UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

x		Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
		For the year ended December 31, 2017
		For the year ended December 31, 2018
o		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 000-51858

ATEL Capital Equipment Fund XI, LLC

(Exact name of registrant as specified in its charter)


California		20-1357935
(State or other jurisdiction of incorporation or organization)		(I. R. S. Employer Identification No.)

The Transamerica Pyramid, 600 Montgomery Street, 9th Floor, San Francisco, California 94111

(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 check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes o No x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Act of 1934.Yes o No x

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 o

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer o		Non-accelerated filer o		Smaller reporting company x

(Do not check if a smaller reporting company)

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

State the aggregate market value of voting stock held by non-affiliates of the registrant: Not applicable

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.) Not applicable

The number of Limited Liability Company Units outstanding as of February 28, ~~2018~~2019 was 5,~~209~~194,307.

DOCUMENTS INCORPORATED BY REFERENCE

None.

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PART I

Item 1. BUSINESS

General Development of Business

ATEL Capital Equipment Fund XI, LLC (the “Company” or the “Fund”) was formed under the laws of the State of California on June 25, 2004. The Company was formed for the purpose of acquiring equipment to engage in equipment leasing, lending and sales activities. Also, from time to time, the Company would purchase securities of its borrowers or receive warrants to purchase securities in connection with its lending arrangements. The Managing Member or Manager of the Company is ATEL Financial Services, LLC (“AFS”), a California limited liability company. The Company may continue until December 31, 2025. 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 May 31, 2005, subscriptions for the minimum number of Units (120,000, representing $1.2 million) had been received 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). As of July 13, 2005, the Company had received subscriptions for 958,274 Units ($9.6 million), thus exceeding the $7.5 million minimum requirement for Pennsylvania, and AFS requested that the remaining funds in escrow (from Pennsylvania investors) be released to the Company. The Company terminated sales of Units effective April 30, 2006. AsLife-to-date ofnet contributions through December 31, ~~2017~~2018 totaled $52.2 million, ~~cumulative~~consisting of approximately $52.8 million in gross contributions, from Other Members purchasing Units under the public offering less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), ~~totaling $52.2 million (inclusive~~ of ~~the~~ $~~500~~651 ~~initial Member’s capital investment) have been received~~thousand. As of ~~the~~December ~~same~~31, ~~date~~2018, 5,~~209~~194,307 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, 2012, 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.

On January 1, 2013, the Company commenced liquidation phase activities pursuant to the guidelines of the Operating Agreement. Prior thereto, the Company was in its acquisition phase and was making distributions on a monthly and quarterly basis. Periodic distributions commenced in June 2005.

Pursuant to the terms of the Operating Agreement, AFS and its affiliates receive compensation for services rendered and reimbursements for costs incurred on behalf of the Company (See Note 5 to the financial statements included in Item 8 of this report). The Company is required to maintain reasonable cash reserves for working capital, the repurchase of Units and contingencies. The repurchase of Units is solely at the discretion of AFS.

Narrative Description of Business

The Company acquired various types of new and used equipment subject to leases and to make loans secured by equipment acquired by its borrowers. The Company’s investment objective was to acquire investments primarily in low-technology, low-obsolescence equipment such as materials handling equipment, manufacturing equipment, mining equipment, and transportation equipment. A portion of the portfolio included some more technology-dependent equipment such as certain types of communications equipment, medical equipment, manufacturing equipment and office equipment.

The Company only purchased equipment under pre-existing leases or for which a lease would be entered into concurrently at the time of the purchase. Through December 31, ~~2017~~2018, the Company purchased equipment with a total acquisition price of $67.5 million. The Company had also loaned $14.5 million for notes receivable secured by various assets.

The Company’s objective was to lease a minimum of 75% of the equipment (by cost), as of the date of the final commitment of its proceeds from the sale of Units, to lessees that the Manager deemed to be high quality corporate credits, of which at least half of the high quality corporate credits satisfying the 75% minimum requirement would ~~have either an average credit rating by Moody’s Investors Service, Inc. of “Baa” or better, or the credit equivalent as~~

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have either an average credit rating by Moody’s Investors Service, Inc. of “Baa” or better, or the credit equivalent as determined by the Manager, with the average rating weighted to account for the original equipment cost for each item leased; and the balance would be public and private corporations with substantial revenues and histories of profitable operations, as well as established hospitals with histories of profitability or municipalities. The remaining 25% of the initial equipment portfolio could include assets financed for companies which, although deemed creditworthy by the Manager, would not satisfy the specific credit criteria for the portfolio described above. Included in this 25% of the portfolio may be one or more growth capital financing investments. No more than 20% of the initial portfolio, by cost, would consist of these growth capital financing investments.

The equipment leasing industry is highly competitive. Equipment manufacturers, corporations, partnerships and others offer users an alternative to the purchase of most types of equipment with payment terms that vary widely depending on the lease term, type of equipment and creditworthiness of the lessee. The ability of the Company to keep the equipment leased and/or operating and the terms of the acquisitions, leases and dispositions of equipment depends on various factors (many of which are not in the control of AFS or the Company), such as general economic conditions, including the effects of inflation or recession, and fluctuations in supply and demand for various types of equipment resulting from, among other things, technological and economic obsolescence.

The business of the Company is not seasonal.

The Company has no full time employees. AFS’ employees and affiliates provide the services the Company requires to effectively operate. The cost of these services is reimbursed by the Company to AFS and affiliates per the Operating Agreement.

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Equipment Leasing Activities

The Company acquired a diversified portfolio of equipment. The equipment was leased to lessees in various industries. The following tables set forth the types of equipment acquired by the Company through December 31, ~~2017~~2018 and the industries to which the assets ~~have~~had been leased (dollars in thousands):

Asset Types	Purchase Price Excluding Acquisition Fees		Percentage ofTotal Acquisitions
Materials handling	$	20,589		30.48	%
Construction		12,649		18.73	%
Transportation, other		12,290		18.19	%
Transportation, rail		11,924		17.65	%
Mining		2,893		4.28	%
Logging and lumber		2,001		2.96	%
Aviation		1,658		2.45	%
Marine vessels		1,415		2.09	%
Manufacturing		1,172		1.7475	%
Other		958		1.43	%
	$	67,549		100.00	%


Industry Types	Purchase Price Excluding Acquisition Fees		Percentage of Total Acquisitions
Transportation, rail	$	11,924		17.65	%
Transportation services		11,460		16.97	%
Manufacturing		9,390		13.90	%
Paper products		8,886		13.15	%
Mining		8,610		12.75	%
Health services		4,967		7.35	%
Food products		3,795		5.62	%
Natural gas		2,893		4.28	%
Chemical products		2,139		3.17	%
Wood/Lumber products		1,677		2.48	%
Other		1,808		2.68	%
	$	67,549		100.00	%

~~From inception to December 31, 2017, the Company has disposed of certain leased assets as set forth below (in thousands):~~ 2

Asset Types	Original Equipment Cost Excluding Acquisition Fees		Sale Price		Gross Rents
Materials handling	$	20,202	$	3,768	$	22,693
Construction		12,662		9,029		7,738
Transportation, other		11,122		2,079		11,947
Transportation, rail		3,910		1,120		4,308
Mining		2,893		1,908		2,517
Logging and lumber		2,001		739		1,805
Manufacturing		953		246		1,384
Other		723		106		1,134
	$	54,466	$	18,995	$	53,526

For further information regarding the Company’s equipment lease portfolio as of December 31, 2017, see Note 4 to the financial statements, Investments in equipment and leases, net, as set forth in Part II, Item 8, Financial Statements and Supplementary Data.

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From inception to December 31, 2018, the Company had disposed of certain leased assets as set forth below (in thousands):


Asset Types	Original Equipment Cost Excluding Acquisition Fees		Sale Price		Gross Rents
Materials handling	$	20,202	$	3,768	$	22,693
Construction		12,662		9,029		7,738
Transportation, other		11,122		2,079		11,947
Transportation, rail		4,956		1,439		5,621
Mining		2,893		1,908		2,517
Logging and lumber		2,001		739		1,805
Manufacturing		1,171		286		1,770
Other		796		116		1,263
	$	55,803	$	19,364	$	55,354

For further information regarding the Company’s equipment lease portfolio as of December 31, 2018, see Note 4 to the financial statements, Investments in equipment and leases, net, as set forth in Part II, Item 8, Financial Statements and Supplementary Data.

Notes Receivable Activities

The Company had financed a diversified portfolio of assets in diverse industries. The following tables set forth the types of assets financed by the Company through December 31, 2018 and the industries to which the assets had been financed (dollars in thousands):


Asset Types	Amount Financed Excluding Acquisition Fees		Percentage of Total Fundings
Computer equipment	$	7,023		48.38	%
Office furniture/Fixtures and other assets		4,120		28.38	%
Storage facility		2,503		17.24	%
Research		504		3.47	%
Manufacturing		367		2.53	%
	$	14,517		100.00	%


Industry of Borrower	Amount Financed Excluding Acquisition Fees		Percentage of Total Fundings
Business services	$	4,326		29.80	%
Communications		3,369		23.21	%
Health services		2,833		19.52	%
Manufacturing		2,503		17.24	%
Electronics		1,119		7.71	%
Engineering		367		2.52	%
	$	14,517		100.00	%

From inception to December 31, 2018, assets financed by the Company that were associated with terminated notes receivable were as follows (in thousands):


Asset Types	Amount Financed Excluding Acquisition Fees		Early Termination of Notes Proceeds		Total Payments Received
Computer equipment	$	7,023	$	2,475	$	5,901
Office furniture/Fixtures and other assets		4,120		883		3,734
Storage facility		2,503		—		3,623
Research		504		—		612
Manufacturing		367		19		424
	$	14,517	$	3,377	$	14,294

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Item 2. PROPERTIES

The Company does not own or lease any real property, plant or material physical properties other than the equipment held for lease as set forth in Item 1, Business.

Item 3. 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 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

Item 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

There are certain material conditions and restrictions on the transfer of Units imposed by the terms of the Limited Liability Company Operating Agreement. Consequently, there is no public market for Units and it is not anticipated that a public market for Units will develop. In the absence of a public market for the Units, there is no currently ascertainable fair market value for the Units.

Holders

As of December 31, ~~2017~~2018, a total of 1,~~215~~212 investors were Unitholders of record in the Company.

Fund Valuation

Background to Fund Valuation

The Financial Industry Regulatory Authority (“FINRA”), in conjunction with the Securities and Exchange Commission (“SEC”) updated rules for the presentation of account statement values relative to pricing of Direct Placement Program (“DPP”) shares. Under FINRA Notice 15-02 (the “Notice”) the SEC approved amendments to National Association of Securities Dealers (“NASD”) Rule 2340, Customer Account Statements, and FINRA rule 2310, which address a FINRA member firm’s participation in a public offering of a DPP. In summary, the amendments require a FINRA member firm to include in the account statements for customers holding DPP securities a per share value for the DPP. This per share value must be prepared by, or with the material assistance or confirmation of, a third-party valuation expert or service. The results of this valuation must be disclosed in the issuer’s reports filed under the Securities Exchange Act of 1934. A valuation in compliance with the Notice must be undertaken and published on at least an annual basis.

The effective date of the Notice was April 11, 2016.

Methodologies

Broker dealers are required to provide a per share estimated value on the customer account statements for each non-listed DPP security held by their customers. Such estimated value must have been developed in a manner reasonably designed to provide a reliable value. Two valuation methodologies have been defined by FINRA, which by such designation are presumed to be reliable.

Net Investment Methodology

The amendments to NASD Rule 2340(c)(1)(A) require “net investment” to be based on the “amount available for investment” percentage disclosed in the “Estimated Use of Proceeds” section of the issuer’s offering prospectus. In essence, such value is equal to the offering price less selling commissions, other offering and organization expenses, and capital reserves. This method may be used for up to 150 days following the second anniversary of a Fund breaking escrow.

Appraised Value Methodology

As amended, Rule NASD 2340(c)(1)(B) requires that the per share estimated value disclosed in an issuer’s most recent periodic or current report be based upon an appraisal of the assets and liabilities of the program by, or with the material assistance or confirmation of, a third-party valuation expert or service, in conformity with standard industry valuation practice as it relates to both the aforementioned assets and liabilities. No later than 150 days following the second anniversary of the issuer’s break of escrow for its minimum offering, this methodology must be used to establish the required estimated values.

