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, 2000
/ / 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
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No _____
Page 1 of 12
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Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VIII, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
June 30, December 31,
2000 1999
________ ________
Cash and cash equivalents $1,459,122 $1,628,789
Accounts receivable 189,427 97,705
Due from related parties 10,425 77,289
Equipment under operating leases
(net of accumulated depreciation of
$927,728 and $1,438,669, respectively) 137,740 283,469
Net investment in direct financing
leases 3,468,268 3,103,244
Equipment held for sale or lease 3,751 12,750
__________ __________
Total assets $5,268,733 $5,203,246
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 10,104 $ 12,701
Accounts payable and
accrued expenses 31,769 52,747
Due to related parties 2,141 6,164
__________ __________
Total liabilities 44,014 71,612
Partners' capital 5,224,719 5,131,634
__________ __________
Total liabilities and
partners' capital $5,268,733 $5,203,246
========== ==========
The accompanying notes are an integral part of these financial statements.
2
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FIDELITY LEASING INCOME FUND VIII, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
____ ____ ____ ____
Income:
Rentals $ 54,577 $171,922 $165,203 $313,777
Earned income on direct
financing leases 78,038 54,743 135,519 104,290
Interest 13,745 14,660 36,716 30,910
Gain on sale of equipment,
net 41,023 - 45,623 19,021
Other 8,160 14,982 8,823 21,912
________ ________ ________ ________
195,543 256,307 391,884 489,910
________ ________ ________ ________
Expenses:
Depreciation 22,152 97,373 89,076 194,746
Write-down of equipment
to net realizable value - 51,865 - 86,265
General and administrative 7,899 25,300 27,625 44,731
General and administrative
to related party 18,333 35,532 38,363 62,989
Management fee to related
party 11,936 12,677 23,735 23,452
________ ________ ________ ________
60,320 222,747 178,799 412,183
________ ________ ________ ________
Net income $135,223 $ 33,560 $213,085 $ 77,727
======== ======== ======== ========
Net income per equivalent
limited partnership unit $ 9.97 $ 2.53 $ 15.76 $ 5.86
======== ======== ======== ========
Weighted average number of equivalent
limited partnership units
outstanding during the period 13,422 13,013 13,387 13,060
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
3
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FIDELITY LEASING INCOME FUND VIII, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the six months ended June 30, 2000
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 2000 $(7,090) 21,695 $5,138,724 $5,131,634
Cash distributions (1,200) - (118,800) (120,000)
Net income 2,131 - 210,954 213,085
_______ ______ __________ __________
Balance, June 30, 2000 $(6,159) 21,695 $5,230,878 $5,224,719
======= ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
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FIDELITY LEASING INCOME FUND VIII, L.P.
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2000 and 1999
(Unaudited)
2000 1999
__________ __________
Cash flows from operating activities:
Net income $ 213,085 $ 77,727
__________ __________
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 89,076 194,746
Write-down of equipment to net realizable value - 86,265
Gain on sale of equipment, net (45,623) (19,021)
(Increase) decrease in accounts receivable (91,722) 86,845
(Increase) decrease in due from related parties 66,864 34,147
Increase (decrease) in lease rents paid
in advance (2,597) 45,037
Increase (decrease) in accounts payable
and accrued expenses (20,978) (33,937)
Increase (decrease) in other, net (4,023) 49,088
__________ __________
(9,003) 443,170
__________ __________
Net cash provided by operating activities 204,082 520,897
__________ __________
Cash flows from investing activities:
Investment in direct financing leases (1,111,396) (348,160)
Proceeds from sale of equipment 111,275 23,000
Proceeds from direct financing leases,
net of earned income 746,372 466,048
__________ __________
Net cash provided by (used in)
investing activities (253,749) 140,888
__________ __________
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 (169,667) 521,785
Cash and cash equivalents, beginning
of period 1,628,789 1,336,219
__________ __________
Cash and cash equivalents, end of period $1,459,122 $1,858,004
========== ==========
The accompanying notes are an integral part of these financial statements.
