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 September 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.)
Seven East Skippack Pike, 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)
September 30, December 31,
1996 1995
___________ ____________
Cash and cash equivalents $ 607,480 $2,861,597
Accounts receivable 266,344 313,745
Interest receivable 23,698 4,259
Due from related parties 60,986 20,706
Equipment under operating leases
(net of accumulated depreciation
of $7,102,754 and $6,629,864
respectively) 3,461,331 2,297,232
Equipment held for sale or lease 750,618 97,853
Organization costs
(net of accumulated amortization of
$10,000 and $8,667, respectively) - 1,333
__________ __________
Total assets $5,170,457 $5,596,725
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 52,125 $ 29,566
Accounts payable and
accrued expenses 44,935 50,909
Due to related parties - 87,475
__________ __________
Total liabilities 97,060 167,950
Partners' capital 5,073,397 5,428,775
__________ __________
Total liabilities and
partners' capital $5,170,457 $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 Nine Months Ended
September 30 September 30
1996 1995 1996 1995
____ ____ ____ ____
Income:
Rentals $523,707 $558,943 $1,566,381 $1,832,746
Interest 25,929 41,997 92,227 133,765
Gain on sale of equipment,
net 1,395 - 29,890 -
Other 897 233 2,230 1,179
________ ________ __________ __________
551,928 601,173 1,690,728 1,967,690
________ ________ __________ __________
Expenses:
Depreciation and amortization 311,084 454,152 998,888 1,579,554
Write-down of equipment
to net realizable value 131,657 - 405,040 125,616
General and administrative 9,427 19,854 51,064 57,805
General and administrative
related party 33,938 26,377 106,669 85,929
Management fee to related party 20,875 22,108 62,097 72,555
Loss on sale of equipment, net - 1,938 - 70,421
________ ________ __________ __________
506,981 524,429 1,623,758 1,991,880
________ ________ __________ __________
Net income (loss) $ 44,947 $ 76,744 $ 66,970 $ (24,190)
======== ======== ========== ==========
Net income (loss) per equivalent
limited partnership unit $ 3.33 $ 5.03 $ 4.83 $ (1.56)
======== ======== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during
the period 13,335 14,618 13,449 15,371
======== ======== ========== ==========
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 nine months ended September 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 - (1,008) (237,348) (237,348)
Cash distributions (1,850) - (183,150) (185,000)
Net income (loss) 2,050 - 64,920 66,970
________ ______ __________ __________
Balance, September 30, 1996 $(10,159) 21,804 $5,083,556 $5,073,397
======== ====== ========== ==========
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 nine months ended September 30, 1996 and 1995
(Unaudited)
1996 1995
____ ____
Cash flows from operating activities:
Net income (loss) $ 66,970 $ (24,190)
__________ __________
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 998,888 1,579,554
Write-down of equipment to net
realizable value 405,040 125,616
(Gain) loss on sale of equipment, net (29,890) 70,421
(Increase) decrease in accounts receivable 47,401 245,261
(Increase) decrease in interest receivable (19,439) 7,671
(Increase) decrease in due from related parties (40,280) (2,748)
Increase (decrease) in lease rents paid
in advance 22,559 (5,743)
Increase (decrease) in accounts payable and
accrued expenses (5,974) 94,580
Increase (decrease) in due to related parties (87,475) 1,499
__________ __________
1,290,830 2,116,111
__________ __________
Net cash provided by operating activities 1,357,800 2,091,921
__________ __________
Cash flows from investing activities:
Acquisition of equipment (3,389,929) (897,705)
Proceeds from sale of equipment 200,360 427,924
__________ __________
Net cash used in investing activities (3,189,569) (469,781)
__________ __________
Cash flows from financing activities:
Redemptions of capital (237,348) (149,455)
Distributions (185,000) (954,003)
__________ __________
Net cash used in financing activities (422,348) (1,103,458)
__________ __________
Increase (decrease) in cash and cash equivalents (2,254,117) 518,682
Cash and cash equivalents, beginning
of period 2,861,597 2,005,306
__________ __________
Cash and cash equivalents, end of period $ 607,480 $2,523,988
========== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS
September 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. Certain amounts on the 1995 financial statements have been
reclassified to conform to the presentation in 1996.
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 quarterly
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. 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, $405,040 and
$125,616 was charged to write-down of equipment to net realizable value for
the nine months ended September 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 September 30, 1996 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1996 $ 606,000
1997 1,562,000
1998 1,289,000
1999 480,000
__________
$3,937,000
==========
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 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 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 distribu-
tions 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 com-
pounded 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 nine months ended September 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 three and nine months ended
September 30, 1996 and 1995:
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
____ ____ ____ ____
Management fee $20,875 $22,108 $ 62,097 $72,555
Reimbursable costs 33,938 26,377 106,669 85,929
Accrued sales fee - 902 - 13,235
Amounts due from related parties at September 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 the Fund.
