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 September 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, PA 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)
September 30, December 31,
1998 1997
______________ _____________
Cash and cash equivalents $ 574,113 $4,269,825
Accounts receivable 131,743 180,772
Due from related parties 37,148 82,090
Equipment under operating leases
(net of accumulated depreciation
of $5,029,800 and $8,038,840,
respectively) 4,649,903 4,718,892
Net investment in direct financing
leases 1,814,945 126,057
Equipment held for sale or lease 2,015,906 468,075
__________ __________
Total assets $9,223,758 $9,845,711
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 69,546 $ 111,922
Accounts payable - equipment - 16,097
Accounts payable and
accrued expenses 79,322 105,025
Due to related parties 120,313 454,765
__________ __________
Total liabilities 269,181 687,809
Partners' capital 8,954,577 9,157,902
__________ __________
Total liabilities and
partners' capital $9,223,758 $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 Nine Months Ended
September 30 September 30
1998 1997 1998 1997
____ ____ ____ ____
Income:
Rentals $1,573,642 $1,145,277 $3,395,884 $3,427,258
Earned income on direct
financing leases 21,711 8,393 37,876 28,600
Interest 12,185 35,331 69,747 85,314
Gain on sale of equipment,
net 28,352 6,725 90,939 113,741
Other 2,842 4,765 14,205 11,159
__________ __________ __________ __________
1,638,732 1,200,491 3,608,651 3,666,072
__________ __________ __________ __________
Expenses:
Depreciation 1,300,083 792,351 2,712,800 2,626,232
Write-down of equipment
to net realizable value 182,825 158,214 393,654 250,885
General and administrative 43,236 22,791 127,518 84,600
General and administrative
to related party 57,372 41,733 179,721 150,535
Management fee to related
party 80,819 58,453 173,283 174,931
__________ __________ __________ __________
1,664,335 1,073,542 3,586,976 3,287,183
__________ __________ __________ __________
Net income (loss) $ (25,603) $ 126,949 $ 21,675 $ 378,889
========== ========== ========== ==========
Net income (loss) per equivalent
limited partnership unit $ (.90) $ 4.26 $ .66 $ 12.74
========== ========== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during
the period 29,217 29,476 29,399 29,435
========== ========== ========== ==========
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 nine months ended September 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 (2,250) - (222,750) (225,000)
Net income 2,250 - 19,425 21,675
______ ______ __________ __________
Balance, September 30, 1998 $2,982 75,294 $8,951,595 $8,954,577
====== ====== ========== ==========
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 nine months ended September 30, 1998 and 1997
(Unaudited) 1998 1997
____ ____
Cash flows from operating activities:
Net income $ 21,675 $ 378,889
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 2,712,800 2,626,232
Write-down of equipment to net
realizable value 393,654 250,885
Proceeds from direct financing leases,
net of earned income 148,325 149,827
Gain on sale of equipment, net (90,939) (113,741)
(Increase) decrease in accounts receivable 49,029 (137,689)
(Increase) decrease in due from related
parties 44,942 79,730
Increase (decrease) in lease rents paid
in advance (42,376) (161,672)
Increase (decrease) in accounts payable and
accrued expenses (25,703) (7,009)
Increase (decrease) in accounts payable -
equipment (16,097) (19,788)
Increase (decrease) in due to related parties (334,452) (28,100)
__________ __________
2,839,183 2,638,675
__________ __________
Net cash provided by operating activities 2,860,858 3,017,564
__________ __________
Cash flows from investing activities:
Acquisition of equipment (4,789,875) (2,724,686)
Investment in direct
financing leases (1,837,211) -
Proceeds from sale of equipment 295,516 296,485
__________ __________
Net cash used in investing activities (6,331,570) (2,428,201)
__________ __________
Cash flows from financing activities:
Distributions (225,000) (250,000)
__________ __________
Net cash used in financing activities (225,000) (250,000)
__________ __________
Increase (decrease) in cash and
cash equivalents (3,695,712) 339,363
Cash and cash equivalents, beginning
of period 4,269,825 2,783,827
__________ __________
Cash and cash equivalents, end of period $ 574,113 $3,123,190
========== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
September 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 main-
tenance 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, $393,654 and
$250,885 was charged to write-down of equipment to net realizable value
for the nine months ended September 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 September 30, 1998 is
as follows:
Net minimum lease payments to be received $1,988,000
Less unearned income 173,000
Add expected future residuals -
__________
$1,815,000
==========
6
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
1. EQUIPMENT LEASED (Continued)
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of September 30, 1998 are as
follows:
Direct
Years Ending December 31 Operating Financing
_______________________ _________ _________
1998 $ 699,000 $ 129,000
1999 2,144,000 601,000
2000 1,221,000 597,000
2001 750,000 322,000
Thereafter 1,018,000 339,000
__________ __________
$5,832,000 $1,988,000
========== ==========
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 nine months
ended September 30, 1998 and 1997:
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
____ ____ ____ ____
Management fee $80,819 $58,453 $173,283 $174,931
Reimbursable costs 57,372 41,733 179,721 150,535
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 September 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 September 30, 1998 and December 31, 1997
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.
