SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1997
OR
___ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File No. 0-21242
TRIUMPHE LEASING VIII L.P.
(Name of Small Business Issuer in Its Charter)
Illinois 36-3799482
(State or Other Jurisdiction of (I.R.S. Employer)
Incorporation or Organization) Identification No.
630 Dundee Road, Suite 345, Northbrook, Illinois 60062
(Address of principal executive offices, including zip code)
(847) 509-1500
(Issuer's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Exchange
Act:
None
Securities registered pursuant to Section 12(g) of the Exchange
Act:
Limited Partnership Units
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
past 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
____
Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B is not contained in this
form, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [X]
The issuer's revenues for the fiscal year ended December 31,
1997 were $250,802.
The aggregate market value of the voting securities of the
registrant beneficially owned by non-affiliates of the registrant
(the exclusion of the market value of the shares owned by any
person shall not be deemed an admission by the registrant that
such person is an affiliate of the registrant) at December 31,
1997 was $0.*
DOCUMENTS INCORPORATED BY REFERENCE
None.
* There has not been, nor is there expected to be, a public
market for the limited partnership units;
the market value of $0 is based on the book value per unit of
limited partnership interest.
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
The registrant, Triumphe Leasing VIII L.P. (the
"Partnership"), is a limited partnership organized in 1991 under
the Revised Uniform Limited Partnership Act of the State of
Illinois. The Partnership sold $2,514,768 in Limited Partnership
Units (the "Units") to the public from March 27, 1992 through
December 31, 1993, pursuant to a Registration Statement on Form
S-18 filed with the Securities and Exchange Commission
(Registration No. 33-44929). The business of the Partnership is
to acquire, own, lease, maintain, manage and sell various items
of new and used computer, computer peripheral, telecommunications
and office equipment (the "Equipment").
Equipment Acquisition. The General Partners select
Equipment which they believe will maintain residual value. Among
the factors adversely affecting the residual values of Equipment,
and which make predictions of residual value uncertain, are
advances in technology that render Equipment obsolete, reductions
in sales prices or rental rates by manufacturers of comparable
new Equipment, and surpluses in the marketplace for comparable
Equipment. The General Partners utilize data prepared by
recognized appraisal or valuation firms as a guide to estimating
the residual values of Equipment.
Terms of Leases. The General Partners generally lease
Equipment to lessees for initial terms ranging from six months to
six years, under agreements which impose on the lessees all costs
of maintenance, taxes and insurance for the Equipment. The
leases may grant the lessees options to extend their leases or to
purchase the leased Equipment at the end of the initial lease
terms.
Lessees. The Partnership leases Equipment to lessees it
believes to be creditworthy. The General Partners will depend
heavily on the lease credit evaluations of the Partnership's
lenders which, in turn, look primarily to rentals under the
leases to repay their loans.
Leverage. The General Partners typically finance the
purchase of Equipment by the use of nonrecourse loans in an
amount in excess of 50% of the purchase price thereof. A
nonrecourse loan is one in which the lender agrees that its
recourse in the event of default is limited to the Equipment
securing the loan, the rents payable under the related lease and
the proceeds derived from their sale, and that neither the
Partnership nor any Partner will be liable for payment. It is
anticipated that generally the loans will be in the maximum
amount which can be repaid with interest out of the lease rentals
receivable during the initial lease terms. The debt incurred
generally bears a fixed interest rate over the term of the loan,
rather than a variable rate which changes with the prime rate or
other criteria.
Refinancing and Sale of Equipment. In some cases the
Partnership may dispose of its Equipment at the end of the
initial term of the related lease. This may be accomplished by
(a) selling the Equipment to the lessee, (b) selling the
Equipment in the open market, (c) negotiating an extension of the
lease term, and (d) securing a new lessee and selling the
Equipment subject to the extended or new lease to another
investor. In other cases, at the end of the initial term of a
lease, the Partnership may decide to retain the Equipment and
enter into a new or extended lease. The Partnership will then
either (a) refinance the Equipment, which will permit the
Partnership to distribute to the Partners any cash received in
the refinancing or (b) retain the debt-free leased Equipment so
as to secure for the Partnership the rental income under the
lease. The Partnership may also sell the lease prior to the end
of the initial lease term. It is not anticipated that the terms
of any extended or replacement leases will extend beyond July 11,
2000.
<PAGE>
Independent Brokers. Most of the Partnership's Equipment
purchases and related lease opportunities will be brought to its
attention by independent leasing brokers, which will either
charge the Partnership a commission for their services or
alternatively purchase the Equipment and secure the lessee and
then resell the package to the Partnership at a
profit. Independent brokers may also be compensated by the
Partnership for assisting in the re-leasing and disposition of
its Equipment. The independent brokers may also participate
in the proceeds of the leases on a percentage or fixed basis
after the Partnership has earned a specified return on its
investment in a lease.
No Commitments. The foregoing description of the business
of the Partnership is only a statement of the present intention
of the General Partners, and should not be viewed as a commitment
as to the Partnership's actual business activities. The General
Partners are granted unlimited discretion in the Partnership
Agreement to make all decisions regarding the business of the
Partnership. These decisions will include the type of equipment
to be acquired, the terms of leases, the amount and nature of
borrowings, and the time and terms of Equipment disposition. The
General Partners intend to exercise sound business judgment in
response to market conditions when making these decisions, which
may result in substantial deviations from the business now
conducted.
Through December 31, 1997, the Partnership had purchased
equipment for an aggregate purchase price of $19,237,745
including the assumption of debt. The Equipment owned by the
Partnership as of that date consists of computer hardware and
peripherals.
Leases. The following is a summary of each of the leases
and related Equipment acquired by the Partnership through
December 31, 1997 and owned during 1997:
1. Thrift Drug, Inc.
(a) Under the terms of a master lease agreement entered
into by Thrift Drug, Inc. ("Thrift") dated January 2, 1992, and
an equipment supplement dated January 2, 1992, Thrift has leased
a computer controller and disk drives manufactured by Hitachi
Data Systems Corporation.
The Partnership has acquired from the original lessor the
equipment and all of the rights under the supplement. The cost
to the Partnership of the equipment and supplement was $734,431.
The Partnership paid $24,258 of this amount in cash, and the
balance by assuming existing nonrecourse financing of the
equipment.
Pursuant to a master lease agreement entered into by the
Partnership and Thrift Drug, Inc., dated as of May 31, 1995, and
an equipment supplement dated May 31, 1995, the Partnership and
Thrift Drug terminated the original master lease agreement and
equipment schedules, and renewed the original equipment. The
initial term of the schedule was 26 months which commenced on
June 1, 1995. The monthly rent was $9,858.
After the lease expired, the Partnership took possession of
the equipment and is in the process of selling the equipment.
