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, 1995
/ / 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: 0-18497
Fidelity Leasing Income Fund VI, L.P.
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 23-2540929
_______________________________________________________________________________
(State of organization) (I.R.S. Employer Identification No.)
250 King of Prussia Road, Radnor, PA 19087
_______________________________________________________________________________
(Address of principal executive offices) (Zip code)
(610) 964-7102
_______________________________________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the regis-
trant was required to file such reports), and (2) has been subject to such fil-
ing requirements for the past 90 days.
Yes __X__ No _____
Page 1 of 12
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VI, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
September 30, December 31,
1995 1994
______________ _____________
Cash and cash equivalents $ 4,264,093 $ 5,509,017
Investment securities held to maturity - 2,235,101
Accounts receivable 116,008 112,131
Interest receivable 5,528 51,877
Due from related parties 7,448 27,051
Equipment under operating leases
(net of accumulated depreciation
of $13,178,044 and $18,360,372,
respectively) 6,351,399 5,001,631
Net investment in direct financing
leases 731,170 969,434
Equipment held for sale or lease 21,275 1,249,700
___________ ___________
Total assets $11,496,921 $15,155,942
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 103,777 $ 218,200
Accounts payable - equipment - 518,100
Accounts payable and
accrued expenses 83,648 163,814
Due to related parties 263,641 298,380
___________ ___________
Total liabilities 451,066 1,198,494
Partners' capital 11,045,855 13,957,448
___________ ___________
Total liabilities and
partners' capital $11,496,921 $15,155,942
=========== ===========
The accompanying notes are an integral part of these financial statements.
2
FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
____ ____ ____ ____
Income:
Rentals $1,238,450 $1,506,814 $4,020,545 $4,668,277
Earned income on direct
financing leases 21,407 23,321 62,902 72,903
Interest 59,009 94,634 222,858 234,220
Gain on sale of equipment,
net - - 549,564 16,425
Other 1,102 3,185 13,368 6,645
__________ __________ __________ __________
1,319,968 1,627,954 4,869,237 4,998,470
__________ __________ __________ __________
Expenses:
Depreciation and
amortization 921,745 1,182,766 3,079,485 3,952,760
Write-down of equipment
to net realizable value 2,183 100,000 303,116 200,000
General and administrative 35,386 42,732 96,205 137,470
General and administrative
to related party 43,419 59,651 171,560 164,626
Management fee to related
party 64,426 75,502 203,933 233,330
Loss on sale of equipment,
net 132,291 131,475 - -
__________ __________ __________ __________
1,199,450 1,592,126 3,854,299 4,688,186
__________ __________ __________ __________
Net income $ 120,518 $ 35,828 $1,014,938 $ 310,284
========== ========== ========== ==========
Net income per equivalent
limited partnership unit $ 3.27 $ .55 $ 27.06 $ 6.09
========== ========== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during
the period 34,072 42,237 36,243 44,735
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
3
FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the nine months ended September 30, 1995
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1995 $ 9,380 80,537 $13,948,068 $13,957,448
Redemptions - (1,241) (186,560) (186,560)
Cash distributions (37,395) - (3,702,576) (3,739,971)
Net income 34,065 - 980,873 1,014,938
_______ ______ ___________ ___________
Balance, September 30, 1995 $ 6,050 79,296 $11,039,805 $11,045,855
======= ====== =========== ===========
The accompanying notes are an integral part of these financial statements.
4
FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1995 and 1994
(Unaudited) 1995 1994
____ ____
Cash flows from operating activities:
Net income $1,014,938 $ 310,284
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 3,079,485 3,952,760
Write-down of equipment to net
realizable value 303,116 200,000
Proceeds from direct financing leases,
net of earned income 238,264 128,816
Gain on sale of equipment, net (549,564) (16,425)
(Increase) decrease in accounts receivable (3,877) 42,893
(Increase) decrease in due from related
parties 19,603 299,780
Increase (decrease) in lease rents paid
in advance (114,423) (159,163)
Increase (decrease) in accounts payable and
accrued expenses (80,166) 166,033
Increase (decrease) in accounts payable -
equipment (518,100) -
Increase (decrease) in due to related parties (34,739) (201,608)
Increase (decrease) in other, net 46,349 2,342
__________ __________
2,385,948 4,415,428
__________ __________
Net cash provided by operating activities 3,400,886 4,725,712
__________ __________
Cash flows from investing activities:
Acquisition of equipment (4,137,211) (432,081)
Purchase of investment securities held
to maturity (250,253) -
Maturity of investment securities held
to maturity 2,485,354 758,534
Proceeds from sale of equipment 1,182,831 978,515
__________ __________
Net cash provided by (used in)
investing activities (719,279) 1,304,968
__________ __________
Cash flows from financing activities:
Distributions (3,739,971) (3,805,903)
Redemptions of capital (186,560) (448,699)
__________ __________
Net cash used in financing activities (3,926,531) (4,254,602)
__________ __________
Increase (decrease) in cash and
cash equivalents (1,244,924) 1,776,078
Cash and cash equivalents, beginning
of period 5,509,017 5,688,512
__________ __________
Cash and cash equivalents, end of period $4,264,093 $7,464,590
========== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
The accompanying unaudited condensed financial statements have been prepared
by the Fund in accordance with generally accepted accounting principles,
pursuant to the rules and regulations of the Securities and Exchange Commis-
sion. In the opinion of Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Certain amounts on the 1994 financial statements have been
reclassified to conform to the presentation adopted in 1995.
