Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

           |X|     Quarterly Report Pursuant to Section 13 or 15(d) of
                   the Securities Exchange Act of 1934.
                   For the quarterly period ended June 30, 2004

           |_|     Transition Report Pursuant to Section 13 or 15(d) of
                   the Securities Exchange Act of 1934.
                For the transition period from _______ to _______

                        Commission File Number 333-62477

                      ATEL Capital Equipment Fund VIII, LLC
             (Exact name of registrant as specified in its charter)

California                                                            94-3307404
----------                                                            ----------
(State or other jurisdiction of                               (I. R. S. Employer
 incorporation or organization)                              Identification No.)

     600 California Street, 6th Floor, San Francisco, California 94108-2733
                    (Address of principal executive offices)

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

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

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

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

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

The number of Limited  Liability  Company Units  outstanding as of June 30, 2004
was 13,570,188.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None




                                       1
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC


 Index


Part I. Financial Information

Item 1. Financial Statements (Unaudited)

Balance Sheets, June 30, 2004 and December 31, 2003.

Statements of Operations for the six and three month periods ended June 30, 2004
and 2003.

Statements of Changes in Members'  Capital for the year ended  December 31, 2003
and for the six month period ended June 30, 2004.

Statements of Cash Flows for the six and three month periods ended June 30, 2004
and 2003.

         Notes to the Financial Statements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

Part II. Other Information

Item 1. Legal Proceedings

Item 2. Changes in Securities and Use of Proceeds

Item 3. Defaults Upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information

Item 6. Exhibits




                                       2
<PAGE>

                          Part I. FINANCIAL INFORMATION

Item 1.  Financial Statements.


                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                                 BALANCE SHEETS

                       JUNE 30, 2004 AND DECEMBER 31, 2003
                                   (Unaudited)


                                     ASSETS


<TABLE>
<CAPTION>
                                                                                    June 30,           December 31,
                                                                                      2004                 2003
                                                                                      ----                 ----
                                                                                   (Unaudited)
<S>                                                                                  <C>                 <C>
Cash and cash equivalents                                                               $ 318,553            $ 508,584
Accounts receivable, net of allowance for doubtful accounts of $90,115 in 2004
   and $225,115 in 2003                                                                 1,544,599            2,124,902
Other assets                                                                               10,000               25,000
Investments in leases                                                                  89,939,464          107,564,258
                                                                                ------------------  -------------------
Total assets                                                                         $ 91,812,616        $ 110,222,744
                                                                                ==================  ===================


                        LIABILITIES AND MEMBERS' CAPITAL


Long-term debt                                                                       $ 33,416,000         $ 39,946,000
Line of credit                                                                          4,500,000            9,500,000
Non-recourse debt                                                                       6,336,442            6,609,335

Accounts payable:
   Managing member                                                                      1,091,118              889,555
   Other                                                                                  245,637              820,799

Accrued interest payable                                                                  139,441              115,844
Interest rate swap contracts                                                            2,018,441            3,207,595
Unearned operating lease income                                                           596,202            1,236,498
                                                                                ------------------  -------------------
Total liabilities                                                                      48,343,281           62,325,626

Other accumulated comprehensive loss                                                   (1,998,473)          (3,143,144)
Members' capital                                                                       45,467,808           51,040,262
                                                                                ------------------  -------------------
Total Members' capital                                                                 43,469,335           47,897,118
                                                                                ------------------  -------------------
Total liabilities and Members' capital                                               $ 91,812,616        $ 110,222,744
                                                                                ==================  ===================
</TABLE>

                             See accompanying notes.


                                       3
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF OPERATIONS

                        SIX AND THREE MONTH PERIODS ENDED
                             JUNE 30, 2004 AND 2003
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                              Six Months                            Three Months
                                                            Ended June 30,                         Ended June 30,
                                                            --------------                         --------------
                                                        2004              2003               2004                 2003
                                                        ----              ----               ----                 ----
Revenues:
Leasing activities:
<S>                                                    <C>                <C>                <C>                  <C>
   Operating leases                                    $10,746,150        $14,277,413        $ 4,801,748          $ 6,898,522
   Direct financing leases                                 613,660            333,758            272,866              161,448
   Gain on sales of assets                               2,177,912            689,655          1,728,270              535,240
Interest                                                     1,773              3,652                847                1,640
Other                                                      435,029             31,545            420,360               13,849
                                                  ----------------- ------------------ ------------------  -------------------
                                                        13,974,524         15,336,023          7,224,091            7,610,699
Expenses:
Depreciation of operating lease assets                   9,018,309         10,401,597          4,201,631            5,064,666
Interest expense                                         1,651,396          3,154,480            772,962            1,131,836
Cost reimbursements to Managing Member                     719,342            753,733             20,127               96,970
Asset management fees to Managing Member                   579,469            775,954            307,620              475,384
Railcar maintenance                                        266,974            806,180            136,527              134,093
Professional fees                                          168,469            286,000             87,026              104,904
Amortization of initial direct costs                       137,257            188,073             65,242               94,037
(Recoveries of) provision for doubtful accounts           (135,000)          (250,000)          (146,000)             (50,000)
Franchise fees and state taxes                              94,061            124,239             69,061              124,239
Outside services                                            92,226             83,560             40,270               32,744
Insurance                                                   85,775                  -             43,455                    -
Impairment losses (recoveries)                                   -          1,890,861                  -              (20,000)
Aircraft maintenance                                             -             45,500                  -                5,500
Other                                                      194,485            109,865            105,466               70,647
                                                  ----------------- ------------------ ------------------  -------------------
                                                        12,872,763         18,370,042          5,703,387            7,265,020
                                                  ----------------- ------------------ ------------------  -------------------
Net income (loss)                                      $ 1,101,761       $ (3,034,019)       $ 1,520,704            $ 345,679
                                                  ================= ================== ==================  ===================

Net income (loss):
   Managing Member                                       $ 500,581          $ 500,404          $ 250,287            $ 250,117
   Other Members                                           601,180         (3,534,423)         1,270,417               95,562
                                                  ----------------- ------------------ ------------------  -------------------
                                                       $ 1,101,761       $ (3,034,019)       $ 1,520,704            $ 345,679
                                                  ================= ================== ==================  ===================
Net income (loss) per Limited Liability
   Company Unit                                             $ 0.04            $ (0.26)            $ 0.09               $ 0.01
Weighted average number of Units outstanding            13,570,188         13,570,188         13,570,188           13,570,188
</TABLE>

                             See accompanying notes.



