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 (Fee Required)
For the year ended December 31, 1995
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For the transition period from _______________ to ______________
Commission file number 0-17658
Fidelity Leasing Income Fund V, L.P.
_________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 23-2496362
_________________________________________________________________
(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)
Securities registered pursuant to Section 12 (b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
None Not applicable
Securities registered pursuant to Section 12 (g) of the Act:
Limited Partnership Interests
Title of Class
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Sections 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_____
The number of outstanding limited partnership units of the
Registrant at December 31, 1995 is 78,970.
There is no public market for these securities.
The index of Exhibits is located on page 11.
1
PART I
Item 1. BUSINESS
Fidelity Leasing Income Fund V, L.P. (the "Fund"), a
Delaware limited partnership, was organized in 1988 and acquires
equipment, primarily computer peripheral equipment, including
printers, tape and disk storage devices, data communications
equipment, computer terminals, data processing and office
equipment, which is leased to third parties on a short-term
basis. The Fund's principal objective is to generate leasing
revenues for distribution. The Fund manages the equipment,
releasing or disposing of equipment as it comes off lease in
order to achieve its principal objective. The Fund will not
borrow funds to purchase equipment.
The Fund generally acquires equipment subject to a lease.
Purchases of equipment for lease are typically made through
equipment leasing brokers, under a sale-leaseback arrangement
directly from lessees owning equipment, from the manufacturer
either pursuant to a purchase agreement relating to significant
quantities of equipment or on an ad hoc basis to meet the needs
of a particular lessee.
The equipment leasing industry is highly competitive. The
Fund competes with leasing companies, equipment manufacturers and
distributors, and entities similar to the Fund (including similar
programs sponsored by the General Partner), some of which have
greater financial resources than the Fund and more experience in
the equipment leasing business than the General Partner. Other
leasing companies and equipment manufacturers and distributors
may be in a position to offer equipment to prospective lessees on
financial terms which are more favorable than those which the
Fund can offer. They may also be in a position to offer trade-
in-privileges, maintenance contracts and other services which the
Fund may not be able to offer. Equipment manufacturers and
distributors may offer to sell equipment on terms and conditions
(such as liberal financing terms and exchange privileges) which
will afford benefits to the purchaser similar to those obtained
through leases. As a result of the advantages which certain of
its competitors may have, the Fund may find it necessary to lease
its equipment on a less favorable basis than certain of its
competitors.
The computer equipment industry is extremely competitive as
well. Competitive factors include pricing, technological
innovation and methods of financing. Certain manufacturer-
lessors maintain advantages through patent protection, where
applicable, and through product protection by the use of a policy
which combines service and hardware benefits with payment for
such benefits accomplished through a single periodic charge.
2
The dominant factor in the marketplace is International
Business Machines Corporation ("IBM"). Because of IBM's
substantial resources and dominant position, revolutionary
changes with respect to pricing, marketing practices,
technological innovation and the availability of new and
attractive financing plans could occur at almost any time.
Significant action in any of these areas by IBM might materially
adversely affect the General Partner's ability to identify and
purchase appropriate equipment. It is the belief of the General
Partner that IBM will continue to make advances in the computer
equipment industry which may result in revolutionary changes with
respect to small, medium and large computer systems.
A brief description of the types of equipment in which the
Fund has invested as of December 31, 1995, together with
information concerning the users of such equipment is contained
in Item 2, following.
The Fund does not have any employees. All persons who work
on the Fund are employees of the General Partner.
Item 2. PROPERTIES
The following schedules detail the type and aggregate
purchase price of the various types of equipment acquired and
leased by the Fund as of December 31, 1995, along with the
percentage of total equipment represented by each type of
equipment, a breakdown of equipment usage by industrial
classification and the average initial term of leases:
Purchase Price Percentage of
Type of Equipment Acquired of Equipment Total Equipment
Communication Controllers $ 3,294,465 15.99%
Disk Storage Systems 10,936,150 53.07
Network Communications 290,004 1.41
Personal Computers, Terminals
and Display Stations 3,383,573 16.42
Printers 561,873 2.73
Tape Storage Systems 1,306,989 6.34
Other 833,311 4.04
___________ ______
Totals $20,606,365 100.00%
=========== ======
3
Breakdown of Equipment Usage
By Industrial Classification
Purchase Price Percentage of
Type of Business of Equipment Total Equipment
Computers/Data Processing $ 1,244,456 6.04%
Diversified Financial/Banking/
Insurance 6,068,314 29.45
Manufacturing/Refining 4,856,261 23.57
Publishing/Printing 299,197 1.45
Retailing/Consumer Goods 3,371,210 16.36
Telephone/Telecommunications 4,373,412 21.22
Broadcasting/Entertainment 393,515 1.91
___________ ______
Totals $20,606,365 100.00%
=========== ======
Average Initial Term of Leases (in months): 30
All of the above equipment is currently leased under operating
leases.
