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, 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 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,
2001 2000
_____________ ____________
Cash and cash equivalents $3,644,829 $1,982,752
Accounts receivable 244,501 209,878
Due from related parties 37,301 42,133
Net investment in direct financing
leases 4,576,071 6,111,432
Equipment under operating leases
(net of accumulated depreciation
of $477,002 and $1,296,798,
respectively) 396,081 603,611
Equipment held for sale or lease 431,255 431,668
__________ __________
Total assets $9,330,038 $9,381,474
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 45,162 $ 35,179
Accounts payable and
accrued expenses 22,070 36,415
Due to related parties 9,150 28,044
__________ __________
Total liabilities 76,382 99,638
Partners' capital 9,253,656 9,281,836
__________ __________
Total liabilities and
partners' capital $9,330,038 $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 Nine Months Ended
September 30 September 30
2001 2000 2001 2000
____ ____ ____ ____
Income:
Earned income on direct
financing leases $106,871 $119,550 $360,274 $ 353,967
Rentals 44,325 182,584 211,594 569,491
Interest 30,464 18,904 75,398 64,737
Gain on sale of equipment,
net - 53,644 46,259 49,645
Other 8,663 10,233 15,905 29,759
________ ________ ________ __________
190,323 384,915 709,430 1,067,599
________ ________ ________ __________
Expenses:
Depreciation 32,735 130,823 150,848 465,349
Write-down of equipment to
net realizable value - 16,000 - 16,000
General and administrative 35,862 28,601 98,492 87,834
General and administrative
to related party 43,111 39,279 111,551 110,475
Management fee to related
party 20,320 21,636 61,719 63,101
________ ________ ________ __________
132,028 236,339 422,610 742,759
________ ________ ________ __________
Net income $ 58,295 $148,576 $286,820 $ 324,840
======== ======== ======== ==========
Net income per equivalent
limited partnership unit $ 1.93 $ 4.96 $ 9.53 $ 10.85
======== ======== ======== ==========
Weighted average number of
equivalent limited partnership
units outstanding during the
period 29,716 29,691 29,756 29,649
======== ======== ======== ==========
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, 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 (3,150) - (311,850) (315,000)
Net income 3,150 - 283,670 286,820
______ ______ __________ __________
Balance, September 30, 2001 $4,800 75,264 $9,248,856 $9,253,656
====== ====== ========== ==========
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, 2001 and 2000
(Unaudited)
2001 2000
____ ____
Cash flows from operating activities:
Net income $ 286,820 $ 324,840
__________ __________
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 150,848 465,349
Write-down of equipment to net
realizable value - 16,000
Gain on sale of equipment, net (46,259) (49,645)
(Increase) decrease in accounts receivable (34,623) (105,889)
(Increase) decrease in due from related
parties 4,832 36,541
Increase (decrease) in lease rents paid
in advance 9,983 (61,918)
Increase (decrease) in accounts payable and
accrued expenses (14,345) 1,724
Increase (decrease) in due to related
parties (18,894) 537
__________ __________
51,542 302,699
__________ __________
Net cash provided by operating activities 338,362 627,539
__________ __________
Cash flows from investing activities:
Investment in direct financing leases (652,894) (1,551,816)
Proceeds from sale of equipment 103,355 177,447
Proceeds from direct financing leases,
net of earned income 2,188,254 1,377,346
__________ __________
Net cash provided by investing activities 1,638,715 2,977
__________ __________
Cash flows from financing activities:
Distributions (315,000) (255,000)
Redemption of capital - -
__________ __________
Net cash used in financing activities (315,000) (255,000)
__________ __________
Increase in cash and cash equivalents 1,662,077 375,516
Cash and cash equivalents, beginning
of period 1,982,752 1,983,958
__________ __________
Cash and cash equivalents, end of period $3,644,829 $2,359,474
========== ==========
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, 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 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 19 to 59 months.
Unguaranteed residuals for direct financing leases represent the estimated
amounts recoverable at lease termination from lease extensions or disposi-
tion 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 approximate net investment in direct financing leases as of Septem-
ber 30, 2001 is as follows (unaudited):
Minimum lease payments to be received $4,189,000
Unguaranteed residuals 733,000
Unearned rental income (278,000)
Unearned residual income (68,000)
__________
$4,576,000
==========
The Fund also has equipment under operating leases. The Fund's operating
leases are for initial lease terms of 58 to 60 months. Generally, operat-
ing leases will not recover all of the undepreciated cost and related ex-
penses of its rental equipment during the initial lease terms and the Fund
is prepared to remarket the equipment. 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 the equipment and competitive factors
in the marketplace are considered among other things, as part of this re-
6
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. EQUIPMENT LEASED (Continued)
view. 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. As a
result, there was no write-down of equipment to net realizable value for
the nine months ended September 30, 2001. For the nine months ended
September 30, 2000, $16,000 was charged to write-down of equipment to
net realizable value. Any future losses are dependent upon unanticipated
technological developments affecting the types of equipment in the port-
folio in subsequent years.