                                       4
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                    STATEMENT OF CHANGES IN MEMBERS' CAPITAL

                      FOR THE YEAR ENDED DECEMBER 31, 2003
                       AND FOR THE SIX MONTH PERIOD ENDED
                                  JUNE 30, 2004
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                 Accumulated
                                                                                                    Other
                                                                                                Comprehensive
                                                 Other Members                 Managing            Income
                                                 -------------
                                            Units             Amount            Member             (Loss)              Total
<S>                                          <C>              <C>                 <C>               <C>                <C>
Balance December 31, 2002                    13,570,188       $71,908,105                $ -        $(5,381,342)       $ 66,526,763

Distributions to members                              -       (12,345,603)        (1,000,979)                 -         (13,346,582)
Reclassification adjustment for
   portion of swap liability charged
   to net loss                                        -                 -                  -             64,451              64,451
Unrealized change in value of
   interest rate swap contracts                       -                 -                  -          2,173,747           2,173,747
Net income (loss)                                     -        (8,522,240)         1,000,979                  -          (7,521,261)
                                      ------------------ ------------------------------------ ------------------  ------------------
Balance December 31, 2003                    13,570,188        51,040,262                  -         (3,143,144)         47,897,118

Distributions to members                              -        (6,173,634)          (500,581)                 -          (6,674,215)
Unrealized change in value of
   interest rate swap contracts                       -                 -                  -          1,144,671           1,144,671
Net income                                            -           601,180            500,581                  -           1,101,761
                                      ------------------ ----------------- ------------------ ------------------  ------------------
Balance June 30, 2004                        13,570,188       $45,467,808                $ -        $(1,998,473)       $ 43,469,335
                                      ================== ================= ================== ==================  ==================
</TABLE>














                             See accompanying notes.



                                       5
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF CASH FLOWS

                        SIX AND THREE MONTH PERIODS ENDED
                             JUNE 30, 2004 AND 2003
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                               Six Months                            Three Months
                                                             Ended June 30,                         Ended June 30,
                                                             --------------                         --------------
                                                         2004              2003               2004                 2003
                                                         ----              ----               ----                 ----
Operating activities:
<S>                                                     <C>               <C>                 <C>                    <C>
Net income (loss)                                       $ 1,101,761       $ (3,034,019)       $ 1,520,704            $ 345,679
Adjustments to reconcile net income (loss) to
   cash provided by operating activities:
   Depreciation of operating lease assets                 9,018,309         10,401,597          4,201,631            5,064,666
   Amortization of initial direct costs                     137,257            188,073             65,242               94,037
   Gain on sales of assets                               (2,177,912)          (689,655)        (1,728,270)            (535,240)
   Impairment losses (recoveries)                                 -          1,890,861                  -              (20,000)
   (Recovery of) provision for doubtful accounts           (135,000)          (250,000)          (146,000)             (50,000)
   Changes in operating assets and liabilities:
      Accounts receivable                                   715,303            554,532            418,442            1,600,635
      Due from Managing Member                                    -            171,119                  -                    -
      Other assets                                           15,000             15,000              7,500                7,500
      Accounts payable, Managing Member                     201,563            111,073            760,695             (149,575)
      Accounts payable, other                              (575,162)           342,473             (1,955)             367,893
      Accrued interest expense                               23,597            (13,995)            11,711              (42,146)
      Unearned lease income                                (640,296)           (69,042)          (107,739)            (315,435)
      Interest rate swap contracts                          (44,483)                 -            (22,209)                   -
                                                   ----------------- ------------------ ------------------  -------------------
Net cash provided by operations                           7,639,937          9,618,017          4,979,752            6,368,014
                                                   ----------------- ------------------ ------------------  -------------------

Investing activities:
Proceeds from sales of assets                            10,319,679         12,256,835          8,834,020           10,235,678
Reduction of net investment in direct financing
   leases                                                   327,461            908,384            200,806              630,344
                                                   ----------------- ------------------ ------------------  -------------------
Net cash provided by investing activities                10,647,140         13,165,219          9,034,826           10,866,022
                                                   ----------------- ------------------ ------------------  -------------------
</TABLE>



                                       6
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF CASH FLOWS
                                   (Continued)
                        SIX AND THREE MONTH PERIODS ENDED
                             JUNE 30, 2004 AND 2003
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                               Six Months                            Three Months
                                                             Ended June 30,                         Ended June 30,
                                                             --------------                         --------------
                                                         2004              2003               2004                 2003
                                                         ----              ----               ----                 ----

Financing activities:
<S>                                                     <C>               <C>                 <C>                    <C>
Repayments of line of credit                            (12,000,000)       (10,300,000)       (11,000,000)          (8,400,000)
Borrowings on line of credit                              7,000,000          8,200,000          3,500,000            4,300,000
Repayments of long-term debt                             (6,530,000)       (14,903,000)        (3,403,000)          (9,482,000)
Repayments of non-recourse debt                            (272,893)          (167,854)                 -             (167,854)
Distributions to other members                           (6,173,634)        (6,171,654)        (3,086,873)          (3,084,779)
Distributions to Managing Member                           (500,581)          (500,404)          (250,287)            (250,117)
                                                   ----------------- ------------------ ------------------  -------------------
Net cash used in financing activities                   (18,477,108)       (23,842,912)       (14,240,160)         (17,084,750)
                                                   ----------------- ------------------ ------------------  -------------------

Net (decrease) increase in cash and cash
   equivalents                                             (190,031)        (1,059,676)          (225,582)             149,286
Cash and cash equivalents at beginning of
   period                                                   508,584          2,263,479            544,135            1,054,517
                                                   ----------------- ------------------ ------------------  -------------------
Cash and cash equivalents at end of period                $ 318,553        $ 1,203,803          $ 318,553          $ 1,203,803
                                                   ================= ================== ==================  ===================

Supplemental disclosures of cash flow
   information:
Cash paid during the period for interest                $ 1,627,799        $ 3,168,475          $ 761,251          $ 1,173,982
                                                   ================= ================== ==================  ===================

Schedule of non-cash transactions:
Change in fair value of interest rate swap
   contracts                                            $ 1,144,671        $ 1,184,760        $ 1,020,846            $ 873,930
                                                   ================= ================== ==================  ===================
</TABLE>

                             See accompanying notes.