Unit Valuation

The per Unit valuation estimate for ATEL CAPITAL EQUIPMENT FUND XI, LLC has been conducted in compliance with the mandates of the Notice.

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For ATEL CAPITAL EQUIPMENT FUND XI, LLC, its estimated value per Unit reflects the Manager’s estimate of current portfolio valuation of all assets and liabilities of the Fund, calculated on a per Unit basis, and as such, does not represent a market value for the Units and may not accurately reflect the value of the Fund Units to the Unit holders if held over time to Fund maturity.

In connection with any estimate of per Unit value, Unit holders and all parties are reminded that no public market for the Units exists. Additionally, in order to preserve the Fund’s pass-through status for federal income tax purposes, the Fund will not permit a secondary market or the substantial equivalent of a secondary market for the Units. In the absence of a public market for the Units, there is no currently ascertainable fair market value for the Units.

The estimate of per Unit value does not take into account any extraordinary potential future business activity of the Fund; rather the valuation represents a snapshot view of the Fund’s portfolio as of the valuation date. In addition, the Fund does not include any analysis of the distributions that have already been paid by the Fund, nor the anticipated returns to Unit holder over the full course of the Fund life cycle, which will be dependent on many factors.

Disclosure

The estimated value per Unit has been calculated using the “Appraised Value Methodology” described above under “Methodologies” above, as of December 31, ~~2017~~2018.

ATEL CAPITAL EQUIPMENT FUND XI, LLC, will satisfy the disclosure requirements for providing estimated per Unit values pursuant to the Notice as follows:

For these disclosures, subsequent to the Fund’s initial compliance with FINRA 15-02, annual disclosures of estimated per Unit values, through the termination of the Fund, will be accomplished and included on an annual basis in a document filed with the Securities and Exchange Commission available to the public.

Specifics Underlying Valuation Methodology: Notes and Explanation of Valuation Components and Calculation

Fund Assets and Liabilities (other than as specifically identified below): The estimated values for non-interest bearing items such as current assets and liabilities are assumed to equal their reported GAAP balances as an appropriate approximation of their fair values. Debt (interest bearing) is assumed to equal the fair values of the debt as disclosed in the footnotes of the financial statements.

Investments in Leases (net of fees and expenses): The estimated values for Investments in Leases are based on calculating the present value of the projected future cash flows. Projected future cash flows include both the remaining contractual lease payments, plus assumptions on lease renewals and sale value of the residuals. Projected future cash flows are net of projected future fees and expenses including:

•

management fees applicable for the Fund (4.00% of revenue)

•

carried interest applicable for the Fund (7.50% of distributions)

•

operating expenses which are assumed to be 3% of original equipment costs for the Fund

Projected future cash flows have been discounted back to present value at discount rates based on like-term U.S. Treasury yields (as of the valuation date) plus a 400 basis point spread, to account for the credit risk differentials between the instrument being valued and U.S. Treasury security yields.

Residual values assumptions used in the cash flow projections are as follows:

For On-Lease and Month-to-Month Lease: Considers realized residual as a percent of book residual of ~~165.9~~166%, based on ATEL’s historical track record as of December 31, ~~2017~~2018.

For Off-Lease: A fair value of off-lease equipment is based on estimates from ATEL’s seasoned Asset Management Group.

Special Situation Leases: The valuation of certain leases has been performed outside of the above noted protocol based upon specific lease assumptions different than the macro assumptions above, due to the specific situations of those leases.

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A fair market value of off-lease equipment is based upon estimates from ATEL’s seasoned Asset Management Group.

C. Investments in ~~Notes Receivable~~Securities: The estimated values for Investments in ~~Notes~~Securities ~~Receivable~~have ~~are~~been ~~assumed~~based toon ~~approximate~~the estimated net book value as of the ~~reported~~valuation ~~GAAP~~date ~~balances~~(with impairment adjustments), plus any unrealized gain on equity. The unrealized gain on equity is based on either: a) the most recent round of financing, b) the most recent 409A valuation provided by the underlying companies of the warrants, or c) the Manager’s estimate of the company valuations based on all available information, including company financials, company valuation reports, public press releases, and other sources.

D. ~~Investments~~Accrued ~~in Securities~~distributions: ~~The~~Accrued ~~estimated~~distributions, ~~values~~which ~~for~~are ~~Investments~~payable into ~~Securities have been based on~~ the ~~estimated~~Unit ~~net~~holders ~~book~~have ~~value~~been asremoved offrom the ~~valuation~~balance ~~date~~sheet ~~(with~~liability ~~impairment~~section ~~adjustments),~~because ~~plus~~they ~~any~~are ~~unrealized~~not ~~gain~~a onliability ~~equity.~~to ~~The unrealized gain on equity is based on either:~~ a) ~~the~~third most recent round of financing, b) the most recent 409A valuation provided by the underlying companies of the warrants, or c) the Manager’s estimate of the company valuations based on all available information, including company financials, company valuation reports, public press releases, and other sourcesparty.

E. Warrants Outstanding: The estimated values for Warrants Outstanding considers the reported GAAP balances to be an appropriate approximation of their fair values.

F. Accrued distributions: Accrued distributions, which are payable to the Unit holders have been removed from the balance sheet liability section because they are not a liability to a third party.

ATEL CAPITAL EQUIPMENT FUND XI, LLC Unit Valuation

The Manager’s estimated per Unit value of ATEL CAPITAL EQUIPMENT FUND XI, LLC at December 31, ~~2017~~2018 as determined, and derived under the guidelines of the Appraised Value Methodology, and pursuant to the above specific enumerated component valuation methodologies and calculations, equals $10.0661. An independent national public accounting firm with valuation expertise was retained to examine, attest and confirm ATEL CAPITAL EQUIPMENT FUND XI, LLC’s per Unit valuation and its component methodologies and calculation as it relates to compliance with the regulatory mandate defined in the Notice. In this regard, they examined the components of the valuation methodologies and determined them to be reasonable and within industry standards. Other component attributes, including the bases and related key assumptions of the calculation were tested for their completeness, underlying documentation support and mathematical accuracy. Upon completion of their efforts, their attestation report confirmed that the per unit valuation of ATEL CAPITAL EQUIPMENT FUND XI, LLC, and the related notes, in all material respects, was based upon industry practice as described in the Manager’s valuation approach.

Disclaimer

The foregoing Fund per Unit valuation has been performed solely for the purpose of providing an estimated value per Unit in accordance with a regulatory mandate, in order to provide the broker dealer and custodian community with a valuation on a reasonable and attested basis for use in assigning an estimation of a Unit holder’s account value. Any report or disclosure of such estimated per Unit valuation is to be accompanied by statements that the value does not represent an estimate of the amount a Unit holder would receive if the Unit holder were to seek to sell the Units, and that the Fund intends to liquidate its assets in the ordinary course of its business and over the Fund’s term. Further, each statement of the Fund’s estimated per Unit valuation is to be accompanied by a disclosure that there can be no assurance as to (1) when the Fund will be fully liquidated, (2) the amount the Fund may actually receive if and when the Fund seeks to liquidate its assets, (3) the amount of lease or loan payments the Fund will actually receive over the remaining term, (4) the amount of asset disposition proceeds the Fund will actually receive over the remaining term, and (5) the amounts that may actually be received in distributions by Unit holders over the course of the remaining term.

Distributions

The Unitholders of record are entitled to certain distributions as provided under the Operating Agreement.

AFS has sole discretion in determining the amount of distributions; provided, however, that AFS will not cause the Company to reinvest operating revenues in equipment, but will distribute available cash, subject to payment of any obligations of the Company, (i) in an amount sufficient to allow an investor in a 31% federal income tax bracket to meet the federal and state income.

From July 2013 through 2015, the Company made semi-annual distributions consistent with a fund in liquidation. The Company made semi-annual distributions at a rate of $0.15 and $0.25 per Unit at June and December 2015, respectively. In addition, the Company made a special distribution at a rate of $0.30 per Unit in June 2015. The Company made a distribution at a rate of $0.25 per Unit at June 2016. The Company made semi-annual distribution at a rate of $0.25 and $0.10 per Unit at January and June 2017, respectively. The Company made no distributions during 2018. The rates and frequency of periodic distributions paid by the Fund during its liquidation phase are solely at the discretion of the Manager.

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Company made a distribution at a rate of $0.25 per Unit at June 2016. The Company made semi-annual distribution at a rate of $0.25 and $0.10 per Unit at January and June 2017, respectively. The rates and frequency of periodic distributions paid by the Fund during its liquidation phase are solely at the discretion of the Manager.

Item 6. SELECTED FINANCIAL DATA

A smaller reporting company is not required to present selected financial data in accordance with item 301(c) of Regulation S-K.

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statements contained in this Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) and elsewhere in this Form 10-K, 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 Company’s performance is also subject to risks relating to the value of its equipment at the end of its leases, which may be affected by the condition of the equipment, technological obsolescence and the 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-K. 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-K or to reflect the occurrence of unanticipated events, other than as required by law.

Overview

ATEL Capital Equipment Fund XI, LLC (the “Company” or the “Fund”) is a California limited liability company that was formed in June 2004 for the purpose of engaging in the sale of limited liability company investment units and acquiring equipment to generate revenues from equipment leasing, lending 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 April 2006. During 2006, the Company completed its initial acquisition stage with the investment of the net proceeds from the public offering of Units. Subsequently, during the reinvestment period (“Reinvestment Period”) (defined as six full years following the year the offering was terminated), the Company has 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, 2025. However, pursuant to the guidelines of the Limited Liability Company Operating Agreement (“Operating Agreement”), the Company commenced liquidation phase activities at the end of the Reinvestment Period on December 31, 2012. Periodic distributions are paid at the discretion of the Managing Member.

Results of Operations

It is the Company’s objective to maintain a 100% utilization rate for all equipment. All equipment transactions were acquired subject to binding lease commitments. Initial lease terms were generally from 36 to 120 months, and as they expire, the Company attempts to re-lease or sell the equipment; as such, utilization rates may tend to decrease during the liquidation stage of the Company. All of the Company’s leased property was acquired in the years 2005 through 2011. The utilization percentage of existing assets under lease was 100% as of December 31, ~~2017~~2018 and ~~2016~~2017.

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

The Operating Agreement places an annual limit and a cumulative limit for cost reimbursements to AFS and/or affiliates. Any reimbursable costs incurred by AFS and/or affiliates during the year exceeding the annual and/or cumulative limits cannot be reimbursed in the current year, though such costs may be reimbursable in future years to the extent of the cumulative limit. As of December 31, 2018 and 2017, the Company has not exceeded the annual and/or cumulative limitations discussed above.

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The2018 Operatingversus Agreement places an annual limit and a cumulative limit for cost reimbursements to AFS and/or affiliates. Any reimbursable costs incurred by AFS and/or affiliates during the year exceeding the annual and/or cumulative limits cannot be reimbursed in the current year, though such costs may be reimbursable in future years to the extent of the cumulative limit. As of December 31, 2017 and 2016, the Company has not exceeded the annual and/or cumulative limitations discussed above.

The Company had net income of $652 thousand and $178 thousand for the years ended December 31, 2018 and 2017, ~~versus~~respectively. ~~2016~~The net results for 2018 reflect an increase in total revenues and a decrease in total operating expenses when compared to prior year.

The Company had net income of $178 thousand and $794 thousand for the years ended December 31, 2017 and 2016, respectively. The net results for 2017 reflects a decrease in total revenues and an increase in total operating expenses when compared to prior year. Revenues

~~Revenues~~Total revenues for 2018 increased by $220 thousand, or 21%, as compared to prior year. This was largely attributable to a $227 thousand, or approximately 4 times, increase in gains recognized on the sale of lease assets due to a change in the volume and mix of assets sold; offset in part, by a $12 thousand, or 1%, decrease in operating lease revenue, a result of portfolio run-off and disposition of lease assets.

