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 June 30, 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: 0-20131
Fidelity Leasing Income Fund VIII, L.P.
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 23-2627143
_______________________________________________________________________________
(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 11
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VIII, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
June 30, December 31,
1996 1995
________ ________
Cash and cash equivalents $2,359,529 $2,861,597
Accounts receivable 378,188 313,745
Interest receivable 23,698 4,259
Due from related parties 41,195 20,706
Equipment under operating leases
(net of accumulated depreciation
of $6,913,424 and $6,629,864,
respectively) 2,393,677 2,297,232
Equipment held for sale or lease 4,836 97,853
Organization costs
(net of accumulated amortization of
$9,667 and $8,667, respectively) 333 1,333
__________ __________
Total assets $5,201,456 $5,596,725
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 39,692 $ 29,566
Accounts payable and
accrued expenses 62,098 50,909
Due to related parties - 87,475
__________ __________
Total liabilities 101,790 167,950
Partners' capital 5,099,666 5,428,775
__________ __________
Total liabilities and
partners' capital $5,201,456 $5,596,725
========== ==========
The accompanying notes are an integral part of these financial statements.
2
FIDELITY LEASING INCOME FUND VIII, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
____ ____ ____ ____
Income:
Rentals $495,565 $595,626 $1,042,674 $1,273,803
Interest 40,393 50,184 66,298 91,768
Gain on sale of equipment,
net 58,861 - 28,495 -
Other 860 626 1,333 946
________ ________ __________ __________
595,679 646,436 1,138,800 1,366,517
________ ________ __________ __________
Expenses:
Depreciation and
amortization 302,360 517,462 687,804 1,125,402
Write-down of equipment
to net realizable value 137,015 125,616 273,383 125,616
General and administrative 8,486 20,001 41,637 37,951
General and administrative
to related party 34,678 39,053 72,731 59,552
Management fee to related
party 19,588 23,575 41,222 50,447
Loss on sale of equipment,
net - 11,374 - 68,483
________ ________ __________ __________
502,127 737,081 1,116,777 1,467,451
________ ________ __________ __________
Net income (loss) $ 93,552 $(90,645) $ 22,023 $ (100,934)
======== ======== ========== ==========
Net income (loss) per equivalent
limited partnership unit $ 6.99 $ (5.86) $ 1.52 $ (6.34)
======== ======== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding
during the period 13,292 15,302 13,507 15,751
======== ======== ========== ==========
The accompanying notes are an integral part of these financial statements.
3
FIDELITY LEASING INCOME FUND VIII, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the six months ended June 30, 1996
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1996 $(10,359) 22,812 $5,439,134 $5,428,775
Redemptions - (958) (226,132) (226,132)
Cash distributions (1,250) - (123,750) (125,000)
Net income 1,450 - 20,573 22,023
_______ ______ __________ __________
Balance, June 30, 1996 $(10,159) 21,854 $5,109,825 $5,099,666
======== ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
FIDELITY LEASING INCOME FUND VIII, L.P.
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1996 and 1995
(Unaudited)
1996 1995
__________ __________
Cash flows from operating activities:
Net income (loss) $ 22,023 $ (100,934)
__________ __________
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation and amortization 687,804 1,125,402
Write-down of equipment to net realizable value 273,383 125,616
(Gain) loss on sale of equipment, net (28,495) 68,483
(Increase) decrease in accounts receivable (64,443) 207,988
(Increase) decrease in interest receivable (19,439) 8,133
(Increase) decrease in due from related parties (20,489) 1,950
Increase (decrease) in lease rents paid
in advance 10,126 (36,908)
Increase (decrease) in due to related parties (87,475) 7,341
Increase (decrease) in other, net 11,189 (887)
__________ __________
762,161 1,507,118
__________ __________
Net cash provided by operating activities 784,184 1,406,184
__________ __________
Cash flows from investing activities:
Acquisition of equipment (1,129,281) (718,637)
Proceeds from sale of equipment 194,161 398,747
__________ __________
Net cash used in investing activities (935,120) (319,890)
__________ __________
Cash flows from financing activities:
Redemptions of capital (226,132) (149,455)
Distributions (125,000) (638,682)
__________ __________
Net cash used in financing activities (351,132) (788,137)
__________ __________
Increase (decrease) in cash and cash equivalents (502,068) 298,157
Cash and cash equivalents, beginning
of period 2,861,597 2,005,306
__________ __________
Cash and cash equivalents, end of period $2,359,529 $2,303,463
========== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 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. EQUIPMENT LEASED
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 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 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. 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, $273,383 and $125,616 was charged to write-
down of equipment to net realizable value for the six months ended
June 30, 1996 and 1995, respectively. Any future losses are dependent upon
unanticipated technological developments affecting the computer equipment
industry in subsequent years.
The future approximate minimum rentals to be received on noncancellable
operating leases as of June 30, 1996 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1996 $ 846,000
1997 879,000
1998 606,000
1999 31,000
__________
$2,362,000
==========
6
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS
The General Partner receives 4% or 2% of rental payments on 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 for which the rental payments
due during the initial term are at least sufficient to recover the purchase
price of the equipment, including acquisition fees. This management fee is
paid monthly only if and when the Limited Partners have received
distributions for the period from the initial closing through the end of
the most recent calendar quarter equal to a return for such period at a
rate of 11% 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 an 11% cumulative
compounded priority return. Based on current estimates, it is not expected
that the Fund will be required to pay this sales fee to the General
Partner. As a result, $55,244 of sales fee accrued by the Fund in prior
periods was recognized into income as part of the net gain on sale of
equipment during the three months ended June 30, 1996.