The amount due to related parties at December 31, 1995 represents 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 a cash distribution of $20,000 in October
1996 for the month ended September 30, 1996, to all admitted partners as of
September 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 $551,928 and
$601,173 for the three months ended September 30, 1996 and 1995, respectively,
and $1,690,728 and $1,967,690 for the nine months ended September 30, 1996 and
1995, respectively. Rental income from the leasing of computer peripheral
equipment accounted for 95% and 93% of total revenues for the third quarter
of 1996 and 1995, respectively, and 93% of total revenues for both the nine
months ended September 30, 1996 and 1995. The decrease in revenues is
primarily attributable to the decrease in rental income. In 1996, rental
income decreased by approximately $643,000 because of equipment which came off
lease and was re-leased at lower rental rates or sold. This decrease, however,
was reduced by approximately $377,000 of rents generated from equipment
purchased since the third quarter of 1995 as well as rental income earned on
1995 equipment purchases for which a full nine months of rent was earned in
1996 but only a portion of the nine months was earned in 1995. In addi-
tion, interest income decreased in 1996 because of lower cash balances
available for investment by the Fund during 1996 as compared to 1995.
Expenses were $506,981 and $524,429 for the three months ended September
30, 1996 and 1995, respectively, and $1,623,758 and $1,991,880 for the nine
months ended September 30, 1996 and 1995, respectively. Depreciation and
amortization comprised 61% and 87% of total expenses during the third quarter
of 1996 and 1995, respectively, and 62% and 79% of total expenses for the nine
months ended September 30, 1996 and 1995, respectively. The decrease in
expenses in 1996 is directly related to the decrease in depreciation expense
resulting from equipment which came off lease or was sold. Additionally, the
Fund recognized a net gain on sale of equipment of $29,890 during the nine
months ended September 30, 1996 as compared to a net loss on sale of equipment
of $70,421 for the nine months ended September 30, 1995 which also contributed
to the decrease in total expenses in 1996. However, the overall decrease in
expenses in 1996 was offset 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, $405,040 and $125,616 was charged
to operations to write down equipment to its estimated net realizable value
during the nine months ended September 30, 1996 and 1995, respectively. Any
future losses are dependent upon unanticipated technological developments
affecting the computer equipment industry in subsequent years.
The Fund's net income (loss) was $44,947 and $76,744 for the three months
ended September 30, 1996 and 1995, respectively, and $66,970 and ($24,190)
for the nine months ended September 30, 1996 and 1995, respectively. The
earnings (loss) per equivalent limited partnership unit, after earnings (loss)
allocated to the General Partner, were $3.33 and $5.03 based on a weighted
average number of equivalent limited partnership units outstanding of 13,335
and 14,618 for the three months ended September 30 1996 and 1995, respectively.
The earnings (loss) per equivalent limited partnership unit, after earnings
(loss) allocated to the General Partner, were $4.83 and ($1.56) based on a
weighted average number of equivalent limited partnership units outstanding of
13,449 and 15,371 for the nine months ended September 30, 1996 and 1995,
respectively.
The Fund generated $486,293 and $532,834 of funds from operations, for the
purpose of determining cash available for distribution, during the quarter
ended September 30, 1996 and 1995, respectively and distributed 8% and 39% of
these amounts to partners during the third quarter of 1996 and 1995, respec-
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)
tively and 4% and 20% of these amounts to partners in October 1996 and 1995,
respectively. For the nine months ended September 30, 1996 and 1995, the Fund
generated $1,441,008 and $1,751,401 of funds from operations and distributed
13% and 48% of these amounts to partners during the nine months ended
September 30, 1996 and 1995, respectively and 1% and 6% of these amounts to
partners in October 1996 and 1995, respectively. 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
During the nine months ended September 30, 1996 and 1995, the Fund pur-
chased $3,389,929 and $897,705, respectively, of equipment. 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.
September 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.
11-13-96 By: Freddie M. Kotek
________ _____________________________
Date Freddie M. Kotek
President of F. L. Partnership Management, Inc.
(Principal Operating Officer)
11-13-96 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.
_______ _____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
_______ _____________________________
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 607,480
<SECURITIES> 0
<RECEIVABLES> 351,028
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 958,508
<PP&E> 11,314,703
<DEPRECIATION> 7,102,754
<TOTAL-ASSETS> 5,170,457
<CURRENT-LIABILITIES> 97,060
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,073,397
<TOTAL-LIABILITY-AND-EQUITY> 5,170,457
<SALES> 1,566,381
<TOTAL-REVENUES> 1,690,728
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,623,758
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 66,970
<INCOME-TAX> 0
<INCOME-CONTINUING> 66,970
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 66,970
<EPS-PRIMARY> 4.83
<EPS-DILUTED> 4.83
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