There is no assurance that the partnership will be able to sell
this equipment, and if sold there is no assurance with the
respect to the amount to be received by the partnership.
(b) Under the terms of (a) a master lease agreement entered
into by Thrift's predecessor, and assumed by Thrift, dated
December 3, 1990, and an equipment supplement dated March 8,
<PAGE>
1991, and (b) a master lease agreement entered into by Thrift
Drug, Inc. dated as of January 2, 1992, and an equipment
supplement dated January 2, 1992, Thrift has leased an IBM
mainframe computer and certain peripheral devices.
The Partnership has acquired from the original lessor the
equipment and all of the rights under the two foregoing described
supplements. The cost to the Partnership of the equipment and
the two supplements was $9,489,339. The Partnership paid
$105,000 of this amount in cash, and the balance by assuming
existing nonrecourse financing of the equipment.
After the expiration of the two supplements, the Partnership
took possession of the Equipment and is in the process of selling
the Equipment. There is no assurance that the partnership will
be able to sell this equipment, and if sold there is no assurance
with the respect to the amount to be received by the partnership.
(c) Under the terms of a master lease agreement entered
into by Thrift dated January 2, 1992, and an equipment supplement
dated August 4, 1992, Thrift has leased 44 laser printers
manufactured by IBM. The term of the supplement is 36 months,
which commenced on November 1, 1992. The Partnership has
acquired from the original lessor the equipment and all of the
rights under the supplement. The cost to the Partnership of the
Equipment and supplement was $235,980. The Partnership paid
$42,825 of this amount in cash, and the balance by assuming
existing non recourse financing of the equipment.
(d) Under the terms of a master lease agreement entered
into by Thrift dated January 2, 1992, and an equipment supplement
dated November, 23 1992, Thrift has leased 4 laser 4 laser
printers manufactured by IBM. The Partnership has acquired from
the original lessor the equipment and all of the rights under the
supplement. The cost to the Partnership of the equipment and
supplement was $21,822, which was paid by the Partnership in
cash. The term of the supplement was 36 months which commenced
on December 1, 1992. The monthly rent was $600.
The term of the schedules in (c) and (d) expired in October
1995 and November 1995, respectively, Under the terms of a master
lease dated May 31, 1995, respectively. Under the terms of a
master lease dated May 31, 1995, and an equipment supplement
dated November 1, 1995, the schedules in (c) and (d) were
renewed with 46 new IBM printers. The term of the schedule is 36
months commencing November 1, 1995. The monthly rent is $4,387.
Thrift operates a chain of retail drug stores.
2. Mount Sinai Hospital, New York
Under the terms of a master lease agreement entered into by
Mount Sinai Hospital ("Mount Sinai") dated May 1, 1992, and an
equipment supplement dated May 28, 1992, Mount Sinai has leased
two laser printers manufactured by IBM.
The Partnership has acquired from the original lessor the
Equipment and all of the rights under the supplement. The term
of the supplement was 48 months, which commenced on September 1,
1992. The monthly rent was $4,400. The cost to the Partnership
of the Equipment and supplement was $185,539. The Partnership
paid $5,000 of this amount in cash, and the balance by assuming
existing nonrecourse financing of the Equipment.
The original lease expired in August 1996 and the equipment
was sold in June 1997.
<PAGE>
3. ICI Americas Inc.
Under the terms of a master lease agreement entered into by
ICI Americas Inc. ("ICI") dated December 5, 1990, and an
equipment schedule dated July 10, 1992, ICI has leased computer
equipment manufactured by IBM, Unidata, Digi-board, and TPS
Systems.
The Partnership has acquired from the original lessor the
equipment and all of the rights under the schedule. The cost to
the Partnership of the equipment and schedule was $301,469. The
Partnership paid $41,664 of this amount in cash, and the balance
by assuming existing nonrecourse financing of the equipment.
The term of the supplement was 36 months, which commenced on
September 1, 1992. The monthly rent was $7,823.
In November 1994, the equipment was upgraded and ICI and the
Partnership negotiated an early renewal of the schedule. The
term of the schedule was extended to October 1997 at a monthly
rent of $4,889.
In March 1996, the equipment was again upgraded and ICI and
the Partnership negotiated an early renewal of the schedule. The
term of the schedule was extended to February 1999 at a monthly
rent of $4,150.
In June 1996, additional equipment was upgraded and added on
to the original equipment, and was executed as an additional
supplement to the original equipment above. The term of the
additional supplement was 32 months, with a commencement date of
July 1, 1996. The cost to the Partnership of the upgraded and
additional equipment was $88,117, the balance of which was paid
for by assuming non recourse financing for the equipment. The
monthly rent for the additional supplement is $3,076.
ICI Americas, Inc., a subsidiary of Imperial Chemical
Industries PLC, is engaged in the manufacture and sale of
pharmaceuticals, plastics, specialty chemicals, advanced
materials, and agricultural products.
4. Advantis
Under the terms of a master lease agreement dated January 4,
1990 entered into by Advantis, having accepted assignment of the
master lease agreement and related equipment supplements from the
original lessee and four equipment supplements dated August 1,
1992 and September 1, 1992, Advantis has leased computer
equipment manufactured by IBM.
The Partnership has acquired from the original lessor the
equipment and all of the rights under the supplements. The term
of each supplement was 36 months. The commencement date for one
supplement was August 1, 1992; the commencement date for the
other supplements was September 1, 1992. The aggregate monthly
rent for the supplements was $3,296. The cost to the Partnership
of the equipment and supplements was $123,616. The Partnership
paid $16,143 of this amount in cash, and the balance by assuming
existing nonrecourse financing of the equipment.
The original term of the lease expired in July and August
1995. One schedule was renewed for 6 months commencing on
September 1, 1995. The renewal rent is $829. After expiration
of the renewal term, this schedule was leased on a month-to-month
basis for 2 months, and subsequently the equipment was returned
and sold in May 1996. The remaining schedules were leased on a
month-to-month basis and sold in January 1997.
<PAGE>
Advantis is a joint venture between a wholly owned
subsidiary of IBM and a wholly owned subsidiary of Sears, Roebuck
& Co., which provides information network, data processing and
telecommunications services.
5. Allied-Signal Inc.
Under the terms of a master lease agreement entered into by
Allied-Signal Inc. ("Allied") dated May 18, 1988, and an
equipment schedule dated October 7, 1992, Allied has leased 71
printers manufactured by IBM.
The Partnership has acquired from the original lessor the
equipment and all of the rights under the schedule. The cost to
the Partnership of the equipment and schedule was $229,753 which
was paid by the Partnership in cash. The term of the schedule
was 48 months, which commenced on October 12, 1992. The monthly
rent was $4,852.
The original lease expired in October 1996. The equipment
lease was renewed during the year and will expire in August 1999,
with monthly rent of $3,847.
Allied's primary businesses are in the aerospace, automotive
products, and engineered materials industries.
