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, 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, PA 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)
September 30, December 31,
1998 1997
___________ ____________
Cash and cash equivalents $ 553,508 $2,022,967
Accounts receivable 251,258 154,812
Due from related parties 172,412 83,907
Equipment under operating leases
(net of accumulated depreciation
of $3,635,324 and $4,603,427,
respectively) 2,949,148 3,014,540
Net investment in direct financing leases 1,533,568 -
Equipment held for sale or lease 5,902 -
__________ __________
Total assets $5,465,796 $5,276,226
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 36,608 $ 82,510
Accounts payable - equipment 246,952 -
Accounts payable and
accrued expenses 44,778 52,701
Due to related parties 1,155 7,918
__________ __________
Total liabilities 329,493 143,129
Partners' capital 5,136,303 5,133,097
__________ __________
Total liabilities and
partners' capital $5,465,796 $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 Nine Months Ended
September 30 September 30
1998 1997 1998 1997
____ ____ ____ ____
Income:
Rentals $577,186 $489,977 $1,713,907 $1,488,571
Earned income on direct
financing leases 28,486 - 36,776 -
Interest 3,565 22,602 45,813 63,054
Gain on sale of equipment,
net 72,145 89,113 72,370 142,890
Other 1,868 1,054 3,817 2,085
________ ________ __________ __________
683,250 602,746 1,872,683 1,696,600
________ ________ __________ __________
Expenses:
Depreciation 404,242 393,428 1,301,300 1,155,836
Write-down of equipment
to net realizable value 92,500 6,743 173,617 13,869
General and administrative 28,844 17,957 66,104 47,858
General and administrative to
related party 29,639 26,491 96,361 80,621
Management fee to related party 26,049 19,599 72,095 59,543
________ ________ __________ __________
581,274 464,218 1,709,477 1,357,727
________ ________ __________ __________
Net income $101,976 $138,528 $ 163,206 $ 338,873
======== ======== ========== ==========
Net income per equivalent
limited partnership unit $ 7.59 $ 10.28 $ 12.08 $ 25.39
======== ======== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during
the period 13,365 13,341 13,363 13,214
======== ======== ========== ==========
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, 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 (1,600) - (158,400) (160,000)
Net income 1,800 - 161,406 163,206
------- ------ ---------- ----------
Balance, September 30, 1998 $(8,336) 21,695 $5,144,639 $5,136,303
======= ====== ========== ==========
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, 1998 and 1997
(Unaudited)
1998 1997
____ ____
Cash flows from operating activities:
Net income $ 163,206 $ 338,873
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 1,301,300 1,155,836
Write-down of equipment to net
realizable value 173,617 13,869
Proceeds from direct financing
leases, net of earned income 168,417 -
Gain on sale of equipment, net (72,370) (142,890)
(Increase) decrease in accounts receivable (96,446) 34,728
(Increase) decrease in due from related parties (88,505) (12,723)
Increase (decrease) in lease rents paid
in advance (45,902) 50,614
Increase (decrease) in accounts payable -
equipment 246,952 -
Increase (decrease) in other, net (14,686) (15,091)
__________ __________
1,572,377 1,084,343
__________ __________
Net cash provided by operating activities 1,735,583 1,423,216
__________ __________
Cash flows from investing activities:
Acquisition of equipment (1,508,883) (807,329)
Investment in direct financing leases (1,701,986) -
Proceeds from sale of equipment 165,827 142,890
__________ __________
Net cash used in investing activities (3,045,042) (664,439)
__________ __________
Cash flows from financing activities:
Distributions (160,000) (180,000)
__________ __________
Net cash used in financing activities (160,000) (180,000)
__________ __________
Increase (decrease) in cash
and cash equivalents (1,469,459) 578,777
Cash and cash equivalents, beginning of
period 2,022,967 1,279,570
__________ __________
Cash and cash equivalents, end of period $ 553,508 $1,858,347
========== ==========
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, 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, $173,617 and
$13,869 was charged to write-down of equipment to net realizable value for
the nine months ended September 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 September 30, 1998 is
as follows:
Net minimum lease payments to be received $1,648,000
Less unearned income 114,000
Add expected future residuals -
__________
$1,534,000
==========
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 September 30, 1998 are as
follows:
Direct
Years Ending December 31 Operating Financing
------------------------ ---------- ----------
1998 $ 490,000 $ 158,000
1999 1,189,000 633,000
2000 525,000 633,000
2001 302,000 224,000
Thereafter 83,000 -
__________ __________
$2,589,000 $1,648,000
========== ==========
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.
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 nine months
ended September 30, 1998 and 1997:
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
____ ____ ____ ____
Management fee $26,049 $19,599 $72,095 $ 59,543
Reimbursable costs 29,639 26,491 96,361 80,621
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, 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 re-
mitted to the Fund.
Amounts due to related parties at September 30, 1998 and
December 31, 1997 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 cash distributions of $20,000
subsequent to September 30, 1998 for each of the months ended July 31,
August 31 and September 30, 1998 for an aggreate $60,000, to all admitted
partners as of July 31, August 31 and September 30, 1998.