Total revenues for 2017 decreased by $587 thousand, or 35%, as compared to prior year. Such decrease was largely attributable to a decrease in the gain on sales of lease assets totaling $409 thousand, or 87%, primarily due to lower volume and a change in the mix of assets sold; a $204 thousand, or 17%, decrease in operating lease revenue, primarily a result of continued run-off of the portfolio of lease assets, offset in part, by a change in the fair value adjustment for warrants of $27 thousand, or 100%. Expenses

~~Expenses~~Total operating expenses for 2018 reflected a net decrease of $256 thousand, or 29%, when compared to prior year. This decrease was primarily due to a $66 thousand, or 200%, reversal of a provision for credit losses, a result of customers fully paying their accounts receivable balances; a $56 thousand, or 18%, decrease in depreciation expense, the result of continuing run-off of the portfolio of lease assets; a $54 thousand, or 30%, decrease in costs reimbursed to Managing Member and/or affiliates, due to a net cost allocation adjustment; a $43 thousand, or 30%, reduction in professional fees, due to the year over year difference in timing and related billings for audit and tax services; a $23 thousand, or 47%, decrease in asset management fees, associated with a continued decline in the portfolio of managed assets and related lease revenues; and an $11 thousand, or 100%, decrease in the provision for losses on investment in securities, due to an impairment adjustment recorded in the prior period.

TotalCapital operatingResources expenses for 2017 increased by $34 thousand, or 4%, as compared to prior year. Such net increase was primarily due to a $43 thousand, or 31%, increase in costs reimbursed to AFS and/or affiliates, due to higher costs allocated by the Manager, a result of refinement of cost allocation methodology; a $36 thousand, or 69%, increase in expenditures for outside services, indicative of additional efforts required to comply with certain regulatory requirements; a $33 thousand, or 100%, increase in the provision for credit losses, relating to loss estimate from certain customers; a $30 thousand, or 100%, increase in taxes on income and franchise fees, due to year over year differences in estimated tax liability related to prior year tax payment; an $18 thousand, or 14%, increase in professional fees, due to year over year differences in timing and related billing for professional audit services, offset in part by, an $84 thousand, or 22%, decrease in period over period depreciation expense, the result of continuing run-off of the portfolio of lease assets; and a $39 thousand, or 44%, decrease in asset management fees to Managing Member, directly attributable to a reduced level of assets under management and associated operating lease revenues. Liquidity

~~Capital~~At ~~Resources~~December 31, 2018 and ~~Liquidity~~2017, the Company’s cash and cash equivalents totaled $1.5 million, and $586 thousand, respectively. The liquidity of the Company varies, increasing to the extent cash flows from leases and proceeds of asset sales exceed expenses and decreasing as distributions are made to the Members and to the extent expenses exceed cash flows from leases and proceeds from asset sales.

AtThe ~~December~~Company ~~31,~~currently ~~2017~~believes ~~and~~it ~~2016,~~has ~~the~~adequate ~~Company’s~~reserves ~~cash~~available ~~and~~to ~~cash~~meet ~~equivalents~~its ~~totaled~~immediate ~~$586~~cash ~~thousand,~~requirements and ~~$1.9~~those ~~million, respectively. The liquidity~~ of the ~~Company~~next ~~varies~~twelve months, ~~increasing~~but toin the ~~extent~~event ~~cash~~those ~~flows~~reserves ~~from~~were ~~leases~~found ~~and~~to ~~proceeds~~be ofinadequate, ~~asset~~the ~~sales~~Company ~~exceed~~would ~~expenses~~likely ~~and~~be ~~decreasing~~in asa ~~distributions~~position ~~are~~to ~~made~~borrow toagainst ~~the~~its ~~Members~~current ~~and~~portfolio to ~~the~~meet ~~extent~~such ~~expenses~~requirements. ~~exceed~~The ~~cash~~Managing ~~flows~~Member ~~from~~envisions ~~leases~~no ~~and~~such ~~proceeds~~requirements ~~from~~for ~~asset~~operating ~~sales~~purposes.

TheCash Company currently believes it has adequate reserves available to meet its immediate cash requirements and those of the next twelve months, but in the event those reserves were found to be inadequate, the Company would likely be in a position to borrow against its current portfolio to meet such requirements. The Managing Member envisions no such requirements for operating purposes. Flows

~~Cash~~The ~~Flows~~following table sets forth summary cash flow data (in thousands):

The following table sets forth summary cash flow data (in thousands):


	2018			2017
Net cash provided by (used in):
Operating activities	$	547		$	510
Investing activities		369			120
Financing activities		(8	)		(1,976	)
Net increase (decrease) in cash and cash equivalents	$	908		$	(1,346	)

	2017			2016
Net cash provided by (used in):
Operating activities	$	510		$	836
Investing activities		120			780
Financing activities		(1,976	)		(2,816	)
Net decrease in cash and cash equivalents	$	(1,346	)	$	(1,200	)

9TABLE OF CONTENTS

TABLE2018 OFversus CONTENTS2017

During 2018 and 2017, ~~versus~~the ~~2016~~Company’s primary source of liquidity has been cash flows from its portfolio of operating lease contracts. In addition, the Company received $369 thousand and $120 thousand of proceeds from sales or dispositions of equipment during the respective years ended December 31, 2018 and 2017.

During ~~2017~~the ~~and~~year ~~2016~~ended December 31, 2018, the Company’s ~~primary~~paid ~~sources~~$8 ofthousand ~~liquidity~~for ~~were~~the ~~cash~~repurchase ~~flows~~of ~~from~~Units. ~~its~~During ~~portfolio~~the ofyear ~~operating~~ended ~~lease~~December ~~contracts.~~31, ~~In addition~~2017, the Company ~~realized~~made $~~120~~2 ~~thousand~~million ~~and~~of ~~$772~~cash ~~thousand~~distributions ofto ~~proceeds~~its ~~from~~Members. ~~sales~~Additionally, orduring ~~dispositions~~2018 ofand ~~equipment~~2017, ~~for~~cash ~~the~~was ~~respective~~primarily ~~years~~used ~~ended~~to ~~December~~pay ~~31,~~invoices ~~2017~~related to management fees and ~~2016~~expenses, and other payables.

During 2017 and 2016, cash was primarily used to pay distributions to both the Other Members and the Managing Member, totaling $2.0 million and $2.8 million, respectively. Additionally, during 2017 and 2016, cash was used to pay invoices related to management fees and expenses, and other payables. Distributions

~~Distributions~~The Company commenced periodic distributions, based on cash flows from operations, beginning with the month of June 2005. From July 2013 through 2015, the Company made semi-annual distributions consistent with a fund in liquidation. The rates and frequency of periodic distributions paid by the Fund during its liquidation phase are solely at the discretion of the Manager. See Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities, for additional information regarding the distributions.

The Company commenced periodic distributions, based on cash flows from operations, beginning with the month of June 2005. From July 2013 through 2015, the Company made semi-annual distributions consistent with a fund in liquidation. The rates and frequency of periodic distributions paid by the Fund during its liquidation phase are solely at the discretion of the Manager. See Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities, for additional information regarding the distributions.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At December 31, ~~2017~~2018, the Company had no commitments to purchase lease assets or to fund loans.

Off-Balance Sheet Transactions

None.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the Report of Independent Registered Public Accounting Firm, Financial Statements and Notes to Financial Statements attached hereto at pages 11 through 2827.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Members
ATEL Capital Equipment Fund XI, LLC

WeOpinion haveon audited the accompanyingFinancial balance sheets of ATEL Capital Equipment Fund XI, LLC (the “Company”) as of December 31, 2017 and 2016, the related statements of income, changes in members’ capital, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Statements

We have audited the accompanying balance sheets of ATEL Capital Equipment Fund XI, LLC (the “Company”) as of December 31, 2018 and 2017, the related statements of income, changes in members’ capital, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Management of the Company’s Managing Member. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Moss Adams LLP San Francisco, California March 2615, ~~2018~~2019

We have served as the Company’s auditor since 2007.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

BALANCE SHEETS

DECEMBER 31, ~~2017~~2018 AND ~~2016~~2017 (In Thousands)

	2017		2016
	2018		2017
ASSETS
Cash and cash equivalents	$	~~586~~1,494	$	~~1,932~~586
Accounts receivable, net of allowance for doubtful accounts of $33 as of December 31, 2017 and $1 as of December 31, 2016		66		111
Accounts receivable, net of allowance for doubtful accounts of $0 as of December 31, 2018 and $33 as of December 31, 2017		64		66
Investment in securities		11		22
Due from Managing Member		6		—
Investments in equipment and leases, net of accumulated depreciation of $10,716 as of December 31, 2017 and $11,215 as of December 31, 2016		1,633		2,004
Investment in securities		11		11
Prepaid expenses and other assets		33		32
Investments in equipment and leases, net of accumulated depreciation of $9,989 as of December 31, 2018 and $10,716 as of December 31, 2017		1,302		1,633
Total assets	$	2,329	$	4,101
Prepaid expenses and other assets		34		33
Total assets	$	2,911	$	2,329
LIABILITIES AND MEMBERS’ CAPITAL
Accounts payable and accrued liabilities:
Managing Member	$	16—	$	3116
Affiliates		36—		—36
Other		8261		7882
Unearned operating lease income		1425		1314
Total liabilities		~~148~~86		~~122~~148
Commitments and contingencies
Members’ capital:
Managing Member		—		—
Other Members		2,~~181~~825		32,~~979~~181
Total Members’ capital		2,~~181~~825		32,~~979~~181
Total liabilities and Members’ capital	$	2,~~329~~911	$	42,~~101~~329

See accompanying notes.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, ~~2017~~2018 AND ~~2016~~2017(In Thousands Except for Units and Per Unit Data)

	2017			2016
	2018			2017
Revenues:
Leasing activities:
Operating leases	$	~~1,001~~989		$	1,~~205~~001
Direct financing leases		—			2
Gain on sales of lease assets		288			61
Gain on sales of lease assets		61			470
Other		13			8
Unrealized loss on fair value adjustment for warrants		—			(27	)
Total revenues		1,290			1,070
Other		8			7
Total revenues		1,070			1,657
Expenses:
Depreciation of operating lease assets		~~306~~250			~~390~~306
Asset management fees to Managing Member		4926			8849
Cost reimbursements to Managing Member and/or affiliates		~~183~~129			~~140~~183
Provision for credit losses		33			—
(Reversal of) provision for credit losses		(33	)		33
Provision for losses on investment in securities		11—			1611
Amortization of initial direct costs		61			86
Professional fees		~~143~~100			~~125~~143
Outside services		8896			5288
Taxes on income and franchise fees		3025			—30
Printing and photocopying		17			9
Insurance		15			17
Other		2930			3329
Total operating expenses		~~895~~639			~~861~~895
Other income (loss), net		3			(2	)
Other income, net		1			3
Net income	$	~~178~~652		$	~~794~~178
Net income:
Managing Member	$	~~148~~—		$	~~105~~148
Other Members		30652			~~689~~30
	$	~~178~~652		$	~~794~~178
Net income per Limited Liability Company Unit (Other Members)	$	0.01		$	0.13
Net income per Limited Liability Company Unit – (Other Members)	$	0.13		$	0.01
Weighted average number of Units outstanding		5,~~209~~198,~~307~~992			5,209,307

See accompanying notes.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

FOR THE YEARS ENDED DECEMBER 31, ~~2017~~2018 AND ~~2016~~2017(In Thousands Except for Units and Per Unit Data)

				Amount
	Units			Amount						Total
	Units			Other Members			Managing Member			Total
				Other Members			Managing Member
Balance December 31, 2015		5,209,307		$	4,593		$	—		$	4,593
Balance December 31, 2016		5,209,307		$	3,979		$	—		$	3,979
Distributions to Other Members ($0.25 per Unit)		—			(1,303	)		—			(1,303	)
Distributions to Managing Member		—			—			(105	)		(105	)
Net income		—			689			105			794
Balance December 31, 2016		5,209,307			3,979			—			3,979
Distributions to Other Members ($0.35 per Unit)		—			(1,828	)		—			(1,828	)
Distributions to Managing Member		—			—			(148	)		(148	)
Net income		—			30			148			178
Balance December 31, 2017		5,209,307		$	2,181		$	—		$	2,181
Repurchase of Units		(15,000	)		(8	)		—			(8	)
Net income		—			652			—			652
Balance December 31, 2018		5,194,307		$	2,825		$	—		$	2,825

See accompanying notes.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, ~~2017~~2018 AND ~~2016~~2017 (In Thousands)