6. BellSouth Telecommunications, Inc.
(a) Under the terms of a master lease agreement entered
into by BellSouth Services Incorporated, the predecessor of
BellSouth Telecommunications, Inc. ( BellSouth ), dated as of
September 1, 1988 and two equipment schedules dated as of August
30, 1993, BellSouth has leased computer equipment manufactured
by Amdahl. The initial term of the schedules was 24 months,
which commenced on October 1, 1993. The monthly rent was
$32,354. The cost of the equipment and schedules to the
Partnership was $813,161. The Partnership paid $148,750 of this
amount in cash and the balance by assuming nonrecourse financing
of the equipment.
(b) Under the terms of a master lease agreement entered
into by BellSouth Services Incorporated, the predecessor of
BellSouth, dated as of September 1, 1988 and an equipment
schedule dated as of December 13, 1993, BellSouth has leased
computer equipment manufactured by Amdahl. The initial term of
the schedule was 24 months, which commenced on October 1, 1993.
The monthly rent was $8,327. The cost of the equipment and the
schedule to the Partnership was $156,124, which the Partnership
paid in cash.
The term of the schedules in (a) and (b)expired in September
1995. The Partnership scrapped the equipment in June 1997.
BellSouth is in the telephone communications business.
7. Charming Shoppes of Delaware, Inc.
(a) Under the terms of a master lease agreement entered
into by Charming Shoppes of Delaware, Inc. ("Charming Shoppes")
dated August 25, 1992 ("Charming Shoppes Master Lease") and an
equipment schedule dated February 22, 1993, Charming Shoppes has
leased computer equipment manufactured by Amdahl.
<PAGE>
The Partnership has acquired from the original lessor the
equipment and all of the rights under the schedule. The term of
the schedule was 36 months, which commenced January 1, 1993. The
monthly rent was $5,599. The cost to the Partnership of the
equipment and schedule was $189,228. The Partnership paid
$20,622 of this amount in cash, and the balance by assuming
nonrecourse financing of the equipment.
The original lease term expired in December 1995, and the
related equipment was returned. Part of the equipment was sold
in August 1996, and the Partnership scrapped the remaining
equipment during 1997.
(b) Under the terms of an equipment schedule, dated August
12, 1993 and amended November 18, 1993, to the Charming Shoppes
Master Lease, Charming Shoppes has leased computer equipment
manufactured by Amdahl. The Partnership has acquired from the
original lessor the equipment and all of the rights under the
schedule. The initial term of the schedule was 36 months which
commenced June 1, 1993. The cost of the equipment and schedule
to the Partnership was $186,031. The monthly rent was $5,599.
The Partnership paid $18,500 of this amount in cash and the
balance by assuming nonrecourse financing of the equipment.
The original lease term expired in May 1996, and the related
equipment was returned. Part of the equipment was sold in
August 1996, and the Partnership scrapped the remaining
equipment in 1997.
(c) Under the terms of an equipment schedule dated October
26, 1993 to the Charming Shoppes Master Lease, Charming Shoppes
has leased computer equipment manufactured by Amdahl. The
Partnership has acquired from the original lessor the equipment
and all of the rights under the schedule. The term of the
schedule was 36 months, which commenced September 1, 1993. The
monthly rent was $5,638. The cost to the Partnership of the
equipment and schedule was $178,629. The Partnership paid
$14,550 of this amount in cash, and the balance by assuming
nonrecourse financing of the equipment.
The original lease term expired in August 1996, and the
related equipment was returned. The Partnership scrapped the
equipment during 1997.
(d) Under the terms of the Charming Shoppes Master Lease,
dated October 13, 1993, Charming Shoppes has leased computer
equipment manufactured by Netframe Systems, Inc. The Partnership
has acquired from the original lessor the equipment and all of
the rights under the schedule. The cost to the Partnership of
the equipment and the schedule was $183,319. The Partnership
paid $18,500 in cash and the balance by executing a nonrecourse
promissory note. The term of the schedule was 36 months which
commenced December 1, 1993. The monthly rent was $6,935.
The original lease term expired in November 1996, and the
related equipment was returned. The Partnership scrapped the
equipment during 1997.
Charming Shoppes is a wholesale distributor of women's
apparel.
8. Perot Systems Corporation
Under the terms of a master lease agreement entered into by
Perot Systems Corporation ("Perot Systems") dated December 3,
1990, and an equipment schedule dated March 29, 1993, Perot
Systems has leased computer equipment manufactured by Amdahl.
<PAGE>
The term of the schedule was 36 months, which commenced
March 1, 1993. The monthly rent was $23,693. The cost to the
Partnership of the equipment and schedule was $795,961. The
Partnership paid $82,478 of this amount in cash, and the balance
by assuming nonrecourse financing of the equipment.
Perot Systems assigned its rights and obligations in the
lease to Nationsbanc Services, Inc. ("Nationsbanc"), as of April
1, 1995. The original lease expired in February 1996. After
expiration of the renewal term, this schedule was leased on a
month-to-month basis for 3 months, and subsequently the
equipment was returned. The Partnership sold part of the
equipment in August 1996, and scrapped the remainder during 1997.
9. Mobil Administrative Services Company, Inc.
Under the terms of a master lease agreement dated as of
March 9, 1990 and an equipment schedule dated as of June 25,
1993, Mobil Administrative Services Company, Inc. ("Mobil"),
Mobil has leased computer equipment manufactured by IBM. The
initial term of the schedule is 30 months which commenced July 1,
1993. The cost of the equipment and schedule to the Partnership
was $490,081. The Partnership paid $103,000 of this amount in
cash and the balance by assuming nonrecourse financing of the
equipment. The monthly rent was $16,076.
The original lease expired in January 1996. After
expiration of the renewal term, this schedule was leased on a
month-to-month basis for 5 months, and subsequently the equipment
was returned. The Partnership has sold certain units of the
equipment in 1996 and 1997, and is currently in the process of
remarketing the remaining items of equipment. There is no
assurance that the partnership will be able to sell
this equipment, and if sold there is no assurance with the
respect to the amount to be received by the partnership.
10. Chrysler Corporation
Under the terms of a master agreement dated March 21, 1989,
and 2 equipment schedules dated November 15, 1993, Chrysler
Corporation ("Chrysler") has leased computer equipment
manufactured by IBM. The initial terms of the schedules are 36
months. One schedule commenced as of April 1, 1994 and the other
commenced August 12, 1994. The aggregate monthly rent was
$15,994. The cost of the equipment and schedules to the
Partnership was $546,634. The Partnership paid $80,524 of this
amount in cash and the balance by assuming nonrecourse financing
of the equipment.
Both equipment schedules were renewed during 1997 and will
expire in March and July of the year 2000, respectively with
aggregate monthly rent of $9,950.
