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, 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: 0-20131
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.)
7004 W. Butler 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,
1997 1996
___________ ____________
Cash and cash equivalents $1,858,347 $1,279,570
Accounts receivable 181,968 216,696
Due from related parties 15,600 2,877
Equipment under operating leases
(net of accumulated depreciation
of $4,148,756 and $6,491,645,
respectively) 3,209,974 3,572,350
__________ __________
Total assets $5,265,889 $5,071,493
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 94,426 $ 43,812
Accounts payable and
accrued expenses 14,775 28,167
Due to related parties 7,015 8,714
__________ __________
Total liabilities 116,216 80,693
Partners' capital 5,149,673 4,990,800
__________ __________
Total liabilities and
partners' capital $5,265,889 $5,071,493
========== ==========
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
1997 1996 1997 1996
____ ____ ____ ____
Income:
Rentals $489,977 $523,707 $1,488,571 $1,566,381
Interest 22,602 25,929 63,054 92,227
Gain on sale of equipment,
net 89,113 1,395 142,890 29,890
Other 1,054 897 2,085 2,230
________ ________ __________ __________
602,746 551,928 1,696,600 1,690,728
________ ________ __________ __________
Expenses:
Depreciation and amortization 393,428 311,084 1,155,836 998,888
Write-down of equipment
to net realizable value 6,743 131,657 13,869 405,040
General and administrative 17,957 8,453 47,858 48,142
General and administrative to
related party 26,491 34,912 80,621 109,591
Management fee to related party 19,599 20,875 59,543 62,097
________ ________ __________ __________
464,218 506,981 1,357,727 1,623,758
________ ________ __________ __________
Net income $138,528 $ 44,947 $ 338,873 $ 66,970
======== ======== ========== ==========
Net income per equivalent
limited partnership unit $ 10.28 $ 3.33 $ 25.39 $ 4.83
======== ======== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during
the period 13,341 13,335 13,214 13,449
======== ======== ========== ==========
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, 1997
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1997 $(9,959) 21,695 $5,000,759 $4,990,800
Cash distributions (1,800) - (178,200) (180,000)
Net income 3,389 - 335,484 338,873
_______ ______ __________ __________
Balance, September 30, 1997 $(8,370) 21,695 $5,158,043 $5,149,673
======= ====== ========== ==========
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, 1997 and 1996
(Unaudited)
1997 1996
____ ____
Cash flows from operating activities:
Net income $ 338,873 $ 66,970
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,155,836 998,888
Write-down of equipment to net
realizable value 13,869 405,040
Gain on sale of equipment, net (142,890) (29,890)
(Increase) decrease in accounts receivable 34,728 47,401
(Increase) decrease in interest receivable - (19,439)
(Increase) decrease in due from related parties (12,723) (40,280)
Increase (decrease) in lease rents paid
in advance 50,614 22,559
Increase (decrease) in accounts payable and
accrued expenses (13,392) (8,896)
Increase (decrease) in due to related parties (1,699) (84,553)
__________ __________
1,084,343 1,290,830
__________ __________
Net cash provided by operating activities 1,423,216 1,357,800
__________ __________
Cash flows from investing activities:
Acquisition of equipment (807,329) (3,389,929)
Proceeds from sale of equipment 142,890 200,360
__________ __________
Net cash used in investing activities (664,439) (3,189,569)
__________ __________
Cash flows from financing activities:
Redemptions of capital - (237,348)
Distributions (180,000) (185,000)
__________ __________
Net cash used in financing activities (180,000) (422,348)
__________ __________
Increase (decrease) in cash and cash equivalents 578,777 (2,254,117)
Cash and cash equivalents, beginning
of period 1,279,570 2,861,597
__________ __________
Cash and cash equivalents, end of period $1,858,347 $ 607,480
========== ==========
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, 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
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 36
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, $13,869 and $405,040 was charged to write-
down of equipment to net realizable value for the nine months ended
September 30, 1997 and 1996, 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, 1997 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1997 $ 453,000
1998 1,572,000
1999 696,000
2000 81,000
__________
$2,802,000
==========
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 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.
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 and nine months
ended September 30, 1997 and 1996:
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
____ ____ ____ ____
Management fee $19,599 $20,875 $59,543 $ 62,097
Reimbursable costs 26,491 34,912 80,621 109,591
The Fund maintains its checking and investment accounts 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 September 30, 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 the Fund.
Amounts due to related parties at September 30, 1997 and December 31,
1996 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. CASH DISTRIBUTION
The General Partner declared and paid a cash distribution of $20,000
subsequent to September 30, 1997 for the month ended September 30, 1997, to
all admitted partners as of September 30, 1997.
