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, 1999
/ / 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,
1999 1998
_____________ ____________
Cash and cash equivalents $2,098,865 $1,336,219
Accounts receivable 115,871 154,987
Due from related parties 17,457 62,993
Equipment under operating leases
(net of accumulated depreciation
of $1,558,766 and $5,339,099,
respectively) 358,305 656,241
Net investment in direct financing leases 2,436,354 2,817,738
Equipment held for sale or lease 22,000 102,002
__________ __________
Total assets $5,048,852 $5,130,180
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 20,677 $ 9,503
Accounts payable and
accrued expenses 50,619 106,614
Due to related parties 3,450 7,068
__________ __________
Total liabilities 74,746 123,185
Partners' capital 4,974,106 5,006,995
__________ __________
Total liabilities and
partners' capital $5,048,852 $5,130,180
========== ==========
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
1999 1998 1999 1998
____ ____ ____ ____
Income:
Rentals $131,882 $577,186 $445,659 $1,713,907
Earned income on direct
financing leases 47,140 28,486 151,430 36,776
Interest 25,275 3,565 56,185 45,813
Gain on sale of equipment,
net 18,912 72,145 37,933 72,370
Other 5,021 1,868 26,933 3,817
________ ________ ________ __________
228,230 683,250 718,140 1,872,683
________ ________ ________ __________
Expenses:
Depreciation 89,253 404,242 283,999 1,301,300
Write-down of equipment
to net realizable value - 92,500 86,265 173,617
General and administrative 16,197 28,844 60,928 66,104
General and administrative to
related party 22,163 29,639 85,152 96,361
Management fee to related party 11,233 26,049 34,685 72,095
________ ________ ________ __________
138,846 581,274 551,029 1,709,477
________ ________ ________ __________
Net income $ 89,384 $101,976 $167,111 $ 163,206
======== ======== ======== ==========
Net income per equivalent
limited partnership unit $ 6.83 $ 7.59 $ 12.68 $ 12.08
======== ======== ======== ==========
Weighted average number of
equivalent limited partnership
units outstanding during
the period 13,002 13,365 13,040 13,363
======== ======== ======== ==========
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, 1999
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1999 $(8,336) 21,695 $5,015,331 $5,006,995
Cash distributions (2,000) - (198,000) (200,000)
Net income 1,800 - 165,311 167,111
_______ ______ __________ __________
Balance, September 30, 1999 $(8,536) 21,695 $4,982,642 $4,974,106
======= ====== ========== ==========
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, 1999 and 1998
(Unaudited)
1999 1998
____ ____
Cash flows from operating activities:
Net income $ 167,111 $ 163,206
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 283,999 1,301,300
Write-down of equipment to net
realizable value 86,265 173,617
Gain on sale of equipment, net (37,933) (72,370)
(Increase) decrease in accounts receivable 39,116 (96,446)
(Increase) decrease in due from related parties 45,536 (88,505)
Increase (decrease) in lease rents paid
in advance 11,174 (45,902)
Increase (decrease) in accounts payable -
equipment - 246,952
Increase (decrease) in accounts payable and
accrued expenses (55,995) (7,923)
Increase (decrease) in other, net (3,618) (6,763)
__________ __________
368,544 1,403,960
__________ __________
Net cash provided by operating activities 535,655 1,567,166
__________ __________
Cash flows from investing activities:
Acquisition of equipment - (1,508,883)
Investment in direct financing leases (348,160) (1,701,986)
Proceeds from sale of equipment 45,607 165,827
Proceeds from direct financing leases,
net of earned income 729,544 168,417
__________ __________
Net cash provided by (used in) investing
activities 426,991 (2,876,625)
__________ __________
Cash flows from financing activities:
Distributions (200,000) (160,000)
__________ __________
Net cash used in financing activities (200,000) (160,000)
__________ __________
Increase (decrease) in cash
and cash equivalents 762,646 (1,469,459)
Cash and cash equivalents, beginning of
period 1,336,219 2,022,967
__________ __________
Cash and cash equivalents, end of period $2,098,865 $ 553,508
========== ==========
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, 1999
(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 1998 financial statements have been
reclassified to conform to the presentation in 1999.
