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 September 30, 2010

¨ 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer, large accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨ Accelerated filer  ¨ Non-accelerated filer  ¨ Smaller reporting company  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 October 31, 2010 was 13,971,486.

DOCUMENTS INCORPORATED BY REFERENCE

None.

ATEL CAPITAL EQUIPMENT FUND X, LLC

Index

Part I.	Financial Information	3
Item 1.	Financial Statements (Unaudited)	3
	Balance Sheets, September 30, 2010 and December 31, 2009	3
	Statements of Income for the three and nine months ended September 30, 2010 and 2009	4
	Statements of Changes in Members’ Capital for the year ended December 31, 2009 and for the nine months ended September 30, 2010	5
	Statements of Cash Flows for the three and nine months ended September 30, 2010 and 2009	6
	Notes to the Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 4.	Controls and Procedures	30
Part II.	Other Information	31
Item 1.	Legal Proceedings	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	[RESERVED]	31
Item 5.	Other Information	31
Item 6.	Exhibits	31

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

ATEL CAPITAL EQUIPMENT FUND X, LLC

BALANCE SHEETS

SEPTEMBER 30, 2010 AND DECEMBER 31, 2009

(in thousands)

(Unaudited)

	September 30, 2010		December 31, 2009
ASSETS
Cash and cash equivalents	$	11,365	$	12,866
Accounts receivable, net of allowance for doubtful accounts of $60 at September 30, 2010 and $48 at December 31, 2009		1,184		1,032
Notes receivable, net of unearned interest income of $335 as of September 30, 2010 and unearned interest income of $465 as of December 31, 2009		1,689		2,276
Due from affiliates		—		1,009
Prepaid expenses and other assets		95		121
Investment in securities		251		248
Investments in equipment and leases, net of accumulated depreciation of $67,773 at September 30, 2010 and $64,825 at December 31, 2009		75,400		92,520
Total assets	$	89,984	$	110,072
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Managing Member	$	315	$	122
Accrued distributions to Other Members		1,313		1,313
Other		624		679
Accrued interest payable		156		118
Interest rate swap contracts		757		967
Deposits due lessees		90		90
Non-recourse debt		27,641		30,921
Receivables funding program obligation		16,982		25,781
Unearned operating lease income		1,260		2,115
Total liabilities		49,138		62,106
Commitments and contingencies
Members’ capital:
Managing Member		—		—
Other Members		40,846		47,966
Total Members’ capital		40,846		47,966
Total liabilities and Members’ capital	$	89,984	$	110,072

See accompanying notes.

3

ATEL CAPITAL EQUIPMENT FUND X, LLC

STATEMENTS OF INCOME

THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2010 AND 2009

(in thousands, except per unit data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010		2009
Revenues:
Leasing activities:
Operating leases	$	5,419		$	6,600		$	17,444	$	20,028
Direct financing leases		1,101			232			3,138		407
Interest on notes receivable		38			61			130		258
Gain on sales of assets and early termination of notes		190			3			283		121
Gain (loss) on sales of securities		—			—			16		(46	)
Other interest		2			3			2		4
Other		65			14			157		27
Total revenues		6,815			6,913			21,170		20,799
Expenses:
Depreciation of operating lease assets		4,382			5,361			14,017		16,607
Asset management fees to Managing Member		316			351			924		950
Acquisition expense		154			6			206		133
Cost reimbursements to Managing Member		244			248			864		686
Amortization of initial direct costs		82			105			273		323
Interest expense		726			667			2,344		2,048
Impairment losses		—			49			282		151
Provision for credit losses		19			32			12		15
Provision for losses on investment in securities		—			—			—		50
Professional fees		32			110			265		298
Franchise fees and taxes		11			29			36		65
Outside services		12			18			103		60
Other		69			11			166		103
Total operating expenses		6,047			6,987			19,492		21,489
Other (expense) income , net		(4	)		221			264		916
Net income	$	764		$	147		$	1,942	$	226
Net income (loss):
Managing Member	$	227		$	227		$	680	$	680
Other Members		537			(80	)		1,262		(454	)
	$	764		$	147		$	1,942	$	226
Net income (loss) per Limited Liability Company Unit (Other Members)	$	0.04		$	(0.01	)	$	0.09	$	(0.03	)
Weighted average number of Units outstanding		13,971,486			13,971,486			13,971,486		13,971,779

See accompanying notes.

4

ATEL CAPITAL EQUIPMENT FUND X, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

YEAR ENDED DECEMBER 31, 2009

AND NINE MONTHS ENDED

SEPTEMBER 30, 2010

(in thousands, except per unit data)

(Unaudited)

	Other Members						Managing Member			Total
	Units			Amount
Balance December 31, 2008		13,975,486		$	59,087		$	—		$	59,087
Syndication costs allocation adjustment		(4,000	)		(26	)		—			(26	)
Distributions to Other Members ($0.80 per Unit)		—			(11,178	)		—			(11,178	)
Distributions to Managing Member		—			—			(906	)		(906	)
Net income		—			83			906			989
Balance December 31, 2009		13,971,486			47,966			—			47,966
Distributions to Other Members ($0.60 per Unit)		—			(8,382	)		—			(8,382	)
Distributions to Managing Member		—			—			(680	)		(680	)
Net income		—			1,262			680			1,942
Balance September 30, 2010		13,971,486		$	40,846		$	—		$	40,846

See accompanying notes.

5

ATEL CAPITAL EQUIPMENT FUND X, LLC

STATEMENTS OF CASH FLOWS

THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2010 AND 2009

(in thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
Operating activities:
Net income	$	764		$	147		$	1,942		$	226
Adjustment to reconcile net income to cash provided by operating activities:
Gain on sales of lease assets and early termination of notes		(190	)		(3	)		(283	)		(121	)
Depreciation of operating lease assets		4,382			5,361			14,017			16,607
Amortization of initial direct costs		82			105			273			323
Amortization of unearned income on direct financing leases		(1,101	)		(232	)		(3,138	)		(407	)
Amortization of unearned income on notes receivable		(38	)		(61	)		(130	)		(258	)
Impairment losses		—			49			282			151
Provision for credit losses		19			32			12			15
Provision for losses on investment in securities		—			—			—			50
Change in fair value of interest rate swap contracts		(51	)		(54	)		(211	)		(639	)
Gain (loss) on sale of securities		—			—			(16	)		46
Changes in operating assets and liabilities:
Accounts receivable		(27	)		1,750			(163	)		388
Due from affiliates		—			—			5			—
Prepaid and other assets		(46	)		(62	)		26			(21	)
Accounts payable, Managing Member		95			226			193			(116	)
Accounts payable, other		21			(32	)		(55	)		(749	)
Accrued interest payable		(8	)		44			38			36
Unearned operating lease income		132			201			(855	)		(132	)
Net cash provided by operating activities		4,034			7,471			11,937			15,399
Investing activities:
Purchases of equipment on operating leases		—			(458	)		(149	)		(1,898	)
Purchase of equipment under direct finance leases		—			(6,054	)		—			(6,054	)
Purchase of securities		—			—			(3	)		—
Proceeds from sales of lease assets and early termination of notes		1,218			19			1,917			979
Payments of initial direct costs		(55	)		(53	)		(55	)		(76	)
Payments received on direct financing leases		1,375			533			4,277			1,376
Payments received on notes receivable		194			286			696			1,082
Proceeds from sale of investment securities		—			1			16			79
Net cash provided by (used in) investing activities		2,732			(5,726	)		6,699			(4,512	)
Financing activities:
Borrowings under acquisition facility		—			500			—			5,000
Repayments under acquisition facility		—			(2,000	)		—			(10,000	)
Borrowings under non-recourse debt		—			12,836			—			20,419
Repayments under non-recourse debt		(1,143	)		(462	)		(3,280	)		(772	)
Repayments under receivables funding program		(2,709	)		(3,214	)		(8,799	)		(10,572	)
Rescissions/repurchases of Units		—			—			—			(26	)
Settlement of amount due from affiliate (transfer of lease asset)		—			—			1,004			—
Distributions to Other Members		(2,794	)		(2,795	)		(8,382	)		(8,383	)
Distributions to Managing Member		(227	)		(227	)		(680	)		(680	)
Net cash (used in) provided by financing activities		(6,873	)		4,638			(20,137	)		(5,014	)
Net (decrease) increase in cash and cash equivalents		(107	)		6,383			(1,501	)		5,873
Cash and cash equivalents at beginning of period		11,472			2,540			12,866			3,050
Cash and cash equivalents at end of period	$	11,365		$	8,923		$	11,365		$	8,923
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	734		$	623		$	2,306		$	2,012
Cash paid during the period for taxes	$	3		$	—		$	64		$	66
Schedule of non-cash transactions:
Distributions declared and payable to Managing Member at period-end	$	106		$	106		$	106		$	106
Distributions declared and payable to Other Members at period-end	$	1,313		$	1,313		$	1,313		$	1,313

See accompanying notes.

