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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, 2008



| ̈ | 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 000-33103

ATEL Capital Equipment Fund VIII, LLC

(Exact name of registrant as specified in its charter)



|                                                              |  |                                      
|------------------------------------------------------------- |  | -------------------------------------
|California                                                    |  | 94-3307404                           
|(State or other jurisdiction ofIncorporation or organization) |  | (I. R. S. EmployerIdentification No.)

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

(Address of principal executive offices)

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

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

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

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark whether the registrant is
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
|                           |  |                      |  | (Do not check if a smaller reporting company) |  |                             

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, 2008 was 13,560,188.

DOCUMENTS INCORPORATED BY
REFERENCE

None.









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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

Index



|         |  |                                                                                                                                  |  |   
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | --
|Part I.  |  | Financial Information                                                                                                            |  | 3 
|         |  |                                                                                                                                 
|Item 1.  |  | Financial Statements (Unaudited)                                                                                                 |  | 3 
|         |  |                                                                                                                                 
|         |  | Balance Sheets, September 30, 2008 and December 31, 2007                                                                         |  | 3 
|         |  |                                                                                                                                 
|         |  | Statements of Operations for the three and nine months ended September 30, 2008 and 2007                                         |  | 4 
|         |  |                                                                                                                                 
|         |  | Statements of Changes in Members Capital for the year ended December 31, 2007 and for the nine months ended September
 30, 2008 |  | 5 
|         |  |                                                                                                                                 
|         |  | Statements of Cash Flows for the three and nine months ended September 30, 2008 and 2007                                         |  | 6 
|         |  |                                                                                                                                 
|         |  | Notes to the Financial Statements                                                                                                |  | 7 
|         |  |                                                                                                                                 
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                            |  | 16
|         |  |                                                                                                                                 
|Item 4.  |  | Controls and Procedures                                                                                                          |  | 20
|         |  |                                                                                                                                 
|Part II. |  | Other Information                                                                                                                |  | 21
|         |  |                                                                                                                                 
|Item 1.  |  | Legal Proceedings                                                                                                                |  | 21
|         |  |                                                                                                                                 
|Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                      |  | 21
|         |  |                                                                                                                                 
|Item 3.  |  | Defaults Upon Senior Securities                                                                                                  |  | 21
|         |  |                                                                                                                                 
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                                              |  | 21
|         |  |                                                                                                                                 
|Item 5.  |  | Other Information                                                                                                                |  | 21
|         |  |                                                                                                                                 
|Item 6.  |  | Exhibits                                                                                                                         |  | 21



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Part I. FINANCIAL INFORMATION



|Item 1. | Financial Statements (Unaudited).
|------- | ---------------------------------

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

BALANCE SHEETS

SEPTEMBER 30, 2008 AND DECEMBER 31, 2007

(In Thousands)

(Unaudited)



|                                                                                                                                                                         |  |                   |        |                  |   |       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ------ | ---------------- | - | ------
|                                                                                                                                                                         |  | September 30,2008 |        | December 31,2007
|ASSETS                                                                                                                                                                   |  |                   |        |                  |   |       
|Cash and cash equivalents                                                                                                                                                |  | $                 | 5,243  |                  | $ | 4,709 
|Accounts receivable, net of allowance for doubtful accounts of $34 as of September 30, 2008 and $38 as of December 31,
2007                                              |  |                   | 1,108  |                  |   | 941   
|Prepaid expenses                                                                                                                                                         |  |                   | 16     |                  |   | 15    
|Investments in equipment and leases, net of accumulated depreciation and impairment loss reserve of $35,655 as of September 30, 2008 and
$37,865 as of December 31, 2007 |  |                   | 12,652 |                  |   | 16,281
|                                                                                                                                                                         |  |                   |        |                  |   |       
|Total assets                                                                                                                                                             |  | $                 | 19,019 |                  | $ | 21,946
|                                                                                                                                                                         |  |                   |        |                  |   |       
|LIABILITIES AND MEMBERS CAPITAL                                                                                                                                         |  |                   |        |                  |   |       
|Accounts payable and accrued liabilities:                                                                                                                                |  |                   |        |                  |   |       
|Managing Member                                                                                                                                                          |  | $                 | 780    |                  | $ | 1,247 
|Accrued distributions to Other Members                                                                                                                                   |  |                   |       |                  |   | 6,448 
|Affiliates                                                                                                                                                               |  |                   | 2      |                  |   |      
|Other                                                                                                                                                                    |  |                   | 382    |                  |   | 525   
|Accrued interest payable                                                                                                                                                 |  |                   | 4      |                  |   | 6     
|Non-recourse debt                                                                                                                                                        |  |                   | 1,335  |                  |   | 1,932 
|Interest rate swap contracts                                                                                                                                             |  |                   | 27     |                  |   | 91    
|Unearned operating lease income                                                                                                                                          |  |                   | 111    |                  |   | 99    
|                                                                                                                                                                         |  |                   |        |                  |   |       
|Total liabilities                                                                                                                                                        |  |                   | 2,641  |                  |   | 10,348
|                                                                                                                                                                         |  |                   |        |                  |   |       
|Commitments and contingencies                                                                                                                                            |  |                   |        |                  |   |       
|Members capital:                                                                                                                                                        |  |                   |        |                  |   |       
|Managing Member                                                                                                                                                          |  |                   |       |                  |   |      
|Other Members                                                                                                                                                            |  |                   | 16,378 |                  |   | 11,598
|                                                                                                                                                                         |  |                   |        |                  |   |       
|Total Members capital                                                                                                                                                   |  |                   | 16,378 |                  |   | 11,598
|                                                                                                                                                                         |  |                   |        |                  |   |       
|Total liabilities and Members capital                                                                                                                                   |  | $                 | 19,019 |                  | $ | 21,946
|                                                                                                                                                                         |  |                   |        |                  |   |       

See accompanying notes.



