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, 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, 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 13
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Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND VI, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
September 30, December 31,
2000 1999
_____________ ____________
Cash and cash equivalents $2,359,474 $1,983,958
Accounts receivable 291,024 185,135
Due from related parties - 36,541
Equipment under operating leases
(net of accumulated depreciation
of $1,187,049 and $1,649,475,
respectively) 713,361 1,299,505
Net investment in direct financing
leases 5,601,126 5,426,656
Equipment held for sale or lease 434,424 457,431
__________ __________
Total assets $9,399,409 $9,389,226
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 30,741 $ 92,659
Accounts payable and
accrued expenses 42,556 40,832
Due to related parties 26,500 25,963
__________ __________
Total liabilities 99,797 159,454
Partners' capital 9,299,612 9,229,772
__________ __________
Total liabilities and
partners' capital $9,399,409 $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 Nine Months Ended
September 30 September 30
2000 1999 2000 1999
____ ____ ____ ____
Income:
Rentals $182,584 $227,275 $ 569,491 $ 760,828
Earned income on direct
financing leases 119,550 88,560 353,967 221,563
Interest 18,904 57,432 64,737 120,129
Gain on sale of equipment,
net 53,644 67,955 49,645 218,955
Other 10,233 19,451 29,759 41,235
________ ________ __________ __________
384,915 460,673 1,067,599 1,362,710
________ ________ __________ __________
Expenses:
Depreciation 130,823 183,077 465,349 594,675
Write-down of equipment to
net realizable value 16,000 29,802 16,000 171,720
General and administrative 28,601 49,926 87,834 125,447
General and administrative
to related party 39,279 44,431 110,475 157,715
Management fee to related
party 21,636 27,863 63,101 63,341
________ ________ __________ __________
236,339 335,099 742,759 1,112,898
________ ________ __________ __________
Net income $148,576 $125,574 $ 324,840 $ 249,812
======== ======== ========== ==========
Net income per equivalent
limited partnership unit $ 4.96 $ 4.22 $ 10.85 $ 8.39
======== ======== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during the
period 29,691 29,433 29,649 29,475
======== ======== ========== ==========
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 nine months ended September 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 (2,550) - (252,450) (255,000)
Net income 3,248 - 321,592 324,840
______ ______ __________ __________
Balance, September 30, 2000 $4,977 75,264 $9,294,635 $9,299,612
====== ====== ========== ==========
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 nine months ended September 30, 2000 and 1999
(Unaudited)
2000 1999
____ ____
Cash flows from operating activities:
Net income $ 324,840 $ 249,812
__________ __________
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 465,349 594,675
Write-down of equipment to net
realizable value 16,000 171,720
Gain on sale of equipment, net (49,645) (218,955)
(Increase) decrease in accounts receivable (105,889) (1,227)
(Increase) decrease in due from related
parties 36,541 63,255
Increase (decrease) in lease rents paid
in advance (61,918) 47,792
Increase (decrease) in accounts payable and
accrued expenses 1,724 (852)
Increase (decrease) in accounts payable -
equipment - (30,848)
Increase (decrease) in due to related
parties 537 (153,462)
__________ __________
302,699 472,098
__________ __________
Net cash provided by operating activities 627,539 721,910
__________ __________
Cash flows from investing activities:
Investment in direct financing leases (1,551,816) -
Proceeds from sale of equipment 177,447 243,405
Proceeds from direct financing leases,
net of earned income 1,377,346 1,011,701
__________ __________
Net cash provided by investing activities 2,977 1,255,106
__________ __________
Cash flows from financing activities:
Distributions (255,000) (250,000)
Redemption of capital - (3,536)
__________ __________
Net cash used in financing activities (255,000) (253,536)
__________ __________
Increase in cash and cash equivalents 375,516 1,723,480
Cash and cash equivalents, beginning
of period 1,983,958 2,892,327
__________ __________
Cash and cash equivalents, end of period $2,359,474 $4,615,807
========== ==========
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
September 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, $16,000 and $171,720 was charged to write-
down of equipment to net realizable value for the nine months ended
September 30, 2000 and 1999, respectively. Any future losses are dependent
upon unanticipated technological developments affecting the types of equip-
ment 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 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 Fund's direct financing leases are
for initial lease terms ranging from 29 to 59 months.
Unguaranteed residuals for direct financing leases represent the estimated
amounts recoverable at lease termination from lease extensions or disposi-
tion 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 September 30, 2000 is
as follows:
Minimum lease payments to be received $5,512,000
Unguaranteed residuals 733,000
Unearned rental income (522,000)
Unearned residual income (122,000)
__________
$5,601,000
==========
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of September 30, 2000 are as
follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
2000 $160,000 $ 646,000
2001 176,000 2,551,000
2002 167,000 1,691,000
2003 116,000 568,000
Thereafter - 56,000
________ __________
$619,000 $5,512,000
======== ==========
Subsequent to September 30, 2000, the Fund invested in approximately
$1,134,000 of direct financing leases with initial lease terms of 2 to 40
months. The future approximate minimum rentals to be received on these
noncancellable direct financing leases are $146,000 in 2000, $457,000 in
2001, $442,000 in 2002, $231,000 in 2003 and $17,500 in 2004.