Item 3. LEGAL PROCEEDINGS
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
4
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS
(a) The Fund's limited partnership units are not publicly
traded. There is no market for the Fund's limited
partnership units and it is unlikely that any
will develop.
(b) Number of Equity Security Holders:
Number of Partners
Title of Class as of December 31, 1995
Limited Partnership Interests 2,604
General Partnership Interest 1
<TABLE>
Item 6. SELECTED FINANCIAL DATA
<CAPTION>
For the Years Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Total Income $6,821,697 $9,380,728 $8,847,285 $10,732,480 10,211,943
Net Income 1,884,603 1,532,102 500,268 1,610,088 1,424,561
Distributions to
Partners 6,760,990 5,530,243 8,147,849 6,103,127 6,012,599
Net Income per
Equivalent Limited
Partnership Unit 63.35 37.01 7.88 22.84 18.00
Weighted Average
Number of Equivalent
Limited Partnership
Units Outstanding
During the Year 29,077 39,545 53,295 67,837 75,790
</TABLE>
<TABLE>
December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Total Assets $ 8,096,622 $12,968,181 $17,642,200 $26,840,514 $31,373,019
Equipment under
Operating Leases
and Equipment Held for
Sale or Lease (Net) 4,249,271 6,568,961 12,939,283 17,507,267 23,057,612
Net Investment in
Direct Financing
Leases 280,779 782,651 914,701 - -
Limited Partnership
Units 78,970 79,679 83,010 88,198 89,051
Limited Partners 2,604 2,628 2,686 2,815 2,825
</TABLE>
5
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Fund had revenues of $6,821,697, $9,380,728 and
$8,847,285 for the years ended December 31, 1995, 1994 and 1993,
respectively. Rental income from the leasing of computer
peripheral equipment accounted for 80%, 89% and 95% of total
income in 1995, 1994 and 1993, respectively. The fluctuation
in total revenues in 1995 and 1994 is primarily attributable to
the decrease in rental income. In 1995, rental income decreased
by approximately $3,848,000 due to renewals of leases at lower
rates and lease terminations or sales of equipment. This
decrease, however, was offset by approximately $977,000 of rental
income generated from equipment purchases made in 1995, as well
as, rental income realized on 1994 equipment purchases for which
a full year of rent was earned in 1995 and only a partial year
was earned in 1994. In 1994, rental income increased by approxi-
mately $833,000 because of rental income generated from equipment
purchased in 1994, as well as, rental income realized on 1993
equipment purchases for which a full year of rent was earned in
1994 and only a partial year was earned in 1993 and $886,000 of
rents recognized upon early termination of an equipment lease.
During the third quarter of 1994, one of the Fund's lessees
terminated its lease early and the Fund received an amount equal
to the present value of future minimum rentals as payment for the
early termination. These increases, however, were offset by a
decrease in rental income of approximately $1,828,000 due to
renewals of leases at lower rates and lease terminations or
sales of equipment. The Fund recognized a net gain on sale of
equipment of $1,041,128, $784,895 and $156,215 for the years
ended December 31, 1995, 1994 and 1993, respectively, contri-
buting to the fluctuation in total revenues during these years.
Expenses were $4,937,094, $7,848,626 and $8,347,017 for the
years ended December 31, 1995, 1994 and 1993, respectively.
