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 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 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 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 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 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 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 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 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 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 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 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