SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 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 11
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VI, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
March 31, December 31,
1996 1995
______________ _____________
Cash and cash equivalents $3,220,445 $2,920,100
Investment securities held to maturity 499,740 499,740
Accounts receivable 70,685 33,021
Interest receivable 4,339 13,376
Due from related parties 56,336 52,267
Equipment under operating leases
(net of accumulated depreciation
of $11,373,875 and $13,650,877,
respectively) 5,215,041 6,242,594
Net investment in direct financing
leases 643,038 687,606
Equipment held for sale or lease 201,100 9,424
__________ ___________
Total assets $9,910,724 $10,458,128
========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 150,131 $ 87,814
Accounts payable and
accrued expenses 431,696 92,163
Due to related parties 271,863 270,678
__________ ___________
Total liabilities 853,690 450,655
Partners' capital 9,057,034 10,007,473
__________ ___________
Total liabilities and
partners' capital $9,910,724 $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
For the three months ended March 31, 1996 and 1995
(Unaudited)
1996 1995
________ ________
Income:
Rentals $1,036,681 $1,428,220
Earned income on direct financing leases 14,911 21,277
Interest 34,137 91,112
Gain on sale of equipment, net 100,112 386,988
Other 1,163 10,687
__________ __________
1,187,004 1,938,284
__________ __________
Expenses:
Depreciation 740,923 1,079,837
Write-down of equipment to net
realizable value 550,095 50,000
General and administrative 44,818 27,072
General and administrative to
related party 56,331 54,047
Management fee to related party 52,651 71,587
__________ __________
1,444,818 1,282,543
__________ __________
Net income (loss) $ (257,814) $ 655,741
========== ==========
Net income (loss) per equivalent
limited partnership unit $ (8.34) $ 16.88
========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during the period 30,598 38,099
========== ==========
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 three months ended March 31, 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 (2,188) - (216,623) (218,811)
Net income (loss) (2,578) - (255,236) (257,814)
_______ ______ ___________ ___________
Balance, March 31, 1996 $(2,328) 75,293 $ 9,059,362 $ 9,057,034
======= ====== =========== ===========
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 three months ended March 31, 1996 and 1995
(Unaudited)
1996 1995
__________ __________
Cash flows from operating activities:
Net income (loss) $(257,814) $ 655,741
__________ __________
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation 740,923 1,079,837
Write-down of equipment to net
realizable value 550,095 50,000
Proceeds from direct financing leases,
net of earned income 44,565 45,963
Gain on sale of equipment, net (100,112) (386,988)
(Increase) decrease in accounts receivable (37,664) (465,273)
(Increase) decrease in interest receivable 9,037 36,663
Increase (decrease) in lease rents paid
in advance 62,317 (82,995)
Increase (decrease) in accounts payable and
accrued expenses 339,533 92,822
Increase (decrease) in due to related parties 1,185 (57,293)
Increase (decreasse) in other, net (4,069) 13,614
__________ __________
1,605,810 326,350
__________ __________
Net cash provided by operating activities 1,347,996 982,091
__________ __________
Cash flows from investing activities:
Acquisition of equipment (475,999) (2,655,423)
Maturity of investment securities held
to maturity - 1,984,848
Proceeds from sale of equipment 120,973 474,877
__________ __________
Net cash used in investing activities (355,026) (195,698)
__________ __________
Cash flows from financing activities:
Redemptions of capital (473,814) (152,335)
Distributions (218,811) (1,256,953)
__________ __________
Net cash used in financing activities (692,625) (1,409,288)
__________ __________
Increase (decrease) in cash and cash
equivalents 300,345 (622,895)
Cash and cash equivalents, beginning
of period 2,920,100 5,509,017
__________ __________
Cash and cash equivalents, end of period $3,220,445 $4,886,122
========== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 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. ORGANIZATION
In February 1996, the name of the General Partner was changed from Fidelity
Leasing Corporation to F.L. Partnership Management, Inc.