Chrysler Corporation is one of the world's largest
manufacturers of automobiles, vans, and trucks.
11. Fingerhut Corporation
Under the terms of a master lease agreement dated July 11,
1990 and an equipment schedule dated as of February 1, 1994,
Fingerhut Corporation ("Fingerhut") has leased computer equipment
manufactured by Hitachi Data Systems Corporation. The initial
term of the schedule was 36 months which commenced February 1,
1994. The monthly rent was $27,945. The cost of the equipment
and the schedule to the Partnership was $1,115,173. The
<PAGE>
Partnership paid $236,140 of this amount in cash and the balance
by assuming nonrecourse financing of the equipment. The
equipment was sold during 1997.
Fingerhut is a direct mail merchandiser of home furnishings,
apparel, recreation items, small appliances and automotive
accessories.
12. Kawasaki Motors, U.S.A.
Under the terms of a master lease agreement dated November
30, 1987, and an equipment schedule dated August 26, 1993,
Kawasaki Motors, U.S.A. ("Kawasaki") has leased computer
equipment manufactured by IBM. The Partnership has acquired from
the original lessor the equipment and all of the rights under the
schedule. Cost to the Partnership of the equipment and the
schedule was $24,858. The Partnership paid $2,600 of this amount
in cash and the balance by assuming existing nonrecourse
financing of the equipment. The term of the schedule was 36
months, which commenced October 1, 1993. The monthly rent was
$1,081.
The original lease expired in September 1996. The lease was
renewed in December 1996 for 24 months, at a monthly rent of
$800.
Kawasaki is engaged primarily in the import and distribution
of motorcycles, jet skis, engines and all-terrain vehicles
supplied by Kawasaki Heavy Industries, Ltd. of Japan ("KHI"),
Kawasaki's parent, and by Kawasaki Motors Manufacturing Corp.,
U.S.A., a wholly-owned manufacturing and assembling subsidiary of
KHI.
<PAGE>
<TABLE>
The following tabulation sets forth the lessee, the equity
investment of the Partnership, the debt incurred at the date of
acquisition, the lease term at the acquisition of the Equipment
and lease term remaining at December 31, 1997:
<CAPTION>
Lease Lease
Term Term
at Remaining
Equipment at
Acquisition 12/31/97
(in (in
Lessee Equity Debt months) months)
<S> <C> <C> <C> <C>
Thrift Drug $ 24,258 $ 710,173 46 (2)
Thrift Drug 105,000 9,384,339 61 (2)
Thrift Drug 91,891 -- 23 (1)
Thrift Drug 42,825 193,155 36 (5)
Thrift Drug 21,822 -- 35 (5)
Aetna Life 116,000 -- 36 (1)
Mount Sinai 5,000 180,539 48 (1)
ICI Americas 41,664 259,805 36 (6)
Advantis 16,143 107,475 35-36 (1)
Allied-Signal 229,753 -- 45 (9)
United Telephone 1,915 43,950 36 (1)
BellSouth 34,591 390,814 45 (1)
BellSouth 148,750 664,411 22 (1)
BellSouth 156,154 -- 18 (1)
Charming Shoppes 20,622 168,606 33 (1)
Charming Shoppes 18,500 167,531 33 (1)
Charming Shoppes 14,550 164,079 32 (1)
Charming Shoppes 18,500 164,819 26 (1)
Perot (Nationsbanc) 82,478 713,483 33 (1)
Sony 174,500 1,337,831 35 (1)
Mobil 103,000 387,081 30 (3)
Chrysler Corp. 43,121 220,100 30 (8)
Chrysler Corp. 37,403 246,010 34 (8)
Chrysler Corp. 117,807 -- 36 (8)
Total System 88,242 557,313 36 (1)
Fingerhut Corp. 236,138 879,035 36 (1)
Halliburton Company 257,175 -- 24 (1)
Halliburton Company 24,536 -- 24 (1)
Kawasaki 2,600 22,258 23 (7)
---------- -----------
Total: $2,274,938 $16,962,807
<FN>
</TABLE>
(1) Lease expired and equipment sold or scrapped.
(2) Lease expired, the Partnership is in the process of
remarketing the equipment.
(3) Lease expired, part of the equipment has been sold, the
Partnership is in the process of remarketing the rest of
the equipment.
(4) Renewed on a month-to-month basis at the original rent.
(5) Renewed with new equipment at a monthly rental of $4,387
for a 36-month term ending in October 1998. The original
equipment was sold in 1996.
<PAGE>
(6) Equipment on lease upgraded; initial term extended to
October 1997. Equipment on lease upgraded again in
March 1996 and June 1996, with additional add-on
schedule. Lease term extended to February 1999.
(7) Lease renewed in December 1996 for 24 months, at a
monthly rent of $800.
(8) Lease renewed in 1997 for 36 months at a monthly rental
of $4,975.
(9) Original lease expired in October 1996. The lease was
renewed for 34 months at a monthly rate of $3,847.
Competition. The equipment leasing industry is highly
competitive and the Partnership competes with other leasing
companies, with equipment manufacturers and distributors, and
with other entities similar to the Partnership, most of which
have greater financial resources than the Partnership and more
experience in the equipment leasing business than the General
Partners. Other leasing companies and especially equipment
manufacturers and distributors may be in a position to offer
equipment for lease upon financial terms more favorable than
those which the Partnership can offer and may also be in a
position to offer trade-in or exchange privileges on a wide range
of equipment, a pass-on of any investment tax credit,
comprehensive maintenance contracts, and other services and
benefits to lessees which the Partnership does not offer.
Major Customers. Approximately 74% of the Partnership's
lease income in the year ended December 31, 1997 was from three
customers. For those direct financing leases in which the
Partnership has a net investment at December 31, 1997, 100% was
with one customer. See note 4 in "Notes to Financial Statements"
in this report.
Employees. The Partnership does not have any employees.
ITEM 2. DESCRIPTION OF PROPERTY
See "Item 1--Description of Business" in this report.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
<PAGE>
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
There has not been, nor is there expected to be, a
public market for the Units. As of December 31, 1996 there were
approximately 226 holders of Units.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
The Partnership commenced the offering of Limited
Partnership Units and began operations on March 27, 1992. As of
December 31, 1993, the date on which the offering of Units
terminated, the Partnership had sold $2,514,768 in Units. At
December 31, 1997, the Partnership had acquired $19,237,743 worth
of equipment, excluding capitalized equipment acquisition costs,
with an equity investment of $2,274,938 and nonrecourse
borrowings of $16,962,807.
Operations
Total revenues decreased to $250,802 for the fiscal year
ended December 31, 1997 ("fiscal 1997") from $1,284,165 for the
fiscal year ended December 31, 1996 ("fiscal 1996"). Total
revenues consist of lease rental income and interest earned on
temporary cash investments and loss on sales of equipment under
lease. This decrease in total revenues resulted from a decrease
in rental income due to the sale of leased equipment.
