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, 2000
/ / 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
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes __X__ No _____
Page 1 of 12
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Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VI, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
June 30, December 31,
2000 1999
______________ _____________
Cash and cash equivalents $2,145,770 $1,983,958
Accounts receivable 222,299 185,135
Due from related parties 14,355 36,541
Equipment under operating leases (net
of accumulated depreciation of
$1,435,551 and $1,649,475, respectively) 875,794 1,299,505
Net investment in direct financing
leases 5,666,476 5,426,656
Equipment held for sale or lease 463,608 457,431
__________ __________
Total assets $9,388,302 $9,389,226
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 75,301 $ 92,659
Accounts payable and
accrued expenses 43,781 40,832
Due to related parties 13,184 25,963
__________ __________
Total liabilities 132,266 159,454
Partners' capital 9,256,036 9,229,772
__________ __________
Total liabilities and
partners' capital $9,388,302 $9,389,226
========== ==========
The accompanying notes are an integral part of these financial statements.
2
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FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
____ ____ ____ ____
Income:
Rentals $179,115 $277,955 $386,907 $533,553
Earned income on direct
financing leases 126,476 64,948 234,417 133,003
Interest 18,833 31,208 45,833 62,697
Gain on sale of equipment,
net 6,800 - - 151,000
Other 17,585 12,240 19,526 21,784
________ ________ ________ ________
348,809 386,351 686,683 902,037
________ ________ ________ ________
Expenses:
Depreciation 156,140 211,720 334,526 411,598
Write-down of equipment to
net realizable value - 93,542 - 141,918
General and administrative 18,996 38,567 59,233 75,521
General and administrative
to related party 34,726 63,287 71,196 113,284
Management fee to related
party 21,219 18,756 41,465 35,478
Loss on sale of equipment,
net - - 3,999 -
________ ________ ________ ________
231,081 425,872 510,419 777,799
________ ________ ________ ________
Net income (loss) $117,728 $(39,521) $176,264 $124,238
======== ======== ======== ========
Net income (loss) per
equivalent limited
partnership unit $ 3.94 $ (1.33) $ 5.89 $ 4.16
======== ======== ======== ========
Weighted average number of
equivalent limited partner-
ship units outstanding
during the period 29,650 29,478 29,629 29,496
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
3
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FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the six months ended June 30, 2000
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 2000 $4,279 75,264 $9,225,493 $9,229,772
Cash distributions (1,500) - (148,500) (150,000)
Net income 1,800 - 174,464 176,264
______ ______ __________ __________
Balance, June 30, 2000 $4,579 75,264 $9,251,457 $9,256,036
====== ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
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FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2000 and 1999
(Unaudited)
2000 1999
__________ __________
Cash flows from operating activities:
Net income $ 176,264 $ 124,238
__________ __________
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 334,526 411,598
Write-down of equipment to net
realizable value - 141,918
(Gain) loss on sale of equipment, net 3,999 (151,000)
(Increase) decrease in accounts receivable (37,164) (30,742)
(Increase) decrease in due from
related parties 22,186 85,020
Increase (decrease) in lease rents paid
in advance (17,358) 23,128
Increase (decrease) in accounts payable and
accrued expenses 2,949 (978)
Increase (decrease) in due to related parties (12,779) (151,182)
__________ __________
296,359 327,762
__________ __________
Net cash provided by operating activities 472,623 452,000
__________ __________
Cash flows from investing activities:
Investment in direct financing leases (1,111,394) -
Proceeds from sale of equipment 79,009 151,000
Proceeds from direct financing leases,
net of earned income 871,574 307,033
__________ __________
Net cash provided by (used in)
investing activities (160,811) 458,033
__________ __________
Cash flows from financing activities:
Distributions (150,000) (150,000)
Redemption - (3,536)
__________ __________
Net cash used in financing activities (150,000) (153,536)
__________ __________
Increase in cash and cash equivalents 161,812 756,497
Cash and cash equivalents, beginning
of period 1,983,958 2,892,327
__________ __________
Cash and cash equivalents, end of period $2,145,770 $3,648,824
========== ==========
The accompanying notes are an integral part of these financial statements.
5
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FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(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 in part of 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 34 to 60 months. Generally, operating leases will not re-
cover all of the undepreciated cost and related expenses of its rental
equipment during the initial lease terms and the Fund is prepared to re-
market the equipment. Fund policy is to review quarterly the expected
economic life of its rental equipment in order to determine the recover-
ability of its undepreciated cost. Recent and anticipated technological
developments affecting the equipment and competitive factors in the market-
place are considered among other things, as part of this review. In accor-
dance 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, there was no write-down of equipment
to net realizable value for the six months ended June 30, 2000 and $141,918
was charged to write-down of equipment to net realizable value for the six
months ended June 30, 1999. Any future losses are dependent upon unantici-
pated technological developments affecting the types of equipment in the
portfolio 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 unguaranteed residuals upon expiration of
the lease over the related equipment cost) over the life of the lease
using the interest method.
Unguaranteed residuals for direct financing leases represent the esti-
mated amounts recoverable at lease termination from lease extensions or
disposition of the equipment. The Fund reviews these residual values
quarterly. If the equipment's fair market value is below the estimated
residual value, an adjustment is made.
6
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FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. EQUIPMENT LEASED (Continued)
The net investment in direct financing leases as of June 30, 2000 is as
follows:
Minimum lease payments to be received $5,613,000
Unguaranteed residuals 733,000
Unearned rental income (546,000)
Unearned residual income (134,000)
__________
$5,666,000
==========
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of June 30, 2000 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ __________
2000 $274,000 $1,222,000
2001 176,000 2,405,000
2002 167,000 1,545,000
2003 117,000 422,000
2004 - 19,000
________ __________
$734,000 $5,613,000
======== ==========
2. RELATED PARTY TRANSACTIONS
The General Partner receives 5% or 2% of gross rental payments from
equipment 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 man-
agement 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.