Depreciation expense comprised 77%, 78% and 82% of total expenses
in 1995, 1994 and 1993, respectively. The decrease in expenses
during 1995 and 1994 was directly related to the decrease in
depreciation expense because of equipment which came off lease
and was terminated or sold. Additionally, the Fund recorded a
write-down of equipment to net realizable value of approximately
$422,000, $763,000 and $495,000 during 1995, 1994 and 1993,
respectively. Currently, the Fund's practice is to review the
recoverability of its undepreciated costs of rental equipment
quarterly. The Fund's policy, as part of this review, is to
analyze such factors as releasing of equipment, technological
developments and information provided in third party
publications. In accordance with Generally Accepted Accounting
Principles, the Fund writes down its rental equipment to its
estimated net realizable value when the amounts are reasonably
estimated and only recognizes gains upon actual sale of its
rental equipment. The General Partner believes, after analyzing
the current equipment portfolio, that there are impending gains
to be recognized upon the sale of certain equipment in future
years. The change in equipment remarketing expenses which are
6
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
Results of Operations (Continued)
included in general and administrative expenses also contributed
to the fluctuation in total expenses in 1995 and 1994.
Furthermore, management fee to related party decreased in
proportion to the decrease in rental income which also accounts
for the decrease in overall expenses in 1995 and 1994.
The Fund's net income was $1,884,603, $1,532,102 and
$500,268 for the years ended December 31, 1995, 1994 and 1993,
respectively. The earnings per equivalent limited partnership
unit, after earnings allocated to the General Partner, were
$63.35, $37.01 and $7.88 for the years ended December 31, 1995,
1994 and 1993, respectively. The weighted average number of
equivalent limited partnership units outstanding were 29,077,
39,545 and 53,295 for 1995, 1994 and 1993, respectively.
The Fund generated funds from operations of $5,071,673,
$7,595,581 and $7,707,611 for the purpose of determining cash
available for distribution and declared distributions of
$4,270,041, $6,838,803 and $8,049,295 to partners for the years
ended December 31, 1995, 1994 and 1993, respectively. For
financial statement purposes, the Fund records cash distributions
to partners on a cash basis in the period in which they are paid.
During the fourth quarter of 1995, the General Partner revised
its policy regarding cash distributions so that the distributions
more accurately reflect the net income of the Fund over the most
recent twelve months.
Analysis of Financial Condition
The Fund continues to purchase computer equipment for lease
with cash available from operations and sales proceeds which are
not distributed to partners. During the years ended December 31,
1995, 1994 and 1993, the Fund purchased $3,237,087, $1,358,457
and $3,889,031, respectively, of equipment.
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 fiscal year.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this Item is submitted as a separate
section of the report commencing on page F-1.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
7
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Effective September 1, 1995, The Fidelity Mutual Life
Insurance Company (in Rehabilitation) sold Fidelity Leasing
Corporation (FLC), the General Partner of the Fund, to Resource
Leasing, Inc., a wholly owned subsidiary of Resource America, Inc.
The Directors and Executive Officers of FLC are:
FREDDIE M. KOTEK, age 39, Chairman of the Board of Directors,
President and Chief Executive Officer of FLC since September
1995 and Senior Vice President of Resource America, Inc.
since 1995. President of Resource Leasing, Inc. since
September 1995. Executive Vice President of Resource
Properties, Inc. (a wholly owned subsidiary of Resource
America, Inc.) since 1993. First Vice President of Royal
Alliance Associates from 1991 to 1993. Senior Vice President
and Chief Financial Officer of Paine Webber Properties from
1990 to 1991.
MICHAEL L. STAINES, age 46, Director and Secretary of FLC
since September 1995 and Senior Vice President and Secretary
of Resource America, Inc. since 1989.
SCOTT F. SCHAEFFER, age 33, Director of FLC since September
1995 and Senior Vice President of Resource America, Inc.
since 1995. Vice President-Real Estate of Resource America,
Inc. and President of Resource Properties, Inc. (a wholly
owned subsidiary of Resource America, Inc.) since 1992.
Vice President of the Dover Group, Ltd. (a real estate
investment company) from 1985 to 1992.
MARK A. MAYPER, age 42, Senior Vice President of FLC
overseeing the lease syndication business since 1987.
Others:
STEPHEN P. CASO, age 40, Vice President and Counsel of FLC
since 1992.
