SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1995
/ / 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: 0-15765
Fidelity Leasing Income Fund III, L.P.
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 51-0292194
_______________________________________________________________________________
(State of organization) (I.R.S. Employer Identification No.)
250 King of Prussia Road, Radnor, PA 19087
_______________________________________________________________________________
(Address of principal executive offices) (Zip code)
(610) 964-7102
_______________________________________________________________________________
(Registrant's telephone number, including area code)
Indicate by 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 regis-
trant was required to file such reports), and (2) has been subject to such fil-
ing requirements for the past 90 days.
Yes __X__ No _____
Page 1 of 10
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND III, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
March 31, December 31,
1995 1994
_____________ ____________
Cash and cash equivalents $ 838,844 $ 771,837
Accounts receivable 286,113 168,167
Interest receivable 1,103 2,388
Due from related parties 16,985 32,941
Equipment under operating leases
(net of accumulated depreciation
of $8,552,169 and $11,077,285,
respectively) 1,001,609 1,495,382
Equipment held for sale or lease 49,440 146,510
__________ __________
Total assets $2,194,094 $2,617,225
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 111,587 $ 114,603
Accounts payable and
accrued expenses 47,362 57,988
__________ __________
Total liabilities 158,949 172,591
Partners' capital 2,035,145 2,444,634
__________ __________
Total liabilities and
partners' capital $2,194,094 $2,617,225
========== ==========
The accompanying notes are an integral part of these financial statements.
2
FIDELITY LEASING INCOME FUND III, L.P.
STATEMENTS OF OPERATIONS
For the three months ended March 31, 1995 and 1994
(Unaudited)
1995 1994
________ ________
Income:
Rentals $615,961 $ 966,486
Interest 12,453 13,763
Gain on sale of equipment, net 134,666 153,545
Other 2,324 987
________ __________
765,404 1,134,781
________ __________
Expenses:
Depreciation 322,554 729,292
General and administrative 61,264 88,062
________ __________
383,818 817,354
________ __________
Net income $381,586 $ 317,427
======== ==========
Net income per equivalent
limited partnership unit $ 31.90 $ 17.17
======== ==========
Weighted average number of
equivalent limited partnership
units outstanding during the period 11,656 17,835
======== ==========
The accompanying notes are an integral part of these financial statements.
3
FIDELITY LEASING INCOME FUND III, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the three months ended March 31, 1995
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1995 $ 7,154 62,215 $2,437,480 $2,444,634
Redemptions - (457) (9,782) (9,782)
Cash distributions (7,813) - (773,480) (781,293)
Net income 9,734 - 371,852 381,586
_______ ______ __________ __________
Balance, March 31, 1995 $ 9,075 61,758 $2,026,070 $2,035,145
======= ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
FIDELITY LEASING INCOME FUND III, L.P.
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1995 and 1994
(Unaudited)
1995 1994
________ ________
Cash flows from operating activities:
Net income $381,586 $ 317,427
________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 322,554 729,292
Gain on sale of equipment, net (134,666) (153,545)
(Increase) decrease in accounts receivable (117,946) 88,603
(Increase) decrease in due from related parties 15,956 84,887
Increase (decrease) in accounts payable and
accrued expenses (10,626) 28,289
Increase (decrease) in due to related parties - 50,172
Increase (decrease) in other, net (1,731) (3,703)
________ __________
73,541 823,995
________ __________
Net cash provided by operating activities 455,127 1,141,422
________ __________
Cash flows from investing activities:
Acquisition of equipment (975) (128,596)
Maturity of investment securities held
to maturity - 149
Proceeds from sale of equipment 403,930 218,707
________ __________
Net cash provided by investing activities 402,955 90,260
________ __________
Cash flows from financing activities:
Distributions (781,293) (1,362,059)
Redemptions of capital (9,782) (72,132)
________ __________
Net cash used in financing activities (791,075) (1,434,191)
________ __________
Increase (decrease) in cash and cash
equivalents 67,007 (202,509)
Cash and cash equivalents, beginning
of period 771,837 1,464,694
________ __________
Cash and cash equivalents, end of period $838,844 $1,262,185
======== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND III, L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 1995
(Unaudited)
The accompanying unaudited condensed financial statements have been prepared
by the Fund in accordance with generally accepted accounting principles,
pursuant to the rules and regulations of the Securities and Exchange Commis-
sion. In the opinion of Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included.
1. EQUIPMENT LEASED
Equipment on lease consists primarily of computer peripheral equipment
under operating leases. A majority of the equipment was manufactured by
IBM. The lessees have agreements with the manufacturer to provide main-
tenance for the leased equipment. The Fund's operating leases are for
initial lease terms of 12 to 48 months. Generally, operating leases will
not recover all of the undepreciated cost and related expenses of its
rental equipment during the initial lease terms and the Fund is prepared to
remarket the equipment in future years. Fund policy is to review periodi-
cally the expected economic life of its rental equipment in order to deter-
mine the recoverability of its undepreciated cost. Recent and anticipated
technological developments affecting computer equipment and competitive
factors in the marketplace are considered among other things, as part of
this review.