1. EQUIPMENT LEASED
Equipment on lease consists primarily of computer peripheral equipment
under operating leases. A majority of the equipment was manufactured by
IBM. The lessees have agreements with the manufacturer to provide main-
tenance for the leased equipment. The Fund's operating leases are for
initial lease terms of 11 to 49 months. Generally, operating leases will
not recover all of the undepreciated cost and related expenses of its
rental equipment during the initial lease terms and the Fund is prepared to
remarket the equipment 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 undepreciated cost. Recent and anticipated
technological developments affecting computer equipment and competitive
factors in the marketplace are considered among other things, as part of
this review. In accordance with Generally Accepted Accounting Principles,
the Fund writes down its rental equipment to its estimated net realizable
value when the amounts are reasonably estimated and only recognizes gains
upon actual sale of its rental equipment. As a result, $300,933 and
$200,000 was charged to write-down of equipment to net realizable value
for the nine months ended September 30, 1995 and 1994, respectively. Any
future losses are dependent upon unanticipated technological developments
affecting the computer equipment industry 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 expira-
tion of the lease over the related equipment cost) over the life of the
lease using the interest method.
The net investment in direct financing leases as of September 30, 1995 is
as follows:
Net minimum lease payments to be received $854,000
Less unearned income 123,000
Add expected future residuals -
__________
$731,000
========
6
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
1. EQUIPMENT LEASED (Continued)
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of September 30, 1995 are as
follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1995 $1,110,000 $ 59,000
1996 2,462,000 238,000
1997 1,508,000 238,000
1998 221,000 238,000
1999 - 81,000
__________ __________
$5,301,000 $ 854,000
========== ==========
2. RELATED PARTY TRANSACTIONS
The General Partner receives 5% or 2% of gross 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 rental payments
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 after the Limited Partners have received distributions at
a rate of 12% per year on the aggregate amount paid for their units.
The General Partner may also receive up to 3% of the proceeds from the
sale of the Fund's equipment for services and activities to be performed
in connection with the disposition of equipment.
Additionally, the General Partner and its affiliates 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 affiliates during the nine months ended September 30:
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
____ ____ ____ ____
Management fee $64,426 $75,502 $203,933 $233,330
Reimbursable costs 43,419 59,651 171,560 164,626
Sales fee 4,646 13,804 36,834 30,263
Amounts due from related parties at September 30, 1995 and December 31,
1994 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 the Fund.
Amounts due to related parties at September 30, 1995 and December 31, 1994
represent monies due to the General Partner for the fees and costs men-
tioned above, as well as, rentals and sales proceeds collected by the Fund
on behalf of other affiliated funds.
7
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
3. SUBSEQUENT EVENT
Cash Distribution:
The General Partner declared and paid a cash distribution of $412,943 and
$92,105 in October and November 1995, respectively for the months ended
August 31 and September 30, 1995 to all admitted partners as of August 31
and September 30, 1995.
8
FIDELITY LEASING INCOME FUND VI, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Fidelity Leasing Income Fund VI, L.P. had revenues of $1,319,968 and
$1,627,954 for the three months ended September 30, 1995 and 1994,
respectively, and $4,869,237 and $4,998,470 for the nine months ended Sep-
tember 30, 1995 and 1994, respectively. Rental income from the leasing of
computer peripheral equipment accounted for 94% and 93% of total revenues for
the third quarter of 1995 and 1994, respectively, and 83% and 93% for the nine
months ended September 30, 1995 and 1994, respectively. The decrease in total
revenues in 1995 is primarily attributable to a decrease in rental income.
During the nine months ended September 30, 1995, rental income decreased by
approximately $1,712,000 because of equipment which came off lease and was re-
leased at lower rental rates or sold. This decrease, however, was offset by
approximately $1,064,000 of rents generated from equipment purchases made since
September of 1994. However, the decrease in total revenues was offset by an
increase in the net gain on sale of equipment. The Fund recognized $549,564 of
net gain on sale of equipment for the nine months ended September 30, 1995 as
compared to $16,425 for the corresponding period in 1994.
