-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IZNRyKAeQilw5ulMJnwP79+pmCJboylE1ZSGpSh0hGJ1Z+LaSdGsk3f1t72uCReA 9DokHcP8+GhnJnzP7NX7aA== 0000846471-98-000002.txt : 19980518 0000846471-98-000002.hdr.sgml : 19980518 ACCESSION NUMBER: 0000846471-98-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY LEASING INCOME FUND VI LP CENTRAL INDEX KEY: 0000846471 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 232540929 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-18497 FILM NUMBER: 98622625 BUSINESS ADDRESS: STREET 1: 250 KING OF PRUSSIAN ROAD CITY: RADNOR STATE: PA ZIP: 19087 BUSINESS PHONE: 610-964-71 MAIL ADDRESS: STREET 1: 250 KING OF PRUSSIA RD STREET 2: 250 KING OF PRUSSIA RD CITY: RADNOR STATE: PA ZIP: 19087 10-Q 1 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, 1998 / / 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 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) March 31, December 31, 1998 1997 ____________ ____________ Cash and cash equivalents $1,642,012 $4,269,825 Accounts receivable 329,599 180,772 Due from related parties 149,561 82,090 Equipment under operating leases (net of accumulated depreciation of $6,130,397 and $8,038,840, respectively) 6,332,657 4,718,892 Net investment in direct financing leases 116,130 126,057 Equipment held for sale or lease 861,623 468,075 __________ __________ $9,431,582 $9,845,711 Total assets ========== ========== LIABILITIES AND PARTNERS' CAPITAL Liabilities: Lease rents paid in advance $ 100,993 $ 111,922 Accounts payable - equipment - 16,097 Accounts payable and accrued expenses 97,677 105,025 Due to related parties 64,182 454,765 __________ __________ Total liabilities 262,852 687,809 Partners' capital 9,168,730 9,157,902 __________ __________ Total liabilities and partners' capital $9,431,582 $9,845,711 ========== ========== 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, 1998 and 1997 (Unaudited) 1998 1997 ________ ________ Income: Rentals $ 967,737 $1,219,790 Earned income on direct financing leases 1,922 10,664 Interest 41,413 21,392 Gain on sale of equipment, net 43,803 101,397 Other 1,144 3,479 __________ __________ 1,056,019 1,356,722 __________ __________ Expenses: Depreciation 725,687 951,308 Write-down of equipment to net realizable value 84,829 59,045 General and administrative 55,462 28,441 General and administrative to related party 55,589 52,310 Management fee to related party 48,624 62,179 __________ __________ 970,191 1,153,283 __________ __________ Net income $ 85,828 $ 203,439 ========== ========== Net income per equivalent limited partnership unit $ 2.87 $ 6.85 ========== ========== Weighted average number of equivalent limited partnership units outstanding during the period 29,586 29,411 ========== ========== 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, 1998 (Unaudited) General Limited Partners Partner Units Amount Total _______ _____ ______ _____ Balance, January 1, 1998 $2,982 75,294 $9,154,920 $9,157,902 Cash distributions (750) - (74,250) (75,000) Net income 858 - 84,970 85,828 ______ _______ __________ __________ Balance, March 31, 1998 $3,090 75,294 $9,165,640 $9,168,730 ====== ======= ========== ========== 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, 1998 and 1997 (Unaudited) 1998 1997 __________ __________ Cash flows from operating activities: Net income $ 85,828 $ 203,439 __________ _________ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 725,687 951,308 Write-down of equipment to net realizable value 84,829 59,045 Proceeds from direct financing leases, net of earned income 9,927 48,810 Gain on sale of equipment, net (43,803) (101,397) (Increase) decrease in accounts receivable (148,827) (33,633) (Increase) decrease in due from related parties (67,471) 8,392 Increase (decrease) in lease rents paid in advance (10,929) 36,753 Increase (decrease) in accounts payable - equipment (16,097) (19,788) Increase (decrease) in accounts payable and accrued expenses (7,348) 19,743 Increase (decrease) in due to related parties (390,583) (28,074) __________ __________ 135,385 941,159 __________ __________ Net cash provided by operating activities 221,213 1,144,598 __________ __________ Cash flows from investing activities: Acquisition of equipment (2,917,056) (2,024,611) Proceeds from sale of equipment 143,030 150,661 __________ __________ Net cash used in