SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
/ / 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.)
7 E. Skippack Pike, Suite 275, Ambler, Pennsylvania 19002
_______________________________________________________________________________
(Address of principal executive offices) (Zip code)
(215) 619-2800
_______________________________________________________________________________
(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)
June 30, December 31,
1996 1995
______________ _____________
Cash and cash equivalents $4,032,114 $2,920,100
Investment securities held to maturity - 499,740
Accounts receivable 144,725 33,021
Interest receivable 39,614 13,376
Due from related parties 192,606 52,267
Equipment under operating leases
(net of accumulated depreciation
of $9,930,284 and $13,650,877,
respectively) 4,392,529 6,242,594
Net investment in direct financing
leases 597,447 687,606
Equipment held for sale or lease 201,722 9,424
__________ __________
Total assets $9,600,757 $10,458,128
========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 165,075 $ 87,814
Accounts payable and
accrued expenses 95,551 92,163
Due to related parties - 270,678
__________ ___________
Total liabilities 260,626 450,655
Partners' capital 9,340,131 10,007,473
__________ ___________
Total liabilities and
partners' capital $9,600,757 $10,458,128
========== ===========
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 Six Months Ended
June 30 June 30
1996 1995 1996 1995
____ ____ ____ ____
Income:
Rentals $ 991,803 $1,353,875 $2,028,484 $2,782,095
Earned income on direct
financing leases 13,885 20,218 28,796 41,495
Interest 62,416 72,737 96,553 163,849
Gain on sale of equipment,
net 331,952 294,867 432,064 681,855
Other 2,571 1,579 3,734 12,266
__________ __________ __________ __________
1,402,627 1,743,276 2,589,631 3,681,560
__________ __________ __________ __________
Expenses:
Depreciation and
amortization 712,493 1,077,903 1,453,416 2,157,740
Write-down of equipment to
net realizable value 108,758 250,933 658,853 300,933
General and administrative 36,127 33,747 80,945 60,819
General and administrative
to related party 61,373 74,094 117,704 128,141
Management fee to related
party 50,779 67,920 103,430 139,507
__________ __________ __________ __________
969,530 1,504,597 2,414,348 2,787,140
__________ __________ __________ __________
Net income $ 433,097 $ 238,679 $ 175,283 $ 894,420
========== ========== ========== ==========
Net income per equivalent
limited partnership unit $ 14.46 $ 6.19 $ 5.72 $ 23.29
========== ========== ========== ==========
Weighted average number of
equivalent limited partner-
ship units outstanding
during the period 29,578 36,557 30,088 37,328
========== ========== ========== ==========
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 six months ended June 30, 1996
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1996 $2,438 79,156 $10,005,035 $10,007,473
Redemptions - (3,863) (473,814) (473,814)
Cash distributions (3,688) - (365,123) (368,811)
Net income 3,250 - 172,033 175,283
______ ______ ___________ ___________
Balance,June 30, 1996 $2,000 75,293 $ 9,338,131 $ 9,340,131
====== ====== =========== ===========
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 six months ended June 30, 1996 and 1995
(Unaudited)
1996 1995
__________ __________
Cash flows from operating activities:
Net income $ 175,283 $ 894,420
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,453,416 2,157,740
Write-down of equipment to net
realizable value 658,853 300,933
Proceeds from direct financing leases,
net of earned income 90,159 92,984
Gain on sale of equipment, net (432,064) (681,855)
(Increase) decrease in accounts receivable (111,704) (30,084)
(Increase) decrease in interest receivable (26,238) 30,962
(Increase) decrease in due from
related parties (140,339) (152,628)
Increase (decrease) in lease rents paid
in advance 77,261 46,360
Increase (decrease) in accounts payable and
accrued expenses 3,388 (95,695)
Increase (decrease) in accounts payable-
equipment - (518,100)
Increase (decrease) in due to related parties (270,678) (20,028)
__________ __________
1,302,054 1,130,589
__________ __________
Net cash provided by operating activities 1,477,337 2,025,009
__________ __________
Cash flows from investing activities:
Acquisition of equipment (475,999) (4,137,211)
Purchase of investment securities held
to maturity - (250,253)
Maturity of investment securities held
to maturity 499,740 2,485,354
Proceeds from sale of equipment 453,561 1,032,612
__________ __________
Net cash provided by (used in)
investing activities 477,302 (869,498)
__________ __________
Cash flows from financing activities:
Redemptions of capital (473,814) (174,195)
Distributions (368,811) (2,499,871)
__________ __________
Net cash used in financing activities (842,625) (2,674,066)
__________ __________
Increase (decrease) in cash and cash
equivalents 1,112,014 (1,518,555)
Cash and cash equivalents, beginning
of period 2,920,100 5,509,017
__________ __________
Cash and cash equivalents, end of period $4,032,114 $3,990,462
========== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(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 primarily of computer equipment under operating
leases. A majority of the equipment was manufactured by IBM. 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 60 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, $658,853 and $300,933 was charged to write-
down of equipment to net realizable value for the six months ended
June 30, 1996 and 1995, 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 June 30, 1996 is
as follows:
Net minimum lease payments to be received $675,000
Less unearned income 78,000
Add expected future residuals -
________
$597,000
========
6
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. EQUIPMENT LEASED (Continued)
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of June 30, 1996 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1996 $1,503,000 $118,000
1997 2,079,000 238,000
1998 361,000 238,000
1999 32,000 81,000
__________ ________
$3,975,000 $675,000
========== ========
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 only if and when the the Limited Partners have received
distributions for the period from January 1, 1990 through the end of the
most recent quarter equal to a return for such period 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. 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 a 12% cumulative
compounded priority return. Based on current estimates, it is not expected
that the Fund will be required to pay this sales fee to the General
Partner. As a result, $269,982 of sales fee accrued by the Fund in prior
periods was recognized into income as part of the net gain on sale of
equipment during the three months ended June 30, 1996.