2. 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 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
Genreally 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, $550,095 and $50,000 was charged to write-
down of equipment to net realizable value for the three months ended March
31, 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 March 31, 1996 is
as follows:
Net minimum lease payments to be received $735,000
Less unearned income 92,000
Add expected future residuals -
________
$643,000
========
6
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. EQUIPMENT LEASED (CONTINUED)
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of March 31, 1996 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1996 $2,339,000 $178,000
1997 2,113,000 238,000
1998 373,000 238,000
1999 32,000 81,000
__________ ________
$4,857,000 $735,000
========== ========
3. 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.
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 months ended March 31:
1996 1995
________ ________
Management fee $52,651 $71,587
Reimbursable costs 56,331 54,047
Accrued sales fee 3,741 14,938
Amounts due from related parties at March 31, 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 March 31, 1996 and December 31, 1995
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 (Continued)
4. SUBSEQUENT EVENT
Cash Distributions:
The General Partner declared and paid a cash distribution of $75,000 in
April 1996 for the month ended February 29, 1996, to all admitted partners
as of February 29, 1996. There was no distribution declared and paid for
the month of March 1996.
8
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 $1,187,004 and
$1,938,284 for the three months ended March 31, 1996 and 1995, respectively.
Rental income from the leasing of computer peripheral equipment accounted for
87% and 74% of total revenues for the first quarter of 1996 and 1995, respec-
tively. The decrease in total revenues in 1996 is primarily attributable to a
decrease in rental income. During the three months ended March 31, 1996, rental
income decreased by approximately $1,131,000 because of equipment which came
off lease and was re-leased at lower rental rates or sold. This decrease,
however, was reduced by approximately $739,000 of rents generated from
equipment purchases made since March of 1995. Additionally, the Fund
recognized a net gain on sale of equipment of $100,112 during the quarter ended
March 31, 1996 as compared to $386,988 for the quarter ended March 31, 1995
which also contributed to the decrease in total revenues in 1996. Futhermore,
interest income decreased in 1996 because of lower cash balances available for
investment during the first quarter of 1996.
Expenses were $1,444,818 and $1,282,543 for the three months ended
March 31, 1996 and 1995, respectively. Depreciation expense comprised 51% and
84% of total expenses during the first quarter of 1996 and 1995, respectively.
The increase in expenses is primarily related to the 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, $550,095 was
charged to operations to write down equipment to its estimated net realizable
value during the three months ended March 31, 1996 as compared to $50,000 for
the three months ended March 31, 1995. Any future losses are dependent upon
unanticipated technological developments affecting the computer equipment
industry in subsequent years. The overall increase in expenses was reduced by
the decrease in depreciation expense in the first quarter of 1996.
Depreciation expense decreased because of equipment which came off lease and
was terminated or sold since the first quarter of 1995.
For the three months ended March 31, 1996 and 1995, the Fund had net income
(loss) of ($257,814) and $655,741, respectively. The earnings (loss) per
equivalent limited partnership unit, after earnings (loss) allocated to the
General Partner, were ($8.34) and $16.88 based on a weighted average number of
equivalent limited partnership units outstanding of 30,598 and 38,099 for the
three months ended March 31, 1996 and 1995, respectively.
The Fund generated funds from operations of $933,092 and $1,398,590, for
the purpose of determining cash available for distribution and distributed 8%
and 30% of these amounts during the first quarter of 1996 and 1995,
respectively and 8% and 59% of these amounts in April and May 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 $2,655,423 of equipment during the three months ended March
31, 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.
9
Part II: Other Information
FIDELITY LEASING INCOME FUND VI, L.P.
March 31, 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: None
b) Reports on Form 8-K: None
10
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.
5-14-96 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
5-14-96 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
11
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,220,445
<SECURITIES> 499,740
<RECEIVABLES> 131,360
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,851,545
<PP&E> 16,790,016
<DEPRECIATION> 11,373,875
<TOTAL-ASSETS> 9,910,724
<CURRENT-LIABILITIES> 853,690
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,057,034
<TOTAL-LIABILITY-AND-EQUITY> 9,910,724
<SALES> 1,036,681
<TOTAL-REVENUES> 1,187,004
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,444,818
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (257,814)
<INCOME-TAX> 0
<INCOME-CONTINUING> (257,814)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (257,814)
<EPS-PRIMARY> (8.34)
<EPS-DILUTED> (8.34)
</TABLE>
