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 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 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 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 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 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 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 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 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 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 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 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