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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
/X/ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the year ended December 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 0-20131
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 Blvd., Philadelphia, Pennsylvania 19106
______________________________________________________________________
(Address of principal executive offices) (Zip Code)
(215) 574-1636
______________________________________________________________________
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
None Not applicable
Securities registered pursuant to Section 12 (g) of the Act:
Limited Partnership Interests
Title of Class
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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____
The number of outstanding limited partnership units of the Registrant at
December 31, 2000 is 75,264.
There is no public market for these securities.
The index of Exhibits is located on page 12.
1
PART I
Item 1. BUSINESS
Fidelity Leasing Income Fund VI, L.P. (the "Fund"), a Delaware limited
partnership, was organized in 1989 and acquires equipment including printers,
tape and disk storage devices, data communications equipment, computer
terminals, technical workstations, networking equipment, as well as other
electronic equipment that is leased to third parties on a short-term basis.
The Fund's principal objective is to generate leasing revenues for distri-
bution. The Fund manages the equipment, releasing or disposing of equipment as
it comes off lease in order to achieve its principal objective. The Fund does
not borrow funds to purchase equipment.
The Fund generally acquires equipment subject to a lease. Purchases of
equipment for lease are typically made through equipment leasing brokers,
under a sale-leaseback arrangement directly from lessees owning equipment,
from the manufacturer either pursuant to a purchase agreement relating to
significant quantities of equipment or on an ad hoc basis to meet the needs
of a particular lessee.
The equipment leasing industry is highly competitive. The Fund
competes with leasing companies, equipment manufacturers and distributors,
and entities similar to the Fund (including similar programs sponsored by the
General Partner), some of which have greater financial resources than the Fund.
Other leasing companies and equipment manufacturers and distributors may be
in a position to offer equipment to prospective lessees on financial terms
which are more favorable than those which the Fund can offer. They may also
be in a position to offer trade-in-privileges, maintenance contracts and other
services which the Fund may not be able to offer. Equipment manufacturers
and distributors may offer to sell equipment on terms and conditions (such as
liberal financing terms and exchange privileges) which will afford benefits
to the purchaser similar to those obtained through leases. As a result of
the advantages which certain of its competitors may have, the Fund may find
it necessary to lease its equipment on a less favorable basis than certain of
its competitors.
A brief description of the types of equipment in which the Fund has
invested as of December 31, 2000, together with information concerning the
users of such equipment is contained in Item 2, following.
The Fund does not have any employees. All persons who work on the Fund
are employees of the General Partner.
2
Item 2. PROPERTIES
The following schedules detail the type, aggregate purchase price and
percentage of the various types of equipment leased by the Fund under the
operating and direct financing lease methods as of December 31, 2000:
Operating Leases:
Purchase Price Percentage of
Type of Equipment of Equipment Total Equipment
PCB Assembly Equipment $ 775,390 40.80%
Technical Workstations and Terminals 603,054 31.73
Other 424,273 22.33
Tape Storage Systems 97,692 5.14
__________ ______
Totals $1,900,409 100.00%
========== ======
Direct Financing Leases:
Purchase Price Percentage of
Type of Equipment of Equipment Total Equipment
Network Communications $4,810,560 56.25%
Disk Storage Systems 1,538,555 17.99
PCB Assembly Equipment 1,371,022 16.03
Electron Microscopes 746,974 8.73
Printers 84,546 1.00
__________ ______
Totals $8,551,657 100.00%
========== ======
The following schedules detail the type of business, aggregate purchase
price and percentage of equipment usage by industrial classification for
equipment leased by the Fund under the operating and direct financing methods
as of December 31, 2000:
Operating Leases:
Purchase Price Percentage of
Type of Business of Equipment Total Equipment
Manufacturing/Refining $1,519,532 79.96%
Telephone/Telecommunications 283,185 14.90
Diversified Financial/Banking/Insurance 97,692 5.14
__________ ______
Totals $1,900,409 100.00%
========== ======
Direct Financing Leases:
Purchase Price Percentage of
Type of Business of Equipment Total Equipment
Retailing/Consumer Goods $4,845,070 56.66%
Manufacturing/Refining 2,212,459 25.87
Computers/Data Processing 1,383,174 16.17
Education 71,516 0.84
Diversified Financial/Banking/Insurance 39,438 0.46
__________ ______
Totals $8,551,657 100.00%
========== ======
3
Item 2. PROPERTIES (Continued)
Average Initial Term of Leases (in months): 36
Item 3. LEGAL PROCEEDINGS
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
4
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
(a) The Fund's limited partnership units are not publicly traded.