Operating expenses decreased to $672,415 for fiscal 1997
from $1,877,402 for fiscal 1996. Operating expenses consist of
interest on nonrecourse financing of equipment purchased,
depreciation of equipment under operating leases, write-down of
the carrying value of equipment in operating leases, amortization
of organization expenses, administrative expenses, and payments
to a related party for administrative cost reimbursements. The
decrease in operating expenses from fiscal 1996 to fiscal 1997
resulted primarily from a decrease in interest expense due to the
payment of long-term debt, and a decrease in depreciation expense
due to lease expirations.
Liquidity and Capital Resources
Cash and cash equivalents of the Partnership at December
31, 1997 include undistributed cash available from operations
during the period March 27, 1992 to December 31, 1997.
The Partnership has a cash management program which
provides for the temporary investment of offering proceeds in
various short-term money market instruments pending their
investment in Equipment.
The Partnership generally finances the purchase of
Equipment by the use of nonrecourse loans in an amount in excess
of 50% of the purchase price thereof. The indebtedness incurred
by the Partnership related to the acquisition of Equipment is
generally fully amortized by the monthly rent payments due to the
Partnership under related leases.
<PAGE>
The Partnership maintains a working capital and
contingency reserve in an amount equal to 1% of the gross
proceeds of the offering of Units. Such amount, together with
any amount reserved from operations, will be available to meet
working capital requirements and to provide for contingencies.
The partnership does not believe that it is subject to any
material costs related to the year 2000 issues .
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Partnership as of
December 31, 1997, and for the fiscal years ended December 31,
1997 and December 31, 1996, and the notes thereto are set forth
elsewhere herein.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
The Partnership has no directors or executive officers.
The General Partners of the Partnership are Gerald A. Horwitz and
TL General VIII Corp., an Illinois corporation ("TL General"),
the sole Director of which is Mr. Horwitz. Mr. Horwitz serves as
Director of TL General until his successor is elected.
The executive officers of TL General are Mr. Horwitz and
Jerry Schwartz, who were elected to serve until their successors
are elected and qualified.
Gerald A. Horwitz. Mr. Horwitz, age 62, is the
President and sole Director of TL General. He is also the
Chairman of the Board, sole Director, President, Treasurer and
sole voting shareholder of Raffaello, Inc., the sole shareholder
of TL General, as well as the sole Director and Treasurer of
Triumphe Leasing Group, Inc. and Horwitz & Associates, Inc.
(formerly known as Horwitz, Schakner & Associates, Inc. and G.A.
Horwitz & Co. Inc.), a securities broker-dealer and investment
adviser, and President and sole Director of TL General Corp., the
corporate General Partner of Triumphe Leasing Limited
Partnership. Prior to organizing Horwitz & Associates, Inc. in
1970, Mr. Horwitz served as an officer of Thomson, McKinnon and
Auchincloss and prior to that he served as an officer of Blair
and Company, both of which were New York Stock Exchange member
firms. Mr. Horwitz attended Roosevelt University in Chicago,
where he earned a Bachelor of Science Degree. He also attended
the University of Wisconsin as an undergraduate, and the
University of Chicago as a post-graduate student and served
part-time as an instructor at Northwestern University.
Mr. Horwitz has served as a general partner of Res-Com,
Ltd., Unilease Associates, Quest, Valley Associates, Leasing
Income Associates, Equipment Leasing Partners and Triumphe
Leasing Limited Partnership; and as an officer and director of
the sole general partners of Triumphe Leasing VIII L.P., Concorde
Leasing Limited Partnership and Invalease, Ltd. Each of these
entities are Illinois limited partnerships engaged in the
equipment leasing business. Mr. Horwitz is also the sole trustee
of Tax Advantaged Income Trust, a grantor trust formed in 1985
under Illinois law to purchase and lease equipment.
<PAGE>
Jerry Schwartz. Mr. Schwartz, age 52, has served in
various executive capacities for affiliates of Raffaello, Inc.
since April 1987. He is Vice President, Secretary and Treasurer
of TL General and TL General Corp. From 1982 to 1987, he served
as a principal of J.L. Schwartz & Co., Inc., a public accounting
firm. Prior thereto, Mr. Schwartz served as an accounting and
operational manager for a certified public accounting firm.
There is no family relationship among the foregoing
officers.
ITEM 10. EXECUTIVE COMPENSATION
As stated in Item 9, the Partnership has no executive
officers or directors. The compensation to the General Partners
is set forth in Item 12 of this report.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
As of December 31, 1997, no person owned of record or
was known by the Partnership to own beneficially more than 5% of
the Partnership's Units then outstanding.
The Partnership has no executive officers. As of
December 31, 1997, neither Gerald A. Horwitz, TL General VIII
Corp. nor Jerry Schwartz owned any Units.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Fees to General Partners and Affiliates. The General
Partners and their affiliates will receive substantial fees,
compensation and reimbursement of expenses from the Partnership.
For its services as placement agent of the Partnership,
Horwitz & Associates, Inc. ("H&A"), an affiliate of Messrs.
Horwitz and Schwartz, receives a sales commission of 8% of the
gross proceeds from the offering of Units. Such fees may be
reallowed to other brokers by H&A.
For its services in actively managing the Partnership,
including, but not limited to, preparation of SEC reports and
filings, preparation of reports to investors, leasing and
re-leasing Equipment, arranging for necessary maintenance and
repairs of Equipment, collecting revenues, paying operating
expenses, determining that the Equipment is used in accordance
with all operative contractual arrangements and providing
clerical and bookkeeping services necessary to the operation of
the Partnership, the Partnership will pay the General Partners
and/or their affiliates an Equipment Management Fee in an amount
equal to (i) 2% of gross rental payments (exclusive of taxes and
other reimbursements) payable to the Partnership with respect to
Full Payout Leases; or (ii) 3% of gross rental payments
(exclusive of taxes and other reimbursements) payable to the
Partnership with respect to Operating Leases.
For its services in locating and acquiring equipment,
and arranging for financing and locating lessees, the Partnership
will pay to the General Partners and their affiliates an
Equipment Acquisition Fee in an amount equal to 5% of the
Partnership's equity investment in such equipment; provided,
however, that the Equipment Acquisition Fee shall not be paid if,
and to the extent that, such payment shall cause the amount of
gross proceeds of the offering invested in Equipment (including
costs of investments other than Equipment) to be less than 85% of
the gross proceeds of the offering.