                                       7
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2004
                                   (Unaudited)


1. Summary of significant accounting policies:

Interim financial statements:


The accompanying unaudited financial statements have been prepared in accordance
with accounting  principles  generally  accepted in the United States (GAAP) for
interim financial  information and with instructions to Form 10-Q and Article 10
of  Regulation  S-X. The  unaudited  interim  financial  statements  reflect all
adjustments  which are, in the opinion of the  Managing  Member,  necessary to a
fair  statement of financial  position and results of operations for the interim
periods  presented.  All such adjustments are of a normal recurring nature.  The
preparation of financial  statements in accordance with GAAP requires management
to make estimates and assumptions  that effect reported amounts in the financial
statements and accompanying notes.  Therefore,  actual results could differ from
those  estimates.  Operating  results for the six months ended June 30, 2004 are
not necessarily indicative of the results for the year ending December 31, 2004.

These unaudited interim financial  statements should be read in conjunction with
the financial  statements and notes thereto contained in the report on Form 10-K
for the year ended  December 31, 2003,  filed with the  Securities  and Exchange
Commission.


2.  Organization and Company matters:

ATEL Capital Equipment Fund VIII, LLC. (the Company),  was formed under the laws
of the state of  California  on July 31,  1998,  for the  purpose  of  acquiring
equipment to engage in equipment leasing and sales  activities.  The Company may
continue until December 31, 2019.

Upon the sale of the  minimum  amount  of Units  of  Limited  Liability  Company
interest  (Units)  of  $1,200,000  and the  receipt of the  proceeds  thereof on
January 13, 1999, the Company commenced operations.

The  Company  does not make a  provision  for income  taxes since all income and
losses will be allocated to the Members for  inclusion in their  individual  tax
returns.

ATEL Financial  Services,  LLC (AFS), an affiliated entity, acts as the Managing
Member of the Company.

Certain prior period amounts have been reclassified to conform to current period
presentation.

The Company is in its operating phase and is making  distributions  on a monthly
or quarterly basis.



                                       8
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2004
                                   (Unaudited)


3.  Investment in leases:

The Company's investment in leases consists of the following:

<TABLE>
<CAPTION>
                                                                 Depreciation /
                                                                  Amortization
                                                                   Expense or
                                                  Balance        Amortization of       Reclass-             Balance
                                                December 31,    Direct Financing    ifications and          June 30,
                                                    2003             Leases          Dispositions             2004
                                                    ----             ------          ------------             ----

<S>                                               <C>                <C>                 <C>                 <C>
Net investment in operating leases                 $87,112,340       $ (9,018,309)       $(7,741,871)        $ 70,352,160
Net investment in direct financing leases           11,497,801           (327,461)        (5,131,628)           6,038,712
Assets held for sale or lease, net of
   accumulated depreciation of $25,355,805 in
   2004 and $16,874,083 in 2003                      8,636,682                  -          4,731,732           13,368,414
Initial direct costs, net of accumulated
   amortization of $1,309,929 in 2004 and
   $1,345,313 in 2003                                  317,435           (137,257)                 -              180,178
                                              ----------------- ------------------ ------------------  -------------------
                                                  $107,564,258       $ (9,483,027)       $(8,141,767)        $ 89,939,464
                                              ================= ================== ==================  ===================
</TABLE>

Management  periodically reviews the carrying values of its assets on leases and
assets held for lease or sale.  As a result of the review during the three month
period ended March 31, 2003,  management determined that the value of a fleet of
covered  hopper rail cars had  declined in value to the extent that the carrying
values had become impaired.  This decline was the result of decreased  long-term
demand for these types of assets and a corresponding reduction in the amounts of
rental payments that these assets could command. Management recorded a provision
for the  decline in value of those  assets in the amount of  $1,910,861  for the
three  months  ended March 31,  2003.  There were no such  impairment  losses in
either the three or six month periods ended June 30, 2004.

In 2004 it came to the  Company's  attention  that the Company  had  incorrectly
calculated  the amounts of  depreciation  expense  associated  with an operating
lease from January 2001 through  December 31, 2003.  During the six months ended
June 30, 2004, the Company recorded additional  depreciation expense of $538,929
to correct the accounting for the transaction. The Company does not believe that
this amount is  material  to the periods in which it should have been  recorded,
nor is it expected that this amount will be material to the Company's  operating
results for the year ending  December 31, 2004.  However,  if this adjustment is
ultimately deemed to be material to the Company's operating results for the year
ending  December 31,  2004,  the Company  will need to restate  prior  financial
reporting periods, including the current period.

The impact on prior financial reporting periods would be a reduction of members'
equity  of  $538,929  ($0.04  per  Unit)  for  all  previous  periods  currently
presented.  The net loss for the six month  period  ended June 30, 2003 would be
increased by $89,822  ($0.01 per Unit) and net income for the three month period
ended June 30, 2003 would be decreased by $44,911 ($0.003 per Unit).  Net income
for the three and six month  periods  ended June 30, 2004 would be  increased by
$538,929 ($0.04 per Unit).



