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: 0-19232
Fidelity Leasing Income Fund VIII, L.P.
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 23-2581971
_______________________________________________________________________________
(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
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.
4. YEAR 2000 COMPLIANCE
The "Year 2000 Issue" addresses the ability of computer programs to
distinguish between the year 2000 and the year 1900. Computer programs
were written using two digits rather than four digits for the year in a
date field. This could ultimately result in miscalculations or inaccur-
acies in processing data.
The Fund is currently in the process of ensuring that all of its systems
are Year 2000 compliant. The Fund's operating system is year 2000
capable. Additionally, two of the three main software systems are Year
2000 compliant and in the testing phase. The third software system is
expected to be year 2000 capable by July 1999.
8
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
4. YEAR 2000 COMPLIANCE (Continued)
The costs incurred to make the software system Year 2000 compliant have
not been material as of September 30, 1998. It is not anticipated that
any remaining costs incurred to complete this project will have a material
affect on the net income of the Fund.
Furthermore, all significant outside suppliers have been contacted to
ensure that their systems will be Year 2000 compliant. All have indicated
that their systems are in compliance or that Year 2000 Compliance programs
will be completed in early 1999. If the Fund determines that any of its
significant external suppliers are not in compliance, the Fund will not be
materially adversely affected and will seek the services of another
supplier.
9
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.
10
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 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.
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.
11
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
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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
4/6/99 _____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
By: Marianne T. Schuster
4/6/99 _____________________________
Date Marianne T. Schuster
Vice President of F.L. Partnership Management, Inc.
(Principal Financial Officer)
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