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, 1997
/ / 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,
1997 1996
_____________ ____________
Cash and cash equivalents $523,300 $462,633
Accounts receivable 39,350 27,153
Due from related parties 9,000 1,473
Equipment under operating leases
(net of accumulated depreciation
of $3,144,366 and $4,577,784,
respectively) 69,649 102,325
________ ________
Total assets $641,299 $593,584
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 26,507 $ 19,702
Accounts payable and
accrued expenses 20,518 30,249
Due to related parties 2,120 9,890
________ ________
Total liabilities 49,145 59,841
Partners' capital 592,154 533,743
________ ________
Total liabilities and
partners' capital $641,299 $593,584
======== ========
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, 1997 and 1996
(Unaudited)
1997 1996
____ ____
Income:
Rentals $147,583 $285,455
Interest 6,214 8,002
Gain on sale of equipment, net - 190,855
Other 649 720
________ ________
154,446 485,032
________ ________
Expenses:
Depreciation 21,081 50,410
General and administrative 7,283 10,255
General and administrative
to related party 5,271 12,208
Management fee to related
party 8,855 17,127
Loss on sale of equipment, net 3,545 -
________ ________
46,035 90,000
________ ________
Net income $108,411 $395,032
======== ========
Net income per equivalent
limited partnership unit $ 12.52 $ 19.68
======== ========
Weighted average number of
equivalent limited partnership
units outstanding
during the period 8,575 9,679
======== ========
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, 1997
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1997 $1,841 61,231 $531,902 $533,743
Cash distributions (2,500) - (47,500) (50,000)
Net income 1,084 - 107,327 108,411
______ ______ ________ ________
Balance, March 31, 1997 $ 425 61,231 $591,729 $592,154
====== ====== ======== ========
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, 1997 and 1996
(Unaudited)
1997 1996
________ ________
Cash flows from operating activities:
Net income $108,411 $395,032
________ ________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 21,081 50,410
(Gain) loss on sale of equipment, net 3,545 (190,855)
(Increase) decrease in accounts receivable (12,197) 282,850
(Increase) decrease in due from related parties (7,527) (22,373)
Increase (decrease) in lease rents paid
in advance 6,805 (303,709)
Increase (decrease) in other, net (17,501) (2,446)
________ ________
(5,794) (186,123)
________ ________
Net cash provided by operating activities 102,617 208,909
________ ________
Cash flows from investing activities:
Proceeds from sale of equipment 8,050 227,750
________ ________
Net cash provided by investing activities 8,050 227,750
________ ________
Cash flows from financing activities:
Distributions (50,000) (250,000)
Redemptions of capital - (5,772)
________ ________
Net cash used in financing activities (50,000) (255,772)
________ ________
Increase in cash and cash equivalents 60,667 180,887
Cash and cash equivalents, beginning
of period 462,633 716,019
________ ________
Cash and cash equivalents, end of period $523,300 $896,906
======== ========
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, 1997
(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. Certain amounts on the 1996 financial statements have been
reclassified to conform to the presentation in 1997.
1. EQUIPMENT LEASED
The remaining equipment on lease consists primarily of computer 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 18 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. 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 General Partner continues the dissolution
process for the Fund and intends to sell any remaining equipment by
December 31, 1997.
The future approximate minimum rentals to be received on noncancellable
operating leases as of March 31, 1997 are $131,351 for the remainder of the
year ending December 31, 1997.
2. 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 parent company 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 parent company during the three months ended
March 31:
1997 1996
________ ________
Management fee $8,855 $17,127
Reimbursable costs 5,271 12,208
6
FIDELITY LEASING INCOME FUND III, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
The Fund maintains its checking and investment acounts in Jefferson Bank, a
subsidiary of JeffBanks, Inc., in which the Chairman of Resource America,
Inc. serves as a director.
Amounts due from related parties at March 31, 1997 and December 31, 1996
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 March 31, 1997 represent monies due to
the General Partner and/or its parent company for the fees and costs
mentioned above, as well as rentals and sales proceeds collected by the
Fund on behalf of other affiliated funds.
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 $154,446 and
$485,032 for the three months ended March 31, 1997 and 1996, respectively.
Rental income from the leasing of computer equipment accounted for 96% and 59%
of total revenues for the first quarter of 1997 and 1996, respectively. The
decrease in revenues is attributable to a decrease in rental income caused by
equipment which came off lease since the first quarter of 1996 and was released
at lower rental rates or sold. Additionally, the Fund recognized a net loss on
sale of equipment of $3,545 for the three months ended March 31,1997 as
compared to a net gain on sale of equipment of $190,855 for the three months
ended March 31, 1996, which contributed to the overall decrease in revenues in
1997.
Expenses were $46,035 and $90,000 during the three months ended March 31,
1997 and 1996, respectively. Depreciation expense comprised 46% and 56% of
total expenses during the first quarter of 1997 and 1996, respectively. The
decrease in expenses between 1997 and 1996 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 1996. Additionally, the decline in management fees, resulting
from the decrease in rental income, contributed to the decrease in total
expenses between the first quarter of 1997 and 1996.
For the three months ended March 31, 1997 and 1996, the Fund had net income
of $108,411 and $395,032, respectively. The earnings per equivalent limited
partnership unit, after earnings allocated to the General Partner were $12.52
and $19.68 based on a weighted average number of equivalent limited partnership
units outstanding of 8,575 and 9,679 for the quarter ended March 31, 1997 and
1996, respectively.
The Fund generated funds from operations of $133,037 and $254,587, for the
purpose of determining cash available for distribution, for the first quarter
of 1997 and 1996, respectively. There was no distribution made to partners for
the three months ended March 31, 1997. A distribution of $254,587 was made to
partners for the three months ended March 31, 1996. For financial statement
purposes, the Fund records cash distributions to partners on a cash basis in
the period in which they are paid.
ANALYSIS OF FINANCIAL CONDITION
The Fund's dissolution process continued during the first quarter of 1997
and should be completed by December 31, 1997. 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
dissolution period.
8
Part II: Other Information
FIDELITY LEASING INCOME FUND III, L.P.
March 31, 1997
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.
5-14-97 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
5-14-97 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-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 523,300
<SECURITIES> 0
<RECEIVABLES> 48,350
<ALLOWANCES> 0
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0
0
<COMMON> 0
<OTHER-SE> 592,154
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<TOTAL-REVENUES> 154,446
<CGS> 0
<TOTAL-COSTS> 0
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<LOSS-PROVISION> 0
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<INCOME-TAX> 0
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<NET-INCOME> 108,411
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