                                       9
<PAGE>

                     ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2004
                                   (Unaudited)


3. Investment in leases (continued):

Impairment losses are recorded as an addition to accumulated depreciation of the
impaired assets.  Depreciation expense and impairment losses on property subject
to operating  leases and assets held for lease or sale consist of the  following
for the three and six month periods ended June 30:

<TABLE>
<CAPTION>
                                           Six Months                          Three Months
                                         Ended June 30,                       Ended June 30,
                                         --------------                       --------------
                                              2004              2003               2004                 2003
                                              ----              ----               ----                 ----
<S>                                          <C>                <C>                <C>                  <C>
Depreciation of operating lease assets       $ 9,018,309        $10,401,597        $ 4,201,631          $ 5,064,666
Impairment losses (recoveries)                         -          1,890,861                  -              (20,000)
                                        ----------------- ------------------ ------------------  -------------------
                                             $ 9,018,309       $ 12,292,458        $ 4,201,631          $ 5,044,666
                                        ================= ================== ==================  ===================
</TABLE>

Net investment in operating leases:

Property on operating leases consists of the following:

<TABLE>
<CAPTION>
                                    Balance                              Reclass-             Balance
                                  December 31,      Depreciation      ifications and          June 30,
                                      2003             Expense         Dispositions             2004
                                      ----             -------         ------------             ----
<S>                               <C>                 <C>                 <C>                  <C>
Transportation, rail                $ 34,295,402           $      -       $ (2,796,816)       $  31,498,586
Manufacturing                         41,079,479                  -        (16,049,848)          25,029,631
Containers                            21,165,000                  -                  -           21,165,000
Transportation, other                 23,302,778                  -         (2,509,010)          20,793,768
Aircraft                              15,448,037                  -                  -           15,448,037
Natural gas compressors               13,677,449                  -           (136,146)          13,541,303
Materials handling                     7,313,238                  -         (2,147,764)           5,165,474
Other                                 10,991,981                  -         (2,022,382)           8,969,599
                                ----------------- ------------------ ------------------  -------------------
                                     167,273,364                  -        (25,661,966)         141,611,398
Less accumulated depreciation        (80,161,024)        (9,018,309)        17,920,095          (71,259,238)
                                ----------------- ------------------ ------------------  -------------------
                                  $   87,112,340      $  (9,018,309)      $ (7,741,871)        $ 70,352,160
                                ================= ================== ==================  ===================
</TABLE>

Net investment in direct financing leases:

As of June  30,  2004,  net  investment  in  direct  financing  leases  consists
primarily of railcars and office automation  equipment.  The following lists the
components of the Company's net investment in direct financing leases as of June
30, 2004:

Total minimum lease payments receivable                           $ 7,125,096
Estimated residual values of leased equipment (unguaranteed)        1,279,905
                                                              ----------------
Investment in direct financing leases                               8,405,001
Less unearned income                                               (2,366,289)
                                                              ----------------
Net investment in direct financing leases                         $ 6,038,712
                                                              ================

All of the property on leases was acquired in 1999, 2000, 2001 and 2002.



                                       10
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2004
                                   (Unaudited)


3. Investment in leases (continued):

At June 30, 2004, the aggregate amounts of future minimum lease payments are as
follows:

<TABLE>
<CAPTION>
                                                            Direct
                                        Operating          Financing
                                         Leases             Leases               Total
<S>                                       <C>                <C>                 <C>
Six months ending December 31, 2004       $ 7,649,564          $ 954,561          $ 8,604,125
      Year ending December 31, 2005        12,034,269          1,767,397           13,801,666
                               2006         5,657,987          1,461,648            7,119,635
                               2007         3,442,848            894,719            4,337,567
                               2008           938,628            663,561            1,602,189
                               2009           588,060            614,760            1,202,820
                         Thereafter            49,170            768,450              817,620
                                    ------------------ ------------------  -------------------
                                          $30,360,526        $ 7,125,096         $ 37,485,622
                                    ================== ==================  ===================
</TABLE>


4.  Non-recourse debt:

At June 30,  2004,  non-recourse  debt  consists of notes  payable to  financial
institutions.  The notes are due in varying quarterly and semi-annual  payments.
Interest on the notes is fixed at rates  ranging from 4.96% to 6.85%.  The notes
are secured by assignments  of lease  payments and pledges of assets.  The notes
mature from 2004 through 2007.

Future minimum payments of non-recourse debt are as follows:


<TABLE>
<CAPTION>
                                        Principal          Interest              Total
<S>                                       <C>                  <C>                <C>
Six months ending December 31, 2004         $ 296,496          $ 116,738            $ 413,234
      Year ending December 31, 2005         4,715,234            180,430            4,895,664
                               2006           646,128             57,792              703,920
                               2007           678,584             25,337              703,921
                                    ------------------ ------------------  -------------------
                                          $ 6,336,442          $ 380,297          $ 6,716,739
                                    ================== ==================  ===================
</TABLE>




                                       11
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2004
                                   (Unaudited)


5. Other long-term debt:

In 1999, the Company entered into a $70 million receivables funding program (the
Program), (which was subsequently increased to $125 million), with a receivables
financing  company that issues  commercial  paper rated A1 by Standard and Poors
and  P1 by  Moody's  Investor  Services.  Under  the  Program,  the  receivables
financing  company  receives  a  general  lien  against  all  of  the  otherwise
unencumbered  assets of the Company.  The Program  provides  for  borrowing at a
variable interest rate (1.6223% at June 30, 2004). The Program expired as to new
borrowings in March 2002.

The  Program  requires  AFS,  on behalf of the  Company,  to enter into  various
interest  rate swaps with a financial  institution  (also rated A1/P1) to manage
interest rate exposure  associated  with  variable  rate  obligations  under the
Program by effectively  converting the variable rate debt to fixed rates.  As of
June 30, 2004, the Company receives or pays interest on a notional  principal of
$32,459,958, based on the difference between nominal rates ranging from 4.35% to
7.72% and the variable rate under the Program. No actual borrowing or lending is
involved.  The  termination of the swaps coincides with the maturity of the debt
with the last of the swaps maturing in 2009.  Through the swap  agreements,  the
interest  rates have been  effectively  fixed.  The  differential  to be paid or
received is accrued as interest  rates change and is recognized  currently as an
adjustment  to interest  expense  related to the debt.  In 2003,  the  remaining
amount owing on an original  borrowing of $8,000,000 was repaid in full,  though
the associated swap will not mature until January 2005.

