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, 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)
June 30, December 31,
1997 1996
________ ________
Cash and cash equivalents $1,490,834 $1,279,570
Accounts receivable 239,704 216,696
Due from related parties - 2,877
Equipment under operating leases
(net of accumulated depreciation
of $4,131,926 and $6,491,645,
respectively) 3,459,486 3,572,350
__________ __________
Total assets $5,190,024 $5,071,493
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 116,719 $ 43,812
Accounts payable and
accrued expenses 22,160 28,167
Due to related parties - 8,714
__________ __________
Total liabilities 138,879 80,693
Partners' capital 5,051,145 4,990,800
__________ __________
Total liabilities and
partners' capital $5,190,024 $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 Six Months Ended
June 30 June 30
1997 1996 1997 1996
____ ____ ____ ____
Income:
Rentals $503,991 $495,565 $ 998,594 $1,042,674
Interest 19,553 40,393 40,452 66,298
Gain on sale of equipment,
net 43,552 58,861 53,777 28,495
Other 456 860 1,031 1,333
________ ________ __________ __________
567,552 595,679 1,093,854 1,138,800
________ ________ __________ __________
Expenses:
Depreciation and
amortization 404,627 302,360 762,408 687,804
Write-down of equipment
to net realizable value 3,563 137,015 7,126 273,383
General and administrative 16,956 7,512 29,901 39,689
General and administrative
to related party 25,848 35,652 54,130 74,679
Management fee to related
party 20,160 19,588 39,944 41,222
________ ________ __________ __________
471,154 502,127 893,509 1,116,777
________ ________ __________ __________
Net income $ 96,398 $ 93,552 $ 200,345 $ 22,023
======== ======== ========== ==========
Net income per equivalent
limited partnership unit $ 7.24 $ 6.99 $ 15.08 $ 1.52
======== ======== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding
during the period 13,182 13,292 13,150 13,507
======== ======== ========== ==========
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, 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 (1,400) - (138,600) (140,000)
Net income 2,003 - 198,342 200,345
_______ ______ __________ __________
Balance, June 30, 1997 $(9,356) 21,695 $5,060,501 $5,051,145
======= ====== ========== ==========
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, 1997 and 1996
(Unaudited)
1997 1996
__________ __________
Cash flows from operating activities:
Net income $ 200,345 $ 22,023
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 762,408 687,804
Write-down of equipment to net realizable value 7,126 273,383
Gain on sale of equipment, net (53,777) (28,495)
(Increase) decrease in accounts receivable (23,008) (64,443)
(Increase) decrease in interest receivable - (19,439)
(Increase) decrease in due from related parties 2,877 (20,489)
Increase (decrease) in lease rents paid
in advance 72,907 10,126
Increase (decrease) in due to related party (10,662) (85,527)
Increase (decrease) in other, net (4,059) 9,241
__________ __________
753,812 762,161
__________ __________
Net cash provided by operating activities 954,157 784,184
__________ __________
Cash flows from investing activities:
Acquisition of equipment (656,670) (1,129,281)
Proceeds from sale of equipment 53,777 194,161
__________ __________
Net cash used in investing activities (602,893) (935,120)
__________ __________
Cash flows from financing activities:
Redemptions of capital - (226,132)
Distributions (140,000) (125,000)
__________ __________
Net cash used in financing activities (140,000) (351,132)
__________ __________
Increase (decrease) in cash and cash equivalents 211,264 (502,068)
Cash and cash equivalents, beginning
of period 1,279,570 2,861,597
__________ __________
Cash and cash equivalents, end of period $1,490,834 $2,359,529
========== ==========
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, 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 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, $7,126 and $273,383 was charged to write-
down of equipment to net realizable value for the six months ended
June 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 June 30, 1997 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1997 $ 907,000
1998 1,506,000
1999 680,000
2000 50,000
__________
$3,143,000
==========
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.
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 six months ended
June 30, 1997 and 1996:
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
____ ____ ____ ____
Management fee $20,160 $19,588 $39,944 $41,222
Reimbursable costs 25,848 35,652 54,130 74,679
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 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 remitted to the Fund.
