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, 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)
March 31, December 31,
1998 1997
____________ ____________
Cash and cash equivalents $1,642,012 $4,269,825
Accounts receivable 329,599 180,772
Due from related parties 149,561 82,090
Equipment under operating leases
(net of accumulated depreciation
of $6,130,397 and $8,038,840,
respectively) 6,332,657 4,718,892
Net investment in direct financing
leases 116,130 126,057
Equipment held for sale or lease 861,623 468,075
__________ __________
$9,431,582 $9,845,711
Total assets ========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 100,993 $ 111,922
Accounts payable - equipment - 16,097
Accounts payable and
accrued expenses 97,677 105,025
Due to related parties 64,182 454,765
__________ __________
Total liabilities 262,852 687,809
Partners' capital 9,168,730 9,157,902
__________ __________
Total liabilities and
partners' capital $9,431,582 $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
For the three months ended March 31, 1998 and 1997
(Unaudited)
1998 1997
________ ________
Income:
Rentals $ 967,737 $1,219,790
Earned income on direct financing leases 1,922 10,664
Interest 41,413 21,392
Gain on sale of equipment, net 43,803 101,397
Other 1,144 3,479
__________ __________
1,056,019 1,356,722
__________ __________
Expenses:
Depreciation 725,687 951,308
Write-down of equipment to net
realizable value 84,829 59,045
General and administrative 55,462 28,441
General and administrative to
related party 55,589 52,310
Management fee to related party 48,624 62,179
__________ __________
970,191 1,153,283
__________ __________
Net income $ 85,828 $ 203,439
========== ==========
Net income per equivalent
limited partnership unit $ 2.87 $ 6.85
========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during the period 29,586 29,411
========== ==========
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, 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 (750) - (74,250) (75,000)
Net income 858 - 84,970 85,828
______ _______ __________ __________
Balance, March 31, 1998 $3,090 75,294 $9,165,640 $9,168,730
====== ======= ========== ==========
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, 1998 and 1997
(Unaudited)
1998 1997
__________ __________
Cash flows from operating activities:
Net income $ 85,828 $ 203,439
__________ _________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 725,687 951,308
Write-down of equipment to net
realizable value 84,829 59,045
Proceeds from direct financing leases,
net of earned income 9,927 48,810
Gain on sale of equipment, net (43,803) (101,397)
(Increase) decrease in accounts receivable (148,827) (33,633)
(Increase) decrease in due from related
parties (67,471) 8,392
Increase (decrease) in lease rents paid
in advance (10,929) 36,753
Increase (decrease) in accounts payable -
equipment (16,097) (19,788)
Increase (decrease) in accounts payable and
accrued expenses (7,348) 19,743
Increase (decrease) in due to related
parties (390,583) (28,074)
__________ __________
135,385 941,159
__________ __________
Net cash provided by operating activities 221,213 1,144,598
__________ __________
Cash flows from investing activities:
Acquisition of equipment (2,917,056) (2,024,611)
Proceeds from sale of equipment 143,030 150,661
__________ __________
Net cash used in investing activities (2,774,026) (1,873,950)
__________ __________
Cash flows from financing activities:
Distributions (75,000) (75,000)
__________ __________
Net cash used in financing activities (75,000) (75,000)
__________ __________
Decrease in cash and cash equivalents (2,627,813) (804,352)
Cash and cash equivalents, beginning
of period 4,269,825 2,783,827
__________ __________
Cash and cash equivalents, end of period $1,642,012 $1,979,475
========== ==========
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, 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 of the equipment
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,
$84,829 and $59,045 was charged to write-down of equipment to net
realizable value for the three months ended March 31, 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 March 31, 1998 is
as follows:
Net minimum lease payments to be received $126,000
Less unearned income 10,000
Add expected future residuals -
________
$116,000
========
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, 1998 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1998 $2,326,000 $ 36,000
1999 2,512,000 47,000
2000 936,000 43,000
2001 482,000 -
2002 474,000 -
Thereafter 39,000 -
__________ ________
$6,769,000 $126,000
========== ========
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 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:
1998 1997
________ ________
Management fee $48,624 $62,179
Reimbursable costs 55,589 52,310
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, 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 March 31, 1998 and December 31, 1997
represent monies due to the General Partner and/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, 1998 for the months ended January 31 and
February 28, 1998 to all admitted partners as of January 31 and
February 28, 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 $1,056,019 and
$1,356,722 for the three months ended March 31, 1998 and 1997, respectively.