7
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FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
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 dis-
tributions equal to the purchase price of their units plus a 12% cumu-
lative 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. Follow-
ing 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, 2000 and 1999:
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
____ ____ ____ ____
Management fee $21,219 $18,756 $41,465 $ 35,478
Reimbursable costs 34,726 63,287 71,196 113,284
Amounts due from related parties at June 30, 2000 and December 31, 1999
represent monies due the Fund from the General Partner and/or other
affiliated funds for rentals and sales proceeds collected and not yet
remitted to the Fund.
Amounts due to related parties at June 30, 2000 and December 31, 1999
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 DISTRIBUTIONS
The General Partner declared and paid three cash distributions of $35,000
each subsequent to June 30, 2000 for the months ended April 30, May 31
and June 30, 2000 to all admitted partners as of April 30, May 31 and
June 30, 2000.
8
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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 $348,809 and
$386,351 for the three months ended June 30, 2000 and 1999, respectively
and $686,683 and $902,037 for the six months ended June 30, 2000 and 1999,
respectively. Rental income from the leasing of equipment accounted for 51%
and 72% of total revenues for the second quarter of 2000 and 1999, respec-
tively and 56% and 59% of total revenues for the six months ended June 30,
2000 and 1999, respectively. The decrease in total revenues in 2000 was
attributable in part to the decrease in rental income. Rental income de-
creased approximately $147,000 in 2000 because of equipment that came off
lease and was sold since June 1999. Additionally, the decrease in net gain
on sale of equipment also contributed to the decrease in total revenues during
the six months ended June 30, 2000. There was no net gain on sale of equipment
recognized for the first six months of 2000 compared to $151,000 for the
first six months of 1999. The overall decrease in revenues was partially
mitigated by the increase in earned income on direct financing leases. The
Fund invested in direct financing leases during late 1999 and the second
quarter of 2000 causing earned income on direct financing leases to increase
from $133,000 during the six months ended June 30, 1999 to $234,000 during
the six months ended June 30, 2000.
Expenses were $231,081 and $425,872 for the three months ended June 30,
2000 and 1999, respectively and $510,419 and $777,799 for the six months
ended June 30, 2000 and 1999, respectively. Depreciation expense comprised
68% and 50% of total expenses for the second quarter of 2000 and 1999,
respectively and 66% and 53% of total expenses for the six months ended
June 30, 2000 and 1999, respectively. The decrease in expenses for the six
months ended June 30, 2000 was primarily attributable to a decrease 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
had no write-down of equipment to its estimated net realizable value for the
six months ended June 30, 2000 compared to $141,918 for the same period in
1999. Any future losses are dependent upon unanticipated technological devel-
opments affecting the types of equipment in the portfolio in subsequent years.
Additionally, the decrease in depreciation expense contributed to the overall
decrease in expenses during the first six months of 2000 compared to the first
six months of 1999. Depreciation expense decreased because of equipment that
came off lease or terminated and was sold since June 1999. Furthermore, gen-
eral and administrative expense to related party decreased during the six
months ended June 30, 2000 compared to the same period in 1999 because of a
decrease in expenses charged by the General Partner or its parent company for
services and materials provided to the Fund. The decrease in this account also
caused the decrease in total expenses in the first six months of 2000.
9
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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)
The Fund's net income (loss) was $117,728 and ($39,521) for the three
months ended June 30, 2000 and 1999, respectively and $176,264 and $124,238
for the six months ended June 30, 2000 and 1999, respectively. The earnings
(loss) per equivalent limited partnership unit, after earnings (loss) allocated
to the General Partner, were $3.94 and ($1.33) based on a weighted average
number of equivalent limited partnership units outstanding of 29,650 and 29,478
for the three months ended June 30, 2000 and 1999, respectively. The earnings
per equivalent limited partnership unit, after earnings allocated to the Gen-
eral Partner, were $5.89 and $4.16 based on a weighted average number of equiv-
alent limited partnership units outstanding of 29,629 and 29,496 for the six
months ended June 30, 2000 and 1999, respectively.
The Fund generated cash from operations of $267,068 and $265,741 for the
purpose of determining cash available for distribution during the quarter ended
June 30, 2000 and 1999, respectively. The Fund paid three cash distributions
of $35,000 each subsequent to June 30, 2000 for the three months ended June 30,
2000. The Fund paid three cash distributions of $25,000 each subsequent to
June 30, 1999 for the three months ended June 30, 1999. For the six months
ended June 30, 2000 and 1999, the Fund generated $514,789 and $526,754 of cash
from operations. The General Partner declared cash distributions totaling
$180,000 and $150,000 for the six months ended June 30, 2000 and 1999, respec-
tively. The Fund paid three cash distributions of $25,000 each during the
first six months of both 2000 and 1999. The Fund paid three cash distributions
of $35,000 each subsequent to June 30, 2000 and three cash distributions of
$25,000 each subsequent to June 30, 1999. 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 2000. 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 look for opportunities to purchase
equipment under operating leases or invest in direct financing leases with
cash available from operations which was not distributed to partners in
previous periods. The Fund made no purchases of equipment, but invested
$1,111,394 in direct financing leases during the six months ended June 30,
2000.
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
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Part II: Other Information
FIDELITY LEASING INCOME FUND VI, L.P.
June 30, 2000
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
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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.
8-14-00 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
8-14-00 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12
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