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, 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.)
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,
2001 2000
______________ _____________
Cash and cash equivalents $2,630,639 $1,982,752
Accounts receivable 284,904 209,878
Due from related parties 220,049 42,133
Equipment under operating leases
(net of accumulated depreciation
of $987,011 and $1,296,798,
respectively) 467,336 603,611
Net investment in direct financing
leases 5,420,984 6,111,432
Equipment held for sale or lease 431,668 431,668
__________ __________
Total assets $9,455,580 $9,381,474
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 60,934 $ 35,179
Accounts payable and
accrued expenses 52,709 36,415
Due to related parties 39,129 28,044
__________ __________
Total liabilities 152,772 99,638
Partners' capital 9,302,808 9,281,836
__________ __________
Total liabilities and
partners' capital $9,455,580 $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
For the three months ended March 31, 2001 and 2000
(Unaudited)
2001 2000
________ ________
Income:
Rentals $ 96,022 $207,792
Earned income on direct financing
leases 128,294 107,941
Interest 20,262 27,000
Gain on sale of equipment, net 43,107 -
Other 4,441 1,941
________ ________
292,126 344,674
________ ________
Expenses:
Depreciation 81,378 178,386
General and administrative 30,449 40,237
General and administrative to
related party 33,151 36,470
Management fee to related party 21,176 20,246
Loss on sale of equipment, net - 10,799
________ ________
166,154 286,138
________ ________
Net income $125,972 $ 58,536
======== ========
Net income per equivalent
limited partnership unit $ 4.19 $ 1.95
======== ========
Weighted average number of
equivalent limited partnership
units outstanding during the period 29,750 29,609
======== ========
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, 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 (1,050) - (103,950) (105,000)
Net income 1,260 - 124,712 125,972
______ ______ __________ __________
Balance, March 31, 2001 $5,010 75,264 $9,297,798 $9,302,808
====== ====== ========== ==========
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, 2001 and 2000
(Unaudited)
2001 2000
________ ________
Cash flows from operating activities:
Net income $ 125,972 $ 58,536
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 81,378 178,386
(Gain) loss on sale of equipment, net (43,107) 10,799
(Increase) decrease in accounts
receivable (75,026) 15,333
(Increase) decrease in due from related
parties (177,916) 23,689
Increase (decrease) in lease rents paid
in advance 25,755 (13,635)
Increase (decrease) in accounts payable
and accrued expenses 16,294 19,833
Increase (decrease) in due to related
parties 11,085 76
__________ __________
(161,537) 234,481
__________ __________
Net cash provided by (used in)
operating activities (35,565) 293,017
__________ __________
Cash flows from investing activities:
Proceeds from direct financing leases,
net of earned income 690,448 384,889
Proceeds from sale of equipment 98,004 27,709
__________ __________
Net cash provided by investing activities 788,452 412,598
__________ __________
Cash flows from financing activities:
Distributions (105,000) (75,000)
__________ __________
Net cash used in financing activities (105,000) (75,000)
__________ __________
Increase in cash and cash equivalents 647,887 630,615
Cash and cash equivalents, beginning
of period 1,982,752 1,983,958
__________ __________
Cash and cash equivalents, end of period $2,630,639 $2,614,573
========== ==========
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, 2001
(Unaudited)
The accompanying unaudited condensed financial statements have been pre-
pared 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
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 34 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
affecting the equipment and competitive 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 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 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 4 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 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, 2001 is
as follows:
Minimum lease payments to be received $5,225,000
Unguaranteed residuals 733,000
Unearned rental income (442,000)
Unearned residual income (95,000)
__________
$5,421,000
==========
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of March 31, 2001 are as
follows:
Years Ending December 31 Operating Direct Financing
________________________ _________ ________________
2001 $178,000 $2,235,000
2002 167,000 2,118,000
2003 117,000 799,000
2004 - 73,000
________ __________
$462,000 $5,225,000
======== ==========
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.
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
7
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (continued)
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:
2001 2000
________ ________
Management fee $21,176 $20,246
Reimbursable costs 33,151 36,470
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 March 31, 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 March 31, 2001 and December 31, 2000
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
$35,000 each subsequent to March 31, 2001 for the months ended
January 31, February 28 and March 31, 2001 to all admitted partners
as of January 31, February 28 and March 31, 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 $292,126 and
$344,674 for the three months ended March 31, 2001 and 2000, respectively.
Rental income from the leasing of equipment accounted for 33% and 60% of
total revenues for the first quarter of 2001 and 2000, respectively. The
decrease in total revenues in 2001 was primarily attributable to the de-
crease in rental income. Rental income decreased by approximately $112,000
because of equipment under operating leases that came off lease or terminated
and was sold since the first quarter of 2000. The overall decrease in rev-
enues was mitigated by the increase in earned income on direct financing
leases. The Fund invested in direct financing leases subsequent to
March 31, 2000 that caused the increase in earned income on direct
financing leases during the three months ended March 31, 2001. Addition-
ally, the Fund recognized a net gain on sale of equipment of $43,107 during
the first quarter of 2001 compared to no net gain on sale of equipment
recorded for the first quarter of 2000. The increase in this account also
served to lower the overall decrease in revenues during 2001.
Expenses were $166,154 and $286,138 for the three months ended
March 31, 2001 and 2000, respectively. Depreciation expense comprised 49%
and 62% of total expenses during the first quarter of 2001 and 2000, respec-
tively. The decrease in expenses was primarily related to the decrease in
depreciation expense during the first quarter of 2001. Depreciation expense
decreased because of equipment that came off lease or terminated and was sold
subsequent to March 2000. Additionally, the decrease in general and
administrative expense also contributed to the overall decrease in ex-
penses in the first quarter of 2001. This account decreased because of
the decrease in various expenses incurred to administer the Fund on a daily
basis. Furthermore, the Fund had no net loss on sale of equipment during
the quarter ended March 31, 2001 compared to $10,799 of net loss on sale of
equipment incurred during the quarter ended March 31, 2001. The decrease
in this account also served to decrease total expenses during the current
quarter.
For the three months ended March 31, 2001 and 2000, the Fund had net
income of $125,972 and $58,536, respectively. The net income per equiva-
lent limited partnership unit, after net income allocated to the General
Partner, was $4.19 and $1.95 based on a weighted average number of
equivalent limited partnership units outstanding of 29,750 and 29,609
for the three months ended March 31, 2001 and 2000, 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 $164,243 and $247,721
for the purpose of determining cash available for distribution during the
quarter ended March 31, 2001 and 2000, respectively. There were no cash
distributions made to partners during the first quarter of 2001 and 2000
for the three months ended March 31, 2001 and 2000. However, the General
Partner declared and paid three cash distributions of $35,000 each during
the first quarter of 2001 for the months ended October 31, November 30 and
December 31, 2000. Subsequent to March 31, 2001, the General Partner de-
clared and paid three cash distributions of $35,000 each to partners for
the first quarter of 2001. Subsequent to March 31, 2000, the General
Partner declared and paid three cash distributions of $25,000 each to
partners for the first quarter of 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 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.
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, 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
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.
5-15-01 By: /s/ Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
5-15-01 By: /s/ Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12