Borrowings under the Program are as follows:

<TABLE>
<CAPTION>
                                                         Notional             Swap             Payment Rate
                    Original           Balance            Balance             Value            on Interest
                     Amount            June 30,          June 30,           June 30,               Swap
Date Borrowed       Borrowed             2004              2004               2004              Agreement
-------------       --------             ----              ----               ----              ---------
<S>                  <C>                <C>                <C>                <C>
  11/11/1999         $ 20,000,000       $ 2,705,000        $ 2,600,876         $ (103,068)        6.84%
  12/21/1999           20,000,000        11,761,000         11,799,339         (1,033,855)        7.41%
  12/24/1999           25,000,000         2,643,000          1,879,573            (98,843)        7.44%
  4/17/2000             6,500,000         2,224,000          2,193,367           (110,320)        7.45%
  4/28/2000             1,900,000           286,000            284,344            (15,141)        7.72%
   8/3/2000            19,000,000         7,363,000          7,340,287           (469,072)        7.50%
  10/31/2000            7,500,000         2,637,000          2,620,466           (140,402)        7.13%
  1/29/2001             8,000,000                 -          1,561,672            (19,969)*       5.91%
   6/1/2001             2,000,000                 -                  -                  -         5.04%
   9/1/2001             9,000,000         2,211,000          2,180,034            (27,771)        4.35%
  1/31/2002             3,900,000         1,586,000                  -                  -           **
                ------------------ ----------------- ------------------ ------------------
                     $122,800,000       $33,416,000        $32,459,958        $(2,018,441)
                ================== ================= ================== ==================
</TABLE>


* This interest rate swap contract is deemed to be ineffective and the change in
value  for the six  month  period  ended  June  30,  2004 has  been  charged  to
operations.

** Under the terms of the Program,  no interest rate swap agreement was required
for this borrowing.





                                       12
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2004
                                   (Unaudited)


5. Other long-term debt (continued):

Other  long-term debt borrowings  mature from 2004 through 2009.  Future minimum
principal payments of long-term debt are as follows:

<TABLE>
<CAPTION>
                                          Debt               Debt                                                    Rates on
                                        Principal         Principal                                               Interest Swap
                                         Swapped         Not Swapped         Interest             Total            Agreements*
                                         -------         -----------         --------             -----            -----------
<S>                                       <C>                 <C>              <C>                <C>                <C>
Six months ending December 31, 2004       $ 5,603,000         $ 398,000        $ 1,096,204        $ 7,097,204        7.009%-7.018%
      Year ending December 31, 2005         9,886,000           816,000          1,605,677         12,307,677        7.044%-7.152%
                               2006         7,130,000           120,000            970,792          8,220,792        7.186%-7.213%
                               2007         4,529,000           172,000            517,970          5,218,970        7.039%-7.103%
                               2008         3,013,000            12,000            247,771          3,272,771        6.832%-7.063%
                               2009         1,669,000            68,000             44,826          1,781,826        6.077%-6.600%
                                    ------------------ ----------------- ------------------ ------------------
                                         $ 31,830,000       $ 1,586,000        $ 4,483,240       $ 37,899,240
                                    ================== ================= ================== ==================
</TABLE>

* Represents the range of monthly weighted average fixed interest rates paid for
amounts  maturing in the particular year. The  receive-variable  rate portion of
the swap represents commercial paper rates (1.6223% at June 30, 2004).


6.  Related party transactions:

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

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

Substantially  all employees of AFS record time incurred in performing  services
on behalf of all of the  companies  serviced by AFS. AFS believes that the costs
reimbursed  are the lower of (i) actual costs  incurred on behalf of the Company
or (ii) the amount the Company would be required to pay independent  parties for
comparable  services in the same  geographic  location and are  reimbursable  in
accordance with the Limited Liability Company Operating Agreement.








                                       13
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2004
                                   (Unaudited)


6. Related party transactions (continued):

AFS and/or affiliates earned fees,  commissions and reimbursements,  pursuant to
the Limited  Liability  Company Agreement during the six and three month periods
ended June 30, 2004 and 2003 as follows:


<TABLE>
<CAPTION>
                                                          Six Months                            Three Months
                                                        Ended June 30,                         Ended June 30,
                                                        --------------                         --------------
                                                    2004              2003               2004                 2003
                                                    ----              ----               ----                 ----
<S>                                                <C>                <C>                  <C>                  <C>
Administrative costs reimbursed to Managing
   Member                                            $ 719,342          $ 753,733           $ 20,127             $ 96,970
Asset management fees to Managing Member               579,469            775,954            307,620              475,384
                                              ----------------- ------------------ ------------------  -------------------
                                                   $ 1,298,811        $ 1,529,687          $ 327,747            $ 572,354
                                              ================= ================== ==================  ===================
</TABLE>

In 2003, it came to the Company's attention that an affiliated company had under
billed the  Company  in a prior  year for  interest  costs  associated  with the
financing  of an asset  acquired on its behalf.  During the three  months  ended
March 31, 2003, the Company recorded  additional interest expense of $742,000 to
correct the  accounting for the  transaction.  The Company does not believe that
this amount is  material  to the periods in which it should have been  recorded,
nor that it is material to the  Company's  operating  results for the year ended
December 31, 2003. The effect of the  additional  interest  expense  recorded in
2003 was to increase the loss in 2003 by $0.05 per Unit.


7. Member's capital:

As of June 30, 2004, 13,570,188 Units were issued and outstanding. The Company's
registration  statement  with the  Securities  and  Exchange  Commission  became
effective December 7, 1998. The offering was concluded on November 30, 2000. The
Company is authorized to issue up to  15,000,050  Units,  including the 50 Units
issued to the initial members.