<PAGE>
For its services in connection with the sale of any
Equipment, the Partnership may pay to the General Partners and
their affiliates a Subordinated Resale Fee in an amount equal to
one-half of a Competitive Equipment Sale Commission, not to
exceed 3% of the contract sales price of such Equipment, provided
that any Subordinated Resale Fee earned shall not be paid to the
General Partners and their affiliates prior to "Payout." Payout
is defined as the time when the aggregate amount of all
distributions to the Investor Limited Partners of Distributable
Cash equals the sum of: (i) the aggregate amount of the Investor
Limited Partners' Capital Contributions, and (ii) a cumulative,
non-compounded 10% annual return on the aggregate amount of each
Investor Limited Partner's unreturned Capital Contributions
(calculated from the date such Investor Limited Partner was
admitted to the Partnership). For purposes of this definition,
Capital Contributions shall be deemed to have been returned only
to the extent that distributions of Distributable Cash to the
Investor Limited Partners exceed the amount required to satisfy
such 10% annual return. If the General Partners participate with
an independent broker on resale, such subordination shall apply
only to the General Partners' Resale Fee. In no event shall
total commissions paid to all persons exceed that which is
reasonable, customary and competitive in light of the size, type
and location of the equipment.
During the fiscal year ended December 31, 1997, the
Partnership paid no sales commissions to H&A, an affiliate of the
General Partners. Management fees to the General Partners for
1997 and 1996 amounted to $55,867 and $123,317, respectively. At
December 31, 1997, $470,845 of equipment management fees are
unpaid. The Partnership paid $5,000 in management fees in 1997.
The General Partners paid no acquisition fees during fiscal 1997.
Allocations and Distributions of the Partnership. In
accordance with the Partnership Agreement, the General Partners
received distributions of $2,966 and were allocated net loss of
$4,216 for fiscal 1997.
Reimbursements. The General Partners and their
Affiliates shall be reimbursed for any expenses they incur in
organizing the Partnership and offering the Units, up to a
maximum of $1,400 multiplied by the number of Units actually
sold.
In addition, reimbursements in amounts not presently
determinable will also be made from time to time to the General
Partners and their Affiliates for reasonable out-of-pocket
expenses incurred in connection with the management,
administration and operation of the Partnership and the
acquisition of Equipment (e.g., photocopying, postage, and filing
fees). The General Partners presently estimate that such
reimbursements will not exceed $25,000 per year.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits, as listed in the Exhibit Index set
forth on page 17, are submitted as a separate section of this
report.
(b) No current reports on Form 8-K were filed during
the quarter ended December 31, 1997.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TRIUMPHE LEASING VIII L.P.
By: TL GENERAL VIII CORP.
Its: General Partner
Date: February 25,1998 By: /s/ Gerald A. Horwitz
----------------------------------
Gerald A. Horwitz, President
In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant in the
capacities and on the dates indicated.
Signatures Title(s) Date
/s/ Gerald A. Horwitz Sole Director and February 25, 1998
- ---------------------- President of the
Gerald A. Horwitz corporate General
Partner and as a
General Partner
(Principal
Executive Officer)
/s/ Jerry Schwartz Vice President, February 25, 1998
- ---------------------- Secretary and
Jerry Schwartz Treasurer of the
corporate General
Partner (Principal
Financial and
Accounting
Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
1. Copy of the Partnership's Certificate of
Limited Partnership filed with the Illinois
Secretary of State on December 10, 1991
(Incorporated by reference to Exhibit 4.4 to
Registration Statement No. 33-44929).
2.1 Copy of the Partnership's original Agreement
of Limited Partnership, dated December 10,
1991 (Incorporated by reference to Exhibit 4.3
to Registration Statement No. 33-44929).
2.2 Form of Amended and Restated Agreement of
Limited Partnership (Incorporated by reference
to Exhibit A to the Partnership's prospectus
dated March 27, 1992 as part of Registration
Statement No. 33-44929).
27. Financial data schedule
Triumphe Leasing VIII L.P.
Financial Statements
Years Ended December 31, 1997 and 1996
<PAGE>
Triumphe Leasing VIII L.P.
Contents
Report Of Independent Certified Public Accountants 3
Financial Statements
Balance Sheet 5-6
Statements of Operations 7
Statements of Partners Equity (Deficit) 8
Statements of Cash Flows 9
Summary of Accounting Policies 10-12
Notes to Financial Statements 13-15
<PAGE>
Report Of Independent Certified Public Accountants
To the Partners
Triumphe Leasing VIII L.P.
Northbrook, Illinois
We have audited the accompanying balance sheet of Triumphe
Leasing VIII L.P. as of December 31, 1997 and the related
statements of operations, partners equity (deficit) and cash
flows for each of the two years in the period ended December 31,
1997. These financial statements are the responsibility of the
Partnership s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Triumphe Leasing VIII L.P. at December 31, 1997, and the
results of its operations and its cash flows for each of the two
years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles.
/s/ BDO Seidman, LLP
Chicago, Illinois
January 16, 1998
<PAGE>
Financial Statements
<PAGE>
<TABLE>
Triumphe Leasing VIII L.P.
Balance Sheet
<CAPTION>
December 31, 1997
<S> <C>
Assets
Current Assets
Cash and cash equivalents $ 83,982
Accounts receivable 1,250
Net investment in direct financing leases
(Notes 1 and 4) 74,866
--------
Total Current Assets 160,098
--------
Computer Equipment on Operating Leases, less
accumulated depreciation of $ 876,589 (Note 1) 166,603
--------
Other Assets
Net investment in direct financing leases,
less current portion (Notes 1 and 4) 21,052
--------
$ 347,753
========
<FN>
</TABLE>
<PAGE>
<TABLE>
Triumphe Leasing VIII L.P.
Balance Sheet
<CAPTION>
December 31, 1997
<S> <C>
Liabilities and Partners Deficit
Current Liabilities
Current maturities of long-term debt
(Note 1) $ 227,060
Other liabilities 3,601
---------
Total Current Liabilities 230,661
---------
Long-Term Debt, less current maturities
(Note 1) 183,411
Accrued management fees (Note 2) 470,845
---------
Total Long-Term Liabilities 654,256
---------
Total Liabilities 884,917
---------
Partners Deficit
General partners (4,827)
Limited partners (532,337)
---------
Total Partners Deficit (537,164)
---------
$ 347,753
=========
<FN>
See accompanying summary of accounting policies and notes to
financial statements.
</TABLE>
<PAGE>
<TABLE>
Triumphe Leasing VIII L.P.