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 $602,746 and
$551,928 for the three months ended September 30, 1997 and 1996, respectively,
and $1,696,600 and $1,690,728 for the nine months ended September 30, 1997 and
1996, respectively. Rental income from the leasing of computer equipment
accounted for 81% and 95% of total revenues for the third quarter of 1997 and
1996, respectively, and 88% of total revenues for the nine months ended
September 30, 1997 and 93% of total revenues for the nine months ended
September 30, 1996. The increase in revenues is primarily attributable to the
increase in net gain on sale of equipment. The Fund recognized a net gain on
sale of equipment of $142,890 and $29,890 for the nine months ended
September 30, 1997 and 1996, respectively. However, the decrease in rental
income served to mitigate the majority of this increase in revenues. In 1997,
rental income decreased by approximately $656,000 because of equipment which
came off lease and was re-leased at lower rental rates or sold. This decrease,
however, was reduced by approximately $578,000 of rents generated from
equipment purchased since the third quarter of 1996 as well as rental income
earned on 1996 equipment purchases for which a full nine months of rent was
earned in 1997 but only a portion of the nine months was earned in 1996. In
addition, interest income decreased in 1997 because of lower cash balances
available for investment by the Fund during 1997 as compared to 1996.
Expenses were $464,218 and $506,981 for the three months ended
September 30, 1997 and 1996, respectively, and $1,357,727 and $1,623,758 for
the nine months ended September 30, 1997 and 1996, respectively. Depreciation
and amortization comprised 85% and 61% of total expenses during the third
quarter of 1997 and 1996, respectively, and 85% and 62% of total expenses for
the nine months ended September 30, 1997 and 1996, respectively. The decrease
in expenses in 1997 is directly related to the decrease in write-down of
equipment to net realizable value. Based upon the quarterly review of the
recoverability of the undepreciated cost of rental equipment, $13,869 and
$405,040 was charged to operations to write down equipment to its estimated net
realizable value during the nine months ended September 30, 1997 and 1996,
respectively. Any future losses are dependent upon unanticipated technological
developments affecting the computer equipment industry in subsequent years.
However, the overall decrease in expenses was reduced by an increase in
depreciation and amortization of $157,000 because of new equipment acquired in
1997 as well as equipment purchased in 1996 that had a full nine months of
depreciation in 1997 and only a portion of the nine months in 1996.
The Fund's net income was $138,528 and $44,947 for the three months
ended September 30, 1997 and 1996, respectively, and $338,873 and $66,970
for the nine months ended September 30, 1997 and 1996, respectively. The
earnings per equivalent limited partnership unit, after earnings
allocated to the General Partner, were $10.28 and $3.33 based on a weighted
average number of equivalent limited partnership units outstanding of 13,341
and 13,335 for the three months ended September 30 1997 and 1996, respectively.
The earnings per equivalent limited partnership unit, after earnings
allocated to the General Partner, were $25.39 and $4.83 based on a
weighted average number of equivalent limited partnership units outstanding of
13,214 and 13,449 for the nine months ended September 30, 1997 and 1996,
respectively.
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)
The Fund generated $449,586 and $486,293 of cash from operations, for the
purpose of determining cash available for distribution, during the quarter
ended September 30, 1997 and 1996, respectively and distributed 8% and 8% of
these amounts to partners during the third quarter of 1997 and 1996, respec-
tively and 4% and 4% of these amounts to partners in October 1997 and 1996,
respectively. For the nine months ended September 30, 1997 and 1996, the Fund
generated $1,365,688 and $1,441,008 of funds from operations and distributed
13% and 13% of these amounts to partners during the nine months ended
September 30, 1997 and 1996, respectively and 1% and 1% of these amounts to
partners in October 1997 and 1996, 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, 1997 and 1996, the Fund pur-
chased $807,329 and $3,389,929, 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, 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: 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.
11/11/97 By:
________ _____________________________
Date Freddie M. Kotek
President of F. L. Partnership Management, Inc.
(Principal Operating Officer)
11/11/97 By:
________ _____________________________
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-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,858,347
<SECURITIES> 0
<RECEIVABLES> 197,568
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,055,915
<PP&E> 7,358,730
<DEPRECIATION> 4,148,756
<TOTAL-ASSETS> 5,265,889
<CURRENT-LIABILITIES> 116,216
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,149,673
<TOTAL-LIABILITY-AND-EQUITY> 5,265,889
<SALES> 1,488,571
<TOTAL-REVENUES> 1,696,600
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,357,727
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 338,873
<INCOME-TAX> 0
<INCOME-CONTINUING> 338,873
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 338,873
<EPS-PRIMARY> 25.39
<EPS-DILUTED> 25.39
</TABLE>
