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, 2001
/ / 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.)
1845 Walnut Street, Suite 1000, Philadelphia, Pennsylvania 19103
________________________________________________________________________
(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,
2001 2000
______________ _____________
Cash and cash equivalents $2,807,262 $1,982,752
Accounts receivable 275,852 209,878
Due from related parties 79,626 42,133
Net investment in direct financing
leases 5,365,965 6,111,432
Equipment under operating leases
(net of accumulated depreciation
of $868,540 and $1,296,798,
respectively) 428,817 603,611
Equipment held for sale or lease 431,255 431,668
__________ __________
Total assets $9,388,777 $9,381,474
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 61,603 $ 35,179
Accounts payable and
accrued expenses 19,336 36,415
Due to related parties 7,477 28,044
__________ __________
Total liabilities 88,416 99,638
Partners' capital 9,300,361 9,281,836
__________ __________
Total liabilities and
partners' capital $9,388,777 $9,381,474
========== ==========
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
2001 2000 2001 2000
____ ____ ____ ____
Income:
Earned income on direct
financing leases $125,109 $126,476 $253,403 $234,417
Rentals 71,247 179,115 167,269 386,907
Interest 24,672 18,833 44,934 45,833
Gain on sale of equipment,
net 3,152 6,800 46,259 -
Other 2,801 17,585 7,242 19,526
________ ________ ________ ________
226,981 348,809 519,107 686,683
________ ________ ________ ________
Expenses:
Depreciation 36,735 156,140 118,113 334,526
General and administrative 32,181 18,996 62,630 59,233
General and administrative
to related party 35,289 34,726 68,440 71,196
Management fee to related
party 20,223 21,219 41,399 41,465
Loss on sale of equipment,
net - - - 3,999
________ ________ ________ ________
124,428 231,081 290,582 510,419
________ ________ ________ ________
Net income $102,553 $117,728 $228,525 $176,264
======== ======== ======== ========
Net income per equivalent
limited partnership unit $ 3.41 $ 3.94 $ 7.60 $ 5.89
======== ======== ======== ========
Weighted average number of
equivalent limited partner-
ship units outstanding
during the period 29,801 29,650 29,776 29,629
======== ======== ======== ========
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, 2001
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 2001 $4,800 75,264 $9,277,036 $9,281,836
Cash distributions (2,100) - (207,900) (210,000)
Net income 2,285 - 226,240 228,525
______ ______ __________ __________
Balance, June 30, 2001 $4,985 75,264 $9,295,376 $9,300,361
====== ====== ========== ==========
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, 2001 and 2000
(Unaudited)
2001 2000
__________ __________
Cash flows from operating activities:
Net income $ 228,525 $ 176,264
__________ __________
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 118,113 334,526
(Gain) loss on sale of equipment, net (46,259) 3,999
(Increase) decrease in accounts receivable (65,974) (37,164)
(Increase) decrease in due from
related parties (37,493) 22,186
Increase (decrease) in lease rents paid
in advance 26,424 (17,358)
Increase (decrease) in accounts payable and
accrued expenses (17,079) 2,949
Increase (decrease) in due to related parties (20,567) (12,779)
__________ __________
(42,835) 296,359
__________ __________
Net cash provided by operating activities 185,690 472,623
__________ __________
Cash flows from investing activities:
Investment in direct financing leases (652,894) (1,111,394)
Proceeds from sale of equipment 103,353 79,009
Proceeds from direct financing leases,
net of earned income 1,398,361 871,574
__________ __________
Net cash provided by (used in)
investing activities 848,820 (160,811)
__________ __________
Cash flows from financing activities:
Distributions (210,000) (150,000)
__________ __________
Net cash used in financing activities (210,000) (150,000)
__________ __________
Increase in cash and cash equivalents 824,510 161,812
Cash and cash equivalents, beginning
of period 1,982,752 1,983,958
__________ __________
Cash and cash equivalents, end of period $2,807,262 $2,145,770
========== ==========
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, 2001
(Unaudited)
The accompanying unaudited condensed financial statements have been prepared
by the Fund in accordance with accounting principles generally accepted in
the United States of America, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of Management, all ad-
justments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included.
1. EQUIPMENT LEASED
The Fund has equipment leased under the direct financing method in accor-
dance 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. The Fund's direct financing leases are for
initial lease terms ranging from 10 to 59 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 is below the estimated
residual value, an adjustment is made.
The net investment in direct financing leases as of June 30, 2001 is as
follows:
Minimum lease payments to be received $5,094,000
Unguaranteed residuals 733,000
Unearned rental income (379,000)
Unearned residual income (82,000)
__________
$5,366,000
==========
The Fund's equipment on lease consists of equipment under operating leases.
The Fund's operating leases are for initial lease terms of 36 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. Fund policy is to re-
view 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 the equipment and com-
petitive factors in the marketplace are considered among other things, as
part of this review. In accordance with accounting principles generally
accepted in the United States of America, the Fund writes down its rental
6
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. EQUIPMENT LEASED (Continued)
equipment to its estimated net realizable value when the amounts are
reasonably estimated and only recognizes gains upon actual sale of its
rental equipment.