There is no market for the Fund's limited partnership units and it
is unlikely that any will develop.
(b) Number of Equity Security Holders:
Number of Partners
Title of Class as of December 31, 2000
Limited Partnership Interests 2,692
General Partnership Interest 1
Item 6. SELECTED FINANCIAL DATA
For the Years Ended December 31,
2000 1999 1998 1997 1996
Total Income $1,369,434 $1,844,586 $6,764,079 $4,765,095 $4,740,607
Net Income 412,064 429,662 245,744 423,226 169,828
Distributions to Partners 360,000 300,000 300,000 300,011 668,800
Net Income per
Equivalent Limited
Partnership Unit 13.75 14.42 8.18 14.22 5.49
Weighted Average Number
of Equivalent Limited
Partnership Units
Outstanding During
the Year 29,679 29,502 29,663 29,471 29,822
December 31,
2000 1999 1998 1997 1996
Total Assets $9,381,474 $9,389,226 $9,392,891 $9,845,711 $9,435,898
Equipment under
Operating Leases and
Equipment Held for
Sale or Lease (Net) 1,035,279 1,756,936 2,744,228 5,186,967 5,973,803
Net Investment in
Direct Financing Leases 6,111,432 5,426,656 3,545,522 126,057 503,093
Limited Partnership
Units 75,264 75,264 75,294 75,294 75,294
Limited Partners 2,692 2,678 2,670 2,665 2,661
5
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
Results of Operations
Fidelity Leasing Income Fund VI, L.P. had revenues of $1,369,434,
$1,844,586 and $6,764,079 for the years ended December 31, 2000, 1999 and
1998, respectively. Rental income from the leasing of equipment accounted for
51%, 54% and 94% of total revenues in 2000, 1999 and 1998, respectively.
The decrease in total revenues in 2000 and 1999 was primarily attributable to
the decrease in rental income. In 2000, rental income decreased by approxi-
mately $297,000 because of equipment that came off lease or terminated and was
sold during both 2000 and 1999. In 1999, rental income decreased by approxi-
mately $2,104,000 because of equipment that came off lease or terminated and
was sold during both 1999 and 1998. This decrease was mitigated by $173,000 of
rents generated on equipment purchased during 1999 as well as rental income
generated on 1998 equipment purchases for which a full year of rent was
recognized in 1999 and only a partial year was recognized in 1998. Addition-
ally, the Fund entered into several transactions during 1998 whereby it col-
lected the remaining rents owed on certain leases. As a result, the Fund
recognized approximately $3,401,000 of rental income on these transactions
during the year ended December 31, 1998 which also contributed to the decrease
in rental income during 1999. Additionally, the Fund recognized a net gain on
sale of equipment of $52,789, $226,430 and $180,509 for the years ended Decem-
ber 31, 2000, 1999 and 1998, respectively. The change in this account contrib-
uted to the overall decrease in revenues in 2000 and reduced the decrease in
overall revenues in 1999. Interest income decreased in 2000 and increased in
1999 because the Fund had larger cash balances available for investment during
the first nine months of 1999. The fluctuation in this account between 2000,
1999 and 1998 contributed to the overall decrease in revenues in 2000 and
lowered the overall decrease in revenues in 1999. However, the increase in
earned income on direct financing leases served to mitigate the decrease in
total revenues in 2000 and 1999. The Fund invested in approximately $2.7
million of direct financing leases during 2000 compared to $3.7 million in 1999
and $3.8 million in 1998. As a result, the Fund recognized earned income on
direct financing leases of $504,019, $420,461 and $140,128 in 2000, 1999 and
1998, respectively.