MARIANNE T. SCHUSTER, age 37, Vice President and Controller
of FLC since 1984.
KRISTIN L. CHRISTMAN, age 28, Portfolio Manager of FLC since
December 1995 and Equipment Brokerage Manager since 1993.
8
Item 11. EXECUTIVE COMPENSATION
The following table sets forth information relating to the
aggregate compensation earned by the General Partner of the Fund
during the year ended December 31, 1995:
Name of Individual or Capacities in
Number in Group Which Served Compensation
Fidelity Leasing
Corporation General Partner $338,489(1)
========
(1) This amount does not include the General Partner's
share of cash distributions made to all partners.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) As of December 31, 1995, there was no person or group known
to the Fund that owned more than 5% of the Fund's outstanding
securities either beneficially or of record.
(b) In 1988, the General Partner contributed $1,000 to the
capital of the Fund but it does not own any of the Fund's
outstanding securities. No individual director or officer of
Fidelity Leasing Corporation nor such directors or officers as a
group, owns more than one percent of the Fund's outstanding
securities. The General Partner owns a general partnership
interest which entitles it to receive 1% of cash distributions
until the Limited Partners have received an amount equal to the
purchase price of their Units plus a 10% cumulative compounded
Priority Return; thereafter 10%. The General Partner will also
share in net income equal to the greater of its cash distribu-
tions or 1% of net income or to the extent there are losses, 1%
of such losses.
(c) There are no arrangements known to the Fund that would, at
any subsequent date, result in a change in control of the Fund.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the year ended December 31, 1995, the Fund was charged
$338,489 of management fees by the General Partner. The General
Partner will continue to receive 6% or 3% of rental payments on
equipment under operating leases or full pay-out leases,
respectively, for administrative and management services performed on
behalf of the Fund. Full pay-out leases are noncancellable leases
with initial lease terms in excess of 42 months for which rental
payments during the initial term are at least sufficient to recover
the purchase price of the equipment, including acquisition fees.
This management fee is paid quarterly only if and when the Limited
Partners have received distributions for the period from January 1,
1989 through the end of the most recent quarter equal to a return for
such period at a rate of 12% per year on the aggregate amount paid
for their units.
9
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(Continued)
The General Partner also receives 1% of cash distributions
until the Limited Partners have received an amount equal to the
purchase price of their Units plus a 10% cumulative compounded
Priority Return. Thereafter, the General Partner will receive
10% of cash distributions. During the year ended December 31,
1995, the General Partner received $67,609 of cash distributions.
The Fund incurred $237,303 of reimbursable costs to the
General Partner for services and materials provided in connection
with the administration of the Fund during 1995.
10
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) (1) and (2). The response to this portion of Item 14 is
submitted as a separate section of this report commencing on page
F-1.
(a) (3) and (c) Exhibits (numbered in accordance with Item 601
of Regulation S-K)
Exhibit Numbers Description Page Number
3(a) & (4) Amended and Restated Agreement *
of Limited Partnership
(9) not applicable
(10) not applicable
(11) not applicable
(12) not applicable
(13) not applicable
(18) not applicable
(19) not applicable
(22) not applicable
(23) not applicable
(24) not applicable
(25) not applicable
(28) not applicable
* Incorporated by reference.
11
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.
FIDELITY LEASING INCOME FUND V, L.P.
A Delaware limited partnership
By: FIDELITY LEASING CORPORATION
Freddie M. Kotek
By: ___________________________
Freddie M. Kotek, Chairman
and President
Dated March 26, 1996
Pursuant to the requirements of the Securities Exchange Act
of 1934, this annual report has been signed below by the
following persons, on behalf of the Registrant and in the
capacities and on the date indicated:
Signature Title Date
Freddie M. Kotek
_________________________ Chairman of the Board of Directors 3-26-96
Freddie M. Kotek and President of Fidelity Leasing
Corporation (Principal Executive
Officer)
Michael L. Staines
_________________________ Director of Fidelity Leasing 3-26-96
Michael L. Staines Corporation
Marianne T. Schuster
__________________________ Vice President and Controller 3-26-96
Marianne T. Schuster of Fidelity Leasing Corporation
(Principal Financial Officer)
12
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Pages
Report of Independent Certified Public Accountants F-2
Balance Sheets as of December 31, 1995 and 1994 F-3
Statements of Operations for the years ended F-4
December 31, 1995, 1994 and 1993
Statements of Partners' Capital for the years F-5
ended December 31, 1995, 1994 and 1993
Statements of Cash Flows for the years ended F-6
December 31, 1995, 1994 and 1993
Notes to Financial Statements F-7 - F-12
All schedules have been omitted because the required information is
not applicable or is included in the Financial Statements or Notes
thereto.
