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, 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.)
7004 W. Butler Pike, 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,
1997 1996
______________ _____________
Cash and cash equivalents $2,587,284 $2,783,827
Accounts receivable 98,110 33,835
Due from related parties 84,643 141,340
Equipment under operating leases
(net of accumulated depreciation
of $8,941,784 and $9,529,793,
respectively) 6,178,258 5,968,039
Net investment in direct financing
leases 404,349 503,093
Equipment held for sale or lease 86,924 5,764
__________ __________
Total assets $9,439,568 $9,435,898
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 266,215 $ 284,933
Accounts payable - equipment - 19,788
Accounts payable and
accrued expenses 55,593 55,318
Due to related parties 6,144 41,183
__________ __________
Total liabilities 327,952 401,222
Partners' capital 9,111,616 9,034,676
__________ __________
Total liabilities and
partners' capital $9,439,568 $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
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
____ ____ ____ ____
Income:
Rentals $1,062,191 $ 991,803 $2,281,981 $2,028,484
Earned income on direct
financing leases 9,543 13,885 20,207 28,796
Interest 28,591 62,416 49,983 96,553
Gain on sale of equipment,
net 5,619 331,952 107,016 432,064
Other 2,915 2,571 6,394 3,734
__________ __________ __________ __________
1,108,859 1,402,627 2,465,581 2,589,631
__________ __________ __________ __________
Expenses:
Depreciation 882,573 712,493 1,833,881 1,453,416
Write-down of equipment to
net realizable value 33,626 108,758 92,671 658,853
General and administrative 33,368 33,377 61,809 75,445
General and administrative
to related party 56,492 64,123 108,802 123,204
Management fee to related
party 54,299 50,779 116,478 103,430
__________ __________ __________ __________
1,060,358 969,530 2,213,641 2,414,348
__________ __________ __________ __________
Net income $ 48,501 $ 433,097 $ 251,940 $ 175,283
========== ========== ========== ==========
Net income per equivalent
limited partnership unit $ 1.63 $ 14.46 $ 8.48 $ 5.72
========== ========== ========== ==========
Weighted average number of
equivalent limited partner-
ship units outstanding
during the period 29,418 29,578 29,414 30,088
========== ========== ========== ==========
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, 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 (1,750) - (173,250) (175,000)
Net income 2,519 - 249,421 251,940
______ ______ __________ __________
Balance, June 30, 1997 $2,519 75,294 $9,109,097 $9,111,616
====== ====== ========== ==========
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, 1997 and 1996
(Unaudited)
1997 1996
__________ __________
Cash flows from operating activities:
Net income $ 251,940 $ 175,283
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 1,833,881 1,453,416
Write-down of equipment to net
realizable value 92,671 658,853
Proceeds from direct financing leases,
net of earned income 98,744 90,159
Gain on sale of equipment, net (107,016) (432,064)
(Increase) decrease in accounts receivable (64,275) (111,704)
(Increase) decrease in interest receivable - (26,238)
(Increase) decrease in due from
related parties 56,697 (140,339)
Increase (decrease) in lease rents paid
in advance (18,718) 77,261
Increase (decrease) in accounts payable and
accrued expenses 275 (2,112)
Increase (decrease) in accounts payable -
equipment (19,788) -
Increase (decrease) in due to related parties (35,039) (265,178)
__________ __________
1,837,432 1,302,054
__________ __________
Net cash provided by operating activities 2,089,372 1,477,337
__________ __________
Cash flows from investing activities:
Acquisition of equipment (2,313,751) (475,999)
Maturity of investment securities held
to maturity - 499,740
Proceeds from sale of equipment 202,836 453,561
__________ __________
Net cash provided by (used in)
investing activities (2,110,915) 477,302
__________ __________
Cash flows from financing activities:
Redemptions of capital - (473,814)
Distributions (175,000) (368,811)
__________ __________
Net cash used in financing activities (175,000) (842,625)
__________ __________
Increase (decrease) in cash and cash
equivalents (196,543) 1,112,014
Cash and cash equivalents, beginning
of period 2,783,827 2,920,100
__________ __________
Cash and cash equivalents, end of period $2,587,284 $4,032,114
========== ==========
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, 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 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 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, $92,671 and
$658,853 was charged to write-down of equipment to net realizable value for
June 30, 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 June 30, 1997 is
as follows:
Net minimum lease payments to be received $437,000
Less unearned income 33,000
Add expected future residuals -
________
$404,000
========
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, 1997 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1997 $2,001,000 $118,000
1998 2,261,000 238,000
1999 1,455,000 81,000
2000 38,000 -
__________ ________
$5,755,000 $437,000
========== ========
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 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 and six months ended
June 30, 1997 and 1996:
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
____ ____ ____ ____
Management fee $54,299 $50,779 $116,478 $103,430
Reimbursable costs 56,492 64,123 108,802 123,204
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 JeffBank, Inc., in which the Chairman of Resource America,
Inc., serves as a director.