Expenses were $957,370, $1,414,924 and $6,518,335 for the years ended
December 31, 2000, 1999 and 1998, respectively. Depreciation expense comprised
60%, 56% and 83% of total expenses in 2000, 1999 and 1998, respectively.
The decrease in expenses in 2000 and 1999 was primarily attributable to the
decrease in depreciation expense. Depreciation expense decreased in 2000 and
1999 because of equipment that came off lease or terminated and was sold during
2000 and 1999. The decrease in write-down of equipment to net realizable value
also contributed to the decrease in total expenses in both 2000 and 1999.
Currently, the Fund's practice is to review the recoverability of its undepre-
ciated costs of rental equipment quarterly. The Fund's policy, as part of this
review, is to analyze such factors as releasing of equipment, technological
developments and information provided in third party publications. In 2000,
1999 and 1998, approximately $16,000, $174,000 and $399,000, respectively, was
charged to write-down of equipment to net realizable value. 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, if any,
upon actual sale of its rental equipment. Any future losses are dependent upon
6
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Results of Operations (Continued)
unanticipated technological developments affecting the types of equipment in
the portfolio in subsequent years. The decrease in general and administrative
expense and general and administrative expense to related party also accounted
for the overall decrease in expenses in 2000 and 1999. General and adminis-
trative expense decreased during the twelve months ended December 31, 2000 and
1999 because of a decrease in expenses incurred to refurbish and remarket
equipment as it came off lease. General and administrative expense to related
party decreased between 2000, 1999 and 1998 as a result of a decrease in
expenses charged by the General Partner or its parent company for services and
materials provided to the Fund during these years. Furthermore, the decrease
in management fee to related party also contributed to the decrease in total
expenses in 2000 and 1999. Management fee to related party changed in pro-
portion to the change in rental income on operating leases. The Fund also paid
lower management fees of 2% of rentals on full pay-out leases. All of the
leases purchased in 2000 and 1999 were direct financing leases which meet the
requirements of full pay-out leases for the purpose of calculating management
fees.
The Fund's net income was $412,064, $429,662 and $245,744 for the years
ended December 31, 2000, 1999 and 1998, respectively. The earnings per
equivalent limited partnership unit, after earnings allocated to the General
Partner, were $13.75, $14.42 and $8.18 for the years ended December 31, 2000,
1999 and 1998, respectively. The weighted average number of equivalent
limited partnership units outstanding were 29,679, 29,502 and 29,663 for the
years ended December 31, 2000, 1999 and 1998, respectively.
The Fund generated cash from operations, for the purpose of determining
cash available for distribution, of $950,373, $1,164,825 and $5,845,993 during
the years ended December 31, 2000, 1999 and 1998, respectively. The Fund
distributed $285,000, $225,000 and $225,000 of those amounts during the period
April 1 through December 31, 2000, 1999 and 1998, respectively, and during the
first quarter of 2001, 2000 and 1999, the Fund distributed $105,000, $75,000
and $75,000 of those amounts, respectively. The Fund also paid $75,000 of cash
distributions to partners during the first quarter of 1998 for the last quarter
of the previous year. 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 is currently in the process of dissolution. 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 for
lease terms consistent with the plan of dissolution. During the year ended
December 31, 1998, the Fund purchased $3,893,271 of equipment subject to
operating leases. There was no equipment purchased subject to operating
leases in 2000 and 1999. The Fund also invested in $2,669,441, $3,699,167
and $3,824,885 of direct financing leases during the twelve months ended
December 31, 2000, 1999 and 1998, respectively.
7
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Results of Operations (Continued)
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.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this Item is submitted as a separate section of this
report commencing on page F-1.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
8
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
F.L. Partnership Management, Inc. (FLPMI) is a wholly owned subsidiary of
Resource Leasing, Inc., a wholly owned subsidiary of Resource America, Inc.