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

STATEMENTS OF OPERATIONS

FOR THE
THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2008 AND 2007

(In Thousands, Except for Units and per Unit data)

(Unaudited)



|                                                              |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|------------------------------------------------------------- |  | -------------------------------- | ---------- | - | ------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ----------
|                                                              |  | Three months ended September 30, |            |   | Nine months ended September 30,
|                                                              |  | 2008                             |            |   | 2007                            |   |            | 2008 |  |   | 2007      
|Revenues:                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Leasing activities:                                           |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Operating leases                                              |  | $                                | 2,080      |   |                                 | $ | 1,852      |      |  | $ | 5,470      |   |  | $ | 6,091     
|Direct financing leases                                       |  |                                  |           |   |                                 |   | 6          |      |  |   | 4          |   |  |   | 23        
|Gain on sales of assets                                       |  |                                  | 56         |   |                                 |   | 47         |      |  |   | 3,522      |   |  |   | 162       
|Interest                                                      |  |                                  | 15         |   |                                 |   | 25         |      |  |   | 56         |   |  |   | 58        
|Other revenue                                                 |  |                                  | 41         |   |                                 |   | 29         |      |  |   | 44         |   |  |   | 35        
|                                                              |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Total revenues                                                |  |                                  | 2,192      |   |                                 |   | 1,959      |      |  |   | 9,096      |   |  |   | 6,369     
|Expenses:                                                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Depreciation of operating lease assets                        |  |                                  | 539        |   |                                 |   | 1,015      |      |  |   | 1,920      |   |  |   | 3,055     
|Provision for losses and impairments                          |  |                                  |           |   |                                 |   | 220        |      |  |   |           |   |  |   | 220       
|Interest expense                                              |  |                                  | 51         |   |                                 |   | 61         |      |  |   | 181        |   |  |   | 222       
|Asset management fees to Managing Member                      |  |                                  | 83         |   |                                 |   |           |      |  |   | 219        |   |  |   | 241       
|Vessel maintenance                                            |  |                                  | 280        |   |                                 |   | 122        |      |  |   | 465        |   |  |   | 443       
|Railcar maintenance                                           |  |                                  | 215        |   |                                 |   | 144        |      |  |   | 536        |   |  |   | 418       
|Cost reimbursements to Managing Member                        |  |                                  |           |   |                                 |   |           |      |  |   | 679        |   |  |   | 679       
|Amortization of initial direct costs                          |  |                                  |           |   |                                 |   | 3          |      |  |   | 2          |   |  |   | 10        
|Professional fees                                             |  |                                  | 23         |   |                                 |   | 82         |      |  |   | 168        |   |  |   | 471       
|Insurance                                                     |  |                                  | 21         |   |                                 |   | 20         |      |  |   | 42         |   |  |   | 67        
|Provision for doubtful accounts                               |  |                                  | (4         | ) |                                 |   | 16         |      |  |   | (4         | ) |  |   | 10        
|Taxes on income and franchise fees                            |  |                                  |           |   |                                 |   | 32         |      |  |   |           |   |  |   | 289       
|Other                                                         |  |                                  | 74         |   |                                 |   | 20         |      |  |   | 172        |   |  |   | 123       
|                                                              |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Total operating expenses                                      |  |                                  | 1,282      |   |                                 |   | 1,735      |      |  |   | 4,380      |   |  |   | 6,248     
|                                                              |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Net income from operations                                    |  |                                  | 910        |   |                                 |   | 224        |      |  |   | 4,716      |   |  |   | 121       
|Other income (loss), net                                      |  |                                  | 23         |   |                                 |   | (8         | )    |  |   | 64         |   |  |   | 65        
|                                                              |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Net income                                                    |  | $                                | 933        |   |                                 | $ | 216        |      |  | $ | 4,780      |   |  | $ | 186       
|                                                              |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Net income:                                                   |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Managing Member                                               |  | $                                |           |   |                                 | $ | 110        |      |  | $ |           |   |  | $ | 110       
|Other Members                                                 |  |                                  | 933        |   |                                 |   | 106        |      |  |   | 4,780      |   |  |   | 76        
|                                                              |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|                                                              |  | $                                | 933        |   |                                 | $ | 216        |      |  | $ | 4,780      |   |  | $ | 186       
|                                                              |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |           
|Net income per Limited Liability Company Unit (Other Members) |  | $                                | 0.07       |   |                                 | $ | 0.01       |      |  | $ | 0.35       |   |  | $ | 0.01      
|Weighted average number of Units outstanding                  |  |                                  | 13,560,188 |   |                                 |   | 13,560,188 |      |  |   | 13,560,188 |   |  |   | 13,560,188

See accompanying notes.



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

STATEMENTS OF CHANGES IN MEMBERS CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2007

AND FOR THE

NINE MONTHS ENDED

SEPTEMBER 30, 2008

(In Thousands, Except for Units and per Unit data)

(Unaudited)



|                                                |  |               |  |        |                |   |  |       |      |   |  |   |        |  
|----------------------------------------------- |  | ------------- |  | ------ | -------------- | - |  | ----- | ---- | - |  | - | ------ | -
|                                                |  | Other Members |  |        | ManagingMember |   |  |       |     
|                                                |  | Units         |  | Amount |                |   |  | Total |     
|Balance December 31, 2006                       |  | 13,560,188    |  | $      | 18,550         |   |  | $     |     |   |  | $ | 18,550 |  
|Distributions to Other Members ($0.58 per Unit) |  |              |  |        | (7,803         | ) |  |       |     |   |  |   | (7,803 | )
|Distributions to Managing Member                |  |              |  |        |               |   |  |       | (633 | ) |  |   | (633   | )
|Net income                                      |  |              |  |        | 851            |   |  |       | 633  |   |  |   | 1,484  |  
|                                                |  |               |  |        |                |   |  |       |      |   |  |   |        |  
|Balance December 31, 2007                       |  | 13,560,188    |  |        | 11,598         |   |  |       |     |   |  |   | 11,598 |  
|Net income                                      |  |              |  |        | 4,780          |   |  |       |     |   |  |   | 4,780  |  
|                                                |  |               |  |        |                |   |  |       |      |   |  |   |        |  
|Balance September 30, 2008                      |  | 13,560,188    |  | $      | 16,378         |   |  | $     |     |   |  | $ | 16,378 |  
|                                                |  |               |  |        |                |   |  |       |      |   |  |   |        |  

See accompanying notes.