The Company's Net Income, Net Losses, and Distributions as defined in the
Limited Liability Company Operating Agreement are to be allocated 92.5% to the
Members and 7.5% to AFS.

Distributions to the Other Members were as follows:

<TABLE>
<CAPTION>
                                                       Six Months                            Three Months
                                                     Ended June 30,                         Ended June 30,
                                                     --------------                         --------------
                                                 2004              2003               2004                 2003
                                                 ----              ----               ----                 ----
<S>                                             <C>                <C>                <C>                  <C>
Distributions                                   $ 6,173,634        $ 6,171,654        $ 3,086,873          $ 3,084,779
Weighted average number of Units outstanding     13,570,188         13,570,188         13,570,188           13,570,188
Weighted average distributions per Unit              $ 0.45             $ 0.45             $ 0.23               $ 0.23
</TABLE>




                                       14
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2004
                                   (Unaudited)


8.  Line of credit:

The Company participates with AFS and certain of its affiliates in a $61,945,455
revolving line of credit  (comprised of an acquisition  facility and a warehouse
facility)  with  a  financial   institution  that  includes  certain   financial
covenants.  During the quarter  ended March 31, 2004,  the facility was extended
for an additional year. At the same time, the total available under the facility
was increased. The line of credit expires on June 28, 2005. As of June 30, 2004,
borrowings under the facility were as follows:

Amount  borrowed by the Company under the acquisition
   facility                                                    $      4,500,000
Amounts borrowed by affiliated partnerships and limited
   liability companies under the acquisition facility                13,500,000
                                                             -------------------
Total borrowings under the acquisition facility                      18,000,000
Amounts borrowed by AFS and its sister corporation under
   the warehouse facility                                                     -
                                                             -------------------
Total outstanding balance                                      $     18,000,000
                                                             ===================

Total available under the line of credit                       $     61,945,455
Total outstanding balance                                           (18,000,000)
                                                             -------------------
Remaining availability                                         $     43,945,455
                                                             ===================

Draws on the acquisition facility by any individual borrower are secured only by
that borrower's assets,  including  equipment and related leases.  Borrowings on
the  warehouse  facility  are  recourse  jointly to  certain  of the  affiliated
partnerships and limited liability companies, the fund and AFS.

The credit agreement  includes certain  financial  covenants  applicable to each
borrower.  The Company was in compliance with its covenants as of June 30, 2004.
Interest rates on the balances outstanding at June 30, 2004 ranged from 3.01375%
to 3.18%.


9.  Commitments:

As of June 30,  2004,  the Company had no  outstanding  commitments  to purchase
lease equipment.


10.  Other comprehensive income:

In 2004 and 2003, other comprehensive income consisted of the following:

<TABLE>
<CAPTION>
                                                                 Six Months                            Three Months
                                                               Ended June 30,                         Ended June 30,
                                                               --------------                         --------------
                                                           2004              2003               2004                 2003
                                                           ----              ----               ----                 ----
<S>                                                       <C>               <C>                 <C>                    <C>
Net income (loss)                                         $ 1,101,761       $ (3,034,019)       $ 1,520,704            $ 345,679
Other comprehensive income:
Change in fair value of interest rate swap contracts        1,144,671          1,184,760          1,020,846              873,930
                                                     ----------------- ------------------ ------------------  -------------------
Comprehensive net income (loss)                           $ 2,246,432       $ (1,849,259)       $ 2,541,550          $ 1,219,609
                                                     ================= ================== ==================  ===================
</TABLE>

There were no other sources of comprehensive net income.



                                       15
<PAGE>

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

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

Capital Resources and Liquidity

During the first  half of 2004 and 2003,  the  Company's  primary  activity  was
engaging in equipment leasing activities.

During 2004 and 2003, the Company's primary sources of liquidity were rents from
operating  leases and proceeds from the sales of lease assets.  The liquidity of
the Company  will vary in the future,  increasing  to the extent cash flows from
leases  exceed  expenses,  and  decreasing  as lease  assets  are  acquired,  as
distributions  are made to the  members and to the extent  expenses  exceed cash
flows from leases.

The Company has contractual  obligations with a diversified group of lessees for
fixed lease terms at fixed rental  amounts.  As the initial  lease terms expire,
the Company will re-lease or sell the equipment. The future liquidity beyond the
contractual  minimum  rentals  will depend on the Managing  Member's  success in
re-leasing or selling the equipment as it comes off lease.

The Company participates with AFS and certain of its affiliates in a $61,945,455
revolving line of credit  (comprised of an acquisition  facility and a warehouse
facility)  with  a  financial   institution  that  includes  certain   financial
covenants.  During the quarter  ended March 31, 2004,  the facility was extended
for an additional year. At the same time, the total available under the facility
was increased. The line of credit expires on June 28, 2005. As of June 30, 2004,
borrowings under the facility were as follows:

Amount  borrowed by the Company under the acquisition
   facility                                                    $      4,500,000
Amounts borrowed by affiliated partnerships and limited
   liability companies under the acquisition facility                13,500,000
                                                             -------------------
Total borrowings under the acquisition facility                      18,000,000
Amounts borrowed by AFS and its sister corporation under
   the warehouse facility                                                     -
                                                             -------------------
Total outstanding balance                                      $     18,000,000
                                                             ===================

Total available under the line of credit                       $     61,945,455
Total outstanding balance                                           (18,000,000)
                                                             -------------------
Remaining availability                                         $     43,945,455
                                                             ===================

Draws on the acquisition facility by any individual borrower are secured only by
that borrower's assets,  including  equipment and related leases.  Borrowings on
the  warehouse  facility  are  recourse  jointly to  certain  of the  affiliated
partnerships  and limited  liability  companies,  the  Company and the  Managing
Member.

The Company  anticipates  reinvesting  a portion of lease  payments  from assets
owned in new leasing  transactions.  Such reinvestment will occur only after the
payment  of  all  obligations,   including  debt  service  (both  principal  and
interest), the payment of management and acquisition fees to the Managing Member
and providing for cash distributions to the members.

