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, 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
<PAGE>
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VI, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
March 31, December 31,
2000 1999
______________ _____________
Cash and cash equivalents $2,614,573 $1,983,958
Accounts receivable 169,802 185,135
Due from related parties 12,852 36,541
Equipment under operating leases
(net of accumulated depreciation
of $1,594,011 and $1,649,475,
respectively) 1,055,281 1,299,505
Net investment in direct financing
leases 5,041,767 5,426,656
Equipment held for sale or lease 484,761 457,431
__________ __________
Total assets $9,379,036 $9,389,226
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 79,024 $ 92,659
Accounts payable and
accrued expenses 60,665 40,832
Due to related parties 26,039 25,963
__________ __________
Total liabilities 165,728 159,454
Partners' capital 9,213,308 9,229,772
__________ __________
Total liabilities and
partners' capital $9,379,036 $9,389,226
========== ==========
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENTS OF OPERATIONS
For the three months ended March 31, 2000 and 1999
(Unaudited)
2000 1999
________ ________
Income:
Rentals $207,792 $255,598
Earned income on direct financing
leases 107,941 68,055
Interest 27,000 31,489
Gain on sale of equipment, net - 151,000
Other 1,941 9,544
________ ________
344,674 515,686
________ ________
Expenses:
Depreciation 178,386 199,878
Write-down of equipment to net
realizable value - 48,376
General and administrative 40,237 36,954
General and administrative to
related party 36,470 49,997
Management fee to related party 20,246 16,722
Loss on sale of equipment, net 10,799 -
________ ________
286,138 351,927
________ ________
Net income $ 58,536 $163,759
======== ========
Net income per equivalent
limited partnership unit $ 1.95 $ 5.49
======== ========
Weighted average number of
equivalent limited partnership
units outstanding during the period 29,609 29,514
======== ========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the three months ended March 31, 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 (750) - (74,250) (75,000)
Net income 750 - 57,786 58,536
______ ______ __________ __________
Balance, March 31, 2000 $4,279 75,264 $9,209,029 $9,213,308
====== ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2000 and 1999
(Unaudited)
2000 1999
________ ________
Cash flows from operating activities:
Net income $ 58,536 $ 163,759
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 178,386 199,878
Write-down of equipment to net
realizable value - 48,376
(Gain) loss on sale of equipment, net 10,799 (151,000)
(Increase) decrease in accounts
receivable 15,333 (214,312)
(Increase) decrease in due from related
parties 23,689 54,938
Increase (decrease) in lease rents paid
in advance (13,635) 72,258
Increase (decrease) in accounts payable
and accrued expenses 19,833 8,653
Increase (decrease) in due to related
parties 76 (105,284)
__________ __________
234,481 (86,493)
__________ __________
Net cash provided by operating activities 293,017 77,266
__________ __________
Cash flows from investing activities:
Proceeds from direct financing leases,
net of earned income 384,889 129,075
Proceeds from sale of equipment 27,709 151,000
__________ __________
Net cash provided by investing activities 412,598 280,075
__________ __________
Cash flows from financing activities:
Redemptions of capital - (3,536)
Distributions (75,000) (75,000)
__________ __________
Net cash used in financing activities (75,000) (78,536)
__________ __________
Increase in cash and cash equivalents 630,615 278,805
Cash and cash equivalents, beginning
of period 1,983,958 2,892,327
__________ __________
Cash and cash equivalents, end of period $2,614,573 $3,171,132
========== ==========
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
The accompanying unaudited condensed financial statements have been pre-
pared by the Fund in accordance with Generally Accepted Accounting Prin-
ciples, pursuant to the rules and regulations of the Securities and Ex-
change Commission. In the opinion of Management, all adjustments (consist-
ing of normal recurring accruals) considered necessary for a fair presen-
tation have been included
1. EQUIPMENT LEASED
Equipment on lease consists of 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 31 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 unde-
preciated cost. Recent and anticipated technological developments
afffecting the 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, $48,376 was charged to write-down
of equipment to net realizable value for the three months ended
March 31, 1999. There was no write-down of equipment to net realizable
value recorded in the first quarter of 2000. Any future losses are
dependent upon unanticipated 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 ag-
gregate future rentals and unguaranteed residual upon expiration of
the lease over the related equipment cost) over the life of the lease
using the interest method. The Fund's direct financing leases are for
initial lease terms ranging from 33 to 60 months.
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 at lease expi-
ration is below the estimated residual value, an adjustment is made.
6
<PAGE>
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 March 31, 2000 is
as follows:
Minimum lease payments to be received $5,077,000
Unguaranteed residuals 618,000
Unearned rental income (530,000)
Unearned residual income (123,000)
__________
$5,042,000
==========
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of March 31, 2000 are as
follows:
Years Ending December 31 Operating Direct Financing
________________________ _________ ________________
2000 $448,000 $1,479,000
2001 176,000 1,929,000
2002 167,000 1,234,000
2003 119,000 424,000
2004 - 11,000
________ __________
$910,000 $5,077,000
======== ==========
Subsequent to March 31, 2000, the Fund invested in a direct financing
lease of approximately $1,111,000 for an initial lease term of 29 months.