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

STATEMENTS OF CASH FLOWS

FOR THE
THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2008 AND 2007

(In Thousands)

(Unaudited)



|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|---------------------------------------------------------------------------- |  | -------------------------------- | ----- | - | ------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                             |  | Three months ended September 30, |       |   | Nine months ended September 30, |  
|                                                                             |  | 2008                             |       |   | 2007                            |   |        | 2008 |  |   | 2007   |  
|Operating activities:                                                        |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net income                                                                   |  | $                                | 933   |   |                                 | $ | 216    |      |  | $ | 4,780  |   |  | $ | 186    |  
|Adjustment to reconcile net income to cash provided by operating activities: |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Gain loss on sales of assets                                                 |  |                                  | (56   | ) |                                 |   | (47    | )    |  |   | (3,522 | ) |  |   | (162   | )
|Depreciation of operating lease assets                                       |  |                                  | 539   |   |                                 |   | 1,015  |      |  |   | 1,920  |   |  |   | 3,055  |  
|Amortization of unearned income on direct finance leases                     |  |                                  |      |   |                                 |   | (6     | )    |  |   | (4     | ) |  |   | (23    | )
|Amortization of initial direct costs                                         |  |                                  |      |   |                                 |   | 3      |      |  |   | 2      |   |  |   | 10     |  
|Change in fair value of interest rate swap contracts                         |  |                                  | (23   | ) |                                 |   | 8      |      |  |   | (64    | ) |  |   | (65    | )
|Provision (reversal of provision) for doubtful accounts                      |  |                                  | (4    | ) |                                 |   | 16     |      |  |   | (4     | ) |  |   | 10     |  
|Provision for losses and impairments                                         |  |                                  |      |   |                                 |   | 220    |      |  |   |       |   |  |   | 220    |  
|Changes in operating assets and liabilities:                                 |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Accounts receivable                                                          |  |                                  | (200  | ) |                                 |   | 104    |      |  |   | (163   | ) |  |   | 261    |  
|Due to Affiliates                                                            |  |                                  | 2     |   |                                 |   |       |      |  |   | 2      |   |  |   |       |  
|Prepaid expenses and other assets                                            |  |                                  | (12   | ) |                                 |   | 20     |      |  |   | (1     | ) |  |   | 61     |  
|Accounts payable, Managing Member                                            |  |                                  | 2     |   |                                 |   | (83    | )    |  |   | 56     |   |  |   | (296   | )
|Accounts payable, other                                                      |  |                                  | (8    | ) |                                 |   | 3      |      |  |   | (143   | ) |  |   | (206   | )
|Accrued interest payable                                                     |  |                                  |      |   |                                 |   | (9     | )    |  |   | (2     | ) |  |   | (20    | )
|Unearned operating lease income                                              |  |                                  | 42    |   |                                 |   | 83     |      |  |   | 12     |   |  |   | 217    |  
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net cash provided by operating activities                                    |  |                                  | 1,215 |   |                                 |   | 1,543  |      |  |   | 2,869  |   |  |   | 3,248  |  
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Investing activities:                                                        |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Proceeds from sales of lease assets                                          |  |                                  | 240   |   |                                 |   | 364    |      |  |   | 5,200  |   |  |   | 927    |  
|Payments received on direct financing leases                                 |  |                                  |      |   |                                 |   | 71     |      |  |   | 49     |   |  |   | 245    |  
|Purchases of equipment on operating leases                                   |  |                                  |      |   |                                 |   | 12     |      |  |   | (16    | ) |  |   | (6     | )
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net cash provided by investing activities                                    |  |                                  | 240   |   |                                 |   | 447    |      |  |   | 5,233  |   |  |   | 1,166  |  
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Financing activities:                                                        |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Repayments of non-recourse debt                                              |  |                                  | (178  | ) |                                 |   | (561   | )    |  |   | (597   | ) |  |   | (1,341 | )
|Distributions to Other Members                                               |  |                                  |      |   |                                 |   | (1,356 | )    |  |   | (6,448 | ) |  |   | (2,660 | )
|Distributions to Managing Member                                             |  |                                  |      |   |                                 |   | (193   | )    |  |   | (523   | ) |  |   | (193   | )
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net cash used in financing activities                                        |  |                                  | (178  | ) |                                 |   | (2,110 | )    |  |   | (7,568 | ) |  |   | (4,194 | )
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net increase (decrease) in cash and cash equivalents                         |  |                                  | 1,277 |   |                                 |   | (120   | )    |  |   | 534    |   |  |   | 220    |  
|Cash and cash equivalents at beginning of period                             |  |                                  | 3,966 |   |                                 |   | 2,198  |      |  |   | 4,709  |   |  |   | 1,858  |  
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Cash and cash equivalents at end of period                                   |  | $                                | 5,243 |   |                                 | $ | 2,078  |      |  | $ | 5,243  |   |  | $ | 2,078  |  
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Supplemental disclosures of cash flow information:                           |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Cash paid during the period for taxes                                        |  | $                                |      |   |                                 | $ | 18     |      |  | $ | 39     |   |  | $ | 275    |  
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Cash paid during the period for interest                                     |  | $                                | 52    |   |                                 | $ | 71     |      |  | $ | 183    |   |  | $ | 242    |  
|                                                                             |  |                                  |       |   |                                 |   |        |      |  |   |        |   |  |   |        |  

See accompanying notes.



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

1. Organization and
Limited Liability Company matters:

ATEL Capital Equipment Fund VIII, LLC (the Company) was formed under the laws of the State of California
on July 31, 1998. The Company was formed for the purpose of acquiring equipment to engage in equipment leasing, lending and sales activities. The Managing Member of the Company is ATEL Financial Services, LLC (AFS), a California
limited liability company. The Company may continue until December 31, 2019. Each Members personal liability for obligations of the Company generally will be limited to the amount of their respective contributions and rights to
undistributed profits and assets of the Company.

The Company conducted a public offering of 15,000,000 Limited Liability Company Units
(Units), at a price of $10 per Unit. On January 13, 1999, 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 (acquiring equipment to engage in equipment leasing, lending and sales activities). Gross contributions in the amount of $135.7
million (13,570,188 units) were received as of November 30, 2000, inclusive of $500 of Initial Members capital investment and $100 of AFS capital investment. The offering was terminated on November 30, 2000. As of
September 30, 2008, 13,560,188 Units were issued and outstanding.

The Companys principal objectives have been 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 ended
December 31, 2006 and (iii) provides additional distributions following the Reinvestment Period and until all equipment has been sold. The Company is governed by its Limited Liability Company Operating Agreement (Operating
Agreement), as amended.

The Company, or AFS on behalf of the Company, has incurred costs in connection with the organization, registration and
issuance of the Limited Liability Company Units (Note 4). The amount of such costs to be borne by the Company is limited by certain provisions of the Companys Operating Agreement. The Company will pay AFS and affiliates of AFS substantial fees
which may result in a conflict of interest. The Company will pay substantial fees to AFS and its affiliates before distributions are paid to investors even if the Company does not produce profits. Therefore, the financial position of the Company
could change significantly.

As of September 30, 2008, the Company continues in the liquidation phase of its life cycle as defined in the Operating
Agreement.

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 of America (GAAP) for interim financial information and with instructions to Form 10-Q and Article 8 of Regulation S-X. The unaudited interim financial statements reflect all adjustments which are,
in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. The preparation of financial statements
in accordance with GAAP requires management to make estimates and assumptions that effect reported amounts in the financial statements and accompanying notes. Therefore, actual results could differ from those estimates. Operating results for the
three and nine months ended September 30, 2008 are not necessarily indicative of the results for the year ending December 31, 2008.