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 six months ended June 30, 1996 and
1995:
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
____ ____ ____ ____
Management fee $19,588 $23,575 $41,222 $50,447
Reimbursable costs 34,678 39,053 72,731 59,552
Accrued sales fee - 4,088 - 12,333
Amounts due from related parties at June 30, 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.
3. SUBSEQUENT EVENT
Cash Distribution:
The General Partner declared and paid a cash distribution of $20,000 in
July 1996 for the month ended June 30, 1996, to all admitted partners as
of June 30, 1996.
7
FIDELITY LEASING INCOME FUND VIII, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Fidelity Leasing Income Fund VIII, L.P. had revenues of $595,679 and
$646,436 for the three months ended June 30, 1996 and 1995, respectively,
and $1,138,800 and $1,366,517 for the six months ended June 30, 1996 and
1995, respectively. Rental income from the leasing of computer peripheral
equipment accounted for 83% and 92% of total revenues for the second
quarter of 1996 and 1995, respectively, and 92% and 93% of total revenues
for the six months ended June 30, 1996 and 1995, respectively. The decrease
in revenues is primarily attributable to the decrease in rental income. In
1996, rental income decreased by approximately $483,000 because of equipment
which came off lease and was re-leased at lower rental rates or sold. This
decrease, however, was reduced by approximately $252,000 of rents generated
from equipment purchased since the second quarter of 1995.
Expenses were $502,127 and $737,081 for the three months ended June 30,
1996 and 1995, respectively, and $1,116,777 and $1,467,451 for the six
months ended June 30, 1996 and 1995, respectively. Depreciation and
amortization comprised 60% and 70% of total expenses during the second
quarter of 1996 and 1995, respectively and 62% and 77% of total expenses for
the six months ended June 30, 1996 and 1995, respectively. The decrease in
expenses is directly related to the decrease in depreciation expense resulting
from equipment which came off lease or was sold since the second quarter of
1995. Additionally, the Fund recognized a net gain on sale of equipment of
$28,495 for the six months ended June 30, 1996 as compared to a net loss on
sale of equipment of $68,483 for the six months ended June 30, 1995 which also
contributed to the decrease in total expenses in 1996. However, the
overall decrease in expenses in 1996 was reduced by an increase in the write-
down of equipment to net realizable value. Based upon the quarterly review
of the recoverability of the undepreciated cost of rental equipment, $273,383
was charged to operations to write down equipment to its estimated net
realizable value during the six months ended June 30, 1996 as compared to
$125,616 for the six months ended June 30, 1995. Any future losses are
dependent upon unanticipated technological developments affecting the computer
equipment industry in subsequent years.
The Fund's net income (loss) was $93,552 and ($90,645) for the three
months ended June 30, 1996 and 1995, respectively, and $22,023 and ($100,934)
for the six months ended June 30, 1996 and 1995, respectively. The
earnings(loss) per equivalent limited partnership unit, after earnings (loss)
allocated to the General Partner, were $6.99 and ($5.86) based on a weighted
average number of equivalent limited partnership units outstanding of 13,292
and 15,302 for the three months ended June 30, 1996 and 1995, respectively.
The earnings (loss) per equivalent limited partnership unit, after earnings
(loss) allocated to the General Partner, were $1.52 and ($6.34) based on a
weighted average number of equivalent limited partnership units outstanding of
13,507 and 15,751 for the six months ended June 30, 1996 and 1995,
respectively.
The Fund generated $474,066 and $563,807 of funds from operations, for the
purpose of determining cash available for distribution, during the quarter
ended June 30, 1996 and 1995, respectively and distributed 8% and 37% of
these amounts to partners during the second quarter of 1996 and 1995, respec-
tively and 4% and 19% of these amounts to partners in July 1996 and 1995,
8
FIDELITY LEASING INCOME FUND VIII, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS (Continued)
respectively. For the six months ended June 30, 1996 and 1995, the Fund
generated $954,715 and $1,218,567 of funds from operations and distributed
13% and 44% of these amounts to partners during the six months ended June 30,
1996 and 1995, respectively and 2% and 9% of these amounts to partners in
July 1996 and 1995, respectively.
ANALYSIS OF FINANCIAL CONDITION
During the six months ended June 30, 1996 and 1995, the Fund purchased
equipment of $1,129,281 and $718,637, respectively. The Fund will continue to
purchase equipment with cash available from operations which is not distributed
to partners.
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.
9
Part II: Other Information
FIDELITY LEASING INCOME FUND VIII, L.P.
June 30, 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: EX-27
b) Reports on Form 8-K: None
10
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 VIII, L.P.
By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of F.L Partnership
Management, Inc.
(Principal Operating Officer)
By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
11
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 VIII, L.P.
By:
_______ ___________________________
Date Freddie M. Kotek
President of F.L Partnership
Management, Inc.
(Principal Operating Officer)
By:
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
11
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,359,529
<SECURITIES> 0
<RECEIVABLES> 443,081
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,802,610
<PP&E> 9,311,937
<DEPRECIATION> 6,913,424
<TOTAL-ASSETS> 5,201,456
<CURRENT-LIABILITIES> 101,790
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,099,666
<TOTAL-LIABILITY-AND-EQUITY> 5,201,456
<SALES> 1,042,674
<TOTAL-REVENUES> 1,138,800
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,116,777
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 22,023
<INCOME-TAX> 0
<INCOME-CONTINUING> 22,023
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,023
<EPS-PRIMARY> 1.52
<EPS-DILUTED> 1.52
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