F-1
Report of Independent Certified Public Accountants
The Partners
Fidelity Leasing Income Fund V, L.P.
We have audited the accompanying balance sheets of Fidelity Leasing
Income Fund V, L.P. as of December 31, 1995 and 1994, and the related
statements of operations, changes in partners' capital and cash flows for
each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Fidelity Leasing
Income Fund V, L.P. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.
Grant Thornton, LLP
Philadelphia, Pennsylvania
February 2, 1996
F-2
FIDELITY LEASING INCOME FUND V, L.P.
BALANCE SHEETS
<TABLE>
ASSETS
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Cash and cash equivalents $3,068,308 $ 4,776,517
Investment securities held to maturity - 495,991
Accounts receivable 263,855 271,585
Interest receivable 10,366 24,920
Due from related parties 224,043 47,556
Equipment under operating leases
(net of accumulated depreciation
of $16,370,416 and $22,658,526,
respectively) 4,235,949 6,008,750
Net investment in direct
financing leases 280,779 782,651
Equipment held for sale or lease 13,322 560,211
__________ ___________
Total assets $8,096,622 $12,968,181
========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 464,730 $ 351,854
Accounts payable and
accrued expenses 241,637 275,955
Due to related parties 12,170 4,411
__________ ___________
Total liabilities 718,537 632,220
Partners' capital 7,378,085 12,335,961
__________ ___________
Total liabilities and
partners' capital $8,096,622 $12,968,181
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
FIDELITY LEASING INCOME FUND V, L.P.
<TABLE>
STATEMENTS OF OPERATIONS
<CAPTION>
For the years ended December 31,
1995 1994 1993
Income:
<S> <C> <C> <C>
Rentals $5,438,038 $8,308,854 $8,418,189
Earned income on direct
financing leases 64,993 76,476 39,387
Interest 236,762 180,500 213,061
Gain on sale of equipment, net 1,041,128 784,895 156,215
Other 40,776 30,003 20,433
__________ __________ __________
6,821,697 9,380,728 8,847,285
__________ __________ __________
Expenses:
Depreciation 3,806,321 6,085,616 6,868,866
Write-down of equipment to net
realizable value 421,877 762,758 494,692
General and administrative 133,104 264,464 176,956
General and administrative to related party 237,303 237,342 304,689
Management fee to related party 338,489 498,446 501,814
__________ __________ __________
4,937,094 7,848,626 8,347,017
__________ __________ __________
Net income $1,884,603 $1,532,102 $ 500,268
========== ========== ==========
Net income per equivalent
limited partnership unit $ 63.35 $ 37.01 $ 7.88
========== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during the year 29,077 39,545 53,295
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
FIDELITY LEASING INCOME FUND V, L.P.
<TABLE>
STATEMENTS OF PARTNERS' CAPITAL
<CAPTION>
For the years ended December 31, 1995, 1994 and 1993
General Limited Partners
Partner Units Amount Total
_______ ___________________ _____
<S> <C> <C> <C> <C>
Balance, January 1, 1993 $16,130 88,198 $26,100,460 $26,116,590
Redemptions - (5,188) (1,523,528) (1,523,528)
Cash distributions (81,478) - (8,066,371) (8,147,849)
Net income 80,493 - 419,775 500,268
_______ ______ ___________ ___________
Balance, December 31, 1993 15,145 83,010 16,930,336 16,945,481
Redemptions _ (3,331) (611,379) (611,379)
Cash distributions (55,302) - (5,474,941) (5,530,243)
Net income 68,387 - 1,463,715 1,532,102
_______ ______ ___________ ___________
Balance, December 31, 1994 28,230 79,679 12,307,731 12,335,961
Redemptions - (709) (81,489) (81,489)
Cash distributions (67,609) - (6,693,381) (6,760,990)
Net income 42,700 - 1,841,903 1,884,603
_______ ______ ___________ ___________
Balance, December 31, 1995 $ 3,321 78,970 $ 7,374,764 $ 7,378,085
======= ====== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
FIDELITY LEASING INCOME FUND V, L.P.
