth, and jointly liable for the pro rata portion of the obligations of each of the affiliated partnerships and limited liability companies participating under the borrowing facility. Transactions are financed through this warehousing facility only until the transactions are allocated to a specific program for purchase or are otherwise disposed by AFS and ALC. When a determination is made to allocate the transaction to a specific program for purchase by the program, the purchaser repays the debt associated with the asset, either with cash or by means of the acquisition facility financing, the asset is removed from the warehouse facility collateral, and ownership of the asset and any debt obligation associated with the asset are assumed solely by the purchasing entity.

19

The financing arrangement discussed above includes certain financial and non-financial covenants applicable to each borrower. The Company and affiliates were in compliance with all covenants as of June 30, 2007.

Throughout the reinvestment period, 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 current obligations, including debt service (both principal and interest), the payment of management and acquisition fees to AFS, and providing for cash distributions to the members.

AFS or an affiliate may purchase equipment in its own name, the name of an affiliate or the name of a nominee, a trust or otherwise and hold title thereto on a temporary or interim basis for the purpose of facilitating the acquisition of such equipment or the completion of manufacture of the equipment or for any other purpose related to the business of the Company, provided, however that: (i) the transaction is in the best interest of the Company; (ii) such equipment is purchased by the Company for a purchase price no greater than the cost of such equipment to AFS or affiliate (including any out-of-pocket carrying costs), except for compensation permitted by the Operating Agreement; (iii) there is no difference in interest terms of the loans secured by the equipment at the time acquired by AFS or affiliate and the time acquired by the Company; (iv) there is no benefit arising out of such transaction to AFS or its affiliate apart from the compensation otherwise permitted by the Operating Agreement; and (v) all income generated by, and all expenses associated with, equipment so acquired will be treated as belonging to the Company.

The Company currently has available adequate reserves to meet its immediate cash requirements and those of the next twelve months, 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. AFS envisions no such requirements for operating purposes.

If inflation in the general economy becomes significant, it may affect the Company in as much 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. For detailed information on the Company’s debt obligations, see footnotes 6 through 8 in the notes to the financial statements.

As another source of liquidity, the Company is expected to have 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 AFS’s success in re-leasing or selling the equipment as it comes off lease.

At June 30, 2007, the Company had a $65 million receivables funding program with a receivables financing company that issues commercial paper rated A1 from Standard and Poor’s and P1 from Moody’s Investor Services. In this receivables funding program, the lenders would receive liens against the Company’s assets. The lender will be in a first position against certain specified assets and will be in either a subordinated or shared position against the remaining assets. The program provides for borrowing at a variable interest rate and requires AFS, on behalf of the Company, to enter into interest rate swap agreements with certain hedge counterparties (also rated A1/P1) to mitigate the interest rate risk associated with a variable interest rate note. AFS anticipates that this program will allow the Company to have a more cost effective means of obtaining debt financing than available for individual non-recourse debt transactions. As more fully described in Note 7, the Company had approximately $11 million outstanding under this receivables funding program as of June 30, 2007. The receivables funding program expires in August 2011.

AFS expects that aggregate borrowings in the future will be approximately 50% of aggregate equipment cost. In any event, the Operating Agreement limits such borrowings to 50% of the total cost of equipment, in aggregate.

As of June 30, 2007, cash balances consisted of working capital and amounts reserved for distributions to be paid in July 2007, generated from operations in 2007.

At June 30, 2007, there were commitments to purchase lease assets totaling approximately $20.7 million. This amount represents contract awards which may be cancelled by the prospective lessee or may not be accepted by the Company.

The Company announced the commencement of regular distributions, based on cash flows from operations, beginning with the month of April 2003. The first distribution payment was made in May 2003 and additional monthly and/or quarterly distributions have been consistently made through June 2007.