	2017			2016
	2018			2017
Operating activities:
Net income	$	~~178~~652		$	~~794~~178
Adjustments to reconcile net income to cash provided by operating activities:
Gain on sales of lease assets		(61288	)		(~~470~~61	)
Depreciation of operating lease assets		~~306~~250			~~390~~306
Amortization of initial direct costs		61			86
Provision for credit losses		33			—
(Reversal of) provision for credit losses		(33	)		33
Provision for losses on investment in securities		11—			1611
Unrealized loss on fair value adjustment for warrants		—			27
Changes in operating assets and liabilities:
Accounts receivable		1235			4512
Prepaid expenses and other assets		(1	)		(1	)
Due from Managing Member and affiliates		(6	)		(1	)
Accounts payable, Managing Member		(15	)		30
Prepaid expenses and other assets		(1	)		(15	)
Accounts payable, affiliates		36			—
Accounts payable, Managing Member and affiliates		(52	)		36
Accounts payable, other		4(22	)		(24	)
Unearned operating lease income		111			(1	)
Net cash provided by operating activities		~~510~~547			~~836~~510
Investing activities:
Proceeds from sales of lease assets		~~120~~369			~~772~~120
Principal payments received on direct financing leases		—			8
Net cash provided by investing activities		369			120
Net cash provided by investing activities		120			780
Financing activities:
Distributions to Other Members		~~(1,828~~—	)		(21,~~606~~828	)
Distributions to Managing Member		~~(148~~—	)		(~~210~~148	)
Net cash used in financing activities		(1,976	)		(2,816	)
Repurchases of Units		(8	)		—
Net decrease in cash and cash equivalents		(1,346	)		(1,200	)
Net cash used in financing activities		(8	)		(1,976	)
Cash and cash equivalents at beginning of year		1,932			3,132
Net increase (decrease) in cash and cash equivalents		908			(1,346	)
Cash and cash equivalents at end of year	$	586		$	1,932
Cash and cash equivalents at beginning of year		586			1,932
Cash and cash equivalents at end of year	$	1,494		$	586
Supplemental disclosures of cash flow information:
Cash paid during the year for taxes	$	2619		$	2126

See accompanying notes.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

1. Organization and Limited Liability Company matters:

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

2. Summary of significant accounting policies:

Basis of presentation:

The accompanying balance sheets as of December 31, ~~2017~~2018 and ~~2016~~2017, and the related statements of income, changes in members’ capital, and cash flows for the years then ended, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission. Certain prior year amounts may have been reclassified to conform to the current year presentation. These reclassifications had no significant effect on the reported financial position or results of operations.

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

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after December 31, ~~2017~~2018, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

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 primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes and for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable.

Accounts receivable:

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

Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company places the majority of its cash deposits in noninterest-bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Funds’ cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating and direct financing leases or notes receivable.

Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 840-20-35-3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell.

The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized.

Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet.

Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis.

Direct financing leases and related revenue recognition:

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

Allowances for losses on direct financing leases are typically established based on historical charge off and collection experience and the collectability of specifically identified lessees and billed and unbilled receivables. Direct financing leases are charged off to the allowance as they are deemed uncollectible.

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

Initial direct costs:

The Company capitalizes initial direct costs (“IDC”) associated with the origination and funding of lease assets and investments in notes receivable. IDC includes 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. The costs are amortized on a lease by lease (or note by note) basis based on actual contract term using a straight-line method for operating leases and the effective interest rate method for direct financing leases and notes receivable. Upon disposal of the underlying lease or loan assets, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases or notes receivable that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense.

Acquisition expense:

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

Asset valuation:

Recorded values of the Company’s leased asset portfolio are reviewed each quarter to confirm the reasonableness of established residual values and to determine whether there is indication that an asset impairment might have taken place. The Company uses a variety of sources and considers many factors in evaluating whether the respective book values of its assets are appropriate. In addition, the Company may direct a residual value review at any time if it becomes aware of issues regarding the ability of a lessee to continue to make payments on its lease contract. An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than the net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date. Upward adjustments for impairments recognized in prior periods are not made in any circumstances.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

values of its assets are appropriate. In addition, the Company may direct a residual value review at any time if it becomes aware of issues regarding the ability of a lessee to continue to make payments on its lease contract. An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than the net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date. Upward adjustments for impairments recognized in prior periods are not made in any circumstances.

Segment reporting:

The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States. The 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 decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas.

The ~~primary~~Company’s ~~geographic~~total ~~regions~~revenues inand ~~which~~long-lived assets for the ~~Company~~years ~~seeks~~ended ~~leasing~~December 31, 2018 and ~~financing~~2017 ~~opportunities~~were ~~are~~sourced ~~North~~in ~~America~~the ~~and~~United ~~Europe~~States.

The ~~table~~primary ~~below summarizes~~ geographic ~~information~~region ~~relating~~in towhich the ~~sources, by nation, of the~~ Company’s ~~total~~seeks ~~revenues~~leasing ~~for~~opportunities ~~the~~is ~~years~~North ~~ended~~America. ~~December 31, 2017 and 2016 and long-lived assets as of December 31, 2017 and 2016 (dollars in thousands):~~

	For The Year Ended December 31,
	2017		% of Total			2016		% of Total
Revenue
United States	$	1,070		100	%	$	1,639		99	%
United Kingdom		—		0	%		18		1	%
Total	$	1,070		100	%	$	1,657		100	%

	As of December 31,
	2017		% of Total			2016		% of Total
Long-lived assets
United States	$	1,633		100	%	$	2,002		100	%
United Kingdom		—		0	%		2		0	%
Total	$	1,633		100	%	$	2,004		100	%

Investment in securities:

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

19Purchased securities:

~~TABLE~~The OFCompany’s ~~CONTENTS~~investment securities registered for public sale are carried at fair value. The Company’s investment securities with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s investment securities that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital.

~~ATEL~~Based ~~CAPITAL~~upon ~~EQUIPMENT~~the ~~FUND~~Company’s XIreview of its portfolio, ~~LLC~~fair ~~NOTES~~value TOadjustments ~~FINANCIAL~~of ~~STATEMENTS~~$0 and $11 thousand were recorded during 2018 and 2017, respectively, relative to an impaired investment. There were no sales or dispositions of securities during 2018 and 2017.

2. Summary of significant accounting policiesWarrants: - (continued)

~~Purchased~~Warrants ~~securities~~owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair value on the balance sheet at the end of the period, as determined by the Managing Member. The company did not hold any warrants as of December 31, 2018 and the estimated fair value of the warrants was deemed nominal as of December 31, 2017. There were no exercises of warrants, net or otherwise, during the years ended December 31, 2018 and 2017.

Purchased securities are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. Based upon the Company’s review of its portfolio, fair value adjustments of $11 thousand and $16 thousand were recorded during 2017 and 2016, respectively, relative to an impaired investment. There were no sales or dispositions of securities during 2017 and 2016.

Warrants

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried at an estimated fair value on the balance sheet at the end of the period, as determined by the Managing Member. During 2017 and 2016, respectively, the Company recorded unrealized losses of $0 and $27 thousand on fair value adjustment of its warrants. As of December 31, 2017 and 2016, the Managing Member estimated the fair value of the warrants to be $0. There were no net exercises of warrants during 2017 and 2016.

Foreign currency transactions:

Foreign currency transaction gains and losses are reported in the results of operations as “other income” or “other loss” in the period in which they occur. Currently, the Company does not use derivative instruments to hedge its economic exposure with respect to assets, liabilities and firm commitments as the foreign currency transactions risks to date have not been significant. The Company’s foreign currency translations gains and losses were nominal during ~~2017~~2018 and ~~2016~~2017.

Unearned operating lease income:

The Company records prepayments on operating leases as a liability under the caption of unearned operating lease income. The liability is recorded when prepayments are received and recognized as operating lease revenue over the period to which the prepayments relate using a straight-line method.

Income taxes:

The Company is treated as a partnership for federal income tax purposes. Pursuant to the provisions of Section 701 of the Internal Review Code, a partnership is not subject to federal income taxes. Accordingly, the Company has provided current income taxes for only those states, which levy income taxes on partnerships. For the years ended December 31, 2017 and 2016, the current provision for state income taxes was approximately $30 thousand and $0, respectively. The Company does not have any entity level uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions and is generally subject to examination by U.S. federal (or state and local) income tax authorities for three years from the filing of a tax return.

~~The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2017 and 2016 as follows (in thousands):~~ 19

	2017			2016
Financial statement basis of net assets	$	2,181		$	3,979
Tax basis of net assets (unaudited)		8,325			9,821
Difference	$	(6,144	)	$	(5,842	)

The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for syndication costs and differences between the depreciation methods used in the financial statements and the Company’s tax returns.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

~~The~~2018 ~~following~~and ~~reconciles~~2017, the ~~net~~current provision for state income ~~reported~~taxes inwas ~~these~~approximately ~~financial~~$25 ~~statements~~thousand toand ~~the~~$30, ~~income~~respectively. ~~reported~~The onCompany ~~the~~does not have any entity level uncertain tax positions. The Company’s ~~federal~~files income tax returns ~~(unaudited)~~in ~~for~~ the ~~years~~U.S. ~~ended~~federal ~~December~~jurisdiction ~~31,~~and ~~2017~~various state jurisdictions and ~~2016,~~is ~~respectively~~generally subject to examination by U.S. federal (inor ~~thousands~~state and local): income tax authorities for three years from the filing of a tax return.

	2017		2016
Net income per financial statements	$	178	$	794
Tax adjustments (unaudited):
Adjustment to depreciation expense		259		226
Provision for doubtful accounts		33		—
Adjustments to revenues		1		(154	)
Adjustments to gain on sales of assets		59		289
Other		10		16
Income per federal tax return (unaudited)	$	540	$	1,171

The tax bases of the Company’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2018 and 2017 as follows (in thousands):


	2018			2017
Financial statement basis of net assets	$	2,825		$	2,181
Tax basis of net assets (unaudited)		9,339			8,325
Difference	$	(6,514	)	$	(6,144	)

The following reconciles the net income reported in these financial statements to the income reported on the Company’s federal tax returns (unaudited) for the years ended December 31, 2018 and 2017, respectively (in thousands):


	2018			2017
Net income per financial statements	$	652		$	178
Tax adjustments (unaudited):
Adjustment to depreciation expense		250			259
Provision for doubtful accounts		(33	)		33
Adjustments to revenues		75			1
Adjustments to gain on sales of assets		80			59
Other		(2	)		10
Income per federal tax return (unaudited)	$	1,022		$	540

Other income (loss), net:

Other income (loss), net is solely comprised of net gains and losses on foreign currency transactions.

Per unit data:

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

Recent accounting pronouncements:

In ~~August~~November ~~2016~~2018, the ~~Financial Accounting Standards Board (“~~FASB”) issued Accounting Standards Update ~~2016~~2018-~~15 — Statement~~19, ofCodification ~~Cash~~Improvements ~~Flows~~to (Topic ~~230~~326, Financial Instruments — Credit Losses (“ASU 2018-19”):. ~~Classification~~The new standard clarifies certain aspects of ~~Certain~~the ~~Cash~~new ~~Receipts~~current ~~and~~expected ~~Cash~~credit ~~Payments~~losses (“CECL) impairment model in ASU 2016-~~15”)~~13. ~~ASU~~The ~~2016-15~~amendment ~~addresses~~clarifies ~~specific~~that ~~cash~~receivables ~~flow~~arising ~~issues~~from ~~with~~operating leases are within the ~~objective~~scope of ~~reducing~~ASC ~~the~~842, ~~existing~~rather ~~diversity~~than inASC ~~practice~~326. The ~~amendments~~effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, ~~2017~~2019, ~~and~~including interim periods within those fiscal years. ~~This~~Management ~~guidance~~ is ~~effective~~currently ~~for~~evaluating the ~~Company~~impact ~~beginning on January 1, 2018. The adoption~~ of ~~ASU~~the ~~2016-15~~standard ~~did not have a material impact~~ on ~~its~~the financial statements and ~~disclosures~~related disclosure requirements.

