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, 1997
/ / 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,
1997 1996
______________ _____________
Cash and cash equivalents $1,979,475 $2,783,827
Accounts receivable 67,468 33,835
Due from related parties 132,948 141,340
Equipment under operating leases
(net of accumulated depreciation
of $8,270,468 and $9,529,793,
respectively) 6,805,440 5,968,039
Net investment in direct financing
leases 454,283 503,093
Equipment held for sale or lease 133,357 5,764
__________ __________
Total assets $9,572,971 $9,435,898
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 321,686 $ 284,933
Accounts payable - equipment - 19,788
Accounts payable and
accrued expenses 75,061 55,318
Due to related parties 13,109 41,183
__________ __________
Total liabilities 409,856 401,222
Partners' capital 9,163,115 9,034,676
__________ __________
Total liabilities and
partners' capital $9,572,971 $9,435,898
========== ==========
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, 1997 and 1996
(Unaudited)
1997 1996
________ ________
Income:
Rentals $1,219,790 $1,036,681
Earned income on direct financing leases 10,664 14,911
Interest 21,392 34,137
Gain on sale of equipment, net 101,397 100,112
Other 3,479 1,163
__________ __________
1,356,722 1,187,004
__________ __________
Expenses:
Depreciation 951,308 740,923
Write-down of equipment to net
realizable value 59,045 550,095
General and administrative 28,441 42,068
General and administrative to
related party 52,310 59,081
Management fee to related party 62,179 52,651
__________ __________
1,153,283 1,444,818
__________ __________
Net income (loss) $ 203,439 $ (257,814)
========== ==========
Net income (loss) per equivalent
limited partnership unit $ 6.85 $ (8.34)
========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during the period 29,411 30,598
========== ==========
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, 1997
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1997 $1,750 75,294 $9,032,926 $9,034,676
Cash distributions (750) - (74,250) (75,000)
Net income 2,034 - 201,405 203,439
_______ ______ ___________ __________
Balance, March 31, 1997 $3,034 75,294 $9,160,081 $9,163,115
====== ====== ========== ==========
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, 1997 and 1996
(Unaudited)
1997 1996
__________ __________
Cash flows from operating activities:
Net income (loss) $ 203,439 $(257,814)
__________ _________
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation 951,308 740,923
Write-down of equipment to net
realizable value 59,045 550,095
Proceeds from direct financing leases,
net of earned income 48,810 44,565
Gain on sale of equipment, net (101,397) (100,112)
(Increase) decrease in accounts receivable (33,633) (37,664)
Increase (decrease) in lease rents paid
in advance 36,753 62,317
Increase (decrease) in accounts payable -
equipment (19,788) -
Increase (decrease) in accounts payable and
accrued expenses 19,743 339,533
Increase (decrease) in due to related parties (28,074) 1,185
Increase (decrease) in other, net 8,392 4,968
__________ __________
941,159 1,605,810
__________ __________
Net cash provided by operating activities 1,144,598 1,347,996
__________ __________
Cash flows from investing activities:
Acquisition of equipment (2,024,611) (475,999)
Proceeds from sale of equipment 150,661 120,973
__________ __________
Net cash used in investing activities (1,873,950) (355,026)
__________ __________
Cash flows from financing activities:
Redemptions of capital - (473,814)
Distributions (75,000) (218,811)
__________ __________
Net cash used in financing activities (75,000) (692,625)
__________ __________
Increase (decrease) in cash and cash
equivalents (804,352) 300,345
Cash and cash equivalents, beginning
of period 2,783,827 2,920,100
__________ __________
Cash and cash equivalents, end of period $1,979,475 $3,220,445
========== ==========
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, 1997
(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 1996 financial statements have been
reclassified to conform to the presentation in 1997.
1. EQUIPMENT LEASED
Equipment on lease consists primarily of computer equipment under operating
leases. The lessees have agreements with the manufacturer of the equipment
to provide maintenance for the leased equipment. The Fund's operating
leases are for initial lease terms of 12 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 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,
$59,045 and $550,095 was charged to write-down of equipment to net
realizable value for the three months ended March 31, 1997 and 1996,
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, 1997 is
as follows:
Net minimum lease payments to be received $497,000
Less unearned income 43,000
Add expected future residuals -
________
$454,000
========
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 March 31, 1997 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1997 $2,946,000 $178,000
1998 2,170,000 238,000
1999 1,446,000 81,000
__________ ________
$6,562,000 $497,000
========== ========
2. RELATED PARTY TRANSACTIONS
The General Partner receives 5% or 2% of rental payments on 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.