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 three and six months ended June 30:
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
____ ____ ____ ____
Management fee $50,779 $67,920 $103,430 $139,507
Reimbursable costs 61,373 74,094 117,704 128,141
Accrued sales fee - 17,250 - 32,188
7
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
Amounts due from related parties at June 30, 1996 and December 31, 1995
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 December 31, 1995 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. SUBSEQUENT EVENT
Cash Distribution:
The General Partner declared and paid a cash distribution of $50,000 in
both July and August 1996 for the months ended May 31 and June 30, 1996 to
all admitted partners as of May 31 and June 30, 1996.
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 $1,402,627 and
$1,743,276 for the three months ended June 30, 1996 and 1995, respectively
and $2,589,631 and $3,681,560 for the six months ended June 30, 1996 and 1995,
respectively. Rental income from the leasing of computer peripheral equipment
accounted for 71% and 78% of total revenues for the second quarter of 1996 and
1995, respectively and 78% and 76% of total revenues for the six months ended
June 30, 1996 and 1995, respectively. The decrease in total revenues in 1996
is primarily attributable to a decrease in rental income. During the six
months ended June 30, 1996, rental income decreased by approximately $1,296,000
because of equipment which came off lease and was re-leased at lower rental
rates or sold. This decrease, however, was offset by approximately $542,000 of
rents generated from equipment purchases made since June of 1995 as well as
rental income recognized on 1995 equipment purchases for which a full six
months was earned in 1996 and only a portion of the six months was earned in
1995. The Fund recognized a net gain on sale of equipment of $432,064 for the
six months ended June 30, 1996 as compared to $681,855 for the six months ended
June 30, 1995 which also accounts for the decrease in total revenues in 1996.
Additionally, interest income decreased in 1996 because of lower cash balances
available for investment during the first six months of 1996 as compared to
1995.
Expenses were $969,530 and $1,504,597 for the three months ended June 30,
1996 and 1995, respectively and $2,414,348 and $2,787,140 for the six months
ended June 30, 1996 and 1995, respectively. Depreciation and amortization
comprised 73% and 72% of total expenses for the second quarter of 1996 and
1995, respectively and 60% and 77% of total expenses for the six months ended
June 30, 1996 and 1995, 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 June 30, 1995. Additionally, management
fee to related party decreased proportionate to the decrease in rental income
in 1996 which also contributed to the decrease in total expenses during the
first six months of 1996 as compared to 1995. The overall decrease in
expenses was reduced 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, $658,853 was charged to operations to
write down equipment to its estimated net realizable value during the six
months ended June 30, 1996 as compared to $300,933 for the six months ended
June 30, 1995. Any future losses are dependent upon unanticipated
technological developments affecting the computer equipment industry in
subsequent years.
The Fund's net income was $433,097 and $238,679 for the three months ended
June 30, 1996 and 1995, respectively and $175,283 and $894,420 for the six
months ended June 30, 1996 and 1995, respectively. The earnings per equivalent
limited partnership unit, after earnings allocated to the General Partner,
were $14.46 and $6.19 based on a weighted average number of equivalent limited
partnership units outstanding of 29,578 and 36,557 for the three months ended
June 30, 1996 and 1995, respectively. The earnings per equivalent limited
partnership unit, after earnings allocated to the General Partner, were $5.72
and $23.29 based on a weighted average number of equivalent limited partner-
ship units outstanding of 30,088 and 37,328 for the six months ended June 30,
1996 and 1995, respectively.
9
FIDELITY LEASING INCOME FUND VI, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (Continued)
The Fund generated funds from operations of $922,396 and $1,272,648, for
the purpose of determining cash available for distribution and distributed 8%
and 32% of these amounts during the second quarter of 1996 and 1995,
respectively and 11% and 65% of these amounts in July and August 1996 and 1995,
respectively. For the six months ended June 30, 1996 and 1995, the Fund
generated $1,855,488 and $2,671,238 of funds from operations and distributed
12% and 62% of these amounts during the first six months of 1996 and 1995,
respectively and 5% and 31% of these amounts in July and August 1996 and 1995,
respectively.
ANALYSIS OF FINANCIAL CONDITION
The Fund will continue to purchase computer equipment with cash available
from operations which is not distributed to partners. The Fund purchased
$475,999 and $4,137,211 of equipment during the six months ended June 30, 1996
and 1995, 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.
June 30, 1996
Item 1. Legal Proceedings: Inapplicable.
Item 2. Changes in Securities: Inapplicable.
Item 3. Defaults Upon Senior Securities: Inapplicable.
Item 4. Submission of Matters to a Vote of Securities Holders: Inapplicable.
Item 5. Other Information: Inapplicable.
Item 6. Exhibits and Reports on Form 8-K:
a) Exhibits: EX-27
b) Reports on Form 8-K: None
11
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.
8-13-96 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
8-13-96 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(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.
By:
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
By:
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,032,114
<SECURITIES> 0
<RECEIVABLES> 376,945
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,409,059
<PP&E> 14,524,535
<DEPRECIATION> 9,930,284
<TOTAL-ASSETS> 9,600,757
<CURRENT-LIABILITIES> 260,626
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,340,131
<TOTAL-LIABILITY-AND-EQUITY> 9,600,757
<SALES> 2,028,484
<TOTAL-REVENUES> 2,589,631
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,414,348
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 175,283
<INCOME-TAX> 0
<INCOME-CONTINUING> 175,283
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 175,283
<EPS-PRIMARY> 5.72
<EPS-DILUTED> 5.72
</TABLE>