(Resource America). The Directors and Executive Officers of FLPMI are:
FREDDIE M. KOTEK, age 45, Chairman of the Board of Directors, President,
and Chief Executive Officer of FLPMI since September 1995 and Senior Vice
President of Resource America since 1995. President of Resource Leasing,
Inc. since September 1995. President of Resource Properties, Inc. (a
wholly owned subsidiary of Resource America) since 2000. Executive Vice
President of Resource Properties, Inc. from 1993 to 2000.
MICHAEL L. STAINES, age 51, Director and Secretary of FLPMI since
September 1995. Director of Resource America from 1989 to 2000 and
Senior Vice President of Resource America since 1989. Chief Operating
Officer, Secretary and Managing Board Member of Atlas Pipeline Partners
G.P., LLC since its formation in 1999. President, Secretary and a direc-
tor of Resource Energy, Inc. ( a wholly owned subsidiary of Resource
America) since 1993.
SCOTT F. SCHAEFFER, age 38, Director of FLPMI since September 1995.
President of RAIT Investment Trust (a publicly traded real estate invest-
ment trust) since October 2000. Vice Chairman of the Board of Resource
America from 1998 to September 2000 and Executive Vice President of Re-
source America from 1997 to 1998. Prior thereto, Senior Vice President
of Resource America since 1995. President of Resource Properties, Inc.
(a wholly owned subsidiary of Resource America) from 1992 to September
2000.
Others:
MARIANNE T. SCHUSTER, age 42, Vice President and Controller of FLPMI
since 1984.
KRISTIN L. CHRISTMAN, age 33, Portfolio Manager of FLPMI since December
1995 and Equipment Brokerage Manager since 1993.
9
Item 11. EXECUTIVE COMPENSATION
The following table sets forth information relating to the aggregate
compensation earned by the General Partner of the Fund during the year ended
December 31, 2000:
Name of Individual or Capacities in
Number in Group Which Served Compensation
F.L. Partnership
Management, Inc. General Partner $84,582(1)
=======
(1) This amount does not include the General Partner's share of
cash distributions made to all partners.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Based upon a review of Schedule 13D as filed with the Securities and
Exchange Commission, the table set forth below outlines the persons or
groups known to the Fund that own more than 5% of the Fund's outstanding
securities either beneficially or of record.
Name of Individual Number of
or Group Units Owned
James S. and Danea T. Riley 6,255.897 (1)
Odd Lot Liquidity Fund, LLC 6,255.897 (2)
Sierra Fund 4, LLC 6,255.897 (3)
(1) Amount represents beneficial ownership interest through
ownership of Odd Lot Liquidity Fund, LLC and Sierra Fund 4, LLC
which own 2,838.897 units and 3,417 units, respectively, of the
outstanding limited partnership units of the Fund.
(2) Amount represents direct ownership by Odd Lot Liquidity
Fund, LLC of 2,838.897 units and beneficial ownership of 3,417
units by virtue of group membership and affiliate status with
Sierra Fund 4, LLC.
(3) Amount represents direct ownership by Sierra Fund 4, LLC
of 3,417 units and beneficial ownership of 2,838.897 units by
virtue of group membership and affiliate status with Odd Lot
Liquidity Fund, LLC.
(b) In 1989, the General Partner contributed $1,000 to the capital of
the Fund but it does not own any of the Fund's outstanding securities.
No individual director or officer of F.L. Partnership Management, Inc.
nor such directors or officers as a group, owns more than one percent
of the Fund's outstanding securities. The General Partner owns a
general partnership interest which entitles it to receive 1% of cash
distributions until the Limited Partners have received an amount equal
to the purchase price of their units plus a 12% compounded priority
10
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(Continued)
return; thereafter 10%. The General Partner will also share in net
income equal to the greater of its cash distributions or 1% of net
income or to the extent there are losses, 1% of such losses.