The Company currently has available adequate reserves to meet contingencies, but
in the event those  reserves  were found to be  inadequate,  the  Company  would
likely be in a position to borrow  against its  current  portfolio  to meet such
requirements.  The Managing Member envisions no such  requirements for operating
purposes.

No  commitments  of capital  have been or are expected to be made other than for
the acquisition of additional  equipment.  There were no such  commitments as of
June 30, 2004.



                                       16
<PAGE>

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

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

Cash Flows

During  the first  half of 2004 and  2003,  the  Company's  primary  sources  of
liquidity was operating lease rents and proceeds from the sales of lease assets.

In the  first  six  months of 2004 and  2003,  the  primary  source of cash from
operations was rents from  operating  leases.  Operating  leases are expected to
remain as the primary source of cash from operations in future periods.

In both 2004 and 2003,  proceeds from sales of assets was the primary  source of
cash from investing activities.  Proceeds from the sales of lease assets are not
expected to be  consistent  from one period to another.  Asset sales are made as
leases expire, as purchasers can be found and as the sales can be negotiated and
completed. There were no investing uses of cash in 2004 or in 2003.

In the  first  six  months  of 2004 and  2003,  the only  sources  of cash  from
financing activities were borrowings under the line of credit. Financing uses of
cash included  repayments of debt of $6,530,000 and $14,903,000 in the six month
periods ended June 30, 2004 and 2003,  respectively.  In the three month periods
ended June 30, 2004 and 2003,  debt  repayments  were $3,403,000 and $9,482,000,
respectively.  Distributions were made to Other Members in amounts of $6,173,634
and  $6,171,654  and to AFS in the amounts of $500,581  and  $500,404 in the six
month periods  ended June 30, 2004 and 2003,  respectively.  Distributions  were
made to Other Members in amounts of $3,086,873  and $3,084,779 and to AFS in the
amounts of $250,287 and $250,117 in the three month  periods ended June 30, 2004
and 2003,  respectively.  Repayments of debt for the six and three month periods
ended  June 30,  2004  decreased  from the same  periods  in the prior year as a
result of the reduction in scheduled repayments.

Results of operations

Operations  resulted in a net loss of $3,034,019  for the six month period ended
June 30, 2003 and net income of $345,679  for the three month  period ended June
30, 2003. In 2004,  operations  resulted in net income of $1,101,761 for the six
month period ended June 30 and $1,520,704 for the second quarter then ended. The
Company's primary source of revenues is from operating  leases.  Operating lease
rents have decreased in 2004 compared to 2003 as a result of two factors:  (1) a
larger  portion  of the  Company's  assets  were off lease  during the first six
months of 2004 than in 2003;  and (2) there have been  sales of assets  over the
last twelve months.  Depreciation is related to operating lease assets and thus,
to operating lease revenues.  Consequently,  depreciation  expense  decreased in
2004 compared to 2003.  For the six month periods,  depreciation  decreased from
$10,401,597  in 2003 to $9,018,309 in 2004 and for the three month  periods,  it
decreased from $5,064,666 in 2003 to $4,201,631 in 2004.

During the second quarter of 2004, the Company received $406,348 of late payment
fees in a settlement with a lessee. There were no similar amounts in 2003.

During the first quarter of 2003, the Company entered into negotiations relating
to the early  termination  of an aircraft lease and the sale of the asset to the
lessee.  The  negotiations  were concluded in early April 2003 and the asset was
sold. As a result,  an impairment loss related to the aircraft has been recorded
in the first quarter of 2003 in the amount of $1,910,861.  This provision is the
single  largest factor in the increase in the loss realized in the first quarter
of 2003. There were no similar impairments recognized in the first half of 2004.

Asset  management  fees are based on the gross lease  rents of the Company  plus
proceeds from the sales of lease assets. They are limited to certain percentages
of lease rents,  distributions  to members and certain other items. The decrease
in asset  management fees from $775,954 in the six months ended June 30, 2003 to
$579,469 for the six month period in 2004 and from  $475,384 for the three month
period  ended June 30, 2003 to $307,620 for the three month period in 2004 are a
direct result of decreases in lease revenues.



                                       17
<PAGE>

Interest  expense has decreased from  $1,131,836 in the three month period ended
June 30, 2003 to $772,962 in the three month period ended June 30, 2004. For the
six month periods ended June 30, interest  expense  decreased from $3,154,480 in
2003 to $1,651,396 in 2004. In 2003, it came to the Company's  attention that an
affiliated  company had under  billed the  Company in a prior year for  interest
costs  associated with the financing of an asset acquired on its behalf.  During
the three months ended March 31, 2003, the Company recorded  additional interest
expense of $742,000 to correct the accounting for the transaction.  There was no
similar charge in 2004.  Overall debt has decreased from $79,214,855 at December
31, 2002 to $44,252,442 at June 30, 2004. This decrease in the debt balances has
resulted in the decreased  interest  charges in 2004 compared to the same period
in 2003.

In the six month  periods  ended June 30, 2004 and 2003,  the  Company  incurred
$266,974 and $806,180,  respectively for maintenance costs relating to railcars.
In the three month  periods ended June 30, 2004 and 2003,  the Company  incurred
$136,527 and $134,093, respectively, of such costs. These costs were incurred in
order to be able to  place  the  railcars  on a new  lease.  The  costs  did not
increase  the  useful  life  of  the  assets  or  increase  their  value  in the
marketplace.

Recoveries of doubtful accounts  decreased from $250,000 to $135,000 for the six
month  periods ended June 30, 2003 and 2004,  respectively.  For the three month
periods  ended June 30,  2003 and 2004,  recoveries  increased  from  $50,000 to
$146,000, respectively.  Recoveries and provisions for doubtful accounts are not
expected to be consistent from one period to another.


Item 3.  Quantitative and Qualitative Disclosures of Market Risk.