1. EQUIPMENT LEASED
Equipment on lease consists of 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. 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 the 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, $86,265 and $173,617 was charged to write-
down of equipment to net realizable value for the nine months ended
September 30, 1999 and 1998, respectively. Any future losses are dependent
upon unanticipated technological developments affecting the types of equip-
ment in the portfolio 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, 1999 is
as follows:
Minimum lease payments to be received $2,497,000
Unguaranteed residuals 143,000
Unearned rental income (188,000)
Unearned residual income (16,000)
__________
$2,436,000
==========
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, 1999 are as
follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1999 $127,000 $ 326,000
2000 132,000 1,305,000
2001 51,000 709,000
2002 30,000 94,000
2003 - 63,000
________ __________
$340,000 $2,497,000
======== ==========
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.
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, 1999 and 1998:
Three Months Ended Nine Months Ended
September 30 September 30
1999 1998 1999 1998
____ ____ ____ ____
Management fee $11,233 $26,049 $34,685 $72,095
Reimbursable costs 22,163 29,639 85,152 96,361
7
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
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, 1999 and December 31,
1998 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, 1999 and December 31, 1998
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. YEAR 2000 COMPLIANCE
All of the main software systems utilized to generate information for the
Fund are now Year 2000 compliant and in the testing phase. The costs
incurred to complete the Year 2000 Compliance project are not expected to
be material to the net income of the Fund.
All suppliers for the Fund continue to complete their Year 2000 Compliance
programs. It is not anticipated that the Fund will incur any significant
losses should any of its outside suppliers fail to meet their Year 2000
Compliance deadlines.
4. CASH DISTRIBUTION
The General Partner declared and paid a cash distribution of $20,000 in
September 1999 for the month ended July 31, 1999, to all admitted partners
as of July 31, 1999. The General Partner declared and paid two cash
distributions of $20,000 each subsequent to September 30, 1999 for the
months ended August 31 and September 30, 1999 to all admitted partners as
of August 31 and September 30, 1999.
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 $228,230 and
$683,250 for the three months ended September 30, 1999 and 1998, respectively,
and $718,140 and $1,872,683 for the nine months ended September 30, 1999 and
1998, respectively. Rental income from the leasing of equipment accounted for
58% and 84% of total revenues for the third quarter of 1999 and 1998,
respectively, and 62% and 92% of total revenues for the nine months ended
September 30, 1999 and 1998, respectively. The decrease in revenues was
primarily attributable to the decrease in rental income. Rental income
decreased approximately $1,268,000 because of equipment that came off lease
and terminated or sold. Additionally, the Fund recognized $37,933 of net gain
on sale of equipment during the nine months ended September 30, 1999 compared
to $72,370 for the same period in 1998. The decrease in this account also
contributed to the overall decrease in revenues in 1999. However, the Fund
invested in direct financing leases during 1998 which generated $151,430 and
$36,776 of earned income during the first nine months of 1999 and 1998,
respectively. The increase in earned income on direct financing leases for
this period served to mitigate the overall decrease in revenues in 1999.
Furthermore, the Fund recorded late charges on rentals of approximately $13,000
in 1999 that are included in other income. There were no late charges recorded
in 1998. This increase also lowered the decrease in total revenues in 1999.
Expenses were $138,846 and $581,274 for the three months ended
September 30, 1999 and 1998, respectively, and $551,029 and $1,709,477
for the nine months ended September 30, 1999 and 1998, respectively.