(c) There are no arrangements known to the Fund that would, at any
subsequent date, result in a change in control of the Fund.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the year ended December 31, 2000, the Fund was charged by the
General Partner $84,582 of management fees. The General Partner will
continue to receive 5% or 2% of rental payments on 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
of the lease are at least sufficient to recover the purchase price of the
equipment, including acquisition fees. All of the direct financing leases
in which the Fund has invested meet the criteria for a full pay-out lease and
pay a 2% management fee to the General Partner. 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 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.
The General Partner receives 1% of cash distributions until the Limited
Partners have received an amount equal to the purchase price of their units
plus a 12% compounded priority return. Thereafter, the General Partner will
receive 10% of cash distributions. During the year ended December 31, 2000,
the General Partner received $3,600 of cash distributions.
The Fund incurred $162,886 of reimbursable costs to the General Partner
and its parent company for services and materials provided in connection with
the administration of the Fund during 2000.
11
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) and (2). The response to this portion of Item 14 is submitted
as a separate section of this report commencing on page F-1.
(a) (3) and (c) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
Exhibit Numbers Description Page Number
3(a) & (4) Amended and Restated Agreement *
of Limited Partnership
(9) not applicable
(10) not applicable
(11) not applicable
(12) not applicable
(13) not applicable
(18) not applicable
(19) not applicable
(22) not applicable
(23) not applicable
(24) not applicable
(25) not applicable
(28) not applicable
* Incorporated by reference.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
A Delaware limited partnership
By: F.L. PARTNERSHIP MANAGEMENT, INC.
/s/ Freddie M. Kotek
By: ___________________________
Freddie M. Kotek, Chairman and President
Dated: March 29, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this
annual report has been signed below by the following persons, on behalf of the
Registrant and in the capacities and on the date indicated:
Signature Title Date
/s/ Freddie M. Kotek
____________________________ Chairman of the Board of Directors and 3-29-01
Freddie M. Kotek President of F.L. Partnership
Management, Inc.
(Principal Executive Officer)
/s/ Michael L. Staines
____________________________ Director of F.L. Partnership 3-29-01
Michael L. Staines Management, Inc.
/s/ Marianne T. Schuster
____________________________ Vice President and Controller 3-29-01
Marianne T. Schuster of F.L. Partnership Management, Inc.
(Principal Financial Officer)
13
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Pages
Report of Independent Certified Public Accountants F-2
Balance Sheets as of December 31, 2000 and 1999 F-3
Statements of Operations for the years ended
December 31, 2000, 1999 and 1998 F-4
Statements of Partners' Capital for the years ended
December 31, 2000, 1999 and 1998 F-5
Statements of Cash Flows for the years ended
December 31, 2000, 1999 and 1998 F-6
Notes to Financial Statements F-7 - F-11
All schedules have been omitted because the required information is not
applicable or is included in the Financial Statements or Notes thereto.
F-1
Report of Independent Certified Public Accountants
The Partners
Fidelity Leasing Income Fund VI, L.P.
We have audited the accompanying balance sheets of Fidelity Leasing
Income Fund VI, L.P. as of December 31, 2000 and 1999, and the related
statements of operations, partners' capital and cash flows for each of the
three years in the period ended December 31, 2000. These financial state-
ments are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the finan-
cial statements are free of material misstatement. An audit includes examin-
ing, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting princi-
ples used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Fidelity Leasing
Income Fund VI, L.P. as of December 31, 2000 and 1999, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted
in the United States of America.
Grant Thornton LLP
Philadelphia, Pennsylvania
February 16, 2001
F-2
FIDELITY LEASING INCOME FUND VI, L.P.
BALANCE SHEETS
ASSETS
December 31,
2000 1999
Cash and cash equivalents $1,982,752 $1,983,958
Accounts receivable 209,878 185,135
Due from related parties 42,133 36,541
Equipment under operating leases
(net of accumulated depreciation
of $1,296,798 and $1,649,475,
respectively) 603,611 1,299,505
Net investment in direct financing
leases 6,111,432 5,426,656
Equipment held for sale or lease 431,668 457,431
__________ __________
Total assets $9,381,474 $9,389,226
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 35,179 $ 92,659
Accounts payable and
accrued expenses 36,415 40,832
Due to related parties 28,044 25,963
__________ __________
Total liabilities 99,638 159,454
Partners' capital 9,281,836 9,229,772
__________ __________
Total liabilities and
partners' capital $9,381,474 $9,389,226
========== ==========
The accompanying notes are an integral part of these financial statements.