6

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

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 9, 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 company. The Company may continue until December 31, 2022.

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. As of March 11, 2005, the offering was terminated. As of that date, subscriptions for 14,059,136 Units ($140.6 million) had been received, of which 87,650 Units ($720 thousand) were subsequently rescinded or repurchased by the Company through September 30, 2010. As of September 30, 2010, 13,971,486 Units remain issued and outstanding.

The Company’s principal objectives are to invest in a diversified portfolio of equipment that (i) preserves, protects and returns the Company’s invested capital; (ii) generates 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 (“Reinvestment Period”) (defined as six full years following the year the offering was terminated) which ends on December 31, 2011 and (iii) provides additional distributions following the Reinvestment Period and until all equipment has been sold. The Company is governed by the Limited Liability Company Operating Agreement (“Operating Agreement”), as amended.

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

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, 2009, filed with the Securities and Exchange Commission.

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. 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. Operating results for the three and nine months ended September 30, 2010 are not necessarily indicative of the results to be expected for the full year.

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on equity or net income.

Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data.

In preparing the accompanying unaudited financial statements, the Managing Member has reviewed events that have occurred after September 30, 2010, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements.

7

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

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 reserve for credit losses on notes receivable.

Segment reporting:

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.

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 nine months ended September 30, 2010 and 2009 and long-lived tangible assets as of September 30, 2010 and December 31, 2009 (in thousands):

	For the nine months ended September 30,
	2010		% of Total			2009		% of Total
Revenue
United States	$	19,858		94	%	$	19,052		92	%
United Kingdom		984		5	%		1,480		7	%
Canada		328		1	%		267		1	%
Total International		1,312		6	%		1,747		8	%
Total	$	21,170		100	%	$	20,799		100	%
	As of September 30,					As of December 31,
	2010		% of Total			2009		% of Total
Long-lived assets
United States	$	71,512		95	%	$	87,689		95	%
United Kingdom		2,758		4	%		3,449		4	%
Canada		1,130		1	%		1,382		1	%
Total International		3,888		5	%		4,831		5	%
Total	$	75,400		100	%	$	92,520		100	%

8

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

2. Summary of significant accounting policies (continued):

Investment in securities:

From time to time, the Company may purchase securities of its borrowers or receive warrants to purchase securities in connection with its lending arrangements.

Purchased securities

Purchased securities are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. Management has concluded that there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the instruments. Accordingly, such investment is stated at cost. There were no impaired securities at September 30, 2010 and December 31, 2009.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair value on the balance sheet at the end of the period, as determined by the Managing Member. At September 30, 2010 and December 31, 2009, the Managing Member estimated the fair value of the warrants to be nominal in amount.

Other (expense) income, net:

The Company’s other (expense) income, net for the three and nine months ended September 30, 2010 and 2009 consists of the following (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2010			2009		2010		2009
Foreign currency (loss) gain	$	(55	)	$	167	$	53	$	277
Change in fair value of interest rate swap contracts		51			54		211		639
Total	$	(4	)	$	221	$	264	$	916

Per Unit data:

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

Recent accounting pronouncements:

In July 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.” ASU 2010-20 requires entities to provide disclosures designed to facilitate financial statement users’ evaluation of (i) the nature of credit risk inherent in the entity’s portfolio of financing receivables, (ii) how that risk is analyzed and assessed in arriving at the allowance for credit losses and (iii) the changes and reasons for those changes in the allowance for credit losses. Disclosures must be disaggregated by portfolio segment, the level at which an entity develops and documents a systematic method for determining its allowance for credit losses, and class of financing receivable, which is generally a

9

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

2. Summary of significant accounting policies (continued):

disaggregation of portfolio segment. The required disclosures include, among other things, a rollforward of the allowance for credit losses as well as information about modified, impaired, non-accrual and past due loans and credit quality indicators. ASU 2010-20 will be effective for the Company’s financial statements as of December 31, 2010, as it relates to disclosures required as of the end of a reporting period. Disclosures that relate to activity during a reporting period will be required for the Company’s financial statements that include periods beginning on or after January 1, 2011. The Company anticipates that adoption of these additional disclosures will not have a material effect on its financial position or results of operations.

In January 2010, the FASB issued ASU No. 2010-06, “Improving Disclosure about Fair Value Measurement.” ASU 2010-06 requires additional disclosures related to recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements, and information on purchases, sales, issuances, and settlements in a rollforward reconciliation of Level 3 fair-value measurements. Except for the Level 3 reconciliation disclosures, which will be effective for fiscal years beginning after December 15, 2010, the guidance became effective for the Company beginning January 1, 2010 and was adopted during the first quarter of 2010 with no impact on the Company’s financial position, results of operations or cash flows.

3. Notes receivable, net:

The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. The terms of the notes receivable are 36 to 120 months and bear interest at rates ranging from 8.42% to 11.97%. The notes are secured by the equipment financed. The notes mature from 2011 through 2016.

Credit losses related to the notes were nominal at September 30, 2010. There were no credit losses related to the notes at December 31, 2009. A note receivable with a net book value of $52 thousand was on non-accrual status as of September 30, 2010; there were no notes receivable on non-accrual status as of December 31, 2009.

As of September 30, 2010, the minimum future payments receivable are as follows (in thousands):

Three months ending December 31, 2010	$	174
Year ending December 31, 2011		571
2012		406
2013		295
2014		221
2015		166
Thereafter		188
		2,021
Less: portion representing unearned interest income		(335	)
		1,686
Unamortized indirect costs		3
Notes receivable, net	$	1,689

	September 30, 2010		December 31, 2009
Net investment in notes receivable placed in non-accrual status	$	52	$	—

10

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

3. Notes receivable, net (continued):

Initial direct costs (“IDC”) amortization expense related to notes receivable and the Company’s operating and direct financing leases for the three and nine months ended September 30, 2010 and 2009 are as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2010		2009		2010		2009
IDC amortization - notes receivable	$	1	$	2	$	2	$	6
IDC amortization - lease assets		81		103		271		317
Total	$	82	$	105	$	273	$	323

4. Investment in equipment and leases, net:

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

	Balance December 31, 2009		Reclassifications, Additions / Dispositions and Impairment Losses			Depreciation/ Amortization Expense or Amortization of Leases			Balance September 30, 2010
Net investment in operating leases	$	71,095	$	(2,336	)	$	(14,013	)	$	54,746
Net investment in direct financing leases		20,645		477			(1,138	)		19,984
Assets held for sale or lease, net		87		110			(4	)		193
Initial direct costs, net of accumulated amortization of $843 at September 30, 2010 and $1,068 at December 31, 2009		693		55			(271	)		477
Total	$	92,520	$	(1,694	)	$	(15,426	)	$	75,400

Additions to net investment in operating leases are stated at cost.