5
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FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(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 1999 financial statements have been
reclassified to conform to the presentation in 2000.
1. EQUIPMENT LEASED
Equipment on lease consists in part 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 36 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 ex-
pected economic life of its rental equipment in order to determine the
recoverability of its undepreciated cost. Recent and anticipated tech-
nological developments affecting 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, there was no charge to
write-down of equipment to net realizable value for the six months ended
June 30, 2000 and $86,265 was charged to write-down of equipment to net
realizable value for the six months ended June 30, 1999. Any future losses
are dependent upon unanticipated technological developments affecting the
types of equipment 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 unguaranteed residuals upon expiration of the
lease over the related equipment cost) over the life of the lease using
the interest method. The Fund's direct financing leases are for initial
lease terms ranging from 29 to 48 months.
Unguaranteed residuals for direct financing leases represent the esti-
mated amounts recoverable at lease termination from lease extensions or
disposition of the equipment. The Fund reviews these residual values
quarterly. If the equipment's fair market value is below the estimated
residual value, an adjustment is made.
6
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FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. EQUIPMENT LEASED (Continued)
The net investment in direct financing leases as of June 30, 2000 is as
follows:
Minimum lease payments to be received $3,460,000
Unguaranteed residuals 337,000
Unearned rental income (279,000)
Unearned residual income (50,000)
__________
$3,468,000
==========
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of June 30, 2000 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ __________
2000 $ 70,000 $1,001,000
2001 51,000 1,702,000
2002 31,000 698,000
2003 - 59,000
________ __________
$152,000 $3,460,000
======== ==========
2. RELATED PARTY TRANSACTIONS
The General Partner receives 4% or 2% of rental payments on equipment
under operating leases and full pay-out leases, respectively, for ad-
ministrative and management services performed on behalf of the Fund.
Full pay-out leases are noncancellable leases for which the rental pay-
ments 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 dis-
tributions equal to the purchase price of their units plus an 11% cumu-
7
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FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
lative 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. Follow-
ing 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, 2000 and 1999:
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
____ ____ ____ ____
Management fee $11,936 $12,677 $23,735 $23,452
Reimbursable costs 18,333 35,532 38,363 62,989
Amounts due from related parties at June 30, 2000 and December 31, 1999
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, 2000 and December 31, 1999
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 three cash distributions of $30,000
each subsequent to June 30, 2000 for the months ended April 30, May 31
and June 30, 2000, to all admitted partners as of April 30, May 31 and
June 30, 2000.
8
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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 $195,543 and
$256,307 for the three months ended June 30, 2000 and 1999, respectively,
and $391,884 and $489,910 for the six months ended June 30, 2000 and 1999,
respectively. Rental income from the leasing of equipment accounted for
28% and 67% of total revenues for the second quarter of 2000 and 1999,
respectively, and 42% and 64% of total revenues for the six months ended
June 30, 2000 and 1999, respectively. The decrease in revenues was primarily
attributable to the decrease in rental income. In 2000, rental income de-
creased by approximately $149,000 because of equipment that came off lease
and was sold or equipment that renewed at lower rental rates. However, the
increase in earned income on direct financing leases lowered the overall
decrease in revenues in 2000. The Fund invested in direct financing leases
during late 1999 and the second quarter of 2000 causing earned income on
direct financing leases to increase from $104,000 during the six months
ended June 30, 1999 to $136,000 during the six months ended June 30, 2000.
Additionally, the Fund recognized $45,623 and $19,021 of net gain on sale
of equipment for the six months ended June 30, 2000 and 1999, respectively.
The increase in this account also served to lower the amount of the decrease
in total revenues in 2000.