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

In general,  the Company manages its exposure to interest rate risk by obtaining
fixed rate debt. The fixed rate debt is structured so as to match the cash flows
required  to service  the debt to the  payment  streams  under  fixed rate lease
receivables.  The  payments  under the leases  are  assigned  to the  lenders in
satisfaction of the debt. Furthermore, the Company has historically been able to
maintain  a stable  spread  between  its cost of funds and lease  yields in both
periods  of  rising  and  falling  interest  rates.  Nevertheless,  the  Company
frequently funds leases with its floating rate line of credit and is, therefore,
exposed to interest  rate risk until fixed rate  financing is  arranged,  or the
floating  rate  line of  credit  is  repaid.  As of June  30,  2004,  there  was
$4,500,000 outstanding on the floating rate line of credit.

Also, the Company  entered into a receivables  funding  facility in 1999.  Since
interest on the outstanding  balances under the facility varies,  the Company is
exposed to market risks  associated  with changing  interest rates. To hedge its
interest rate risk, the Company enters into interest rate swaps that effectively
convert the underlying interest  characteristic on the facility from floating to
fixed.  Under  the swap  agreements,  the  Company  makes or  receives  variable
interest  payments  to or from the  counterparty  based on a notional  principal
amount. The net differential paid or received by the Company is recognized as an
adjustment to interest expense related to the facility balances. The amount paid
or received  represents the difference  between the payments  required under the
variable  interest  rate  facility and the amounts due under the facility at the
fixed (hedged)  interest  rate. As of June 30, 2004,  borrowings on the facility
were $33,416,000 and the associated variable interest rate was 1.6223%. The


Item 4.  Controls and procedures.

Evaluation of disclosure controls and procedures

Under  the  supervision  and  with the  participation  of our  management  (ATEL
Financial  Services,  LLC as Managing  Member of the  registrant,  including the
chief  executive  officer and chief  financial  officer),  an  evaluation of the
effectiveness of the design and operation of the Company's  disclosure  controls
and procedures [as defined in Rules  240.13a-14(c) under the Securities Exchange
Act of 1934]  was  performed  as of the date of this  report.  Based  upon  this
evaluation,  the  chief  executive  officer  and  the  chief  financial  officer
concluded that, as of the evaluation date, except as noted below, our disclosure
controls  and   procedures   were  effective  for  the  purposes  of  recording,
processing,  summarizing,  and  timely  reporting  information  required  to  be
disclosed by us in the reports that we file under the Securities Exchange Act of
1934;  and  that  such  information  is  accumulated  and  communicated  to  our
management in order to allow timely decisions regarding required disclosure.



                                       18
<PAGE>

As  disclosed in the Form 10-K for the year ended  December 31, 2003,  the chief
executive and chief financial  officer of the Managing Member of the Company had
identified  certain  enhanced  controls  needed to  facilitate a more  effective
closing of the Company's financial statements.  During the first quarter of 2004
and since the end of the quarter,  the Managing  Member hired a new  controller,
added  additional  accounting  staff  personnel,  and has  instituted or revised
existing  procedures  in order to ensure that the  Company's  ability to execute
internal  controls in accounting and  reconciliation  in the closing  process is
adequate  in all  respects.  The  Managing  Member  will  continue to review its
accounting  procedures  and  practices  to  determine  their  effectiveness  and
adequacy  and will take such  steps as deemed  necessary  in the  opinion of the
Managing  Member's chief  executive and chief  financial  officers to ensure the
adequacy of the Company's accounting controls and procedures.

The Managing  Member's chief executive  officer and chief financial officer have
determined that no weakness in financial and accounting  controls and procedures
had any  material  effect on the  accuracy  and  completeness  of the  Company's
financial reporting and disclosure included in this report.

Changes in internal controls

There have been no  significant  changes in our  internal  controls  or in other
factors that could  significantly  affect our disclosure controls and procedures
subsequent to the evaluation date nor were there any significant deficiencies or
material  weaknesses in our internal controls,  except as described in the prior
paragraphs.

                           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.  The following is a discussion  of legal matters  involving the Company,
but which do not represent claims against the Company or its assets.

Solectron:

This is a matter  whereby  the  Company  has  declared a lessee in  default  for
failure to pay rent in a timely manner, and for other various defaults.  A claim
was filed on August 29,  2002,  by AFS on behalf of the Company in the amount of
$13,332,328.  The lessee  filed a  counter-claim  against the Company  asserting
unfair business practices.  In 2003, the Company elected to dismiss its suit and
subsequently  obtained a corresponding  dismissal of Solectron's  counter-claim.
The  Company is  continuing  to seek  resolution  of its claims as a  negotiated
settlement.


Item 2. Changes in Securities and Use of Proceeds

         Inapplicable.

Item 3. Defaults Upon Senior Securities.

         Inapplicable.

Item 4. Submission Of Matters To A Vote Of Security Holders.

         Inapplicable.

Item 5. Other Information.

         Inapplicable.



                                       19
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Item 6. Exhibits And Reports On Form 8-K.

(a) Documents filed as a part of this report

     1.  Financial Statement Schedules

          All other  schedules  for which  provision  is made in the  applicable
          accounting  regulations of the Securities and Exchange  Commission are
          not required under the related  instructions or are inapplicable,  and
          therefore have been omitted.

     2.  Other Exhibits

          31.1 Certification of Paritosh K. Choksi

          31.2 Certification of Dean L. Cash

          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

(b) Report on Form 8-K

          None



                                       20
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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:
August 11, 2004

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC
                                  (Registrant)



By: ATEL Financial Services, LLC
    Managing Member of Registrant




By: /s/ Dean L. Cash
    ------------------------------------
    Dean L. Cash
    President and Chief Executive
    Officer of Managing Member




By: /s/ Paritosh K. Choksi
    ------------------------------------
    Paritosh K. Choksi
    Executive Vice President of
    Managing Member, Principal
    financial officer of registrant



By: /s/ Donald E.  Carpenter
    -------------------------------------
    Donald E. Carpenter
    Principal accounting officer of
    registrant

                                       21
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