F-3
FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENTS OF OPERATIONS
For the years ended December 31,
2000 1999 1998
Income:
Rentals $ 696,191 $ 992,807 $6,324,748
Earned income on direct
financing leases 504,019 420,461 140,128
Interest 80,988 161,923 95,069
Gain on sale of equipment, net 52,789 226,430 180,509
Other 35,447 42,965 23,625
__________ __________ __________
1,369,434 1,844,586 6,764,079
__________ __________ __________
Expenses:
Depreciation 575,098 788,056 5,382,228
Write-down of equipment to
net realizable value 16,000 173,537 398,530
General and administrative 118,804 147,586 153,055
General and administrative to
related party 162,886 212,510 257,295
Management fee to related party 84,582 93,235 327,227
__________ __________ __________
957,370 1,414,924 6,518,335
__________ __________ __________
Net income $ 412,064 $ 429,662 $ 245,744
========== ========== ==========
Net income per equivalent
limited partnership unit $ 13.75 $ 14.42 $ 8.18
========== ========== ==========
Weighted average number of
equivalent limited partnership
units outstanding during the year 29,679 29,502 29,663
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
F-4
FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENTS OF PARTNERS' CAPITAL
For the years ended December 31, 2000, 1999 and 1998
General Limited Partners
Partner Units Amount Total
_______ ____________________ _____
Balance, January 1, 1998 $2,982 75,294 $9,154,920 $9,157,902
Cash distributions (3,000) - (297,000) (300,000)
Net income 3,000 - 242,744 245,744
______ ______ __________ __________
Balance, December 31, 1998 2,982 75,294 9,100,664 9,103,646
Cash distributions (3,000) - (297,000) (300,000)
Redemptions - (30) (3,536) (3,536)
Net income 4,297 - 425,365 429,662
______ ______ __________ __________
Balance, December 31, 1999 4,279 75,264 9,225,493 9,229,772
Cash distributions (3,600) - (356,400) (360,000)
Net income 4,121 - 407,943 412,064
______ ______ __________ __________
Balance, December 31, 2000 $4,800 75,264 $9,277,036 $9,281,836
====== ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
F-5
FIDELITY LEASING INCOME FUND VI, L.P.
STATEMENTS OF CASH FLOWS
For the years ended December 31,
2000 1999 1998
Cash flows from operating activities:
Net income $ 412,064 $ 429,662 $ 245,744
__________ __________ __________
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 575,098 788,056 5,382,228
Write-down of equipment to net
realizable value 16,000 173,537 398,530
(Gain) loss on sale of equipment, net (52,789) (226,430) (180,509)
(Increase) decrease in accounts receivable (24,743) (82,472) 78,109
(Increase) decrease in due from
related parties (5,592) 71,610 (26,061)
Increase (decrease) in lease rents paid in
advance (57,480) 47,448 (66,711)
Increase (decrease) in accounts payable
and accrued expenses (4,417) (8,888) (55,305)
Increase (decrease) in due to related parties 2,081 (137,503) (291,299)
Increase (decrease) in accounts payable -
equipment - (30,848) 14,751
__________ __________ __________
448,158 594,510 5,253,733
__________ __________ __________
Net cash provided by operating activities 860,222 1,024,172 5,499,477
__________ __________ __________
Cash flows from investing activities:
Acquisition of equipment - - (3,893,271)
Investment in direct financing leases (2,669,441) (3,699,167) (3,824,885)
Proceeds from direct financing leases,
net of earned income 1,984,665 1,818,032 405,416
Proceeds from sale of equipment 183,348 252,130 735,765
__________ __________ __________
Net cash used in investing activities (501,428) (1,629,005) (6,576,975)
__________ __________ __________
Cash flows from financing activities:
Distributions (360,000) (300,000) (300,000)
Redemptions of capital - (3,536) -
_________ __________ __________
Net cash used in financing activities (360,000) (303,536) (300,000)
__________ __________ __________
Decrease in cash and cash equivalents (1,206) (908,369) (1,377,498)
