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, 1998
/ / 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.)
3 North Columbus Boulevard, Philadelphia, Pennsylvania 19106
_______________________________________________________________________________
(Address of principal executive offices) (Zip code)
(215) 574-1636
_______________________________________________________________________________
(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 12
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VIII, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
June 30, December 31,
1998 1997
________ ________
Cash and cash equivalents $ 104,325 $2,022,967
Accounts receivable 151,994 154,812
Due from related parties 7,552 83,907
Equipment under operating leases
(net of accumulated depreciation
of $5,339,099 and $4,603,427,
respectively) 3,326,518 3,014,540
Net investment in direct financing
leases 788,331 -
Equipment held for sale or lease 875,101 -
__________ __________
Total assets $5,253,821 $5,276,226
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 53,945 $ 82,510
Accounts payable and
accrued expenses 123,609 52,701
Due to related parties 1,939 7,918
__________ __________
Total liabilities 179,493 143,129
Partners' capital 5,074,328 5,133,097
__________ __________
Total liabilities and
partners' capital $5,253,821 $5,276,226
========== ==========
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
1998 1997 1998 1997
____ ____ ____ ____
Income:
Rentals $593,614 $503,991 $1,136,720 $ 998,594
Earned income on direct
financing leases 8,290 - 8,290 -
Interest 15,769 19,553 42,249 40,452
Gain on sale of equipment,
net 225 43,552 225 53,777
Other 1,415 456 1,949 1,031
________ ________ __________ __________
619,313 567,552 1,189,433 1,093,854
________ ________ __________ __________
Expenses:
Depreciation 471,646 404,627 897,058 762,408
Write-down of equipment
to net realizable value 81,117 3,563 81,117 7,126
General and administrative 16,940 16,956 37,259 29,901
General and administrative
to related party 36,480 25,848 66,722 54,130
Management fee to related
party 24,165 20,160 46,046 39,944
________ ________ __________ __________
630,348 471,154 1,128,202 893,509
________ ________ __________ __________
Net income (loss) $( 11,035) $ 96,398 $ 61,231 $ 200,345
========= ======== ========== ==========
Net income (loss) per equivalent
limited partnership unit $ (.87) $ 7.24 $ 4.49 $ 15.08
========= ======== ========== ==========
Weighted average number of equivalent
limited partnership units
outstanding during the period 13,350 13,182 13,362 13,150
========= ======== ========== ==========
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, 1998
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1998 $(8,536) 21,695 $5,141,633 $5,133,097
Cash distributions (1,200) - (118,800) (120,000)
Net income 1,200 - 60,031 61,231
_______ ______ __________ __________
Balance, June 30, 1998 $( 8,536) 21,695 $5,082,864 $5,074,328
======== ====== ========== ==========
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, 1998 and 1997
(Unaudited)
1998 1997
__________ __________
Cash flows from operating activities:
Net income $ 61,231 $ 200,345
__________ __________
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 897,058 762,408
Write-down of equipment to net realizable value 81,117 7,126
Proceeds from direct financing leases,
net of earned income 38,554 -
Gain on sale of equipment, net (225) (53,777)
(Increase) decrease in accounts receivable 2,818 (23,008)
(Increase) decrease in due from related parties 76,355 2,877
Increase (decrease) in lease rents paid
in advance (28,565) 72,907
Increase (decrease) in accounts payable
and accrued expenses 70,908 (6,007)
Increase (decrease) in other, net (5,979) (8,714)
__________ __________
1,132,041 753,812
__________ __________
Net cash provided by operating activities 1,193,272 954,157
__________ __________
Cash flows from investing activities:
Acquisition of equipment (2,165,254) (656,670)
Investment in direct financing leases (826,885) -
Proceeds from sale of equipment 225 53,777
__________ __________
Net cash used in investing activities (2,991,914) (602,893)
__________ __________
Cash flows from financing activities:
Distributions (120,000) (140,000)
__________ __________
Net cash used in financing activities (120,000) (140,000)
__________ __________
Increase (decrease) in cash and
cash equivalents (1,918,642) 211,264
Cash and cash equivalents, beginning
of period 2,022,967 1,279,570
__________ __________
Cash and cash equivalents, end of period $ 104,325 $1,490,834
========== ==========
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, 1998
(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 1997 financial statements have been
reclassified to conform to the presentation in 1998.
1. EQUIPMENT LEASED
Equipment on lease consists primarily of computer equipment under operating
leases. 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 11 to 58 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, $81,117 and $7,126
was charged to write-down of equipment to net realizable value for the six
months ended June 30, 1998 and 1997, respectively. Any future losses are
dependent upon unanticipated technological developments affecting the
computer equipment industry in subsequent years.
The Fund also has equipment leased under the direct financing method in
accordance with Statement of Financial Accounting Standards No. 13. This
method provides for recognition of income (the excess of the aggregate
future rentals and estimated additional amounts recoverable upon expiration
of the lease over the related equipment cost) over the life of the lease
using the interest method.
The net investment in direct financing leases as of June 30, 1998 is as
follows:
Net minimum lease payments to be received $866,000
Less unearned income 78,000
Add expected future residual -
________
$788,000
========
6
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. EQUIPMENT LEASED (Continued)
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of June 30, 1998 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1998 $ 894,000 $140,000
1999 1,146,000 281,000
2000 474,000 281,000
2001 251,000 164,000
2002 53,000 -
Thereafter 4,000 -
__________ ________
$2,822,000 $866,000
========== ========
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.