20

Cash Flows

The three months ended June 30, 2007 versus the three months ended June 30, 2006

Operating Activities

The Company’s primary source of cash from operations is rents from operating leases. Additionally, the Company’s cash flows are impacted by changes in certain assets and liabilities. Cash provided by operating activities totaled $3.4 million and $3.9 million for the three months ended June 30, 2007 and 2006, respectively. Cash flow from operations decreased primarily due to increased payments made against accounts payable and accrued liabilities offset, in part, by (1) the quarter over quarter difference in results of operations, adjusted for non-cash revenue and expense such as gains on sales of assets and depreciation expense, and (2) increased payments received on accounts receivable.

Cash used to pay accounts payable and accrued liabilities during the three months ended June 30, 2007 increased by $1.3 million when compared to the same period in 2006. The increase in payments made was due primarily to the timing of inestimable third party vendor invoices.

The decrease in cash was partially offset by cash generated by the quarter over quarter difference in results of operations, adjusted for non-cash items, and a decrease in accounts receivable. When adjusted to exclude non-cash income and expenses such as depreciation expense and gains on sales of assets, cash from operations improved by approximately $795 thousand during the three months ended June 30, 2007 when compared to the same period in 2006. The increase was due primarily to an increase in operating lease revenue offset by increases in interest expense and cost reimbursements to AFS. Similarly, the increase in payments received on accounts receivable during the three months ended June 30, 2007 improved cash flow by $209 thousand when compared to the same period in 2006.

Investing Activities

The main use of cash in investing activities for the three month periods ended June 30, 2007 and 2006 has been the purchase of equipment and funding of investments in notes receivable. Cash used in investing activities was $2.9 million and $11.2 million for the three months ended June 30, 2007 and 2006, respectively. The increase in cash flow was primarily due to decreases in cash used for operating lease purchases and funding of investments in notes receivable as well as an increase in proceeds from sales of lease assets.

Cash used to purchase operating leases declined by $6.0 million for the three months ended June 30, 2007 when compared to the same period in 2006, while cash used to fund investments in notes receivable declined by $1.9 million for the same comparative three month periods. The acquisition activity declined in 2007 due to a lower level of demand when compared to 2006.

Proceeds from sales of lease assets increased by $260 thousand during the three months ended June 30, 2007 when compared to the same period in 2006.

Financing Activities

Since the termination of the Company’s offering in March 2005, the main source of cash has been borrowings on the Company’s various credit facilities while the main uses of cash during the same timeframe have been repayment of debt and distributions to both Other Members and Managing Member.

Cash provided by financing activities totaled $591 thousand and $468 thousand for the three months ended June 30, 2007 and 2006, respectively. Cash availability increased as the Company’s borrowings, net of repayments, slightly increased during the three months ended June 30, 2007 when compared to the same period in 2006. The Company had net borrowings of $3.6 million and $3.5 million for the three months ended June 30, 2007 and 2006, respectively.

The six months ended June 30, 2007 versus the six months ended June 30, 2006

Operating Activities

The Company’s primary source of cash from operations is rents from operating leases. Additionally, the Company’s cash flows are impacted by changes in certain assets and liabilities. Cash provided by operating activities totaled $4.8 million and $7.4 million for the six months ended June 30, 2007 and 2006, respectively. Cash flow from operations decreased primarily due to increased payments made against accounts payable and accrued liabilities partially offset by the year over year difference in results of operations, adjusted for non-cash revenue and expense such as gains on sales and depreciation expense, and increased payments received on accounts receivable.

Company payments for accounts payable and accrued liabilities during the first half of 2007 significantly increased compared to the same period in 2006 due primarily to the timing of inestimable third party vendor invoices. Cash outflow related to the increased payments made against accounts payable and accrued liabilities was $1.9 million for the first half of 2007 compared to a cash inflow of $2.9 million for the same period 2006 related to an incremental increase in accounts payable and accrued liabilities – a year over year decrease of $4.8 million.

