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, 1998
/ / 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.)
3 North Columbus Boulevard, Philadelphia, Pennsylvania 19106
______________________________________________________________________________
(Address of principal executive offices) (Zip code)
(215) 574-1636
______________________________________________________________________________
(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,
1998 1997
______________ _____________
Cash and cash equivalents $ 582,798 $4,269,825
Accounts receivable 104,870 180,772
Due from related parties 97,209 82,090
Equipment under operating leases
(net of accumulated depreciation
of $5,369,454 and $8,038,840,
respectively) 6,416,544 4,718,892
Net investment in direct financing
leases 792,664 126,057
Equipment held for sale or lease 1,271,599 468,075
__________ __________
Total assets $9,265,684 $9,845,711
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 117,493 $ 111,922
Accounts payable - equipment - 16,097
Accounts payable and
accrued expenses 67,290 105,025
Due to related parties 50,721 454,765
__________ __________
Total liabilities 235,504 687,809
Partners' capital 9,030,180 9,157,902
__________ __________
Total liabilities and
partners' capital $9,265,684 $9,845,711
========== ==========
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
1998 1997 1998 1997
____ ____ ____ ____
Income:
Rentals $854,505 $1,062,191 $1,822,242 $2,281,981
Earned income on direct
financing leases 14,243 9,543 16,165 20,207
Interest 16,149 28,591 57,562 49,983
Gain on sale of equipment,
net 18,784 5,619 62,587 107,016
Other 10,219 2,915 11,363 6,394
________ __________ __________ __________
913,900 1,108,859 1,969,919 2,465,581
________ __________ __________ __________
Expenses:
Depreciation 687,030 882,573 1,412,717 1,833,881
Write-down of equipment to
net realizable value 126,000 33,626 210,829 92,671
General and administrative 28,820 33,368 84,282 61,809
General and administrative
to related party 66,760 56,492 122,349 108,802
Management fee to related
party 43,840 54,299 92,464 116,478
________ __________ __________ __________
952,450 1,060,358 1,922,641 2,213,641
________ __________ __________ __________
Net income (loss) $(38,550) $ 48,501 $ 47,278 $ 251,940
======== ========== ========== ==========
Net income (loss) per equivalent
limited partnership unit $ (1.34) $ 1.63 $ 1.55 $ 8.48
======== ========== ========== ==========
Weighted average number of
equivalent limited partner-
ship units outstanding
during the period 29,395 29,418 29,490 29,414
======== ========== ========== ==========
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, 1998
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1998 $2,982 75,294 $9,154,920 $9,157,902
Cash distributions (1,750) - (173,250) (175,000)
Net income 1,500 - 45,778 47,278
______ ______ __________ __________
Balance, June 30, 1998 $2,732 75,294 $9,027,448 $9,030,180
====== ====== ========== ==========
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, 1998 and 1997
(Unaudited)
1998 1997
__________ __________
Cash flows from operating activities:
Net income $ 47,278 $ 251,940
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities 1,412,717 1,833,881
Write-down of equipment to net
realizable value 210,829 92,671
Proceeds from direct financing leases,
net of earned income 51,433 98,744
Gain on sale of equipment, net (62,587) (107,016)
(Increase) decrease in accounts receivable 75,902 (64,275)
(Increase) decrease in interest receivable
(Increase) decrease in due from
related parties (15,119) 56,697
Increase (decrease) in lease rents paid
in advance 5,571 (18,718)
Increase (decrease) in accounts payable -
equipment (16,097) (19,788)
Increase (decrease) in accounts payable and
accrued expenses (37,735) 275
Increase (decrease) in due to related parties (404,044) (35,039)
__________ __________
1,220,870 1,837,432
__________ __________
Net cash provided by operating activities 1,268,148 2,089,372
__________ __________
Cash flows from investing activities:
Acquisition of equipment (4,291,667) (2,313,751)
Investment in direct financing leases (718,038) -
Proceeds from sale of equipment 229,530 202,836
__________ __________
Net cash used in investing activities (4,780,175) (2,110,915)
__________ __________
Cash flows from financing activities:
Distributions (175,000) (175,000)
__________ __________
Net cash used in financing activities (175,000) (175,000)
__________ __________
Decrease in cash and cash equivalents (3,687,027) (196,543)
Cash and cash equivalents, beginning
of period 4,269,825 2,783,827
__________ __________
Cash and cash equivalents, end of period $ 582,798 $2,587,284
========== ==========
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, 1998
(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. 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 24 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, $210,829 and
$92,671 was charged to write-down of equipment to net realizable value for
the six months ended June 30, 1998 and 1997, 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, 1998 is
as follows:
Net minimum lease payments to be received $915,000
Less unearned income 122,000
Add expected future residuals -
________
$793,000
========
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, 1998 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1998 $1,622,000 $111,000
1999 2,666,000 222,000
2000 975,000 218,000
2001 483,000 175,000
2002 474,000 170,000
Thereafter 65,000 19,000
__________ ________
$6,285,000 $915,000
========== ========
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, 1998 and 1997:
Three Months Ended Six Months Ended
June 30 June 30
1998 1997 1998 1997
____ ____ ____ ____
Management fee $43,840 $54,299 $ 92,464 $116,478
Reimbursable costs 66,760 56,492 122,349 108,802
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, 1998 and December 31, 1997
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, 1998 and December 31, 1997
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 each
subsequent to June 30, 1998 for the months ended May 31 and June 30, 1998
to all admitted partners as of May 31 and June 30, 1998.