Expenses were $60,320 and $222,747 for the three months ended June 30,
2000 and 1999, respectively, and $178,799 and $412,183 for the six months
ended June 30, 2000 and 1999, respectively. Depreciation expense comprised
37% and 44% of total expenses during the second quarter of 2000 and 1999,
respectively and 50% and 47% of total expenses for the six months ended
June 30, 2000 and 1999, respectively. The decrease in expenses was primarily
attributable to the decrease in depreciation expense resulting from equipment
under operating leases that came off lease or was sold since the second quarter
of 1999. Additionally, the decrease in write-down of equipment to net realiz-
able value during the first six months of 2000 also accounted for the decrease
in total expenses in this year. Based upon the quarterly review of the re-
coverability of the undepreciated cost of rental equipment, there was no write-
down of equipment to net realizable value recorded for the six months ended
June 30, 2000 compared to $86,265 of write-down of equipment to net realizable
value recorded for the six months ended June 30, 1999. Any future losses are
dependent upon unanticipated technological developments affecting the types
of equipment in the portfolio in subsequent years. Furthermore, general and
administrative expense to related party decreased during the six months ended
June 30, 2000 compared to the same period in 1999 because of a decrease in
expenses charged by the General Partner or its parent company for services
and materials provided to the Fund. The decrease in this account also contrib-
uted to the overall decrease in expenses during the first six months of 2000.
The Fund's net income was $135,223 and $33,560 for the three months ended
June 30, 2000 and 1999, respectively, and $213,085 and $77,727 for the six
9
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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)
months ended June 30, 2000 and 1999, respectively. The earnings per equiva-
lent limited partnership unit, after earnings allocated to the General Partner,
were $9.97 and $2.53 based on a weighted average number of equivalent limited
partnership units outstanding of 13,422 and 13,013 for the three months ended
June 30, 2000 and 1999, respectively. The earnings per equivalent limited
partnership unit, after earnings allocated to the General Partner, were $15.76
and $5.86 based on a weighted average number of equivalent limited partnership
units outstanding of 13,387 and 13,060 for the six months ended June 30, 2000
and 1999, respectively.
The Fund generated $116,352 and $182,798 of cash from operations, for
the purpose of determining cash available for distribution, during the quarter
ended June 30, 2000 and 1999, respectively. The Fund made three cash distri-
butions of $30,000 each subsequent to June 30, 2000 for the three months
ended June 30, 2000. The Fund made one cash distribution of $20,000 in
June 1999 for April 1999 and two cash distributions of $20,000 each subsequent
to June 30, 1999 for the months of May and June 1999. For the six months ended
June 30, 2000 and 1999, the Fund generated $256,538 and $339,717 of cash from
operations, for the purpose of determining cash available for distribution.
The General Partner declared cash distributions totaling $150,000 and $120,000
for the six months ended June 30, 2000 and 1999, respectively. The Fund paid
three cash distributions of $20,000 each during the first six months of 2000
and three cash distributions of $30,000 each subsequent to June 30, 2000. The
Fund paid four cash distributions of $20,000 each during the first six months
of 1999 and two cash distributions of $20,000 each subsequent to June 30, 1999.
For financial statement purposes, the Fund records cash distributions to part-
ners 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 liqui-
dated as promptly as is consistent with obtaining their fair value. During
this time, the Fund will continue to look for opportunities to purchase equip-
ment under operating leases or invest in direct financing leases with cash
available from operations that was not distributed to partners in previous
periods. The Fund did not make any purchases of equipment subject to operat-
ing leases during the six months ended June 30, 2000 and 1999, respectively.
The Fund invested $1,111,396 and $348,160 in direct financing leases during
the six months ended June 30, 2000 and 1999, 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
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Part II: Other Information
FIDELITY LEASING INCOME FUND VIII, L.P.
June 30, 2000
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
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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.
8-10-00 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of F.L Partnership
Management, Inc.
(Principal Operating Officer)
8-10-00 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of F.L. Partnership
Management, Inc.
(Principal Financial Officer)
12
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