Cash and cash equivalents, beginning of year 1,983,958 2,892,327 4,269,825
__________ __________ __________
Cash and cash equivalents, end of year $1,982,752 $1,983,958 $2,892,327
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
F-6
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF BUSINESS
Fidelity Leasing Income Fund VI, L.P. (the "Fund") was formed in January
1989. The General Partner of the Fund is F.L. Partnership Management, Inc.
("FLPMI") which is a wholly owned subsidiary of Resource Leasing, Inc., a
wholly owned subsidiary of Resource America, Inc. (Resource America). The Fund
is managed by the General Partner. The Fund's limited partnership interests
are not publicly traded. There is no market for the Fund's limited partnership
interests and it is unlikely that any will develop. The Fund acquires computer
equipment, including printers, tape and disk storage devices, data communica-
tions equipment, computer terminals, technical workstations and networking
equipment, as well as other electronic equipment. This equipment is leased to
third parties throughout the United States on a short-term basis.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of Credit Risk
Financial instruments which potentially subject the Fund to concentra-
tions of credit risk consist principally of temporary cash investments. The
Fund places its temporary investments in money market savings accounts.
Concentrations of credit risk with respect to accounts receivables are
limited due to the dispersion of the Fund's lessees over different industries
and geographies.
Impairment of Long-Lived Assets
The Fund reviews its assets to determine if it has any long-lived assets
that are carried on the books for an amount that may not be recoverable. If
it is determined that an asset's estimated future cash flows will not be suf-
ficient to recover its carrying amount, an impairment charge will be recorded.
Equipment Held for Sale or Lease
Equipment held for sale or lease is carried at its estimated net real-
izable value.
Use of Estimates
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Accounting for Leases
The Fund's leasing operations consist of both operating and direct
financing leases. Under the operating method of accounting for leases, the
cost of the leased equipment is recorded as an asset and depreciated on a
F-7
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting for Leases (Continued)
straight-line basis over its estimated useful life, up to seven years.
Acquisition fees associated with lease placements are allocated to equipment
when purchased and depreciated as part of equipment cost. Rental income
consists primarily of monthly periodic rentals due under the terms of the
leases. Generally, during the remaining terms of existing operating leases,
the Fund will not recover all of the undepreciated cost and related expenses
of its rental equipment and is prepared to remarket the equipment in future
years. Upon sale or other disposition of assets, the cost and related
accumulated depreciation are removed from the accounts and the resulting
gain or loss, if any, is reflected in income.
Under the direct financing method of accounting for leases, income (the
excess of the aggregate future rentals and estimated unguaranteed residuals
upon expiration of the lease over the related equipment cost) is recognized
over the life of the lease using the interest method.
Income Taxes
Federal and State income tax regulations provide that taxes on the
income or benefits from losses of the Fund are reportable by the partners in
their individual income tax returns. Accordingly, no provision for such
taxes has been made in the accompanying financial statements.
Statements of Cash Flows
For purposes of the statements of cash flows, the Fund considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
Net Income per Equivalent Limited Partnership Unit
Net income per equivalent limited partnership unit is computed by
dividing net income allocated to limited partners by the weighted average
number of equivalent limited partnership units outstanding during the year.
The weighted average number of equivalent units outstanding during the year
is computed based on the weighted average monthly limited partners' capital
account balances, converted into equivalent units at $500 per unit.
3. ALLOCATION OF PARTNERSHIP INCOME, LOSS AND CASH DISTRIBUTIONS
Cash distributions, if any, are made monthly as follows: 99% to the
Limited Partners and 1% to the General Partner, until the Limited Partners
have received an amount equal to the purchase price of their units, plus a
12% compounded priority return (an amount equal to 12% compounded annually on
the portion of the purchase price not previously distributed); thereafter,
90% to the Limited Partners and 10% to the General Partner.