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 $913,900 and
$1,108,859 for the three months ended June 30, 1998 and 1997, respectively
and $1,969,919 and $2,465,581 for the six months ended June 30, 1998 and 1997,
respectively. Rental income from the leasing of equipment accounted for 94%
and 96% of total revenues for the second quarter of 1998 and 1997, respectively
and 93% of total revenues for both the six months ended June 30, 1998 and 1997.
The decrease in total revenues in 1998 is primarily attributable to the
decrease in rental income. Rental income decreased approximately $920,000 in
1998 because of equipment which came off lease and was re-leased at lower
rental rates or sold. This decrease, however, was mitigated by an increase in
rental income of approximately $460,000 for the six months ended June 30, 1998.
This increase resulted from rents generated on equipment purchases made since
the second quarter of 1997 as well as rents recognized on 1997 second quarter
equipment purchases for which a full six months was earned in 1998 and only a
portion of the six months was earned in 1997. Additionally, the Fund recog-
nized a net gain on sale of equipment of $62,587 for the six months ended
June 30, 1998 compared to $107,016 for the six months ended June 30, 1997 which
also accounts for the decrease in total revenues in the current period.
Expenses were $952,450 and $1,060,358 for the three months ended June 30,
1998 and 1997, respectively and $1,922,641 and $2,213,641 for the six months
ended June 30, 1998 and 1997, respectively. Depreciation expense comprised 72%
and 83% of total expenses for the second quarter of 1998 and 1997, respectively
and 73% and 83% of total expenses for the six months ended June 30, 1998 and
1997, respectively. The decrease in expenses for the six months ended June 30,
1998 as compared to the same period in 1997 is primarily attributable to a
decrease in depreciation expense resulting from equipment which came off lease
or was terminated and sold since June 1997. The overall decrease in expenses
was reduced by the increase in 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 $210,829 to operations to write down
equipment to its estimated net realizable value for the six months ended June
30, 1998 as compared to $92,671 for the same period in 1997. Any future losses
are dependent upon unanticipated technological developments affecting the
computer equipment industry in subsequent years.
The Fund's net income (loss) was ($38,550) and $48,501 for the three months
ended June 30, 1998 and 1997, respectively and $47,278 and $251,940 for the six
months ended June 30, 1998 and 1997, respectively. The earnings (loss) per
equivalent limited partnership unit, after earnings (loss) allocated to the
General Partner, were ($1.34) and $1.63 based on a weighted average number of
equivalent limited partnership units outstanding of 29,395 and 29,418 for the
three months ended June 30, 1998 and 1997, respectively. The earnings per
equivalent limited partnership unit, after earnings allocated to the General
Partner, were $1.55 and $8.48 based on a weighted average number of equivalent
limited partnership units outstanding of 29,490 and 29,414 for the six months
ended June 30, 1998 and 1997, 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 $755,696 and $959,081, for
the purpose of determining cash available for distribution and distributed 3%
of these amounts during the second quarter of both 1998 and 1997, and 7% and 5%
of these amounts subsequent to June 30, 1998 and 1997, respectively. For the
six months ended June 30, 1998 and 1997, the Fund generated $1,608,237 and
$2,071,476 of cash from operations and distributed 6% and 5% of these amounts
during the first six months of 1998 and 1997, respectively and 3% and 2% of
these amounts subsequent to June 30, 1998 and 1997, respectively.
ANALYSIS OF FINANCIAL CONDITION
The Fund continues the process of dissolution during 1998. As provided in
the Restated Limited Partnership Agreement, the assets of the Fund shall be
liquidated as promptly as is consistent with obtaining their fair value.
During this period, the Fund will continue to purchase equipment for lease with
cash available from operations which is not distributed to partners. The Fund
purchased $4,291,667 and $2,313,751 of equipment during the six months ended
June 30, 1998 and 1997, respectively. The Fund also invested $718,038 in
direct financing leases during the six months ended June 30, 1998.
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, 1998
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.
8-13-98 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
8-13-98 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:
8- -98 ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
By:
8- -98 ___________________________
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-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 582,798
<SECURITIES> 0
<RECEIVABLES> 202,079
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 784,877
<PP&E> 13,057,597
<DEPRECIATION> 5,369,454
<TOTAL-ASSETS> 9,265,684
<CURRENT-LIABILITIES> 235,504
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,030,180
<TOTAL-LIABILITY-AND-EQUITY> 9,265,684
<SALES> 1,822,242
<TOTAL-REVENUES> 1,969,919
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,922,641
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 47,278
<INCOME-TAX> 0
<INCOME-CONTINUING> 47,278
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 47,278
<EPS-PRIMARY> 1.55
<EPS-DILUTED> 1.55
</TABLE>