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

Management periodically reviews the carrying values of its assets on leases and assets held for lease or sale. Impairment losses are recorded as an adjustment to the net investment in operating leases. During the first half of 2010, the Company deemed certain operating lease and off-lease equipment (assets) to be impaired. Accordingly, the Company recorded fair value adjustments totaling $282 thousand which reduced the cost basis of the assets. There was no impaired equipment during the third quarter of 2010. During the third quarter of 2009, the Company recognized an approximate $49 thousand impairment loss which reduced the residual value of certain off-lease assets. In addition, during the first half of 2009, the Company recognized an approximate $102 thousand impairment loss which reduced the residual value of a direct financing lease asset. Such asset was subsequently renewed as an operating lease.

Depreciation expense on property subject to operating leases and property held for lease or sale was approximately $4.4 million and $5.4 million for the respective three months ended September 30, 2010 and 2009, and was approximately $14.0 million and $16.6 million for the respective nine months ended September 30, 2010 and 2009 respectively.

All of the leased property was acquired in years beginning with 2003 through 2010.

11

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

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

On April 30, 2009, a major lessee, Chrysler Corporation, filed for bankruptcy protection under Chapter 11. Under a pre-package agreement, a new company was formed to purchase the assets of old Chrysler – its plants, brands, land, equipment, as well as its contracts with the union, dealers and suppliers – from the bankruptcy court. Under this agreement, the Company had its leases with the old, bankrupt Chrysler assumed by the new Chrysler, Chrysler Group, LLC, which is 35% owned by Fiat. The Company, in accordance with its accounting policy for delinquent operating leases, has placed all operating leases with Chrysler on non-accrual status pending resumption of recurring payment activity. The new Chrysler has remitted payments relative to the affirmed leases. However, at September 30, 2010, the account remains on cash basis in accordance with Company policy as the short payment history of the new Chrysler does not yet substantiate its ability to maintain accounts current.

At September 30, 2010 and December 31, 2009, net investment in equipment underlying all lease contracts placed on a cash basis approximated $752 thousand and $1.0 million, all of which were related to Chrysler. The Company also considered the equipment underlying the lease contracts for impairment and believes that such equipment is not impaired as of September 30, 2010 and December 31, 2009.

Operating leases:

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

	Balance December 31, 2009			Additions			Reclassifications, Dispositions and Impairment Losses			Balance September 30, 2010
Materials handling	$	39,128		$	83		$	(4,234	)	$	34,977
Transportation, other		30,951			—			(2,523	)		28,428
Transportation, rail		22,293			—			(12	)		22,281
Manufacturing		12,683			—			(2,840	)		9,843
Construction		10,376			66			(2,802	)		7,640
Aircraft		4,732			—			—			4,732
Logging & lumber		4,728			—			—			4,728
Mining		3,248			—			—			3,248
Petro/natural gas		2,446			—			—			2,446
Agriculture		1,509			—			—			1,509
Research		1,443			—			(313	)		1,130
Data processing		937			—			—			937
Other		571			—			(212	)		359
		135,045			149			(12,936	)		122,258
Less accumulated depreciation		(63,950	)		(14,013	)		10,451			(67,512	)
Total	$	71,095		$	(13,864	)	$	(2,485	)	$	54,746

The average estimated residual value for assets on operating leases was 22% and 23% of the assets’ original cost at September 30, 2010 and December 31, 2009, respectively. Operating leases in non-accrual status totaled $752 thousand and $1.0 million at September 30, 2010 and December 31, 2009, respectively.

12

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

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

Direct financing leases:

As of September 30, 2010 and December 31, 2009, investment in direct financing leases consists of railcars, manufacturing, mining and materials handling equipment. The following lists the components of the Company’s investment in direct financing leases as of September 30, 2010 and December 31, 2009 (in thousands):

	September 30, 2010			December 31, 2009
Total minimum lease payments receivable	$	30,322		$	33,303
Estimated residual values of leased equipment (unguaranteed)		6,486			6,479
Investment in direct financing leases		36,808			39,782
Less unearned income		(16,824	)		(19,137	)
Net investment in direct financing leases	$	19,984		$	20,645

There were no investments in direct financing lease assets in non-accrual status at September 30, 2010 and December 31, 2009.

At September 30, 2010, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating Leases		Direct Financing Leases		Total
Three months ending December 31, 2010	$	5,187	$	1,900	$	7,087
Year ending December 31, 2011		13,331		5,967		19,298
2012		8,277		5,038		13,315
2013		5,159		4,744		9,903
2014		2,433		4,538		6,971
2015		922		4,451		5,373
Thereafter		57		3,684		3,741
	$	35,366	$	30,322	$	65,688

The Company utilizes a straight line depreciation method for equipment in all of the categories currently in its portfolio of operating 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
Construction		7 - 10
Logging & lumber		7 - 10
Materials handling		7 - 10
Petro/natural gas		7 - 10
Transportation, other		7 - 10
Research		7 - 10
Agriculture		7 - 10
Data processing		3 - 5

13

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

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 in 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. 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”) and AFS is a wholly-owned subsidiary of ATEL Capital Group and performs services for the Company. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations, communications services and general administrative services for the Company are performed by AFS.

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 total assets, number of investors or contributed capital based upon the type of cost incurred. The Operating Agreement places an annual limit and a cumulative limit for cost reimbursements to AFS and/or affiliates. Any reimbursable costs incurred by AFS and/or affiliates during the year exceeding the annual and/or cumulative limits cannot be reimbursed in the current year, though such costs may be recovered in future years to the extent of the cumulative limit. As of September 30, 2010, the Company has not exceeded the annual and/or cumulative limitations discussed above.

During the three and nine months ended September 30, 2010 and 2009, AFS and/or affiliates earned fees, commissions and reimbursements, pursuant to the Operating Agreement as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2010		2009		2010		2009
Costs reimbursed to Managing Member and/or affiliates	$	244	$	248	$	864	$	686
Asset management fees to Managing Member and/or affiliates		316		351		924		950
Acquisition and initial direct costs paid to Managing Member		154		59		207		203
	$	714	$	658	$	1,995	$	1,839

During December 2009, operating lease assets were purchased and a lease agreement entered into by the Company with an original cost of $1.0 million. During the same month, the assets and associated lease were transferred to an affiliate of the Company resulting in an amount due from an affiliate equivalent to the original cost of the assets. The amount due from the affiliate was settled in January 2010.

6. Non-recourse debt:

At September 30, 2010, non-recourse debt consists of notes payable to financial institutions. The notes are due in varying quarterly and semi-annual installments. Interest on the notes is at fixed rates ranging from 4.19% to 6.66%. The notes are secured by assignments of lease payments and pledges of assets. At September 30, 2010, gross operating lease rentals and future payments on direct financing leases totaled approximately $38.0 million over the remaining lease terms; and the carrying value of the pledged assets is $21.1 million. The notes mature at various dates from 2010 through 2017.

14

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

6. Non-recourse debt (continued):

The non-recourse notes payable does not contain any material financial covenant. The note is secured by a lien granted by the Company to the non-recourse lender on (and only on) the discounted lease transaction. The lender has recourse only to the following collateral: the specific leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. The non-recourse obligation is payable solely out of this specific security and the Company does not guarantee (nor is the Company otherwise contractually responsible for) the payment of non-recourse note as a general obligation or liability of the Company. Although the Company does not have any direct general liability in connection with the non-recourse note apart from the security granted, the Company is directly and generally liable and responsible for certain representations, warranties, and covenants made to the lender, such as warranties as to genuineness of the transaction parties’ signatures, as to the genuineness of the lease chattel paper or the transaction as a whole, or as to the Company’s good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants typically provided by non-recourse borrowers and customary in the equipment finance industry, and are viewed by such industry as being consistent with a non-recourse discount financing obligation. Accordingly, as there are no financial covenants or ratios imposed on the Company in connection with this non-recourse obligation, the Company has determined that there are no material covenants with respect to the non-recourse note that warrant footnote disclosure.