In ~~June~~August ~~2016~~2018, the FASB issued Accounting Standards Update ~~2016~~2018-13, ~~Financial~~Fair ~~Instruments — Credit~~Value ~~Losses~~Measurement (~~Topic 326) (~~“ASU ~~2016~~2018-13”)., ~~The~~which ~~main~~amends ~~objective of this Update is to provide financial statement users with more decision-useful information about~~ the ~~expected~~disclosure ~~credit~~requirements ~~losses~~ on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value ~~through~~measurements ~~net income. The amendments affect loans, debt securities, trade receivables, net investments~~ in ~~leases,~~Topic ~~off-balance-sheet credit exposures~~820, ~~reinsurance~~Fair ~~receivables,~~Value ~~and any other financial assets not excluded from the scope that have the contractual right to receive cash~~Measurement. This ASU ~~2016-13~~modifies isdisclosure ~~effective~~requirements for ~~fiscal~~fair ~~years~~value ~~beginning~~measurements ~~after~~by ~~December 15~~removing, ~~2019,~~modifying ~~including~~or ~~interim~~adding ~~periods~~certain within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

~~effectively~~disclosures. ~~obtains~~The ~~control~~amendments ofin ~~the~~this ~~underlying~~Update ~~assets.~~are ~~ASU~~effective ~~2016-02~~for isall ~~effective~~entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2018~~2019. The amendments on changes in unrealized gains and losses, ~~including~~the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim ~~periods~~or ~~within~~annual ~~those~~period presented in the initial fiscal ~~years~~year of adoption. ~~While~~All ~~early~~other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted, ~~the~~upon ~~Company~~issuance ~~does~~of ~~not~~this ~~expect~~Update. An entity is permitted to ~~elect~~early ~~that~~adopt ~~option.~~any ~~The~~removed ~~Company~~or ~~expects~~modified todisclosures ~~adopt~~upon issuance of this Update and delay adoption of the ~~guidance~~additional indisclosures until their effective date. Management is currently evaluating the ~~first~~impact ~~quarter~~of ~~2019~~this ~~using~~standard on the ~~modified~~financial ~~retrospective~~statements ~~method~~and related disclosure requirements.

~~Management~~In isAugust ~~currently~~2016, ~~evaluating~~ the ~~impact~~FASB issued Accounting Standards Update 2016-15 — Statement of ~~this~~Cash ~~standard~~Flows on(Topic ~~the~~230): ~~financial~~Classification ~~statements~~of ~~and~~Certain ~~its~~Cash ~~operational~~Receipts and ~~related~~Cash ~~disclosure~~Payments ~~requirements,~~(“ASU ~~including~~2016-15”). ~~the~~ASU ~~impact~~2016-15 onaddresses specific cash flow issues with the ~~Company’s~~objective ~~current~~of ~~lease~~reducing ~~portfolio~~the ~~from~~existing adiversity ~~lessor~~in ~~perspective~~practice. ~~Given~~The ~~the~~amendments ~~limited~~in ~~changes~~this toUpdate ~~lessor~~are ~~accounting~~effective for fiscal years beginning after December 15, ~~Management~~2017, ~~does~~and ~~not~~interim ~~expect~~periods ~~material~~within ~~changes~~those tofiscal ~~recognition~~years. orThis ~~measurement,~~guidance ~~but~~is effective for the Company isbeginning ~~early~~on inJanuary ~~the~~1, ~~implementation~~2018. ~~process~~The ~~and~~adoption ~~will~~of ~~continue~~ASU to2016-15 ~~evaluate~~did ~~the~~not have a material impact on its financial statements and disclosures.

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new standard will require lessees to recognize lease assets and lease liabilities arising from operating leases with lease terms greater than 12 months in the statement of financial position. Lessor accounting per ASU 2016-02 is mostly unchanged from the previous lease accounting under GAAP. Certain changes were made to the lessor accounting guidance in order to align the lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. Similar to the previous guidance, lessors will classify leases as operating, direct financing, or sales-type. Lessors in operating leases will continue to recognize the underlying asset and recognize income on a straight-line basis. Lessors determine whether a lease is a sale of the underlying asset based on whether the lessee effectively obtains control of the underlying assets. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. While early adoption is permitted, the Company does not expect to elect that option. The Company expects to adopt the guidance in the first quarter 2019 using the modified retrospective method. Management is currently evaluating the impact of this standard on the financial statements and its operational and related disclosure requirements, including the impact on the Company’s current lease portfolio from a lessor perspective. As part of the adoption of the standard, the Company has selected and is in the process of implementing new lease accounting software. The Company is in the process of identifying and designing appropriate changes to its business processes, systems and controls to support the new standard. Given the limited changes to lessor accounting, management does not expect material changes to recognition or measurement.

In July 2018, the FASB issued Accounting Standards Update 2018-11, Leases (Topic 842) Targeted Improvements (“ASU 2018-11”). The new standard provides a new transition method and practical expedient to simplify the application of the new leasing standard. Under the new transition method, comparative periods presented in the financial statements in the period of adoption will not need to be restated. Instead, a Company would initially apply the new lease requirements at the effective date, and recognize a cumulative-effect adjustment to the opening balance

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

of retained earnings in the period of adoption. The Company would continue to report comparative periods presented in the financial statements in the period of adoption under current GAAP and provide the applicable required disclosures for such periods. The new practical expedient allows lessors to avoid separating lease and associated nonlease components within a contract if certain criteria are met. If elected, lessors will be able to aggregate nonlease components that otherwise would be accounted for under the new revenue standard with the associated lease component if the following conditions are met (1) the timing and pattern of transfer of the nonlease component and the associated lease component are the same and (2) the stand-alone lease component would be classified as an operating lease if accounted for separately. For entities that have not adopted Topic 842 before the issuance of this Update, the effective date and transition requirements for the amendments in this Update related to separating components of a contract are the same as the effective date and transition requirements in Update 2016-02. The practical expedient may be elected either in the first reporting period following the issuance of this Update or at the original effective date of Topic 842 for that entity. The practical expedient may be applied either retrospectively or prospectively. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements. The Company plans to adopt this guidance on January 1, 2019 and will prospectively apply the new lease requirements and recognize a cumulative effect adjustment upon adoption. As part of the adoption, the Company has elected to apply the package of transitional practical expedients under which the Company will not reassess prior conclusions about lease identification, lease classification, and initial direct costs of existing leases as of the date of adoption. Under Topic 842, initial direct costs include only those incremental costs of a lease that would not have been incurred if the lease had not been executed. Therefore, only certain costs that the Company capitalized as initial direct costs under ASC Topic 840: Leases may be expensed as incurred under Topic 842. The Company expects an immaterial cumulative effect adjustment upon adoption. The Company plans to elect the lessor practical expedient to combine the lease and non-lease components. The Company expects that the lease components are the predominant component in the majority of its leasing arrangements and will account for the combined component as an operating lease under Topic 842. The Company currently does not believe the adoption will significantly affect the timing of the recognition of its combined lease and non-lease components.

In December 2018, the FASB issued Accounting Standards Update 2018-20, Narrow-Scope Improvements for Lessors (“ASU 2018-20”). The new standard includes amendments related to sales taxes and other similar taxes collected from lessees, lessor costs paid by a lessee and recognition of variable payments for contracts with lease and non-lease components. The effective date in this Update is the same as that of ASU 2016-02, which is for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects the adoption of ASU 2018-20 will have an immaterial impact on the Company’s financial statements and disclosures.

In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The new standard provides guidance related to accounting for equity investments and financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, and (v) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. This guidance is effective for the Company beginning on January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on its financial statements and disclosures.

InThe ~~May~~Company ~~2014,~~elected ~~the~~to ~~FASB~~record ~~issued~~equity ~~Accounting~~investments ~~Standards~~without ~~Update~~readily ~~2014-09,~~determinable ~~Revenue~~fair ~~from~~values ~~Contracts~~at ~~with Customers (“ASU 2014-09”)~~cost, ~~which~~less amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. On July 9impairment, ~~2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year~~ and inadjusted ~~August 2015, issued Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”). ASU 2015-14 is effective~~ for ~~annual reporting~~changes ~~periods~~in ~~beginning~~observable ~~after December 15, 2017, including interim periods within that reporting period~~prices. ~~Earlier~~Any ~~application~~changes isin permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the ~~cumulative~~basis ~~effect recognized as~~ of ~~the~~these ~~date~~equity ofinvestments ~~adoption.~~are ~~This~~reported ~~guidance~~in iscurrent ~~effective for the Company beginning on January 1, 2018~~earnings. Management’s evaluation of the impact of such adoption on the financial statements of the Fund indicates that such impact is non-material as the new revenue guideline does not affect revenues from leases and loans, which comprise the majority of the Company’s revenues.

3.In ~~Concentration~~May of2014, ~~credit~~the ~~risk~~FASB ~~and~~issued ~~major~~Accounting ~~customers:~~Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on

The Company leases equipment to lessees and provides debt financing to borrowers in diversified industries. Leases and notes receivable are subject to AFS’s credit committee review. The leases and notes receivable provide for the return of the equipment to the Company upon default. 22

AsTABLE ofOF December 31, 2017 and 2016, there were concentrations (greater than or equal to 10% as a percentage of total equipment cost) of equipment leased to lessees and/or financed for borrowers in certain industries as follows: CONTENTS

	2017			2016
Transportation, rail		65	%		65	%
Manufacturing		25	%		25	%

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

32. ConcentrationSummary of creditsignificant riskaccounting and major customerspolicies: - (continued)

~~During~~principles ~~2017~~that ~~and~~govern ~~2016~~the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. On July 9, ~~certain~~2015, ~~lessees~~the FASB approved the deferral of the effective date of ASU 2014-09 by one year and~~/or~~ ~~financial~~in ~~borrowers~~August ~~generated~~2015, ~~significant~~issued ~~portions~~Revenue from Contracts with Customers (~~defined~~Topic 606): Deferral of the Effective Date (“ASU 2015-14”). ASU 2015-14 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as ~~greater~~of ~~than~~annual orreporting ~~equal~~periods beginning after December 31, 2016, including interim reporting periods within that reporting period. The new revenue standard may be applied retrospectively to ~~10%)~~each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. This guidance was effective for the Company beginning on January 1, 2018. The adoption of ASU 2014-09 did not have a material impact on the Company’s ~~total~~financial ~~leasing~~statements and disclosures as revenues, ~~excluding~~calculated ~~gains~~under orthe ~~losses~~new onguidelines ~~disposition~~were ofsubstantially ~~assets,~~the same as ~~follows:~~had previously been determined.

			Percentage of Total Leasing Revenues
Lessee	Type of Equipment		2017			2016
Union Pacific		Transportation, rail		34	%		31	%
Kirby Inland Marine, LP		Marine vessels		19	%		21	%
Aircraft Service International, Inc.		Aviation		18	%		15	%
Tyson Foods, Inc.		Transportation, other		16	%		13	%

3. Concentration of credit risk and major customers:

The Company leases equipment to lessees in diversified industries. Leases and notes receivable are subject to AFS’s credit committee review. The leases and notes receivable provide for the return of the equipment to the Company upon default.

As of December 31, 2018 and 2017, there were concentrations (greater than or equal to 10% as a percentage of total equipment cost) of equipment leased to lessees and/or financed for borrowers in certain industries as follows:


	2018			2017
Transportation, rail		62	%		65	%
Manufacturing		27	%		25	%
Transportation services		11	%		*

Less than 10%

During 2018 and 2017, certain lessees and/or financial borrowers generated significant portions (defined as greater than or equal to 10%) of the Company’s total leasing revenues, excluding gains or losses on disposition of assets, as follows:


Lessee	Type of Equipment		Percentage of Total Leasing Revenues
Lessee	Type of Equipment		2018			2017
Kirby Inland Marine, LP		Marine vessels		32	%		19	%
Union Pacific		Transportation, rail		30	%		34	%
Aircraft Service International, Inc.		Aviation		19	%		18	%
Tyson Foods, Inc.		Transportation, other		16	%		16	%

4. Investments in equipment and leases, net:

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

	Balance December 31, 2016		Reclassifications, Additions/ Dispositions			Depreciation/ Amortization Expense or Amortization of Leases			Balance December 31, 2017
	BalanceDecember 31,2017		Reclassifications,Additions/Dispositions			Depreciation/AmortizationExpense orAmortizationof Leases			BalanceDecember 31,2018
Net investment in operating leases	$	1,~~996~~632	$	(5881	)	$	(~~306~~249	)	$	1,~~632~~302
Assets held for sale or lease, net		1—		(1	)		—(1	)		—
Initial direct costs, net of accumulated amortization of $2 at December 31, 2017 and $36 at December 31, 2016		7		—			(6	)		1
Initial direct costs, net of accumulated amortization of $0 at December 31, 2018 and $2 at December 31, 2017		1		—			(1	)		—
Total	$	21,~~004~~633	$	(5980	)	$	(~~312~~251	)	$	1,~~633~~302

~~Impairment of investments in leases and assets held for sale or lease:~~23

~~Management~~TABLE ~~determined~~OF ~~that no impairment losses existed during the years ended December 31, 2017 and 2016.~~ CONTENTS

The Company utilizes a straight line depreciation method for equipment in all of the categories currently in its portfolio of operating lease transactions. Depreciation expense on the Company’s equipment was approximately $306 thousand and $390 thousand for the respective years ended December 31, 2017 and 2016. IDC amortization expense related to the Company’s operating and direct financing leases totaled $6 thousand and $8 thousand for the respective years ended December 31, 2017 and 2016.