These
unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10-KSB for the year ended December 31, 2007, filed with the Securities and Exchange Commission.



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##### Table of Contents

ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued):

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

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

Cash and cash equivalents:

Cash and cash equivalents include cash in
banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities of ninety days or less.

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 relate primarily 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.

Credit risk:

Financial instruments that potentially
subject the Company to concentrations of credit risk include cash and cash equivalents and accounts receivable. The Company places the majority of its cash deposits and temporary cash investments in U.S. Treasury denominated instruments with the
remainder placed in creditworthy, high quality financial institutions so as to meet ongoing working capital requirements. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company.
Accounts receivable represent amounts due from lessees in various industries, related to equipment on operating leases.

Initial direct costs:

In prior years, the Company capitalized initial direct costs (IDC) associated with the origination and funding of lease assets as defined
in Statement of Financial Accounting Standards (SFAS) No. 91 Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases. IDC included both internal costs
(e.g., the costs of employees activities in connection with successful lease and loan originations) and external broker fees incurred with such originations. Remaining IDC is being amortized on a lease by lease basis based on actual lease term
using a straight-line method for operating leases and the effective interest rate method for direct finance leases. Upon disposal of the underlying lease assets, both the initial direct costs and the associated accumulated amortization are relieved.
Costs related to leases that were not consummated were not eligible for capitalization as initial direct costs. Such amounts were expensed as acquisition expense.

Segment reporting:

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

The Companys principal decision makers are the Managing Members Chief Executive Officer
and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b)
the principal



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued):

decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does
not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing;
and e) the Company has not chosen to organize its business around geographic areas.

Certain of the Companys lessee customers might have
international operations. In these instances, the Company is aware that certain equipment, primarily rail and transportation, may periodically exit the country. However, these lessee customers are US-based, and it is impractical for the Company to
track, on an asset-by-asset day-by-day basis, where these assets are deployed.

The primary geographic regions in which the Company sought leasing
opportunities were North America and Europe. Currently, 100% of the Companys operating revenues are from customers domiciled in North America.

Per Unit data:

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

Recent Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), as an amendment to SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS 161 requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The fair value of derivative instruments and their gains and
losses will need to be presented in tabular format in order to present a more complete picture of the effects of using derivative instruments. SFAS 161 is effective for financial statements issued for fiscal years beginning after November 15,
2008. The Company is currently evaluating the impact of adopting this pronouncement.

In December 2007, the FASB issued SFAS No. 141R, Business
Combinations (SFAS 141R). SFAS 141R replaces SFAS 141 and establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed,
any non controlling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. This standard is
effective for fiscal years beginning after December 15, 2008. The Company does not presently anticipate the adoption of SFAS 141R to significantly impact its financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilitiesincluding an amendment of FASB
Statement No. 115 (SFAS 159). This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with
the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value
measurement, which is consistent with the Boards long-term measurement objectives for accounting for financial instruments. The Company adopted the provisions of SFAS 159 on January 1, 2008. The adoption of SFAS 159 did not have a
significant effect on the Companys financial position, results of operations or cash flows.



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued):

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). This standard clarifies the
definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The provisions of SFAS 157 were to be effective for fiscal years
beginning after November 15, 2007. However, in February 2008, the FASB issued FASB Staff Position (FSP) No. 157-2, which defers the effective date of SFAS 157 as it pertains to fair value measurements of nonfinancial assets and
nonfinancial liabilities until fiscal years beginning after November 15, 2008. On January 1, 2008, the Company adopted the provisions of SFAS 157 except as it applied to its investments in leases, and other nonfinancial assets and
nonfinancial liabilities as noted in FSP No. 157-2. The partial adoption of SFAS 157 did not have a significant effect on the Companys financial position, results of operations or cash flows. The Company is in the process of evaluating
the impact of the deferred provisions of SFAS 157.

3. Investment in equipment and leases, net:

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



|                                                                                                                 |  |                         |        |                                           |   |        |                                                          |  |   |                          |   |  |   |       
|---------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------ | ----------------------------------------- | - | ------ | -------------------------------------------------------- |  | - | ------------------------ | - |  | - | ------
|                                                                                                                 |  | BalanceDecember 31,2007 |        | Reclassifications&Additions /Dispositions |   |        | Depreciation/AmortizationExpense orAmortizationof Leases |  |   | BalanceSeptember 30,2008
|Net investment in operating leases                                                                               |  | $                       | 15,796 |                                           | $ | (1,374 | )                                                        |  | $ | (1,919                   | ) |  | $ | 12,503
|Net investment in direct financing leases                                                                        |  |                         | 379    |                                           |   | (334   | )                                                        |  |   | (45                      | ) |  |   |      
|Assets held for sale or lease, net                                                                               |  |                         | 103    |                                           |   | 46     |                                                          |  |   | (1                       | ) |  |   | 148   
|Initial direct costs, net of accumulated amortization of $26 at September 30, 2008 and $108 at December 31, 2008 |  |                         | 3      |                                           |   |       |                                                          |  |   | (2                       | ) |  |   | 1     
|                                                                                                                 |  |                         |        |                                           |   |        |                                                          |  |   |                          |   |  |   |       
|Total                                                                                                            |  | $                       | 16,281 |                                           | $ | (1,662 | )                                                        |  | $ | (1,967                   | ) |  | $ | 12,652
|                                                                                                                 |  |                         |        |                                           |   |        |                                                          |  |   |                          |   |  |   |       

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. At September 30, 2008 and December 31, 2007, the Company had an impairment loss reserve of $70 thousand related to railcars. There were no impairment losses for the three and nine months ended
September 30, 2008 and 2007.

Depreciation expense on property subject to operating leases and property held for lease or sale was $539 thousand and
$1.0 million for the respective three months ended September 30, 2008 and 2007; and $1.9 million and $3.1 million for the respective nine months ended September 30, 2008 and 2007.

All of the leased property was acquired during the period from 1999 through 2002.