Future minimum payments of non-recourse debt are as follows (in thousands):

	Principal		Interest		Total
Three months ending December 31, 2010	$	1,160	$	436	$	1,596
Year ending December 31, 2011		4,719		1,564		6,283
2012		4,931		1,264		6,195
2013		4,689		954		5,643
2014		4,013		679		4,692
2015		4,208		410		4,618
Thereafter		3,921		134		4,055
	$	27,641	$	5,441	$	33,082

7. Borrowing facilities:

The Company participates with AFS and certain of its affiliates in a revolving credit facility (the “Credit Facility”) comprised of a working capital facility to AFS, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”) to AFS, the Company and affiliates, and a venture facility available to an affiliate with a syndicate of financial institutions which Credit Facility includes certain financial covenants. The Credit Facility is for an amount up to $75 million and expires in June 2012.

As of September 30, 2010 and December 31, 2009, borrowings under the facility were as follows (in thousands):

	September 30, 2010		December 31, 2009
Total amount available under the financing arrangement	$	75,000	$	75,000
Amount borrowed by the Company under the acquisition facility		—		—
Amounts borrowed by affiliated partnerships and limited liability companies under the working capital, acquisition and warehouse facilities		—		(1,750	)
Total remaining available under the working capital, acquisition and warehouse facilities	$	75,000	$	73,250

The Company and its affiliates pay an annual commitment fee to have access to this line of credit. As of September 30, 2010, the aggregate amount remaining unutilized under the Credit Facility is potentially available to the Company, subject to certain sub-facility and borrowing-base limitations. However, as amounts are drawn on the Credit Facility by each of the Company and the affiliates who are borrowers under the Credit Facility, the amount remaining available to all

15

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

7. Borrowing facilities (continued):

borrowers to draw under the Credit Facility is reduced. As the Warehousing Facility is a short term bridge facility, any amounts borrowed under the Warehousing Facility, and then repaid by the affiliated borrowers (including the Company) upon allocation of an acquisition to a specific purchaser, become available under the Warehouse Facility for further short term borrowing.

As of September 30, 2010, the Company’s Tangible Net Worth requirement under the Credit Facility was $15.0 million, the permitted maximum leverage ratio was not to exceed 1.25 to 1, and the required minimum interest coverage ratio was not to be less than 2 to 1. The Company was in compliance with these financial covenants under the Credit Facility with a minimum Tangible Net Worth, leverage ratio and interest coverage ratio, as calculated per the Credit Facility agreement of $41.6 million, 1.07 to 1, and 8.69 to 1, respectively, as of September 30, 2010. As such, as of September 30, 2010, the Company was in compliance with all material financial covenants, and with all other material conditions of the Credit Facility. The Company does not anticipate any covenant violations nor does it anticipate that any of these covenants will restrict its operations or its ability to procure additional financing.

Fee and interest terms

The interest rate on the Credit Facility 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 Credit Facility that are prepaid may be re-borrowed on the terms and subject to the conditions set forth under the Credit Facility. The Company has no outstanding borrowings under the acquisition facility at both September 30, 2010 and December 31, 2009. The weighted average interest rate on borrowings was 2.48% during the nine months ended September 30, 2009.

Warehouse facility

To hold the assets under the Warehousing Facility prior to allocation to specific investor programs, a Warehousing Trust has been entered into by the Company, AFS, ALC, and certain of the affiliated partnerships and limited liability companies. The Warehousing Trust is used by the Warehouse Facility borrowers 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, 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 are added.

As of September 30, 2010, the investment program participants were the Company, ATEL Capital Equipment Fund XI, LLC and ATEL 12, LLC. Pursuant to the Warehousing Trust, the benefit of the lease transaction assets, and the corresponding liabilities under the Warehouse 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 Warehousing Trust estate, excepting that the trustees, AFS and ALC, are both jointly and severally liable for the pro rata portion of the obligations of each of the affiliated partnerships and limited liability companies participating under the Warehouse Facility. Transactions are financed through this Warehouse 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 proceeds of a draw under the Acquisition Facility, and 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.

There were no borrowings under the Warehouse Facility as of September 30, 2010 and December 31, 2009.

16

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

8. Receivables funding program:

As of September 30, 2010, the Company had amounts outstanding under an $80 million receivables funding program (the “RF Program”) with a receivables financing company that issued commercial paper rated A1 from Standard and Poor’s and P1 from Moody’s Investors Service. Under the RF Program, the lender holds liens against the Company’s assets. The lender is in a first position against certain specified assets and in either a subordinated or shared position against the remaining assets. The RF Program does not contain any credit risk related default contingencies and is scheduled to mature in July 2014 at which time advances under the RF Program are to be repaid in full.

The RF Program provides for borrowing at a variable interest rate and requires 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. The RF Program allows 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 $17.0 million and $25.8 million outstanding under the RF Program at September 30, 2010 and December 31, 2009, respectively. During the three months ended September 30, 2010 and 2009, the Company paid program fees, as defined in the receivables funding agreement, totaling $19 thousand and $34 thousand, respectively. During the nine months ended September 30, 2010 and 2009, such program fees paid totaled $65 thousand and $108 thousand, respectively. The RF Program fees are included in interest expense in the Company’s statements of income.

As of September 30, 2010, the Company has entered into interest rate swap agreements to receive or pay interest on a notional principal of $17.0 million based on the difference between nominal rates ranging from 3.21% to 5.39% and variable rates that ranged from 0.23% to 0.35%. As of December 31, 2009, the Company had interest rate swap agreements to receive or pay interest on a notional principal of $25.8 million based on the difference between the same nominal rates and variable rates that ranged from 0.24% to 0.55%. No actual borrowing or lending is involved. The termination of the swaps coincides with the maturity 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 not designated as hedging instruments and are carried at fair value on the balance sheet with unrealized gain/loss included in the statements of income in other income/(expense).

In conjunction with the RF Program, the lender under the RF Program has entered into an inter-creditor agreement with the lenders under the Credit Facility with the respect to priority and the sharing of collateral pools of the Company, including the Acquisition Facility and Warehouse Facility described in Note 7 above. Among the provisions of the inter-creditor agreement are cross-default provisions and acceleration provisions requiring payment before stated maturity in a default situation.

At September 30, 2010 and December 31, 2009, borrowings and interest rate swap agreements under the RF Program are as follows (in thousands):

Date Borrowed	Original Amount Borrowed		Balance September 30, 2010		Notional Balance September 30, 2010		Swap Value September  30, 2010			Payment Rate On Interest Swap Agreement
January 16, 2007	$	12,365	$	2,481	$	2,481	$	(126	)		5.15	%
July 2, 2007		7,222		1,048		1,048		(50	)		5.39	%
September 19, 2007		6,874		2,517		2,517		(139	)		4.83	%
January 15, 2008		10,018		2,197		2,197		(79	)		3.58	%
March 27, 2008		5,410		3,233		3,233		(146	)		3.21	%
May 16, 2008		10,194		4,295		4,295		(182	)		3.69	%
May 28, 2008		5,470		1,211		1,211		(35	)		3.49	%
	$	57,553	$	16,982	$	16,982	$	(757	)

17

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

8. Receivables funding program (continued):

Date Borrowed	Original Amount Borrowed		Balance December 31, 2009		Notional Balance December 31, 2009		Swap Value December 31, 2009			Payment Rate On Interest Swap Agreement
January 16, 2007	$	12,365	$	4,054	$	4,054	$	(199	)		5.15	%
July 2, 2007		7,222		1,917		1,917		(89	)		5.39	%
September 19, 2007		6,874		3,454		3,454		(183	)		4.83	%
January 15, 2008		10,018		3,845		3,845		(109	)		3.58	%
March 27, 2008		5,410		3,919		3,919		(214	)		3.21	%
May 16, 2008		10,194		6,257		6,257		(115	)		3.69	%
May 28, 2008		5,470		2,335		2,335		(58	)		3.49	%
	$	57,553	$	25,781	$	25,781	$	(967	)

At September 30, 2010, the minimum repayment schedule under the Program is as follows (in thousands):

Three months ending December 31, 2010	$	2,459
Year ending December 31, 2011		6,857
2012		4,358
2013		2,528
2014		780
	$	16,982

At September 30, 2010, there are specific leases that are identified as collateral under the Program with expected future lease receivables of approximately $18.3 million at their discounted present value.

