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 March 31, 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
<PAGE>
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VIII, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
March 31, December 31,
2000 1999
________ ________
Cash and cash equivalents $2,163,100 $1,628,789
Accounts receivable 140,531 97,705
Due from related parties 6,853 77,289
Equipment under operating leases
(net of accumulated depreciation
of $1,505,593 and $1,438,669,
respectively) 216,545 283,469
Net investment in direct
financing leases 2,779,273 3,103,244
Equipment held for sale or lease 6,250 12,750
__________ __________
Total assets $5,312,552 $5,203,246
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 108,061 $ 12,701
Accounts payable and
accrued expenses 47,566 52,747
Due to related parties 7,429 6,164
__________ __________
Total liabilities 163,056 71,612
Partners' capital 5,149,496 5,131,634
__________ __________
Total liabilities and
partners' capital $5,312,552 $5,203,246
========== ==========
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
FIDELITY LEASING INCOME FUND VIII, L.P.
STATEMENTS OF OPERATIONS
For the three months ended March 31, 2000 and 1999
(Unaudited)
2000 1999
________ ________
Income:
Rentals $110,626 $141,855
Earned income on direct financing leases 57,481 49,547
Interest 22,971 16,250
Gain on sale of equipment, net 4,600 19,021
Other 663 6,930
________ ________
196,341 233,603
________ ________
Expenses:
Depreciation 66,924 97,373
Write-down of equipment to net
realizable value - 34,400
General and administrative 19,726 19,431
General and administrative to related
party 20,030 27,457
Management fee to related party 11,799 10,775
________ ________
118,479 189,436
________ ________
Net income $ 77,862 $ 44,167
======== ========
Net income per equivalent
limited partnership unit $ 5.77 $ 3.32
======== ========
Weighted average number of
equivalent limited partnership
units outstanding during the period 13,351 13,106
======== ========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
FIDELITY LEASING INCOME FUND VIII, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the three months ended March 31, 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 (600) - (59,400) (60,000)
Net income 779 - 77,083 77,862
________ ______ __________ __________
Balance, March 31, 2000 $(6,911) 21,695 $5,156,407 $5,149,496
======== ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
FIDELITY LEASING INCOME FUND VIII, L.P.
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2000 and 1999
(Unaudited)
2000 1999
__________ __________
Cash flows from operating activities:
Net income $ 77,862 $ 44,167
__________ __________
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 66,924 97,373
Write-down of equipment to net realizable value - 34,400
(Gain) loss on sale of equipment, net (4,600) (19,021)
(Increase) decrease in accounts receivable (42,826) (2,539)
(Increase) decrease in due from related parties 70,436 59,121
Increase (decrease) in lease rents paid
in advance 95,360 52,160
Increase (decrease) in accounts payable and
accrued expenses (5,181) (62,179)
Increase (decrease) due to related parties 1,265 (943)
__________ __________
181,378 158,372
__________ __________
Net cash provided by operating activities 259,240 202,539
__________ __________
Cash flows from investing activities:
Proceeds from direct financing leases,
net of earned income 323,971 218,006
Proceeds from sale of equipment 11,100 23,000
__________ __________
Net cash provided by investing activities 335,071 241,006
__________ __________
Cash flows from financing activities:
Distributions (60,000) (60,000)
__________ __________
Net cash used in financing activities (60,000) (60,000)
__________ __________
Increase in cash and cash equivalents 534,311 383,545
Cash and cash equivalents, beginning
of period 1,628,789 1,336,219
__________ __________
Cash and cash equivalents, end of period $2,163,100 $1,719,764
========== ==========
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 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.
1. EQUIPMENT LEASED
Equipment on lease consists of equipment under operating leases. The
lessees have agreements with the manufacturer of the equipment 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 re-
lated 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 unde-
preciated cost. Recent and anticipated technological developments af-
fecting the equipment and competitive factors in the marketplace are con-
sidered 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 during the quarter ended March 31,
2000 and $34,400 was charged to write-down of equipment to net realiz-
able value for the quarter ended March 31, 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 ag-
gregate 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 financ-
ing leases are for initial lease terms ranging from 32 to 48 months.
Unguaranteed residuals for direct financing leases represent the
estimated amounts recoverable at lease termination from lease exten-
sions or disposition of the equipment. The Fund reviews these resid-
ual values quarterly. If the equipment's fair market value is below
the estimated residual value, an adjustment is made.
6
<PAGE>
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 March 31, 2000 is
as follows:
Minimum lease payments to be received $2,810,000
Unguaranteed residuals 222,000
Unearned rental income (222,000)
Unearned residual income (31,000)
__________
$2,779,000
==========
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of March 31, 2000 are as follows:
Years Ending December 31 Operating Direct Financing
________________________ _________ ________________
2000 $101,000 $1,144,000
2001 51,000 1,223,000
2002 30,000 380,000
2003 - 63,000
________ __________
$182,000 $2,810,000
======== ==========
Subsequent to March 31, 2000, the Fund invested in a direct financing
lease of approximately $1,111,000 for an initial lease term of 29 months.