The minimum lease payments to be received on this lease are $357,000 in
2000, $476,000 in 2001 and $317,000 in 2002.
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.
7
<PAGE>
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
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:
2000 1999
________ ________
Management fee $20,246 $16,722
Reimbursable costs 36,470 49,997
Amounts due from related parties at March 31, 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 March 31, 2000 and December 31, 1999
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 three cash distributions of
$25,000 each subsequent to March 31, 2000 for the months ended
January 31, February 29 and March 31, 2000 to all admitted partners
as of January 31, February 29 and March 31, 2000.
8
<PAGE>
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 $344,674 and
$515,686 for the three months ended March 31, 2000 and 1999, respectively.
Rental income from the leasing of equipment accounted for 60% and 50% of
total revenues for the first quarter of 2000 and 1999, respectively. The
decrease in total revenues in 2000 was primarily attributable to a decrease
in net gain on sale of equipment. The Fund did not record a net gain on sale
of equipment during the three months ended March 31, 2000 but recorded
$151,000 of net gain on sale of equipment during the three months ended
March 31, 1999. Additionally, the decrease in rental income in the first
quarter of 2000 also contributed to the overall decrease in revenues. Rental
income decreased by approximately $48,000 because of equipment under oper-
ating leases that came off lease or was sold since the first quarter of 1999.
The overall decrease in revenues was mitigated by the increase in earned
income on direct financing leases. During the last quarter of 1999, the
Fund invested in a direct financing lease of approximately $3.7 million
that generated earned income. As a result, the Fund recognized $107,941
of earned income on direct financing leases for the first quarter of 2000
compared to $68,055 for the first quarter of 1999.
Expenses were $286,138 and $351,927 for the three months ended
March 31, 2000 and 1999, respectively. Depreciation expense comprised 62%
and 57% of total expenses during the first quarter of 2000 and 1999, respec-
tively. The decrease in expenses was primarily related to the 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,
there was no charge to operations to write down equipment to its estimated
net realizable value during the three months ended March 31, 2000 compared
to $48,376 of write-down of equipment to net realizable value recorded for
the three months ended March 31, 1999. Any future losses are dependent upon
unanticipated technological developments affecting the types of equipment in
the portfolio in subsequent years. Additionally, the decrease in depreci-
ation expense in the first quarter of 2000 also contributed to the overall
decrease in expenses. Depreciation expense decreased during the three months
ended March 31, 2000 compared to March 31, 1999 because of equipment under
operating leases that came off lease or was sold since the first quarter
of 1999.
For the three months ended March 31, 2000 and 1999, the Fund had net
income of $58,536 and $163,759, respectively. The net income per equiva-
lent limited partnership unit, after net income allocated to the General
Partner, was $1.95 and $5.49 based on a weighted average number of
equivalent limited partnership units outstanding of 29,609 and 29,514
for the three months ended March 31, 2000 and 1999, respectively.
9
<PAGE>
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 generated cash from operations of $247,721 and $261,013
for the purpose of determining cash available for distribution during the
quarter ended March 31, 2000 and 1999, respectively. There were no cash
distributions made to partners during the first quarter of 2000 and 1999
for the three months ended March 31, 2000 and 1999. However, the General
Partner declared and paid three cash distributions of $25,000 each during
the first quarter of 2000 for the months ended October 31, November 30 and
December 31, 1999. Subsequent to March 31, 2000 and 1999, 30% and 29% of
the cash available from operations was paid to partners for the quarter
ended March 31, 2000 and 1999, respectively. For financial statement pur-
poses, 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 pro-
vided 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 prior periods.
Subsequent to March 31, 2000, the Fund invested in a direct financing
lease of approximately $1,111,00 for an initial lease term of 29 months
commencing in April 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
<PAGE>
Part II: Other Information
FIDELITY LEASING INCOME FUND VI, L.P.
March 31, 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
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIDELITY LEASING INCOME FUND VI, L.P.
5-11-00 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
5-11-00 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,614,573
<SECURITIES> 0
<RECEIVABLES> 182,654
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,797,227
<PP&E> 3,134,053
<DEPRECIATION> 1,594,011
<TOTAL-ASSETS> 9,379,036
<CURRENT-LIABILITIES> 165,728
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,213,308
<TOTAL-LIABILITY-AND-EQUITY> 9,379,036
<SALES> 207,792
<TOTAL-REVENUES> 344,674
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 286,138
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 58,536
<INCOME-TAX> 0
<INCOME-CONTINUING> 58,536
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,536
<EPS-BASIC> 1.95
<EPS-DILUTED> 1.95
</TABLE>
