SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1997
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____ to _____
Commission file number: 0-20131
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)
March 31, December 31,
1997 1996
________ ________
Cash and cash equivalents $1,761,842 $1,279,570
Accounts receivable 210,970 216,696
Due from related parties 13,794 2,877
Equipment under operating leases
(net of accumulated depreciation
of $4,311,229 and $6,491,645,
respectively) 3,211,006 3,572,350
__________ __________
Total assets $5,197,612 $5,071,493
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 139,865 $ 43,812
Accounts payable and
accrued expenses 22,058 28,167
Due to related parties 942 8,714
__________ __________
Total liabilities 162,865 80,693
Partners' capital 5,034,747 4,990,800
__________ __________
Total liabilities and
partners' capital $5,197,612 $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
For the three months ended March 31, 1997 and 1996
(Unaudited)
1997 1996
________ ________
Income:
Rentals $494,603 $547,109
Interest 20,899 25,905
Gain on sale of equipment, net 10,225 -
Other 575 473
________ ________
526,302 573,487
________ ________
Expenses:
Depreciation and amortization 357,781 385,444
Write-down of equipment to net
realizable value 3,563 136,368
General and administrative 12,945 32,177
General and administrative to related
party 28,282 39,027
Management fee to related party 19,784 21,634
Loss on sale of equipment, net - 30,366
________ ________
422,355 645,016
________ ________
Net income (loss) $103,947 $(71,529)
======== ========
Net income (loss) per equivalent
limited partnership unit $ 7.84 $ (5.16)
======== ========
Weighted average number of
equivalent limited partnership
units outstanding during the period 13,131 13,721
======== ========
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 three months ended March 31, 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 (600) - (59,400) (60,000)
Net income 1,039 - 102,908 103,947
_______ ______ __________ __________
Balance, March 31, 1997 $(9,520) 21,695 $5,044,267 $5,034,747
======= ====== ========== ==========
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 three months ended March 31, 1997 and 1996
(Unaudited)
1997 1996
__________ __________
Cash flows from operating activities:
Net income (loss) $ 103,947 $ (71,529)
__________ __________
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 357,781 385,444
Write-down of equipment to net realizable value 3,563 136,368
(Gain) loss on sale of equipment, net (10,225) 30,366
(Increase) decrease in accounts receivable 5,726 (19,951)
(Increase) decrease in due from related parties (10,917) (80,629)
Increase (decrease) in lease rents paid
in advance 96,053 (598)
Increase (decrease) in due to related parties (7,772) (31,830)
Increase (decrease) in accounts payable and
accrued expenses (6,109) 38,424
Increase (decrease) in other, net - 4,136
__________ __________
428,100 461,730
__________ __________
Net cash provided by operating activities 532,047 390,201
__________ __________
Cash flows from investing activities:
Acquisition of equipment - (1,129,280)
Proceeds from sale of equipment 10,225 134,281
__________ __________
Net cash provided by (used in)
investing activities 10,225 (994,999)
__________ __________
Cash flows from financing activities:
Redemptions of capital - (226,132)
Distributions (60,000) (65,000)
__________ __________
Net cash used in financing activities (60,000) (291,132)
__________ __________
Increase (decrease) in cash and cash equivalents 482,272 (895,930)
Cash and cash equivalents, beginning
of period 1,279,570 2,861,597
__________ __________
Cash and cash equivalents, end of period $1,761,842 $1,965,667
========== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
The accompanying unaudited condensed financial statements have been prepared
by the Fund in accordance with Generally Accepted Accounting Principles,
pursuant to the rules and regulations of the Securities and Exchange Commis-
sion. In the opinion of Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Certain amounts on the 1996 financial statements have been
reclassified to conform to the presentation in 1997.
1. EQUIPMENT LEASED
Equipment on lease consists primarily of computer equipment under operating
leases. The lessees have agreements with the manufacturer of the equipment
to provide maintenance for the leased equipment. The Fund's operating
leases are for initial lease terms of 24 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,
$3,563 and $136,368 was charged to write-down of equipment to net
realizable value for the three months ended March 31, 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 March 31, 1997 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1997 $1,309,000
1998 1,306,000
1999 480,000
__________
$3,095,000
==========
Subsequent to March 31, 1997, the Fund purchased $656,670 of equipment
subject to operating leases with initial lease terms of 36 months. The
future approximate minimum rentals to be received on these noncancellable
operating leases are $149,913 in 1997 and $199,884 in 1998 and $199,884 in
1999 and $49,971 in 2000.