Statements of Operations
<CAPTION>
Year ended December 31, 1997 1996
<S> <C> <C>
Revenues
Lease income (Note 4) $ 402,401 $1,635,732
Loss on sale of equipment under
lease (152,237) (352,832)
Interest 638 1,265
--------- ---------
Total revenues 250,802 1,284,165
--------- ---------
Operating Expenses
Interest 60,777 253,804
Depreciation and amortization 405,590 1,437,783
Administrative (Note 2) 206,048 185,815
--------- ---------
Total operating expenses 672,415 1,877,402
--------- ---------
Net Loss $(421,613) $(593,237)
========= =========
Net Loss Allocated to
General partners $ (4,216) $ (5,932)
Limited partners (417,397) (587,305)
--------- ---------
$(421,613) $(593,237)
========= =========
Weighted Average Units Outstanding During the Year
General partners 1.2894 1.2894
Limited partners 127.6553 127.6553
Basic and Fully Diluted Earnings Per Unit
General partners $ (3,270) $ (4,601)
Limited partners $ (3,270) $ (4,601)
<FN>
See accompanying summary of accounting policies and notes to
financial statements.
</TABLE>
<PAGE>
<TABLE>
Triumphe Leasing VIII L.P.
Statements of Partners Equity (Deficit)
<CAPTION>
General Limited
Total Partners Partners
<S> <C> <C> <C>
Partners Equity, at
December 31, 1995 $ 1,611,890 $ 16,664 $ 1,595,226
Distributions
($6,500 per unit) (837,702) (8,377) (829,325)
Net loss (593,237) (5,932) (587.305)
Partners Equity, at
December 31, 1996 $ 180,951 $ 2,355 $ 178,596
Distributions
($2,300 per unit) (296,502) (2,966) (293,536)
Net loss (421,613) (4,216) (417,397)
---------- -------- ----------
Partners Deficit, at
December 31, 1997 $ (537,164) $ (4,827) $ (532,337)
========== ======== ==========
<FN>
See accompanying summary of accounting policies and notes to
financial statements.
</TABLE>
<PAGE>
<TABLE>
Triumphe Leasing VIII L.P.
Statements of Cash Flows
<CAPTION>
Year ended December 31, 1997 1996
<S> <C> <C>
Cash Flows From Operating Activities
Net loss $ (421,613) $ (593,237)
Adjustments to reconcile
net loss to net cash provided
by operating activities
Depreciation and amortization 405,590 1,437,783
Loss on sale of equipment
under lease 152,237 352,832
Amortization of unearned income (64,851) (258,826)
Changes in assets and liabilities
Decrease (increase) in
accounts receivable 42,767 (44,017)
Increase in accounts payable 31,276 87,449
Decrease in other liabilities (23,549) (34,182)
---------- ----------
Net cash provided by operating
activities 121,857 947,802
---------- ----------
Cash Flows From Investing Activities
Purchase of computer equipment
on operating leases - (108,393)
Principal payments received
under direct financing leases 1,538,915 2,717,687
Proceeds from sale of equipment
under lease 15,576 793,660
---------- ----------
Net cash provided by investing
activities 1,554,491 3,402,954
---------- ----------
Cash Flows From Financing Activities
Principal payments on
nonrecourse debt (1,698,403) (3,714,875)
Proceeds from nonrecourse debt 323,633 221,312
Distributions to partners (296,502) (837,702)
---------- ----------
Net cash used in financing
activities (1,671,272) (4,331,265)
---------- ----------
Net Increase in Cash and Cash
Equivalents 5,076 19,491
Cash and Cash Equivalents, at
beginning of year 78,906 59,415
---------- ----------
Cash and Cash Equivalents, at
end of year $ 83,982 $ 78,906
========== ==========
Supplemental Disclosures of Cash
Flow Information
Cash paid during the year
for interest $ 60,777 $ 253,804
<FN>
See accompanying summary of accounting policies and notes to
financial statements.
</TABLE>
<PAGE>
Triumphe Leasing VIII L.P.
Summary of Accounting Policies
Organization and Triumphe Leasing VIII L.P. (the
Business Partnership ), located in Northbrook,
Illinois, was formed on December 10,
1991 under the Revised Limited
Partnership Act of the State of
Illinois. The Partnership acquires,
owns, leases, maintains, manages and
sells equipment. At December 31, 1997
and 1996, 127.66 limited partnership
units were outstanding.
The Partnership maintains its records
on the accrual method of accounting
for financial reporting and income tax
purposes. The statements do not give
effect to any assets or liabilities,
including income taxes, that the
partners may have outside of their
interest in the Partnership.
The Partnership purchases and leases
to third parties various items of
equipment. The equipment purchased by
the Partnership to date and related
lease opportunities are brought to the
attention of the Partnership by
independent leasing brokers, who
either charge the Partnership a fee
for their services or purchase the
equipment and secure the lessee and
then resell the package to the
Partnership. At the conclusion of a
lease, the leased equipment is either
(I) released to the same lessee, (ii)
leased to a new lessee or (iii) sold.
Generally, the Partnership compensates
the independent brokers for re-leasing
or disposing of the equipment
purchased to date by allowing them to
participate in the proceeds of the
renewal leases or sales.
Lease Accounting The Partnership records leases in
conformity with generally accepted
accounting principles and prevalent
accounting practices within the
leasing industry. All existing leases
are in the form of direct financing
leases or operating leases.
Direct financing leases are defined as
those leases which transfer
substantially all of the benefits
and risks of ownership of the
equipment to the lessee. The
Partnership records its net investment
at the inception of the lease as the
aggregate of the gross investment and
any initial direct costs less unearned
income, where the gross investment is
the aggregate of the minimum lease
payments and the estimated
unguaranteed residual value and
unearned income is the difference
between the gross investment and the
cost of the leased equipment.
Unearned income net of initial direct
costs is recognized over the lease
term so as to produce a constant
periodic rate of return on the net
investment in the lease.
<PAGE>
Triumphe Leasing VIII L.P.
Summary of Accounting Policies
Operating leases are defined as those
which do not transfer substantially
all of the benefits and risks of
ownership of the equipment to the
lessee. The leased property is
included in computer equipment on
operating leases and depreciated
following the Partnership's
depreciation policy. Rent is reported
as income over the lease term as it
becomes receivable according to the
provisions of the lease.
The Partnership evaluates the
recoverability of its portfolio of
leases quarterly, or more frequently
whenever events and circumstances
warrant revised estimates, and
considers whether the carrying value
of leases should be completely or
partially written off. In 1995, the
Partnership adopted Statement of
Financial Accounting Standards No.
121, Accounting for Impairment of
Long-Lived Assets and for Long-Lived
Assets to be Disposed of. During
1997 and 1996, the Partnership
recorded charges of $194,000 and
$447,000, respectively (included in
depreciation and amortization) to
write-down certain impaired assets to
their fair value. These assets
included data processing and
telecommunications equipment not on
lease at December 31, 1997 and 1996,
respectively. Fair value was based on
estimates of discounted future cash
flows.
The Partnership's leasing operations
consist of the leasing of various
types of data processing equipment and
telecommunications equipment. A
substantial portion of the
Partnership's leases are classified as
direct financing leases which expire
over the next two years. Other data
processing equipment is leased under
operating leases that expire over the
next three years.