F-8
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
3. ALLOCATION OF PARTNERSHIP INCOME, LOSS AND CASH DISTRIBUTIONS (Continued)
Net Losses are allocated 99% to the Limited Partners and 1% to the
General Partner. The General Partner is allocated Net Income equal to its
cash distributions, but not less than 1% of Net Income, with the balance
allocated to the Limited Partners.
Net Income (Losses) allocated to the Limited Partners are allocated to
individual limited partners based on the ratio of the daily weighted average
partner's net capital account balance (after deducting related commission
expense) to the total daily weighted average of the Limited Partners' net
capital account balances.
4. EQUIPMENT LEASED
Equipment on lease consists of equipment under operating leases. The
lessees have agreements with the manufacturer to provide maintenance for the
leased equipment. The Fund's operating leases are for initial lease terms of
34 to 60 months.
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 recog-
nizes gains upon actual sale of its rental equipment. As a result, in 2000,
1999 and 1998, approximately $16,000, $174,000 and $399,000, respectively, was
charged to write-down of equipment to net realizable value. Any future losses
are dependent upon unanticipated technological developments affecting the
equipment in subsequent years.
Unguaranteed residuals for direct financing leases represent the
estimated 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 December 31, 2000
is as follows:
Minimum lease payments to be received $6,047,000
Unguaranteed residuals 733,000
Unearned rental income (560,000)
Unearned residual income (109,000)
__________
$6,111,000
==========
F-9
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
4. EQUIPMENT LEASED (Continued)
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of December 31 are as follows:
Direct
Operating Financing
2001 $211,000 $3,039,000
2002 167,000 2,133,000
2003 117,000 802,000
2004 - 73,000
________ __________
$495,000 $6,047,000
======== ==========
5. 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 the rental payments due during
the initial term of the lease 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 calendar
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 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 and its parent company during the years ended December 31:
2000 1999 1998
Management fee $ 84,582 $ 93,235 $327,227
Reimbursable costs 162,886 212,510 257,295
During 1999, the Fund maintained its checking and investment accounts in
Jefferson Bank, a subsidiary of JeffBanks, Inc. in which the Chairman of
Resource America served as a director. In November 1999, Hudson United Bancorp
acquired JeffBanks, Inc. The Fund maintains a normal banking relationship
with Hudson United Bancorp. As of December 31, 2000 and 1999, the Chairman of
Resource America did not hold any position with Hudson United Bancorp.
F-10
FIDELITY LEASING INCOME FUND VI, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
5. RELATED PARTY TRANSACTIONS (Continued)
Amounts due from related parties at December 31, 2000 and 1999 represent
monies due to 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 December 31, 2000 and 1999 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.
6. MAJOR CUSTOMERS
For the year ended December 31, 2000, five customers accounted for 21%,
18%, 16%, 14% and 13% of the Fund's rental income. For the year ended
December 31, 1999, three customers accounted for 14%, 13% and 10% of the
Fund's rental income and two customers accounted for 12% each of the Fund's
rental income. For the year ended December 31, 1998, four customers accounted
for 25%, 21%, 20% and 12% of the Fund's rental income.
7. CASH DISTRIBUTIONS
Below is a summary of the cash distributions paid to partners during
the years ended December 31:
For the Quarter Ended 2000 1999 1998
March $ 75,000 $ 75,000 $ 75,000
June 75,000 75,000 75,000
September 105,000 100,000 75,000
December 105,000 50,000 75,000
________ ________ ________
$360,000 $300,000 $300,000
======== ======== ========
In addition, the General Partner declared and paid three cash distri-
butions of $35,000 each in January, February and March 2001 for each of the
months ended October 31, November 30 and December 31, 2000, for an aggregate
of $105,000 to all admitted partners as of October 31, November 30 and Decem-
ber 31, 2000.
F-11