Rental income from the leasing of computer equipment accounted for
92% and 90% of total revenues for the first quarter of 1998 and 1997, respec-
tively. The decrease in total revenues in 1998 is primarily attributable to a
decrease in rental income. During the three months ended March 31, 1998,
rental income decreased by approximately $372,000 because of equipment which
came off lease and was re-leased at lower rental rates or sold. This decrease
was mitigated by an increase in rental income of approximately $120,000 because
of rents earned on equipment purchased since the first quarter of 1997 as well
as rents generated from first quarter 1997 equipment purchases for which a full
three months of rent was earned in the first quarter of 1998 and only a portion
of the three months was earned in the first quarter of 1997. Additionally, the
Fund recognized a net gain on sale of equipment of $43,803 for the first
quarter of 1998 as compared to $101,397 for the same period in 1997 which
contributed to the overall decrease in revenues in the current year.
Expenses were $970,191 and $1,153,283 for the three months ended
March 31, 1998 and 1997, respectively. Depreciation expense comprised 75% and
82% of total expenses during the first quarter of 1998 and 1997, respectively.
The decrease in expenses is primarily related to the decrease in depreciation
expenses. Depreciation expense decreased during 1998 because of equipment
which came off lease or was terminated and sold since March 1997. However, the
increase in write-down of equipment to net realizable value in 1998 reduced the
overall decrease in expenses in this year. Based upon the quarterly review of
the recoverability of the undepreciated cost of rental equipment, $84,829 was
charged to operations to write down equipment to its estimated net realizable
value during the three months ended March 31, 1998 as compared to $59,045 for
the three months ended March 31, 1997. Any future losses are dependent upon
unanticipated technological developments affecting the computer equipment
industry in subsequent years. Furthermore, general and administrative expense
increased in 1998 as compared to 1997 because of the increase in expenses
incurred to refurbish and remarket equipment in the first quarter of 1998.
This increase also lowered the amount of decrease in total expenses during the
first quarter of 1998.
For the three months ended March 31, 1998 and 1997, the Fund had net income
of $85,828 and $203,439, respectively. The earnings per equivalent limited
partnership unit, after earnings allocated to the General Partner, were $2.87
and $6.85 based on a weighted average number of equivalent limited partnership
units outstanding of 29,586 and 29,411 for the three months ended March 31,
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 $852,541 and $1,112,395, for
the purpose of determining cash available for distribution during the quarter
ended March 31, 1998 and 1997, respectively. There were no cash distributions
made to partners during the first quarter of 1998 for the three months ended
March 31, 1998. However, $75,000 of cash distributions were paid during the
first quarter of 1998 for the months of October, November and December of 1997.
During the quarter ended March 31, 1997, 2% of the cash available from
operations for the three months ended March 31, 1997 was paid to partners.
Subsequent to March 31, 1998 and 1997, 9% and 4% of the cash available from
operations was paid to partners for the quarter ended March 31, 1998 and 1997,
respectively. For financial statement purposes, the Fund records cash
distributions to partners on a cash basis in the period in which they are paid.
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 time, the Fund will continue to purchase equipment for lease with
$2,024,611 of equipment during the three months ended March 31, 1998 and 1997,
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.
March 31, 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: None
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.
5-14-98 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
5-14-98 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,642,012
<SECURITIES> 0
<RECEIVABLES> 479,160
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,121,172
<PP&E> 13,324,677
<DEPRECIATION> 6,130,397
<TOTAL-ASSETS> 9,431,582
<CURRENT-LIABILITIES> 262,852
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,168,730
<TOTAL-LIABILITY-AND-EQUITY> 9,431,582
<SALES> 969,659
<TOTAL-REVENUES> 1,056,019
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 970,191
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 85,828
<INCOME-TAX> 0
<INCOME-CONTINUING> 85,828
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 85,828
<EPS-PRIMARY> 2.87
<EPS-DILUTED> 2.87
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