The minimum lease payments to be received on this lease are $357,000 in
2000, $476,000 in 2001 and $317,000 in 2002.
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 acquisi-
tion 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.
7
<PAGE>
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (continued)
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 per-
formed 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 fee to
the General Partner.
Additionally, the General Partner and its parent company are reim-
bursed 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
months ended March 31:
2000 1999
________ ________
Management fee $11,799 $10,775
Reimbursable costs 20,030 27,457
Amounts due from related parties at March 31, 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 March 31, 2000 and December 31,
1999 represent monies due to the General Partner and/or its parent
company for the fees and costs mentioned above, as well as, rentals
and sales proceeds collected by the Fund on behalf of other affili-
ated funds.
3. CASH DISTRIBUTIONS
The General Partner declared and paid three cash distributions
of $20,000 each subsequent to March 31, 2000 for the months ended
January 31, February 29 and March 31, 2000, to all admitted
partners as of January 31, February 29 and March 31, 2000.
8
<PAGE>
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 $196,341 and
$233,603 for the three months ended March 31, 2000 and 1999, respectively.
Rental income from the leasing of equipment accounted for 56% and 61% of
total revenues for the first quarter of 2000 and 1999, respectively. The
decrease in revenues in 2000 was primarily attributable to the decrease in
rental income. In 2000, rental income decreased by approximately $31,000
because of equipment under operating leases that came off lease or was sold
since the first quarter of 1999. Additionally, the Fund recognized $4,600 of
net gain on sale of equipment during the first three months of 2000 compared
to $19,021 for the first three months of 1999. The decrease in this account
also contributed the decrease in total revenues in 2000.
Expenses were $118,479 and $189,436 for the three months ended
March 31, 2000 and 1999, respectively. Depreciation expense comprised
56% and 51% of total expenses for the first quarter of 2000 and 1999,
respectively. The decrease in expenses in 2000 is partly related to the
decrease in depreciation expense resulting from equipment under operating
leases that came off lease or was sold since the first quarter of 1999.
Additionally, the decrease in write-down of equipment to net realizable value
in the first quarter of 2000 also accounted for the decrease in total ex-
penses in this year. Based upon the quarterly review of the recoverability
of the undepreciated cost of rental equipment, there was no write-down of
equipment to net realizable value recorded for the three months ended
March 31, 2000 compared to $34,400 of write-down of equipment to net
realizable value recorded during the three months ended March 31, 1999.
Any future losses are dependent upon unanticipated technological develop-
ments affecting the types of equipment in the portfolio in subsequent years.
The Fund's net income was $77,862 and $44,167 for the three months
ended March 31, 2000 and 1999, respectively. The net income per equivalent
limited partnership unit, after income allocated to the General Partner,
was $5.77 and $3.32 based on a weighted average number of equivalent
limited partnership units outstanding of 13,351 and 13,106 for the three
months ended March 31, 2000 and 1999, respectively.
The Fund generated $140,186 and $156,919 of cash from operations, for
the purpose of determining cash available for distribution, during the
quarter ended March 31, 2000 and 1999, respectively. There were no cash
distributions paid to partners during the first quarter of 2000 and 1999
for the three months ended March 31, 2000 and 1999. However, the General
Partner declared and paid three cash distributions of $20,000 each during
the first quarter of 2000 for the months ended October 31, November 30 and
December 31, 1999. Subsequent to March 31, 2000 and 1999, 43% and 38% of
9
<PAGE>
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 cash available from operations was paid to partners for the first quarter
of 2000 and 1999, 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
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 look for opportunities to pur-
chase equipment under operating leases or invest in direct financing leases
with cash available from operations which was not distributed to partners in
prior periods.
Subsequent to March 31, 2000, the Fund invested in a direct financing
lease of approximately $1,111,000 for an initial lease term of 29 months
commencing in April 2000.
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
<PAGE>
Part II: Other Information
FIDELITY LEASING INCOME FUND VIII, L.P.
March 31, 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
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIDELITY LEASING INCOME FUND VIII, L.P.
5-11-00 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of F.L Partnership
Management, Inc.
(Principal Operating Officer)
5-11-00 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,163,100
<SECURITIES> 0
<RECEIVABLES> 147,384
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,310,484
<PP&E> 1,728,388
<DEPRECIATION> 1,505,593
<TOTAL-ASSETS> 5,312,552
<CURRENT-LIABILITIES> 163,056
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,149,496
<TOTAL-LIABILITY-AND-EQUITY> 5,312,552
<SALES> 110,626
<TOTAL-REVENUES> 196,341
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 118,479
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 77,862
<INCOME-TAX> 0
<INCOME-CONTINUING> 77,862
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 77,862
<EPS-BASIC> 5.77
<EPS-DILUTED> 5.77
</TABLE>