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 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 months ended
March 31:
1997 1996
________ ________
Management fee $19,784 $21,634
Reimbursable costs 28,282 39,027
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 March 31, 1997 and December 31, 1996
represent monies due the Fund from the General Partner and/or other
affiliated funds for rentals and sales proceeds collected and not yet re-
mitted to the Fund.
Amounts due to related parties at March 31, 1997 and December 31, 1996
represent monies due to the General Partner and/or its parent company for
the fees and costs mentioned above, as well as, rentals and sales proceeds
collected by the Fund on behalf of other affiliated funds.
3. CASH DISTRIBUTIONS
The General Partner declared and paid two cash distributions of $20,000
each subsequent to March 31, 1997 for the months ended February 28 and
March 31, 1997, to all admitted partners as of February 28 and March 31,
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 $526,302 and
$573,487 for the three months ended March 31, 1997 and 1996, respectively.
Rental income from the leasing of computer peripheral equipment accounted for
94% and 95% of total revenues for the first quarter of 1997 and 1996, respec-
tively. The decrease in revenues is primarily attributable to the decrease in
rental income. In 1997, rental income decreased by approximately $223,000 be-
cause of equipment which came off lease and was re-leased at lower rental rates
or sold. This decrease, however, was mitigated by approximately $171,000 of
rents generated from equipment purchased since the first quarter of 1996.
Expenses were $422,355 and $645,016 for the three months ended March 31,
1997 and 1996, respectively. Depreciation and amortization comprised 85% and
60% of total expenses during the first quarter of 1997 and 1996, respectively.
The decrease in expenses is partially related to the decrease in depreciation
expense resulting from equipment which came off lease or was sold since the
first quarter of 1996. Additionally, the decrease in expenses was due to a
decrease in the write-down of equipment to net realizable value. Based upon
the review of the recoverability of the undepreciated cost of rental equipment,
$3,563 was charged to operations to write down equipment to its estimated net
realizable value for the three months ended March 31, 1997 as compared to
$136,368 for the three months ended March 31, 1996. Any future losses are
dependent upon unanticipated technological developments affecting the computer
equipment industry in subsequent years. Furthermore, the Fund recorded a net
gain on sale of equipment of $10,225 for the first quarter of 1997 and a net
loss on sale of equipment of $30,366 for the first quarter of 1996 which
contributed to the overall decrease in expenses between the first quarter of
1997 and 1996.
The Fund's net income (loss) was $103,947 and ($71,529) for the three
months ended March 31, 1997 and 1996, respectively. The income (loss) per
equivalent limited partnership unit, after income (loss) allocated to the
General Partner, was $7.84 and ($5.16) based on a weighted average number of
equivalent limited partnership units outstanding of 13,131 and 13,721 for the
three months ended March 31, 1997 and 1996, respectively.
The Fund generated $455,066 and $480,649 of funds from operations, for the
purpose of determining cash available for distribution, during the quarter
ended March 31, 1997 and 1996, respectively and distributed 4% and 14% of
these amounts to partners during the first quarter of 1997 and 1996, respec-
tively and 9% and 4% of these amounts to partners subsequent to March 31, 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.
8
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
ANALYSIS OF FINANCIAL CONDITION
During the three months ended March 31, 1997, the Fund made no
purchases of equipment. During the three months ended March 31, 1996, the Fund
purchased $1,129,280 of equipment. The Fund will continue to purchase
equipment with cash available from operations which is not distributed to
partners.
Subsequent to March 31, 1997, the Fund purchased $656,670 of equipment for
lease.
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.
March 31, 1997
Item 1. Legal Proceedings: Inapplicable.
Item 2. Changes in Securities: Inapplicable.
Item 3. Defaults Upon Senior Securities: Inapplicable.
Item 4. Submission of Matters to a Vote of Securities Holders: Inapplicable.
Item 5. Other Information: Inapplicable.
Item 6. Exhibits and Reports on Form 8-K:
a) Exhibits: None
b) Reports on Form 8-K: None
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.
5-14-97 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of F.L Partnership
Management, Inc.
(Principal Operating Officer)
5-14-97 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
11
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,761,842
<SECURITIES> 0
<RECEIVABLES> 224,764
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,986,606
<PP&E> 7,522,235
<DEPRECIATION> 4,311,229
<TOTAL-ASSETS> 5,197,612
<CURRENT-LIABILITIES> 162,865
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,034,747
<TOTAL-LIABILITY-AND-EQUITY> 5,197,612
<SALES> 494,603
<TOTAL-REVENUES> 526,302
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 422,355
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 103,947
<INCOME-TAX> 0
<INCOME-CONTINUING> 103,947
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103,947
<EPS-PRIMARY> 7.84
<EPS-DILUTED> 7.84
</TABLE>