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

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

Operating leases:

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



|                               |  |                         |         |   |           |   |        |                                  |  |   |                          |   |  |   |         |  
|------------------------------ |  | ----------------------- | ------- | - | --------- | - | ------ | -------------------------------- |  | - | ------------------------ | - |  | - | ------- | -
|                               |  | BalanceDecember 31,2007 |         |   | Additions |   |        | Reclassificationsor Dispositions |  |   | BalanceSeptember 30,2008 |  
|Transportation, rail           |  | $                       | 23,822  |   |           | $ | 16     |                                  |  | $ | (5,248                   | ) |  | $ | 18,590  |  
|Containers                     |  |                         | 20,952  |   |           |   |       |                                  |  |   | (106                     | ) |  |   | 20,846  |  
|Transportation, other          |  |                         | 5,020   |   |           |   |       |                                  |  |   |                         |   |  |   | 5,020   |  
|Material handling              |  |                         | 1,041   |   |           |   |       |                                  |  |   | (101                     | ) |  |   | 940     |  
|Other                          |  |                         | 2,300   |   |           |   |       |                                  |  |   | (481                     | ) |  |   | 1,819   |  
|                               |  |                         |         |   |           |   |        |                                  |  |   |                          |   |  |   |         |  
|                               |  |                         | 53,135  |   |           |   | 16     |                                  |  |   | (5,936                   | ) |  |   | 47,215  |  
|Less: accumulated depreciation |  |                         | (37,339 | ) |           |   | (1,919 | )                                |  |   | 4,546                    |   |  |   | (34,712 | )
|                               |  |                         |         |   |           |   |        |                                  |  |   |                          |   |  |   |         |  
|Total                          |  | $                       | 15,796  |   |           | $ | (1,903 | )                                |  | $ | (1,390                   | ) |  | $ | 12,503  |  
|                               |  |                         |         |   |           |   |        |                                  |  |   |                          |   |  |   |         |  

The average estimated residual value for assets on operating leases was 21% and 22% of the assets original
cost at September 30, 2008 and December 31, 2007, respectively.

At September 30, 2008, the aggregate amount of future lease payments is as
follows (in thousands):



|                                      |  |  |  |                 |      
|------------------------------------- |  |  |  | --------------- | -----
|                                      |  |  |  | OperatingLeases
|Three months ending December 31, 2008 |  |  |  | $               | 553  
|Year ending December 31, 2009         |  |  |  |                 | 1,977
|2010                                  |  |  |  |                 | 1,300
|2011                                  |  |  |  |                 | 761  
|2012                                  |  |  |  |                 | 358  
|2013                                  |  |  |  |                 | 128  
|Thereafter                            |  |  |  |                 | 64   
|                                      |  |  |  |                 |      
|                                      |  |  |  | $               | 5,141
|                                      |  |  |  |                 |      

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



|                      |  |            
|--------------------- |  | -----------
|Equipment category    |  | Useful Life
|Transportation, rail  |  | 30 -35     
|Containers            |  | 20 -30     
|Transportation, other |  | 20 -30     
|Manufacturing         |  | 10 -20     
|Material handling     |  | 7 - 10     



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

4. Related party transactions:

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

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

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 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.

During the
three and nine months ended September 30, 2008 and 2007, AFS and/or affiliates earned fees, commissions and reimbursements, pursuant to the Operating Agreement as follows (in thousands):



|                                         |  |                                 |    |                               |   |      |  |      |     |  |   |    
|---------------------------------------- |  | ------------------------------- | -- | ----------------------------- | - | ---- |  | ---- | --- |  | - | ---
|                                         |  | Three Months EndedSeptember 30, |    | Six Months EndedSeptember 30,
|                                         |  | 2008                            |    | 2007                          |   | 2008 |  | 2007
|Asset management fees to Managing Member |  | $                               | 83 |                               | $ |     |  | $    | 219 |  | $ | 241
|Cost reimbursements to Managing Member   |  |                                 |   |                               |   |     |  |      | 679 |  |   | 679
|                                         |  |                                 |    |                               |   |      |  |      |     |  |   |    
|                                         |  | $                               | 83 |                               | $ |     |  | $    | 898 |  | $ | 920
|                                         |  |                                 |    |                               |   |      |  |      |     |  |   |    

The Operating Agreement places an annual limit and a cumulative limit for cost reimbursements to AFS and/or
affiliates. The cumulative limit increases annually. 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
reimbursable in future years to the extent of the cumulative limit. As of September 30, 2008, costs reimbursable to AFS in future periods totaled approximately $1.5 million.

5. Non-recourse debt:

At September 30, 2008, non-recourse debt consists of a note payable to a financial
institution. The note is due in monthly installments. Interest on the note is at a fixed rate of 6.90% per annum. The note is secured by assignments of lease payments and pledges of assets. At September 30, 2008, gross lease rentals
totaled approximately $1.6 million over the remaining lease terms; and the carrying value of the pledged assets is $952 thousand. The note matures in 2010.

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



|                                      |  |  |  |           |       |          |   |       |  |   |      
|------------------------------------- |  |  |  | --------- | ----- | -------- | - | ----- |  | - | -----
|                                      |  |  |  | Principal |       | Interest |   | Total
|Three months ending December 31, 2008 |  |  |  | $         | 181   |          | $ | 22    |  | $ | 203  
|Year ending December 31, 2009         |  |  |  |           | 756   |          |   | 56    |  |   | 812  
|2010                                  |  |  |  |           | 398   |          |   | 8     |  |   | 406  
|                                      |  |  |  |           |       |          |   |       |  |   |      
|                                      |  |  |  | $         | 1,335 |          | $ | 86    |  | $ | 1,421
|                                      |  |  |  |           |       |          |   |       |  |   |      



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

6. Receivables funding program:

In 1999, the Company established a $40 million receivables funding program (Program) (which was subsequently increased to a maximum of $125 million in July
2000) with a receivables financing company that issues commercial paper rated A1 from Standard and Poors and P1 from Moodys Investor Services. Under the terms of the Program, the lenders received a general lien against all of the
otherwise unencumbered assets of the Company. The Program provided for borrowing at a variable interest rate and required the Company to enter into interest rate swap agreements with certain counterparties (also rated A1/P1) to mitigate the interest
rate risk associated with a variable rate note. The program expired as to new borrowings in January 2002 and was fully terminated in January 2007.

As of
September 30, 2008, the Company receives or pays interest on interest rate swap agreements with a notional principal totaling $1.4 million, based on the difference between nominal rates of 7.41% and a variable rate of 2.58% at
September 30, 2008. As of December 31, 2007, the Company had interest rate swap agreements to receive or pay interest on a notional principal totaling $3.9 million, based on the difference between nominal rates ranging from 4.35% to 7.50%
and a variable rate of 4.57% at December 31, 2007. No actual borrowing or lending is involved. The termination of swaps was to coincide with the maturity of the debt. The differential to be paid or received is accrued as interest rates change
and is recognized currently in earnings. Through the swap agreements, the interest rates on historical borrowings were effectively fixed. The differential to be paid or received is accrued as interest rates change and is recognized currently as an
adjustment to earnings. The interest rate swaps are carried at fair value on the balance sheet with unrealized gain/loss included in the statement of operations line item Other income (loss), net.

