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, 1995 / / 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.) 250 King of Prussia Road, Radnor, PA 19087 _______________________________________________________________________________ (Address of principal executive offices) (Zip code) (610) 964-7102 _______________________________________________________________________________ (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 12 Part I: Financial Information Item 1: Financial Statements FIDELITY LEASING INCOME FUND VI, L.P. BALANCE SHEETS ASSETS (Unaudited) (Audited) September 30, December 31, 1995 1994 ______________ _____________ Cash and cash equivalents $ 4,264,093 $ 5,509,017 Investment securities held to maturity - 2,235,101 Accounts receivable 116,008 112,131 Interest receivable 5,528 51,877 Due from related parties 7,448 27,051 Equipment under operating leases (net of accumulated depreciation of $13,178,044 and $18,360,372, respectively) 6,351,399 5,001,631 Net investment in direct financing leases 731,170 969,434 Equipment held for sale or lease 21,275 1,249,700 ___________ ___________ Total assets $11,496,921 $15,155,942 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Liabilities: Lease rents paid in advance $ 103,777 $ 218,200 Accounts payable - equipment - 518,100 Accounts payable and accrued expenses 83,648 163,814 Due to related parties 263,641 298,380 ___________ ___________ Total liabilities 451,066 1,198,494 Partners' capital 11,045,855 13,957,448 ___________ ___________ Total liabilities and partners' capital $11,496,921 $15,155,942 =========== =========== 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 Nine Months Ended September 30 September 30 1995 1994 1995 1994 ____ ____ ____ ____ Income: Rentals $1,238,450 $1,506,814 $4,020,545 $4,668,277 Earned income on direct financing leases 21,407 23,321 62,902 72,903 Interest 59,009 94,634 222,858 234,220 Gain on sale of equipment, net - - 549,564 16,425 Other 1,102 3,185 13,368 6,645 __________ __________ __________ __________ 1,319,968 1,627,954 4,869,237 4,998,470 __________ __________ __________ __________ Expenses: Depreciation and amortization 921,745 1,182,766 3,079,485 3,952,760 Write-down of equipment to net realizable value 2,183 100,000 303,116 200,000 General and administrative 35,386 42,732 96,205 137,470 General and administrative to related party 43,419 59,651 171,560 164,626 Management fee to related party 64,426 75,502 203,933 233,330 Loss on sale of equipment, net 132,291 131,475 - - __________ __________ __________ __________ 1,199,450 1,592,126 3,854,299 4,688,186 __________ __________ __________ __________ Net income $ 120,518 $ 35,828 $1,014,938 $ 310,284 ========== ========== ========== ========== Net income per equivalent limited partnership unit $ 3.27 $ .55 $ 27.06 $ 6.09 ========== ========== ========== ========== Weighted average number of equivalent limited partnership units outstanding during the period 34,072 42,237 36,243 44,735 ========== ========== ========== ========== 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 nine months ended September 30, 1995 (Unaudited) General Limited Partners Partner Units Amount Total _______ _____ ______ _____ Balance, January 1, 1995 $ 9,380 80,537 $13,948,068 $13,957,448 Redemptions - (1,241) (186,560) (186,560) Cash distributions (37,395) - (3,702,576) (3,739,971) Net income 34,065 - 980,873 1,014,938 _______ ______ ___________ ___________ Balance, September 30, 1995 $ 6,050 79,296 $11,039,805 $11,045,855 ======= ====== =========== =========== 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 nine months ended September 30, 1995 and 1994 (Unaudited) 1995 1994 ____ ____ Cash flows from operating activities: Net income $1,014,938 $ 310,284 __________ __________ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,079,485 3,952,760 Write-down of equipment to net realizable value 303,116 200,000 Proceeds from direct financing leases, net of earned income 238,264 128,816 Gain on sale of equipment, net (549,564) (16,425) (Increase) decrease in accounts receivable (3,877) 42,893 (Increase) decrease in due from related parties 19,603 299,780 Increase (decrease) in lease rents paid in advance (114,423) (159,163) Increase (decrease) in accounts payable and accrued expenses (80,166) 166,033 Increase (decrease) in accounts payable - equipment (518,100) - Increase (decrease) in due to related parties (34,739) (201,608) Increase (decrease) in other, net 46,349 2,342 __________ __________ 2,385,948 4,415,428 __________ __________ Net cash provided by operating activities 3,400,886 4,725,712 __________ __________ Cash flows from investing activities: Acquisition of equipment (4,137,211) (432,081) Purchase of investment securities