During the three months ended September 30, 2010 and 2009, the weighted average interest rates on the RF Program, including interest on the swap contracts, were 4.99% and 5.54%, respectively. During the nine months ended September 30, 2010 and 2009, the weighted average interest rates were 5.04% and 6.11%, respectively. The RF Program discussed above includes certain financial and non-financial covenants applicable to the Company as borrower. The Company was in compliance with all covenants as of September 30, 2010 and December 31, 2009.

9. Commitments:

At September 30, 2010, there were commitments to purchase lease assets totaling approximately $1.0 million. This amount represents contract awards which may be cancelled by the prospective lessee or may not be accepted by the Company.

10. 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.

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.

18

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

11. Member’s capital:

Units issued and outstanding were 13,971,486 at both September 30, 2010 and December 31, 2009. 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.

The Company has the right, exercisable in the Manager’s discretion, but not the obligation, to repurchase Units of a Unit holder who ceases to be a U.S. Citizen, for a price equal to 100% of the holder’s capital account. The Company is otherwise permitted, but not required, to repurchase Units upon a holder’s request. The repurchase of Fund units is made in accordance with Section 13 of the Amended and Restated Limited Liability Company Operating Agreement. The repurchase would be at the discretion of the Manager on terms it determines to be appropriate under given circumstances, in the event that the Manager deems such repurchase to be in the best interest of the Company; provided, the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units are cancelled. Units repurchased in prior periods were repurchased at amounts representing the original investment less cumulative distributions made to the unit-holder with respect to the Units. All Units repurchased during a quarter are deemed to be repurchased effective the last day of the preceding quarter, and are not deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs.

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 during the respective nine months ended September 30, 2010 and 2009. 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 September 30,				Nine Months Ended September 30,
	2010		2009		2010		2009
Distributions declared	$	2,794	$	2,795	$	8,382	$	8,383
Weighted average number of Units outstanding		13,971,486		13,971,486		13,971,486		13,971,779
Weighted average distributions per Unit	$	0.20	$	0.20	$	0.60	$	0.60

12. Fair value measurements:

Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, generally on a national exchange.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market.

Level 3 – Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability.

At September 30, 2010 and December 31, 2009, only the fair value of the Company’s interest rate swap contracts was measured on a recurring basis. In addition, at December 31, 2009, the Company measured the fair value of impaired leased and off-lease equipment on a non-recurring basis. Such estimate of measurement methodology is as follows:

19

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

12. Fair value measurements (continued):

Interest rate swaps

The fair value of interest rate swaps is estimated using a valuation method (discounted cash flow) with inputs that are defined or that can be corroborated by observable market data. The discounted cash flow approach utilizes each swap’s notional amount, payment and termination dates, swap coupon, and the prevailing market rate and pricing data to determine the present value of the future swap payments. Accordingly, such swap contracts are classified within Level 2 of the valuation hierarchy.

Impaired lease and off-lease equipment

During the first nine months of 2010, the Company deemed certain operating lease and off-lease equipment (assets) to be impaired. Accordingly, the Company recorded fair value adjustments totaling $282 thousand which reduced the cost basis of the assets. Such fair value adjustments are non-recurring. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of impaired lease assets are classified within Level 3 of the valuation hierarchy as the data sources utilized for the valuation of such assets reflect significant inputs that are unobservable in the market. Such valuation utilizes a market approach technique and uses inputs that reflect the sales price of similar assets sold by affiliates and/or information from third party remarketing agents not readily available in the market. During 2009, fair value adjustments related to impaired operating lease and off-lease assets approximated $404 thousand which reduced the cost basis of the assets. In addition, the Company recognized an approximate $102 thousand impairment loss which reduced the residual value of a direct financing lease asset.

The following table presents the fair value measurement of assets and liabilities measured at fair value on a recurring and non-recurring basis and the level within the hierarchy in which the fair value measurements fall at September 30, 2010 and December 31, 2009 (in thousands):

	September 30, 2010		Level 1 Estimated Fair Value		Level 2 Estimated Fair Value		Level 3 Estimated Fair Value
Assets measured at fair value on a non-recurring basis:
Impaired off-lease assets	$	126	$	—	$	—	$	126
Liabilities measured at fair value on a recurring basis:
Interest rate swaps	$	757	$	—	$	757	$	—
	December 31, 2009		Level 1 Estimated Fair Value		Level 2 Estimated Fair Value		Level 3 Estimated Fair Value
Assets measured at fair value on a non-recurring basis:
Impaired leased and off-lease assets	$	447	$	—	$	—	$	447
Liabilities measured at fair value on a recurring basis:
Interest rate swaps	$	967	$	—	$	967	$	—

The following disclosure of the estimated fair value of financial instruments is made in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification. Fair value estimates, methods and assumptions, set forth below for the Company’s financial instruments, are made solely to comply with the requirements of the Financial Instruments Topic and should be read in conjunction with the Company’s financial statements and related notes.

The Company has determined the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to

20

ATEL CAPITAL EQUIPMENT FUND X, LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

12. Fair value measurements (continued):

interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize or has realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash and cash equivalents

The recorded amounts of the Company’s cash and cash equivalents approximate fair value because of the liquidity and short-term maturity of these instruments.

Notes receivable

The fair value of the Company’s notes receivable is estimated using discounted cash flow analyses, based upon current market rates for similar types of lending arrangements.

Investment in securities

The Company’s investment securities are not registered for public sale and are carried at cost. The investment securities are adjusted for impairment, if any, based upon factors which include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. Management has concluded that there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the instruments. Accordingly, such investment is stated at cost.

Borrowings

Borrowings include the outstanding amounts on the Company’s acquisition facility. The carrying amount of these variable rate obligations approximate fair value based on current borrowing rates for similar types of borrowings.

Non-recourse debt

The fair value of the Company’s non-recourse debt is estimated using discounted cash flow analyses, based upon current market borrowing rates for similar types of borrowing arrangements.

Limitations

The fair value estimates presented herein were based on pertinent information available to the Company as of September 30, 2010 and December 31, 2009. Although the Company is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since those dates and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

The following table presents estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at September 30, 2010 and December 31, 2009 (in thousands):

	September 30, 2010				December 31, 2009
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	11,365	$	11,365	$	12,866	$	12,866
Notes receivable		1,689		1,689		2,276		2,276
Financial liabilities:
Non-recourse debt		27,641		28,926		30,921		30,653
Borrowings		16,982		16,982		25,781		25,781
Interest rate swap contracts		757		757		967		967

21

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. In particular, the economic recession and changes in general economic conditions, including, fluctuations in demand for equipment, lease rates, and interest rates, may result in delays in investment and reinvestment, delays in leasing, re-leasing, and disposition of equipment, and reduced returns on invested capital. The Company’s performance is subject to risks relating to lessee defaults and the creditworthiness of its lessees. The Company’s performance is also subject to risks relating to the value of its equipment at the end of its leases, which may be affected by the condition of the equipment, technological obsolescence and the market for new and used equipment at the end of lease terms. 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.

Overview

ATEL Capital Equipment Fund X, LLC (the “Company”) is a California limited liability company that was formed in August 2002 for the purpose of engaging in the sale of limited liability company investment units and acquiring equipment to generate revenues from equipment leasing and sales activities, primarily in the United States. The Managing Member of the Company is ATEL Financial Services, LLC (“AFS”), a California limited liability company.