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



|              |  |                        |         |                          |   |                                  |  |                             |       |  |                                      |     |   |  |      |  
|------------- |  | ---------------------- | ------- | ------------------------ | - | -------------------------------- |  | --------------------------- | ----- |  | ------------------------------------ | --- | - |  | ---- | -
|Date Borrowed |  | OriginalAmountBorrowed |         | BalanceSeptember 30,2008 |   | NotionalBalanceSeptember 30,2008 |  | Swap ValueSeptember 30,2008 |       |  | Payment RateOn InterestSwapAgreement |    
|11/11/1999    |  | $                      | 20,000  |                          | $ |                                 |  | $                           |      |  | $                                    |    |   |  |     |  
|12/21/1999    |  |                        | 20,000  |                          |   |                                 |  |                             | 1,422 |  |                                      | (27 | ) |  | 7.41 | %
|12/24/1999    |  |                        | 25,000  |                          |   |                                 |  |                             |      |  |                                      |    |   |  |     |  
|4/17/2000     |  |                        | 6,500   |                          |   |                                 |  |                             |      |  |                                      |    |   |  |     |  
|4/28/2000     |  |                        | 1,900   |                          |   |                                 |  |                             |      |  |                                      |    |   |  |     |  
|8/3/2000      |  |                        | 19,000  |                          |   |                                 |  |                             |      |  |                                      |    |   |  |     |  
|10/31/2000    |  |                        | 7,500   |                          |   |                                 |  |                             |      |  |                                      |    |   |  |     |  
|1/29/2001     |  |                        | 8,000   |                          |   |                                 |  |                             |      |  |                                      |    |   |  |     |  
|6/1/2001      |  |                        | 2,000   |                          |   |                                 |  |                             |      |  |                                      |    |   |  |     |  
|9/1/2001      |  |                        | 9,000   |                          |   |                                 |  |                             |      |  |                                      |    |   |  |     |  
|1/31/2002     |  |                        | 3,900   |                          |   |                                 |  |                             |      |  |                                      |    |   |  | *    |  
|              |  |                        |         |                          |   |                                  |  |                             |       |  |                                      |     |   |  |      |  
|              |  | $                      | 122,800 |                          | $ |                                 |  | $                           | 1,422 |  | $                                    | (27 | ) |  |      |  
|              |  |                        |         |                          |   |                                  |  |                             |       |  |                                      |     |   |  |      |  



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

6. Receivables funding program (continued):



|              |  |                        |         |                         |   |                                 |  |                           |       |  |                                      |     |   |  |      |  
|------------- |  | ---------------------- | ------- | ----------------------- | - | ------------------------------- |  | ------------------------- | ----- |  | ------------------------------------ | --- | - |  | ---- | -
|Date Borrowed |  | OriginalAmountBorrowed |         | BalanceDecember 31,2007 |   | NotionalBalanceDecember 31,2007 |  | SwapValueDecember 31,2007 |       |  | Payment RateOn InterestSwapAgreement |    
|11/11/1999    |  | $                      | 20,000  |                         | $ |                                |  | $                         |      |  | $                                    |    |   |  |     |  
|12/21/1999    |  |                        | 20,000  |                         |   |                                |  |                           | 3,467 |  |                                      | (88 | ) |  | 7.41 | %
|12/24/1999    |  |                        | 25,000  |                         |   |                                |  |                           |      |  |                                      |    |   |  |     |  
|4/17/2000     |  |                        | 6,500   |                         |   |                                |  |                           | 5     |  |                                      |    |   |  |     |  
|4/28/2000     |  |                        | 1,900   |                         |   |                                |  |                           |      |  |                                      |    |   |  |     |  
|8/3/2000      |  |                        | 19,000  |                         |   |                                |  |                           | 291   |  |                                      | (3  | ) |  | 7.50 | %
|10/31/2000    |  |                        | 7,500   |                         |   |                                |  |                           |      |  |                                      |    |   |  |     |  
|1/29/2001     |  |                        | 8,000   |                         |   |                                |  |                           |      |  |                                      |    |   |  |     |  
|6/1/2001      |  |                        | 2,000   |                         |   |                                |  |                           |      |  |                                      |    |   |  |     |  
|9/1/2001      |  |                        | 9,000   |                         |   |                                |  |                           | 143   |  |                                      |    |   |  | 4.35 | %
|1/31/2002     |  |                        | 3,900   |                         |   |                                |  |                           |      |  |                                      |    |   |  | *    |  
|              |  |                        |         |                         |   |                                 |  |                           |       |  |                                      |     |   |  |      |  
|              |  | $                      | 122,800 |                         | $ |                                |  | $                         | 3,906 |  | $                                    | (91 | ) |  |      |  
|              |  |                        |         |                         |   |                                 |  |                           |       |  |                                      |     |   |  |      |  



|* | Under the terms of the Program, no interest rate swap agreements were required for this borrowing.
|- | --------------------------------------------------------------------------------------------------

7. Guarantees:

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

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



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ATEL CAPITAL EQUIPMENT FUND VIII, LLC

NOTES TO FINANCIAL STATEMENTS

8. Members capital:

As of September 30, 2008, 13,560,188 Units were issued and outstanding. The Company was authorized to issue up to 15,000,000 Units in addition to the Units issued to
the initial members (50 Units).

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.

Distributions accrued at year-end 2007 and 2006 totaling $6.4 million and $1.3 million, respectively, were
each paid to Other Members during the first quarter of the following year. There were no distributions accrued or paid during the three months ended September 30, 2008 and 2007.



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##### Table of Contents

|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, 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 Fund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 markets 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 VIII, LLC (the Company) is a California limited liability company that was formed in July 1998 for the purpose of engaging in the sale of limited liability investment units and acquiring equipment to generate revenues from
equipment leasing and sales activities, primarily in the United States.

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 November 2000. Total proceeds of the offering were $135.7 million. During early 2001, the Company completed its initial acquisition stage with the investment of
the net proceeds from the public offering of Units. Subsequently, throughout the reinvestment period (Reinvestment Period) (defined as six full years following the year the offering was terminated), the Company reinvested cash flow in
excess of certain amounts required to be distributed to the Other Members and/or utilized its credit facilities to acquire additional equipment.

The
Company may continue until December 31, 2019. However, pursuant to the guidelines of the Operating Agreement, the Company began to liquidate its assets and distribute the proceeds thereof after the end of the Reinvestment Period which ended in
December 2006.