held to maturity (250,253) - Maturity of investment securities held to maturity 2,485,354 758,534 Proceeds from sale of equipment 1,182,831 978,515 __________ __________ Net cash provided by (used in) investing activities (719,279) 1,304,968 __________ __________ Cash flows from financing activities: Distributions (3,739,971) (3,805,903) Redemptions of capital (186,560) (448,699) __________ __________ Net cash used in financing activities (3,926,531) (4,254,602) __________ __________ Increase (decrease) in cash and cash equivalents (1,244,924) 1,776,078 Cash and cash equivalents, beginning of period 5,509,017 5,688,512 __________ __________ Cash and cash equivalents, end of period $4,264,093 $7,464,590 ========== ========== The accompanying notes are an integral part of these financial statements. 5 FIDELITY LEASING INCOME FUND VI, L.P. NOTES TO FINANCIAL STATEMENTS September 30, 1995 (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. Certain amounts on the 1994 financial statements have been reclassified to conform to the presentation adopted in 1995. 1. EQUIPMENT LEASED Equipment on lease consists primarily of computer peripheral equipment under operating leases. A majority of the equipment was manufactured by IBM. The lessees have agreements with the manufacturer to provide main- tenance for the leased equipment. The Fund's operating leases are for initial lease terms of 11 to 49 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 undepreciated cost. Recent and anticipated technological developments affecting computer 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, $300,933 and $200,000 was charged to write-down of equipment to net realizable value for the nine months ended September 30, 1995 and 1994, respectively. Any future losses are dependent upon unanticipated technological developments affecting the computer equipment industry 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 net investment in direct financing leases as of September 30, 1995 is as follows: Net minimum lease payments to be received $854,000 Less unearned income 123,000 Add expected future residuals - __________ $731,000 ======== 6 FIDELITY LEASING INCOME FUND VI, L.P. NOTES TO FINANCIAL STATEMENTS 1. EQUIPMENT LEASED (Continued) The future approximate minimum rentals to be received on noncancellable operating and direct financing leases as of September 30, 1995 are as follows: Direct Years Ending December 31 Operating Financing ________________________ _________ _________ 1995 $1,110,000 $ 59,000 1996 2,462,000 238,000 1997 1,508,000 238,000 1998 221,000 238,000 1999 - 81,000 __________ __________ $5,301,000 $ 854,000 ========== ========== 2. RELATED PARTY TRANSACTIONS The General Partner receives 5% or 2% of gross rental payments from 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 after the Limited Partners have received distributions 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. Additionally, the General Partner and its affiliates 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 affiliates during the nine months ended September 30: Three Months Ended Nine Months Ended September 30 September 30 1995 1994 1995 1994 ____ ____ ____ ____ Management fee $64,426 $75,502 $203,933 $233,330 Reimbursable costs 43,419 59,651 171,560 164,626 Sales fee 4,646 13,804 36,834 30,263 Amounts due from related parties at September 30, 1995 and December 31, 1994 represent monies due the Fund from the General Partner and/or other affiliated funds for rentals and sales proceeds collected and not yet re- mitted the Fund. Amounts due to related parties at September 30, 1995 and December 31, 1994 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. 7 FIDELITY LEASING INCOME FUND VI, L.P. NOTES TO FINANCIAL STATEMENTS 3. SUBSEQUENT EVENT Cash Distribution: The General Partner declared and paid a cash distribution of $412,943 and $92,105 in October and November 1995, respectively for the months ended August 31 and September 30, 1995 to all admitted partners as of August 31 and September 30, 1995. 