The Company conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. The offering was terminated in March 2005. During 2005, the Company completed its initial acquisition stage with the investment of the net proceeds from the public offering of Units. Subsequently, during the reinvestment period (“Reinvestment Period”) (defined as six full years following the year the offering was terminated), the Company has utilized its credit facilities and reinvested cash flow in excess of certain amounts required to be distributed to the Other Members to acquire additional equipment. Throughout the Reinvestment Period, which ends December 31, 2011, the Company anticipates continued reinvestment of cash flow in excess of minimum distributions and other obligations.

The Company may continue until December 31, 2022. Periodic distributions will be paid at the discretion of the Managing Member.

Results of Operations

The three months ended September 30, 2010 versus the three months ended September 30, 2009

The Company had net income of $764 thousand and $147 thousand for the three months ended September 30, 2010 and 2009, respectively. The results for the third quarter of 2010 reflect a reduction in total operating expenses partially offset by a decline in total revenues when compared to the prior year period.

Revenues

Total revenues for the third quarter of 2010 decreased by $98 thousand, or 1%, as compared to the prior year period. The decrease was primarily due to lower operating lease revenues offset, in part, by higher direct financing lease revenues, gains recognized on sales of assets and early termination of notes, and other revenue.

Operating lease revenues declined by $1.2 million largely due to the termination of a significant operating lease which was subsequently renewed as a direct financing lease during the second half of 2009, continued run-off of the lease portfolio and sales of lease assets.

As partial offsets to the aforementioned decrease in revenues, direct financing lease revenues increased by $869 thousand largely due to new leases which commenced during the second half of 2009; and, gains recognized on sales of lease assets increased by $187 thousand reflecting increased volume and type of assets sold during the current year quarter. In addition, other revenue increased by $51 thousand as a result of additional billings for excess wear and tear on returned equipment.

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Expenses

Total expenses for the third quarter of 2010 decreased by $940 thousand, or 13%, as compared to the prior year period. The net decrease was largely due to lower depreciation expense, professional fees, impairment losses, asset management fees paid to AFS, and amortization of initial direct costs related to asset purchases offset, in part, by higher acquisition expense, interest expense and other expense.

The decrease in depreciation expense totaled $979 thousand and was largely a result of the termination of a significant operating lease during the latter half of 2009 combined with run-off and sales of lease assets. Professional fees declined by $78 thousand primarily due to a period over period reduction in legal fees, as the third quarter 2009 amount included legal expenses related to certain contractual re-structuring and other matters. Moreover, impairment losses declined by $49 thousand due to third quarter 2009 losses recognized on certain off-lease equipment. There were no such impairment losses during the current year quarter.

Asset management fees paid to AFS declined by $35 thousand largely due to the period over period decrease in managed assets and related rents; and, amortization of initial direct costs related to asset purchases declined by $23 thousand largely due to the period over period decline in capitalized acquisition costs.

Partly offsetting the aforementioned decreases in expenses were increases in acquisition expense, interest expense and other expense totaling $148 thousand, $59 thousand and $58 thousand, respectively. The increase in acquisition expense reflects costs related to business development efforts. Interest expense increased largely as a result of higher non-recourse debt balances. Approximately $24.9 million of new non-recourse debt was added during the latter half of 2009 of which a portion of the proceeds were used to refurbish certain existing lease assets which were subsequently re-leased as direct financing leases. Finally, other expense increased on higher maintenance costs on certain aging railcars, coupled with increased bank charges and postage costs.

Other (expense) income, net

The Company recorded other expense, net totaling $4 thousand for the third quarter of 2010 as compared to other income, net totaling $221 thousand for the prior year period, a net decrease of $225 thousand. The decrease was primarily attributable to a $222 thousand unfavorable change in foreign currency transaction gains and losses recognized during the third quarter of 2010 as compared to the prior year period.

The unfavorable change in foreign currency transaction gains and losses was primarily a result of a stronger U.S. currency when compared to the British pound at the time of the transactions. The Company’s foreign currency transactions are primarily denominated in British pounds.

The nine months ended September 30, 2010 versus the nine months ended September 30, 2009

The Company had net income of $1.9 million and $226 thousand for the nine months ended September 30, 2010 and 2009, respectively. The results for the first nine months of 2010 reflects the combination of a 9% reduction in total operating expenses and a 2% increase in total revenues when compared to the prior year period.

Revenues

Total revenues for the first nine months of 2010 increased by $371 thousand, or 2%, as compared to the prior year period. The increase was primarily a result of higher direct financing lease revenues, higher gains recognized on sales of lease assets and early termination of notes, increased other revenue, and a favorable change in gain recognized on the disposition of securities offset, in part, by decreases in revenues from operating leases and in interest income on notes receivable.

The increase in revenues from direct financing leases totaled $2.7 million and was primarily attributable to new leases which commenced during the second half of 2009. Gain on sales of lease assets and early termination of notes increased by $162 thousand, reflecting increased volume and the type of assets sold during the current year period. In addition, other revenue increased by $130 thousand as a result of additional billings for excess wear and tear on returned equipment; and, the favorable change in gain on sale or disposition of securities, which totaled $62 thousand, was largely a result of a first half 2009 loss on the disposition of securities associated with a terminated note.

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Partially offsetting the aforementioned increases in revenues were reductions in operating lease revenues and interest income on the notes receivable totaling $2.6 million and $128 thousand, respectively. The decline in operating lease revenues was largely due to the termination of a significant operating lease which was subsequently renewed as a direct financing lease during the second half of 2009, run-off of the lease portfolio and sales of lease assets. The decrease in interest income on notes receivable was mainly a result of certain maturities and/or early termination.

Expenses

Total expenses for the first nine months of 2010 decreased by $2.0 million, or 9%, as compared to the prior year period. The net decline in expenses was primarily due to decreases in depreciation expense, amortization of initial direct costs related to asset purchases and the provision for losses on investment in securities offset, in part, by increases in interest expense, costs reimbursed to AFS, impairment losses, acquisition expense and other expense.

The decrease in depreciation expense totaled $2.6 million and was largely a result of the termination of a significant operating lease during the latter half of 2009 combined with run-off and sales of lease assets. Amortization of initial direct costs related to asset purchases declined by $50 thousand largely due to the period over period decline in capitalized acquisition costs; and impairment losses on investment in securities decreased by $50 thousand due to a first quarter 2009 impairment recognized on an investment security which was subsequently disposed of during the latter half of 2009; no such impairment was recognized during the current year period.

Partially offsetting the aforementioned decreases in expense was a $296 thousand increase in interest expense, a $178 thousand increase in costs reimbursed to AFS, a $131 thousand hike in impairment losses, a $73 thousand increase in acquisition expense and a $63 thousand increase in other expense.

The increase in interest expense was largely a result of higher non-recourse debt balances. Approximately $24.9 million of new non-recourse debt was added during the latter half of 2009 of which a portion of the proceeds were used to refurbish certain existing lease assets which were subsequently re-leased as direct financing leases. Costs reimbursed to AFS increased primarily due to a refinement of cost allocation methodologies employed by the Managing Member; and, impairment losses increased as a result of a period over period increase in equipment deemed impaired by the Company.

Moreover, acquisition expense increased on higher costs related to business development efforts; and, other expense increased on higher maintenance costs on certain aging railcars, higher printing and postage costs related to investor communication, and increased bank charges.

Other income, net

Other income, net for the first nine months of 2010 decreased by $652 thousand as compared to the prior year period. The net decrease in other income, net was the result of a $428 thousand unfavorable change in the fair value of the Company’s interest rate swap contracts coupled with a $224 thousand unfavorable change in foreign currency transaction gains and losses recognized during the first nine months of 2010 as compared to the prior year period.