Depreciation expense comprised 64% and 70% of total expenses during the third
quarter of 1999 and 1998, respectively, and 52% and 76% of total expenses
for the nine months ended September 30, 1999 and 1998, respectively. The
decrease in expenses was primarily attributable to the decrease in depreciation
expense resulting from sales or terminations of equipment under operating
leases since the third quarter of 1998. Additionally, the decrease in write-
down of equipment to net realizable value also accounted for the overall
decrease in expenses in 1999. Based upon the quarterly review of the recover-
ability of the undepreciated cost of rental equipment, $86,265 and $173,617 was
charged to operations to write down equipment to its estimated net realizable
value during the nine months ended September 30, 1999 and 1998, respectively.
Any future losses are dependent upon unanticipated technological developments
affecting the types of equipment in the portfolio in subsequent years.
Management fee to related party also decreased in 1999 which contributed to
the decrease in total expenses. The decrease in this account was partially
related to the decrease in rental income earned by the Fund on operating
leases. The Fund also paid lower management fees of 2% to the General Partner
on full pay-out leases. Many of the leases purchased in 1998 were direct
financing leases which meet the requirements of full pay-out leases for the
purpose of calculating management fees.
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's net income was $89,387 and $101,976 for the three months
ended September 30, 1999 and 1998, respectively, and $167,111 and $163,206
for the nine months ended September 30, 1999 and 1998, respectively. The
earnings per equivalent limited partnership unit, after earnings allocated to
the General Partner, were $6.83 and $7.59 based on a weighted average number of
equivalent limited partnership units outstanding of 13,002 and 13,365 for the
three months ended September 30 1999 and 1998, respectively. The earnings per
equivalent limited partnership unit, after earnings allocated to the General
Partner, were $12.68 and $12.08 based on a weighted average number of
equivalent limited partnership units outstanding of 13,040 and 13,363 for the
nine months ended September 30, 1999 and 1998, respectively.
The Fund generated $159,728 and $526,573 of cash from operations, for the
purpose of determining cash available for distribution, during the quarter
ended September 30, 1999 and 1998, respectively and distributed 13% and 0% of
these amounts to partners during the third quarter of 1999 and 1998, respec-
tively and 25% and 11% of these amounts to partners subsequent to September 30,
1999 and 1998, respectively. For the nine months ended September 30, 1999 and
1998, the Fund generated $499,442 and $1,565,753 of cash from operations and
distributed 28% and 8% of these amounts to partners during the nine months
ended September 30, 1999 and 1998, respectively and 8% and 4% of these amounts
to partners subsequent to September 30, 1999. For financial statement pur-
poses, the Fund records cash distributions to partners on a cash basis in the
period in which they are paid.
ANALYSIS OF FINANCIAL CONDITION
The Fund is currently in the process of dissolution. As provided in
the Restated Limited Partnership Agreement, the assets of the Fund shall be
liquidated as promptly as is consistent with obtaining their fair value.
During this time, the Fund will continue to purchase equipment with cash
available from operations that was not distributed to partners in previous
periods. During the nine months ended September 30, 1999, the Fund made no
purchases of equipment subject to operating leases. During the nine months
ended September 30, 1998, the Fund purchased $1,508,883 of equipment subject
to operating leases. The Fund also invested $348,160 and $1,701,986 in direct
financing leases during the nine months ended September 30, 1999 and 1998,
respectively.
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, 1999
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.
11-10-99 By: Freddie M. Kotek
________ ____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
11-10-99 By: Marianne T. Schuster
________ ____________________________
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,098,865
<SECURITIES> 0
<RECEIVABLES> 133,328
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,232,193
<PP&E> 1,939,071
<DEPRECIATION> 1,558,766
<TOTAL-ASSETS> 5,048,852
<CURRENT-LIABILITIES> 74,746
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,974,106
<TOTAL-LIABILITY-AND-EQUITY> 5,048,852
<SALES> 445,659
<TOTAL-REVENUES> 718,140
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 551,029
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 167,111
<INCOME-TAX> 0
<INCOME-CONTINUING> 167,111
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 167,111
<EPS-BASIC> 12.68
<EPS-DILUTED> 12.68
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