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, 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, 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 13
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Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VIII, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
September 30, December 31,
2000 1999
_____________ ____________
Cash and cash equivalents $1,749,993 $1,628,789
Accounts receivable 346,797 97,705
Due from related parties 15,819 77,289
Equipment under operating leases
(net of accumulated depreciation
of $947,862 and $1,438,669,
respectively) 117,607 283,469
Net investment in direct financing leases 3,037,479 3,103,244
Equipment held for sale or lease - 12,750
__________ __________
Total assets $5,267,695 $5,203,246
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 10,135 $ 12,701
Accounts payable and
accrued expenses 33,341 52,747
Due to related parties 3,863 6,164
__________ __________
Total liabilities 47,339 71,612
Partners' capital 5,220,356 5,131,634
__________ __________
Total liabilities and
partners' capital $5,267,695 $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 Nine Months Ended
September 30 September 30
2000 1999 2000 1999
____ ____ ____ ____
Income:
Rentals $ 68,639 $131,882 $233,842 $445,659
Earned income on direct
financing leases 69,647 47,140 205,166 151,430
Interest 12,769 25,275 49,485 56,185
Gain on sale of equipment, net - 18,912 44,873 37,933
Other 1,618 5,021 10,441 26,933
________ ________ ________ ________
152,673 228,230 543,807 718,140
________ ________ ________ ________
Expenses:
Depreciation 20,134 89,253 109,210 283,999
Write-down of equipment
to net realizable value - - - 86,265
General and administrative 12,844 16,197 40,469 60,928
General and administrative to
related party 20,808 22,163 59,171 85,152
Management fee to related party 12,500 11,233 36,235 34,685
Loss on sale of equipment 750 - - -
________ ________ ________ ________
67,036 138,846 245,085 551,029
________ ________ ________ ________
Net income $ 85,637 $ 89,384 $298,722 $167,111
======== ======== ======== ========
Net income per equivalent
limited partnership unit $ 6.29 $ 6.83 $ 22.02 $ 12.68
======== ======== ======== ========
Weighted average number of
equivalent limited partnership
units outstanding during
the period 13,478 13,002 13,432 13,040
======== ======== ======== ========
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 nine months ended September 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 (2,100) - (207,900) (210,000)
Net income 2,987 - 295,735 298,722
_______ ______ __________ __________
Balance, September 30, 2000 $(6,203) 21,695 $5,226,559 $5,220,356
======= ====== ========== ==========
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 nine months ended September 30, 2000 and 1999
(Unaudited)
2000 1999
____ ____
Cash flows from operating activities:
Net income $ 298,722 $ 167,111
__________ __________
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 109,210 283,999
Write-down of equipment to net
realizable value - 86,265
Gain on sale of equipment, net (44,873) (37,933)
(Increase) decrease in accounts receivable (249,092) 39,116
(Increase) decrease in due from related parties 61,470 45,536
Increase (decrease) in lease rents paid
in advance (2,566) 11,174
Increase (decrease) in accounts payable and
accrued expenses (19,406) (55,995)
Increase (decrease) in other, net (2,301) (3,618)
__________ __________
(147,558) 368,544
__________ __________
Net cash provided by operating activities 151,164 535,655
__________ __________
Cash flows from investing activities:
Investment in direct financing leases (1,111,396) (348,160)
Proceeds from sale of equipment 114,275 45,607
Proceeds from direct financing leases,
net of earned income 1,177,161 729,544
__________ __________
Net cash provided by investing activities 180,040 426,991
__________ __________
Cash flows from financing activities:
Distributions (210,000) (200,000)
__________ __________
Net cash used in financing activities (210,000) (200,000)
__________ __________
Increase in cash and cash equivalents 121,204 762,646
Cash and cash equivalents, beginning of
period 1,628,789 1,336,219
__________ __________
Cash and cash equivalents, end of period $1,749,993 $2,098,865
========== ==========
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
FIDELITY LEASING INCOME FUND VIII, L.P.
NOTES TO FINANCIAL STATEMENTS
September 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.
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 re-
cover all of the undepreciated cost and related expenses of its rental
equipment during the initial lease terms and the Fund is prepared to re-
market the equipment. Fund policy is to review quarterly the expected
economic life of its rental equipment in order to determine the recover-
ability of its undepreciated cost. Recent and anticipated technological
developments affecting the equipment and competitive factors in the market-
place are considered among other things, as part of this review. In accor-
dance 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 write-down of equipment to
net realizable value for the nine months ended September 30, 2000. For
the nine months ended September 30, 1999, $86,265 was charged to write-
down of equipment to net realizable value. 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 Fund's direct financing leases
are for initial lease terms ranging from 29 to 48 months.
Unguaranteed residuals for direct financing leases represent the estimated
amounts recoverable at lease termination from lease extensions or disposi-
tion 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 September 30, 2000 is
as follows:
Minimum lease payments to be received $2,960,000
Unguaranteed residuals 337,000
Unearned rental income (216,000)
Unearned residual income (44,000)
__________
$3,037,000
==========
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of September 30, 2000 are as
follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
2000 $ 48,000 $ 500,000
2001 65,000 1,702,000
2002 30,000 698,000
2003 - 60,000
________ __________
$143,000 $2,960,000
======== ==========
Subsequent to September 30, 2000, the Fund invested in approximately
$740,000 of direct financing leases with initial lease terms of 2 to 35
months. The future approximate minimum rentals to be received on these
noncancellable direct financing leases are $114,000 in 2000, $311,000 in
2001, $299,000 in 2002 and $111,000 in 2003.
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.