<TABLE>
STATEMENTS OF CASH FLOWS
<CAPTION>
For the years ended December 31
1995 1994 1993
Cash flows from operating activities:
<S> <C> <C> <C>
Net income $1,884,603 $1,532,102 $ 500,268
__________ __________ __________
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 3,806,321 6,085,616 6,868,866
Write-down of equipment to net realizable value 421,877 762,758 494,692
Proceeds from direct financing leases,
net of earned income 501,872 132,050 57,639
Gain on sale of equipment, net (1,041,128) (784,895) (156,215)
(Increase) decrease in accounts receivable 7,730 (52,282) 305,443
(Increase) decrease in due from related parties (176,487) 227,447 (167,464)
Increase (decrease) in lease rents paid in advance 112,876 (167,968) 52,062
Increase (decrease) in accounts payable
and accrued expenses (34,318) 122,121 (39,920)
Increase (decrease) in due to related parties 7,759 (18,139) (36,276)
Increase (decrease) in other, net 14,554 (13,647) 43,109
__________ __________ __________
Total adjustments 3,621,056 6,293,061 7,421,936
__________ __________ __________
Net cash provided by operating activities 5,505,659 7,825,163 7,922,204
__________ __________ __________
Cash flows from investing activities:
Acquisition of equipment (3,237,087) (1,358,457) (3,889,031)
Investment in direct financing leases - - (972,342)
Purchase of investment securities held to maturity - (1,722,869) -
Maturity of investment securities held to maturity 495,991 2,218,414 3,395,131
Proceeds from sale of equipment 2,369,707 1,665,300 1,250,840
__________ __________ __________
Net cash provided by (used in)
investing activities (371,389) 802,388 (215,402)
__________ __________ __________
Cash flows from financing activities:
Distributions (6,760,990) (5,530,243) (8,147,849)
Redemptions of capital (81,489) (611,379) (1,523,528)
__________ __________ __________
Net cash used in financing activities (6,842,479) (6,141,622) (9,671,377)
__________ __________ __________
Increase (decrease) in cash and cash equivalents (1,708,209) 2,485,929 (1,964,575)
Cash and cash equivalents, beginning of year 4,776,517 2,290,588 4,255,163
__________ __________ __________
Cash and cash equivalents, end of year $3,068,308 $4,776,517 $2,290,588
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
FIDELITY LEASING INCOME FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF OPERATIONS
Fidelity Leasing Income Fund V, L.P. (the "Fund") was formed in January
1988 with Fidelity Leasing Corporation ("FLC") as the General Partner.
FLC is a wholly owned subsidiary of Resource Leasing, Inc., a wholly
owned subsidiary of Resource America, Inc. The Fund is managed by the
General Partner. The Fund's limited partnership interests are not
publicly traded. There is no market for the Fund's limited partnership
interests and it is unlikely that any will develop. The Fund acquires
computer equipment including printers, tape and disk storage devices,
data communications equipment, computer terminals, data processing and
office equipment which is leased to third parties throughout the
United States on a short-term basis.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment Securities Held to Maturity
The Fund adopted Statement of Financial Accounting Standard (SFAS) No.
115, "Accounting for Certain Investments in Debt and Equity Securities"
on January 1, 1994. This new standard requires investments in
securities to be classified in one of three categories: held to
maturity, trading and available for sale. Debt securities that the
Fund has the positive intent and ability to hold to maturity are
classified as held to maturity and are reported at amortized cost. As
the Fund does not engage in security trading, the balance, if any, of
its debt securities and equity securities are classified as available
for sale. Net unrealized gains and losses for securities available for
sale are required to be recognized as a separate component of partners'
capital and excluded from the determination of net income. The Fund
adopted this new standard for the year ended December 31, 1994 with no
resulting financial statement impact on the Fund. Prior to the
adoption of SFAS No. 115, investment securities were carried at cost
which approximates market.