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 $1,319,968 and $1,627,954 for the three months ended September 30, 1995 and 1994, respectively, and $4,869,237 and $4,998,470 for the nine months ended Sep- tember 30, 1995 and 1994, respectively. Rental income from the leasing of computer peripheral equipment accounted for 94% and 93% of total revenues for the third quarter of 1995 and 1994, respectively, and 83% and 93% for the nine months ended September 30, 1995 and 1994, respectively. The decrease in total revenues in 1995 is primarily attributable to a decrease in rental income. During the nine months ended September 30, 1995, rental income decreased by approximately $1,712,000 because of equipment which came off lease and was re- leased at lower rental rates or sold. This decrease, however, was offset by approximately $1,064,000 of rents generated from equipment purchases made since September of 1994. However, the decrease in total revenues was offset by an increase in the net gain on sale of equipment. The Fund recognized $549,564 of net gain on sale of equipment for the nine months ended September 30, 1995 as compared to $16,425 for the corresponding period in 1994. Expenses were $1,199,450 and $1,592,126 for the three months ended Septem- ber 30, 1995 and 1994, respectively, and $3,854,299 and $4,688,186 for the nine months ended September 30, 1995 and 1994, respectively. Depreciation and amortization comprised 77% and 74% of total expenses for the third quarter of 1995 and 1994, respectively and 80% and 84% for the nine months ended September 30, 1995 and 1994, respectively. The decrease in expenses is primarily related to the decrease in depreciation expense due to equipment which came off lease and was terminated or sold since September 30, 1994. In addition, equipment expenses incurred by the Fund for remarketing of equipment, which are included in general and administrative expenses, decreased in 1995 as compared to 1994. During 1995, management fee to related party decreased proportionate to the decrease in rental income which also accounts for the decrease in total expenses. The overall decrease in expenses was offset by an increase in the write-down of equipment to net realizable value. Based upon the quarterly review of the recoverability of the undepreciated cost of rental equipment, $303,116 was charged to operations to write down equipment to its estimated net realizable value during the nine months ended September 30, 1995 as compared to $200,000 for the nine months ended September 30, 1994. Any future losses are dependent upon unanticipated technological developments affecting the computer equipment industry in subsequent years. The Fund's net income was $120,518 and $35,828 for the three months ended September 30, 1995 and 1994, respectively, and $1,014,938 and $310,284 for the nine months ended September 30, 1995 and 1994, respectively. The earnings per equivalent limited partnership unit, after earnings allocated to the General Partner, were $3.27 and $.55 based on a weighted average number of equivalent limited partnership units outstanding of 34,072 and 42,237 for the three months ended September 30, 1995 and 1994, respectively. The earnings per equivalent limited partnership unit, after earnings allocated to the General Partner, were $27.06 and $6.09 based on a weighted average number of equivalent limited partnership units outstanding of 36,243 and 44,735 for the nine months ended September 30, 1995 and 1994, respectively. 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 generated funds from operations of $1,176,737 and $1,450,069 for the purpose of determining cash available for distribution, and distributed 35% and 29% of these amounts during the third quarter of 1995 and 1994, respectively and 43% and 58% of these amounts in October and November 1995 and 1994, respectively. For the nine months ended September 30, 1995 and 1994, the Fund generated $3,847,975 and $4,446,619 of funds from operations and distributed 75% and 66% of these amounts during the first nine months of 1995 and 1994, respectively and 13% and 19% of these amounts in October and November 1995 and 1994, respectively. ANALYSIS OF FINANCIAL CONDITION The Fund will continue to purchase computer peripheral equipment with sales proceeds and cash available from operations which is not distributed to partners. The Fund purchased $4,137,211 and $432,081 of equipment during the nine months ended September 30, 1995 and 1994, 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. September 30, 1995 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: A report on Form 8-K was filed with the Securities and Exchange Commission on October 12, 1995 reporting under Item 1. 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. 11-14-95 By: P. Donald Mooney ________ _____________________________ Date P. Donald Mooney President of Fidelity Leasing Corporation (Principal Operating Officer) 11-14-95 By: Marianne T. Schuster ________ _____________________________ Date Marianne T. Schuster Vice President of Fidelity Leasing Corporation (Principal Financial Officer) 12 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. _______ _____________________________ Date P. Donald Mooney President of Fidelity Leasing Corporation (Principal Operating Officer) _______ _____________________________ Date Marianne T. Schuster Vice President of Fidelity Leasing Corporation (Principal Financial Officer) 12