As of September 30, 2008, the Company continues in its liquidation phase. Accordingly, assets that mature will be returned to
inventory and most likely subsequently sold, which will result in decreasing revenue as earning assets decrease. Periodic distributions are paid at the discretion of the Managing Member.

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 Other 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 lease terms expire, the Company re-leases or sells the equipment. The future
liquidity beyond the contractual minimum rentals will depend on the Companys success in remarketing or selling the equipment as it comes off rental.

If inflation in the general economy becomes significant, it may affect the Company in as much as the residual (resale) values and rates on re-leases of the Companys leased assets may increase as the costs of similar assets increase.
However, the Companys revenues from existing leases would not increase; as such rates are generally fixed for the terms of the leases without adjustment for inflation.

If interest rates increase significantly, the lease rates that the Company can obtain on future leases will be expected to increase as the cost of capital is a significant factor in the pricing of lease financing.
Leases already in place, for the most part, would not be affected by changes in interest rates.



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In 1999, the Company established a $40 million receivables funding program (Program) (which was subsequently
increased to a maximum of $125 million in July 2000) with a receivables financing company that issues commercial paper rated A1 from Standard and Poors and P1 from Moodys Investor Services. Under the terms of the Program, the lenders
received a general lien against all of the otherwise unencumbered assets of the Company. The Program provided for borrowing at a variable interest rate and requires the Company to enter into interest rate swap agreements with certain counterparties
(also rated A1/P1) to mitigate the interest rate risk associated with a variable rate note. The Program expired as to new borrowings in January 2002 and was fully terminated in January 2007.

As of September 30, 2008, the Company receives or pays interest on interest rate swap agreements with a notional principal totaling $1.4 million, based on the
difference between nominal rates of 7.41% and a variable rate of 2.58% at September 30, 2008. The fair value of the interest rate swaps totaled $27 thousand at September 30, 2008 and was recorded as a liability on the balance sheet with a
corresponding unrealized gain/loss included in the statement of operations in other income or loss.

Finally, the Company has access to certain sources of
non-recourse debt financing, which the Company uses on a transaction basis as a means of mitigating credit risk. The non-recourse debt financing consists of a note payable to a financial institution. The note is due in monthly installments. Interest
on the note is at a fixed rate of 6.90% per annum. The note is secured by an assignment of lease payments and pledges of assets. At September 30, 2008, gross lease rentals totaled approximately $1.6 million over the remaining lease terms;
and the carrying value of the pledged assets is $952 thousand. The note matures in 2010. The Operating Agreement limits such borrowings to 50% of the total cost of equipment, in the aggregate.

The Company commenced periodic distributions, based on cash flows from operations, beginning with the month of January 1999.

At September 30, 2008, the Company had no commitments to purchase lease assets. Pursuant to the Operating Agreement, the Company will no longer purchase any new
lease assets.

Cash Flows

The three
months ended September 30, 2008 versus the three months ended September 30, 2007

Operating Activities

The Companys primary source of cash from operations has been rents from operating leases. Additionally, its cash flows are impacted by changes in certain operating
assets and liabilities.

Net cash provided by operating activities for the third quarter of 2008 decreased by $328 thousand, or 21%, as compared to the
third quarter of 2007. The net decrease in cash flow was primarily due to increased levels of accounts receivable, a decline in unearned lease income and period over period reduction in operating results - as adjusted for non-cash revenue and
expense such as gains on sales of assets and depreciation. The aforementioned decreases in cash flow was partially offset by an increase resulting from higher levels of accounts payable and accrued.

The increase in accounts receivable reduced cash flow by $304 thousand and was primarily due to a quarter over quarter rise in revenues earned from increased utilization
of the Companys marine vessels. The decline in unearned lease income reduced cash flow by $41 thousand and was mainly due to an increase in unearned rents realized during the third quarter of 2008, as compared to the third quarter of 2007.
Likewise, the decrease in operating results, as adjusted for non-cash items, reduced cash flow by $36 thousand and was mainly due to higher vessel and railcar maintenance expenses.

Partially offsetting the aforementioned decreases in cash flow was an increase of $74 thousand attributable to increased levels of accounts payable and accrued liabilities. The increase in accounts payable and accrued
liabilities was primarily due to period-end accruals related to administrative costs reimbursable to AFS.

Investing Activities

Net cash provided by investing activities for the third quarter of 2008 decreased by $207 thousand as compared to the third quarter of 2007. The net decrease in cash flow
was primarily due to a $124 thousand decline in proceeds from the sale of assets combined with a $71 thousand reduction in payments received on the Companys investment in direct financing leases.



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Proceeds from sales of assets decreased primarily due to a quarter over quarter decline in the volume of assets sold; and
the reduction in payments received on the Companys investment in direct financing leases was mainly a result of run-off and dispositions of direct finance lease assets.

Financing Activities

Net cash used in financing activities for the third quarter of 2008 decreased by $1.9 million
as compared to the third quarter of 2007. The decline in cash used (increase in cash flow) primarily reflects distributions paid to both Other Members and the Managing Member totaling a combined $1.5 million during the third quarter of 2007 compared
to none paid during the third quarter of 2008. In addition, repayments of the Companys non-recourse debt declined by $383 thousand mainly due to the continued decline in outstanding borrowings.

The nine months ended September 30, 2008 versus the nine months ended September 30, 2007

Operating Activities

Net cash provided by operating activities for
the first nine months of 2008 decreased by $379 thousand, or 12%, as compared to the first nine months of 2007. The net decrease in cash flow was primarily due to increased levels of accounts receivable, a decline in unearned lease income and a
period over period decrease in operating results as adjusted for non-cash revenue and expense such as gains on sales of assets and depreciation offset, in part, by increased levels of accounts payable and accrued liabilities.

The increase in accounts receivable reduced cash flow by $424 thousand and was primarily due to a rise in revenues earned from increased utilization of the
Companys marine vessels since April 2008. The decline in unearned lease income reduced cash flow by $205 thousand and was mainly due to an increase in unearned rents realized during the first nine months of 2008, as compared to the prior year
period. In addition, the decline in operating results, as adjusted for non-cash items, reduced cash flow by $123 thousand and was primarily a result of the drop in revenues from operating leases offset, in part, by decreased operating expenses.

Partially offsetting the aforementioned decreases in cash flow was an increase of $415 thousand attributable to increased levels of accounts payable and
accrued liabilities. The increase in accounts payable and accrued liabilities was primarily due to period-end accruals related to administrative costs reimbursable to AFS.