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 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, 2000 and 1999:
Three Months Ended Nine Months Ended
September 30 September 30
2000 1999 2000 1999
____ ____ ____ ____
Management fee $12,500 $11,233 $36,235 $34,685
Reimbursable costs 20,808 22,163 59,171 85,152
Amounts due from related parties at September 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 re-
mitted to the Fund.
Amounts due to related parties at September 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 DISTRIBUTION
The General Partner declared and paid three cash distributions of $30,000
each subsequent to September 30, 2000 for the months ended July 31,
August 31 and September 30, 2000 to all admitted partners as of July 31,
August 31 and September 30, 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 $152,673 and
$228,230 for the three months ended September 30, 2000 and 1999, respectively,
and $543,807 and $718,140 for the nine months ended September 30, 2000 and
1999, respectively. Rental income from the leasing of equipment accounted
for 45% and 58% of total revenues for the third quarter of 2000 and 1999,
respectively, and 43% and 62% of total revenues for the nine months ended
September 30, 2000 and 1999, respectively. The decrease in revenues was
primarily attributable to the decrease in rental income. Rental income de-
creased approximately $212,000 because of equipment under operating leases
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
served to mitigate the overall decrease in revenues in 2000. The Fund in-
vested in direct financing leases during late 1999 and the second quarter of
2000 causing earned income on direct financing leases to increase from $151,000
during the nine months ended September 30, 1999 to $205,000 during the nine
months ended September 30, 2000.
Expenses were $67,036 and $138,846 for the three months ended Septem-
ber 30, 2000 and 1999, respectively, and $245,085 and $551,029 for the nine
months ended September 30, 2000 and 1999, respectively. Depreciation expense
comprised 30% and 64% of total expenses during the third quarter of 2000 and
1999, respectively, and 45% and 52% of total expenses for the nine months ended
September 30, 2000 and 1999, respectively. The decrease in expenses was pri-
marily attributable to the decrease in depreciation expense resulting from
equipment under operating leases that terminated and was sold since the third
quarter of 1999. Additionally, the decrease in write-down of equipment to net
realizable value also accounted for the overall decrease in expenses in 2000.
Based upon the quarterly review of the recoverability of the undepreciated
cost of rental equipment, there was no write-down of equipment to net realiz-
able value charged to operations during the nine months ended September 30,
2000 compared to $86,265 of write-down of equipment to net realizable value
recorded during the nine months ended September 30, 1999. Any future losses
are dependent upon unanticipated technological developments affecting the types
of equipment in the portfolio in subsequent years. General and administrative
expense to related party also decreased in 2000 which contributed to the
decrease in total expenses during the nine months ended September 30, 2000.
The decrease in this account resulted from a decrease in the amount of expenses
charged by the General Partner or its parent company for services and materials
provided to the Fund. Furthermore, general and administrative expense de-
creased during the nine months ended September 30, 2000 compared to the same
period in 1999 because of an overall decrease in the expenses incurred to
operate the Fund on a daily basis. The decrease in this account also con-
tributed to the overall decrease in expenses in 2000.
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 Fund's net income was $85,637 and $89,384 for the three months
ended September 30, 2000 and 1999, respectively, and $298,722 and $167,111
for the nine months ended September 30, 2000 and 1999, respectively. The
earnings per equivalent limited partnership unit, after earnings allocated to
the General Partner, were $6.29 and $6.83 based on a weighted average number of
equivalent limited partnership units outstanding of 13,478 and 13,002 for the
three months ended September 30, 2000 and 1999, respectively. The earnings per
equivalent limited partnership unit, after earnings allocated to the General
Partner, were $22.02 and $12.68 based on a weighted average number of equiv-
alent limited partnership units outstanding of 13,432 and 13,040 for the nine
months ended September 30, 2000 and 1999, respectively.
The Fund generated $106,521 and $159,728 of cash from operations, for the
purpose of determining cash available for distribution, during the quarter
ended September 30, 2000 and 1999, respectively. The Fund paid three cash
distributions of $30,000 each subsequent to September 30, 2000 for the three
months ended September 30, 2000. The Fund paid one cash distribution of
$20,000 in September 1999 for July 1999 and two cash distributions of $20,000
each subsequent to September 30, 1999 for the months of August and September
1999. For the nine months ended September 30, 2000 and 1999, the Fund gen-
erated $363,059 and $499,442 of cash from operations for the purpose of deter-
mining cash available for distribution. The General Partner declared cash
distributions totaling $240,000 and $180,000 for the nine months ended
September 30, 2000 and 1999, respectively. The Fund paid three cash distri-
butions of $20,000 each and three cash distributions of $30,000 each during
the first nine months of 2000 and three cash distributions of $30,000 each
subsequent to September 30, 2000. The Fund paid seven cash distributions of
$20,000 each during the first nine months of 1999 and two cash distributions
of $20,000 each subsequent to September 30, 1999. 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
purchase equipment 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 invested $1,111,396 and $348,160 in
direct financing leases during the nine months ended September 30, 2000 and
1999, respectively.
10
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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)
ANALYSIS OF FINANCIAL CONDITION (Continued)
Subsequent to September 30, 2000, the Fund invested in approximately
$740,000 of direct financing leases with initial lease terms of 2 to 35 months.
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
<PAGE>
Part II: Other Information
FIDELITY LEASING INCOME FUND VIII, L.P.
September 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
12
<PAGE>
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.
11-13-00 By: Freddie M. Kotek
________ ____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
11-13-00 By: Marianne T. Schuster
________ ____________________________
Date Marianne T. Schuster
Vice President of F.L. Partnership Management, Inc.
(Principal Financial Officer)
13
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