3. CASH DISTRIBUTION:
The General Partner declared and paid a cash distribution of $25,000
subsequent to September 30, 1998 for each of the months ended July 31,
August 31 and September 30, 1998 for an aggregate of $75,000 to all
admitted partners as of July 31, August 31 and September 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 $1,638,732 and
$1,200,491 for the three months ended September 30, 1998 and 1997,
respectively, and $3,608,651 and $3,666,072 for the nine months ended
September 30, 1998 and 1997, respectively. Rental income from the leasing of
equipment accounted for 96% and 95% of total revenues for the third
quarter of 1998 and 1997, respectively and 94% and 93% of total revenues for
the nine months ended September 30, 1998 and 1997, respectively. The decrease
in total revenues in 1998 is primarily attributable to the decrease in rental
income. During the nine months ended September 30, 1998, rental income
decreased by approximately $634,000 because of equipment which came off
lease or was re-leased at lower rental rates or sold. However, this
decrease in rental income was mitigated by an increase in rents of $603,000
because of equipment purchases made since September of 1997 as well as
rental income recognized on 1997 equipment purchases for which a full
nine months was earned in 1998 and only a portion of the nine months was
earned in 1997. Additionally, the Fund recognized a net gain on sale of
equipment of $90,939 for the nine months ended September 30, 1998 compared
to $113,741 for the nine months ended September 30, 1997 which also
accounts for the overall decrease in total revenue in 1998.
Expenses were $1,664,335 and $1,073,542 for the three months ended Septem-
ber 30, 1998 and 1997, respectively, and $3,586,976 and $3,287,183 for the nine
months ended September 30, 1998 and 1997, respectively. Depreciation expense
comprised 78% and 74% of total expenses for the third quarter of 1998 and 1997,
respectively and 76% and 80% of total expenses for the nine months ended
September 30, 1998 and 1997, respectively. The increase in expenses for the
nine months ended September 30, 1998 is primarily related to 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,
$393,654 was charged to write-down of equipment to net realizable value during
the nine months ended September 30, 1998 compared to $250,885 for the nine
months ended September 30, 1997. Any future losses are dependent upon
unanticipated technological developments affecting the computer equipment
industry in subsequent years. Additionally, the increase in depreciation
expense contributed to the overall increase in expenses in 1998. Depreciation
expense increased because of equipment purchases made since September 1997 as
well as depreciation expense taken on 1997 equipment purchases for which a full
nine months of depreciation was recorded in 1998 but only a portion of the nine
months was recorded in 1997. Furthermore, the equipment remarketing fees that
are included in general and administrative expenses increased in 1998 compared
to 1997 which also caused the increase in total expenses during the nine months
ended September 30, 1998.
The Fund's net income (loss) was ($25,603) and $126,949 for the three
months ended September 30, 1998 and 1997, respectively, and $21,675 and
$378,889 for the nine months ended September 30, 1998 and 1997, respectively.
The earnings (loss) per equivalent limited partnership unit, after earnings
(loss) allocated to the General Partner, were ($.90) and $4.26 based on a
9
FIDELITY LEASING INCOME FUND VI, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS (Continued)
weighted average number of equivalent limited partnership units outstanding of
29,217 and 29,476 for the three months ended September 30, 1998 and 1997,
respectively. The earnings per equivalent limited partnership unit,
after earnings allocated to the General Partner, were $ .66 and $12.74
based on a weighted average number of equivalent limited partnership units
outstanding of 29,399 and 29,435 for the nine months ended September 30, 1998
and 1997, respectively.
The Fund generated cash from operations of $1,428,953 and $1,070,789 for
the purpose of determining cash available for distribution, and distributed
0% and 2% of these amounts during the third quarter of 1998 and 1997,
respectively and 5% of these amounts subsequent to both September 30, 1998
and 1997. For the nine months ended September 30, 1998 and 1997, the
Fund generated $3,037,190 and $3,142,265 of cash from operations and
distributed 5% and 6% of these amounts during the first nine months of 1998
and 1997, respectively and 2% of these amounts subsequent to both
September 30, 1998 and 1997. 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 will continue to purchase equipment with cash available
from operations which is not distributed to partners. The Fund purchased
$4,789,875 and $2,724,686 of equipment during the nine months ended
September 30, 1998 and 1997, respectively. The Fund also invested $1,837,211
in direct financing leases during the nine months ended September 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.
September 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.
11-12-98 By: Freddie M. Kotek
_________ _____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
11-12-98 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.
_____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
_____________________________
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 574,113
<SECURITIES> 0
<RECEIVABLES> 168,891
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 743,004
<PP&E> 11,695,609
<DEPRECIATION> 5,029,800
<TOTAL-ASSETS> 9,223,758
<CURRENT-LIABILITIES> 269,181
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,954,577
<TOTAL-LIABILITY-AND-EQUITY> 9,223,758
<SALES> 3,395,884
<TOTAL-REVENUES> 3,608,651
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,586,976
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 21,675
<INCOME-TAX> 0
<INCOME-CONTINUING> 21,675
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,675
<EPS-PRIMARY> 0.66
<EPS-DILUTED> 0.66
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