Investing Activities

Net cash provided by investing activities for the first nine months of 2008 increased by $4.1
million as compared to the prior year period. The net increase in cash flow was primarily due to a period over period increase in proceeds from the sale of lease assets totaling $4.3 million offset, in part, by a decrease in payments received on the
Companys investment in direct financing leases totaling $196 thousand.

The increase in proceeds from sales of lease assets was primarily due to an
increase in the volume of assets sold during the first nine months of 2008 as compared to the prior year period; while the decline in payments received on direct financing leases was largely a result of continued run-off and dispositions of direct
finance lease assets.

Financing Activities

Net cash
used in financing activities increased by $3.4 million for the first nine months of 2008 as compared to the prior year period. The net increase in cash used (net decrease in cash flow) was primarily due to a $4.1 million rise in distributions paid
to Other Members and the Managing Member offset, in part, by a $744 thousand decline in cash used to repay the Companys outstanding non-recourse debt.

The distributions are based on cash available net of any short-term payables and reserves, and made at the discretion of the Managing Member. The period over period decrease in cash used to repay debt reflects the continued decline of
outstanding nonrecourse debt.



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Results of Operations

The three months ended September 30, 2008 versus the three months ended September 30, 2007

The Company had net income of
$933 thousand and $216 thousand for the third quarters of 2008 and 2007, respectively. The results for the third quarter of 2008 reflect an increase in total revenues combined with a decline in operating expenses when compared to the third quarter
of 2007.

Revenues

Total revenues for the third
quarter of 2008 increased by $233 thousand, or 12%, as compared to the third quarter of 2007. The net growth in total revenues was primarily a result of a $228 thousand increase in operating lease revenues earned from increased utilization of the
Companys marine vessels.

Expenses

Total
expenses for the third quarter of 2008 decreased by $453 thousand, or 26%, as compared to the third quarter of 2007. The net decrease in total expenses was mainly due to decreases in depreciation expense, provision for credit losses and professional
fees offset, in part, by increases in vessel maintenance, asset management fees paid to AFS and railcar maintenance costs.

The period over period decline
in depreciation expense totaled $476 thousand and was the result of continued run-off of the Companys lease portfolio and sales of lease assets. The provision for credit losses was reduced by $220 thousand due to the clearing of a reserve
established for impaired gas compressors during the third quarter 2007; and professional fees decreased by $59 thousand primarily due to the elimination of costs associated with the audit and restatement of the Companys prior year financial
statements which were completed by the third quarter of 2007.

Partially offsetting the above decreases in expenses are increases in vessel maintenance,
asset management fees paid to AFS and railcar maintenance costs totaling $158 thousand, $83 thousand and $71 thousand, respectively. The increase in vessel maintenance expense was primarily due to increased utilization of the marine vessels as well
as the impact of inflation on maintenance costs. Similarly, railcar maintenance expense increased due to the timing of required repairs, the aging of the railcar portfolio, and the impact of inflation on railcar maintenance costs. The quarter over
quarter increase in asset management fees was mainly due to the higher level of asset sales during the third quarter of 2007 which effectively lowered assets under management and therefore, the related management fees.

Other

The Company recorded other income, net totaling $23 thousand
for the third quarter of 2008 and other loss, net totaling $8 thousand for the third quarter of 2007, related to the change in the fair value of its interest swap contracts.

The nine months ended September 30, 2008 versus the nine months ended September 30, 2007

The
Company had net income of $4.8 million and $186 thousand for the first nine months of 2008 and 2007, respectively. The results for the first nine months of 2008 reflect an increase in total revenues and a decline in operating expenses when compared
to the prior year period.

Revenues

Total revenues for
the first nine months of 2008 increased by $2.7 million, or 43%, as compared to the first nine months of 2007. The net increase in total revenues was primarily a result of a $3.4 million increase in net gains on sales of lease assets offset, in
part, by a $621 thousand decrease in operating lease revenue.

The period over period increase in net gain on sales of lease assets was primarily due to
gains of $3.0 million recognized on the sale of railcars to a major railway customer in January 2008 combined with approximately $401 thousand of gains recognized on the sale of tractors and trailers to two major customers during the second quarter
of 2008. The net decline in operating lease revenue was mainly attributable to sales and run-off of the lease asset portfolio offset, in part, by the rise in revenues earned from increased utilization of the Companys marine vessels.



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Expenses

Total
expenses for the first nine months of 2008 decreased by $1.9 million, or 30%, as compared to the first nine months of 2007. The net decrease in total expenses was mainly due to decreases in depreciation expense, professional fees, estimated state
franchise and income taxes and provision for credit losses. The aforementioned decreases in expenses were partially offset by an increase in railcar maintenance expense.

The period over period decline in depreciation expense totaled $1.1 million and was the result of sales and continued run-off of the Companys lease asset portfolio. Professional fees decreased by $303 thousand
primarily due to the elimination of costs associated with the audit and restatement of the Companys prior year financial statements which were completed by the third quarter of 2007. Further, state franchise and income tax expense decreased by
$289 thousand primarily as a result of lower state franchise and income tax liability and estimated tax payments; and the $220 thousand decline in the provision for credit losses reflects the clearing of a reserve established for impaired gas
compressors during the third quarter 2007.

The aforementioned decreases in expenses were partially offset by an increase in railcar maintenance expense
totaling $118 thousand. The increase was mainly attributable to the impact of inflation on maintenance and repair costs.

Other

The Company recorded other income, net totaling $64 thousand and $65 thousand for the first nine months of 2008 and 2007, respectively, related to the change in the fair
value of its interest swap contracts.



|Item 4. | Controls and procedures.
|------- | ------------------------

Evaluation of disclosure
controls and procedures

The Companys Managing Members Chief Executive Officer, and Executive Vice President and Chief Financial 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, the Chief Executive Officer and Executive Vice President and Chief Financial Officer and Chief Operating Officer concluded that as of the end of the period covered by this report,
the design and operation of these disclosure controls and procedures were effective.

The Company does not control the financial reporting process, and is
solely dependent on the Management of the Managing Member, who 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, 2008 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. | Submission Of Matters To A Vote Of Security Holders.
|------- | ----------------------------------------------------

None.



|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 not applicable, and therefore have been omitted.



| | 2. | Other Exhibits
| | -- | --------------



|     |  |                                                                       
|---- |  | ----------------------------------------------------------------------
|31.1 |  | Rule 13a-14(a)/ 15d-14(a) Certification of Dean L. Cash               
|     | 
|31.2 |  | Rule 13a-14(a)/ 15d-14(a) 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 11, 2008

ATEL CAPITAL EQUIPMENT FUND
VIII, LLC

(Registrant)



By:

ATEL Financial Services, LLCManaging 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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