All of the leased property was acquired during the years 2005 through 2011.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

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

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

Management determined that no impairment losses existed during the years ended December 31, 2018 and 2017.

The Company utilizes a straight line depreciation method for equipment in all of the categories currently in its portfolio of operating lease transactions. Depreciation expense on the Company’s equipment was approximately $250 thousand and $306 thousand for the respective years ended December 31, 2018 and 2017. IDC amortization expense related to the Company’s operating leases totaled $1 thousand and $6 thousand for the respective years ended December 31, 2018 and 2017.

All of the leased property was acquired during the years 2005 through 2011.

Operating leases:

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

	Balance December 31, 2016			Additions			Reclassifications or Dispositions			Balance December 31, 2017
	BalanceDecember 31,2017			Additions			Reclassifications or Dispositions			BalanceDecember 31,2018
Transportation, rail	$	8,~~499~~015		$	—		$	(~~484~~1,046	)	$	86,~~015~~969
Aviation		1,658			—			—			1,658
Marine vessels		1,415			—			—			1,415
Transportation, other		1,~~349~~223			—			~~(126~~—	)		1,223
Materials handling		~~156~~27			—			~~(129~~—	)		27
Manufacturing		10			—			—(10	)		10—
		13,087			—			(739	)		12,348
		12,348			—			(1,056	)		11,292
Less accumulated depreciation		(1110,~~091~~716	)		(~~306~~249	)		~~681~~975			(109,~~716~~990	)
Total	$	1,~~996~~632		$	(~~306~~249	)	$	(5881	)	$	1,~~632~~302

The average estimated residual value for assets on operating leases was 8.0% ~~and 7.7%~~ of the assets’ original cost at both December 31, ~~2017~~2018 and ~~2016, respectively~~2017. There were no operating lease contracts placed in non-accrual status at December 31, ~~2017~~2018 and ~~2016~~2017.

At December 31, ~~2017~~2018, the aggregate amounts of future minimum operating lease payments receivable are as follows (in thousands):

	Operating Leases
	OperatingLeases
Year ending December 31, 2018	$	675
Year ending December 31, 2019	$	551
2019		310
2020		245
2020		256
2021		72
2021		76
	$	868
	$	1,317

The useful lives for each category of leases is reviewed at a minimum of once per quarter. At both December 31, ~~2017~~2018 and ~~2016~~2017, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):

Equipment category	Useful Life
Transportation, rail		35 – 4050
Marine vessels		20 – 30
Aviation		15 – 20
Manufacturing		10 – 15
Materials handling		7 – 10
Transportation, other		7 – 10

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

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

The Operating Agreement allows for the reimbursement of costs incurred by AFS in providing administrative services to the Company. Administrative services provided include Company accounting, finance/treasury, investor relations, legal counsel, and lease and equipment documentation. AFS is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of equipment.

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; and investor relations, communications services and general administrative services are performed by AFS.

The Fund’s Operating Agreement places an annual ~~limit~~ and a cumulative limit for cost reimbursements to AFS and/or its affiliates. Any reimbursable costs incurred by AFS and/or affiliates during the year exceeding the annual and/or cumulative limits cannot be reimbursed in the current year, though such costs may be reimbursable in future years to the extent such amounts may be payable if within the annual and cumulative limits in such future years. The Fund is a finite life and self-liquidating entity, and AFS and its affiliates have no recourse against the Fund for the amount of any unpaid excess reimbursable administrative expenses. The Fund will continue to require administrative services from AFS and its affiliates through the end of its term, and will therefore continue to incur reimbursable administrative expenses in each year. The Fund has determined that payment of any amounts in excess of the annual and cumulative ~~limit~~limits is not probable, and the date any portion of such amount may be paid, if ever, is uncertain. When the Fund completes its liquidation stage and terminates, any unpaid amount will expire unpaid, with no claim by AFS or its affiliates against any liquidation proceeds or any party for the unpaid balance. As of December 31, 2018 and 2017, the Company has not exceeded the annual and/or cumulative limitations discussed above.

AFS and/or affiliates earned fees and billed for reimbursements pursuant to the Operating Agreement as follows during each of the years ended December 31, ~~2017~~2018 and ~~2016~~2017 (in thousands):

	2017		2016
	2018		2017
Costs reimbursed to Managing Member and/or affiliates	$	~~183~~129	$	~~140~~183
Asset management fees to Managing Member		4926		8849
	$	~~232~~155	$	~~228~~232

6. Commitments:

At December 31, ~~2017~~2018, the Company had no commitments to either purchase lease assets or to fund loans.

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.

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.

~~8. Members’ capital:~~25

~~Units~~TABLE ~~issued~~OF and outstanding were 5,209,307 at both December 31, 2017 and 2016. The Company was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial members (50 Units). The Company terminated sales of Units effective April 30, 2006. CONTENTS

The Company has the right, exercisable in the Manager’s discretion, but not the obligation, to repurchase Units of a Unitholder who ceases to be a U.S. Citizen, for a price equal to 100% of the holder’s capital account. The Company is

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

8. Members’ capital: - (continued)

~~otherwise permitted, but not required, to repurchase~~ Units ~~upon~~issued aand ~~holder’s~~outstanding ~~request.~~were ~~The~~5,194,307 ~~repurchase~~and of5,209,307 ~~Fund~~at ~~Units~~December is31, ~~made~~2018 ~~in accordance with Section 13 of the Amended~~ and ~~Restated~~2017, ~~Limited Liability Company Operating Agreement~~respectively. The ~~repurchase~~Company ~~would~~was beauthorized ~~at the discretion of the Manager on terms it determines~~ to beissue ~~appropriate~~up ~~under given circumstances, in the event that the Manager deems such repurchase~~ to ~~be in the best interest of the Company; provided~~15, ~~the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund~~000,000 ~~the tendered~~ Units ~~are cancelled. Units repurchased~~ in ~~prior~~addition ~~periods~~to ~~were repurchased at amounts representing~~ the ~~original~~Units ~~investment~~issued ~~less cumulative distributions made~~ to the ~~Unitholder~~initial ~~with~~members ~~respect~~(50 ~~to the~~ Units). ~~All~~The ~~Units~~Company ~~repurchased~~terminated ~~during~~sales aof ~~quarter~~Units ~~are deemed to be repurchased~~ effective ~~the~~April ~~last day of the preceding quarter~~30, ~~and are not deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs~~2006. ~~There were no Units repurchased during 2017 and 2016.~~

~~During~~The Company has the ~~years~~right, ~~ended~~exercisable ~~December~~in 31the Manager’s discretion, ~~2017~~but ~~and~~not ~~2016~~the obligation, ~~distributions~~to repurchase Units of a Unitholder who ceases to be a U.S. Citizen, for a price equal to 100% of the ~~Other~~holder’s ~~Members~~capital ~~were~~account. asThe ~~follows~~Company (is otherwise permitted, but not required, to repurchase Units upon a holder’s request. The repurchase of Fund Units is made in ~~thousands~~accordance with Section 13 of the Amended and Restated Limited Liability Company Operating Agreement. The repurchase would be at the discretion of the Manager on terms it determines to be appropriate under given circumstances, ~~except~~in asthe event that the Manager deems such repurchase to be in the best interest of the Company; provided, the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units are cancelled. Units repurchased in prior periods were repurchased at amounts representing the original investment less cumulative distributions made to the Unitholder with respect to the Units. All Units repurchased during a quarter are deemed to be repurchased effective the last day of the preceding quarter, and ~~per~~are ~~Unit~~not ~~data):~~deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs.

	2017		2016
Distributions	$	1,828	$	1,303
Weighted average number of Units outstanding		5,209,307		5,209,307
Weighted average distributions per Unit	$	0.35	$	0.25

During the years ended December 31, 2018 and 2017, distributions to the Other Members were as follows (in thousands, except as to Units and per Unit data):

The rates and frequency of periodic distributions paid by the Fund during its liquidation phase are solely at the discretion of the Manager.


	2018		2017
Distributions	$	—	$	1,828
Weighted average number of Units outstanding		5,198,992		5,209,307
Weighted average distributions per Unit	$	—	$	0.35

The rates and frequency of periodic distributions paid by the Fund during its liquidation phase are solely at the discretion of the Manager.

9. Fair value measurements:

Under applicable accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

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

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

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

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

At December 31, 2017 ~~and 2016~~, only the Company’s warrants were measured on a recurring basis. ~~During the same comparative years, the Company recorded non-recurring adjustments to reduce the cost basis of certain impaired investment securities.~~

The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

9. Fair value measurements: - (continued)

the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources.

Such fair value adjustments utilized the following methodology:

Warrants (recurring)

Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried on the balance sheet at an estimated fair value at the end of the period. The valuation of the warrants was determined using a Black-Scholes formulation of value based upon the stock price(s), the exercise price(s), the volatility of comparable venture companies, time to maturity, and a risk free interest rate for the term(s) of the warrant exercise(s). As of December 31, ~~2017~~2018, ~~and~~the ~~2016~~Company held no warrants. As of December 31, 2017, the calculated fair value of the Fund’s warrant portfolio was $0. ~~Such valuations are classified within Level 3 of the valuation hierarchy.~~

The following table reconciles the beginning and ending balances of the Company’s Level 3 recurring assets (in thousands):

	Level 3 Assets
	2016
Fair value of warrants at beginning of year	$	27
Unrealized loss on fair value adjustment for warrants		(27	)
Fair value of warrants at end of year	$	—

Impaired investment securities (non-recurring)

The Company’s investment securities are not registered for public sale and are carried at cost. The investment securities are adjusted for impairment, if any, based upon factors which include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital.

During 2017 and 2016, the Company recorded fair value adjustments of $11 thousand and $16 thousand, respectively, to reduce the cost basis of an impaired investment security to zero. The reduction in value was based on a market approach technique and uses inputs that reflect qualitative and quantitative information provided by the management of the investee, which indicated reduced growth opportunity and eventual reduction in cash flows and revenues.

Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the aforementioned impaired investment securities were classified within Level 3 of the valuation hierarchy.

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

The Company has determined the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash and cash equivalents

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

Investment in securities

The Company’s investment securities are not registered for public sale and are carried at cost which management believes approximates fair value, as appropriately adjusted for impairment.

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ATEL CAPITAL EQUIPMENT FUND XI, LLC NOTES TO FINANCIAL STATEMENTS

9. Fair value measurements: - (continued)

Commitments and Contingencies

Management has determined that no recognition for the fair value of the Company’s loan commitments is necessary because their terms are made on a market rate basis and require borrowers to be in compliance with the Company’s credit requirements at the time of funding.

The fair value of contingent liabilities (or guarantees) is not considered material because management believes there has been no event that has occurred wherein a guarantee liability has been incurred or will likely be incurred.

The following table presents estimated fair values of the Company’s financial instruments at December 31, ~~2017~~2018 and ~~2016~~2017 (in thousands):

	Fair Value Measurements at December 31, 2017
	Fair Value Measurements at December 31, 2018
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	~~586~~1,494	$	~~586~~1,494	$	—	$	—	$	~~586~~1,494
Investment in securities		11		—		—		11		11

	Fair Value Measurements at December 31, 2016
	Fair Value Measurements at December 31, 2017
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	~~1,932~~586	$	~~1,932~~586	$	—	$	—	$	~~1,932~~586
Investment in securities		22		—		—		22		22

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Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

None.