21

The aforementioned decrease in cash was partially offset by cash generated by the year over year difference in results and a decrease in accounts receivable. The year over year difference in results of operations, adjusted for non-cash items, increased cash inflow by approximately $1.6 million during the first six months of 2007 when compared to the same period in 2006. The increase was due primarily to the increase in operating lease revenue offset by increases in interest expense, cost reimbursements to AFS, professional fees and outside services. Similarly, the year over year increase in payments received on accounts receivable improved cash flow by $830 thousand.

Investing Activities

The main use of cash in investing activities for the six month periods ended June 30, 2007 and 2006 has been the purchase of equipment and funding of investments in notes receivable. Cash used in investing activities was $8.4 million and $16.1 million for the six months ended June 30, 2007 and 2006, respectively. The increase in cash flow was due to a decline in cash used to originate and fund leases and investments in notes receivable, combined with an increase in proceeds from the sale of lease assets and early termination of notes receivable.

The year over year decrease in cash used to purchase operating leases and fund investments in notes receivable totaled $4.3 million and $1.5 million, respectively. The acquisition activity declined during the first six months of 2007 due to a lower level of demand when compared to the same period in 2006.

During the first half of 2007, the Company had proceeds of $1.7 million related to an early termination of a note receivable ($1.2 million) and sales of assets ($429 thousand). This compares to proceeds of $33 thousand from sales of assets during the first half of 2006.

Financing Activities

During the six months ended June 30, 2007 and 2006, the Company’s main source of cash has been borrowings on its credit facilities while the main uses of cash during the same timeframe have been repayment of debt and distributions to both Other Members and Managing Member.

Cash provided by financing activities totaled $1.9 million for the six months ended June 30, 2007 compared to cash used in financing activities of $2.6 million for the six months ended June 30, 2006. The increase in cash was due to the year over year increase in net borrowings. The Company had net borrowings of $8.0 million and $3.5 million for the six months ended June 30, 2007 and 2006, respectively.

Results of Operations

As of April 9, 2003, the Company, had received and accepted subscriptions for the minimum amount of the offering ($1,200,000). As of that date, the Company commenced operations in its primary business (“leasing and lending activities”). After the Company’s public offering and its initial asset acquisition stage terminate, the results of operations are expected to change significantly.

Cost reimbursements to the Managing Member are based on its costs incurred in performing administrative services for the Company. These costs are allocated to each managed entity based on certain criteria such as existing or new leases, number of investors or equity depending upon the type of cost incurred.

The three months ended June 30, 2007 versus the three months ended June 30, 2006

The Company had a net loss of $351 thousand for the three months ended June 30, 2007 compared to net income of $43 thousand for the three months ended June 30, 2006. Results for the three months ended June 30, 2007 reflected increases in both operating expenses and total revenues when compared with the three months ended June 30, 2006.

22

Revenues

Total revenues were $5.4 million and $3.9 million for the three months ended June 30, 2007.and 2006, respectively. The increase was due to the continued growth in operating lease revenue partially offset by a decline in interest earned on cash and cash equivalents.

Operating lease revenues were $5.0 million and $3.3 million for the three months ended June 30, 2007 and 2006, respectively. The increase was primarily due to revenues derived from lease assets purchased since June 30, 2006 totaling $36.4 million, including approximately $3.9 million purchased during the three months ended June 30, 2007. Net operating lease assets increased from $65.5 million at June 30, 2006 to $86.4 million at June 30, 2007.

The increase in operating lease revenue was partially offset by a $215 thousand decrease in interest earned on cash and cash equivalents, which have declined by $21.7 million since June 30, 2006 as the Company continued to use its cash to purchase lease assets. Cash and cash equivalents on hand totaled $4.3 million and $26.0 million at June 30, 2007 and 2006.

Expenses

Total expenses were $5.9 million and $3.9 million for the three months ended June 30, 2007 and 2006, respectively. The increase in total expenses was primarily due to greater amounts of depreciation, interest expense and cost reimbursements to the Managing Member, all results of increased levels of activity pursuant to the growth of assets under management.