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of June 30, 2001 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ __________
2001 $ 97,000 $1,665,000
2002 167,000 2,468,000
2003 117,000 888,000
2004 - 73,000
________ __________
$381,000 $5,094,000
======== ==========
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.
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-
7
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
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, 2001 and 2000:
Three Months Ended Six Months Ended
June 30 June 30
2001 2000 2001 2000
____ ____ ____ ____
Management fee $20,223 $21,219 $41,399 $41,465
Reimbursable costs 35,289 34,726 68,440 71,196
During the first quarter of 2001, the Fund transferred its checking and
investment accounts from Hudson United Bank to The Bancorp.com, Inc.
(TBI). The son and the spouse of the Chairman of Resource America, Inc.
are the Chairman and Chief Executive Officer, respectively, of TBI. The
Fund maintains a normal banking relationship with TBI.
Amounts due from related parties at June 30, 2001 and December 31, 2000
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, 2001 and December 31, 2000
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, 2001 for the months ended April 30, May 31
and June 30, 2001 to all admitted partners as of April 30, May 31 and
June 30, 2001.
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 $226,981 and
$348,809 for the three months ended June 30, 2001 and 2000, respectively
and $519,107 and $686,683 for the six months ended June 30, 2001 and 2000,
respectively. Rental income from the leasing of equipment accounted for 31%
and 51% of total revenues for the second quarter of 2001 and 2000, respec-
tively and 32% and 56% of total revenues for the six months ended June 30,
2001 and 2000, respectively. The decrease in total revenues in 2001 was
primarily attributable to the decrease in rental income. Rental income de-
creased approximately $220,000 in 2001 because of equipment that terminated
and was sold since June 2000. The decrease in other income also contributed
to the total decrease in revenues during the first six months of 2001. Other
revenues decreased because of the decrease in transfer fees recognized for
investor account transfers during the six months ended June 30, 2001 compared
to the six months ended June 30, 2000. The increase in net gain on sale of
equipment served to mitigate the decrease in total revenues during the six
months ended June 30, 2001. There was a net gain on sale of equipment of
$46,259 recognized for the first six months of 2001 compared to no net gain
on sale of equipment recognized for the same period in 2000. Additionally,
the increase in earned income on direct financing leases also lowered the
overall decrease in revenues during the first six months of 2001. The Fund
invested in direct financing leases during late 2000 and the second quarter
of 2001 causing earned income on direct financing leases to increase from
$234,000 during the six months ended June 30, 2000 to $253,000 during the
six months ended June 30, 2001.
Expenses were $124,428 and $231,081 for the three months ended June 30,
2001 and 2000, respectively and $290,582 and $510,419 for the six months
ended June 30, 2001 and 2000, respectively. Depreciation expense comprised
30% and 68% of total expenses for the second quarter of 2001 and 2000,
respectively and 41% and 66% of total expenses for the six months ended
June 30, 2001 and 2000, respectively. The decrease in expenses during the
six months ended June 30, 2001 was attributable to the decrease in deprecia-
tion expense. Depreciation expense decreased because of equipment that ter-
minated and was sold since June 2000.
The Fund's net income was $102,553 and $117,728 for the three months
ended June 30, 2001 and 2000, respectively and $228,525 and $176,264 for
the six months ended June 30, 2001 and 2000, respectively. The earnings
per equivalent limited partnership unit, after earnings allocated to the
General Partner, were $3.41 and $3.94 based on a weighted average number
of equivalent limited partnership units outstanding of 29,801 and 29,650
for the three months ended June 30, 2001 and 2000, respectively. The earn-
ings per equivalent limited partnership unit, after earnings allocated to
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 General Partner, were $7.60 and $5.89 based on a weighted average number
of equivalent limited partnership units outstanding of 29,776 and 29,629 for
the six months ended June 30, 2001 and 2000, respectively.
The Fund generated cash from operations of $136,136 and $267,068, for the
purpose of determining cash available for distribution during the quarter ended
June 30, 2001 and 2000, respectively. The Fund paid three cash distributions
of $35,000 each subsequent to June 30, 2001 and 2000 for the three months ended
June 30, 2001 and 2000, respectively for a total of $105,000 during each of
these quarters. For the six months ended June 30, 2001 and 2000, the Fund
generated $300,379 and $514,789, respectively of cash from operations, for the
purpose of determining cash available for distribution. The General Partner
declared cash distributions totaling $210,000 and $180,000 for the six months
ended June 30, 2001 and 2000, respectively. The Fund paid three cash distribu-
tions of $35,000 each during the first six months of 2001 and three cash
distributions of $35,000 each subsequent to June 30, 2001. The Fund also
paid three cash distributions of $35,000 during the first six months of 2001
for the months of October, November and December 2000. The Fund paid three
cash distributions of $25,000 each during the first six months of 2000 and
three cash distributions of $35,000 each subsequent to June 30, 2000. 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 2001. 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 pur-
chase equipment under operating leases or invest in direct financing leases
with cash available from operations that was not distributed to partners in
previous periods. The Fund invested $652,894 and $1,111,394 in direct financ-
ing leases during the six months ended June 30, 2001 and 2000, respectively.
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, 2001
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) 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.
8-14-01 By: /s/ Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
8-14-01 By: /s/ Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12