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, 1996
/ / 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.)
7 E. Skippack Pike, Suite 275, Ambler, Pennsylvania 19002
_______________________________________________________________________________
(Address of principal executive offices) (Zip code)
(215) 619-2800
_______________________________________________________________________________
(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,
1996 1995
_____________ ____________
Cash and cash equivalents $ 896,906 $ 716,019
Accounts receivable 18,904 301,754
Interest receivable 118 4,190
Due from related parties 28,722 6,349
Equipment under operating leases
(net of accumulated depreciation
of $4,577,784 and $8,552,169,
respectively) 235,142 310,347
Equipment held for sale or lease 1,118 13,218
__________ __________
Total assets $1,180,910 $1,351,877
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 71,939 $ 375,648
Accounts payable and
accrued expenses 33,179 24,597
Due to related parties - 15,100
__________ __________
Total liabilities 105,118 415,345
Partners' capital 1,075,792 936,532
__________ __________
Total liabilities and
partners' capital $1,180,910 $1,351,877
========== ==========
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, 1996 and 1995
(Unaudited)
1996 1995
____ ____
Income:
Rentals $285,455 $615,961
Interest 8,002 12,453
Gain on sale of equipment,
net 190,855 134,666
Other 720 2,324
________ ________
485,032 765,404
________ ________
Expenses:
Depreciation 50,410 322,554
General and administrative 10,255 18,004
General and administrative
to related party 12,208 6,342
Management fee to related
party 17,127 36,918
________ ________
90,000 383,818
________ ________
Net income $395,032 $381,586
======== ========
Net income per equivalent
limited partnership unit $ 19.68 $ 31.90
======== ========
Weighted average number of
equivalent limited partnership
units outstanding
during the period 9,679 11,656
======== ========
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, 1996
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1996 $ 11,841 61,743 $924,691 $ 936,532
Redemptions - (508) (5,772) (5,772)
Cash distributions (12,500) - (237,500) (250,000)
Net income 204,587 - 190,445 395,032
________ ______ ________ __________
Balance, March 31, 1996 $203,928 61,235 $871,864 $1,075,792
======== ====== ======== ==========
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, 1996 and 1995
(Unaudited)
1996 1995
________ ________
Cash flows from operating activities:
Net income $395,032 $381,586
________ ________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 50,410 322,554
Gain on sale of equipment, net (190,855) (134,666)
(Increase) decrease in accounts receivable 282,850 (117,946)
(Increase) decrease in due from related parties (22,373) 15,956
Increase (decrease) in lease rents paid
in advance (303,709) (3,016)
Increase (decrease) in other, net (2,446) (9,341)
________ ________
(186,123) 73,541
________ ________
Net cash provided by operating activities 208,909 455,127
________ ________
Cash flows from investing activities:
Acquisition of equipment - (975)
Proceeds from sale of equipment 227,750 403,930
________ ________
Net cash provided by investing activities 227,750 402,955
________ ________
Cash flows from financing activities:
Distributions (250,000) (781,293)
Redemptions of capital (5,772) (9,782)
________ ________
Net cash used in financing activities (255,772) (791,075)
________ ________
Increase in cash and cash equivalents 180,887 67,007
Cash and cash equivalents, beginning
of period 716,019 771,837
________ ________
Cash and cash equivalents, end of period $896,906 $838,844
======== ========
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, 1996
(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. ORGANIZATION
In February 1996, the name of the General Partner was changed from Fidelity
Leasing Corporation to F.L. Partnership Management, Inc.
2. EQUIPMENT LEASED
The remaining 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 maintenance for the leased equipment. The Fund's operating leases
are for initial lease terms of 5 to 48 months. Generally, during the
remaining terms of existing operating leases, the Fund will not recover all
of the undepreciated cost and related expenses of its rental equipment and
is prepared to remarket the equipment in future years. Currently, the
Fund's policy is to review quarterly the expected economic life of its
rental equipment in order to determine 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, 1996 are $312,000 for the remainder of the
year ending December 31, 1996.
3. RELATED PARTY TRANSACTIONS
The General Partner receives 6% of gross rental payments from equip-
ment under operating leases for administrative and management services
performed on behalf of the Fund.
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:
1996 1995
________ ________
Management fee $17,127 $36,918
Reimbursable costs 12,208 6,342
6
FIDELITY LEASING INCOME FUND III, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
3. RELATED PARTY TRANSACTIONS (Continued)
Amounts due from related parties at March 31, 1996 and December 31, 1995
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 to the Fund.
Amounts due to related parties at December 31, 1995 represent monies due to
the General Partner for the fees and costs mentioned above, as well as
rentals and sales proceeds collected by the Fund on behalf of other
affiliated funds.
4. SUBSEQUENT EVENT
Cash Distribution:
The General Partner declared and paid a cash distribution of $254,587 in
May 1996 for the three months ended March 31, 1996, to all admitted
partners as of March 31, 1996.
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 $485,032 and
$765,404 for the three months ended March 31, 1996 and 1995, respectively.
Rental income from the leasing of computer peripheral equipment accounted for
59% and 80% of total revenues for the first quarter of 1996 and 1995, 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 1996 and was re-leased at lower rental rates or sold. Additionally, the
Fund recognized a net gain on sale of equipment of $190,855 and $134,666 for
the three months ended March 31, 1996 and 1995, respectively, which reduced the
overall decrease in revenues in 1996.
Expenses were $90,000 and $383,818 during the three months ended March 31,
1996 and 1995, respectively. Depreciation expense comprised 13% and 84% of
total expenses during the first quarter of 1996 and 1995, respectively. The
decrease in expenses between 1996 and 1995 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 1995.
For the three months ended March 31, 1996 and 1995, the Fund had net income
of $395,032 and $381,586, respectively. The earnings per equivalent limited
partnership unit, after earnings allocated to the General Partner were $19.68
and $31.90 based on a weighted average number of equivalent limited partnership
units outstanding of 9,679 and 11,656 for the quarter ended March 31, 1996 and
1995, respectively.
The Fund generated funds from operations of $254,587 and $569,474, for the
purpose of determining cash available for distribution and distributed $254,587
and $973,400 to partners for the first quarter of 1996 and 1995, respec-
tively. The distribution for the three months ended March 31, 1995
includes $403,926 of sales proceeds and cash available from prior quarters
which had not been distributed previously.
ANALYSIS OF FINANCIAL CONDITION
The General Partner continues the dissolution process for the Fund with the
intent of fully liquidating the Fund in 1996. Therefore, as leases expire, the
General Partner will seek to sell the equipment at its market value.
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 the remainder of the
liquidation period.
8
Part II: Other Information
FIDELITY LEASING INCOME FUND III, L.P.
March 31, 1996
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.
5-14-96 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
5-14-96 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
10
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 896,906
<SECURITIES> 0
<RECEIVABLES> 47,744
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 944,650
<PP&E> 4,814,044
<DEPRECIATION> 4,577,784
<TOTAL-ASSETS> 1,180,910
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<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,075,792
<TOTAL-LIABILITY-AND-EQUITY> 1,180,910
<SALES> 285,455
<TOTAL-REVENUES> 485,032
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 90,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 395,032
<INCOME-TAX> 0
<INCOME-CONTINUING> 395,032
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 395,032
<EPS-PRIMARY> 19.68
<EPS-DILUTED> 19.68
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