Computer Equipment Computer equipment on operating leases
on Operating Leases; is stated at cost. Depreciation is
Depreciation computed using the double declining
balance and straight-line methods over
the estimated useful lives of the
assets.
Cash and Cash For purposes of the statements of cash
Equivalents flows, the Partnership considers all
highly liquid investments purchased
with a maturity of three months or
less to be cash equivalents.
Income Taxes The Partnership is not a tax-paying
entity for federal income tax purposes
and, accordingly, no income tax
expense has been provided for in the
financial statements. Income or loss
from the Partnership is required to be
reported by the partners on their
respective income tax returns.
The Partnership is responsible for
State of Illinois replacement tax on
income it generates.
<PAGE>
Triumphe Leasing VIII L.P.
Summary of Accounting Policies
All of the Partnership's leases are
treated as operating leases for income
tax purposes (Note 3).
Earnings per Unit In February, 1997, the Financial
Standards Board issued Statement of
Financial Accounting Standard ( SFAS )
No. 128, Earnings per Share. The
new standard simplifies the method for
computing earnings per unit and
requires the presentation of two new
amounts, basic and fully diluted
earnings per unit.
Management Estimates The preparation of financial
statements in conformity with
generally accepted accounting
principles requires management to make
estimates and assumptions that affect
the reported amounts of assets and
liabilities and disclosure of
contingent assets and liabilities at
the date of the statements and
reported amounts of revenue and
expenses during the reporting period.
Actual results could differ from those
estimates.
The Partnership has estimated the
residual values of equipment under
direct financing and operating leases.
These estimates have been developed
based upon published market values of
similar equipment and the general
partners prior experience. Management
has provided for estimated future
losses on the disposition or lease
renewals of equipment currently under
lease. Given the volatility of market
for the resale of computer equipment,
it is reasonably possible that the
Partnership's estimates for residual
value may change in the near term.
Recent Accounting In June, 1997, the Financial
Pronouncement Accounting Board issued SFAS No. 130,
Reporting Comprehensive Income . The
new standard discusses how to report
and display comprehensive income and
its components. The standard is
effective for years beginning after
December 15, 1997. When the
Partnership adopts this statement, it
is not expected to have a material
impact on the Partnership s financial
statements.
<PAGE>
Triumphe Leasing VIII L.P.
Notes to Financial Statements
1. Leases and Computer Estimated future minimum lease
Equipment Financing payments under both direct financing
and operating leases, including
estimated residual values of leased
property (unguaranteed) of $6,972, net
of unearned income under direct
financing leases, and the related debt
maturities under financing leases and
operating leases at December 31, 1997
are as follows:
[CAPTION]
<TABLE>
Estimated future minimum lease
payments receivable
------------------------------------------
Direct
financing Operating Debt
leases leases Total maturities
------------------------------------------
<S> <C> <C> <C> <C>
1998 $ 86,709 $ 202,851 $ 289,560 $ 227,060
1999 21,424 119,400 140,824 124,993
2000 - 59,700 59,700 58,418
------------------------------------------
108,133 381,951 490,024
$ 410,471
----------
Less unearned
income 12,215 - 12,215
-------------------------------
$ 95,918 $ 381,951 $ 477,869
<FN>
</TABLE>
The various debt obligations are
payable monthly to financial
institutions and include interest
at rates ranging from 5.75% to 8.75%.
The Partnership estimates that
the fair value of its fixed-rate
borrowings approximates the carrying
value at December 31, 1997 given the
Partnership's current borrowing
capabilities. The debt obligations
are collateralized by the related
equipment and future rental payments
under the respective leases. The
indebtedness is without recourse
against the Partnership.
2. Related Party The Partnership pays companies related
Transactions to the general partners through common
ownership an equipment acquisition
fee, in the amount of 5% of the
Partnership's equity investment in
such equipment, for locating and
acquiring equipment, arranging lease
financing and locating lessees.
Equipment acquisition fees are not
paid unless at least 85% of the gross
limited partner contributions have
<PAGE>
<TABLE>
Triumphe Leasing VIII L.P.
Notes to Financial Statements
been invested in equipment. There
were no fees in 1997 and 1996.
For their services in actively
managing the Partnership, the
Partnership is charged by the general
partners an equipment management fee
in an amount equal to 3% of gross
rental payments (exclusive of taxes
and other reimbursements) payable to
the Partnership. These expenses
amounted to $ 55,867 and $123,317 in
1997 and 1996, respectively.
At December 31, 1997, $ 470,845 of
equipment management fees are unpaid
and included in accounts payable. Per
an agreement with the general
partners, the management fees are not
payable until March 31, 1999.
3. Reconciliation of
Reported Net Loss
to Tax Net (Loss)
Income
<CAPTION>
Year ended December 31, 1997 1996
<S> <C> <C>
Reported net loss $(421,613) $(593,237)
Add tax leasing revenues
in excess of reported
leasing revenues 1,474,064 2,458,861
Less tax loss in excess
of reported loss on
sale of equipment
under lease (173,214) (43,627)
Less tax depreciation
in excess of reported
depreciation (1,121,110) (847,741)
Add management fees in
excess of tax management
fees 55,866 -
------------------------------------------------
Tax net (loss) income $ (186,007) $ 974,256
------------------------------------------------
<FN>
</TABLE>
<PAGE>
Triumphe Leasing VIII L.P.
Notes to Financial Statements
The Partnership's tax basis in its net
assets differs from the amount at
which its net assets are reported for
financial purposes, principally due to
the accounting for direct financing
leases. At December 31, 1997, the
Partnership's basis for financial
reporting purposes of its net assets
was less than its basis for tax
reporting purposes by approximately
$651,000. As a result, aggregate
future income for income tax reporting
purposes will be lesser than for
financial reporting purposes.
4. Major Customers Approximately 74% and 75% of the
Partnership s lease income
in the years ended December 31, 1997
and 1996, respectively, was from six
customers. The percentages are as
follows:
1997 1996
------------------------------------------
Customer A 35% 12%
Customer B 26 18
Customer C 13 -
Customer D - 21
Customer E - 14
Customer F - 10
-------------------------------------------
Total 74% 75%
-------------------------------------------
For those direct financing leases in
which the Partnership has a net
investment at December 31, 1997,
100% was with one customer which
manufactures pharmaceuticals,
plastics, specialty chemicals,
advanced materials and agricultural
products.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 1-YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 83,982
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 160,098
<PP&E> 1,043,192
<DEPRECIATION> 876,589
<TOTAL-ASSETS> 347,753
<CURRENT-LIABILITIES> 230,661
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 347,753
<SALES> 0
<TOTAL-REVENUES> 250,802
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 60,777
<INCOME-PRETAX> (421,613)
<INCOME-TAX> 0
<INCOME-CONTINUING> (421,613)
<DISCONTINUED> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