The Company’s largest expense during the three months ended June 30, 2007 and 2006 was depreciation, which is directly related to its acquisition of operating lease assets during its initial acquisition phase. Depreciation expense totaled $4.2 million and $2.8 million for the three months ended June 30, 2007 and 2006, respectively. The increase in depreciation expense was primarily due to the increase in purchases of operating lease assets since June 30, 2006, and is consistent with the increase in operating lease revenue.

Interest expense on the Company’s borrowings totaled $333 thousand and $8 thousand for the three months ended June 30, 2007 and 2006, respectively. The increase was due to borrowings of approximately $14.5 million made against the Company’s credit facilities since June 30, 2006 to fund equipment purchases.

Costs reimbursed to Managing Member totaled $394 thousand and $204 thousand for the three months ended June 30, 2007 and 2006, respectively. The $190 thousand increase was primarily due to increased administrative costs related to the growth of the Company’s asset portfolio.

Other

The Company records other income or expense which may include recoveries of amounts previously written off, gains and losses on interest rate swap contracts, or gains and losses on foreign exchange transactions.

During the three months ended June 30, 2007, other income of $148 thousand was comprised of a favorable fair value adjustment on interest rate swap contracts of $78 thousand and a foreign currency gain of $70 thousand. During the three months ended June 30, 2006, other income was solely comprised of a foreign currency gain of $17 thousand.

The six months ended June 30, 2007 versus the six months ended June 30, 2006

The Company had a net loss of $1.0 million for the six months ended June 30, 2007 compared to net income of $69 thousand for the six months ended June 30, 2006. Results for the six months ended June 30, 2007 reflected increases in both operating expenses and total revenues when compared with the six months ended June 30, 2006.

Revenues

Total revenues were $10.8 million and $7.5 million for the six months ended June 30, 2007.and 2006, respectively. The increase was due to increases in (1) operating lease revenue and (2) gains on sales of assets partially offset by a decline in interest income on cash and cash equivalents.

Operating lease revenues were $9.9 million and $6.4 million for the six months ended June 30, 2007 and 2006, respectively. The $3.5 million increase was primarily due to revenues derived from lease assets purchased since June 30, 2006 totaling $36.4 million, including approximately $10.6 million purchased during the first six months of 2007.

The Company recognized a gain of $232 thousand related to sales of lease assets ($120 thousand) and an early termination of a note receivable ($112 thousand) during the first six months of 2007. This compares to a gain of $7 thousand on sales of lease assets recognized during the same period in 2006.

The above mentioned increases were partially offset by a $406 thousand decrease in interest earned on cash and cash equivalents, which declined by $21.7 million since June 30, 2006 due to acquisitions of lease assets.

23

Expenses

Total expenses were $11.9 million and $7.4 million for the six months ended June 30, 2007 and 2006, respectively. The increase in total expenses was a result of increases in depreciation, interest expense, cost reimbursements to Managing Member, professional fees, outside services and asset management fees, all results of increased levels of activity pursuant to the growth of assets under management.

Depreciation expense totaled $8.2 million and $5.3 million for the six months ended June 30, 2007 and 2006, respectively. The increase in depreciation expense was primarily due to the year over year increase in depreciable lease assets.

Interest expense totaled $583 thousand and $19 thousand for the six months ended June 30, 2007 and 2006, respectively. The increase was due to the year over year increase in borrowings as previously discussed. The Company had approximately $18.0 million and $3.5 million of outstanding debt at June 30, 2007 and 2006, respectively.

Professional fees and outside services totaled $1.2 million and $635 thousand for the six months ended June 30, 2007 and 2006, respectively. The increase reflects costs related to the Company’s restatement effort and the audit of prior period financial statements.

Cost reimbursed to Managing Member and asset management fees $1.2 million and $698 thousand for the six months ended June 30, 2007 and 2006, respectively. The increase was primarily a result of the increase in the Company’s asset portfolio.