The future approximate minimum rentals to be received on noncancellable
operating leases as of March 31, 1995 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1995 $209,000
1996 270,000
1997 98,000
________
$577,000
========
2. RELATED PARTY TRANSACTIONS
The General Partner receives 6% or 3% of gross rental payments from equip-
ment under operating leases and full pay-out leases, respectively, for
administrative and management services performed on behalf of the Fund.
Full pay-out leases are noncancellable leases with terms in excess of 42
months and for which rental payments during the initial term are at least
sufficient to recover the purchase price of the equipment, including acqui-
sition fees.
6
FIDELITY LEASING INCOME FUND III, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
Additionally, the General Partner and its affiliates are reimbursed by the
Fund for certain costs of services and materials used by or for the Fund
except those items covered by the above-mentioned fees. Following is a
summary of fees and costs of services and materials charged by the General
Partner or its affiliates during the three months ended March 31:
1995 1994
________ ________
Management fee $36,918 $57,435
Reimbursable costs 6,342 16,109
Amounts due from related parties at March 31, 1995 and December 31, 1994
represent monies due the Fund from the General Partner and/or other
affiliated funds for rentals and sales proceeds collected and not yet re-
mitted the Fund.
3. SUBSEQUENT EVENT
Cash Distribution:
The General Partner declared a cash distribution of $973,400 in May 1995
for the three months ended March 31, 1995, to all admitted partners as of
March 31, 1995.
7
FIDELITY LEASING INCOME FUND III, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Fidelity Leasing Income Fund III, L.P. had revenues of $765,404 and
$1,134,781 for the three months ended March 31, 1995 and 1994, respectively.
Rental income from the leasing of computer peripheral equipment accounted for
80% and 85% of total revenues for the first quarter of 1995 and 1994, respec-
tively. The decrease in revenues is primarily attributable to a decrease in
rental income caused by equipment which came off lease since the first quarter
of 1994 and was re-leased at lower rental rates or sold. Additionally, the
Fund recognized a net gain on sale of equipment of $134,666 and $153,545 for
the three months ended March 31, 1995 and 1994, respectively, which also
accounted for the decrease in revenues in 1995.
Expenses were $383,818 and $817,354 during the three months ended March 31,
1995 and 1994, respectively. Depreciation expense comprised 84% and 89% of
total expenses during the first quarter of 1995 and 1994, respectively. The
decrease in expenses between 1995 and 1994 is primarily attributable to a de-
crease in depreciation expense. The decrease in depreciation expense was
caused by equipment which came off lease or became fully depreciated since the
first quarter of 1994. In addition, management fees, included in general and
administrative expenses, decreased proportionate to the decrease in rental
income.
For the three months ended March 31, 1995 and 1994, the Fund had net income
of $381,586 and $317,427, respectively. The earnings per equivalent limited
partnership unit, after earnings allocated to the General Partner were $31.90
and $17.17 based on a weighted average number of equivalent limited partnership
units outstanding of 11,656 and 17,835 for the quarter ended March 31, 1995 and
1994, respectively.
The Fund generated funds from operations of $569,474 and $893,174, for the
purpose of determining cash available for distribution and distributed $973,400
and $1,117,318 to partners for the first quarter of 1995 and 1994, respec-
tively. The distributions for the three months ended March 31, 1995 and 1994
include $403,926 and $224,144, respectively, of sales proceeds and cash
available from previous quarters which was not distributed.
ANALYSIS OF FINANCIAL CONDITION
The General Partner has commenced the dissolution process for the Fund with
the intent of fully liquidating the Fund by the end of 1996. The Fund contin-
ues to consider the purchase of computer peripheral equipment, primarily up-
grades to existing lease schedules, with cash available from operations which
was not distributed to partners. The Fund purchased $975 and $128,596 of
equipment during the three months ended March 31, 1995 and 1994, respectively.
The cash position of the Fund is reviewed daily and cash is invested on a
short-term basis.
The Fund's cash from operations is expected to continue to be adequate to
cover all operating expenses and contingencies during the next twelve month
period.
8
Part II: Other Information
FIDELITY LEASING INCOME FUND III, L.P.
March 31, 1995
Item 1. Legal Proceedings: Inapplicable.
Item 2. Changes in Securities: Inapplicable.
Item 3. Defaults Upon Senior Securities: Inapplicable.
Item 4. Submission of Matters to a Vote of Securities Holders: Inapplicable.
Item 5. Other Information: Inapplicable.
Item 6. Exhibits and Reports on Form 8-K:
a) Exhibits: None
b) Reports on Form 8-K: None
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the regis-
trant has duly caused this report to be signed on its behalf by the under-
signed, thereunto duly authorized.
FIDELITY LEASING INCOME FUND III, L.P.
5-11-95 By: P. Donald Mooney
_______ ___________________________
Date P. Donald Mooney
President of
Fidelity Leasing Corporation
(Principal Operating Officer)
5-11-95 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
Fidelity Leasing Corporation
(Principal Financial Officer)
10