investing activities (2,774,026) (1,873,950) __________ __________ Cash flows from financing activities: Distributions (75,000) (75,000) __________ __________ Net cash used in financing activities (75,000) (75,000) __________ __________ Decrease in cash and cash equivalents (2,627,813) (804,352) Cash and cash equivalents, beginning of period 4,269,825 2,783,827 __________ __________ Cash and cash equivalents, end of period $1,642,012 $1,979,475 ========== ========== 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, 1998 (Unaudited) The accompanying unaudited condensed financial statements have been prepared by the Fund in accordance with Generally Accepted Accounting Principles, pursuant to the rules and regulations of the Securities and Exchange Commis- sion. In the opinion of Management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. 1. EQUIPMENT LEASED Equipment on lease consists primarily of computer 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 24 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 undepreciated cost. Recent and anticipated technological developments affecting computer equipment and competitive factors in the marketplace are considered among other things, as part of this review. In accordance with Generally Accepted Accounting Principles, the Fund writes down its rental equipment to its estimated net realizable value when the amounts are reasonably estimated and only recognizes gains upon actual sale of its rental equipment. As a result, $84,829 and $59,045 was charged to write-down of equipment to net realizable value for the three months ended March 31, 1998 and 1997, respectively. Any future losses are dependent upon unanticipated technological developments affecting the computer equipment industry in subsequent years. The Fund also has equipment leased under the direct financing method in accordance with Statement of Financial Accounting Standards No. 13. This method provides for recognition of income (the excess of the aggregate future rentals and estimated additional amounts recoverable upon expira- tion of the lease over the related equipment cost) over the life of the lease using the interest method. The net investment in direct financing leases as of March 31, 1998 is as follows: Net minimum lease payments to be received $126,000 Less unearned income 10,000 Add expected future residuals - ________ $116,000 ======== 6 FIDELITY LEASING INCOME FUND VI, L.P. NOTES TO FINANCIAL STATEMENTS (Continued) 1. EQUIPMENT LEASED (CONTINUED) The future approximate minimum rentals to be received on noncancellable operating and direct financing leases as of March 31, 1998 are as follows: Direct Years Ending December 31 Operating Financing ________________________ _________ _________ 1998 $2,326,000 $ 36,000 1999 2,512,000 47,000 2000 936,000 43,000 2001 482,000 - 2002 474,000 - Thereafter 39,000 - __________ ________ $6,769,000 $126,000 ========== ======== 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 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: 1998 1997 ________ ________ Management fee $48,624 $62,179 Reimbursable costs 55,589 52,310 7 FIDELITY LEASING INCOME FUND VI, L.P. NOTES TO FINANCIAL STATEMENTS (Continued) 2. RELATED PARTY TRANSACTIONS (CONTINUED) The Fund maintains its checking and investment accounts in Jefferson Bank, a subsidiary of JeffBanks, Inc., in which the Chairman of Resource America, Inc. serves as a director. Amounts due from related parties at March 31, 1998 and December 31, 1997 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 March 31, 1998 and December 31, 1997 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 two cash distributions of $25,000 each subsequent to March 31, 1998 for the months ended January 31 and February 28, 1998 to all admitted partners as of January 31 and February 28, 1998. 8 FIDELITY LEASING INCOME FUND VI, L.P. Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Fidelity Leasing Income Fund VI, L.P. had revenues of $1,056,019 and $1,356,722 for the three months ended March 31, 1998 and 1997, respectively. Rental income from the leasing of computer equipment accounted for 92% and 90% of total revenues for the first quarter of 1998 and 1997, respec- tively. The decrease in total revenues in 1998 is primarily attributable to a decrease in rental income. During the three months ended March 31, 1998, rental income decreased by approximately $372,000 because of equipment which came off lease and was re-leased at lower rental rates or sold. This decrease was mitigated by an increase in rental income of approximately $120,000 because of rents earned on equipment purchased since the first quarter of 1997 as well as rents generated from first quarter 1997 equipment purchases for which a full three months of rent was earned in the first quarter of 1998 and only a portion of the three months was earned in the first quarter of 1997. Additionally, the Fund recognized a net gain on sale of equipment of $43,803 for the first quarter of 1998 as compared to $101,397 for the same period in 1997 which contributed to the overall decrease in revenues in the current year. Expenses were $970,191 and $1,153,283 for the three months ended March 31, 1998 and 1997, respectively. Depreciation expense comprised 75% and 82% of total expenses during the first quarter of 1998 and 1997, respectively. The decrease in expenses is primarily related to the decrease in depreciation expenses. Depreciation expense decreased during 1998 because of equipment which came off lease or was terminated and sold since March 1997. However, the increase in write-down of equipment to net realizable value in 1998 reduced the overall decrease in expenses in this year. Based upon the quarterly review of the recoverability of the undepreciated cost of rental equipment, $84,829 was charged to operations to write down equipment to its estimated net realizable value during the three months ended March 31, 1998 as compared to $59,045 for the three months ended March 31, 1997. Any future losses are dependent upon unanticipated technological developments affecting the computer equipment industry in subsequent years. Furthermore, general and administrative expense increased in 1998 as compared to 1997 because of the increase in expenses incurred to refurbish and remarket equipment in the first quarter of 1998. This increase also lowered the amount of decrease in total expenses during the first quarter of 1998. For the three months ended March 31, 1998 and 1997, the Fund had net income of $85,828 and $203,439, respectively. The earnings per equivalent limited partnership unit, after earnings allocated to the General Partner, were $2.87 and $6.85 based on a weighted average number of equivalent limited partnership units outstanding of 29,586 and 29,411 for the three months ended March 31, 1998 and 1997, respectively. 9 FIDELITY LEASING INCOME FUND VI, L.P. Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (Continued) The Fund generated cash from operations of $852,541 and $1,112,395, for the purpose of determining cash available for distribution during the quarter ended March 31, 1998 and 1997, respectively. There were no cash distributions made to partners during the first quarter of 1998 for the three months ended March 31, 1998. However, $75,000 of cash distributions were paid during the first quarter of 1998 for the months of October, November and December of 1997. During the quarter ended March 31, 1997, 2% of the cash available from operations for the three months ended March 31, 1997 was paid to partners. Subsequent to March 31, 1998 and 1997, 9% and 4% of the cash available from operations was paid to partners for the quarter ended March 31, 1998 and 1997, respectively. 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 1998. 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 purchase equipment for lease with $2,024,611 of equipment during the three months ended March 31, 1998 and 1997, 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. March 31, 1998 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. 5-14-98 By: Freddie M. Kotek _______ ___________________________ Date Freddie M. Kotek President of F.L. Partnership Management, Inc. (Principal Operating Officer) 5-14-98 By: Marianne T. Schuster _______ ___________________________ Date Marianne T. Schuster Vice President of F.L. Partnership Management, Inc. (Principal Financial Officer) 12 EX-27 2
5 3-MOS DEC-31-1998 MAR-31-1998 1,642,012 0 479,160 0 0 2,121,172 13,324,677 6,130,397 9,431,582 262,852 0 0 0 0 9,168,730 9,431,582 969,659 1,056,019 0 0 970,191 0 0 85,828 0 85,828 0 0 0 85,828 2.87 2.87
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