Additionally, the General Partner and its parent company are reimbursed by
the Fund for certain costs of services and materials used by or for the
Fund except those items covered by the above-mentioned fees. Following is
a summary of fees and costs of services and materials charged by the
General Partner or its parent company during the three months ended
March 31:
1997 1996
________ ________
Management fee $62,179 $52,651
Reimbursable costs 52,310 59,081
7
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (CONTINUED)
The Fund maintains its checking and investment accounts in Jefferson Bank,
a subsidiary of JeffBanks, Inc., in which the Chairman of Resource America,
Inc. serves as a director.
Amounts due from related parties at March 31, 1997 and December 31, 1996
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, 1997 and December 31, 1996
represent monies due to the General Partner or its parent company for the
fees and costs mentioned above, as well as, rentals and sales proceeds
collected by the Fund on behalf of other affiliated funds.
3. CASH DISTRIBUTIONS
The General Partner declared and paid two cash distributions of $25,000
each subsequent to March 31, 1997 for the months ended February 28 and
March 31, 1997 to all admitted partners as of February 28 and
March 31, 1997.
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 $1,356,722 and
$1,187,004 for the three months ended March 31, 1997 and 1996, respectively.
Rental income from the leasing of computer equipment accounted for
90% and 87% of total revenues for the first quarter of 1997 and 1996, respec-
tively. The increase in total revenues in 1997 is primarily attributable to an
increase in rental income. During the three months ended March 31, 1997, rental
income increased by approximately $447,000 because of equipment which came
on lease since the first quarter of 1996 as well as rents generated from 1996
equipment purchases for which a full three months of rent was earned in the
first quarter of 1997 and only a portion of the three months was earned in the
first quarter of 1996. This increase, however, was reduced by approximately
$264,000 of a decrease in rental income because of equipment which came off
lease and was re-leased at lower rental rates or sold. Futhermore, interest
income decreased in 1997 because of lower cash balances available for
investment during the first quarter of 1997 which reduced the overall increase
in revenues in 1997.
Expenses were $1,153,283 and $1,444,818 for the three months ended
March 31, 1997 and 1996, respectively. Depreciation expense comprised 82% and
51% of total expenses during the first quarter of 1997 and 1996, respectively.
The decrease in expenses is primarily related to the decrease 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, $59,045 was
charged to operations to write down equipment to its estimated net realizable
value during the three months ended March 31, 1997 as compared to $550,095 for
the three months ended March 31, 1996. Any future losses are dependent upon
unanticipated technological developments affecting the computer equipment
industry in subsequent years. Depreciation expense increased during the
quarter ended March 31, 1997 in comparison to the same period in 1996 because
of depreciation on new equipment purchases made since the first quarter of
1996. This increase in depreciation expense reduced the overall decrease in
expenses in first quarter of 1997.
For the three months ended March 31, 1997 and 1996, the Fund had net income
(loss) of $203,439 and ($257,814), respectively. The earnings (loss) per
equivalent limited partnership unit, after earnings (loss) allocated to the
General Partner, were $6.85 and ($8.34) based on a weighted average number of
equivalent limited partnership units outstanding of 29,411 and 30,598 for the
three months ended March 31, 1997 and 1996, respectively.
The Fund generated funds from operations of $1,112,395 and $933,092, for
the purpose of determining cash available for distribution and distributed 2%
and 8% of these amounts during the first quarter of 1997 and 1996,
respectively and 4% and 8% of these amounts subsequent to March 31, 1997 and
1996, 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
$2,024,611 and $475,999 of equipment during the three months ended March
31, 1997 and 1996, 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, 1997
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.
5-14-97 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
5-14-97 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-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,979,475
<SECURITIES> 0
<RECEIVABLES> 200,416
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,179,891
<PP&E> 15,209,265
<DEPRECIATION> 8,270,468
<TOTAL-ASSETS> 9,572,971
<CURRENT-LIABILITIES> 409,856
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,163,115
<TOTAL-LIABILITY-AND-EQUITY> 9,572,971
<SALES> 1,219,790
<TOTAL-REVENUES> 1,356,722
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,153,283
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 203,439
<INCOME-TAX> 0
<INCOME-CONTINUING> 203,439
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 203,439
<EPS-PRIMARY> 6.85
<EPS-DILUTED> 6.85
</TABLE>