Amounts due to related parties at December 31, 1996 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. CASH DISTRIBUTIONS
The General Partner declared and paid a cash distribution of $20,000
subsequent to June 30, 1997 for the month ended June 30, 1997, to all
admitted partners as of June 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 $567,552 and
$595,679 for the three months ended June 30, 1997 and 1996, respectively,
and $1,093,854 and $1,138,800 for the six months ended June 30, 1997 and
1996, respectively. Rental income from the leasing of computer equipment
accounted for 89% and 83% of total revenues for the second quarter of 1997 and
1996, respectively, and 91% and 92% of total revenues for the six months ended
June 30, 1997 and 1996, respectively. The decrease in revenues is primarily
attributable to the decrease in rental income. In 1997, rental income
decreased by approximately $435,000 because of equipment which came off lease
and was re-leased at lower rental rates or sold. This decrease, however, was
reduced by approximately $391,000 of rents generated from equipment purchased
since the second quarter of 1996. Additionally, interest income decreased in
1997 as compared to 1996 because of lower cash balances available for invest-
ment by the Fund in the current year. The Fund recognized a net gain on sale
of equipment of $53,777 for the six months ended June 30, 1997 as compared to a
net gain on sale of equipment of $28,495 for the six months ended June 30, 1996
which reduced the overall decrease in revenues in 1997.
Expenses were $471,154 and $502,127 for the three months ended June 30,
1997 and 1996, respectively, and $893,509 and $1,116,777 for the six
months ended June 30, 1997 and 1996, respectively. Depreciation and
amortization comprised 86% and 60% of total expenses during the second
quarter of 1997 and 1996, respectively and 85% and 62% of total expenses for
the six months ended June 30, 1997 and 1996, respectively. The decrease in
expenses is directly related to the 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, $7,126 was charged to operations to
write down equipment to its estimated net realizable value for the six months
ended June 30, 1997 as compared to $273,383 for the six months ended June 30,
1996. Any future losses are dependent upon unanticipated technological
developments affecting the computer equipment industry in subsequent years.
The increase in depreciation expense in 1997 resulting from new equipment
purchases made since June 1996 reduced the overall decrease in expenses in
1997.
The Fund's net income was $96,398 and $93,552 for the three months
ended June 30, 1997 and 1996, respectively, and $200,345 and $22,023 for the
six months ended June 30, 1997 and 1996, respectively. The earnings per
equivalent limited partnership unit, after earnings allocated to the General
Partner, were $7.24 and $6.99 based on a weighted average number of equivalent
limited partnership units outstanding of 13,182 and 13,292 for the three months
ended June 30, 1997 and 1996, respectively. The earnings per equivalent
limited partnership unit, after earnings allocated to the General Partner, were
$15.08 and $1.52 based on a weighted average number of equivalent limited
partnership units outstanding of 13,150 and 13,507 for the six months ended
June 30, 1997 and 1996, respectively.
The Fund generated $461,036 and $474,066 of cash from operations, for the
purpose of determining cash available for distribution, during the quarter
ended June 30, 1997 and 1996, respectively and distributed 9% and 8% of
these amounts to partners during the second quarter of 1997 and 1996, respec-
tively and 4% of these amounts to partners subsequent to both June 1997 and
1996. For the six months ended June 30, 1997 and 1996, the Fund generated
$916,102 and $954,715 of cash from operations and distributed 11% and 13% of
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)
these amounts to partners during the six months ended June 30, 1997 and 1996,
respectively and 2% of these amounts to partners subsequent to both June 1997
and 1996. For financial statement purposes, the Fund records cash distribu-
tions to partners on a cash basis in the period in which they are paid.
ANALYSIS OF FINANCIAL CONDITION
During the six months ended June 30, 1997 and 1996, the Fund purchased
equipment of $656,670 and $1,129,281, 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, 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.
8/11/97 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of F.L Partnership
Management, Inc.
(Principal Operating Officer)
8/11/97 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-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,490,834
<SECURITIES> 0
<RECEIVABLES> 239,704
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,730,538
<PP&E> 7,591,412
<DEPRECIATION> 4,131,926
<TOTAL-ASSETS> 5,190,024
<CURRENT-LIABILITIES> 138,879
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,051,145
<TOTAL-LIABILITY-AND-EQUITY> 5,190,024
<SALES> 998,594
<TOTAL-REVENUES> 1,093,854
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 893,509
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 200,345
<INCOME-TAX> 0
<INCOME-CONTINUING> 200,345
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 200,345
<EPS-PRIMARY> 15.08
<EPS-DILUTED> 15.08
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