Other

During the six months ended June 30, 2007, other income was comprised of a foreign currency gain of $68 thousand and favorable fair value adjustment on interest rate swap contracts of $13 thousand. During the six months ended June 30, 2006, other expense was solely comprised of a foreign currency gain of $1 thousand.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company, like most other companies, is exposed to certain market risks, including primarily changes in interest rates. The Company believes its exposure to other market risks, including foreign currency exchange rate risk, commodity risk and equity price risk, are insignificant to both its financial position and results of operations.

In general, the Company expects to manage its exposure to interest rate risk by obtaining fixed rate debt. The fixed rate debt is to be structured so as to match the cash flows required to service the debt to the payment streams under fixed rate lease receivables. The payments under the leases are assigned to the lenders in satisfaction of the debt. Furthermore, AFS has historically been able to maintain a stable spread between its cost of funds and lease yields in both periods of rising and falling interest rates. Nevertheless, the Company expects to frequently fund leases with its floating interest rate line of credit and will, therefore, be exposed to interest rate risk until fixed rate financing is arranged, or the floating interest rate line of credit is repaid.

24

Item 4. Controls and procedures.

Evaluation of disclosure controls and procedures

The Company’s Managing Member’s Chief Executive Officer, and Executive Vice President and Chief Financial and Operating Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) during and as of the end of the period covered by this report. Based on the evaluation of the Company’s disclosure controls and procedures the Chief Executive Officer and Executive Vice President and Chief Financial and Operating Officer concluded that, as of the end of the period covered by this report, the design and operation of these disclosure controls and procedures were ineffective.

The Company does not control the financial reporting process, and is dependent on the Managing Member, who is responsible for providing the Company with financial statements in accordance with generally accepted accounting principles. The Managing Member’s disclosure controls and procedures over the timeliness of the financial statement close process were determined to be ineffective and constitute a material weakness in internal control over financial reporting.

Changes in internal control

The Managing Member has reviewed the above noted material weakness and believes that the following corrective actions taken as a whole will address the material weakness in its disclosure controls and procedures described above.

• We have aggressively recruited experienced professionals to augment and upgrade our financial staff to address issues of timeliness in financial reporting even during periods when we are preparing filings for the Securities and Exchange Commission. Although we believe that this corrective step will enable management to conclude that the internal controls over our financial reporting are effective when the staff is trained and the current surge of regulatory reports have been completed, we cannot assure with certainty that these steps will be sufficient.

The Managing Member believes that the following corrective actions taken as a whole have addressed, and mitigated, one of the material weaknesses noted in its disclosure controls and procedures listed in its previously filed Form 10-Q as of its fiscal quarter ended March 31, 2007:

• With regard to identifying and estimating liabilities in the correct periods, the Managing Member has performed a detailed review to identify and record the liabilities, in the correct period. A standardized quarterly review process has been implemented to ensure the identification and estimation of the liabilities.

Except for the preceding items, no change in our internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Securities Exchange Act of 1934) occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

25

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In the ordinary course of conducting business, there may be certain claims, suits, and complaints filed against the Company. In the opinion of management, the outcome of such matters, if any, will not have a material impact on the Company’s financial position or results of operations. No material legal proceedings are currently pending against the Company or against any of its assets.

Item 1A. Risk Factors

There were no material changes in the risk factors previously disclosed in the Company’s Prospectus, as amended on Form POS AM, Post-Effective Amendment No. 5, which was filed on November 29, 2004. The Company’s offering was terminated on March 11, 2005.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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.

Documents filed as a part of this report

1. 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.

2. Other Exhibits

31.1 Certification of Dean L. Cash

31.2 Certification of Paritosh K. Choksi

32.1 Certification Pursuant to 18 U.S.C. section 1350 of Dean L. Cash

32.2 Certification Pursuant to 18 U.S.C. section 1350 of Paritosh K. Choksi

26

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 13, 2007

ATEL CAPITAL EQUIPMENT FUND X, 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
	Principal Financial Officer
	of Registrant

27