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of September 30, 2001 are as
follows (unaudited):
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
2001 $ 44,000 $ 821,000
2002 167,000 2,421,000
2003 117,000 874,000
2004 - 73,000
________ __________
$328,000 $4,189,000
======== ==========
2. RELATED PARTY TRANSACTIONS
The General Partner receives 5% or 2% of rental payments from equipment
under operating leases and full pay-out leases, respectively, for adminis-
trative 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 distributions
7
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
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 and nine months
ended September 30, 2001 and 2000 (unaudited):
Three Months Ended Nine Months Ended
September 30 September 30
2001 2000 2001 2000
____ ____ ____ ____
Management fee $20,320 $21,636 $ 61,719 $ 63,101
Reimbursable costs 43,111 39,279 111,551 110,475
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 September 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 re-
mitted to the Fund.
Amounts due to related parties at September 30, 2001 and December 31, 2000
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.
3. CASH DISTRIBUTION
The General Partner declared and paid three cash distributions of $35,000
each subsequent to September 30, 2001 for each of the months ended July 31,
August 31 and September 30, 2001 for an aggregate of $105,000 to all
admitted partners as of July 31, August 31 and September 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 $190,323 and $384,915
for the three months ended September 30, 2001 and 2000, respectively, and
$709,430 and $1,067,599 for the nine months ended September 30, 2001 and 2000,
respectively. Earned income on direct financing leases and rental income from
the leasing of equipment accounted for 79% and 78% of total revenues for the
third quarter of 2001 and 2000, respectively and 81% and 86% of total revenues
for the nine months ended September 30, 2001 and 2000, respectively. The de-
crease in total revenues in 2001 was primarily attributable to the decrease in
rental income. During the nine months ended September 30, 2001, rental income
decreased by approximately $358,000 because of equipment that terminated and
was sold during 2000 and 2001. Additionally, the decrease in other income
also contributed to the overall decrease in revenues during the nine months
ended September 30, 2001. Other income decreased because of a reduction in
transfer fees received for investor account transfers in 2001 compared to 2000.
Expenses were $132,028 and $236,339 for the three months ended Septem-
ber 30, 2001 and 2000, respectively, and $422,610 and $742,759 for the nine
months ended September 30, 2001 and 2000, respectively. Depreciation expense
comprised 25% and 55% of total expenses for the third quarter of 2001 and
2000, respectively and 36% and 63% of total expenses for the nine months
ended September 30, 2001 and 2000, respectively. The decrease in expenses
for the nine months ended September 30, 2001 was primarily related to the
decrease in depreciation expense resulting from equipment that terminated
and was sold during 2000 and 2001. Additionally, the decrease in write-down
of equipment to net realizable value contributed to the overall decrease in
expenses in 2001. Based upon the quarterly review of the recoverability of
the undepreciated cost of rental equipment, there was no charge to write-down
of equipment to net realizable value during the nine months ended September 30,
2001 compared to $16,000 for the nine months ended September 30, 2000. Any
future losses are dependent upon unanticipated technological developments
affecting the types of equipment in the portfolio in subsequent years.
The Fund's net income was $58,295 and $148,576 for the three months ended
September 30, 2001 and 2000, respectively, and $286,820 and $324,840 for the
nine months ended September 30, 2001 and 2000, respectively. The earnings per
equivalent limited partnership unit, after earnings allocated to the General
Partner, were $1.93 and $4.96 based on a weighted average number of equivalent
limited partnership units outstanding of 29,716 and 29,691 for the three months
ended September 30, 2001 and 2000, respectively. The earnings per equivalent
limited partnership unit, after earnings allocated to the General Partner, were
$9.53 and $10.85 based on a weighted average number of equivalent limited
partnership units outstanding of 29,756 and 29,649 for the nine months ended
September 30, 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 $91,030 and $241,755, for the
purpose of determining cash available for distribution, during the quarters
ended September 30, 2001 and 2000, respectively. The Fund paid three cash
distributions of $35,000 each subsequent to both September 30, 2001 and 2000
for the three months ended September 30, 2001 and 2000. For the nine months
ended September 30, 2001 and 2000, the Fund generated $391,409 and $756,544 of
cash from operations, for the purpose of determining cash available for dis-
tribution. The General Partner declared cash distributions totaling $315,000
and $285,000 for the nine months ended September 30, 2001 and 2000, respec-
tively. The Fund paid six cash distributions of $35,000 each during the nine
months ended September 30, 2001 and three cash distributions of $35,000 each
subsequent to September 30, 2001 for the nine months ended September 30, 2001.
The Fund also paid three cash distributions of $35,000 each during the first
nine months of 2001 for the months of October, November and December 2000.
The Fund paid three cash distributions of $25,000 each and three cash dis-
tributions of $35,000 each during the nine months ended September 30, 2000
and three cash distributions of $35,000 each subsequent to September 30, 2000
for the nine months ended September 30, 2000. 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 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 purchase
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 $1,551,816 in direct
financing leases during the first nine months of 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.
September 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) Exhibits: None
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.
11-13-01 By: Freddie M. Kotek
________ _____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
11-13-01 By: Marianne T. Schuster
________ _____________________________
Date Marianne T. Schuster
Vice President of F.L. Partnership Management, Inc.
(Principal Financial Officer)
12