7
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
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, 1998 and 1997:
Three Months Ended Six Months Ended
June 30 June 30
1998 1997 1998 1997
____ ____ ____ ____
Management fee $24,165 $20,160 $46,046 $39,944
Reimbursable costs 36,480 25,848 66,722 54,130
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 June 30, 1998 and December 31, 1997
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 June 30, 1998 and December 31, 1997
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 cash distributions of $20,000 each
subsequent to June 30, 1998 for the months ended May 31 and June 30, 1998,
to all admitted partners as of May 31 and June 30, 1998.
8
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 $619,313 and
$567,552 for the three months ended June 30, 1998 and 1997, respectively,
and $1,189,433 and $1,093,854 for the six months ended June 30, 1998 and
1997, respectively. Rental income from the leasing of equipment accounted for
96% and 89% of total revenues for the second quarter of 1998 and 1997,
respectively, and 96% and 91% of total revenues for the six months ended
June 30, 1998 and 1997, respectively. The increase in revenues is primarily
attributable to the increase in rental income. In 1998, rental income
increased by approximately $239,000 resulting from rents generated from
equipment purchased since the second quarter of 1997 as well as rents
recognized on second quarter 1997 equipment purchases for which a full six
months was earned in 1998 and only a portion of six months was earned in 1997.
This increase, however, was reduced by approximately $101,000 because of
equipment which came off lease and was re-leased at lower rental rates or sold.
The Fund recognized a net gain on sale of equipment of $225 for the six months
ended June 30, 1998 as compared to a net gain on sale of equipment of $53,777
for the six months ended June 30, 1997 which reduced the overall increase in
revenues in 1998.
Expenses were $630,348 and $471,154 for the three months ended June 30,
1998 and 1997, respectively, and $1,128,202 and $893,509 for the six
months ended June 30, 1998 and 1997, respectively. Depreciation expense
comprised 60% and 86% of total expenses during the second quarter of 1998 and
1997, respectively and 70% and 85% of total expenses for the six months ended
June 30, 1998 and 1997, respectively. The increase in expenses is primarily
attributable to the increase in depreciation expense resulting from equipment
purchases made since June 1997. The increase in expenses is also related to
the increase in the write-down of equipment to net realizable value.
Based upon the review of the recoverability of the undepreciated cost of rental
equipment, $81,117 was charged to operations to write down equipment to its
estimated net realizable value for the six months ended June 30, 1998
compared to $7,126 for the six months ended June 30, 1997. Any future losses
are dependent upon unanticipated technological developments affecting the
computer equipment industry in subsequent years.
The Fund's net income (loss) was ($11,035) and $96,398 for the three
months ended June 30, 1998 and 1997, respectively, and $61,231 and $200,345
for the six months ended June 30, 1998 and 1997, respectively. The earnings
(loss) per equivalent limited partnership unit, after earnings (loss) allocated
to the General Partner, were $(0.87) and $7.24 based on a weighted average
number of equivalent limited partnership units outstanding of 13,350 and
13,182 for the three months ended June 30, 1998 and 1997, respectively. The
earnings per equivalent limited partnership unit, after earnings allocated to
the General Partner, were $4.49 and $15.08 based on a weighted average number
of equivalent limited partnership units outstanding of 13,362 and 13,150 for
the six months ended June 30, 1998 and 1997, respectively.
9
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 $541,503 and $461,036 of cash from operations, for the
purpose of determining cash available for distribution, during the quarter
ended June 30, 1998 and 1997, respectively and distributed 4% and 9% of
these amounts to partners during the second quarter of 1998 and 1997, respec-
tively and 7% and 4% of these amounts to partners subsequent to June 30, 1998
and 1997, respectively. For the six months ended June 30, 1998 and 1997, the
Fund generated $1,039,181 and $916,102 of cash from operations and distributed
8% and 11% of these amounts to partners during the six months ended June 30,
1998 and 1997, respectively and 4% and 2% of these amounts to partners
subsequent to June 30, 1998 and 1997, 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 six months ended June 30, 1998 and 1997, the Fund purchased
$2,165,254 and $656,670, respectively, of equipment subject to operating
leases. The Fund also invested $826,885 in direct financing leases during the
quarter ended June 30, 1998. 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.
10
Part II: Other Information
FIDELITY LEASING INCOME FUND VIII, L.P.
June 30, 1998
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
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.
8-13-98 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of F.L Partnership
Management, Inc.
(Principal Operating Officer)
8-13-98 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12
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:
8-13-98 ___________________________
Date Freddie M. Kotek
President of F.L Partnership
Management, Inc.
(Principal Operating Officer)
By:
8-13-98 ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 104,325
<SECURITIES> 0
<RECEIVABLES> 159,546
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 263,871
<PP&E> 9,540,718
<DEPRECIATION> 5,339,099
<TOTAL-ASSETS> 5,253,821
<CURRENT-LIABILITIES> 179,493
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,074,328
<TOTAL-LIABILITY-AND-EQUITY> 5,253,821
<SALES> 1,136,720
<TOTAL-REVENUES> 1,189,433
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,128,202
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 61,231
<INCOME-TAX> 0
<INCOME-CONTINUING> 61,231
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61,231
<EPS-PRIMARY> 4.49
<EPS-DILUTED> 4.49
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