The decrease in the value of the interest rate swaps was mostly driven by the lower interest rate environment offset, in part, by a decline in the notional balance of outstanding contracts since September 30, 2009. The lower interest rate environment adversely impacts the Company as the fixed rate payer in the swap contracts.

The unfavorable change in foreign currency transaction gains and losses was primarily a result of a stronger U.S. currency when compared to the British pound at the time of the transactions. The Company’s foreign currency transactions are primarily denominated in British pounds.

Capital Resources and Liquidity

The liquidity of the Company varies, 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 primary source of liquidity for the Company is its cash flow from leasing activities. As the 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 remarketing or selling the equipment as it comes off rental.

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The changes in the Company’s cash flow for the three and nine months ended September 30, 2010 as compared to the three and nine months ended September 30, 2009 are as follows:

The three months ended September 30, 2010 versus the three months ended September 30, 2009

• Operating Activities

Net cash provided by operating activities during the third quarter of 2010 decreased by $3.4 million as compared to the prior year period. The net decrease in cash flow was mainly due to an unfavorable year over year three-month change in accounts receivable, coupled with a decline in net operating results as adjusted for non-cash revenue and expense items, such as gains on sales of assets and depreciation expense.

The unfavorable change in accounts receivable reduced cash flow by $1.8 million and was primarily attributable to a higher level of collections during the third quarter of 2009 as compared to the current year period. Such was occasioned by higher billings accrued at June 30, 2009 of which a large portion was related to a significant lease that was subsequently terminated during the first quarter of 2010.

The decrease in net operating results as adjusted for non-cash items further reduced cash flow by $1.5 million and was mainly a result of the decline in operating lease revenues.

• Investing Activities

Net cash provided by investing activities totaled $2.7 million for the third quarter of 2010 as compared to cash used in investing activities totaling $5.7 million for the third quarter of 2009, an $8.4 million increase. The net increase in cash flow was mainly due to a decline in cash used to purchase lease assets coupled with increases in proceeds from sales of lease assets and early termination of notes receivable, and in payments received on direct financing leases.

Cash used to purchase lease assets declined by $6.5 million primarily due to the decline in acquisition phase activity as the Fund has approached full investment. A majority of the prior year amount reflects refurbishment costs related to existing lease assets which were subsequently re-leased as direct financing leases.

The increase in proceeds from sales of lease assets and early termination of notes totaled $1.2 million and was largely due to increased volume and the type of assets sold during the current year quarter; and, the increase in payments received on direct financing leases totaled $842 thousand and was mainly a result of new leases which commenced during the latter half of 2009.

• Financing Activities

Net cash used in financing activities totaled $6.9 million for the third quarter of 2010 as compared to cash provided by financing activities totaling $4.6 million for the third quarter of 2009, a decrease of $11.5 million. The decrease was comprised of a $13.3 million decline in cash flow resulting from the absence of Company borrowings during the current quarter offset by a $1.8 million reduction in repayments.

The nine months ended September 30, 2010 versus the nine months ended September 30, 2009

• Operating Activities

Net cash provided by operating activities during the first nine months of 2010 decreased by $3.5 million as compared to the prior year period. The net decrease in cash flow was mainly due to a reduction in net operating results as adjusted for non-cash revenue and expense items, such as gains on sales of assets and depreciation expense, a decline in unearned operating lease income, and an unfavorable year over year nine-month change in accounts receivable offset, in part, by a favorable change in accounts payable and accrued liabilities during the same period.

The decrease in net operating results as adjusted for non-cash items reduced cash flow by $3.2 million and was mainly a result of the decline in operating lease revenue and increases in interest expense and costs reimbursed to AFS. The decrease in unearned operating lease income also reduced cash flow by $723 thousand. Such decrease was largely attributable to a period over period reduction in advance billings and increased amortization of prepaid rents received in prior periods. Moreover, the unfavorable change in accounts receivable reduced cash flow by $551 thousand and was primarily a result of an increase in accrued billings and property taxes, as well as delinquent invoices at September 30, 2010 as compared to September 30, 2009.

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Partially offsetting the aforementioned decreases in cash flow was a $1.0 million increase resulting from a favorable change in accounts payable and accrued liabilities. The favorable change was largely due to higher 2008 year-end accruals when compared to 2009. Such accruals related to higher amounts of asset purchase obligations and costs reimbursable to AFS. Accordingly, this resulted in higher amounts of payables paid during the first nine months of 2009 as compared to the first nine months of 2010.

• Investing Activities

Net cash provided by investing activities totaled $6.7 million for the first nine months of 2010 as compared to cash used in investing activities totaling $4.5 million for the prior year period, an $11.2 million increase. The net increase in cash flow was mainly due to a decline in cash used to purchase lease assets coupled with increases in payments received on direct financing leases and in proceeds from sales of lease assets and early termination of notes receivable offset, in part, by a decline in payments received on the notes.

Cash used to purchase lease assets declined by $7.8 million primarily due to the decline in acquisition phase activity as the Fund has approached full investment. As previously discussed, a majority of the prior year amount reflects refurbishment costs related to existing lease assets which were subsequently re-leased as direct financing leases.

The increase in payments received on direct financing leases totaled $2.9 million thousand and was mainly a result of new leases which commenced during the second half of 2009; and, the increase in proceeds from sales of lease assets and early termination of notes receivable totaled $938 thousand and was largely due to increased volume and the type of assets sold during the current year period.

Partially offsetting the above discussed increases in cash flow was a $386 thousand decrease resulting from the reduction in payments received on the Company’s investment in notes receivable, which declined mainly due to run-off and early termination of certain notes receivable.

• Financing Activities

Net cash used in financing activities during the first nine months of 2010 increased by $15.1 million as compared to the prior year period. The increase in cash used (decrease in cash flow) was largely due to a $16.2 million decrease in net borrowing activity comprised of a $25.4 million decrease in cash flow resulting from the absence of Company borrowings during the current year period partially offset by a $9.3 million reduction in repayments.

The aforementioned decrease in cash flow was offset, in part, by the receipt of a $1.0 million settlement related to a December 31, 2009 reassignment of certain operating lease assets to an affiliate.

Throughout the reinvestment period, the Company anticipates reinvesting a portion of lease payments from assets owned, and/or payments received on notes receivable, in new leasing or financing transactions. Such reinvestment will occur only after the payment of all current obligations including debt (both principal and interest), the payment of management and acquisition fees to AFS and providing for cash distributions to the members.

In a normal economy, 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 and notes would not increase as such rates are generally fixed for the terms of the leases and notes without adjustment for inflation. In addition, if interest rates increase significantly under such circumstances, the rates that the Company can obtain on future leases or financing transactions will be expected to increase as the cost of capital is a significant factor in the pricing of lease financing and investments in notes receivable. Conversely, should interest rates remain low or decrease, the rates that the Company can obtain on renewals, or future lease or financing transactions will be expected to remain constant or decline. Leases and notes already in place, for the most part, would not be affected by changes in interest rates.

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.

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Revolving credit facility

The Company participates with AFS and certain of its affiliates in a revolving credit facility (the “Credit Facility”) comprised of a working capital facility to AFS, an acquisition facility (the “Acquisition Facility”) and a warehouse facility (the “Warehouse Facility”) to AFS, the Company and affiliates, and a venture facility available to an affiliate, with a syndicate of financial institutions.

Receivable funding program

In addition to the Credit Facility, as of September 30, 2010, the Company had amounts outstanding under an $80 million receivables funding program (the “RF Program”) with a receivables financing company that issued commercial paper rated A1 from Standard and Poor’s and P1 from Moody’s Investor Services. Under the RF Program, the lender holds liens against the Company’s assets. The lender is in a first position against certain specified assets and is in either a subordinated or shared position against the remaining assets. The ability to draw down on the RF Program terminated on July 31, 2008, and the RF Program matures in July 2014 upon repayment in full of all outstanding amounts due under the Program.