Concentration of Credit Risk
Financial instruments which potentially subject the Fund to
concentrations of credit risk consist principally of temporary cash
investments. The Fund places its temporary investments in securities
backed by the United States Government, commercial paper with high
credit quality institutions, bank money market funds and time deposits
and certificates of deposit.
Concentrations of credit risk with respect to accounts receivables are
limited due to the dispersion of the Fund's leesees over different
industries and geographies.
Equipment Held for Sale or Lease
Equipment held for sale or lease is carried at its estimated net
realizable value.
F-7
FIDELITY LEASING INCOME FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of
the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Accounting for Leases
The Fund's leasing operations consist primarily of operating leases
whereby the cost of the leased equipment is recorded as an asset and
depreciated on a straight-line basis over its estimated useful life, up
to six years. Acquisition fees associated with lease placements are
allocated to equipment when purchased and depreciated as part of
equipment cost. Rental income consists primarily of monthly periodic
rentals due under the terms of the leases plus deferred revenue
recognized. 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. Upon sale or other disposition
of assets, the cost and related accumulated depreciation are removed
from the accounts and the resulting gain or loss, if any, is reflected
in income.
The Fund does have direct financing leases, as well. Under the direct
financing method, income (the excess of the aggregate future rentals
and estimated additional amounts recoverable upon expiration of the
lease over the related equipment cost) is recognized over the life of
the lease using the interest method.
Income Taxes
Federal and State income tax regulations provide that taxes on the
income or benefits from losses of the Fund are reportable by the
partners in their individual income tax returns. Accordingly, no
provision for such taxes has been made in the accompanying financial
statements.
Statements of Cash Flows
For purposes of the statements of cash flows, the Fund considers all
highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Net Income per Equivalent Limited Partnership Unit
Net income per equivalent limited partnership unit is computed by
dividing net income allocated to limited partners by the weighted
average number of equivalent limited partnership units outstanding
F-8
FIDELITY LEASING INCOME FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Income per Equivalent Limited Partnership Unit (Continued)
during the year. The weighted average number of equivalent units
outstanding during the year is computed based on the weighted average
monthly limited partners' capital account balances, converted into
equivalent units at $500 per unit.
Significant Fourth Quarter Adjustments
Currently, the Fund's practice is to review the recoverability of its
undepreciated costs of rental equipment quarterly. The Fund's policy,
as part of this review, is to analyze such factors as releasing of
equipment, technological developments and information provided in
third party publications. Based upon this review, the Fund recorded an
adjustment of approximately $307,000, $613,000 and $495,000 or $10.56,
$15.50 and $9.29 per unit to write down its rental equipment in 1995,
1994 and 1993, respectively.
Reclassification
Certain amounts on the 1994 and 1993 financial statements have been
reclassified to conform to the presentation adopted in 1995.
3. ALLOCATION OF PARTNERSHIP INCOME, LOSS AND CASH DISTRIBUTIONS
Cash distributions, if any, are made quarterly as follows: 99% to the
Limited Partners and 1% to the General Partner, until the Limited
Partners have received an amount equal to the purchase price of their
Units, plus a 10% compounded Priority Return (an amount equal to 10%
compounded annually on the portion of the purchase price not previously
distributed); thereafter, 90% to the Limited Partners and 10% to the
General Partner.
Net Losses are allocated 99% to the Limited Partners and 1% to the
General Partner. The General Partner is allocated Net Income equal to
its cash distributions, but not less than 1% of Net Income, with the
balance allocated to the Limited Partners.
Net Income (Losses) allocated to the Limited Partners are allocated to
individual limited partners based on the ratio of the daily weighted
average partner's net capital account balance (after deducting related
commission expense) to the total daily weighted average of the Limited
Partners' net capital account balances.
4. EQUIPMENT LEASED
Equipment on lease consists primarily of computer peripheral equipment
under operating leases. The 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 9 to 60 months.
F-9
FIDELITY LEASING INCOME FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
4. EQUIPMENT LEASED (Continued)
In accordance with Generally Accepted Accounting Principles, the Fund
writes down its rental equipment to its estimated net realizable value
when the amounts are reasonably estimated and only recognizes gains
upon actual sale of its rental equipment. As a result, in 1995, 1994
and 1993, approximately $422,000, $763,000 and $495,000, respectively
was charged to write-down of equipment to net realizable value.