2. RELATED PARTY TRANSACTIONS
The General Partner receives 5% or 2% of rental payments from equipment
under operating leases and full pay-out leases, respectively, for adminis-
trative 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
7
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FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
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, 2000 and 1999:
Three Months Ended Nine Months Ended
September 30 September 30
2000 1999 2000 1999
____ ____ ____ ____
Management fee $21,636 $27,863 $ 63,101 $ 63,341
Reimbursable costs 39,279 44,431 110,475 157,715
The amount due from related parties at December 31, 1999 represents 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 September 30, 2000 and December 31, 1999
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 three cash distributions of $35,000
each subsequent to September 30, 2000 for each of the months ended July 31,
August 31 and September 30, 2000 for an aggregate of $105,000 to all
admitted partners as of July 31, August 31 and September 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 $384,915 and $460,673
for the three months ended September 30, 2000 and 1999, respectively, and
$1,067,599 and $1,362,710 for the nine months ended September 30, 2000 and
1999, respectively. Rental income from the leasing of equipment accounted
for 47% and 49% of total revenues for the third quarter of 2000 and 1999,
respectively and 53% and 56% of total revenues for the nine months ended
September 30, 2000 and 1999, respectively. The decrease in total revenues
in 2000 was partially attributable to the decrease in rental income. During
the nine months ended September 30, 2000, rental income decreased by approxi-
mately $191,000 because of equipment that came off lease or equipment that
terminated and was sold. Additionally, the Fund recognized a net gain on sale
of equipment of $49,645 for the nine months ended September 30, 2000 compared
to $218,955 for the nine months ended September 30, 1999 which also accounted
for the overall decrease in revenues in 2000. Furthermore, the interest income
earned by the Fund on the short-term investment of cash decreased in 2000
which contributed to the decrease in total revenues during the nine months
ended September 30, 2000, as well. The Fund had larger cash balances avail-
able for investment during 1999 compared to 2000. The overall decrease in
revenues, however, 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 $222,000 during the nine months ended
September 30, 1999 to $354,000 during the nine months ended September 30, 2000.
Expenses were $236,339 and $335,099 for the three months ended Septem-
ber 30, 2000 and 1999, respectively, and $742,759 and $1,112,898 for the nine
months ended September 30, 2000 and 1999, respectively. Depreciation expense
comprised 55% of total expenses for the third quarter of both 2000 and 1999
and 63% and 53% of total expenses for the nine months ended September 30, 2000
and 1999, respectively. The decrease in expenses for the nine months ended
September 30, 2000 was partially related to the decrease in depreciation
expense resulting from equipment that came off lease or terminated and was
sold since September 1999. Additionally, the decrease in write-down of
equipment to net realizable value contributed to the overall decrease in
expenses in 2000. Based upon the quarterly review of the recoverability of
the undepreciated cost of rental equipment, $16,000 was charged to write-down
of equipment to net realizable value during the nine months ended September 30,
2000 compared to $171,720 for the nine months ended September 30, 1999. Any
future losses are dependent upon unanticipated technological developments
affecting the types of equipment in the portfolio in subsequent years.
Furthermore, general and administrative expense and general and administrative
expense to related party decreased in 2000 which also accounted for the
overall decrease in expenses in the current year. General and administrative
expense decreased during the nine months ended September 30, 2000 compared to
the same period in 1999 because of a decrease in expenses incurred to re-
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)
furbish equipment as it comes off lease. General and administrative expense
to related party decreased in 2000 compared to 1999 resulting from a decrease
in the amount of expenses charged by the General Partner or its parent company
for services and materials provided to the Fund.
The Fund's net income was $148,576 and $125,574 for the three months ended
September 30, 2000 and 1999, respectively, and $324,840 and $249,812 for the
nine months ended September 30, 2000 and 1999, respectively. The earnings per
equivalent limited partnership unit, after earnings allocated to the General
Partner, were $4.96 and $4.22 based on a weighted average number of equivalent
limited partnership units outstanding of 29,691 and 29,433 for the three months
ended September 30, 2000 and 1999, respectively. The earnings per equivalent
limited partnership unit, after earnings allocated to the General Partner, were
$10.85 and $8.39 based on a weighted average number of equivalent limited
partnership units outstanding of 29,649 and 29,475 for the nine months ended
September 30, 2000 and 1999, respectively.
The Fund generated cash from operations of $241,755 and $270,498, for the
purpose of determining cash available for distribution, during the nine months
ended September 30, 2000 and 1999, respectively. The Fund paid three cash
distributions of $35,000 each subsequent to September 30, 2000 for the three
months ended September 30, 2000. The Fund paid three cash distributions of
$25,000 each subsequent to September 30, 1999 for the three months ended
September 30, 1999. For the nine months ended September 30, 2000 and 1999,
the Fund generated $756,544 and $797,252 of cash from operations, for the
purpose of determining cash available for distribution. The General Partner
declared cash distributions totaling $285,000 and $225,000 for the nine months
ended September 30, 2000 and 1999, respectively. The Fund paid three cash
distributions of $25,000 each and three cash distributions of $35,000 each
during the nine months ended September 30, 2000 and three cash distributions
of $35,000 each subsequent to September 30, 2000. The Fund paid six cash
distributions of $25,000 each during the nine months ended September 30, 1999
and three cash distributions of $25,000 each subsequent to September 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
10
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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)
ANALYSIS OF FINANCIAL CONDITION (Continued)
cash available from operations which was not distributed to partners in
previous periods. The Fund invested $1,551,816 in direct financing leases
during the first nine months of 2000.
Subsequent to September 30, 2000, the Fund invested in approximately
$1,134,000 of direct financing leases with initial lease terms of 2 to 40
months.
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.
11
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Part II: Other Information
FIDELITY LEASING INCOME FUND VI, L.P.
September 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
12
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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.
11-13-00 By: Freddie M. Kotek
________ _____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
11-13-00 By: Marianne T. Schuster
________ _____________________________
Date Marianne T. Schuster
Vice President of F.L. Partnership Management, Inc.
(Principal Financial Officer)
13
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