8
FIDELITY LEASING INCOME FUND VIII, L. P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
RESULTS OF OPERATIONS
Fidelity Leasing Income Fund VIII, L.P. had revenues of $683,250 and
$602,746 for the three months ended September 30, 1998 and 1997, respectively,
and $1,872,683 and $1,696,600 for the nine months ended September 30, 1998 and
1997, respectively. Rental income from the leasing of equipment accounted for
84% and 81% of total revenues for the third quarter of 1998 and 1997,
respectively, and 92% and 88% of total revenues for the nine months ended
September 30, 1998 and 1997, respectively. The increase in revenues is
primarily attributable to the increase in rental income. Rental income
increased approximately $398,000 because of rents generated from equipment
purchased since the third quarter of 1997 as well as rental income earned on
1997 equipment purchases for which a full nine months of rent was earned in
1998 and only a portion of the nine months was earned in 1997. This increase
in rental income was reduced by approximately $173,000 because of equipment
which came off lease and was re-leased at lower rental rates or sold.
Additionally, the Fund earned approximately $37,000 of income from direct
financing leases during the nine months ended September 30, 1998. There were
no direct financing leases at September 30, 1997. The increase in this account
also contributed to the overall increase in revenues. However, during the
first nine months of 1998, the Fund recognized $72,370 of net gain on sale of
equipment compared to $142,890 of net gain on sale of equipment for the same
period in 1997. This decrease reduced the increase in total revenues in 1998.
Expenses were $581,274 and $464,218 for the three months ended
September 30, 1998 and 1997, respectively, and $1,709,477 and $1,357,727
for the nine months ended September 30, 1998 and 1997, respectively.
Depreciation expense comprised 70% and 85% of total expenses during the third
quarter of 1998 and 1997, respectively, and 76% and 85% of total expenses
for the nine months ended September 30, 1998 and 1997, respectively. The
increase in expenses is partially attributable to the increase in write-down
of equipment to net realizable value. Based upon the quarterly review of the
recoverability of the undepreciated cost of rental equipment, $173,617 and
$13,869 was charged to operations to write down equipment to its estimated net
realizable value during the nine months ended September 30, 1998 and 1997,
respectively. Any future losses are dependent upon unanticipated technological
developments affecting the computer equipment industry in subsequent years.
Additionally, total expenses rose in 1998 because of the increase in
depreciation expense resulting from equipment purchases made since September
1997 as well as equipment purchased in 1997 that had a full nine months of
depreciation in 1998 and only a portion of the nine months in 1997.
The Fund's net income was $101,976 and $138,528 for the three months
ended September 30, 1998 and 1997, respectively, and $163,206 and $338,873
for the nine months ended September 30, 1998 and 1997, respectively. The
earnings per equivalent limited partnership unit, after earnings
allocated to the General Partner, were $7.59 and $10.28 based on a weighted
average number of equivalent limited partnership units outstanding of 13,365
and 13,341 for the three months ended September 30 1998 and 1997, respectively.
The earnings per equivalent limited partnership unit, after earnings
allocated to the General Partner, were $12.08 and $25.39 based on a
weighted average number of equivalent limited partnership units outstanding of
13,363 and 13,214 for the nine months ended September 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 $526,573 and $449,586 of cash from operations, for the
purpose of determining cash available for distribution, during the quarter
ended September 30, 1998 and 1997, respectively and distributed 0% and 8% of
these amounts to partners during the third quarter of 1998 and 1997, respec-
tively and 11% and 4% of these amounts to partners subsequent to September 30,
1998 and 1997,respectively. For the nine months ended September 30, 1998 and
1997, the Fund generated $1,565,753 and $1,365,688 of cash from operations and
distributed 8% and 13% of these amounts to partners during the nine months
ended September 30, 1998 and 1997, respectively and 4% and 1% of these amounts
to partners in October 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 nine months ended September 30, 1998 and 1997, the Fund pur-
chased $1,508,883 and $807,329, respectively, of equipment. Additionally,
the Fund invested $1,701,986 in direct financing leases during the nine
months ended September 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.
September 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.
By: Freddie M. Kotek
11-10-98
_______ ____________________________
Date Freddie M. Kotek
President of F. L. Partnership Management, Inc.
(Principal Operating Officer)
By: Marianne T. Schuster
11-10-98
________ ____________________________
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.
_____________________________
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
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 553,508
<SECURITIES> 0
<RECEIVABLES> 423,670
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 977,178
<PP&E> 6,590,374
<DEPRECIATION> 3,635,324
<TOTAL-ASSETS> 5,465,796
<CURRENT-LIABILITIES> 329,493
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,136,303
<TOTAL-LIABILITY-AND-EQUITY> 5,465,796
<SALES> 1,713,907
<TOTAL-REVENUES> 1,872,683
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,709,477
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 163,206
<INCOME-TAX> 0
<INCOME-CONTINUING> 163,206
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 163,206
<EPS-PRIMARY> 12.08
<EPS-DILUTED> 12.08
</TABLE>