However, the General Partner believes, after analyzing the current
equipment portfolio, that there are impending gains to be recognized
upon the sale of certain of its equipment in future years.
During the year ended December 31, 1995, the Fund acquired equipment
and leased it under the direct financing method in accordance with SFAS
No. 13. This method provides for recognition of income (the excess of
the aggregate future rentals and estimated additional amounts
recoverable upon expiration of the lease over the related equipment
cost) over the life of the lease using the interest method.
The net investment in direct financing leases as of December 31, 1995
is as follows:
Net minimum lease payments to be received $326,000
Less unearned income (45,000)
Add expected future residuals -
_________
$281,000
=========
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of December 31 are as follows:
Direct
Operating Financing
1996 $3,036,215 $ 93,000
1997 1,004,583 93,000
1998 252,684 93,000
1999 - 47,000
__________ ________
$4,293,482 $326,000
========== ========
5. RELATED PARTY TRANSACTIONS
The General Partner receives 6% or 3% of rental payments on equipment
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,
F-10
FIDELITY LEASING INCOME FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
5. RELATED PARTY TRANSACTIONS (Continued)
including acquisition fees. This management fee is paid quarterly only
if and when the Limited Partners have received distributions for the
period from January 1, 1989 through the end of the most recent quarter
equal to a return for such period at a rate of 12% per year on the
aggregate amount paid for their units.
The General Partner may also receive up to 3% of the proceeds from the
sale of the Fund's equipment for services and activities to be
performed in connection with the disposition of equipment. The payment
of this sales fee is deferred until the Limited Partners have received
cash distributions equal to the purchase price of their units plus a
10% cumulative compounded Priority Return. Based on current estimates,
it is not expected that the Fund will be required to pay the General
Partner a sales fee.
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 charged by the General Partner or its
affiliates during the years ended December 31:
1995 1994 1993
Management fee $338,489 $498,446 $501,814
Reimbursable costs 237,303 237,342 304,689
Amounts due from related parties at December 31, 1995 and 1994
represent monies due to the Fund from the General Partner and/or other
affiliated funds for rentals and sales proceeds collected and not yet
remitted the Fund.
Amounts due to related parties at December 31, 1995 and 1994 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.
6. MAJOR CUSTOMERS
For the year ended December 31, 1995, three customers accounted for
approximately 21%, 16% and 11% of the Fund's rental income. For
the year ended December 31, 1994, four customers accounted for
approximately 16%, 15%, 12% and 11% of the Fund's rental income. For
the year ended December 31, 1993, one customer accounted for
approximately 12% of the Fund's rental income and two customers
accounted for approximately 11% each of the Fund's rental income.
F-11
FIDELITY LEASING INCOME FUND V, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
7. CASH DISTRIBUTIONS
Below is a summary of the quarterly cash distributions paid to partners
during the years ended December 31:
<TABLE>
Month of Distribution 1995 1994 1993
<CAPTION>
<S> <C> <C> <C>
February $2,730,949 $1,422,389 $1,520,943
May 2,168,996 1,370,215 2,316,534
August 1,354,750 1,369,740 2,887,982
November 506,295 1,367,899 1,422,390
__________ __________ __________
$6,760,990 $5,530,243 $8,147,849
========== ========== ==========
</TABLE>
In addition, the General Partner declared a cash distribution of
$240,000 in February 1996 for the three months ended December 31,
1995, to all admitted partners as of December 31, 1995.
F-12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,068,308
<SECURITIES> 0
<RECEIVABLES> 498,264
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,566,572
<PP&E> 20,619,687
<DEPRECIATION> 16,370,416
<TOTAL-ASSETS> 8,096,622
<CURRENT-LIABILITIES> 718,537
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,378,085
<TOTAL-LIABILITY-AND-EQUITY> 8,096,622
<SALES> 5,438,038
<TOTAL-REVENUES> 6,821,697
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,937,094
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,884,603
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,884,603
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,884,603
<EPS-PRIMARY> 63.35
<EPS-DILUTED> 63.35
</TABLE>