Item 9A.

CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

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

The Company does not control the financial reporting process, and is solely dependent on the Management of the Managing Member, 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 they are applicable to the Company, means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

The Management of the Managing Member is responsible for establishing and maintaining adequate internal control over financial reporting as that term is defined in Exchange Act Rule 13a-15(f) for the Company, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, ~~2017~~2018. The internal control process of the Managing Member, as it is applicable to the Company, was designed to provide reasonable assurance to Management regarding the preparation and fair presentation of published financial statements, and includes those policies and procedures that:

(1)

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States, and that the Company’s receipts and expenditures are being made only in accordance with authorization of the Management of the Managing Member; and

(2)

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

All internal control processes, no matter how well designed, have inherent limitations. Therefore, even those processes determined to be effective can provide only reasonable assurance with respect to the reliability of financial statement preparation and presentation. Further, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management of the Managing Member assessed the effectiveness of its internal control over financial reporting, as it is applicable to the Company, as of December 31, ~~2017~~2018. In making this assessment, it used the criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, Management of the Managing Member concluded that the Managing Member’s internal control over financial reporting, as it is applicable to the Company, was effective as of December 31, ~~2017~~2018.

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This annual report does not include an audit report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s internal control over financial reporting was not subject to audit by the Company’s independent registered public accounting firm pursuant to Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which exempts non-accelerated filers from Section 404(b) of the Sarbanes-Oxley Act of 2002.

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 year ended December 31, ~~2017~~2018 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 III

Item 10.

DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The registrant is a Limited Liability Company and has no officers or directors.

ATEL Financial Services, LLC (“AFS”) is the Company’s Managing Member or Manager. AFS is controlled by ATEL Capital Group (“ACG” or “ATEL”), a holding company formed to control AFS and affiliated companies. The outstanding voting capital stock of ACG is owned 100% by Dean L. Cash.

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

The officers and directors of ATEL and its affiliates are as follows:


Dean L. Cash		President and Chief Executive Officer of ATEL Financial Services, LLC (Managing Member)
Paritosh K. Choksi		Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Financial Services, LLC (Managing Member)
Vasco H. Morais		Executive Vice President, Secretary and General Counsel of ATEL Financial Services, LLC (Managing Member)

Dean L. Cash, age 6768, joined ATEL as director of marketing in 1980 and has been a vice president since 1981, executive vice president since 1983 and a director since 1984. He has been President and CEO since April 2001. Prior to joining ATEL, Mr. Cash was a senior marketing representative for Martin Marietta Corporation, data systems division, from 1979 to 1980. From 1977 to 1979, he was employed by General Electric Corporation, where he was an applications specialist in the medical systems division and a marketing representative in the information services division. Mr. Cash was a systems engineer with Electronic Data Systems from 1975 to 1977, and was involved in maintaining and developing software for commercial applications. Mr. Cash received a B.S. degree in psychology and mathematics in 1972 and an M.B.A. degree with a concentration in finance in 1975 from Florida State University. Mr. Cash is an arbitrator with the American Arbitration Association.

Paritosh K. Choksi, age 6465, joined ATEL in 1999 as a director, senior vice president and its chief financial officer. He became its executive vice president and CFO/COO in April 2001. Prior to joining ATEL, Mr. Choksi was chief financial officer at Wink Communications, Inc. from 1997 to 1999. From 1977 to 1997, Mr. Choksi was with Phoenix American Incorporated, a financial services and management company, where he held various positions during his tenure, and was senior vice president, chief financial officer and director when he left the company. Mr. Choksi was involved in all corporate matters at Phoenix and was responsible for Phoenix’s capital market needs. He also served on the credit committee overseeing all corporate investments, including its venture lease portfolio. Mr. Choksi was a part of the executive management team which caused Phoenix’s portfolio to increase from $50 million in assets to over $2 billion. Mr. Choksi is a member of the board of directors of Syntel, Inc. Mr. Choksi received a bachelor of technology degree in mechanical engineering from the Indian Institute of Technology, Bombay; and an M.B.A. degree from the University of California, Berkeley.

Vasco H. Morais, age 5960, joined ATEL in 1989 as general counsel to provide legal support in the drafting and reviewing of lease documentation, advising on general corporate law matters, and assisting on securities law issues. From 1986 to 1989, Mr. Morais was employed by the BankAmeriLease Companies, Bank of America’s equipment leasing subsidiaries, providing in-house legal support on the documentation of tax-oriented and non-tax oriented direct and leveraged lease transactions, vendor leasing programs and general corporate matters. Prior to the BankAmeriLease Companies, Mr. Morais was with the Consolidated Capital Companies in the corporate and securities legal department involved in drafting and reviewing contracts, advising on corporate law matters and securities law issues. Mr. Morais received a B.A. degree in 1982 from the University of California in Berkeley, a J.D. degree in 1986 from Golden Gate University Law School and an M.B.A. (Finance) in 1997 from Golden Gate University. Mr. Morais has been an active member of the State Bar of California since 1986.

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Audit Committee

The board of directors of the Managing Member acts as the audit committee of the Company. Dean L. Cash and Paritosh K. Choksi are members of the board of directors of the Managing Member and are deemed to be financial experts. They are not independent of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely on a review of Forms 3, 4, and 5, the Company is not aware of any failures to file reports of beneficial ownership required to be filed during or for the year ended December 31, ~~2017~~2018.

Code of Ethics

A Code of Ethics that is applicable to the Company, including the Chief Executive Officer and Chief Financial Officer and Chief Operating Officer of its Managing Member, AFS, or persons acting in such capacity on behalf of the Company, is included as Exhibit 14.1 to this report.

Item 11. EXECUTIVE COMPENSATION

The registrant has no officers or directors.

Set forth hereinafter is a description of the nature of remuneration paid and to be paid to ATEL and its Affiliates. The amount of such remuneration paid for the years ended December 31, ~~2017~~2018 and ~~2016~~2017 is set forth in Item 8 of this report under the caption “Financial Statements and Supplementary Data — Notes to Financial Statements — Related party transactions,” at Note 5 thereof, which information is hereby incorporated by reference.

Selling Commissions

The Company paid selling commissions in the amount of 9% of Gross Proceeds, as defined, to ASC, an affiliate of AFS.

Through December 31, 2017, $4.7 million of such commissions had been paid to AFS or its affiliate. Of that amount, $3.9 million has been re-allowed to other broker/dealers.

Asset Management Fee and Carried Interest

The Company pays AFS an Asset Management Fee in an amount equal to 4% of Operating Revenues, which includes Gross Lease Revenues and Cash from Sales or Refinancing. The Asset Management Fee is paid on a monthly basis. The amount of the Asset Management Fee payable in any year is reduced for that year to the extent it would otherwise exceed the Asset Management Fee Limit, as described below. The Asset Management Fee is paid for services rendered by AFS and its affiliates in determining portfolio and investment strategies (i.e., establishing and maintaining the composition of the Equipment portfolio as a whole and the Company’s overall debt structure) and generally managing or supervising the management of the Equipment.

AFS also receives, as its Carried Interest, an amount equal to 7.5% of all Company Distributions.

AFS supervises performance of all management activities, including, among other activities: the acquisition and financing of the equipment portfolio, collection of lease revenues, monitoring compliance by lessees with the lease terms, assuring that Equipment is being used in accordance with all operative contractual arrangements, paying operating expenses and arranging for necessary maintenance and repair of equipment in the event a lessee fails to do so, monitoring property, sales and use tax compliance and preparation of operating financial data. AFS intends to delegate all or a portion of its duties and the Asset Management Fee to one or more of its affiliates who are in the business of providing such services.

Limitations on Fees

The Fund has adopted a single Asset Management Fee plus the Carried Interest as a means of compensating the Manager for sponsoring the Fund and managing its operations. While this compensation structure is intended to simplify management compensation for purposes of investor’s understanding, state securities administrators use a more complicated compensation structure in their review of equipment program offerings in order to assure that those offerings are fair under the states’ merit review guidelines. The total of all Front End Fees, the Carried Interest and the Asset Management Fee will be subject to the Asset Management Fee Limit in order to assure these state administrators that the Fund will not bear greater fees than permitted under the state merit review guidelines. The North American Securities Administrators Association, Inc. (“NASAA”) is an organization of state securities administrators, those state government agencies responsible for qualifying securities offerings in their respective states. NASAA has established standards for the qualification of a number of different types of securities offerings and investment products, including its Statement of Policy on Equipment Programs (the “NASAA Equipment Leasing Guidelines”). Article IV, Sections C through G of the NASAA Equipment Leasing Guidelines establish the standards for payment of reasonable carried interests, promotional interests and fees for equipment acquisition, management, resale and releasing services to equipment leasing program sponsors. Article IV, Sections C through G of the NASAA Equipment Leasing Guidelines

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Asset Management Fee will be subject to the Asset Management Fee Limit in order to assure these state administrators that the Fund will not bear greater fees than permitted under the state merit review guidelines. The North American Securities Administrators Association, Inc. (“NASAA”) is an organization of state securities administrators, those state government agencies responsible for qualifying securities offerings in their respective states. NASAA has established standards for the qualification of a number of different types of securities offerings and investment products, including its Statement of Policy on Equipment Programs (the “NASAA Equipment Leasing Guidelines”). Article IV, Sections C through G of the NASAA Equipment Leasing Guidelines establish the standards for payment of reasonable carried interests, promotional interests and fees for equipment acquisition, management, resale and releasing services to equipment leasing program sponsors. Article IV, Sections C through G of the NASAA Equipment Leasing Guidelines set the maximum compensation payable to the sponsor and its affiliates from an equipment leasing program such as the Fund. The Asset Management Fee Limit will equal the maximum compensation payable under Article IV, Sections C through G of the NASAA Equipment Leasing Guidelines as in effect on the date of the Fund’s prospectus (the “NASAA Fee Limitation”). Under the Asset Management Fee Limit, the Fund will calculate the maximum fees payable under the NASAA Fee Limitation and guarantee that the Asset Management Fee it will pay the Manager and its Affiliates, when added to its Carried Interest, will never exceed the fees and interests payable to a sponsor and its affiliates under the NASAA Fee Limitation.

Asset Management Fee Limit. The Asset Management Fee Limit will be calculated each year during the Fund’s term by calculating the total fees that would be paid to the Manager if the Manager were to be compensated on the basis of the maximum compensation payable under the NASAA Fee Limitation, including the Manager’s Carried Interest, as described below. To the extent that the amount paid as Front End Fees, the Asset Management Fee, and the Carried Interest for any year would cause the total fees to exceed the aggregate amount of fees calculated under the NASAA Fee Limitation for the year, the Asset Management Fee and/or Carried Interest for that year will be reduced to equal the maximum aggregate fees under the NASAA Fee Limitation. To the extent any such fees are reduced, the amount of such reduction will be accrued and deferred, and such accrued and deferred compensation would be paid to the Manager in a subsequent period, but only to the extent that the deferred compensation would be within the Asset Management Fee Limit for that later period. Any deferred fees that cannot be paid under the applicable limitations through the date of liquidation would be forfeited by the Manager at liquidation.

Under the NASAA Equipment Leasing Guidelines, the Fund is required to commit a minimum percentage of the Gross Proceeds to Investment in Equipment, calculated as the greater of: (i) 80% of the Gross Proceeds reduced by 0.0625% for each 1% of indebtedness encumbering the Fund’s equipment; or (ii) 75% of such Gross Proceeds. The Fund intends to incur total indebtedness equal to 50% of the aggregate cost of its equipment. The Operating Agreement requires the Fund to commit at least 85.875% of the Gross Proceeds to Investment in Equipment. Based on the formula in the NASAA Guidelines, the Fund’s minimum Investment in Equipment would equal 76.875% of Gross Proceeds (80% - [50% × .0625%] = 76.875%), and the Fund’s minimum Investment in Equipment would therefore exceed the NASAA Fee Limitation minimum by 9%.