Expenses were $1,199,450 and $1,592,126 for the three months ended Septem-
ber 30, 1995 and 1994, respectively, and $3,854,299 and $4,688,186 for the nine
months ended September 30, 1995 and 1994, respectively. Depreciation and
amortization comprised 77% and 74% of total expenses for the third quarter of
1995 and 1994, respectively and 80% and 84% for the nine months ended September
30, 1995 and 1994, respectively. The decrease in expenses is primarily related
to the decrease in depreciation expense due to equipment which came off lease
and was terminated or sold since September 30, 1994. In addition, equipment
expenses incurred by the Fund for remarketing of equipment, which are included
in general and administrative expenses, decreased in 1995 as compared to 1994.
During 1995, management fee to related party decreased proportionate to the
decrease in rental income which also accounts for the decrease in total
expenses. The overall decrease in expenses was offset by an increase in the
write-down of equipment to net realizable value. Based upon the quarterly
review of the recoverability of the undepreciated cost of rental equipment,
$303,116 was charged to operations to write down equipment to its estimated net
realizable value during the nine months ended September 30, 1995 as compared to
$200,000 for the nine months ended September 30, 1994. Any future losses are
dependent upon unanticipated technological developments affecting the computer
equipment industry in subsequent years.
The Fund's net income was $120,518 and $35,828 for the three months ended
September 30, 1995 and 1994, respectively, and $1,014,938 and $310,284 for the
nine months ended September 30, 1995 and 1994, respectively. The earnings per
equivalent limited partnership unit, after earnings allocated to the General
Partner, were $3.27 and $.55 based on a weighted average number of equivalent
limited partnership units outstanding of 34,072 and 42,237 for the three months
ended September 30, 1995 and 1994, respectively. The earnings per equivalent
limited partnership unit, after earnings allocated to the General Partner, were
$27.06 and $6.09 based on a weighted average number of equivalent limited
partnership units outstanding of 36,243 and 44,735 for the nine months ended
September 30, 1995 and 1994, respectively.
9
FIDELITY LEASING INCOME FUND VI, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS (Continued)
The Fund generated funds from operations of $1,176,737 and $1,450,069 for
the purpose of determining cash available for distribution, and distributed
35% and 29% of these amounts during the third quarter of 1995 and 1994,
respectively and 43% and 58% of these amounts in October and November 1995 and
1994, respectively. For the nine months ended September 30, 1995 and 1994, the
Fund generated $3,847,975 and $4,446,619 of funds from operations and
distributed 75% and 66% of these amounts during the first nine months of 1995
and 1994, respectively and 13% and 19% of these amounts in October and November
1995 and 1994, respectively.
ANALYSIS OF FINANCIAL CONDITION
The Fund will continue to purchase computer peripheral equipment with sales
proceeds and cash available from operations which is not distributed to
partners. The Fund purchased $4,137,211 and $432,081 of equipment during the
nine months ended September 30, 1995 and 1994, respectively.
The cash position of the Fund is reviewed daily and cash is invested on a
short-term basis.
The Fund's cash from operations is expected to continue to be adequate to
cover all operating expenses and contingencies during the next twelve month
period.
10
Part II: Other Information
FIDELITY LEASING INCOME FUND VI, L.P.
September 30, 1995
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: A report on Form 8-K was filed with the
Securities and Exchange Commission on October 12, 1995 reporting
under Item 1.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the regis-
trant has duly caused this report to be signed on its behalf by the under-
signed, thereunto duly authorized.
FIDELITY LEASING INCOME FUND VI, L.P.
11-14-95 By: P. Donald Mooney
________ _____________________________
Date P. Donald Mooney
President of
Fidelity Leasing Corporation
(Principal Operating Officer)
11-14-95 By: Marianne T. Schuster
________ _____________________________
Date Marianne T. Schuster
Vice President of
Fidelity Leasing Corporation
(Principal Financial Officer)
12
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 VI, L.P.
_______ _____________________________
Date P. Donald Mooney
President of
Fidelity Leasing Corporation
(Principal Operating Officer)
_______ _____________________________
Date Marianne T. Schuster
Vice President of
Fidelity Leasing Corporation
(Principal Financial Officer)
12
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 4,264,093
<SECURITIES> 0
<RECEIVABLES> 128,984
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,393,077
<PP&E> 19,550,718
<DEPRECIATION> 13,178,044
<TOTAL-ASSETS> 11,496,921
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0
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<OTHER-SE> 11,045,855
<TOTAL-LIABILITY-AND-EQUITY> 11,496,921
<SALES> 4,020,545
<TOTAL-REVENUES> 4,869,237
<CGS> 0
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<INCOME-TAX> 0
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