Amounts due from related parties at June 30, 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 June 30, 1997 and December 31, 1996
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. CASH DISTRIBUTION
The General Partner declared and paid a cash distribution of $25,000 in
both July and August 1997 for the months ended May 31 and June 30, 1997 to
all admitted partners as of May 31 and June 30, 1997.
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 $1,108,859 and
$1,402,627 for the three months ended June 30, 1997 and 1996, respectively
and $2,465,581 and $2,589,631 for the six months ended June 30, 1997 and 1996,
respectively. Rental income from the leasing of computer equipment accounted
for 96% and 71% of total revenues for the second quarter of 1997 and 1996,
respectively and 93% and 78% of total revenues for the six months ended
June 30, 1997 and 1996, respectively. The decrease in total revenues in 1997
is primarily attributable to the decrease in the net gain on sale of equipment.
The Fund recognized a net gain on sale of equipment of $107,016 during the six
months ended June 30, 1997 as compared to $432,064 for the same period in 1996.
Additionally, the decrease in interest income contributed to the overall
decrease in revenues due to lower cash balances available for investment by the
Fund in the first six months of 1997 as compared to the same period in
1996. However, the increase in rental income in 1997 reduced the overall
decrease in revenues. Rental income increased by approximately $1,060,000
during the six months ended June 30, 1997 because of rents generated from
equipment purchases made since June 1996 as well as rental income recognized on
1996 equipment purchases for which a full six months was earned in 1997 and
only a portion of the six months was earned in 1996. This increase was
mitigated by approximately $807,000 because of equipment which came off lease
and was re-leased at lower rental rates or sold.
Expenses were $1,060,358 and $969,530 for the three months ended June 30,
1997 and 1996, respectively and $2,213,641 and $2,414,348 for the six months
ended June 30, 1997 and 1996, respectively. Depreciation comprised 83% and 73%
of total expenses for the second quarter of 1997 and 1996, respectively and 83%
and 60% of total expenses for the six months ended June 30, 1997 and 1996,
respectively. The decrease in expenses for the six months ended June 30, 1997
as compared to the same period in 1996 is primarily attributable to a 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, the Fund charged $92,671 to operations to write down equipment to
its estimated net realizable value for the six months ended June 30, 1997 as
compared to $658,853 for the same period in 1996. Any future losses are
dependent upon unanticipated technological developments affecting the computer
equipment industry in subsequent years. Depreciation expense increased for the
first six months of 1997 due to approximately $5.8 million of equipment
purchased since June 1996, which reduced the overall decrease in expenses
during the six months ended June 30, 1997 as compared to the same period in
1996.
The Fund's net income was $48,501 and $433,097 for the three months ended
June 30, 1997 and 1996, respectively and $251,940 and $175,283 for the six
months ended June 30, 1997 and 1996, respectively. The earnings per equivalent
limited partnership unit, after earnings allocated to the General Partner,
were $1.63 and $14.46 based on a weighted average number of equivalent limited
partnership units outstanding of 29,418 and 29,578 for the three months ended
June 30, 1997 and 1996, respectively. The earnings per equivalent limited
partnership unit, after earnings allocated to the General Partner, were $8.48
and $5.72 based on a weighted average number of equivalent limited partner-
ship units outstanding of 29,414 and 30,088 for the six months ended June 30,
1997 and 1996, 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 cash from operations of $959,081 and $922,396, for
the purpose of determining cash available for distribution and distributed 3%
and 8% of these amounts during the second quarter of 1997 and 1996,
respectively and 5% and 11% of these amounts in July and August 1997 and
1996, respectively. For the six months ended June 30, 1997 and 1996, the Fund
generated $2,071,476 and $1,855,488 of cash from operations and distributed
5% and 12% of these amounts during the first six months of 1997 and 1996,
respectively and 2% and 5% of these amounts in July and August 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
$2,313,751 and $475,999 of equipment during the six months ended June 30, 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.
10
Part II: Other Information
FIDELITY LEASING INCOME FUND VI, L.P.
June 30, 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: 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.
8-13-97 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
8-13-97 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
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,587,284
<SECURITIES> 0
<RECEIVABLES> 182,753
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,179,891
<PP&E> 15,206,966
<DEPRECIATION> 8,941,784
<TOTAL-ASSETS> 9,439,568
<CURRENT-LIABILITIES> 327,952
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,111,616
<TOTAL-LIABILITY-AND-EQUITY> 9,439,568
<SALES> 2,281,981
<TOTAL-REVENUES> 2,465,581
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,213,641
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 251,940
<INCOME-TAX> 0
<INCOME-CONTINUING> 251,940
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 251,940
<EPS-PRIMARY> 8.48
<EPS-DILUTED> 8.48
</TABLE>