The amount of the Carried Interest permitted the Manager under the NASAA Fee Limitation will be dependent on the amount by which the percentage of Gross Proceeds the Fund ultimately commits to Investment in Equipment exceeds the minimum Investment in Equipment under the NASAA Fee Limitation. The NASAA Fee Limitation permits the Manager and its Affiliates to receive compensation in the form of a carried interest in Fund Net Income, Net Loss and Distributions equal to 1% for the first 2.5% of excess Investment in Equipment over the NASAA Guidelines minimum, 1% for the next 2% of such excess, and 1% for each additional 1% of excess Investment in Equipment. With a minimum Investment in Equipment of 85.875%, the Manager and its Affiliates may receive an additional carried interest equal to 6.5% of Net Profit, Net Loss and Distributions under the foregoing formula (2.5% + 2% + 4.5% = 9%; 1% + 1% + 4.5% = 6.5%). At the lowest permitted level of Investment in Equipment, the NASAA Guidelines would permit the Manager and its Affiliates to receive a promotional interest equal to 5% of Distributions of Cash from Operations and 1% of Distributions of Sale or Refinancing Proceeds until Members have received total Distributions equal to their Original Invested Capital plus an 8% per annum cumulative return on their Adjusted Invested Capital, and, thereafter, the promotional interest may increase to 15% of all Distributions.

With the additional carried interest calculated as described above, the maximum aggregate fees payable to the Manager and Affiliates under the NASAA Guidelines as carried interest and promotional interest would equal 11.5% of Distributions of Cash from Operations (6.5% + 5% = 11.5%), and 7.5% of Distributions of Sale or Refinancing Proceeds (6.5% + 1% = 7.5%), before the subordination level was reached, and 21.5% of all Distributions thereafter. The maximum amounts to be paid under the terms of the Operating Agreement are subject to the application of the Asset Management Fee Limit provided in Section 8.3 of the Agreement, which limits the annual amount payable to the Manager and its Affiliates as the Asset Management Fee and the Carried Interest to an aggregate not to exceed the total amount of fees that would be payable to the Manager and its Affiliates under the NASAA Fee Limitation.

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Upon completion of the offering of Units, final commitment of offering proceeds to acquisition of equipment and establishment of final levels of permanent portfolio debt, the Manager will calculate the maximum carried interest and promotional interest payable to the Manager and its Affiliates under the NASAA Fee Limitation and compare such total permitted fees to the total of the Asset Management Fee and Manager’s Carried Interest. If and to the extent that the Asset Management Fee and Manager’s Carried Interest would exceed the fees calculated under the NASAA Fee Limitation, the fees payable to the Manager and its Affiliates will be reduced by an amount sufficient to cause the total of such compensation to comply with the NASAA Fee Limitation. The adjusted Asset Management Fee Limit will then be applied to the Asset Management Fee and Carried Interest as described above. A comparison of the Front End Fees actually paid by the Fund and the NASAA Fee Limitation maximums will be repeated, and any required adjustments will be made, at least annually thereafter.

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See Note 5 to the financial statements as set forth in Part II, Item 8, Financial Statements and Supplementary Data, for amounts paid.

Managing Member’s Interest in Operating Proceeds

AFS receives an allocation of all 7.5% of all Company net income, net loss and investment tax credits corresponding to its Carried Interest in Distributions and the remaining 92.5% is allocated among the Members. See financial statements as set forth in Part II, Item 8, Financial Statements and Supplementary Data, of this report for amounts allocated to AFS in ~~2017~~2018 and ~~2016~~2017.

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners

At December 31, ~~2017~~2018, no investor is known to hold beneficially more than 5% of the issued and outstanding Units.

Security Ownership of Management

The parent of AFS is the beneficial owner of Limited Liability Company Units as follows:


(1) Title of Class	(2) Name and Address of Beneficial Owner	(3) Amount and Nature of Beneficial Ownership	(4) Percent of Class
Limited Liability Company Units	ATEL Capital Group The Transamerica Pyramid 600 Montgomery Street, 9th Floor San Francisco, CA 94111	Initial Limited Liability Company Units 50 Units ($500)	0.0010%

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Changes in Control

The Members have the right, by vote of the Members owning more than 50% of the outstanding Limited Liability Company Units, to remove the Managing Member.

AFS may at any time call a meeting of the Members or a vote of the Members without a meeting, on matters on which they are entitled to vote, and shall call such meeting or for vote without a meeting following receipt of a written request therefore of Members holding 10% or more of the total outstanding Limited Liability Company Units.

The responses to Item 1 of this report under the caption “Equipment Leasing Activities,” Item 8 of this report under the caption “Financial Statements and Supplementary Data — Notes to Financial Statements — Related party transactions” at Note 5 thereof, and Item 11 of this report under the caption “Executive Compensation,” are hereby incorporated by reference.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

During the years ended December 31, ~~2017~~2018 and ~~2016~~2017, the Company incurred audit fees with its principal auditors totaling $9754 thousand and $7997 thousand, respectively.

Audit fees consist of the aggregate fees and expenses billed in connection with the audit of the Company’s annual financial statements and the review of the financial statements included in the Company’s quarterly reports on Form 10-Q.

The board of directors of the Managing Member acts as the audit committee of the registrant. Engagements for audit services, audit related services and tax services are approved in advance by the Chief Financial Officer of the Managing Member acting on behalf of the board of directors of the Managing Member in its role as the audit committee of the Company.

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PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

Financial Statements and Schedules

Financial Statements

Included in Part II of this report:
Report of Independent Registered Public Accounting Firm			11
Balance Sheets at December 31, 2017 and 2016			12
Balance Sheets at December 31, 2018 and 2017			12
Statements of Income for the years ended December 31, 2017 and 2016			13
Statements of Income for the years ended December 31, 2018 and 2017			13
Statements of Changes in Members’ Capital for the years ended December 31, 2017 and 2016			14
Statements of Changes in Members’ Capital for the years ended December 31, 2018 and 2017			14
Statements of Cash Flows for the years ended December 31, 2017 and 2016			15
Statements of Cash Flows for the years ended December 31, 2018 and 2017			15
Notes to Financial Statements			16

Financial Statement Schedules

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

(b)

Exhibits

(3) and (4) Amended and Restated Limited Liability Company Operating Agreement, included as exhibit B to the Prospectus effective April 11, 2005 as filed on May 05, 2005 (File Number 333-120276) is hereby incorporated herein by reference.

(14.1)		Code of Ethics
(31.1)		Certification of Dean L. Cash pursuant to Rules 13a-14(a)/15d-14(a)
(31.2)		Certification of Paritosh K. Choksi pursuant to Rules 13a-14(a)/15d-14(a)
(32.1)		Certification of Dean L. Cash pursuant to 18 U.S.C. section 1350
(32.2)		Certification of Paritosh K. Choksi pursuant to 18 U.S.C. section 1350
(101.INS)		XBRL Instance Document
(101.SCH)		XBRL Taxonomy Extension Schema Document
(101.CAL)		XBRL Taxonomy Extension Calculation Linkbase Document
(101.DEF)		XBRL Taxonomy Extension Definition Linkbase Document
(101.LAB)		XBRL Taxonomy Extension Label Linkbase Document
(101.PRE)		XBRL Taxonomy Extension Presentation Linkbase Document
(101.DEF)		XBRL Taxonomy Extension Definition Linkbase Document

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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: March 2615, ~~2018~~2019

ATEL Capital Equipment Fund XI, LLC
(Registrant)

By:

ATEL Financial Services, LLC
Managing Member of Registrant

By:

/s/ Dean L. Cash

Dean L. Cash,
President and Chief Executive Officer of
ATEL Financial Services, LLC (Managing Member)

By:

/s/ Paritosh K. Choksi

Paritosh K. Choksi,
Executive Vice President and Chief Financial Officer and
Chief Operating Officer of ATEL Financial Services, LLC
(Managing Member)

By:

/s/ Samuel Schussler

Samuel Schussler,
Senior Vice President and Chief Accounting Officer of ATEL Financial Services, LLC (Managing Member)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the persons in the capacities and on the dates indicated.

SIGNATURE	CAPACITIES	DATE
/s/ Dean L. CashDean L. Cash	President and Chief Executive Officer of ATEL Financial Services, LLC (Managing Member)	March 2615, ~~2018~~2019
/s/ Paritosh K. ChoksiParitosh K. Choksi	Executive Vice President and Chief Financial Officer and Chief Operating Officer of ATEL Financial Services, LLC (Managing Member)	March 2615, ~~2018~~2019
/s/ Samuel SchusslerSamuel Schussler	Senior Vice President and Chief Accounting Officer of ATEL Financial Services, LLC (Managing Member)	March 2615, ~~2018~~2019

No proxy materials have been or will be sent to security holders. An annual report will be furnished to security holders subsequent to the filing of this report on Form 10-K, and copies thereof will be furnished supplementally to the Commission when forwarded to the security holders.

3735

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

Form 10-K

Commission File number 000-51858

ATEL Capital Equipment Fund XI, LLC

The Transamerica Pyramid, 600 Montgomery Street, 9th Floor, San Francisco, California 94111

DOCUMENTS INCORPORATED BY REFERENCE

PART I

Item 1. BUSINESS

General Development of Business

Narrative Description of Business

Equipment Leasing Activities

Notes Receivable Activities

Item 2. PROPERTIES

Item 3. LEGAL PROCEEDINGS

Item 4. MINE SAFETY DISCLOSURES

PART II

Market Information

Holders

Fund Valuation

Background to Fund Valuation

Methodologies

Net Investment Methodology

Appraised Value Methodology

Unit Valuation

Disclosure

Specifics Underlying Valuation Methodology: Notes and Explanation of Valuation Components and Calculation

ATEL CAPITAL EQUIPMENT FUND XI, LLC Unit Valuation

Disclaimer

Distributions

Item 6. SELECTED FINANCIAL DATA

Overview

Results of Operations

The Company had net income of $178 thousand and $794 thousand for the years ended December 31, 2017 and 2016, respectively. The net results for 2017 reflects a decrease in total revenues and an increase in total operating expenses when compared to prior year. Revenues

TABLE2018 OFversus CONTENTS2017

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

Off-Balance Sheet Transactions

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Basis for Opinion

ATEL CAPITAL EQUIPMENT FUND XI, LLC BALANCE SHEETS

ATEL CAPITAL EQUIPMENT FUND XI, LLC STATEMENTS OF INCOME

ATEL CAPITAL EQUIPMENT FUND XI, LLC STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

ATEL CAPITAL EQUIPMENT FUND XI, LLC STATEMENTS OF CASH FLOWS

ATEL CAPITAL EQUIPMENT FUND XI, LLC NOTES TO FINANCIAL STATEMENTS

1. Organization and Limited Liability Company matters:

2. Summary of significant accounting policies:

Basis of presentation:

ATEL CAPITAL EQUIPMENT FUND XI, LLC NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

Cash and cash equivalents:

Use of estimates:

Accounts receivable:

Credit risk:

Equipment on operating leases and related revenue recognition:

ATEL CAPITAL EQUIPMENT FUND XI, LLC NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

Direct financing leases and related revenue recognition:

Initial direct costs:

Acquisition expense:

Asset valuation:

ATEL CAPITAL EQUIPMENT FUND XI, LLC NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

Segment reporting:

Investment in securities:

19Purchased securities:

2. Summary of significant accounting policiesWarrants: - (continued)

Warrants

Foreign currency transactions:

Unearned operating lease income:

Income taxes:

ATEL CAPITAL EQUIPMENT FUND XI, LLC NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

Other income (loss), net:

Per unit data:

Recent accounting pronouncements:

ATEL CAPITAL EQUIPMENT FUND XI, LLC NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

ATEL CAPITAL EQUIPMENT FUND XI, LLC NOTES TO FINANCIAL STATEMENTS

2. Summary of significant accounting policies: - (continued)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ATEL CAPITAL EQUIPMENT FUND XI, LLC

BALANCE SHEETS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

STATEMENTS OF INCOME

ATEL CAPITAL EQUIPMENT FUND XI, LLC

STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL

ATEL CAPITAL EQUIPMENT FUND XI, LLC

STATEMENTS OF CASH FLOWS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

ATEL CAPITAL EQUIPMENT FUND XI, LLC

NOTES TO FINANCIAL STATEMENTS

Filing Compare · ATEL Capital Equipment Fund XI, LLC