Compliance with covenants

The Credit Facility and the RF Program (collectively, the “Facilities”) include certain financial and non-financial covenants applicable to each borrower, including the Company. Such covenants include covenants typically found in credit facilities of the size and nature of the Facilities, such as accuracy of representations, good standing, absence of liens and material litigation, etc. The Company was in compliance with all covenants under the Facilities as of September 30, 2010. The Company considers certain financial covenants to be material to its ongoing use of the Facilities and these covenants are described below.

Material financial covenants

Under the Credit Facility, the Company is required to maintain a specific tangible net worth, to comply with a leverage ratio and an interest coverage ratio, and to comply with other terms expressed in the Credit Facility, including limitation on the incurrence of additional debt and guaranties, defaults, and delinquencies. The material financial covenants are summarized as follows:

Under both the RF Program and Credit Facility:

Minimum Tangible Net Worth: $15 million

Leverage Ratio (leverage to Tangible Net Worth): not to exceed 1.25 to 1

Under the Credit Facility Only:

Collateral Value: Collateral value under the Warehouse Facility must exceed outstanding borrowings under that facility.

EBITDA to Interest Ratio: Not less than 2 to 1 for the four fiscal quarters just ended.

“EBITDA” is defined under the Credit Facility as, for the relevant period of time (1) gross revenues (all payments from leases and notes receivable) for such period minus (2) expenses deducted in determining net income for such period plus (3) to the extent deducted in determining net income for such period (a) provision for income taxes and (b) interest expense, and (c) depreciation, amortization and other non-cash charges. Extraordinary items and gains or losses on (and proceeds from) sales or dispositions of assets outside of the ordinary course of business are excluded in the calculation of EBITDA. “Tangible Net Worth” is defined as, as of the date of determination, (i) the net worth of the Company, after deducting therefrom (without duplication of deductions) the net book amount of all assets of the Company, after deducting any reserves and other amounts for assets which would be treated as intangibles under accounting principles generally accepted in the United States of America (“GAAP”), and after certain other adjustments permitted under the agreements.

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The financial covenants referred to above are applicable to the Company only to the extent that the Company has borrowings outstanding under the Facilities. As of September 30, 2010, the Company’s Tangible Net Worth requirement under the Credit Facility was $15 million and under the RF Program was $15 million, the permitted maximum leverage ratio under the Facilities was 1.25 to 1, and under the Credit Facility, the required minimum interest coverage ratio (EBITDA/interest expense) was 2 to 1. The Company was in compliance with each of these financial covenants with a minimum Tangible Net Worth, leverage ratio and (EBITDA) interest coverage ratio, as calculated per the Credit Facility agreement of $41.6 million, 1.07 to 1, and 8.69 to 1, respectively, as of September 30, 2010. As such, as of September 30, 2010, the Company was in compliance with all such material financial covenants.

Reconciliation to GAAP of EBITDA

For purposes of compliance with the Credit Facility covenants, the Company uses a financial calculation of EBITDA which is not in accordance with GAAP. The EBITDA is utilized by the Company to calculate one of its debt covenant ratios.

The following is a reconciliation of EBITDA to net income for the nine months ended September 30, 2010 (in thousands):

Net income - GAAP basis	$	1,942
Interest expense		2,344
Depreciation and amortization		14,017
Amortization of initial direct costs		273
Impairment loss		282
Provision for credit losses		12
Change in fair value of interest rate swap contracts		(211	)
Payments received on direct finance leases		4,277
Payments received on notes receivable		696
Amortization of unearned income on direct finance leases		(3,138	)
Amortization of unearned income on notes receivable		(130	)
EBITDA (for Credit Facility financial covenant calculation only)	$	20,364

Events of default, cross-defaults, recourse and security

The terms of both of the Facilities include standard events of default by the Company which, if not cured within applicable grace periods, could give lenders remedies against the Company, including the acceleration of all outstanding borrowings and a demand for repayment in advance of their stated maturity. If a breach of any material term of either of the Facilities should occur, the lenders may, at their option, increase borrowing rates, accelerate the obligations in advance of their stated maturities, terminate the facility, and exercise rights of collection available to them under the express terms of the facility, or by operation of law. The lenders also retain the discretion to waive a violation of any covenant at the Company’s request.

The Company is currently in compliance with its obligations under the Facilities. In the event of a technical default (e.g., the failure to timely file a required report, or a one-time breach of a financial covenant), the Company believes it has ample time to request and be granted a waiver by the lenders, or, alternatively, cure the default under the existing provisions of its debt agreements, including, if necessary, arranging for additional capital from alternate sources to satisfy outstanding obligations.

The lending syndicate providing the Credit Facility has a blanket lien on all of the Company’s assets as collateral for any and all borrowings under the Acquisition Facility, and on a pro-rata basis under the Warehouse Facility.

In conjunction with the RF Program, the lender under the RF Program has entered into an inter-creditor agreement with the lenders under the Credit Facility with respect to priority and the sharing of collateral pools of the Company, including under the Acquisition Facility and Warehouse Facility. Among the provisions of the inter-creditor agreement are cross-default provisions among the Credit Facility and the RF Program.

The Acquisition Facility is generally recourse solely to the Company, and is not cross-defaulted to any other obligations of affiliated companies under the Credit Facility, except as described in this paragraph, and in connection with the RF Program, as noted above. The Facilities are cross-defaulted to a default in the payment of

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any debt (other than non-recourse debt) or any other agreement or condition beyond the period of grace (not exceeding 30 days), the effect of which would entitle the lender under such agreement to accelerate the obligations prior to their stated maturity in an individual or aggregate principal amount in excess of 15% of the Company’s consolidated Tangible Net Worth with respect to the Credit Facility, and $2.5 million with respect to the RF Program. Also, a bankruptcy of AFS will trigger a default for the Company under the Credit Facility.

The Operating Agreement limits aggregate borrowings to 50% of the total cost of equipment. For detailed information on the Company’s debt obligations, see Notes 6 through 8 in Item 1. Financial Statements.

Due to the bankruptcy of a major lessee, Chrysler Corporation, in April 2009, the Company, in accordance with its accounting policy for allowance for doubtful accounts, has placed all operating and direct financing leases with Chrysler on non-accrual status pending resumption of recurring payment activity. As a result, the Company has provided for its related billed, but not yet paid, lease payments as of September 30, 2010 through its results of operations. The Company also considered the net book value of the equipment underlying the lease contracts of $752 thousand for impairment and believes that, as of September 30, 2010, no probable impairment exists.

The Company commenced periodic 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 September 2010.

At September 30, 2010, there were commitments to purchase lease assets totaling approximately $1.0 million (see Note 9, Commitments, as set forth in Item 1. Financial Statements).

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America 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. On an on-going basis, the Company evaluates its estimates, which are based upon historical experiences, market trends and financial forecasts, and upon various other assumptions that management believes to be reasonable under the circumstances and at that certain point in time. Actual results may differ, significantly at times, from these estimates under different assumptions or conditions.

The Company’s critical accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2009. There have been no material changes to the Company’s critical accounting policies since December 31, 2009.

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Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures

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

The Company does not control the financial reporting process, and is solely dependent on the Management of the Managing Member, which is responsible for providing the Company with financial statements in accordance with generally accepted accounting principles in the United States. The Managing Member’s disclosure controls and procedures, as it is applicable to the Company, were effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Changes in internal control

There were no changes in the Managing Member’s internal control over financial reporting, as it is applicable to the Company, during the quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, the Managing Member’s internal control over financial reporting, as it is applicable to the Company.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. [Reserved].

Item 5. Other Information.

None.

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

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 12, 2010

		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 ATEL Financial Services, LLC (Managing Member)
		By:	/s/ Paritosh K. Choksi
			Paritosh K. Choksi
			Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Financial Services, LLC (Managing Member)
		By:	/s/ Samuel Schussler
			Samuel Schussler
			Vice President and Chief Accounting Officer of ATEL Financial Services, LLC (Managing Member)

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